CenterPoint Energy
Cnp Infrastructure Work
Cnp Infrastructure Work
Cnp Infrastructure Work
Cnp Infrastructure Work
Cnp Infrastructure Work

CenterPoint Adds Again to Investment Plans

Nov. 4, 2022
The additional capital spending sets up the utility to grow its rate base by an average of 9.5% through 2030.

The leaders of Houston-based CenterPoint Energy Inc. have beefed up their electricity operations capital spending plan for the rest of this decade by $2.3 billion and sketched out plans to invest another $3 billion in resiliency, reliability and grid modernization.

Speaking to analysts after CenterPoint reported its third-quarter results—an adjusted profit of $206 million, up slightly from the same 2021 period, as electric throughput slipped about 1% from the year before—CEO Dave Lesar said the planned investments will help his team address strong economic growth in the Houston market and better protect it against severe weather. The company’s capital spending plan through 2030 now totals $42.3 billion and Lesar said the newly added projects include some undergrounding work, pole replacements and elevating substations and other key parts of the grid to protect them from high waters.

“Our management team is committed to executing on what we believe is one of the most tangible growth stories in the industry, which is driven by the growth profile of our largest jurisdiction, the Houston area,” Lesar said.

CFO Jason Wells (who will become president and COO on Jan. 1) said the incremental capital spending—about $300 million of which is already being spent this year—will help CenterPoint grow its rate base at an average of more than 9.5% annually through 2030. Of the roughly $43 billion in Entergy’s 10-year spending plan, more than $26 billion is earmarked for its electric operations and about $17 billion is for natural gas-related work.

"We wouldn’t spend this capital if we didn’t believe and have confidence that we would earn on it," Wells said. "So the takeaway should be, this enhances the long-term earning power of the company."

Shares of CenterPoint (Ticker: CNP) were changing hands around $28.20 on the afternoon of Nov. 3, which was down about 2% from their closing price before Lesar and his team reported earnings. Over the past six months, they have slipped about 5%, lowering the company’s market capitalization to about $18 billion.

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