The leaders of CenterPoint Energy Inc. have added $500 million to the company’s capital spending plan, investments that will focus on electrification, electric-vehicle infrastructure and other grid modernization projects.
Of the incremental capex, $200 million is already being spent this year while the remainder is slated for 2024 and 2025. Similar to past spending plan increases, executives said in a presentation that the new amounts being contemplated “are not reliant on ‘big bets’” and will be recovered largely through interim funding mechanisms. The CenterPoint team, which oversees electric and natural gas utilities in Texas, Louisiana, Mississippi, Minnesota, Indiana and Ohio, plans to devote about $2.2 billion of its $3.7 billion in 2024 capex to the company’s electric operations.
“This additional capital represents our move to take advantage of a few factors,” CFO Chris Foster said on an Oct. 26 conference call with analysts. “First, we have the opportunity provided by the recent resiliency legislation that passed in the Texas Legislature where we can start to pull some of that work into play soon. And the team has come a long way on better capital execution in recent years.”
Alongside their earnings report, CenterPoint’s leaders also announced that Dave Lesar will step down as CEO in early January and hand the reins to Jason Wells, a veteran of PG&E who joined CenterPoint in 2020 and a year ago was named president and COO. Lesar has led CenterPoint since May 2020 and before that helmed Health Care Service Corp. (on an interim basis) and Halliburton Co.
Houston-based Entergy reported a third-quarter profit of $282 million, up from $202 million in the same period of 2022, while revenues dipped to $1.86 billion. A hot summer, particularly in its Houston Electric footprint, helped grow throughput for the quarter 16% to nearly 13,900 GWh. That growth’s boost to profits helped offset much of the higher interest expenses CenterPoint had to pay during the quarter.
Executives also laid out their first earnings guidance for 2024, saying they see earnings per share climbing 8% from this year, which is at the high end of their mid-term target.
Shares of CenterPoint (Ticker: CNP) fell more than 3% to $26.69 in Oct. 27 trading. Over the past six months, they have lost about 10% of their value, which has trimmed the company’s market capitalization to about $17 billion.