CenterPoint Leaders Add $1.2B to Capex Plan
CenterPoint Energy Inc. executives have added $1.2 billion to the utility’s investment plan because of strong demand from customers in its Houston service area and work on resiliency work in the city.
Two-thirds of the increase to CenterPoint’s previous $65.5 billion plan is powered by large-load customers. Speaking to analysts and investors on July 28 after reporting CenterPoint’s second-quarter results, Chairman, President and CEO Jason Wells said his team has submitted to the Electric Reliability Council of Texas proposals for large-load projects that would require 17 gigawatts of power. Of those plans, 14 gigawatts worth are expected to be eligible for ERCOT’s new Batch Zero approval framework and require about $800 million in “targeted system upgrades” before they come online between next year and 2031.
The remaining $400 million of the capex increase reflect a new estimate for spending as part of investments focused on downtown Houston. Wells said CenterPoint teams have settled on new sites for two substations that needed to be relocated.
While the new $1.2 billion is officially part of CenterPoint’s 10-year capital plan, the company will spend that amount over the next five years. Doing so, Wells said, will lift the annual growth rate of Houston Electric’s rate base to 18% over the next three years.
As if to emphasize that point, Wells and his team said they also have in their investment pipeline a $700 million or so of work that would be required by customer plans for another roughly 3 gigawatts of power.
CenterPoint produced a net profit of $244 million in the three months that ended June 30, an increase from $198 million in the same period of last year. Total revenues rose to $2.15 billion from $1.94 billion. Throughput at the company’s electric operations, which service parts of Indiana as well as Texas, was flat from a year earlier in part due to milder weather.
Shares of CenterPoint (Ticker: CNP) were changing hands around $42.20 on the afternoon of July 30. They’re up about 10% year to date, which has grown the company’s market value to nearly $28 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications T&D World, Healthcare Innovation, IndustryWeek, FleetOwner and Oil & Gas Journal. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.