Officials blamed in part reduced usage because of outages from Hurricane Beryl for the revenue decline.
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CenterPoint Energy, the Houston-based electric and gas utility, reported $198 million in consolidated income for the quarter ending in September, as compared to $256 million in the same quarter last year.
During an Oct. 28 call with analysts, company officials attributed its earnings drop to the expenditure of $70 million for vegetation management, for which the company will not seek recovery. Officials also blamed operations and management expenses, and reduced usage because of outages from Hurricane Beryl. Officials said that for 2023, the return on equity for its Houston Electric division was below its authorized rate.
CenterPoint CEO Jason Wells also said that if its request to withdraw from an ongoing rate case in Houston is approved by the Texas Public Utility Commission, that the utility will refile the case before June 30, 2025. That new filing would be based on the 2024 calendar year, he said. “Outside of the rate case filing, we intend to continue to seek recovery of capital investments. In the fourth quarter of this year, we anticipate filing to start recovery of both our recent transmission and distribution investments,” he said.
The utility also reported that its capital spending continues apace, and that it has met its near-term targets regarding its actions to shore up its system reliability in the Houston area. That effort is known as the Greater Houston Reliability Initiative. The company also provided an update on its recovery of storm related expenses.
Some of the details from the Oct. 28 analyst call include:
System Reliability
- CEO Wells said that company seeks to spend under a revised System Resiliency Initiative approximately $5 billion from 2026 through 2028. That’s an increase of approximately $2.5 billion over a previous System Resiliency plan that the company has since withdrawn.
- CenterPoint reports that it has exceeded its August 2024 targets for trimming and removing high-risk vegetation; for installing storm-resilient poles; for installing automated electronic trip-saver devices and for other aspects of its Greater Houston Reliability Initiative. Through June 1, 2025, during the second phase of that initiative, CenterPoint plans on installing 25,000 wind-resistant poles and 4,500 automated reliability devices. It also plans on trimming 4,000 miles of high-risk vegetation, burying underground 400 miles of power lines, and installing 100 weather monitoring stations.
- In response to outcry over its poorly functioning outage tracker during Hurricane Beryl, the company on Aug. 1 launched an updated outage tracker for residential use.
- CenterPoint reports that currently, a bit more than 46 percent of its Houston electric distribution system is underground. On a proportional basis, that’s more than twice the industry average, according to CEO Wells. Mr. Wells said the company eventually could serve 60 percent of its Houston area customers with underground lines.
Overall Capital Spending
- As part of its five-year spending plans — from 2021 through 2025 — CenterPoint plans to make $21.3 billion in capital expenditures, including $13.7 billion on its electric systems across multiple states. It also plans on spending $7.5 billion on its natural gas holdings.
- Over the longer term — from 2021 though 2030 — the company plans to make $47 billion in capital expenditures, including $31.5 billion on its electric systems and $15.3 billion on its natural gas systems.
- Chris Foster, the company’s chief financial officer, told investment analysts that CenterPoint spent $900 million during the third quarter of 2024, excluding expenditures for storm restoration. Year to date, the company has spent approximately $2.6 billion, which represents over 70 percent of its original 2024 capital expenditure target of $3.7 billion.
Storm Recovery Costs
- CFO Foster said that CenterPoint has now accounted for most recovery costs from the Derecho weather event in May and from Hurricane Beryl in July, and he reports that they totally $1.6 billion.
- Mr. Foster says CenterPoint intends to make a filing at the Public Utility Commission in connection with the securitization for the May storm costs in the coming weeks. He said it will make a filing for storm restoration costs associated with Hurricane Beryl in the first half of next year.