The money would finance CenterPoint’s “System Resiliency Plan,” which is a funding mechanism authorized by the Texas Legislature in 2023 to shore up utility power delivery networks
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CenterPoint Energy will spend $3.2 billion over three years to fortify its Houston-area power grid under a settlement agreement announced this month.
Although the settlement would lead to rate increases if approved, the company’s original plan would have cost ratepayers substantially more. But after negotiations with intervenors, including the City of Houston and the Gulf Coast Coalition of Cities, CenterPoint agreed to remove about $2.5 billion — or about 44 percent — from its request. The settlement was filed with the Public Utility Commission on June 12.
System Resiliency Plan
The money included in the settlement would finance CenterPoint’s “System Resiliency Plan,” which is a funding mechanism authorized by the Texas Legislature in 2023 to shore up utility power delivery networks. Planned improvements under the three-year plan include the installation of more storm-resilient utility poles, the burying of more power lines, and increased tree trimming.
CenterPoint claims the improvements, once implemented, will prevent nearly a billion minutes of power outages for Houston-area homes and businesses by 2029. But the plan also will add approximately $1.40 per month for the average household electric bill each year from 2026 through 2028, according to CenterPoint.
In a statement, the company said another 60 cents also would be added in 2030 “to help lessen bill impacts in previous years.”
As noted by Houston Chronicle reporter Claire Hao, the company’s shareholders will benefit from the deal as well. “Most of the agreed-to spending is for big capital projects such as new utility poles and other grid equipment, for which the company can earn a 9.65 percent return, essentially profit,” Ms. Hao noted in a June 17 article.
The Public Utility Commission still must approve the settlement before it can take effect.
Resiliency Plan History
Texas utilities received authorization to file system resiliency plans in 2023, with the adoption of House Bill 2555 by the Texas Legislature. CenterPoint filed a $2.7 billion plan shortly after HB 2555 became law but then withdrew it after Hurricane Beryl knocked out power for more than a million of its customers. CenterPoint refiled the plan months later, but with twice the proposed spending — $5.75 billion. That’s by far the largest SRP ever proposed by any Texas utility.
The June 12 settlement reduces CenterPoint’s resiliency spending from that requested $5.75 billion to $3.2 billion. Much of the savings comes from the removal of proposed improvements to its long-range transmission system. PUC staff and others argued that some of this proposed transmission system spending was unrelated to efforts to weatherproofing. However, CenterPoint can — and likely will — file for recovery of additional transmission spending in a separate proceeding.
Under the current plan, if approved, the following spending projects would be authorized:
- CenterPoint would add 130,000 stronger utility poles to its system, representing approximately 10 percent of the company’s 1.2 million poles.
- CenterPoint would bury more power lines so that 50 percent of its system is underground, up from 46 percent today.
- The company would trim all the vegetation along its power lines every three years, rather than every five years as it does now.