The auditors cited reports of a potential “improper relation” between the company’s then-CEO and one of the vendor officers.
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CenterPoint failed to adequately consider potential conflicts of interest in its procurement of large mobile generation units and failed to complete formal vendor risk assessments as required by its own policies, according to a new performance audit of the utility’s management activities.
Conducted by Moss Adams, an international accounting firm, the May 8 review was requested by the Public Utility Commission in response to CenterPoint’s much maligned Hurricane Beryl recovery efforts in July 2024. Moss Adams focused specifically on CenterPoint’s decision not to deploy several leased high-voltage mobile generation units (MGUs) during the restoration efforts. Those units remained idle even as a large portion of their customers went without power for several days.
Top line findings include:
- CenterPoint did not complete formal vendor risk assessments for its MGU-related procurements as required by its own policies.
- CenterPoint did not adequately consider potential conflicts of interest in its procurement of large MGUs. This raised concerns about fair competition and undermined stakeholder confidence in the procurement process.
- While CenterPoint had an Emergency Operations Plan in place in March 2024, it does not maintain formal Corrective Action Programs with clear program ownership for its training and exercises.
- While CenterPoint’s MGU procurements included analyses of mobile generation needs and MGU operability in emergencies, its leasing agreements lacked details regarding required maintenance services and their frequency. CenterPoint does not effectively oversee the maintenance performed by its vendors.
- CenterPoint’s limited communication to customers about the use of MGUs during Hurricane Beryl caused confusion among the public regarding their deployment.
Background
In 2021, Texas lawmakers adopted House Bill 2483 to allow transmission and distribution utilities to lease and operate mobile generation facilities to help restore power during widespread power outages. CenterPoint took advantage of HB 2483 later that year when it entered into lease agreements for 33 mobile generation units and supporting equipment. However, the largest of those leased units remained idle during Hurricane Beryl recovery efforts. This raised questions about the value of the units to ratepayers. Questions also arose in press reports regarding potential conflicts of interest between CenterPoint’s then-CEO and an official working with Life Cycle Power, one of the utility’s vendors.
The Review
Moss Adams performed its audit from January through March 2025. During fieldwork, the company conducted document analyses, management and staff interviews, site visits, and industry best practices research.
The consultants noted that while CenterPoint’s procurement policies generally align with corporate best practices, the company did not follow best practices regarding the MGU procurements. Also, some required documents were missing. “For one vendor, emails between Procurement Team members referred to a financial fitness review that was conducted, but no documentation was provided for other risk areas,” according to Moss Adams.
The auditors likewise cited reports of a potential “improper relation” between the company’s then-CEO and one of the vendor officers. “Despite the existence of codes of conduct that instruct CenterPoint employees and vendors to avoid conflicts of interest, and procurement protocol that should have included a review of conflict of interest, CenterPoint management and staff involved in the procurement process were not asked about actual or perceived conflicts of interest during the 2021 bid review process,” the auditors reported.
Moss Adams reported that it could not independently verify the veracity of the reported conflicts of interest.
The auditor’s report can be found on the PUC website under Project No. 58049.
CenterPoint Requests More than $1 billion System Restoration Costs
CenterPoint Energy has requested reimbursement of nearly $1.3 billion from ratepayers to finance system restoration costs related to Hurricane Beryl, Hurricane Francine, and Winter Storm Enzo, all of which occurred in 2024 and 2025.
The restoration costs, which were outlined in a filing made to the PUC on May 2, come on top of separate restoration costs of approximately $396 million recently approved by the agency commissioners.
Hurricane Beryl, Hurricane Francine and Winter Storm Enzo
Under both filings, the Houston-based utility would receive recovery through a debt financing process known as “securitization,” under which CenterPoint would receive payments in the short term and ratepayers would retire the debt over time.
Under its most recent proposal, ratepayers would be responsible for $1.847 billion in system recovery costs, and $107.4 million in debt carrying costs — for a total of $1.295 billion. These costs would be associated with Hurricane Beryl, Hurricane Francine, and Winter Storm Enzo. For a typical residential customer using 1,000 kilowatt hours of power each month, the average bill impact would be $2.13 per month.
Hurricane Beryl made landfall near Matagorda, Texas early on July 8, 2024, and led to power losses for approximately 2.26 million CenterPoint customers. Hurricane Francine, which made landfall in Louisiana on September 11, 2024, did not directly cause any system outages but required the company to take various preemptive actions. Winter Storm Enzo was a strong winter weather event in late January 2025 that impacted six of the company’s transmission lines.
This proposal still requires regulatory approval. More information can be found on the PUC website, under Docket Nos. 58028.
The Houston Derecho and May 28, 2024, Thunderstorms
In a separate case, CenterPoint is set to recover $396,325,134 for distribution-related storm restoration costs associated with two weather events in 2024. The PUC adopted the proposed order on April 24.
That approved amount will cover the costs of a May 16-17, 2024, windstorm (the Houston Derecho) and May 28, 2024, thunderstorms. Under the order — which reflects the terms of a settlement with various intervenors, including cities — CenterPoint agreed to remove $10 million in distribution-related system restoration costs from its initial Nov. 8 application and remove an additional $17.5 million in requested distribution-related system restoration costs regarding pole replacement and feeder damage costs. In its initial application, CenterPoint sought system restoration costs of $502 million.
More information on this case can be found on the PUC website, under Docket No. 57271.