CenterPoint will spend $1.7 billion to $2.1 billion on electric system hardening, including replacing and upgrading substations and converting older 69-kilovolt transmission lines to more robust 138-KV lines.
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CenterPoint Electric says it will spend more than $44 billion on capital projects during the ten-year period ending in 2030, with some of that new spending supported by a new Texas law intended to shore up electric system reliability.
That’s the word from company CEO Jason P. Wells, who, during an April 30 call with investment analysts, reaffirmed plans for approximately $29 billion in 10-year spending on CenterPoint’s electricity holdings and $15.3 billion on its gas holdings. Overall, the company’s $44.5 billion in projected capital spending from 2021 through 2030 represents a 10 percent increase over projections the company released just three years ago.
The company said that over 80 percent of its capital expenditures will be supported through interim rate mechanisms, such as the Gas Reliability Infrastructure Program for Texas gas utilities, and the Distribution Cost Recovery Factor and Transmission Cost Recovery Factor mechanisms for its electric utilities. Such interim mechanisms require less regulatory oversight than traditional rate cases that the company says support just 5 percent of its capital spending.
Various federal and state dollars likewise will bolster its capital spending, including hundreds of millions of dollars in grants and loans for grid reliability. Officials said that just last week that CenterPoint applied for $100 million in funding from the U.S. Department of Energy.
System Resiliency Spending
CenterPoint officials on April 30 also summarized the company’s three-year plans for spending on system resiliency. Such spending is supported by House Bill 2555, adopted by the Texas Legislature in 2023, that instructs electric utilities to plan for enhanced reliability of its transmission and distribution systems. From 2025 through 2027, CenterPoint plans to spend the following on such projects in Texas:
- $1.7 billion to $2.1 billion on electric system hardening, which will include replacing and upgrading substations and converting older 69-kilovolt transmission lines to more robust 138-KV lines.
- $40 million on flood control, which includes the elevation of substation equipment.
- $35 million on physical security, which includes updates to security monitoring systems.
- $140 million on wildfire mitigation.
- $315 million to $400 million on technology upgrades, including the implementation of technology to assist the utility during severe weather events and to enhance its cybersecurity risk monitoring.
The company said that its balance sheet continues to benefit from the approximately 1-2 percent annual customer growth in the Houston area, which currently has about 2.8 metered electric customers. The company said it expects earnings per share to grow annually by about 6 to 8 percent through 2030. Its reported earnings per share of .55 cents for the first quarter of 2024 is 10 percent higher than its earnings per share during the comparable quarter of 2023.
About CenterPoint
CenterPoint Energy is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio, and Texas. As of December 31, 2022, the company owned approximately $38 billion in assets, and employed approximately 9,000 people.
More information about the company’s earnings call, including an associated presentation, can be found at https://investors.centerpointenergy.com/events.