Centerpoint identified revenues from interim rate adjustments as contributing to its income growth, along with customer growth in the Houston area and favorable weather.
CenterPoint Energy continues to increase revenues and shareholder earnings, with much of its reported growth due to interim rate increases in Texas, according to information provided by the company during a February 17 call with financial analysts.
It identified revenues from interim rate adjustments — both the electric Distribution Cost Recovery Factor and transmission-related adjustments — as contributing to its income growth, along with customer growth in the Houston area and favorable weather.
During the call with financial analysts, CenterPoint Chief Executive Officer Dave Lesar announced that the Houston-based company has increased its 10-year capital spending plan by $2.3 billion, taking it from approximately $40 billion through 2030 to $43 billion.
During the most recent quarter, the company made a record $1.6 billion in capital expenditures across its various jurisdictions — an increase of $200 million from the same period the previous year. That brings total capital expenditures for the year to $4.8 billion, said Lesar.
He said that much of the additional capital spending related to work at the Texas Medical Center, which is expected to double in size over the next five years. The company also identified $500 million spent for temporary mobile generation units as contributing to its capital expenditure increases.
The company predicted an increase in customer bills by about 2 percent per year, which it noted is less than inflation. However, the projected increase would have been greater if not for reductions in its operations and maintenance expenses, the eventual rolling off of securitization charges from bills, and expected reductions in natural gas fuel prices, according to information released by CenterPoint.
Securitization Proceeds Delay
Chief Operating Officer Jason Wells said the company anticipates the release of Winter Storm Uri-related securitization proceeds during the coming months. He said the company had securitized $1.1 billion of excess gas fuel costs from the storm and had anticipated receiving these proceeds earlier, but there have been delays.
“This delay has been driven by various stakeholders in Texas exploring alternatives including potentially appropriating state surplus funds to pay this off in whole or in part for the benefit of our customers,” said Wells.
Regarding recent rate cases, the company reported that in April 2022 it filed a Distribution Cost Recovery Factor rate request in Texas for $144 million, and in July it settled for $78 million (with rates becoming effective in September 2022). However, the settlement excluded $57 million for mobile generation expenses, and an administrative law judge has recommended no recovery of those costs, he said.
“We’re disappointed in this proposed decision … and now that the case is back in front of the PUC for a final decision, we look forward to a constructive resolution in this case,” said Wells.
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