Dive Brief:
- CenterPoint Energy will propose a $5 billion investment into Houston-area grid resilience and forego some profits related to the utility’s lease of large mobile generators, the Texas utility said in an Aug. 28 letter to state lawmakers.
- The utility has faced criticism for its response to Hurricane Beryl in July, which left almost 2.3 million customers around Houston without power. An $800 million fleet of mobile generators went largely unused during the recovery.
- CenterPoint told lawmakers it wanted to “sincerely apologize” for not communicating more clearly the “cost and limitations of such large-scale units.” The Texas attorney general has opened an investigation into the utility’s storm response, including “allegations of fraud, waste, and improper use of taxpayer-provided funds.”
Dive Insight:
CenterPoint launched a “Greater Houston Resiliency Initiative” following Beryl, and it said last week that it had completed “core resiliency actions” ahead of schedule in the first phase of the program.
"We have heard the call to action from our customers and elected officials, and we are responding with bold actions. Our defining goal, going forward, is this: to build the most resilient coastal grid in the country,” CenterPoint President and CEO Jason Wells said in a statement.
The Houston efforts include replacing approximately 1,000 wooden poles with stronger fiberglass poles, doubling its vegetation management workforce and installing automated devices to reduce outages and improve restoration times.
A second phase of the Houston resilience work will include system hardening, strategic undergrounding, installation of self-healing grid technology and enhancements to the company's outage tracker, CenterPoint said.
Looking ahead, the utility says it has plans for a larger investment as well.
“As part of its longer-term strategy, CenterPoint will also propose investing approximately $5 billion from 2026 to 2028,” the company said in a statement. It will be the largest investment in Houston-area infrastructure in the company's history, it said.
“The mission of this longer-term plan of action is ... investing in a smarter grid of the future that can better withstand a broad spectrum of risks,” the utility said, adding that it will make the proposal to the Public Utility Commission of Texas on or before Jan. 31, 2025.
CenterPoint also told lawmakers it wants to “sincerely apologize” for how it communicated regarding its lease of mobile generators. Criticism largely focuses on 15 32-MW generators and five 5-MW generators CenterPoint leased from Life Cycle Power and why none of the larger generators were deployed after Beryl.
Most of those mobile generators were too large to assist in post-Beryl recovery, CenterPoint told regulators last month. However, the leasing contracts cannot be canceled, it said.
“We, as a company, should have communicated more clearly to our elected officials about the cost and the limitations of such large-scale units,” CenterPoint said in its letter.
The company is “proposing to forego approximately $110 million in profit, which is equivalent to more than half of the profits anticipated from our lease of temporary emergency generation assets,” it told lawmakers. CenterPoint also said it will evaluate the role of large-scale emergency generation and plans to eliminate one large-scale unit. Funds resulting from the return of the large unit will be used to increase the utility’s fleet of small- and medium-sized generators.
“This expanded fleet of small- and medium-sized temporary generation will be used to address outages of prioritized critical care facilities more often,” it said.
