CenterPoint vows billions in new investments to bolster resiliency of Texas grid

With Texas officials investigating CenterPoint Energy Inc. after a series of extensive blackouts this year in its Houston-area service territory, the utility has announced a long-term plan to invest billions of dollars in resiliency, funded primarily through cost recovery from ratepayers.

CenterPoint announced Aug. 28 a plan to spend some $5 billion to bolster its Houston-area infrastructure between 2026 and 2028. That figure would be roughly double what the utility had budgeted previously, the company noted.

The announcement came after Texas Attorney General Ken Paxton, a Republican, opened an investigation into "allegations of fraud, waste, and improper use of taxpayer-provided funds" at the utility in the wake of Hurricane Beryl. That storm, which hit the Houston area July 8, knocked out service to 2.26 million CenterPoint customers. More than 200,000 people were without electric service for at least a week.

Beryl marked the third time in two months that extreme weather caused hundreds of thousands of CenterPoint customers to lose service for extended periods, and both ratepayers and Texas politicians have made their displeasure felt.

Also in July, Texas Gov. Greg Abbott, a Republican, ordered the company to accelerate maintenance efforts on its transmission and distribution system, with a focus on vegetation management and upgrading distribution poles.

"We have heard the call to action from our customers and elected officials, and we are responding with bold actions," CenterPoint President and CEO Jason Wells said in an Aug. 28 statement. "Our defining goal, going forward, is this: to build the most resilient coastal grid in the country that can better withstand the extreme weather of the future."

In an Aug. 28 letter to state legislators, Wells promised that the utility would file its long-term resiliency plan with the Public Utility Commission of Texas by Jan. 31. "We anticipate that our new capital investment plan will include over $21 billion in total capital investment in our Texas electric and gas systems from 2025 through 2030, exceeding our current plan, which comprised roughly over $18 billion in investments in Texas through that same time period," he wrote.

While the company did not provide details of what specific investments it would undertake in its long-term plan, Wells said the goal would be "to mitigate a broad spectrum of risks" by hardening infrastructure and making the grid better able to withstand hurricanes, other extreme weather, and wildfires.

CenterPoint spokesperson John Sousa said in an Aug. 29 email that the resiliency investments would be recovered from ratepayers, using either rate case proceedings or other existing recovery mechanisms. "CenterPoint will propose a plan that incorporates both the costs and benefits of these resiliency investments, and we look forward to engaging with interveners, customers and our regulators on finding the appropriate balance between this investment and customer affordability," Sousa said.

In addition to its long-term actions, CenterPoint promised to take steps now to prepare for the coming winter and next year's hurricane season. Between Sept. 1 and June 1, 2025, the utility vowed to invest another $2 billion into its Texas electric and gas systems. Among the actions to be prioritized in the near term are burying some electric infrastructure and wider adoption of risk-based vegetation management modeling to identify power lines needing quick attention, CenterPoint said.

The utility also said it would work to add advanced automation technology to its grid. "We will install devices that enable faster power restoration to customers' homes or businesses automatically, reducing the need for human intervention or time spent getting to a specific location or replacing older, standard fuses," it said. "Additionally, we will put in place technology that reroutes power, and actively creates smaller sections of the grid to contain outages to lower numbers of customers."

In response to Abbott's call for action, CenterPoint said that since July it has installed more than 300 automation devices and upgraded more than 1,000 poles with more wind-resistant varieties. The utility said it has also trimmed or removed dangerous vegetation along more than 2,000 miles of power lines.

Generator controversy

CenterPoint has come under particular criticism for its use of funds received from an emergency rider for leasing emergency generators. Texas Lt. Gov. Dan Patrick, a Republican, has blasted the utility for spending $800 million from that rider to lease large generators rather than small, portable units, suggesting in an Aug. 2 letter to the state's public utilities commission that CenterPoint may have sought to maximize its profits at the expense of customers.

In his letter to legislators, Wells promised that CenterPoint would not seek ratepayer recovery for $70 million in storm-hardening expenses incurred after Beryl or for $40 million of prospective equity return for the generators for which the utility would be eligible starting in 2028.

Wells also said CenterPoint would return one of its large temporary generators and use the proceeds from that transaction to obtain more small and medium-sized temporary generators to minimize outages at critical care facilities.

Meanwhile, other Texas utilities are also working to bolster their resiliency efforts to avoid running afoul of state regulators. TXNM Energy Inc. subsidiary Texas-New Mexico Power Co. filed its own resiliency plan with regulators Aug. 28, calling for $600.3 million in capital investment from 2025 to 2027.