CenterPoint Energy’s customer base of nearly 2.8 million residents could see a rate hike of as much as 2% in their electricity bills over the next 15 years, if approved by the Texas Public Utility Commission.
What happened
During a July 30 quarterly earnings call with shareholders, CenterPoint Energy senior executives discussed how Hurricane Beryl and derecho restoration costs came with a price tag costing the utility company an estimated $1.6 billion-$1.8 billion.
To recoup costs, Chief Financial Officer Christopher Foster said the company will seek approval to sell bonds to be paid back over a 15-year period, a time frame that aligns with a traditional Texas utility statutory requirement, he said.
Bond approval or denial will come from the PUC, the authoritative body in charge of regulating Texas’ utility companies. Foster said the company anticipates filing for the security in the fourth quarter of this year, which begins in October.
“We currently anticipate that we will securitize both the capital and noncapital portion of the $1.5 billion to $1.7 billion distribution costs to limit the impact to our customers on their bills,” Foster said.
What else
CEO Jason Wells began the meeting with talks on how the company prepared for Beryl nine days before the Category 1 storm made landfall on July 8 as well as what recovery steps were enacted, including:
- Going from securing 3,000 mutual assistance crew members from locations outside of the projected path of the storm to over 15,000 crew members
- Coordinating with utility companies across Texas and the region for extra resources
- Restoring power to over 1 million customers within 48 hours
- Deploying mobile generators across the Greater Houston area to various critical facilities
Wells also told shareholders details about the company’s grid resiliency, including vegetation management and power restoration.
“The key issue, though, at the end of the day, was, candidly, there was little structural damage on the system. It was, well, less than even 0.5% of our poles failed. But what really caused the outages were ... 60% of the trees impacting our lines were outside of our right of way,” Wells said.
Zooming out
CenterPoint Energy executives laid out a three-phase resiliency and communications plan while appearing in front of the state's public utility commissioners in Austin on July 25.
From July until December, investigations, formal hearings and analyses are ongoing into CenterPoint Energy and other Greater Houston-area utility providers’ emergency response and preparedness efforts for the storm. The PUC’s final investigation report will be delivered to Gov. Greg Abbott and the Legislature for review by Dec.1.
“That's why I'm confident that as we execute on the incremental resiliency commitments that we've made to Gov. Abbott and others, it will have a meaningful impact for our communities. The last month has been tough on the city of Houston. We understand the role we play, but that's also why I have confidence looking forward,” Wells said.
