CenterPoint proposes $5bn investment into grid resiliency in Houston
(The eye of Hurricane Beryl, which made landfall in the Houston area in July. Image by Flickr.)
In a letter to lawmakers, CenterPoint has proposed a roughly $5 billion investment toward grid resiliency in the Houston area. This includes removing vegetation around power lines, along with system hardening, advanced automation, predictive modeling, and further actions to improve preparedness and communication ahead of winter and the 2025 hurricane season.
CenterPoint broke down its proposed investments, some of which were part of the first phase of its Greater Houston Resiliency Initiative (GHRI), into three phases:
- Immediate actions (July – August 2024): The first phase of the GHRI included 42 commitments, of which CenterPoint has achieved 39, it said (including all of those with an August deadline). GHRI’s first phase also included “accelerated” resiliency actions such as trimming or removing 2,000 miles of vegetation around powerlines, installing over 300 automation devices, and installing over 1,000 composite poles.
- Near-term actions (September 2024 – June 2025): The second phase of the resiliency actions will focus on further strengthening and enhancing key areas of CenterPoint’s operations in preparation for winter and before the 2025 hurricane season. These actions include system hardening, advanced automation, predictive modeling, and further actions to improve preparedness and communications.
- Longer-term strategy (2026 – 2028): The third phase will include longer-term efforts to invest in smart grid technology, CenterPoint said. However, the utility will detail the entire scope of actions in its resiliency plan that it expects to file with the Public Utility Commission of Texas by January 31, 2025.
CenterPoint Energy has apologised after coming under fire for its $800 million lease of generators weeks after Hurricane Beryl made landfall in the Houston area. It’s one of the multiple criticisms the utility has faced following the storm, which made landfall in early July and took out power for millions. During a post-Beryl Texas Senate special committee meeting, there were many questions about the utility’s $800 million purchase of massive, more expensive generators rather than mobile generators as intended by state law.
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That legislation – SB 1075 and HB 1500 from the 88th Texas Legislative Session – allowed utilities like CenterPoint to lease small mobile generators to quickly get power to hospitals, vulnerable populations, and cooling or warming centers. However, the larger generators purchased by CenterPoint could not be used in nearly all emergencies during the storm.
“…We, as a company, should have communicated more clearly to our elected officials about the cost and limitations of such large-scale units as they worked tirelessly and urgently to evaluate policy solutions for the state and protect Texans from the devastating impacts of extreme winter weather in the months following Winter Storm Uri,” CenterPoint President and CEO Jason Wells said in a letter to state lawmakers August 28. “For that, we not only sincerely apologize to all our elected officials but will also undertake a series of actions to responsibly address this issue.”
In late July, CenterPoint CEO Jason Wells told the Public Utilities Commission of Texas that CenterPoint’s Hurricane Beryl restoration effort could cost customers as much as $1.3 billion, increasing their bills by 2% over the next 15 years. In a letter sent to the governor on July 24, Wells said the utility needed to “amend or refile” its pending resilience plan based on the governor’s concerns.
Soon after, Texas Gov. Greg Abbott met with Wells and Jason Ryan, the utility’s executive vice president of regulatory and government affairs, at the Texas Capitol to discuss CenterPoint’s “inadequate” proposal. The group analyzed “every line” of CenterPoint’s plan during the two-and-a-half-hour meeting, which concluded with a list of changes necessary to ensure improvements are completed faster.
Wells said the utility is proposing to forego nearly $110 million in profit, equivalent to more than half of the profits from CenterPoint’s lease of temporary emergency generation assets.
This would include CenterPoint absorbing approximately $70 million in incremental storm-hardening expenses incurred this year, instead of through recovery from ratepayers.
Beginning in 2028, the utility would also forego the remaining $40 million by not seeking recovery of prospective equity return for load shed-oriented temporary emergency generation units as new dispatchable generation comes online as a result of the Texas Energy Fund (TEF).
CenterPoint would also sell one of the large-scale generators, using the funds to increase its fleet of small and medium-sized temporary generation.
The utility would also donate 10 backup small generators to support critical county facilities across Houston. Finally, CenterPoint would conduct an annual review on risk and temporary emergency generation and share analysis for public review through filings with lawmakers.
A longer-term resiliency strategy would also be filed with the Public Utility Commission of Texas (PUCT) by January 31, 2025.c
Originally published by Kevin Clarke and Sean Wolfe on power-grid.com
