CenterPoint Energy proposes solution to help mitigate ERCOT's regional energy shortfall in Central Texas while lowering Greater Houston-area customer bills
Rhea-AI Summary
CenterPoint Energy (CNP) has proposed a solution to address ERCOT's projected electricity supply shortfall in the San Antonio region starting summer 2025. The company plans to relocate 15 large emergency generation units (27mW-32mW each) to San Antonio, potentially providing up to 450mW of power to help offset an expected 800-megawatt shortfall caused by the retirement of three gas-fired units.
The units would remain in Houston through winter 2024-2025 before being transported to San Antonio in early 2025 for approximately two years of service. CNP will not generate revenue or profit from this arrangement and plans to reduce Greater Houston-area customer bills starting Spring 2025. After the service period, CNP intends to market these units, citing strong demand from AI and data center growth.
Positive
- Planned reduction in Houston-area customer bills starting Spring 2025
- No additional costs will be charged to Houston customers for the units' operation in San Antonio
- Strong market demand exists for emergency generation units due to AI and data center growth
Negative
- None.
News Market Reaction
On the day this news was published, CNP gained 2.46%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Proposal would send all 15 large emergency generation units to the
Company would make no revenue or profit off the proposal to help ERCOT and the State;
Over the last several months, the company has worked with a variety of stakeholders, regulators, and industry peers to address the specific energy shortfall and potential for load shed risk that could materialize beginning in summer 2025. Earlier this year, ERCOT issued a request for proposal to replace three gas-fired units – Braunig 1, 2 and 3. The retirement of these three gas-fired power plants is expected to create an approximately 800-megawatt shortfall in the ERCOT footprint beginning in the summer 2025. CenterPoint's 15 large emergency generation units (ranging from 27mW to 32mW) could provide up 450mW of power to be dispatched by ERCOT to serve customers.
"As part of our commitment to better serve our customers, listen to feedback, and help address the State's growing energy needs, we've been working diligently to determine the future role of these 15 large-scale emergency generation units that were originally acquired to help protect customers against extreme weather events like Winter Storm Uri. Our top priority has remained finding a positive,
"We are optimistic that as we continue to work closely with our elected leaders, regulators, peer utilities and other stakeholders, we will finalize a solution that best serves the needs of the
As part of this proposal to help the State and ERCOT, CenterPoint would intend to do the following:
- Send all 15 large (27mW -32mW) units, each which could potentially power up to roughly 30,000 homes, to the
Greater San Antonio area prior to summer 2025. - Until then, these 15 large units would remain in place in the
Greater Houston region over the winter to protect against an extreme cold weather event risk during December, January, February, and March. It is expected these units would be transported to theSan Antonio region in first half of 2025. - By the summer of 2025, these 15 units would be physically located at substations around
San Antonio to serve ERCOT for what is likely to be roughly two years, or a shorter period of time if certain transmission projects are completed ahead of schedule. - CenterPoint would receive no revenue or profit from ERCOT for the time period when the units are in
San Antonio being dispatched by ERCOT. - CenterPoint would also not charge
Houston -area customers for costs associated with these units incurred during the time period when they are inSan Antonio being dispatched by ERCOT. - Assuming all necessary transaction approvals are received, this proposal would result in an expected reduction to customer bills for Houston Electric customers that the company would propose to the Public Utility Commission of
Texas in theSpring 2025. - After the units complete their roughly two-year service period in
San Antonio , CenterPoint would continue to not charge customers for these units relating to any future periods, as the company plans to market the units for other purposes. - Currently, there is significant market demand for these types of emergency generation units due to growing energy consumption from the increase of AI use and data centers as well as the development of numerous energy projects across the state.
CenterPoint's role in the
CenterPoint is an electric transmission and distribution company in the
About CenterPoint Energy, Inc.
As the only investor-owned electric and gas utility based in
Forward-looking Statements
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will," "would" or other similar words are intended to identify forward-looking statements. These forward-looking statements, which include statements regarding a potential transaction with ERCOT, future bill impacts, and future potential transactions regarding the large emergency generation units, including effectiveness, timing and related matters, are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. Any statements in this news release regarding future events that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release speaks only as of the date of this release. Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include risks and uncertainties relating to: (1) the impact of pandemics, including the COVID-19 pandemic; (2) financial market conditions; (3) general economic conditions; (4) the timing and impact of future regulatory and legislative decisions; and (5) other factors, risks and uncertainties discussed in CenterPoint Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and CenterPoint's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024 and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.
For more information, contact:
Communications
Media.Relations@CenterPointEnergy.com
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SOURCE CenterPoint Energy
FAQ
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