CenterPoint Energy proposes solution to help mitigate ERCOT’s regional energy shortfall in Central Texas while lowering Greater Houston-area customer bills

Today, CenterPoint Energy (CNP) proposed a solution to help the Electric Reliability Council of Texas (ERCOT) and the State of Texas to help offset the projected electricity supply shortfall starting in summer 2025 around the greater San Antonio region. CenterPoint has put forward a proposal to support ERCOT’s and State’s energy replacement needs while reducing Greater Houston Area customer bills beginning in Spring 2025.

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, Texas-driven solution for these units that helps address the energy needs of Texans while helping reduce our customers’ bills,” said Jason Wells, President & Chief Executive Officer of CenterPoint Energy.

“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 State of Texas, ERCOT and our Houston-area customers.”

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 the San 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 in San 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 the Spring 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 Texas electricity market

CenterPoint is an electric transmission and distribution company in the Texas market. The Company does not own any power plants in the state; does not generate any electricity in the state; and does not purchase electricity on behalf of customers in Texas. It also does not have any electric customers in Texas outside the 12-county Greater Houston area.