3 Takeaways from Landing’s Review

In the wake of Hurricane Beryl, many have turned their ire toward CenterPoint Energy, eager to learn what the utility’s plan is to prevent future widespread power outages during extreme weather.

CenterPoint officials highlighted their $2.2 billion “resiliency plan,” about $1.5 billion of which will go toward modernizing the electrical infrastructure in which many have lost confidence.

But a review of the company’s plan by Houston Landing and interviews with industry analysts suggest the $1 billion proposal likely won’t be enough to protect Houston from similarly catastrophic outages.

Here are three key points from Landing’s analysis, released Thursday morning.

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1. CenterPoint should probably spend more to reduce outages during extreme weather conditions

CenterPoint is facing increased scrutiny of its infrastructure — including distribution circuits, transmission towers and street poles that carry electricity to customers — that failed during Beryl.

The company’s plan includes funds to replace transmission towers, upgrade or secure distribution poles and bury some power lines, among other improvements.

CenterPoint’s plans aren’t new, though. The company has spent at least $1.1 billion on similar measures since 2019, according to its proposal to the Public Utility Commission, the state’s utility regulator.

And despite similar improvements in the past, Houston’s electrical infrastructure, as revealed by the Beryl and May derecho, remains vulnerable to major storms.

CenterPoint should invest much more money to prevent major outages in the future, industry researchers say. One researcher compared the company’s $1.5 billion plan for electrical infrastructure to “trying to charge a Tesla with a double-A battery.”

2. CenterPoint’s plan makes no promises of effectiveness

CenterPoint’s resiliency plan doesn’t provide specific details about how much the upgrades would reduce or prevent future outages. Company officials have mostly spoken broadly about its impact, saying in an April press release that it would “reduce overall customer downtime” and “decrease the number of impacted customers.”

The only quantifiable forecast comes from consultants who reviewed the project. Their analysis, included in the PUC filing, includes an estimate that the upgrades would save 500 million “minutes of customer downtime.”

However, electrical engineers told The Landing that the calculation lacked enough context to truly assess the plan’s effectiveness.

The plan also does not reveal who would benefit from the equipment improvements or where most of the upgrades would be located — which the researchers said is also necessary to assess the potential impact.

3. Financing a much larger project would be tricky

If the $2.2 billion plan isn’t enough to make a big difference in bolstering Houston’s infrastructure, the question becomes: How could CenterPoint afford to do more?

Without any state or federal subsidies, CenterPoint plans to ask the PUC to approve a $3-a-month rate increase for customers to cover the cost of the $2.2 billion plan. An even bigger spending plan would likely require even bigger increases in electric bills — an approach that would meet resistance given widespread frustration with the company.

CenterPoint could ask state lawmakers for funding, but they are unlikely to be very interested. State Sen. Nathan Johnson, a Dallas Democrat and a member of the Senate Business and Commerce Committee, said lawmakers aren’t funding system upgrades, but they could pass legislation that would incentivize CenterPoint to invest its money in equipment upgrades.

This costly situation means Houston residents will likely be left in the dark the next time extreme weather strikes.

“We’ve had three major storms hit Houston in less than two months,” said Michael Webber, a professor of mechanical engineering at the University of Texas at Austin. “In reality, this is probably a glimpse of the future. This is not an aberration. So what do we do? We have to toughen up.”

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