CenterPoint Could Forgo $110m Profit After Massive Texas Outages

CenterPoint Energy has reportedly offered to forgo an estimated $110 million in profit following controversy over its response to Hurricane Beryl in July, which left more than 2.2 million people without power across Texas.

The Houston Chronicle reports the proposal was made in a letter from the company’s CEO Jason Wells to Texas state Senator Charles Schwertner, who heads a special committee investigating how utility companies responded to the storm, and state Representative Todd Hunter who chairs the state affairs committee.

The $110 million in profit is half that derived from a number of large generators which CenterPoint Energy hired for $800 million, but which controversially remained largely unused during the power outages caused by the hurricane in July.

According to local authorities, Hurricane Beryl, which made landfall in Texas on July 8 with wind speeds of up to 80 miles per hour, killed 26 people in the Greater Houston area. Figures from PowerOutage.us showed that among the 2.2 million properties in Texas left without power on July 11, 1.1 million were signed up with CenterPoint Energy.

In his letter to lawmakers, Wells also claimed CenterPoint Energy plans to spend $5 billion between 2026 and 2028 on protecting its infrastructure from future extreme weather, claiming its aim was to “build the most resilient coastal grid in the country.”

In a statement sent to Newsweek regarding the generators, CenterPoint Energy said it had “apologized to lawmakers for not communicating more clearly to them about the cost and the limitations of such large-scale units.”

Consequently, he said: “CenterPoint is undertaking a series of actions to address this issue, including a proposal to forego approximately $110 million in profit, which is equivalent to more than half the equity earnings from the company’s lease of temporary emergency generation.”

In an email sent to The Houston Chronicle Schwertner said he welcomed the CenterPoint Energy proposal, but said it was still insufficient given the challenges. He commented: “I appreciate CenterPoint’s movement in becoming a better partner to their ratepayers and to Texas. However, they have yet to hit that mark.”

Wells appeared before a special Texas Senate committee hearing in July during which he apologized for how CenterPoint Energy had handled Hurricane Beryl, but said the company had implemented 40 changes in response and insisted he wouldn’t step down as “if I resign today, we lose momentum for the things that will have the best impact for the Houston region.”

Speaking at the hearing, Houston Mayor John Whitmire said: “Let me get right to the bottom line, their communication sucks. Enough is enough. It’s time to hold CenterPoint accountable.

“I’m upset. I don’t have any more patience. No more excuses. CenterPoint makes a great return, and they’re just going to have to spend it on preparation, operations, and recovery.”

According to its website “CenterPoint Energy’s primary businesses include: electric transmission and distribution, natural gas distribution and natural gas sales and services.” It has faced widespread criticism over its performance following bad weather.

In a statement sent to Newsweek ahead of Wells’ July committee appearance, the CEO said: “I take accountability for those areas where we fell short of our customers’ expectations, and I want to apologize for the frustration our customers and their families experienced as a result. There are no excuses. We will do better. We will improve. And we will act with a greater sense of urgency.

“Hurricane Beryl impacted so many lives, and I want to express my condolences to the families and friends who lost loved ones … our response to the impacts of Hurricane Beryl, including our communications, did not meet the high standard we expect of ourselves, let alone what the public expects of us.”