It took a matter of hours, maybe even minutes, for Hurricane Beryl to knock out electricity for more than 2.2 million customers in the Houston region.
Residents might have to spend 15 years paying for the restoration costs incurred by CenterPoint Energy, which in many cases took a week or longer to get the lights back on after the July 8 storm.
CenterPoint CEO Jason Wells acknowledged during a special Texas Senate committee hearing Monday that the utility company plans to pass its recovery costs onto its 2.8 million customers in the Houston area. It was revealed Tuesday, during a quarterly earnings call with investors, that CenterPoint also intends to lump its restoration costs with those from the derecho windstorm in May – which caused power outages for more than 920,000 – when it files a rate-increase request with the Public Utility Commission of Texas (PUCT).
The total estimated restoration cost for those two severe weather events is between $1.6-$1.8 billion, according to Chris Foster, CenterPoint's chief financial officer. He said during Tuesday's conference call that, in turn, customers likely would see a bill increase of a "little more than 2 percent" for a period of 15 years.
Consumer advocates said that was unacceptable.
"Customers should not be charged for bad investment decisions and weak infrastructure that resulted in multiple deaths and billions in losses," said Sandra Haverlah, the president of the Texas Consumer Association.
CenterPoint, which reported a financially successful second quarter of the year after taking in more than $6.5 billion in gross profits in 2023, has been the subject of sharp criticism since the Category 1 hurricane passed almost directly over Houston earlier this month. The company, which supplies power for much of the region, has been questioned over its storm preparation, restoration efforts and communications with customers.
Wells rejected calls to resign but apologized and vowed to do better during Monday's hearing before the state Senate, which created a special committee filled largely with Houston-area lawmakers. He said the company would nearly double the size of its vegetation management crews, after tree-damaged power lines were a significant factor in the widespread power outages, and launch a more customer-oriented online outage tracker.
"We will improve," Wells said Monday. "And we will act with a greater sense of urgency."
State Sen. Carol Alvarado, a Houston Democrat, asked Wells whether CenterPoint would ask for a rate increase to recoup its storm recovery costs. After Wells said the company intended to do that, Alvarado posted a video clip of their exchange on social media and wrote, "That dog won't hunt."
https://twitter.com/CarolforTexas/status/1818079269836509472
Foster indicated during Tuesday's conference call that CenterPoint plans to ask the state utility commission for permission to issue interest-bearing securitization bonds to recover its storm-related costs, with that debt eventually being paid by customers through monthly charges on their bills. The company has done that after previous severe weather events such as Winter Storm Uri in 2021, when much of Texas faced prolonged freezing weather and extended power outages.
RELATED: Houston-area Hurricane Beryl death toll spikes to 36, at least one other death pending
CenterPoint likely will make a new securitization bond request late this year, according to Foster, who said the company would expect to sell the bonds by the end of 2025.
CenterPoint has two, unrelated rate-increase requests pending before the PUCT, one to recover infrastructure costs it has incurred and another to fund future resiliency expenses. The Texas Consumer Association is an intervenor in both rate cases and wants them to be paused as CenterPoint continues to analyze its storm-related damages and costs and state leaders continue to examine the company and its operations.
"More information is needed before we move forward and give them more money," Haverlah said.
Texas also needs a better system for allowing utility companies to recoup their infrastructure and storm recovery costs, that do not correlate to increased costs for customers, according to Haverlah.
Energy costs already are a burden for many Houston-area residents. A survey released in April by the nonprofit Texas Energy Poverty Research Institute found that 47% of people in the Gulf Coast region with low to moderate incomes consider their electricity bills to be unaffordable, a percentage that is significantly higher than the statewide average.
Two damaging storms within a two-month span this year could increase electricity costs for the better part of two decades. And what are typically the two most active months for hurricanes, August and September, are upcoming.
"Fifteen years is a long time to drag out the recovery," Haverlah said. "How many more hurricanes in the next 15 years will you have as well? You could have a dozen more hurricanes come along. And this process continues where customers have to keep paying, time and time again. There's no telling how many charges can be on the bill that are just storm recovery.
"I think somebody at the PUCT ought to start looking into this in terms of how we do rate recovery for storms," she added. "I don't understand why customers are responsible for paying this back – 100% of it back."
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