CenterPoint Energy submitted more than 17 GW of large load projects to the Electric Reliability Council of Texas’ new large-load interconnection process and expects 14 GW to be eligible as base load or studied load, officials said Tuesday in the company’s second quarter earnings call.
Texas regulators approved the new rules in June. The first set of projects to navigate the new process is called “Batch Zero.”
The 14 GW would represent a more than 65% increase from the company’s current Houston-area peak system demand of 21 GW, company officials said. The utility is anticipating 50% load growth by the end of 2029.
“Based on projected load ramps sought by customers, we expect nearly all of these projects to be energized by the end of 2030,” CenterPoint CEO Jason Wells told analysts. “We are confident the combined 14 GW of base load and study load are well positioned to move forward in the Batch Zero process, given the level of customer commitments already secured.”
Of the 14 GW, approximately 10 GW of projects have all required ERCOT studies approved and are eligible for base load designation, Wells said. The remaining 4 GW “are positioned to qualify as studied load because they have one of the two required studies already approved.”
The 14 GW are supported by signed facility extension agreements with long-term end-user commitments, approximately $900 million of customer cash commitments and deposits, and “clear line of sight to the materials execution capability and system capacity to serve,” Wells said. The remaining 3 GW of Batch Zero submissions “represent additional customer demand that is pending ERCOT approval of the required studies.”
CenterPoint increased its 10-year capital investment plan by $1.2 billion, to $66.7 billion, through 2035. The increase reflects incremental investment to support accelerating demand from large-load customers in Houston and higher costs around the utility’s Downtown Houston Revitalization project.
CenterPoint expects the growth to help keep utility bills affordable. The 14 GW of higher demand from large loads will result in residential and commercial savings over $5 billion over the next decade, Wells said.
Besides the transmission-level demand CenterPoint is seeing from large-load customers, the utility anticipates an additional 2 GW of increased distribution-level demand over the next several years, “driven by reshoring of advanced manufacturing and continued population growth in the Greater Houston area,” Wells noted.
While Texas is CenterPoint’s largest service territory, where it serves almost 2.8 million metered customers and dozens of retail providers, the company also sees the potential for “transformational” large-load opportunities in its Indiana electric territory. CenterPoint serves more than 150,000 customers in Southwestern Indiana and has begun work to serve a new customer that would represent the “single largest load we serve in the region,” Wells said.
“As a result of commitment from the customer, we have already begun work to serve this load. Outside of the project identified, we are engaged with multiple counterparties for additional large load projects in that area,” he said. “The related investments required to serve these large loads would be incremental and outside of our current base plan.”
CenterPoint Energy has been planning for the retirement of the coal-fired F.B. Culley Unit 2 in Indiana, but the U.S. Department of Energy issued emergency orders in December, March and June directing the utility to continue operating the unit through Sept. 19.
The utility filed a complaint with the Federal Energy Regulatory Commission “to request creation of a cost recovery/cost allocation mechanism,” CenterPoint said in a quarterly report filed with the U.S. Securities and Exchange Commission. In March, FERC directed the Midcontinent Independent System Operator to adopt a tariff amendment that would authorize the F.B. Culley unit to recover costs.
“A separate filing will be made at a later date with the FERC to seek recovery of all costs incurred to comply with the U.S. Department of Energy’s emergency 202(c) orders,” CenterPoint said. The utility said it has also filed an application with regulators in Indiana “to recover any compliance costs associated with the emergency 202(c) orders that are not recovered through the FERC proceedings.”
