CenterPoint Wants Houston Customers to Cover $2 Billion in Storm Costs
(Bloomberg) -- CenterPoint Energy Inc. wants customers to cover nearly $2 billion in costs stemming from a devastating windstorm and hurricane that blacked out millions of people across wide swaths of the Houston metro area.
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The company intends to sell bonds to deal with as much as $1.8 billion in storm costs that would be paid back over a 15-year period, CenterPoint executives told investors on Tuesday. The bonds would raise utility bills by 2%, they said. Recovery of storm costs typically requires regulatory approval.
Almost 1 million residents in and around the fourth-largest US city were plunged into darkness when a May 16 storm slammed the region with 100 mile-an-hour winds, toppling power lines and crippling transmission gear. Eight weeks later, Hurricane Beryl created even more devastation, blacking out more than 2 million homes and businesses, paralyzing transportation and commerce across much of the city, and leaving residents without air conditioning amid heat indexes above 100F (38C).
CenterPoint has been roundly criticized by politicians and its own customers for inept storm preparation, the slow pace of power restoration, and poor communication with the public. Several Texas lawmakers have called for the company to face penalties for poor performance. Recovery costs involve clean-up work like replacing broken poles, wires and transformers, removing fallen trees, and paying thousands of repair crews.
Chief Executive Officer Jason Wells apologized for the frustrations felt by customers during a legislative hearing Monday but rejected calls to resign, saying the utility would lose momentum on planned improvements. The company’s post-storm plan includes increasing tree-trimming efforts, installing tougher poles and wires, and recruiting more executives with emergency preparation skills, he said.
Meanwhile, CenterPoint said second-quarter profit rose 31% from a year earlier to $234 million, on an adjusted basis, exceeding every analyst estimate in a Bloomberg survey.
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