CenterPoint Energy proposes solution to help mitigate ERCOT's regional energy shortfall in Central Texas while lowering Greater Houston-area customer bills
CenterPoint Energy (CNP) has proposed a solution to address ERCOT's projected electricity supply shortfall in the San Antonio region starting summer 2025. The company plans to relocate 15 large emergency generation units (27mW-32mW each) to San Antonio, potentially providing up to 450mW of power to help offset an expected 800-megawatt shortfall caused by the retirement of three gas-fired units.
The units would remain in Houston through winter 2024-2025 before being transported to San Antonio in early 2025 for approximately two years of service. CNP will not generate revenue or profit from this arrangement and plans to reduce Greater Houston-area customer bills starting Spring 2025. After the service period, CNP intends to market these units, citing strong demand from AI and data center growth.
CenterPoint Energy (CNP) ha proposto una soluzione per affrontare la previsione di carenza di fornitura elettrica di ERCOT nella regione di San Antonio a partire dall'estate del 2025. L'azienda prevede di trasferire 15 grandi unità di generazione di emergenza (27mW-32mW ciascuna) a San Antonio, potenzialmente fornendo fino a 450mW di energia per aiutare a compensare una prevista carenza di 800 megawatt causata dal ritiro di tre unità a gas.
Le unità rimarranno a Houston fino all'inverno 2024-2025 prima di essere trasportate a San Antonio all'inizio del 2025 per un servizio di circa due anni. CNP non genererà ricavi o profitti da questo accordo e prevede di ridurre le bollette dei clienti dell'area di Greater Houston a partire dalla primavera del 2025. Dopo il periodo di servizio, CNP intende commercializzare queste unità, citando una forte domanda legata alla crescita dell'AI e dei centri dati.
CenterPoint Energy (CNP) ha propuesto una solución para abordar la proyectada escasez de suministro eléctrico de ERCOT en la región de San Antonio a partir del verano de 2025. La empresa planea trasladar 15 grandes unidades de generación de emergencia (27mW-32mW cada una) a San Antonio, proporcionando potencialmente hasta 450mW de energía para ayudar a compensar una esperada escasez de 800 megavatios causada por el retiro de tres unidades de gas.
Las unidades permanecerán en Houston hasta el invierno de 2024-2025 antes de ser transportadas a San Antonio a principios de 2025 durante aproximadamente dos años de servicio. CNP no generará ingresos ni beneficios de este acuerdo y planea reducir las facturas de los clientes del área metropolitana de Houston a partir de la primavera de 2025. Después del período de servicio, CNP tiene la intención de comercializar estas unidades, citando una fuerte demanda por el crecimiento de la IA y de los centros de datos.
CenterPoint Energy (CNP)는 2025년 여름부터 시작되는 샌안토니오 지역의 ERCOT 전력 공급 부족을 해결하기 위한 방안을 제안했습니다. 이 회사는 15개의 대형 비상 발전 유닛(각각 27mW-32mW)을 샌안토니오로 이전할 계획이며, 이는 예상되는 800메가와트의 부족을 보완하기 위해 최대 450mW의 전력을 제공할 수 있습니다.
이 유닛은 2024-2025년 겨울까지 휴스턴에 남아 있다가 2025년 초에 샌안토니오로 운반되어 약 2년간 서비스할 예정입니다. CNP는 이Arrangement으로부터 수익이나 이익을 창출하지 않을 것이며, 2025년 봄부터 휴스턴 광역 고객의 요금을 인하할 계획입니다. 서비스 기간이 종료된 후, CNP는 AI와 데이터 센터 성장에 따른 강력한 수요를 언급하며 이러한 유닛을 마케팅할 예정입니다.
CenterPoint Energy (CNP) a proposé une solution pour répondre au déficit de fourniture électrique prévu par l'ERCOT dans la région de San Antonio à partir de l'été 2025. L'entreprise prévoit de déplacer 15 grandes unités de génération d'urgence (27mW-32mW chacune) vers San Antonio, ce qui pourrait fournir jusqu'à 450mW d'énergie pour compenser un déficit attendu de 800 mégawatts en raison du retrait de trois unités au gaz.
Les unités resteront à Houston jusqu'à l'hiver 2024-2025 avant d'être transportées à San Antonio au début de 2025 pour un service d'environ deux ans. CNP ne générera pas de revenus ni de profits grâce à cet arrangement et prévoit de réduire les factures des clients de la grande région de Houston à partir du printemps 2025. Après la période de service, CNP prévoit de commercialiser ces unités, citant une forte demande liée à la croissance de l'IA et des centres de données.
CenterPoint Energy (CNP) hat eine Lösung vorgeschlagen, um den erwarteten Stromengpass von ERCOT in der Region San Antonio ab Sommer 2025 zu beheben. Das Unternehmen plant, 15 große Notstromerzeugungseinheiten (jeweils 27mW-32mW) nach San Antonio zu verlagern, die potenziell bis zu 450mW Strom liefern könnten, um einen erwarteten Mangel von 800 Megawatt aufgrund der Stilllegung von drei gasbetriebenen Einheiten auszugleichen.
Die Einheiten bleiben bis zum Winter 2024-2025 in Houston, bevor sie Anfang 2025 nach San Antonio transportiert werden, um dort etwa zwei Jahre lang im Einsatz zu sein. CNP wird aus dieser Vereinbarung keinen Umsatz oder Gewinn erzielen und plant, die Kundenrechnungen im Großraum Houston ab Frühjahr 2025 zu senken. Nach der Betriebszeit beabsichtigt CNP, diese Einheiten zu vermarkten, da eine starke Nachfrage durch das Wachstum von KI und Rechenzentren besteht.
- Planned reduction in Houston-area customer bills starting Spring 2025
- No additional costs will be charged to Houston customers for the units' operation in San Antonio
- Strong market demand exists for emergency generation units due to AI and data center growth
- None.
Insights
This proposal represents a strategic move to address Texas' growing energy challenges while benefiting multiple stakeholders. The relocation of 450MW generation capacity to San Antonio tackles 56% of ERCOT's projected 800MW shortfall, demonstrating significant impact on grid stability. The zero-profit structure and customer bill reduction create a unique win-win scenario.
The timing is particularly crucial, coinciding with rising energy demands from AI and data centers. These emergency units, originally deployed post-Uri storm, will maintain winter protection for Houston before their strategic redeployment. The proposal's structure suggests potential capital recovery through future market sales, given the high demand for such units in Texas' rapidly evolving energy landscape.
For investors, this showcases CNP's ability to leverage existing assets creatively while maintaining regulatory relationships and addressing regional infrastructure needs - critical factors for utility valuations.
The proposal's regulatory framework is particularly noteworthy for its innovative approach to asset utilization. By structuring the arrangement without profit margins and including customer bill reductions, CenterPoint has crafted a proposal likely to receive favorable regulatory treatment. The commitment to remove these assets from the rate base during their San Antonio deployment, followed by complete removal thereafter, aligns perfectly with regulatory preferences for ratepayer protection.
The strategic timing of the Spring 2025 rate adjustment creates a smooth transition that should facilitate regulatory approval. This approach could set a precedent for future utility cooperation in addressing regional grid challenges, potentially influencing regulatory frameworks across other ERCOT jurisdictions.
The technical implementation of this proposal reveals sophisticated grid management strategy. Deploying these 27-32MW units across San Antonio's substations provides granular grid support capability, offering ERCOT precise control over regional power distribution. The mobility of these units adds a new dimension to grid resilience planning, creating a flexible response mechanism for future system needs.
The two-year deployment timeline aligns with expected transmission infrastructure upgrades, indicating this is a well-calculated bridge solution. The units' future marketability for AI and data center applications suggests strong residual value, particularly given the growing trend of distributed generation assets supporting high-density computing facilities.
Proposal would send all 15 large emergency generation units to the
Company would make no revenue or profit off the proposal to help ERCOT and the State;
Over the last several months, the company has worked with a variety of stakeholders, regulators, and industry peers to address the specific energy shortfall and potential for load shed risk that could materialize beginning in summer 2025. Earlier this year, ERCOT issued a request for proposal to replace three gas-fired units – Braunig 1, 2 and 3. The retirement of these three gas-fired power plants is expected to create an approximately 800-megawatt shortfall in the ERCOT footprint beginning in the summer 2025. CenterPoint's 15 large emergency generation units (ranging from 27mW to 32mW) could provide up 450mW of power to be dispatched by ERCOT to serve customers.
"As part of our commitment to better serve our customers, listen to feedback, and help address the State's growing energy needs, we've been working diligently to determine the future role of these 15 large-scale emergency generation units that were originally acquired to help protect customers against extreme weather events like Winter Storm Uri. Our top priority has remained finding a positive,
"We are optimistic that as we continue to work closely with our elected leaders, regulators, peer utilities and other stakeholders, we will finalize a solution that best serves the needs of the
As part of this proposal to help the State and ERCOT, CenterPoint would intend to do the following:
- Send all 15 large (27mW -32mW) units, each which could potentially power up to roughly 30,000 homes, to the
Greater San Antonio area prior to summer 2025. - Until then, these 15 large units would remain in place in the
Greater Houston region over the winter to protect against an extreme cold weather event risk during December, January, February, and March. It is expected these units would be transported to theSan Antonio region in first half of 2025. - By the summer of 2025, these 15 units would be physically located at substations around
San Antonio to serve ERCOT for what is likely to be roughly two years, or a shorter period of time if certain transmission projects are completed ahead of schedule. - CenterPoint would receive no revenue or profit from ERCOT for the time period when the units are in
San Antonio being dispatched by ERCOT. - CenterPoint would also not charge
Houston -area customers for costs associated with these units incurred during the time period when they are inSan Antonio being dispatched by ERCOT. - Assuming all necessary transaction approvals are received, this proposal would result in an expected reduction to customer bills for Houston Electric customers that the company would propose to the Public Utility Commission of
Texas in theSpring 2025. - After the units complete their roughly two-year service period in
San Antonio , CenterPoint would continue to not charge customers for these units relating to any future periods, as the company plans to market the units for other purposes. - Currently, there is significant market demand for these types of emergency generation units due to growing energy consumption from the increase of AI use and data centers as well as the development of numerous energy projects across the state.
CenterPoint's role in the
CenterPoint is an electric transmission and distribution company in the
About CenterPoint Energy, Inc.
As the only investor-owned electric and gas utility based in
Forward-looking Statements
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will," "would" or other similar words are intended to identify forward-looking statements. These forward-looking statements, which include statements regarding a potential transaction with ERCOT, future bill impacts, and future potential transactions regarding the large emergency generation units, including effectiveness, timing and related matters, are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. Any statements in this news release regarding future events that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release speaks only as of the date of this release. Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include risks and uncertainties relating to: (1) the impact of pandemics, including the COVID-19 pandemic; (2) financial market conditions; (3) general economic conditions; (4) the timing and impact of future regulatory and legislative decisions; and (5) other factors, risks and uncertainties discussed in CenterPoint Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and CenterPoint's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024 and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.
For more information, contact:
Communications
Media.Relations@CenterPointEnergy.com
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FAQ
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