The leaders of CenterPoint Energy Inc. expect that the powerful storms that hit the Houston region in mid-May—and which at one point interrupted electric service to more than 900,000 people—will eventually cost the company between $425 million and $475 million.
In a recent regulatory filing, CenterPoint executives said their estimates could change over time as their teams carry out repairs on transmission assets. That work, they noted, could continue into 2025.
On the evening of May 16, a series of storms battered the Greater Houston area with hurricane-strength winds that included a tornado northwest of the city. In Houston proper, winds of up to 100 miles per hour damaged many buildings and knocked out Entergy infrastructure to the extent that 922,000 customers were without power at one point. Entergy Corp.’s operations in the region also suffered damage; at the peak of the company’s outages, 44,500 of its customers did not have power.
CenterPoint officials initially estimated that repair work would cost more than $100 million but that number has since ballooned to more than $400 million. The company last week signed a $300 million loan agreement with Mizuho Bank, TD Bank and U.S. Bank to help fund reconstruction work. The loan will mature in December 2025 and CenterPoint can expand it to $500 million under certain conditions. The company also expects to work with the Public Utility Commission of Texas and other regulators to pursue separate financing tools—including customer surcharges—to cover its spending.
“The ultimate recovery of costs is expected to be sought through traditional regulatory mechanisms or through securitization bonds, as applicable,” the company said in its filing with the U.S. Securities and Exchange Commission. “Assuming those bonds are issued, the company expects to recover the amount of storm restoration costs approved by the PUCT out of the net proceeds from the bond offering, with the debt service and other financing costs of the bonds being paid over the term of the bonds through a storm restoration charge imposed on the company’s customers.”
Shares of CenterPoint (Ticker: CNP) fell about 3% after it disclosed its latest damage estimate. They ended Friday trading at $31.03, effectively level with where they finished the previous week. Over the past six months, they have climbed nearly 10%, growing the company’s market capitalization to nearly $20 billion.
