The leaders of CenterPoint Energy Inc. this summer saw “a fundamental shift” in data center activity in their Greater Houston footprint, CEO Jason Wells told analysts Oct. 28. After beginning the season with about 1 gigawatt of demand from data center operators in their interconnection queue, the parent of Houston Electric today has about 8 gigawatts of requests on its books.
Speaking after CenterPoint reported third-quarter results, Wells said his team recognizes that not all of those 8 gigawatts will be developed but pointed to the boom in demand as an affirmation of Houston’s overall economic strength and growth story.
“Texas remains very attractive in terms of being able to build new transmission lines, new generation,” Wells said. “Our interconnection timelines compare very favorably in a state that can move quickly with large infrastructure investments. I think that’s why we’ve seen it dramatically change this summer.”
To put the 8 gigawatts potential in perspective, Dominion Energy Inc. typically connects 15 data centers with a total load of 1 gigawatt annually via its operations in Northern Virginia, which is considered the heart of the U.S. data center industry. If the average project size is similar for CenterPoint, that translates to roughly 120 projects being on the drawing board for the utility’s Houston teams—which means much more investment in transmission lines and substations.
Wells and his team are planning to invest $3.7 billion in CenterPoint’s networks this year and another $4.9 billion in 2025. Of that combined $8.6 billion, the company’s electric operations will claim about $5.8 billion, a figure that includes resiliency spending pulled forward from future years as the company responds to the damage from Hurricane Beryl this summer.
Along with CenterPoint’s third-quarter results—$193 million in net income on nearly $1.86 billion in total revenues—Wells and CFO Chris Foster told analysts and investors that they’ve been able to shrink their cost estimates from Beryl and a May derecho that hit the Houston area to $1.6 billion from their previous range of $1.6 billion to $1.8 billion.
Foster said CenterPoint officials plans move forward with filings related to the securitization of the costs from the May storms in the next few weeks. The next round of filings associated with Beryl costs recovery should follow in the first half of 2025.
Shares of CenterPoint (Ticker: CNP) rose 1.5% to $29.75 on Oct. 28. They are up slightly over the past six months, which has grown the company’s market capitalization to nearly $20 billion.
