The Electric Reliability Council of Texas (ERCOT) Board has approved to proceed finalizing CenterPoint's proposal to utilize 15 emergency generation units to help address the state's generation shortfall concerns.
As part of the proposal, CenterPoint will make no revenue or profit from these 15 units while helping ERCOT and the State of Texas. CenterPoint's 2.8 million Greater Houston-area electric customers will also benefit from the arrangement with lower monthly bills related to this transaction by 2027.
Subject to finalization of mutually agreed upon documentation among the relevant parties, including ERCOT and the service provider/operator of the emergency generation units, CenterPoint will send the 15 units to the San Antonio area by summer 2025, for up to two years, which will help the state and ERCOT offset a projected energy shortfall.
CenterPoint will make its Houston Electric customers whole for the portion of the units that they have been billed for to date through a combination of rate reductions and foregoing other costs (such as some 2024 storm and vegetation management costs).
The cost of these large temporary generation units will be removed from CenterPoint's Houston Electric rates upon leaving the CenterPoint service area in the coming months. The average Houston Electric customer (who uses 1,000 kWh/month) will witness a reduction in bills of an estimated $2/month related to this transaction by 2027.
The 15 units (ranging from 27 MW to 32 MW) can each power approximately 30,000 homes and were originally acquired to help protect customers against the impacts of extreme weather like Winter Storm Uri. CenterPoint's leased 15 emergency generation units will help provide approximately 450 MW of power to be dispatched by ERCOT to serve Texans in the San Antonio region.
Important facts related to the proposal include the following:
- Lowering Bills for CenterPoint Customers: Costs associated with these units will start to come out of rates for Houston Electric customers in the coming months. Going forward, bills will be reduced by an estimated $2/month by 2027 (for the average customer) related to this transaction. This is based on an average customer who uses approximately 1,000 kWh.
Final timing and agreement on the rate reduction will be approved by the Public Utility Commission of Texas in Spring 2025.
- Supporting EROCT/Texas Energy Needs: CenterPoint will send the 15 units to the Greater San Antonio area in the coming months. By Summer 2025, these units will be located at substations around San Antonio. These units will be available to serve ERCOT for up to two years. This approximately two-year timeframe is predicted to be reduced if transmission projects planned in the South Texas area are completed before schedule.
- Helping Texas: The Texas-driven solution will provide critical generation capacity for the San Antonio region, avoiding the risk of possible shortfalls.
- Forgoing Revenue and Profit for Units: CenterPoint will receive no revenue or profit from the 15 units for an up to two-year period based on the proposal with ERCOT.
- Seeking Future Market Opportunities: After the up-to-two-year ERCOT service period, CenterPoint will seek future market opportunities, including sub-leasing these units to third parties. CenterPoint will continue to not charge customers for these units relating to this future period.
