HOUSTON – The Electric Reliability Council of Texas (ERCOT) has given the approval for CenterPoint Energy to move ahead with a proposal to utilize 15 large emergency generation units to help address the state’s generation shortfall concerns.
These 15 units, currently in the Houston-area, are set to be transferred to the San Antonio-area by summer 2025.
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“Under its 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 arraignment by seeing lower monthly bills related to this transaction by 2027,” CenterPoint says.
The proposal is still subject to finalization between the relevant parties, but once finalized, the 15 units will be moved for up to two years to help the state and ERCOT offset a projected energy shortfall.
“As an outcome of this proposal, CenterPoint would 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),” CenterPoint said. “The cost of these large temporary generation units will be removed from CenterPoint’s Houston Electric rates once they leave the CenterPoint service area in the coming months. The average Houston Electric customer (who uses 1,000 kWh/month) will see a reduction in bills of an estimated $2/month related to this transaction by 2027.”
The 15 units can each power approximately 30,000 homes and were originally acquired to help protect customers from the impact of extreme weather events.
“All of us at CenterPoint work hard every day to find solutions that benefit our many different stakeholders. This proposal is an unprecedented contribution of value to the state at a key inflection point in the Texas energy market. This unique, commonsense, Texas-driven solution will reduce our customers’ electric bills and address the state’s projected power needs for the next few years. We want to especially thank the ERCOT board, and all our state and local elected leaders for their strong support as we continue to work together to finalize this smart and forward-looking solution that provides bill relief to our customers while helping meet the ever-growing energy needs of our vibrant Texas economy,” said Jason Wells, President and Chief Executive Officer of CenterPoint Energy
CenterPoint’s leased 15 large emergency generation units will help provide up to approximately 450MW 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 must be approved by the Public Utility Commission of Texas in Spring 2025.
- Supporting EROCT/Texas Energy Needs: CenterPoint will send the 15 large (27MW - 32MW) 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 could be shortened if transmission projects planned in the South Texas area are completed ahead of 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 large 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.