On Monday, Texas Republicans and Democrats from Houston stood united in the Senate as they questioned CenterPoint CEO Jason Wells. One primary concern was whether CenterPoint had forgone vegetation maintenance in favor of buying generators because the latter creates profit for the company.
In 2021, CenterPoint leased $800 million worth of mobile generators from Life Cycle Power. These were theoretically supposed to be used in case of a massive, region-wide outage, such as the ones following Hurricane Beryl and the recent derecho that left Houston in the dark for days. It turns out that these generators were actually too big to move and sat idle as people sweltered and died without electricity.
However, the deal for these generators, approved by the Public Utility Commission, allows CenterPoint to charge ratepayers to recoup the loss, plus an additional 6.25 percent profit ($50 million). If you’ve noticed a slight increase of $1-$3 in your electric bill, this is why.
The Houston delegation, led by Sen. Paul Bettencourt and buoyed by former senator-turned-Houston-mayor John Whitmire, outright accused CenterPoint of prioritizing the useless generators over vegetation maintenance for monetary gain.
“Vegetation management — the utility doesn’t make profit on,” Bettencourt said. “However, they make a profit on generator expenses. If you don’t make a profit on vegetation management, you may reduce those numbers.”
Many Houstonians were outraged that such a minor hurricane had caused a prolonged set of widespread outages. Downed trees was the overwhelming cause.
CenterPoint has defended itself, pointing out that spending on vegetation maintenance has increased 32 percent from 2022 to 2023. There’s an asterisk, though. The number of miles that CenterPoint is maintaining has steadily dropped. Reports show that the utility is maintaining about 20 percent fewer miles than it did this time two years ago. Contractors who were brought into help after Beryl have called what work that has been done shoddy.
Bettencourt lost no time threatening CenterPoint with legislation over the failures during the recent storms. He has proposed a bill that would help taxpayers recoup the cost of CenterPoint’s generator buy and the profits that they’ll enjoy from passing the cost onto customers.
Meanwhile, CEO Wells remains defiant and says he will not step down. Instead, he promises new plans to avoid future outages. If those plans rely on the generators, it’s unlikely to do much good. They take days to assemble and permits to move, all of which make them virtually useless for the sort of outages that have been common lately.
A more long-term solution would be to mandate that CenterPoint spend a certain amount of their corporate resources on things like vegetation maintence that are not profitable but which are essential to keeping the grid running after a disaster.
“This cannot be the new normal,” said Sen. Carol Alvarado during the hearing.
