CenterPoint Energy (CNP) has officially proposed a solution, which is designed to help the Electric Reliability Council of Texas (ERCOT) and the State of Texas offset the projected electricity supply shortfall starting in summer 2025 around the greater San Antonio region.
According to certain reports, this the company will do while simultaneously reducing Greater Houston Area customer bills beginning in Spring 2025. More on that would reveal how, over the last few months, CNP has actively collaborated with a wide assortment of stakeholders, regulators, and industry peers to address the specific energy shortfall and potential for load shed risk that could materialize beginning in summer 2025.
Another detail worth a mention here is rooted in how, earlier this year; ERCOT issued a request for proposal to replace three gas-fired units – Braunig 1, 2 and 3. The retirement of these three gas-fired power plants is, in turn, expected to create an approximately 800-megawatt shortfall in the ERCOT footprint beginning from the summer 2025. Fortunately enough, CenterPoint’s 15 large emergency generation units (ranging from 27mW to 32mW) could provide upto 450mW of power to be dispatched for ERCOT to help the latter serve its clientele.
“We are optimistic that as we continue to work closely with our elected leaders, regulators, peer utilities and other stakeholders, we will finalize a solution that best serves the needs of the State of Texas, ERCOT and our Houston-area customers.”
Under the proposed terms, CenterPoint will aid ERCOT’s case by sending all 15 large (27mW -32mW) units, each one capable of power up to roughly 30,000 homes, to the Greater San Antonio area prior to summer 2025. Until that happens, though, these 15 large units would remain in the Greater Houston region over the winter to protect against an extreme cold weather event risk during December, January, February, and March. Markedly enough, it is expected that these units would be transported to the San Antonio region in first half of 2025.
On top of that, by the summer of 2025, these 15 units would be physically located at substations around San Antonio to serve ERCOT for what is likely to be around a two years timeframe, or a shorter period of time if certain transmission projects are completed ahead of schedule. It must be acknowledged that CenterPoint would receive no revenue or profit from ERCOT for the time period when the units are in San Antonio being dispatched by ERCOT.
Furthermore, CNP will also not charge Houston-area customers for costs associated with these units during the time period when they are in San Antonio. Hold on, we still have a few bits left to unpack, considering we haven’t touched upon the fact that, assuming all necessary transaction approvals are received, this proposal would result in an expected reduction to bills for Houston Electric customers, something which the company would propose to the Public Utility Commission of Texas in the Spring 2025.
Another detail worth a mention here is rooted in a piece of detail which claims that, after the units complete their roughly two-year service period in San Antonio, CenterPoint would continue to not charge customers for these units relating to any future periods, given the company plans to market the units for other purposes.
Contextualizing the importance of this development would be significant market demand for these types of emergency generation units due to growing energy consumption from the increase of AI use and data centers, as well as the inception of numerous energy projects across the state.
“As part of our commitment to better serve our customers, listen to feedback, and help address the State’s growing energy needs, we’ve been working diligently to determine the future role of these 15 large-scale emergency generation units that were originally acquired to help protect customers against extreme weather events like Winter Storm Uri. Our top priority has remained finding a positive, Texas-driven solution for these units that helps address the energy needs of Texans while helping reduce our customers’ bills,” said Jason Wells, President & Chief Executive Officer of CenterPoint Energy.
