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A plan is in the works to partially relieve Houston-area ratepayers of CenterPoint Energy’s $800 million lease of controversial generators that have sat mostly unused during power outages.
The bulk of the lease includes 15 large generators, each big enough to power roughly 30,000 homes. These generators have been under public scrutiny since July, when a Houston Chronicle investigation revealed CenterPoint has never deployed them to restore outages, including in the aftermath of Hurricane Beryl, because they take days to move and aren’t suited for use after storms damage neighborhood-level power lines and poles.
According to a proposal under evaluation by the Electric Reliability Council of Texas, the state’s power grid operator, the 15 generators could be sent to CPS Energy, San Antonio’s electric utility, to mitigate a power supply crunch in that region.
While the generators are in San Antonio, CenterPoint would receive no revenue or profit from ERCOT for their use. CenterPoint would also not charge Houston-area customers for any costs incurred while the generators are in San Antonio, which would reduce customer bills starting in spring 2025.
ERCOT’s board will vote on the plan at its next meeting in February. If approved, the generators would be moved to San Antonio in the spring and stay with CPS Energy for approximately two years, or until additional power lines are built to relieve the region’s power shortfalls.
Even after CPS Energy is done with the generators around 2027, CenterPoint wouldn’t charge its Houston-area customers for any future use of the generators until its lease is up in 2029, according to a statement from the Houston utility. CenterPoint said it plans to “market the units for other purposes” and mentioned that there is significant demand for such generators as artificial intelligence drives a massive build-out of data centers desperate for electricity.
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If the proposal is approved, CenterPoint’s generators would replace the need for CPS Energy to continue operating two natural gas power plants at its Braunig complex past their planned March retirement. Maintaining operations at these two power plants is expected to cost $56 million, which would be paid by utility customers across the state.
ERCOT has already ordered CPS Energy to keep the largest of the three Braunig power plants open at a cost of $34 million. Additional power supply is needed in the San Antonio region because there isn’t enough power line capacity to move plentiful electricity generated by wind farms in South Texas to power-hungry cities further north, according to ERCOT.
Without the Braunig units, which are located north of the bottleneck, or CenterPoint’s generators, those power lines could become overloaded, which could in a worst-case scenario lead to outages. Overloaded power lines in South Texas were a major trigger of a grid emergency in September 2023, the first to occur since the infamous outages of the February 2021 freeze.
Chad Seely, ERCOT’s general counsel, told the PUC at its Thursday meeting that ERCOT is still assessing how much it would cost to use CenterPoint’s generators to mitigate San Antonio’s power shortfalls instead of the Braunig units. ERCOT plans to issue on Friday a request for companies to submit other solutions to see if a more cost-effective alternative emerges, he said.
“The market (would be) competing against what we believe is a better, more reliable solution that is probably less costly than the Braunig units,” Seely said, referring to the proposal to use CenterPoint’s generators, which would still be paid for by utility customers across the state.
If it means that we in Houston don’t get charged any more for these things, then it’s all fine by me. It would be nice if the state made some investment in more and better transmission lines to take advantage of all that wind energy that could be used instead, but that’s a different issue. If you want to know more about CenterPoint and the many issues and proposals surrounding it, you should listen to my interview with Sandie Haverlah of the Texas Consumer Association, in which she answered a bunch of questions about those things.