Population growth, cost control boost utility
CenterPoint Energy, the utility that distributes power and natural gas to the Houston area, more than doubled its earnings last year, reflecting population growth, favorable weather and better cost management.
The company reported a profit of $791 million in 2019 compared with $368 million the company earned in 2018. Revenues were $12.3 billion last year, a 16 percent increase from 2018.
CenterPoint’s earnings per share grew 80 percent in 2019, a financial performance that puts the company at No. 8 on the Houston Chronicle’s list of top-performing public companies. CenterPoint has 9,600 employees, including 4,800 in Houston.
“We will continue to meet the energy delivery needs of our customers and communities safely and reliably especially now during these unprecedented times.” said David J. Lesar, CenterPoint chief executive.
Lesar has run CenterPoint since July 1, when he replaced John W. Somerhalder II, CenterPoint’s interim chief executive. Somerhalder stepped into the job in February following the sudden departure of CEO Scott M. Prochazka. Somerhalder sold CenterPoint assets to pay down debt while the company searched for a permanent chief executive.
CenterPoint asked Texas regulators for a $161 million rate hike last year to cover the cost of new transmission lines to accommodate Houston’s growing population, improve the reliability and resiliency of the electric grid and complete repairs to damage caused by Hurricane Harvey.
But the utility ultimately settled early this year for a $13 million rate increase, less than onetenth the amount it sought after the grocery chain H-E-B complained about on-going problems with power outages. CenterPoint agreed to reduce its allowed rate of return, a proxy for profit, to 9.4 percent from 10 percent, which was set a decade ago.
Like other utilities, CenterPoint has tried to expand the unregulated parts of its business to improve its bottom line. CenterPoint, which was already selling gas line repair protection plans, last year expanded its home warranty business to include a wider range of residential calamities, including repairs on residential water heaters, cooling systems and sewer lines.