Still lots to keep up on, so let’s get to it.
CenterPoint spent $800M on mobile generators. Where are they post-Hurricane Beryl?
Seen at I-10 and Sawyer
Over the last three years, CenterPoint Energy – the company in charge of delivering power to millions of customers in the Houston region – has spent $800 million on 20 massive generators. The hefty price tag was controversial at the time, but state regulators approved it because CenterPoint claimed the generators would keep the lights on during an extended power outage.
Last week, Hurricane Beryl led to massive outages in and around the nation’s fourth-largest city, leaving more than a million people in the dark for days. So, where were those generators?
It turns out that almost none of them were deployed in the wake of Hurricane Beryl, the Chronicle has found – even as some 90,000 people remained in the dark as of Tuesday afternoon.
That’s partly because even though CenterPoint has referred to the equipment as “mobile generation,” the vast majority of it is not actually that mobile. Fifteen of the generators – each with a capacity of 32 megawatts, big enough to power entire neighborhoods – take several days to assemble and cannot be moved without a special permit, which itself can take days to secure.
None of those generators have been put in service since CenterPoint first began renting them in 2021. Indeed, the company told the Chronicle this week that they are “not for rapid response use” and “are not designed to be ‘mobile’,” even though it has repeatedly described them as “mobile” in news releases, regulatory filings and memos to investors.
In Beryl’s wake, CenterPoint has deployed three of its remaining five large generators at a water processing plant and two senior living centers. Each of those is the size of a tractor-trailer and has a capacity of about five megawatts.
“It’s something that we have seen tremendous value from,” said CenterPoint executive Eric Easton in an interview with the Chronicle on Tuesday. He acknowledged that the larger 32-megawatt generators have never been used, but said they serve as a crucial “insurance policy” for even bigger power outages.
Houston-area leaders, consumer advocates and many trade groups disagree. They launched a fierce protest when CenterPoint first asked in 2022 to hike rates to cover the cost of leasing the generators.
But state regulators overruled them, ultimately allowing CenterPoint to recoup the cost of the generators – plus a 6.5% profit. They’ve already added about $1 per month to the average residential customer’s bill, and are expected to hike rates by at least another $3 a month in the coming years, records show.
“The math of these things just doesn’t work,” said Doug Lewin, a Texas energy analyst and publisher of the Texas Energy and Power Newsletter. “There are far better ways to spend money to get resiliency and reliability.”
It’s a long story that I knew little about, so read the rest. One of the more interesting pieces of this was the news that Oncor, a much bigger utility, went a lot smaller in its initial generator investment. This is the sort of thing that the Public Utility Commission and the Lege could reasonably and productively investigate, if they’re actually interested in making things better. Maybe this was a defensible idea that didn’t work out, and maybe it was a total boondoggle that should have been avoided. Either way, there ought to be lessons to learn from it, if we pursue them.
CenterPoint’s $2.3B plan is supposed to protect against extreme weather. Houston is skeptical.
Opposition to CenterPoint Energy’s nearly $2.3 billion “resiliency plan” to shore up its electric transmission and distribution infrastructure against extreme weather and other risks was already brewing among some Houston-area cities and consumer groups before Hurricane Beryl left a record number of the utility’s customers in the dark.
CenterPoint is now facing the ire of politicians and regulators who will investigate if it was underprepared for the Category 1 storm that crippled the company’s power lines and poles in the Houston region. Under pressure to do more to prepare for future storms, questions about whether CenterPoint’s desired investments are prudent have become even more relevant.
The plan, filed with the Public Utility Commission of Texas in April, includes such measures as replacing and upgrading equipment most susceptible to severe weather, elevating substations to avoid flooding damage, wildfire mitigation, moving of certain power lines underground, vegetation management and funding a city of Houston employee who would oversee implementation of power resiliency projects for city facilities.
Katie Coleman, managing partner at the Austin office of O’Melveny, the law firm representing the Texas Industrial Energy Consumers trade group, said her clients are concerned that CenterPoint includes existing projects in the resiliency plan. The trade association filed comments with the PUCT protesting the plan in June.
“It’s stuff that they were going to do anyway and that they should do anyway,” Coleman said.
Under House Bill 2555 passed last year, CenterPoint and other utilities can get approval from the PUCT for a rate increase to recover the costs of resiliency plans before those investments are made and the improvements are in service. In typical rate cases, they can only recover costs already incurred. That structure incentivizes utilities to recategorize existing programs as resiliency measures, Coleman said.
In Beryl’s aftermath, Coleman said she was worried CenterPoint and the PUCT will feel compelled to green-light proposals that could improve storm preparedness and response even a little bit, regardless of cost to consumers.
“What I’m worried is going to happen is, utilities are going to feel pressure to propose all these crazy undergrounding schemes and ridiculous resiliency plans, and then the commission is going to be under pressure to approve it,” Coleman said. “Because if they don’t, next time there’s an event, is it going to be their heads that roll? My concern is that people are going to lose sight of what’s actually effective, not to mention cost-effective.”
See above in re: things the PUC and the Lege could be doing to make things better. Really, the PUC should be feeling some heat here as well, since they approved CenterPoint’s plans. This is what “oversight” is about, y’all. See the Houston Landing story on the same topic for more.
There’s also this: What can state officials do to punish CenterPoint for Beryl failures? Here’s what history tells us.
Hurricane Beryl was not the first storm to test the performance of a Texas utility company after paralyzing much of East Texas’ power grid.
Entergy, the utility company that serves areas north and east of Houston, became so overwhelmed during its response to a rare ice storm in 1997 that municipal employees handled live wires on their own in the company’s absence. It took the company seven days to restore power to 120,000 customers during a week of freezing temperatures.
Not only was Entergy’s emergency response found lacking — much like critics have found CenterPoint’s hurricane response problematic — state regulators discovered that the company had slashed its maintenance spending, enhancing the storm’s natural ability to take down power lines.
“The January 1997 ice storm was certainly a severe storm that would have adversely affected even the best-maintained distribution system,” the state’s Public Utility Commission said in a 1998 order denying Entergy millions in profits it requested. “(Entergy’s) distribution system, however, is not the best-maintained.”
The 26-year-old case shows the rare but not unprecedented mechanism that the state’s regulators can use to hold utility companies accountable for failures when they find them. In the wake of Beryl, it could serve as a model for how the PUC might penalize CenterPoint if it is found to have acted negligently.
CenterPoint’s profits are guaranteed as part of the regulated monopoly it maintains in Houston, where the utility owns the network of electrical poles and wires carrying power into homes and businesses. Yet regulators have demonstrated they have discretion to reduce those profits when a utility fails to provide adequate maintenance and service to its customers.
I agree that could happen. Certainly enough people are mad enough to demand that it happens. Whether it will happen, well, let’s just say I’ll believe it when I see it.
And from the national perspective: Houstonians Are Using EVs to Power Their Houses After Beryl.
After Hurricane Beryl left more than 2 million people without power in Houston last week, Ford CEO Jim Farley noticed something interesting: Hundreds of F-150 owners in the Houston area were suddenly using their trucks to generate electricity.
Ford calls this system Pro Power Onboard, and it’s been marketed mostly as a way to run power tools in the field, in true car-commercial fashion. Let’s say you’re out on some rugged outcropping and you need to jump on your jackhammer for a few minutes. No problem.
But last week, it seemed, Houston-area drivers were suddenly using their cars to pinch-hit for their hapless local electricity provider. It’s a phenomenon that the company first noticed during the 2021 Texas ice storms and saw again last summer, when tornadoes hit Michigan, according to Mike Levine, Ford’s comms director. But the scale of the Houston blackout has coincided with the rise of Ford’s F-150 Lightning. Not only can the company’s massive electric truck put out four times as much power as the older gas-fueled models, but it can do so without noise or pollution for days at a time.
At present, most Houstonians who generate their own current after disasters (the city has seen more than its fair share) do so with diesel generators. But those are loud, dirty, dangerous, and expensive—creating a post-disaster “generator divide” between rich and poor neighborhoods. What if those generators one day yield to a world of electric vehicles, instant power sources at practically every suburban home?
“The use of an EV for disaster response, especially for residences, has been theorized for a long time,” observes Scott Shepard, director of EV research at the Center for Sustainable Energy, a nonprofit research group. After Japan’s earthquake-tsunami disaster in 2011, early electric vehicles played a key role in the recovery. But it has taken a while for EV manufacturers to adopt “bidirectionality,” making it easy to feed car power back to a fridge, a home, or the grid.
At the vanguard here, surprisingly enough, is the familiar yellow school bus. Vermont has purchased a fleet of electric school buses to serve as mobile power sources in the event of a blackout. What’s more, the vehicles can help deliver a little extra juice to the grid in the summer, taking the weight off dirty “peaker plants” called into service on hot days.
“Many people who work in the space have been captivated by that big vision, that electric vehicles will be part of the power grid in the U.S.,” says Jeff Allen, the head of Forth, a Portland-based electric-mobility think tank. Wind and solar power tend to deliver lots of energy on windy and sunny days, but little on still or cloudy days, presenting a challenge for power companies that need to send out essentially the same amount of energy regardless of the weather. “We have a lot of renewables. We need a lot of storage. We’re already paying for it—it’s just they’re on wheels.” Conveniently, these wheeled bundles of energy spend 95 percent of their time parked.
Fascinating, and not something I observed directly; we have a lot of old school generators in my neighborhood. I will just note that both Metro and HISD have both purchased or received funds to purchase electric buses. If any of them were mobilized for the immediate recovery efforts, I’m not aware of it. Maybe this should be a bigger part of our preparation and response for the next time we have a big power outage.
