Jason P. Wells
President & Chief Executive Officer at CenterPoint Energy
Thank you, Jackie, and good morning, everyone. Before I get into the quarter and the annual results for the first time as CEO, I want to take a moment to thank the board once again for entrusting me to lead this great company into its next chapter. I'm privileged to work with an amazing team and I couldn't be prouder of how we closed out 2023 and how we're off to an already strong start in 2024. On this morning's call, I'm excited to cover four key topics before turning it over to Chris to cover our financial results in more detail.
First, I want to discuss my continued commitment to our strategic objectives as I have now stepped into this new role. Second, I'll briefly summarize the financial results for the fourth quarter and full year 2023. Third, I'll discuss the rationale for the sale of our Louisiana and Mississippi Gas LDCs that we announced this morning and provide an update on our long term capital investment plan. Finally, I'll conclude with an update on where we stand with respect to our regulatory calendar.
I'm fortunate to step into this role at a time when CenterPoint is undoubtedly better positioned than it was when we held our Analyst Day in 2021. In my time here, I've clearly articulated that I believe we have one of the most tangible long-term growth plans in the industry. My focus will be continuing our established track record of consistently executing this plan and thoughtfully enhancing it for the benefit of all of our stakeholders. At our 2021 Analyst Day, we put forth a premium value proposition underpinned by our strategic objectives, which included delivering consistent and sustainable non-GAAP EPS and dividend per share growth to our investors, investing in customer driven capital in our core regulated utility businesses driving industry-leading rate based growth, providing affordable service to our customers through O&M discipline, and maintaining a strong balance sheet while efficiently funding our capital investments.
I want to reiterate my commitment to these strategic objectives and discuss each in more detail. First, looking at delivering consistent and sustainable growth for our stakeholders. Looking over the last three years, we have demonstrated that not only do we have a great plan in which we have targeted 8% non-GAAP EPS growth each year, but we also have the ability to execute above expectations. This execution resulted in us achieving a 9% non-GAAP EPS CAGR over that period, which is top decile in the sector.
In addition to growing non-GAAP EPS, we also grew our dividend in line with earnings leading to one of the highest dividend growth rates in the sector over that same period of time. To expand on a point I made last quarter, I'm excited about the company's great future as we continue to be laser focused on providing outstanding service to our customers and communities and executing consistently to deliver enhanced stakeholder value. We are collectively focused on continuously improving service levels while maintaining customer affordability by utilizing a lean mindset throughout the organization.
Now turning to investing in customer driven capital in our regulated businesses. Supporting our strong financial results is a capital investment plan and resulting rate based growth that is among the highest in the sector. At our 2021 Analyst Day, we outlined a $40 billion plus capital investment plan that translated to an approximately 9% rate based growth through 2030. Today, we're once again announcing a capital increase supported by customer driven capital investments to $44.5 billion, a nearly 11% increase since the 2021 Analyst Day.
This revised capital investment plan now supports a 10% rate based growth CAGR through 2030, which is again one of the highest in the industry. This strong growth will continue to serve as a solid foundation for our long term non-GAAP EPS growth targets. In addition to effectively executing on our capital plan, we also strive to provide affordable service to our customers. We continue to be mindful of the impact of our investments on our customer bills. For this reason, we remain focused on our target of reducing O&M 1% to 2% per year on average through 2030.
Our relentless attention to this area has result resulted in an average annual reduction of 2% over the last three years, the high end of our target range despite reinvesting additional savings back into the business for the benefit of our customers. One of the other targets we put forth in our 2021 Analyst Day dovetails with our O&M reduction targets. As we target our net zero goal for scope 1 and scope 2 emissions by 2035, we are retiring generation from less efficient fuel sources, which translates into customer savings over the long-term.
Finally, turning our focus on maintaining a strong balance sheet and efficiently financing our customer driven investments. At our 2021 Analyst Day, we targeted funding our 10 year capital investment plan through 2030 without reliance on external equity issuances. We evolved that message last quarter with the introduction of a modest ATM program to support growth capital investment opportunities in 2024 and today, we're continuing that efficient financing evolution with our strategic transaction we announced this morning.
The transaction which I'll discuss in more detail will be the fourth we have pursued to recycle capital and reinvest transaction proceeds back into our regulated operations for the benefit of all stakeholders. In addition, as we have incremental financing needs outside of our growth capital investment plans, we are also extending the need for $250 million per year of equity or equity like funding through 2030. Chris will provide further color regarding our ongoing financing of our business.
Moving to my second key topic. I'll briefly cover the fourth quarter and full year 2023 results. This morning we announced non-GAAP EPS of $0.32 for the quarter and full year 2023 non-GAAP EPS of $1.50. Again, these full year results translate to 9% non-GAAP EPS growth from prior year actual results for what is now the third consecutive year. Most importantly, we have rebased our long term growth targets off these higher earning levels each year. Consistent with this practice, we are reaffirming our 2024 non-GAAP EPS guidance range of $1.61 to $1.63, which would equate to an 8% growth rate at the midpoint from our higher base of $1.50. Beyond 2024, we continue to expect to grow non-GAAP EPS at the mid to high end of the 6% to 8% range annually through 2030 and continuing to grow dividends per share in line with earnings growth. Chris will provide additional details regarding our financial results and earnings guidance later.
Now I want to discuss the sale of our Louisiana and Mississippi Gas LDCs we announced this morning. We anticipate closing the sale in late first quarter of next year and it is anticipated to result in after tax cash proceeds of approximately $1 billion, which equates to an earnings multiple of approximately 32 times 2023 earnings. This is a terrific outcome for all stakeholders. Again, following the execution of this transaction, we will mark our fourth time over the last few years in which we have recycled transaction sales proceeds to efficiently fund our industry leading growth plan. Although the transaction is a great outcome, it is always hard to part with a great team as well as great assets. Louisiana and Mississippi are incredible jurisdictions and we have been privileged to serve those communities over the years.
I want to share color around the decision to sell these gas LDCs, which was driven principally by three reasons. First, the sale of our Louisiana and Mississippi Natural gas LDCs will allow us to efficiently recycle the roughly $1 billion in anticipated after tax cash proceeds to support our continued capital investment programs. Devaluation of about 32 times 2023 earnings is approximately 75% more cost effective than issuing our own common stock to support our industry leading rate based growth and to maintain the strength of our balance sheet. The valuation also illustrates that even in a much different cost of capital environment than our last LDC sale, there continues to be a strong market demand for gas LDCs, particularly for those in high growth and constructive jurisdictions.
Second, we anticipate that the sale of these gas LDCs will allow us to reprioritize approximately $1 billion of capital expenditures to support other jurisdictions. The added benefit of this reallocation of $1 billion of capital investment is that we expect that we will be able to deploy much of it in jurisdictions with less regulatory lag, therefore enhancing the ongoing earnings power of the company. Third, as we work to optimize our portfolio, it made sense for us to focus our time and resources in jurisdictions where we have both gas and electric service or where we have a larger presence. This transaction will help support our non-GAAP annual EPS growth target of 8% in 2024 and at the mid to high end of our 6% to 8% non-GAAP EPS growth range through 2030 while also helping maintain the strength of our balance sheet.
Now shifting to how this transaction fits within the broader context of our now $44.5 billion capital investment plan. Today we're announcing that once again we have positively revised our capital investment plan by an increase of $600 million to $44.5 billion through 2030. $100 million of this increase was already deployed in the fourth quarter of this year, which brought the total capital investments in 2023 to $4.3 billion for the benefit of our customers. This represents a nearly 20% increase over the $3.6 billion we originally guided to at the beginning of 2023.
We made the decision to increase the amount of planned work on our systems principally related to critical investments to improve resiliency and reliability in our Houston in electric service territory. We did this knowing we would be able to efficiently fund these investments once the announced sale of our Louisiana and Mississippi gas LDC is closed. The added benefit of this increased capital spend is that it will also help offset the loss of approximately $800 million of rate base that we have invested in those states today.
Today's capital increase will be focused on investments in system resiliency at Houston Electric in response to the resiliency bill that was enacted in 2023 by the Texas legislature as well as targeted investments in our gas businesses. These resiliency investments at Houston Electric will support the prioritizing of operational programs that modernize, harden and enhance the resiliency and reliability of our transmission and distribution system, such as asset hardening, distribution automation devices and substation flood mitigation. We look forward to filing our multiyear resiliency plan likely early in the second quarter of this year and sharing further details on our next earnings call.
Before I move on from this capital investment conversation, I want to make a few comments around our modest pivot and our long-term financing plans moving forward, which Chris will cover in more detail momentarily. In addition to the efficient recycling of strategic transaction proceeds I described earlier, we are also planning to incorporate approximately $250 of annual equity or equity like funding needs, into our long-term financing plans moving forward. This is to allow us to continue to fund our growing capital plans, maintain the strength of our balance sheet and address incremental annual cash needs that Chris will describe shortly.
Lastly, before turning it over to Chris, I want to provide some color on our rate cases and put into context what is a relatively busy regulatory calendar. I think it's important to remember the place where we start from that although greater than 80% of total enterprise rate base is located in jurisdictions where we are anticipated to have rate cases in the next 12 months. We are uniquely positioned and that most of these investments have already been through some regulatory review. As we've stated previously, over 80% of our capital expenditures are recovered through interim trackers and as such are already in rates. This is a key differentiator from rate cases in other jurisdictions.
Now turning to our largest jurisdiction, Houston Electric. On our previous call, we indicated that we had requested an extension to file our Houston Electric rate case from March 9 to the second quarter of this year. However, in the January PUCT open meeting, the commission decided to stay with the original March 9, 2024 deadline as ordered in the last rate case. While we preferred the extended filing date that was supported by all parties in the case, we will be prepared to file the case in early March in anticipated relative flat revenue requirement increase.
At the same January open meeting, the PUCT finalized its rulemaking for House Bill 2555 better known as the resiliency bill. As you may recall from our previous earnings call, the resiliency bill allows Texas TDUs to file a multiyear resiliency plan that would allow for the recovery of certain costs through riders or regulatory assets. For Houston Electric, these investments are expected to include investments in upgrading distribution lines, building new and upgrading older substations and upgrading our transmission system. These upgrades should help support fewer and shorter unplanned outages, faster restoration response time and greater accuracy with respect to our restoration times.
Additionally, the rulemaking in its final form allows for deferral of certain costs, such as depreciation and a return on our cost of capital associated with distribution investments and resiliency between the time the assets are placed in service and when rates are updated for those investments. This final rule is beneficial in reducing regulatory lag on these critical investments. We initially indicated that we would make our filing towards the end of the first quarter. However, as the final rulemaking was slightly delayed, our filing will likely be submitted early in the second quarter.
Now I'll highlight our three recently filed rate cases. In our other electric jurisdiction in Indiana, we filed a rate case in the first week of December with a requested revenue requirement increase of approximately $119 million distributed over the next three years. Much of this requested revenue requirement increase is associated with our investments in connection with a generation transition plan as we move away from coal to a more efficient and cost effective fuel types such as renewables and natural gas.
As a reminder, we plan to fully exit operating coal generation by the end of 2027. These investments are a continuation of our prudent investing in Indiana as we strive to also keep customer bills affordable. In fact, since rates went into effect from our last rate case in 2009, customer charges have increased at a compounded annual growth rate of 0.5%, well below our peers in the state, which ranged between 1.7% and 4.7% over that same period of time. Absent this settlement, we expect a final decision in this case in Q4 of this year.
Moving on to Texas Gas. We filed our Texas Gas rate case towards the end of October with a requested revenue requirement increase of approximately $37 million. As a reminder, we combined all four of our Texas jurisdictions into a single rate case filing. This combined filing should not only result in a reduced number of filings on a go-forward basis, but in the near term, it should also result in declining bills for many of our customers, specifically those located in more rural areas. We have a third settlement conference later this month and we look forward to continuing to work towards a constructive resolution of this case. Absent this settlement, we expect a final decision in the middle of the year.
Finally, turning to our Minnesota Gas business. We filed a rate case on November 1 with requested revenue increases of approximately $85 million and $52 million for 2024 and 2025, respectfully. Interim rates for 2024 were approved in mid December and went into effect on January 1. The commission will consider interim rates for 2025 towards the end of this year if we have not settled the case before then. This is the first time we have filed a multiyear rate case in Minnesota with a goal of providing smoother revenue increases for the benefit of our customers in the future. The majority of the requested revenue requirement increase could be attributed to the fundamental safety programs we operate as well as some of the projects which we filed for under the Natural Gas Innovation Act.
Lastly, I want to mention that we have one other rate case we will be filing in 2024 in our Ohio Gas business. We anticipate filing this rate case midyear and will provide more details as we get closer to the filing. We look forward to working with all of our stakeholders to reach constructive resolutions to all of our rate cases. We believe we are well positioned in all of our cases as we've made prudent investments for our customers and we've made concerted efforts to reduce controllable O&M for the benefit of our customers. I realize that is a lot of information, but given the relevance of the rate cases to all stakeholder groups and our intense focus on successfully executing this activity, I believe it's important to cover it in some depth with you.
Those are all of my updates for now. With a strong foundation of a simple, focused plan to drive value for all stakeholders, 2023 was another great year here at CenterPoint as we continue to build a long track record of consistent execution. I am confident in our path forward as we reaffirm our commitment to our proven strategy into our long-term non-GAAP EPS growth guidance target of 8% in 2024 and at the mid to high end of our 6% to 8% non-GAAP EPS guidance range for 2025 through 2030. I want to thank all of our employees, but especially those on the front lines as they've worked hard to provide service to our customers even as we faced a historically hot summer in our Houston Electric service territory, damaging severe storms in Indiana and extreme cold throughout our service territories this winter. 2024 will no doubt bring its own unique challenges, but I am confident we have the right team in place here to manage through them.
With that, I'll hand it over to Chris for his financial update.
