CenterPoint Energy Q1 Earnings Call Highlights

Key Points

• Q1 results and guidance: CenterPoint reported Q1 GAAP EPS of $0.48 and non-GAAP EPS of $0.56, and reiterated 2026 non-GAAP EPS guidance of $1.89–$1.91 (midpoint implies ~8% growth vs. 2025) with long‑term non‑GAAP EPS growth targeted at the mid‑to‑high end of 7–9% annually through 2028 and beyond.
• Houston load surge: The Houston Electric pipeline increased to 12.2 GW of firmly committed load (up from prior 7.5 GW), with 3.2 GW ERCOT‑approved and the remaining ~9 GW to be filed soon, creating near‑term earnings tailwinds, customer affordability benefits (~$4B in savings over 10 years) and material incremental demand‑charge revenue.
• CapEx and financing posture: CenterPoint invested $1.2B in Q1 and remains on track for $6.8B of 2026 investment while assessing >$10B of incremental opportunities, has completed ~70% of 2026 financing including a $650M convertible, and expects cash‑tax benefits (CAT refund) that could free roughly $150M/year—equivalent to about $1B of additional CapEx without issuing equity.

CenterPoint Energy NYSE: CNP reported first-quarter 2026 earnings of $0.48 per diluted share on a GAAP basis and $0.56 on a non-GAAP basis, and management reiterated its full-year non-GAAP EPS guidance range of $1.89 to $1.91.

First-quarter results and 2026 guidance

Chair, President and CEO Jason Wells said the company’s “strong first quarter financial results” position CenterPoint well for the remainder of the year, and he reiterated the 2026 non-GAAP EPS guidance of $1.89 to $1.91. Wells said the midpoint implies 8% growth over “actual 2025 delivered results,” and he emphasized the company’s practice of rebasing long-term guidance from each year’s actual results.

EVP and CFO Chris Foster said non-GAAP EPS exclusions in the quarter included “the impacts from the tax gain and other expenses related to the sale of our Ohio LDC,” which he said remains on track to close in the fourth quarter of 2026. He also said the company continues to exclude the impact of removing temporary generation units from base rates because “they are no longer part of our regulated utility business.” Foster added that CenterPoint expects to start marketing those units for “either a sublease or sale later this year” and anticipates getting them back “no later than spring of next year.”

Foster detailed the primary drivers of first-quarter earnings compared with the same period last year:

• Growth and rate recovery: +$0.11, driven by a full-quarter impact of updated rates reflecting interim filing mechanisms that went into effect late last year.
• Weather and usage: -$0.02, attributed to milder weather across Texas and Indiana.
• Interest expense: -$0.04, reflecting new issuances, partly offset by lower commercial paper balances and favorable pricing on convertible debt issued during the quarter.
• O&M: flat, as the company accelerated “peer-leading vegetation management” efforts.
• Louisiana and Mississippi divestitures: -$0.05 due to the absence of earnings from those businesses post-divestiture.

Both Wells and Foster reiterated CenterPoint’s longer-term targets, with management expecting to grow non-GAAP EPS at the mid to high end of its 7% to 9% annual range through 2028 and 7% to 9% annually thereafter through 2035.

Houston Electric load outlook rises to 12.2 GW of “firmly committed” projects

A central theme of the call was accelerating load growth in Greater Houston. Wells said CenterPoint now has “clear line of sight to 12.2 GW of firmly committed load” at Houston Electric, up from the prior outlook that included 7.5 GW of firmly committed load expected to be energized by 2029.

Wells said the company has already secured ERCOT approval for 3.2 GW of the firmly committed load, including 2.5 GW approved since the prior earnings call “within less than 80 days of filing.” He added CenterPoint expects to submit the remaining 9 GW of projects to ERCOT “within the next few weeks.”

Management emphasized the diversity of the pipeline. Wells said the load spans “more than a dozen unique customers across nearly 20 distinct projects,” and he characterized most projects as manageable in size, noting “90% representing half a GW of demand or less.” He also pointed to faster interconnections enabled by customer selection of sites near substations and use of existing capacity.

In the Q&A, Wells clarified that the company previously cited 7.5 GW and now expects about 8 GW “by the end of 2028,” while the broader firmly committed total has risen to 12.2 GW. He also discussed ERCOT’s processes, telling UBS’s Bill Appicelli that 3.2 GW already approved would likely qualify for ERCOT’s baseline concept, and the 9 GW expected to be filed should qualify for “Batch Zero.”

Affordability and demand-charge tailwinds, with transmission planning underway

Wells framed the Houston growth story as a source of both near-term earnings tailwinds and customer affordability benefits. He said CenterPoint expects that utilizing 10 GW of existing system capacity could provide “approximately $4 billion in aggregate savings for Texas residential and commercial customers over the next 10 years.” He also said the company’s electricity delivery charges are “11% below the national average and the lowest in ERCOT.”

On capital impacts, Wells told Wells Fargo’s Shahriar Pourreza that ERCOT’s model differs from most of the country because CenterPoint provides transmission and distribution service, and “incremental system modifications, switch yard, and substations that are needed to connect these customers timely are paid for by the large load customer.” As a result, he said investors should not view the 12.2 GW as “necessarily a direct impact to the CapEx plan.”

However, Wells highlighted two financial tailwinds. First, he said additional industrial load drives incremental demand charges, estimating that “for every 1 GW of industrial load that we add to our system, it’s about $6 million a month of incremental demand charges.” Second, he said the influx of load increases the need to replace capacity over time, which the company expects to address through transmission planning updates later in 2026.

Responding to Truist’s Richard Sunderland, Wells said the company is focusing on existing hosting capacity, citing “existing capacity on our system of roughly 10 GW,” while also noting “about 9 GW of generation that wants to connect” in the Greater Houston region. He said the company’s existing $65.5 billion plan includes intra-regional projects and increased import capacity through 765 kV lines expected to come online in 2031 and 2032, while the ongoing transmission study aims to “fill a gap around 2029, 2030, and 2031” as existing capacity is exhausted ahead of those import projects. Wells said the company expects to highlight a “fairly significant set of new transmission projects” in the second half of the year.

Asked by Scotiabank’s Andrew Weisel about a potential “per incremental gigawatt” cost, Wells said he could not size it given project variability, but he described additional investments as further supportive of customer benefits and reiterated that economic development is a key driver of affordability.

Indiana Electric: “transformational” large-load opportunity and about $1 billion of potential CapEx

Wells said CenterPoint is “increasingly confident” it can secure a major load opportunity in its Southern Indiana territory, describing an active discussion with a large load customer that could become the company’s single largest load in that region, with “substantial upside for additional growth.” He estimated the initial incremental load could enable “$250 million in savings for residential customers over 15 years.”

In response to Wolfe Research’s Steve Fleishman, Wells outlined how the company could serve that potential demand. He referenced a transmission project in the MISO queue and an integrated resource plan scenario that contemplates a large-load customer. Wells said CenterPoint could also add capacity by converting an existing simple-cycle plant to a combined-cycle facility, which he said would “unlock at least 1.5 GW of incremental capacity.” He characterized the incremental capital opportunity as “more around about a $1 billion opportunity as opposed to several billion dollars,” and said it would likely occur within 2027 through 2029.

Regulatory filings, capital plan execution, and financing update

Foster said CenterPoint continues to recover about 85% of its investments through capital trackers and provided updates on several filings:

• Houston Electric DCRF: filed in February requesting an approximately $108 million revenue requirement increase for incremental distribution investments over the last six months; Foster said the company entered a settlement earlier in April and requested rates effective in June.
• Houston Electric TCOS: filed requesting an approximately $36 million revenue requirement increase for transmission investments made between July and December of the prior year; Foster said the filing was approved and new rates went into effect “just last week.”
• Texas Gas GRIP: filed in February requesting an approximately $62 million revenue requirement increase for capital investments made through 2025; pending approval, Foster said these investments are expected to be reflected in rates in June.

Foster also said the company plans to file rate case applications for its Minnesota and Indiana gas businesses later in 2026, which he said represent “less than 20% of the earnings power of our consolidated base.” In Q&A, Foster said the Minnesota filing is focused on replacement capital spending for safety and reliability, while the Indiana filing is tied to affordability, including a potential effort to combine two Indiana gas rate cases into one filing in the fourth quarter, which he said could provide a customer bill benefit in Southwest Indiana due to cost allocation changes.

On capital deployment, Foster said CenterPoint invested $1.2 billion in the first quarter and remains on track for $6.8 billion of planned 2026 investment. He added the company continues to evaluate “over $10 billion of incremental capital investment opportunities” beyond its base 10-year $65.5 billion plan, including potential additions from the transmission planning refresh expected to be completed in the second half of 2026.

On financing and credit, Foster said adjusted funds from operations to debt was 12.5% at quarter-end under Moody’s methodology, reflecting temporary timing pressure from pulling forward debt issuances. He said the company expects that impact to reverse over the year as capital is deployed and financing normalizes. Foster also said CenterPoint has completed “nearly 70%” of its planned 2026 financing needs and highlighted a $650 million convertible debt issuance in February that reduced near-term floating-rate exposure. He added that parent-level commercial paper balance ended the quarter at zero, compared with a normal average of about $1 billion.

In response to JPMorgan’s Jeremy Tonet and Scotiabank’s Weisel on cash taxes, Foster pointed to favorable guidance related to the Corporate Alternative Minimum Tax, saying CenterPoint expects a refund later in 2026 and anticipates no longer being a cash taxpayer at roughly $150 million per year. He added the company believes that benefit could support “the equivalent of adding an incremental, $1 billion of CapEx to the plan with no incremental equity.”

Separately, asked about the market for temporary generation units, Foster said CenterPoint is already in the market on some smaller units and is seeing “very strong market receptivity,” with lease rate indications “almost double the original lease rates” from 2021. For the larger units currently serving the San Antonio area, he said the company expects the return date from when it could start marketing them would be “probably the end of March 2027.”

About CenterPoint Energy NYSE: CNP

CenterPoint Energy, Inc NYSE: CNP is a Houston-based regulated utility company that provides electric and natural gas delivery services and related infrastructure operations. The company's principal activities center on the transmission and distribution of electricity in the greater Houston metropolitan area and the distribution of natural gas to customers across several states in the Midwest and South. As a vertically integrated utility, CenterPoint focuses on the reliable delivery of energy through owned and operated networks of lines, pipelines and associated facilities.

CenterPoint's core businesses include regulated electric transmission and distribution services, regulated natural gas distribution, and the operation and maintenance of energy infrastructure.

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