CenterPoint Energy Q2 Earnings Call Highlights

Key Points

• CenterPoint reaffirmed its 2026 outlook, reporting Q2 GAAP earnings of $0.37 per diluted share and non-GAAP earnings of $0.40. Full-year non-GAAP EPS guidance remains $1.89–$1.91, representing about 8% growth at the midpoint.
• The company advanced more than 14 GW of eligible large-load projects in Texas, with nearly all expected to be energized by 2030. CenterPoint raised its 10-year capital plan by $1.2 billion to $66.7 billion, including $800 million for related system upgrades and $400 million for downtown Houston revitalization.
• Management said the Texas projects could generate more than $5 billion in customer savings over 10 years, while demand-charge cash flow is expected to provide roughly $6 million per GW per month as new load comes online. CenterPoint said the revised capital plan does not require additional equity financing.

CenterPoint Energy NYSE: CNP reported second-quarter 2026 GAAP earnings of $0.37 per diluted share and non-GAAP earnings of $0.40 per share, while reaffirming its full-year non-GAAP earnings guidance of $1.89 to $1.91 per share.

Chair and CEO Jason Wells said the midpoint of the guidance range would represent 8% growth from the company’s 2025 delivered results. CenterPoint also reiterated its expectation for non-GAAP earnings-per-share growth at the mid-to-high end of its 7% to 9% annual target range through 2028, followed by 7% to 9% annual growth through 2035.

Chief Financial Officer Chris Foster said higher rate recovery added $0.10 per share year over year during the quarter, reflecting updated rates and interim filing mechanisms. Operating and maintenance expense was $0.02 favorable, which Foster attributed to efficiencies in the company’s vegetation-management program. Milder weather in Texas and Indiana reduced results by $0.01 per share, while higher interest expense was also a $0.01 unfavorable factor.

Texas large-load projects advance through ERCOT process

CenterPoint said it submitted more than 17 gigawatts of prospective large-load projects through ERCOT’s Batch Zero process. Of those submissions, 14 GW remain eligible for the process, representing more than 65% of Houston Electric’s current 21-GW system peak.

Approximately 10 GW of the eligible projects have both required studies approved and qualify for base-load designation, Wells said. Another 4 GW has one required study approved and may qualify as studied load, subject to ERCOT’s allocation process, which is expected to conclude in April 2027.

The company expects nearly all of the 14 GW of eligible base-load and studied-load projects to be energized by the end of 2030, based on customers’ projected load ramps. Wells said the projects are backed by signed Facilities Extension Agreements, long-term end-user commitments and approximately $900 million of customer cash commitments and security already received.

CenterPoint has begun targeted system-upgrade work for the base-load-eligible projects and expects that work to continue over the next four years. The company said it expects to connect 3 GW in 2027. For later projects, it has begun engineering work and secured long-lead materials, according to Wells.

In addition to transmission-level demand, Wells said Houston Electric is seeing growing distribution-level demand. The company anticipates an additional 2 GW of distribution-level demand over the coming years, driven by advanced manufacturing, population growth and other development in the greater Houston area. During the question-and-answer session, Wells said the 65% growth figure tied to Batch Zero does not include distribution-level customer growth.

Capital plan rises by $1.2 billion

CenterPoint increased its 10-year capital investment plan to $66.7 billion from $65.5 billion. The $1.2 billion increase includes $800 million for targeted system upgrades associated with the 14 GW of Batch Zero-eligible projects and $400 million for the Downtown Houston Revitalization Project.

Wells said Houston Electric’s roughly 10 GW of existing hosting capacity allows the company to connect large-load projects with relatively modest incremental investment. CenterPoint estimates the system upgrades can be completed at less than $60 million per gigawatt.

The company also identified approximately $700 million of potential investment opportunities to serve about 3 GW of additional demand that is not currently eligible as base load or studied load in the Batch Zero process. Those investments are not included in the updated capital plan because they remain subject to future batch processes.

Following final site selections for two substation relocations tied to the Downtown Houston project, CenterPoint refined its investment estimate and added $400 million to the plan. The company now expects Houston Electric’s rate base to grow at a compound annual rate of more than 18% over the next three years.

Foster said the revised plan does not require additional equity financing. He cited existing funding capacity following clarification of Corporate Alternative Minimum Tax rules, as well as the expected October 1 closing of the sale of the Ohio Gas local distribution company after regulatory approval. CenterPoint’s planned equity issuance remains unchanged.

The company said potential future financing tailwinds include cash flow from demand charges, potential proceeds or flexibility from marketing temporary generation units, and anticipated tax refunds. CenterPoint expects about $6 million per GW per month in demand-charge cash flow as the expected 14 GW of new load is energized over the next five years. Foster said those cash-flow benefits have not yet been incorporated into the company’s plan.

Customer affordability and Indiana opportunities

CenterPoint estimates that the addition of 14 GW of eligible large-load projects in Texas could save residential and commercial electric customers more than $5 billion over the next decade. Foster said the estimate reflects large-load customers absorbing system costs that otherwise would be borne by smaller customers. He described the result as roughly $500 million in annual savings over 10 years.

In Indiana, CenterPoint said it continues to advance a large-load opportunity that could be the single largest load served in its Indiana Electric territory. The company has begun engineering work, ordered long-lead materials and secured a place in the MISO interconnection queue for the project, Wells said.

Wells added that system analysis has identified incremental short- and medium-term capacity that can support discussions with multiple potential customers. CenterPoint has previously estimated that the initial Indiana demand could provide about $250 million in residential customer savings over 15 years.

If Indiana demand exceeds approximately 1.5 GW, Wells said the company could consider pursuing a generation-company structure to support additional generation needs. Investments related to Indiana large-load opportunities would be incremental to CenterPoint’s current base capital plan.

Regulatory and balance-sheet update

Foster said CenterPoint recovers approximately 85% of its investments through capital trackers. In Houston Electric, the company filed a distribution capital tracker seeking a $73 million revenue requirement increase, with customer delivery charges expected to be updated in November. It also expects to file a transmission capital tracker next month.

CenterPoint received approval for a Texas Gas capital investment recovery filing seeking approximately $62 million in additional revenue requirement, with rates taking effect in June. The company also plans to file forward-looking rate cases for Minnesota Gas and its North and South Indiana Gas operations by year-end.

CenterPoint invested $1.5 billion during the second quarter and said it had completed about 40% of its planned 2026 capital spending through the first half. The company remains on track to invest $6.8 billion this year.

Its adjusted funds-from-operations-to-debt ratio under Moody’s methodology was 13.4% at the end of the second quarter, nearly 100 basis points higher than in the first quarter. Foster said a portion of an expected Corporate Alternative Minimum Tax refund could add roughly 30 basis points to the metric in the third quarter.

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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