With CenterPoint in the hot seat, Texas policymakers look to harden the state’s power transmission and distribution

From Houston Public Media:

This coming Monday, a Texas Senate select committee will hold its first hearing to investigate the state’s utilities’ performance and failures in the wake of Hurricane Beryl. And the spotlight will be on CenterPoint, which submitted a resiliency plan for its transmission and distribution system to the Public Utility Commission of Texas (PUC) in late April. A major question for some Texas policymakers is how that plan stacks up against efforts by Florida, which seems faster at restoring power after major storms.

Three days after Hurricane Beryl struck Houston, the PUC met in Austin to hear testimony from CenterPoint and other utilities. Commissioner Jimmy Glotfelty pointed to Florida’s biggest power company and how it was able to quickly restore power after the last hurricane.

“This is not inexpensive, and it’s not a short-term fix on the system. But resiliency works,” Glotfelty said. “And this has some significant reductions in time and expense to get systems back up if you harden them the correct way.”

Glotfelty outlined investments Florida Power & Light — Florida’s largest electric power utility — has made, such as replacing wooden poles with stronger ones. And he called for the Florida utility to be part of the Texas discussion.

PUC Chairman Thomas Gleeson seemed open to the idea, though he sounded less than enthusiastic. “I’m sure there are things that work there that maybe wouldn’t work here,” Gleeson said. “We’ll find a Texas solution, obviously. But yeah, we can learn a lot from other places.”

Commissioner Kathleen Jackson added her voice to Glotfelty’s. She noted that not only has Florida Power & Light’s plan improved resiliency in the face of storms, but it has also improved daily reliability by more than 40% since 2006, slashing the average time a customer experiences an outage in any given year by nearly half the time.

“Shoring up the system in anticipation that management of risk for that critical event that you’re trying to pay for, that worst case scenario, also helps shore up your ongoing reliability, which is something we can always use,” Jackson said.

The Floridian experience

Florida Power & Light began improving the resilience of its transmission and distribution system more than 20 years ago, including burying miles of power lines. But what really sped up the process were the hurricane seasons of 2004 and 2005, when eight named storms hit the state.

“The Florida Public Service Commission said, maybe there’s something we can be doing here to improve the resilience of the infrastructure,” according to Ted Kury, Director of Energy Studies at the University of Florida’s Public Utility Research Center.

Kury said the Florida Public Service Commission, the agency that regulates the state’s utilities, began getting much more aggressive, demanding more accountability and investment from its power companies. In the meantime, more than a decade went by without a major storm.

“And a lot of folks started saying, ‘look, I know we’re doing all this preparation and education. But you know, this costs something, it costs my people time. It costs resources. And we haven’t had any storms. Do we really need to keep doing this?’” Kury said. “And the Public Service Commission basically said yes, because we’re not rescinding the order.”

All that work paid off in 2017 when Hurricane Irma, a category 4 storm, hit Florida. After the storm, it took just one day for Florida Power & Light to restore power to half of the 4.4 million customers affected and 10 days to restore power to everyone. That was a dramatic improvement over what it could do before. “I think that’s where the Florida regulator and the Florida utilities have done a really good job,” Kury said.

How CenterPoint and Texas stack up

How does that compare with CenterPoint and the Public Utility Commission of Texas? CenterPoint delivered its resiliency plan to the PUC after being ordered to do so by the Legislature in 2023. Some of it is similar to Florida’s. It includes replacing wooden power poles with steel or cement structures and more active vegetation control to reduce the risk of trees falling on power lines. The plan also includes burying power lines at freeway crossings.

But moving existing power lines underground is expensive, and the solution may not work for much of Houston.

“If you’re more concerned about wind events, falling trees, flying debris, then undergrounding the power lines might be worth the expense,” Kury said. “But then you have to understand, now you’ve made them more vulnerable to flooding and to storm surge. And you just have to be willing to live with that.”

That point was highlighted in Florida since category 4 Irma was a wind event. So, its buried lines haven’t really been tested by a big flood event like Houston’s Hurricane Harvey, which also happened in 2017.

Just how thoroughly Florida’s experience can be applied in Texas is uncertain, because the two states have very different regulatory models. While transmission and distribution remain regional monopolies, the state has decentralized and privatized power generation, so that customers choose the company from whom they buy.

“You have a very different regulatory setup than we do in Florida, where we have these completely vertically integrated utilities, from generation to transmission to distribution,” said Bradley Marshall, a senior attorney with the Florida office of Earthjustice.

For now, CenterPoint’s resilience plan costs $2.1 billion. The question is who will pay for it? Pat Wood III, now CEO of the Hunt Energy Network, is a former chairman of the PUC and a former chairman of the Federal Energy Regulatory Commission.

“What do we want, and how much are we willing to spend for it?” Wood said “So do you want it to be 99.9999% reliable? That’s going to be expensive. Do you want it 99% reliable? That’s going to be cheaper. Do you want it 95% reliable? That’s going to be a whole lot cheaper.”

Ed Hirs, Energy Fellow at the University of Houston, said the big difference between Texas and Florida is that Texas leans toward holding down prices. “Keep in mind that the Public Utility Commission really doesn’t want to approve higher rates, because that reflects back on the governor who appoints them,” Hirs said.

But in the days following Beryl, many customers, consumer advocates and politicians have been pushing back. They say ratepayers are already paying more, but the money they’re paying hasn’t been used effectively.

State Senator Paul Bettencourt (R-Houston) singled out one major example. “After Winter Storm Uri, we put $800 million into large generators which have not been used, or at least by and large not been used,” Bettencourt said.” So, you have to make sure you’re buying the right technology that can be used, and otherwise, it’s just going to sit on the shelf and be paid for by ratepayers.”

Houston Public Media reached out to CenterPoint, but no one from the company was available to comment for this story.

Who’s responsible for what comes next

Lieutenant Governor Dan Patrick says that, ultimately, Beryl is the utilities’ failure. Last week, he appointed a Senate select committee to make sure CenterPoint and other utilities respond more effectively to future storms. Senator Bettencourt is a member of the committee.

“It’s time that we have a reckoning about it and get this whole utility back on track to do what they’re supposed to do,” Bettencourt said, “which is be primarily associated with the delivery of power and maintaining of transmission to distribution in their service area.”

State Senator Carol Alvarado (D-Houston), another member of the committee, said she planned to grill CenterPoint on its proposals to harden its transmission infrastructure and whether the utility failed to plan sufficiently for Beryl’s impact. “Policy-wise, everything is on the table right now,” Alvarado said. “It is clear that the status quo is not sustainable.”

But Ed Hirs said the PUC and lawmakers need to be looking at themselves.

“The regulatory compact that the public has with government is (that) they, the elected officials, represent us against the utilities, because you and I are unable to negotiate with CenterPoint for reliability,” Hirs said. “The government stands as our representative to make sure we get value for our payments. And Texas has failed in that regard.”

Many of CenterPoint’s frustrated customers agree, particularly given the experience of Winter Storm Uri in 2021.

“We also lost power during the freeze,” said Franklin Allaire of Katy, who lost power for the better part of two weeks after Beryl. “It’s, to me, laughable that some of the powers that be are now pointing their finger and wagging their fingers at CenterPoint, which definitely deserves blame. But there’s also another, a political side to it where there wasn’t the political will to address those infrastructure issues.”

While the Senate select committee meets for the first time on Monday, the PUC has opened its own investigation into CenterPoint and other utilities affected by Beryl. It’s expected to issue its final report by December 1.

Former Harris County Judge Ed Emmett, now the Fellow in Energy and Transportation Policy at Rice University’s Baker Institute, expects much of the initial questioning will hinge on CenterPoint’s poor communications with its customers during and after Beryl. But he hopes it doesn’t stop there.

“People are angry. People want answers. Well, but the real answer we need is, who lost power and why?” Emmett said. “And as much as you can determine that, then that allows you to go forward and find some answers.”

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