Sen. King accused the Houston-area energy provider of misrepresenting costs and details to obtain approval for generators.
Holly Hansen
Aug 9, 2024
Following weeks of scrutiny, finger-pointing, and demands for transparency and accountability from the energy company under fire for its performance before and after Hurricane Beryl, a state lawmaker is firing back over accusations that he helped CenterPoint Energy gain approval for generators that could not be used to relieve Texans left without power for nearly two weeks in the summer heat.
“CenterPoint deceived me, the Texas Legislature, and the Public,” said Sen. Phil King (R-Weatherford) in a statement Thursday.
Following Winter Storm Uri in 2021, lawmakers moved to allow energy companies to lease or purchase generators that could provide emergency backup power in the aftermath of a storm or other crisis and seek to cover portions of the costs through rate hikes to customers.
While King and other lawmakers, including Lt. Gov. Dan Patrick, say the purpose of the legislative changes was to provide small mobile generators, CenterPoint leased 15 32-megawatt generators at a total cost of $800 million. These take days to assemble and each requires three semi-trucks to move.
CenterPoint sought approval from the Texas Public Utility Commission to pass on expenses to customers, but two state administrative law judges objected to what they termed an “imprudent” expenditure.
In an effort to overcome the objections, CenterPoint sought support from King and Sen. Carol Alvarado (D-Houston), but King now says the energy provider misled him.
“Almost 18 months ago, I took the word of senior CenterPoint executives when they asked me to sign a letter in support of their reportedly $200 million investment in what they represented to be mobile generators,” said King, who added he only recently learned the true cost of the lease was actually $800 million.
“I had seen how successful these mobile deployments were in my area of North Texas and was assured that CenterPoint had similarly deployed their units in its service area. I have since learned this was not the case. I am extremely upset to learn that CenterPoint clearly ignored the legislative intent envisioned when we unanimously passed the bill to improve public safety and minimize power outages in the aftermath of a storm or other emergency. Had I known then that I had been deceived I would never have signed that letter.”
During the recovery from Beryl, King said he called CenterPoint to see how the mobile generation units had been deployed, but was “mystified” when he was told that the fleet was mostly stationary by design and not available for use.
Accusing CenterPoint of “angling for profits,” King said the company had been providing lawmakers with images of mobile generation on wheels instead of what had been leased, “clearly engaging in deceptive and misleading tactics.” He also said they must also provide transparency on the lease contracts, which were called into question last month during a special state Senate committee hearing.
While questioning CenterPoint CEO Jason Wells, Sen. Charles Schwertner (R-Georgetown) noted that the company selected to provide the massive generators, Life Cycle Power, had bid 50 percent more than the next highest provider. While Wells said that the competing proposal was a “non-conforming” bid, Sen. Paul Bettencourt (R-Houston) lambasted Wells for basing the project on assumptions that the generators would operate 96 hours a year, longer than Uri’s 72 hours, and would be moved three times a year.
Bettencourt has suggested the bid award may be fraudulent and has called for an investigation, and this week King agreed that all allegations must be officially investigated.
“We also now know the bidding process was exceptionally questionable, including very serious allegations of an inappropriate relationship with a former CenterPoint executive and an executive of the leasing company,” said King.
King joined Patrick in demanding that all costs associated with the generator lease must be absorbed by CenterPoint and called on the company to find a way to terminate the leases. He also questioned the state’s lack of oversight.
“Additionally, I was disappointed to learn just today that after more than two and a half years since opening its docket on rulemaking for mobile generation, the PUC has still not finalized its rules concerning mobile generation,” said King. “This is a critical part of the PUC’s oversight responsibility.”
Authorities have attributed at least 36 deaths to Beryl, and at least eight Harris County deaths were determined to be heat-related due to the extended loss of power in the Houston area.
Last week CenterPoint executives withdrew a request for a rate increase of $1.25 per month per customer that was pending before the PUC. However several groups representing cities and customers have challenged that withdrawal and urged the state commission to consider decreasing the amount customers must pay the provider.
CenterPoint captured a net income of $917 million in 2023. Wells’ total compensation was $7.1 million for the same year.
Disclosure: Unlike almost every other media outlet, The Texan is not beholden to any special interests, does not apply for any type of state or federal funding, and relies on its readers for financial support.
