In the aftermath of Hurricane Beryl, which devastated the Houston area and left millions without power, Texas lawmakers have been vocal in their criticism of CenterPoint Energy, the region’s primary electric utility. The primary focus of their scrutiny has been CenterPoint’s decision in 2021 to lease a fleet of generators at a staggering cost of $800 million—generators that have largely remained unused.
Republican state Senator Phil King, who played a key role in crafting the legislation that allowed utilities to lease such generators, expressed his frustration during a recent hearing at the state capitol. “I feel like I’ve been taken advantage of,” King stated, reflecting the sentiments of many who are now questioning the wisdom of the investment.
Democratic state Senator Carol Alvarado echoed King’s concerns, labeling the decision as “arrogant.” She criticized the substantial investment without a clear, demonstrated need, while Republican state Senator Paul Bettencourt went further, suggesting the deal could warrant an investigation for potential fraud. “If I was an inspector general, I’d be looking at this contract for fraud,” Bettencourt remarked.
Republican state Senator Charles Schwertner also joined the chorus of criticism, implying that the deal might have been driven by ulterior motives. “It doesn’t smell good at all… There’s more to this story that I hope comes out sooner rather than later,” Schwertner said, before questioning, “Whose pockets are getting lined here?”
The criticism from these lawmakers is striking, given that in January 2023, two administrative judges issued a damning 70-page ruling advising state regulators against allowing CenterPoint to pass the generator costs onto consumers. The judges cited an “extremely short” acquisition process and noted that CenterPoint failed to justify the need for such extensive generation capacity.
However, in a twist of irony, both King and Alvarado penned letters to regulators just weeks after the judges’ ruling, urging them to overlook the decision and approve CenterPoint’s investment. Their letters praised the utility for securing a significant generation capacity, despite CenterPoint’s own admission that the generators had never been deployed and would not be sufficient to power critical facilities, such as hospitals, in the wake of a hurricane.
Further complicating the situation, Schwertner and King, who chaired the influential Texas Senate Business and Commerce Committee, were instrumental in pushing through two new laws in 2023. These laws made it easier for CenterPoint to acquire generators and more difficult for regulators to challenge the associated costs.
Houston Mayor Sylvester Turner, then a state senator, sent city staff to Austin to testify before the committee, expressing concerns about the proposals. Turner also reached out to Houston-area lawmakers, including Alvarado and Bettencourt, but his efforts were ultimately unsuccessful, as the legislation passed despite the opposition.
As the controversy surrounding CenterPoint’s $800 million investment continues to unfold, the same lawmakers who once approved and praised the generator deal now find themselves under scrutiny, raising questions about the true motivations behind the decision and the implications for Texas consumers.
Related topics:
