The paragraph is an introduction to CenterPoint Energy, Inc.'s First Quarter 2025 Earnings Conference Call. The call features senior management, including CEO Jason Wells and CFO Chris Foster, who will discuss the company's first-quarter results. The operator, Jackie Richert, emphasizes that management will provide forward-looking statements, which are subject to risks and uncertainties. These statements are based on current management beliefs and available information. The company reported earnings of $0.45 per share on a GAAP basis for the first quarter of 2025. Non-GAAP measures, such as diluted adjusted earnings per share, will also be discussed, with more information available on their website. The call is recorded, and details on accessing the replay are provided.

The speaker outlines four main topics to be discussed on the call: first quarter financial results, hurricane preparedness and grid resilience improvements, regulatory progress and recent filings at Houston Electric, and significant load growth in the Houston Electric service area resulting in a $1 billion increase in the capital investment plan through 2030. They report a non-GAAP EPS of $0.53 for the first quarter, noting that revenue from capital recovery mechanisms will be more prominent in the second half of the year due to last year's rate case activity. The 2025 EPS guidance range is reaffirmed, and expectations for long-term growth in both EPS and dividends are highlighted. Regarding hurricane preparedness, the Greater Houston Resiliency Initiative aims to accelerate resiliency investments to minimize outages and restore service quickly during extreme weather events.

The paragraph highlights the significant progress made by CenterPoint Energy, Inc. in strengthening its grid resiliency and regulatory achievements. By June 1, the company aims to double its grid automation devices, replace 26,000 poles designed to withstand extreme winds, and manage high-risk vegetation. This effort equates to completing an additional 1.5 years of work alongside the base work plan over nine months. These improvements target enhancing customer outcomes ahead of the 2025 hurricane season with the goal of becoming the most resilient coastal grid in the U.S. On the regulatory front, substantial progress has been made, with most service territories not subject to rate case proceedings for up to four years, reducing risk and providing a stable foundation for the company's financial plan. The paragraph concludes with a mention of upcoming regulatory filings, particularly in the Houston Electric service territory.

The paragraph discusses three key updates from a recent filing. First, the removal of the unamortized rate base for temporary generation units will lead to a slight reduction in residential electric delivery charges, supported by stakeholders. Second, an update on the system resiliency plan, revised after stakeholder feedback following Hurricane Barrow, is set to be mediated soon, with a final order expected by mid-September if no settlement is reached. Lastly, a cost determination filing will be made within two weeks to recover $1.1 billion in restoration costs from Hurricane Barrel and an additional $100 million from two subsequent storms, primarily for frontline personnel and mutual aid workers.

The paragraph highlights the effectiveness of the securitization mechanism in Texas for storm cost recovery, benefiting both customers and utilities by reducing the impact on customer bills and ensuring utilities can maintain capital investments. It also mentions the anticipation of a 10-gigawatt increase in peak load on the Keystone electric system by 2031, despite a significant rise in load interconnection requests since the forecast was submitted. This anticipated growth, driven by diverse factors like industrial demand and electrification projects, strengthens confidence in the forecast without altering the overall expected increase in peak demand.

The paragraph discusses the significant growth potential in the electric transmission system requiring at least an additional $3 billion in capital investment by the end of the decade. An initial increase of $1 billion in investment is planned, raising the total investment plan to $48.5 billion through 2030. This involves submitting nearly a dozen transmission projects to the ERCOT regional planning group. The company will update its investment guidance over the next two quarters as it continues to refine its plans based on stakeholder discussions. Additionally, there are opportunities for capital investment in the Houston Electric service territory, focusing on downtown revitalization and grid modernization, and in other jurisdictions to enhance grid resiliency.

The paragraph highlights the company's plans and investment opportunities, particularly in the Texas gas business, where they aim to build a high-pressure distribution network in Houston, similar to one in Minnesota. Investments will start next year and continue into the next decade, with a comprehensive ten-year plan to be shared in the third quarter. The company anticipates long-term growth through a combination of their Houston Electric service territory growth, capital investment opportunities, and other businesses. This growth strategy aims to benefit customers and stakeholders across their four-state footprint. Chris Foster then takes over to cover four focus areas: first-quarter results, regulatory progress, execution of the 2025 capital investment plan, and a revised plan through 2030.

The paragraph provides an update on the company's financial results for the first quarter of 2025, reporting a GAAP EPS of $0.45 and a non-GAAP EPS of $0.53, down from $0.55 in the first quarter of 2024. The non-GAAP EPS excludes a book loss from the sale of Louisiana and Mississippi Gas LDCs, which included the disposal of $217 million in goodwill. The lower earnings compared to previous first quarters are attributed to delayed rate recovery, as the company was unable to file for capital investment recoveries promptly during 2024. This delay resulted in a catch-up of approximately $2.2 billion in capital investments and $260 million in revenue requirements, which will reflect in future rates and earnings. Consequently, a lower earnings profile is expected in the first half of 2025 due to these timing differences, with expectations for earnings detailed on slide seven.

The article discusses the company's financial performance, highlighting a back-weighted earnings profile anticipated for the year due to factors such as seasonably normal weather in Texas and Indiana, which improved earnings by $0.05 compared to the first quarter of 2024. However, operational and maintenance expenses were $0.02 higher due to accelerated vegetation management work for the 2025 hurricane season. Additionally, interest and financing costs increased by $0.04 because of $3.4 billion in new debt issuances, including higher-coupon junior subordinated notes. The issuance of $500 million in common equity, with half pulled forward from 2025, negatively impacted earnings by $0.02. The company also made regulatory progress, including filing an interim capital recovery tracker (DCRF) with a proposed $123 million revenue increase for Houston Electric.

The paragraph outlines various financial filings and investment plans made by a company. It details the incorporation of capital investments from the previous year and updates on revenue recovery for Houston Electric and Texas Gas. A transmission recovery tracker filing (TCOS) was approved, resulting in a $64 million revenue requirement increase, while a gas recovery mechanism (GRIP) was filed for $71 million. The company is on track with its 2025 capital investment target, having invested $1.3 billion in the first quarter, and has increased its 2030 capital investment plan by $1 billion to $48.5 billion, intending to finance these through a mix of equity and debt.

The company is not updating its equity plans for the year due to having already met its 2025 equity needs last year. It is increasing capital investment to support growth in the Greater Houston area, with further updates on capital expenditure and financing expected over the next two quarters. A comprehensive update and new ten-year plan will be provided later in Q3. The company's trailing twelve months adjusted FFO to debt ratio is at 13.9% according to Moody's, and progress has been made towards its target cushion range following the sale of Louisiana and Mississippi LDCs. Additional securitization proceeds are anticipated from storm costs related to the May 2024 derecho and Hurricane Beryl, with bond proceeds expected by year-end. The company has also executed equity forward sales to reduce risk for 2026's financing plan.

In the provided paragraph, the company discusses its financial plans and expectations for the coming years. For 2025, there are no anticipated needs for additional common equity to fund current plans, but they will be opportunistic about addressing 2026 equity needs. The company reaffirms its 2025 EPS guidance, aiming for growth, and expects to continue growing EPS annually through 2030. Jason Wells and Jackie Richert transition the call to a Q&A session, where Konstantin Lednev from Guggenheim Partners asks about updates related to capital expenditures and future financial planning, specifically regarding updates in the 2030 plan and potential for a comprehensive update by March. Jason Wells acknowledges the question but does not provide a detailed answer.

The paragraph is a conversation between Jason and Konstantin, where Jason highlights two main points regarding their business's capital expenditure (CapEx). First, he mentions significant CapEx opportunities, particularly in Houston Electric and Texas Gas. Second, he discusses the company's approach of regularly updating CapEx guidance based on new data. They have recently updated their guidance by a billion dollars due to new projects with ERCOT and plan for more updates in the future, including a comprehensive third-quarter review moving toward a ten-year plan. The company initially set a $40 billion ten-year plan, which has increased to $48.5 billion, indicating strong CapEx growth. Konstantin asks about potential regulatory issues limiting return on equity (ROE) due to increased CapEx. Jason assures there are no challenges in achieving their guidance despite regulatory lags, citing their track record and previous success in doubling CapEx at Houston Electric.

The paragraph discusses the company's approach to managing capital expenditures (CapEx) and regulatory lag. They have doubled their CapEx several times and increased their earned returns, without perceiving regulatory lag as a challenge to achieving their financial guidance. Despite having some regulatory lag due to a historical test year, the company is committed to finding regulatory and legislative solutions to reduce it, benefiting both customers and investors. Nicholas Campanella from Barclays asks about the company's strategy for financing new opportunities and whether equity or asset sales are preferred routes. Chris Foster responds, indicating there is no need for additional equity in 2025 despite CapEx momentum and emphasizes the company's proactive approach in the current trading environment.

The paragraph discusses the company's approach to financing its operations and growth, particularly in electric transmission and gas LDCs, with a 50% debt and 50% equity strategy. The company is open to efficient financing methods given the current macroeconomic environment. It highlights the benefits of completing rate cases, such as improved operating cash flow by about 5% and earnings-related tailwinds. Nicholas Campanella asks about the company's long-term earnings growth outlook, previously set at 6% to 8%, wondering if the company is reassessing its compound annual growth rate (CAGR) as they approach the third quarter.

In this paragraph, Jason Wells discusses the company's strong financial foundation and its plans for continued growth, highlighting a more than 10% compound annual growth rate (CAGR) in its rate base through the end of the decade. He emphasizes the importance of capital expenditure driven by customer demand, system hardening, and economic growth. Wells also mentions the company's track record of meeting or exceeding its earnings guidance and expresses confidence in future performance. Nicholas Campanella thanks him, and the operator introduces the next question from Durgesh Chopra of Evercore ISI, who seeks clarification on the discrepancy between a significant increase in capital expenditure and a modest rise in equity. Chris Foster responds, referencing a previous quarter when CapEx was also increased.

The paragraph discusses the financial planning and capital expenditure (CapEx) strategies of a company focused on electric transmission projects and system resiliency plans. Roughly $500 million has been increased, with an associated $250 million equity boost, maintaining a 50% debt and 50% equity approach. Chris Foster and Durgesh Chopra discuss the discrepancy in expectations regarding equity increases. Jason Wells emphasizes an additional $3 billion in capital opportunities, with $2 billion allocated for electric transmission improvements and $1 billion for gas transmission, suggesting significant future investment potential.

The paragraph discusses the potential adoption of a 765 kV electric transmission standard, which could significantly impact capital expenditure plans. Durgesh Chopra recognizes a possible $3 billion increase in capital expenditures, which may be more through the decade. Steve Fleishman inquires about the 765 kV decision, and Jason Wells explains that the decision could be made soon and will influence policy standards. The state is inclined towards the 765 kV standard, and its approval would affect infrastructure, particularly substations and transmission pathways. This includes a complex and costly project connecting the northern and southern systems through Houston, leading to a wide range of potential transmission buildout costs, estimated at a minimum of $2 billion.

The paragraph discusses the potential for increased capital expenditure (CapEx) in the electric transmission sector, particularly in the Greater Houston region, driven by renewable energy growth and infrastructure development. The company is considering adopting a 765 kV standard and high voltage DC lines to enhance grid stability and efficiency, leading to possible CapEx increases. With accelerating growth in the region, the need for expanded transmission capacity is expected to continue well into the next decade. The focus on electric transmission could provide significant future growth opportunities for the company. In the context of this growth, Steve Fleishman asks if there are any updates on data center backlog numbers, noting the company's diversified growth.

In the paragraph, Jason Wells discusses the increase in their interconnection queue from 40 to 47 gigawatts, with a significant portion driven by data center demand. The growth in the Greater Houston area, particularly in the tech sector with companies like Foxconn, Apple, and Nvidia expanding their manufacturing, is contributing to this demand. Additionally, Steve Fleishman and Julien Dumoulin-Smith ask about future opportunities, particularly the $3 billion in additional developments. Julien seeks clarification on specific components of this opportunity, including a billion-dollar gas transmission project and mentions of a high-pressure distribution network, similar to what was done in Minnesota. He also refers to a focus on both a five-year and a ten-year plan for these developments.

In the paragraph, Jason Wells discusses the company's capital expenditure (CapEx) plans and potential upside opportunities. He mentions an incremental $3 billion potential in electric transmission CapEx, with $1 billion already incorporated into current guidance and at least $2 billion more expected by the end of the decade, potentially driven by policy decisions in Texas. Additionally, there's another $1 billion planned for gas transmission improvements around the Greater Houston region, similar to past projects in Minnesota, aimed at reducing customer rates through efficient gas movement. Some of this gas project expenditure might extend into the early 2030s.

The paragraph discusses potential capital expenditure (CapEx) opportunities for enhancing system resiliency and infrastructure development from 2029 onwards. It highlights plans to increase spending to harden their system against future threats, particularly in coastal grids, noting that plans have yet to be updated for 2029-2030. Additionally, there are opportunities in Indiana, with potential growth in electric transmission and data center activity, as well as continued growth in Texas, driven by new residential developments and generation interconnection requests. Overall, the paragraph suggests there could be at least $3 billion in CapEx opportunities through the decade, with further growth expected beyond that, and plans to quantify these long-term prospects in the company's upcoming ten-year plan.

In the paragraph, Jeremy Tonet from JPMorgan Securities asks about potential impacts of tariffs and recession risks on the company's operations. Jason Wells responds by explaining that the company has low exposure to tariff costs because most materials and equipment are sourced domestically, with steps underway to further reduce international sourcing. Regarding recession risks, Wells highlights the economic diversification in the Greater Houston region, which has helped it withstand past recessions. Additionally, he notes potential positive effects from tariffs, as indicated by an increase in interconnection requests.

The paragraph discusses the positive outlook for firms centralizing high-tech manufacturing in the Greater Houston region, which may benefit from reshoring efforts and show resilience against potential recessionary pressures. There is strong growth in Indiana's electric and gas sectors, and no slowdown is observed in Minnesota. Despite concerns about a possible recession, the companies are well positioned due to their domestic supply and minimal exposure to federal tax policy changes. As a "wires company," they have reduced generation-related risks and low impact from transferability concerns, maintaining financial stability.

In the paragraph, Jason Wells responds to David Arcaro's inquiry about the load growth forecast in Texas, particularly addressing skepticism around its feasibility. Wells emphasizes that their approach to forecasting has been conservative. Originally, they estimated a 40-gigawatt interconnection request, anticipating 10 gigawatts (or 25%) to materialize by 2031. Since then, the interconnection request has increased to 47 gigawatts, yet their expectation remains stable at 10 gigawatts materializing. Wells reiterates the conservative nature of their estimates by noting that ERCOT applied a one-third reduction to total submissions, which implied a 50% rise in peak demand. Comparatively, Wells's team applied a more substantial 75% reduction and still foresaw a 50% peak demand increase. To illustrate their conservatism, he mentions that 1.5 gigawatts of the anticipated 10 gigawatts (or 11 in the 40) are expected to come from data center demand.

The paragraph discusses the conservative approach taken in estimating the costs and growth associated with energy and infrastructure projects. It highlights the incorporation of gigawatts and connections, specifically mentioning hydrogen projects. The projected increase in peak demand by 2031 is deemed realistic. The conversation touches on the transmission outlook and potential application of a $7.65 network proposed by ERCOT, discussing whether it will affect the company's CapEx estimates. If the state decides to proceed with ERCOT's proposal, there could be potential for additional capital expenditure beyond current discussions.

The paragraph discusses the potential adoption of a 765 kV standard in the ERCOT market in Texas and mentions the rights of substation owners. It highlights the dynamic nature of the situation and the conservative stance taken due to potential changes in policy. The discussion shifts to a load forecast, where it's revealed that the interconnection queue has grown by seven gigawatts, primarily due to data center demand, with the rest attributed to manufacturing and industrial sectors. The conversation hints at financial considerations but ends before detailing FFO to debt metrics.

The paragraph discusses the company's progress towards achieving financial targets and improving its credit rating. Chris Foster expresses confidence that they will exceed 14% by year-end, highlighting the importance of securitizations related to recent severe weather events. Progress has been made, especially concerning regulatory mechanisms in Texas, but improvement in the credit rating outlook from negative will require further advances in hurricane recovery requests. The company plans to file necessary documentation soon to support this.

The paragraph discusses a five-month review period focused on prudency, which is important for gaining market insights, especially for rating agencies. Andrew Russell expresses gratitude, and Jackie Richert and the operator conclude CenterPoint Energy, Inc.'s first-quarter 2025 earnings conference call, thanking participants for joining.

This summary was generated with AI and may contain some inaccuracies.