CNP Utilities · Regulated utility · Texas grid · Gas distribution · Thesis updated July 12, 2026

Texas load growth tests a pricey grid build

CenterPoint makes most of its money from regulated delivery of electricity and natural gas, not power generation.
The core bull case is the $65.5 billion 10-year capital plan tied to grid hardening and Texas demand growth.
Management says it has 12.2 GW of firmly committed new load, with 8 GW planned for Greater Houston by 2029.
Full-year 2026 non-GAAP EPS guidance stayed at $1.89 to $1.91, which management said implies 8% growth over 2025.
The big worry is whether regulators and customers will accept the bills needed to pay for this buildout.
The growth story is real, but the price paid and the funding plan still matter a lot.

01 Running thesis

A Houston grid growth bet

CenterPoint is becoming a bigger bet on electricity demand around Houston. The company reaffirmed a $65.5 billion capital plan through 2035. That money is meant to harden the grid, modernize equipment, and connect new industrial and data center demand.

The latest proof point is load growth. Management said it has 12.2 GW of firmly committed new load and plans to energize 8 GW in Greater Houston by 2029. If that demand arrives on time, CenterPoint can add assets to rate base, which is the value of utility assets regulators let it earn a return on.

The bear case is also clearer. This plan is huge for a regulated utility. Cost overruns, slow permits, labor shortages, or weak supply chains could delay projects. A bigger risk is that some large customers cancel or leave after CenterPoint has built expensive infrastructure for them.

Regulators are the final gatekeeper. CenterPoint needs future rate cases to recover the money it spends. If customer bills rise too fast, regulators may push back. That makes the stock less about a simple utility yield and more about whether a large Texas grid build can be done on time, on budget, and with public support.

Apr 2026▲Q1 2026 reinforced the thesis. Management reaffirmed 2026 non-GAAP EPS guidance of $1.89 to $1.91, kept the $65.5 billion 10-year capital plan, and gave a stronger load proof point with 12.2 GW firmly committed.

Apr 2026→The Q1 2026 Form 10-Q showed Electric net income of $140 million and Natural Gas net income of $250 million. The filing said there were no material changes to risk factors from the 2025 Form 10-K.

Feb 2026▲The 2025 Form 10-K confirmed the plan had grown to about $65.5 billion through 2035. It also framed the Houston demand story, with peak load forecast to rise to over 30 GW by 2029 and nearly double by the mid-2030s versus 2024.

Nov 2025→The later Q3 filing confirmed the Ohio gas LDC sale agreement and the $65 billion capital plan. It did not change the main risks.

Oct 2025▲CenterPoint signed a definitive agreement to sell the Ohio gas LDC and announced a $65 billion 10-year capital plan. That made the long-term rate base growth path clearer.

Jul 2025▲The System Resiliency Plan settlement supported about $3.18 billion of distribution-related investments. This lowered near-term regulatory uncertainty, while transmission work still needed separate paths.

Apr 2025▲CenterPoint completed the Louisiana and Mississippi gas LDC sale for about $1.2 billion. The filing also gave a clearer event path for the then-pending System Resiliency Plan.

Feb 2025▼The 2024 Form 10-K showed a clearer $5.75 billion resiliency plan, but litigation and insurance risks after Hurricane Beryl had increased. Growth visibility improved, but so did the risk load.

02 Business model

Paid to deliver energy

CenterPoint is a regulated public utility holding company. Its Electric business, mainly Houston Electric, owns transmission and distribution assets. In plain English, it runs the poles, wires, substations, and grid equipment that move power to customers.

The company does not own large power generation assets. That helps shield it from the ups and downs of fuel and wholesale power prices. It earns money by charging regulated delivery rates that are approved by utility commissions.

The Natural Gas business runs local gas distribution systems for homes, stores, and industrial customers across several states. This is also a regulated model. CenterPoint spends money on pipes, meters, safety, and reliability, then asks regulators to let it recover those costs plus a return.

The model breaks if regulators decide costs were not prudent, if projects come in too expensive, or if customers cannot afford the rate increases. CenterPoint is also selling gas assets, including the planned Ohio gas LDC sale for about $2.62 billion, to recycle capital into its larger growth plan.

03 Product portfolio

Wires, pipes, and capital recycling

Growth engine

Houston Electric transmission and distribution

This is the main Texas wires business. It benefits from customer growth, grid investment, and the new load tied to industrial sites and data centers.

Option

Major transmission projects

Large new transmission projects are needed to serve the forecasted load growth. These could support long-term earnings, but they need filings, permits, land, and regulatory approval.

Growth engine

Grid resiliency and modernization

CenterPoint is investing in harder, smarter grid assets after recent storm stress. The approved distribution-related resiliency plan gave the company a clearer path for part of this spend.

Cash cow

Natural gas local distribution

The gas utilities serve residential, commercial, and industrial customers. They are steady regulated businesses, though the portfolio is shrinking as CenterPoint sells selected gas assets.

Option

Portfolio asset sales

CenterPoint completed the sale of its Louisiana and Mississippi gas LDC businesses and plans to sell its Ohio gas LDC. The goal is to fund higher-growth utility investment without relying only on new debt or equity.

04 Business segments

Q1 profit split

Electric36%growing fast

Natural Gas64%modest

Segment mix is based on net income for the three months ended March 31, 2026. Electric reported $140 million and Natural Gas reported $250 million, so this is a profit mix, not a revenue mix.

05 Risk factors

What could break the plan

Capital plan runs over budget

High impact · Medium odds

CenterPoint plans to spend about $65.5 billion over 10 years. The company itself warns that project execution depends on materials, equipment, labor, permits, land, easements, and public support. A few bad years of cost overruns could weaken the growth case.

We watchTrack annual capital spending versus plan, project delay language, and any increases to cost estimates in 10-Q and 10-K filings.

Big-load customers do not show up

High impact · Medium odds

The bull case depends on data centers and industrial customers using a lot more power in Houston Electric territory. Management says 12.2 GW is firmly committed, but the 10-K warns that large customers may delay, cancel, leave, or prove transitory. If assets are built for demand that fades, customers and regulators may question who pays.

We watchTrack updates on the 12.2 GW committed load and the 8 GW planned for Greater Houston by 2029.

Regulators push back on customer bills

High impact · Medium odds

CenterPoint must ask regulators to recover the cost of its grid and gas investments. The larger the capital plan gets, the larger future rate requests may become. If regulators cite customer affordability, allowed returns or cost recovery could be weaker than investors expect.

We watchWatch Texas PUCT orders, future rate case settlements, and comments about customer affordability.

Supply chain and labor shortages slow builds

Medium impact · Medium odds

Utility projects need transformers, poles, wire, skilled crews, engineering work, and permits. The company has flagged supply chain disruptions, inflation, labor shortages, and scarce materials as risks. These pressures can delay projects and raise costs before regulators approve recovery.

We watchLook for management comments on transformer availability, contractor costs, labor availability, and in-service dates.

Storm litigation stays unresolved

Medium impact · Medium odds

Hurricane Beryl-related class-action lawsuits remain an overhang. Insurance disputes could make the issue more costly if some claims are not covered. Even if the core utility story stays intact, litigation can weigh on sentiment and cash needs.

We watchFollow lawsuit updates, insurance coverage disclosures, and any reserve changes tied to Hurricane Beryl.

Ohio gas sale does not close on time

Medium impact · Low odds

CenterPoint expects to close the Ohio gas LDC sale in the fourth quarter of 2026 for about $2.62 billion. That cash is part of the capital recycling plan. A delay would not end the growth story, but it could raise funding pressure.

We watchWatch for regulatory approvals and closing updates on the CEOH sale before the end of Q4 2026.

06 Quick answers

In one breath

What does CenterPoint Energy do?

CenterPoint runs regulated electric delivery assets around Houston and regulated natural gas distribution systems in several states. It mainly gets paid to deliver energy, not to generate electricity.

Why is CenterPoint tied to data centers?

Data centers and industrial projects need large amounts of electricity. CenterPoint says it has 12.2 GW of firmly committed new load, with 8 GW planned for Greater Houston by 2029.

What is the main risk for CNP stock?

The main risk is execution of the $65.5 billion capital plan. CenterPoint must build the assets, keep costs under control, and win regulatory approval to recover the spending from customers.

Is CenterPoint a growth utility or a value utility?

It has a stronger growth story than many traditional utilities because of Houston load growth. But the funding needs, regulatory risk, and valuation question make it less simple than a low-risk bond-like utility.