CenterPoint Energy to Sell Louisiana, Mississippi Natgas Assets for $1.2 Billion
CenterPoint Energy to Divest Unregulated Assets for $1.2 Billion
CenterPoint Energy announced it will sell its assets in Louisiana and Mississippi for $1.2 billion to Bernhard Capital Partners. This decision aligns with the company’s strategy to focus on its regulated business.
Utility Industry Trends
Several U.S. utilities have been shedding their unregulated assets to avoid dependence on market-driven returns. Investors favor regulated operations due to their consistent returns.
Regulated vs. Unregulated States
In regulated states, utilities manage electricity generation, transmission, and distribution. However, in unregulated states, generation is separate from distribution and transmission, allowing consumers to choose their power providers.
CEO’s Statement
CEO Jason Wells expressed confidence in the company’s regulated natural gas utilities in Texas, Indiana, Minnesota, and Ohio. The company plans to utilize the expected $1 billion in cash proceeds from the sale for capital investments in locations with fewer regulatory constraints.
Asset Details
The assets being sold include 12,000 miles of main pipelines, serving approximately 380,000 customers in Louisiana and Mississippi.
Financial Impact and Growth Plans
The deal is expected to close by the end of the first quarter of 2025. It will not impact the company’s targeted adjusted profit growth rate of 8% in 2024 and the mid-to-high end of 6%-8% annually from 2025 through 2030. CenterPoint has raised its capital expenditures plan through 2030 by $600 million to $44.5 billion.
Operational Investments
CenterPoint raised its capital investments last year by about 20% to improve its Texas network. The company aims to enhance resiliency and reliability in its Houston Electric service territory.
Financial Performance
CenterPoint reported fourth-quarter revenue of $2.18 billion, falling short of analyst estimates. However, adjusted profit was in line with expectations. The company attributed the revenue shortfall to increased interest expense.
