HOUSTON – It’s been nearly half a year since more than a million Houstonians spent days in the dark following a derecho outbreak in May. Many of those same people were left without power and air conditioning for a second time in July during Hurricane Beryl.
Since then, CenterPoint CEO Jason Wells has not agreed to an interview with a TV news station.
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That is until now.
Wells agreed to an exclusive interview with KPRC 2′s Gage Goulding on Thursday, where the two talked about the utility’s failure of the nation’s fourth-largest city, the future of CenterPoint and how their infrastructure will be ready to weather another natural disaster.
After all—it’s not if, it’s when.
- READ THE FULL TRANSCRIPT HERE: KPRC 2′s exclusive interview with CenterPoint Energy CEO Jason Wells
Is CenterPoint Overcharging Customers?
Our conversation started with the topic we’ve heard most from Houstonians: rates increasing.
The City of Houston and roughly 40 other cities have cried that CenterPoint has been overcharging customers to the tune of around $100 million a year.
Wells disagrees.
Gage Goulding: “Is that happening? What’s your response?”
Jason Wells: “You know, we want to work with all of our stakeholders on what is a fair rate for our service. I don’t think that we’re overcharging our customers $100 million. I know there’s been some frustration with our withdrawal of our rate case, and I think it’s helpful to put a little context behind that. Our rates are set in a very public process with our regulator. We often seek recovery throughout the year for our capital investments. The rate case that we filed, we have to file once every four years, and that really sets the profit on those capital investments. During this process, this this past year. Every single intervener that perpetuated that rate case actually supported a higher level of profit of the investments we’re making in our system. And given the community’s frustration around our response to Hurricane Beryl, now is not the time to talk about higher profits. So, we withdrew the rate case so we could focus on making these critical investments to improve our service.”
CenterPoint originally proposed a rate increase. Then the utility withdrew the proposal.
But then, again in September, our rates increased regardless.
Are you confused? You’re not alone.
Gage Goulding: “There was the rate hike and then the withdrawal, and then there was an increase in September. So, can you help us understand what exactly that means? Why was that increase implemented in September?”
Jason Wells: “...There’s a number of things that impact our rates. Some of those things are outside of our control. The way that the transmission lines—the large lines that move power across the state of Texas—those lines are often shared. It’s a shared cost across Texas. And so, as some of our peer utilities modify their rates, those impact our transmission charges.”
Wells offered a sign of relief to customers as well, hinting that rates will relax a bit as charges for previous capital investments are taken off of your bill.
“In the foreseeable future here this year, we’re going to see a rate reduction from some charges rolling off the bill,” Wells said. “So, there’s a lot of activity that occurs, but all of that occurs with our regulator, governors and what we can charge our customers.”
Be Honest... Did CenterPoint Fail?
That’s the exact question asked by Gage Goulding.
We’ve heard it time and time again that Houstonians think the utility failed them not once, but twice in the same calendar year.
The utility’s CEO agrees.
Gage Goulding: “Do you feel that CenterPoint failed customers during that time period?”
Jason Wells: “I know I personally let our customers down with both of those events. And for that, I’m deeply apologetic. We will be better. I’m determined to be better. That we will be better. All of the team here at CenterPoint is determined to earn our customer’s trust.”
The grim reality of that failure is that lives were lost. According to medical examiner records, at least 10 people died in Harris County from hyperthermia - or overheating.
Gage Goulding: “Do you think CenterPoint has to share the blame for that?”
Jason Wells: “All loss of life is terribly tragic. My heart goes out to those families who have lost their loved ones. There’s not a day that passes that I personally, that we don’t personally think about the loss our community experienced, and that is the drive behind our determination to create this most resilient coastal grid in the country.”
One of those deaths was Pamela Jarrett. Her sister called on CenterPoint to make changes in an interview with KPRC 2′s Rilwan Balogun.
Wells watched a portion of that story during this interview.
“I just I’m so deeply sorry. Any loss of life is incredibly tragic, obviously, emotionally that, you know, that hits me in the stomach,” Wells said. “That is why we are so determined to build the grid that our customers expect and deserve.”
Forging A Way Forward
Nearly a half year has passed since the first outage that left nearly a million customers in the dark.
How does the company plan on moving forward? How are they making sure this doesn’t happen again?
It’s not an one size fits all answer.
However, they’re starting by listening to the customers.
CenterPoint has embarked on what they’re calling a “listening tour.” So far, executive team members, including Wells, have attended nearly two dozen community events where they can hear feedback from their customers.
That includes a Public Utilities Commission meeting scheduled for Saturday.
Gage Goulding: “Will CenterPoint reps be there to hear directly from customers this Saturday?”
Jason Wells: “Yes, we will personally be there. Our team will be there. We look forward to every opportunity to gather and feedback from our customers.”
Gage Goulding: “There’s a lot of distrust right now between the Houston area and CenterPoint. How do you plan on restoring that trust?”
Jason Wells: “I believe that making sure that we execute on the actions we commit to is that first step of beginning to rebuild trust along the way.”
In addition to that, they’ve already completed phase one of their Greater Houston Resiliency Initiative. They just now are starting phase two, which focuses on hardening their infrastructure from all angles.
Gage Goulding: “In your words, in a short version, if you could, what is the resiliency plan for the future of CenterPoint Energy in the Houston area?”
Jason Wells: “It’s creating a grid that can take a punch and get back up as quickly as possible.”
This includes installing new, storm-resistant power poles, automated devices to keep power flowing during disruptions and trimming trees - a lot of trees.
“We made significant investments in our transmission system and our substation. That’s really the backbone of this electric grid that moves the most amount of power across our communities. And the investments we made to hard in that system stood out both in the derecho and in Beryl. We had very little structural damage,” Wells said. “The next frontier is really building the distribution grid of the future. That activity is replacing some of the older utility poles with composite poles, stronger wood poles to withstand extreme winds. Some of that is burying our equipment underground. A lot of it is trimming trees back and making sure that they’re not a risk to our electric service.”
The future of CenterPoint’s grid is a “self-healing grid.” This means crews won’t have to go out and physically turn power back on during certain situations.
“Many of the outages our customers experience don’t result in damage. Our crews need to go out, though and close the fuzes and restore power,” Wells said. “There’s equipment that we are going to blitz our system with before June 1st, next year that will automatically restore power without having to send a crew. And in the cases where there’s actually damage, this equipment can reroute power to isolate that damage to the fewest possible customers and again, re-energize for the rest of the customers who aren’t impacted by that damage. And so I think that is going to be the game changer for our customers going forward.”
Wells Isn’t Going Anywhere
In the wake of the derecho and Hurricane Beryl, many Houstonians called for Wells to step down, resigning from the role he just assumed in January.
Wells openly addressed that at a special Senate Committee hearing earlier this year.
Again to KPRC 2, he doubled down saying he won’t be leaving.
“I believe it stronger today than even when I said it then. I’ve had the privilege of being in this industry for 25 years. I’ve seen how this industry runs to the challenge,” Wells said. “The men and women that came to from across the country to help us restore our service. I can’t do that work. But that spirit of running towards the challenge has rubbed off on me. I know that we can rely on our community’s trust here. We’ve kind of talked about it. It’s not just the investment. It’s not just listening tour. It’s bringing technology that will help us move faster and deploy this these hardening investments on a more targeted basis. It’s a combination of those activities. I’m confident we’ll build a system that our customers expect of us.”
A Promise To Houston
To wrap up this story, we asked Wells what his promise is - right here and right now - to his customers, the people of Houston.
We leave you with his response:
“We will absolutely be better. We will be the utility, the company that our customers expect of us will be there understanding their needs in their community before a storm hits. We will have less outages. We will restore faster and we will be empathetic to the experiences that they have. We will be a good neighbor, if you will, for our community that we have the great privilege to serve.”