Key Earnings Metrics

CenterPoint delivered a solid first quarter with non-GAAP EPS of $0.56, supported by growth and rate recovery contributions of $0.11 year over year. The quarter's real story is the continued acceleration of firmly committed industrial load in Houston, which now stands at 12.2 GW across nearly 20 projects.

• Non-GAAP EPS: $0.56 for Q1 2026, with GAAP EPS at $0.48. Growth and rate recovery added $0.11, partially offset by $0.04 in higher interest expense and $0.05 from the absence of Louisiana and Mississippi earnings post-divestiture.
• 2026 EPS Guidance: $1.89-$1.91 reiterated, representing 8% growth over 2025 actuals. Long-term guidance remains 7%-9% annually through 2028 and through 2035.
• Firmly Committed Load: 12.2 GW across nearly 20 distinct projects and more than a dozen customers, up from 7.5 GW at the prior update. ERCOT has approved 3.2 GW, with 2.5 GW approved in under 80 days.
• 2026 Capital Deployment: $1.2 billion invested in Q1, on track for the full-year $6.8 billion plan. The base 10-year capital plan stands at $65.5 billion with over $10 billion in incremental opportunities identified.
• Financing Progress: Nearly 70% of 2026 financing needs completed, including a $650 million convertible debt issuance in February that reduced floating-rate exposure. Parent commercial paper balance was zero at quarter-end versus a normal average of approximately $1 billion.
• FFO to Debt: 12.5% on a Moody's adjusted basis, reflecting temporary timing pressure from pulled-forward debt issuances. Management expects this to reverse as capital is deployed and financing normalizes.

Management Commentary

CEO Jason Wells framed the quarter around four themes: financial execution, Houston load growth, affordability benefits from existing system capacity, and emerging transformational load opportunities in Indiana. The load forecast increase to 12.2 GW is the most consequential operational update, representing a 63% increase from the 7.5 GW figure shared just one quarter ago.

Wells emphasized that Greater Houston is no longer an emerging data center destination but an established location of choice for major hyperscalers and developers. He noted that growth extends beyond data centers into life sciences, energy exports, and advanced manufacturing, with residential growth running at 2% annually for decades.

On affordability, management highlighted that utilizing 10 GW of existing system capacity could provide approximately $4 billion in aggregate savings for Texas residential and commercial customers over ten years. CenterPoint's delivery charges are 11% below the national average and the lowest in ERCOT, which strengthens its competitive position for attracting large load customers.

CFO Chris Foster detailed the earnings bridge, noting that weather and usage were $0.02 unfavorable due to milder conditions in Texas and Indiana. O&M was flat as the company accelerated its vegetation management program. The divested Louisiana and Mississippi rate base has already been replaced by accelerated Texas investments.

Foster also confirmed that approximately 85% of investments are recovered through capital trackers. The company filed a DCRF requesting $108 million for Houston Electric distribution, a TCOS filing for $36 million that was approved with rates effective, and a Texas Gas GRIP filing for $62 million. Rate case applications for gas businesses in Minnesota and Indiana are planned for later in 2026.

On the large load economics, Wells clarified an important point during Q&A: in ERCOT's model, CenterPoint provides transmission and distribution service, and customers pay for interconnection modifications directly. The financial tailwind comes through incremental demand charges of roughly $6 million per month for every 1 GW of industrial load added, plus indirect CapEx needs from future transmission replacement projects identified through the ongoing load study.

Strategic Implications

The 12.2 GW firmly committed load figure is the central strategic development. What matters is not just the volume but the diversification and project sizing. Ninety percent of projects represent half a GW or less, which makes interconnections more manageable. The team's ability to secure 2.5 GW of ERCOT approval in under 80 days demonstrates execution speed that few peer utilities can match.

The path to energizing 8 GW by 2029 is notable because it achieves 80% of the original 10 GW forecast for end of 2031, pulled forward by two years. This acceleration directly supports the demand charge revenue stream and strengthens the affordability proposition for existing customers by spreading fixed costs across a larger load base.

The Indiana Electric opportunity warrants close attention. Management described increasing confidence in securing a potentially transformational large load project in Southern Indiana that would represent the single largest load in that service territory. The initial incremental load could enable $250 million in residential customer savings over 15 years, with upside for additional growth.

From a capital allocation perspective, the $65.5 billion base 10-year plan already provides substantial earnings visibility, and the over $10 billion in incremental opportunities gives meaningful upside. The refreshed transmission study expected in H2 2026 will be a key input for identifying additional projects needed to replace system capacity consumed by new load connections.

The financing de-risking is meaningful for near-term execution. With 70% of 2026 needs completed and the convertible debt issuance reducing floating-rate exposure, the company has flexibility to continue deploying capital without balance sheet pressure. The temporary FFO-to-debt dip to 12.5% is explicitly tied to timing and expected to reverse.

The Ohio LDC sale, on track for Q4 2026 close, simplifies the portfolio and redirects capital toward higher-growth Texas and Indiana jurisdictions. The plan to market temporary generation units for sublease or sale later in 2026 further streamlines the business.

What to Watch Next

I would watch four things over the next two quarters:

• ERCOT approval pipeline: The remaining 9 GW of firmly committed load is slated for ERCOT submission within weeks. The speed of approvals will confirm whether the 80-day timeline for the prior 2.5 GW batch was an outlier or a repeatable execution pace.
• Indiana large load announcement: Management's language around increasing confidence suggests a potential definitive agreement could materialize. The size and structure of any deal would clarify how much incremental CapEx and demand charge revenue enters the plan.
• Refreshed transmission study: Expected in H2 2026, this study will identify the replacement capacity projects needed to support load beyond the near-term pipeline. The scope and cost of identified projects will determine how much of the $10 billion incremental opportunity gets formalized.
• FFO to debt recovery: The 12.5% first-quarter reading should improve as capital deployment ramps and financing normalizes. The trajectory toward year-end will indicate whether the company ends at the high end of its targeted cushion as guided.

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