CenterPoint Energy(US:CNP)2021-02-25 16:42Financial Data and Key Metrics Changes - CenterPoint Energy reported a guidance basis EPS of $0.29 for Q4 2020 and $1.40 for the full year, exceeding consensus and previous guidance [20][41] - The company raised its 2021 guidance basis utility EPS range to $1.24 to $1.26, establishing a new baseline for future growth targets of 6% to 8% [20][41] - The total incremental gas purchase costs due to the February winter storm are expected to be around $2.5 billion, spread across various jurisdictions [15][64] Business Line Data and Key Metrics Changes - The electric and gas systems demonstrated resilience during the winter storm, with over 98% of electric customers restored within 12 hours [10][12] - The company maintained a $16 billion capital spending program and a 10% compound annual rate base growth target [21][41] - The gas LDC sales process is on track, with efforts to minimize midstream exposure continuing [21][22] Market Data and Key Metrics Changes - Natural gas prices spiked significantly during the storm, but regulatory mechanisms are in place to recover these costs in a timely manner [12][63] - The Texas Railroad Commission confirmed that utilities can record extraordinary expenses related to the winter storm as regulatory assets, allowing for future recovery [65] Company Strategy and Development Direction - The company aims to focus on core utility operations, increase capital spending, and enhance ESG initiatives while minimizing midstream exposure [5][28] - CenterPoint is transitioning towards a fully regulated utility business model, with plans to exit midstream investments in a disciplined manner [22][25] - The management is committed to maintaining strong relationships with regulators and ensuring affordable service for customers [36][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the winter storm will not impact the utility EPS growth rate of 6% to 8% [9][17] - The company is focused on balancing the financial health of utilities with the impact on customer bills during the recovery process [102] - There is a commitment to continuous improvement in operations and cost management to support growth [78][82] Other Important Information - The company has received $1.7 billion in short-term financing commitments to support liquidity needs following the storm [66][70] - CenterPoint plans to announce the sale of its gas LDC businesses in Arkansas and Oklahoma in early Q2 2021, with completion expected by year-end [71][72] Q&A Session Summary Question: What opportunities does CenterPoint see in light of the recent storm and policy discussions in Austin? - Management indicated ongoing discussions in Austin regarding potential improvements to grid stability, including the possibility of incorporating batteries and fuel cells into the rate base [87][89] Question: Is there a risk of financial impact from generators or retail energy providers facing difficulties? - Management stated that there is a low risk of financial impact due to strong regulatory protections allowing recovery of delinquent accounts [91][93] Question: Can you elaborate on the exit strategy for midstream investments? - Management confirmed that the focus is on minimizing midstream exposure first, with plans to exit once the merger with Energy Transfer is completed [95][98] Question: How will the company manage the costs associated with the winter storm? - Management assured that the guidance includes the impact of storm-related financing costs, with confidence in managing these through regulatory mechanisms [100][102] Question: What are the plans for winterization and capital investments following the storm? - Management noted that while winterization is challenging, there are opportunities for system hardening and resilience improvements that can be included in capital spending [110]