Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Investor Day (September 2021)
93 slides from Centerpoint Energy, Inc (holding Co)'s investor day presentation, Sep 23, 2021
Slide 1: Establishing a Path Towards Premium Through Sustainable Growth
Exhibit 99.1 Establishing a path towards PREMIUM T h r o u g h S u s t a i n a b l e G r o w t h … CenterPoint Analyst Day September 2021 CenterPoint Energy Analyst Day – September 2021Exhibit 99.1 Establishing a path towards PREMIUM T h r o u g h S u s t a i n a b l e G r o w t h … CenterPoint Anal
Slide 2: Cautionary Statement and Other Disclaimers
CAUTIONARY STATEMENT AND OTHER DISCLAIMERS This presentation and the oral statements made in connection herewith contain statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future operations, events, financial position, earnings, growth, costs, prospects, capital i
Slide 3: Company Profile
Executive Kickoff COMPANY PROFILE Minnesota Gas (1) MN MI Financial Statistics Ohio Gas (5) Arkansas Gas (1) ▪ Stock Price $26.22 ▪ Total Assets – $36B Texas Gas WI Mississippi Gas (2) ▪ Market Cap – ~$16B MI ▪ Non-GAAP Utility Net Income – $757M Houston Electric Company HQ ▪ Enterprise Value – ~$32
Slide 4: Executive Kickoff
Executive kickoff Executive Kickoff Dave Lesar President and Chief Executive Officer CenterPoint Energy Analyst Day – September 2021 4Executive kickoff Executive Kickoff Dave Lesar President and Chief Executive Officer CenterPoint Energy Analyst Day – September 2021 4
Slide 5: Our Team
Executive kickoff OUR TEAM Dave Lesar * Kristie Colvin Scott Doyle * Lynne Harkel-Rumford Monica Karuturi President and Chief Executive Officer SVP and Chief Accounting Officer EVP of Natural Gas SVP and Chief Human Resources Officer SVP and General Counsel Jason Ryan * Gregory Knight * Kenny Mercad
Slide 6: Analyst Day Agenda
Executive kickoff ANALYST DAY AGENDA Time Event Presenter(s) 9:00 AM Executive kickoff Dave Lesar 9:20 AM Integrating industry-leading Net-Zero commitments Jason Wells 9:30 AM Investing in our utility businesses Kenny Mercado and Scott Doyle 10:00 AM Delivering clean & resilient services for our cus
Slide 7: Yesterday's Great Headlines
Executive kickoff YESTERDAY’S GREAT HEADLINES…. (1) (2) 8% Utility EPS Growth For 2021 (Top decile) (1) (2) 6% - 8% Utility EPS Growth 5-year annual growth (Top decile) $16B+ 2021 – 2025 Capital Plan (3) 10% CAGR Rate Base Growth (4) Moving to a purely regulated utility Supporting a transaction to a
Slide 8: Today's Headlines
Executive kickoff TODAY’S HEADLINES…. CenterPoint Energy Analyst Day – September 2021 8Executive kickoff TODAY’S HEADLINES…. CenterPoint Energy Analyst Day – September 2021 8
Slide 9: Headline 1 – Increasing Utility EPS Growth Guidance
Executive kickoff HEADLINE 1 – INCREASING UTILITY EPS GROWTH GUIDANCE…. 8% Expected annual growth in 2021, 22, 23 and 24 6% - 8% Expected annual growth from 2025-30 This would double Utility EPS and dividends in less than 10 years (1) ….THIS IS TOP DECILE UTILITY EPS GROWTH FOR THE INDUSTRY Note: Re
Slide 10: Headline 2 – Increasing Capital Investment
Executive kickoff HEADLINE 2 – INCREASING CAPITAL INVESTMENT…. (1) Increasing our current 5-year capital plan to $18B+ from $16B+ We are announcing today a new $40B+ (2) 10-year capital plan ~$1B of additional reserve capital No spending cliff here ….TO CONTINUE TO INVEST IN SAFETY AND RESILIENCY OF
Slide 11: Headline 3 – No Equity Needs to Fund Growth
Executive kickoff HEADLINE 3 – NO EQUITY NEEDS TO FUND GROWTH…. Announcing the elimination (1) of our previously communicated $300M of ATM equity needs Announcing no external equity issuance for the full 10-year capital plan Utilizing >$3B (2) of after-tax proceeds to efficiently fund growth and pay
Slide 12: Headline 4 – Eliminating Midstream Exposure
Executive kickoff HEADLINE 4 - ELIMINATING MIDSTREAM EXPOSURE…. We expect to exit midstream by (1) end of 2022 Announcing a contingent forward sale of 50 million Energy Transfer common units Anticipate (1) >40% monetization by end of 2021, including Energy Transfer preferred units ….BECOMING A PUREL
Slide 13: Headline 5 – Announcing a Net-Zero Carbon Target
Executive kickoff HEADLINE 5 – ANNOUNCING A NET-ZERO CARBON TARGET…. Net Zero direct emissions by 2035 with clear and transparent steps across all jurisdictions, no exclusions An industry-leading goal ~15 years (1) ahead of the peer average ….THAT IS MORE AGGRESSIVE THAN OTHER UTILITIES WITH GENERAT
Slide 14: Headline 6 – Maintaining a Strong Balance Sheet
Executive kickoff HEADLINE 6 – MAINTAINING A STRONG BALANCE SHEET…. Plan supports 14% - 15% (1) long-term FFO/Debt over the 10-year plan Starting in 2022 Expect parent level debt at ~20% by the end of 2022 Note: Refer to slide 2 for information on forward-looking statements and slide 93 for informat
Slide 15: Headline 7 – Cost Discipline and Serving Growing Regions
Executive kickoff HEADLINE 7 – MAINTAINING COST DISCIPLINE AND SERVING GROWING REGIONS…. Plan maintains 1% - 2% (1) Annual O&M reductions through continuous improvement 1% - 2% (2) Organic annual customer growth 1% - 2% (3) Potential incremental load growth from EVs ….KEEPING SERVICE AFFORDABLE FOR
Slide 16: Our 10-Year Financial Plan
Executive kickoff OUR 10-YEAR FINANCIAL PLAN…. Scenario assuming 2021E-2024E annual Utility EPS growth of 8% and 2025E-2030E annual Utility EPS growth of 7% Rate Base Growth Utility EPS Growth Dividend Growth (1) (1) $2.38 $1.21 ~$37B+ 2030E Utility EPS 2030E Dividend per Share 2030E Rate Base (2) $
Slide 17: Premium Utility Benchmark Comparisons
Executive kickoff PREMIUM UTILITY BENCHMARK COMPARISONS…. CNP vs. (1) Headline CenterPoint Premium Utilities Premium Utilities (2) Utility EPS Growth 8% 5 - 7% Top (3) Rate Base Growth 9% 6 - 8% Top (4) Dividend Per Share Growth 8% 5 - 7% Top (5) External Equity Needs 0% 0 - 5% Among Top (5) Net-Zer
Slide 18: Our New Premium Value Proposition
Executive kickoff OUR NEW PREMIUM VALUE PROPOSITION 10 YEAR PLAN Delivering industry-leading Utility EPS growth of 8% annually through 2024 and (1) 6-8% annually through 2030 ; targeting Dividend growth in line with Utility EPS growth Increasing 5-year Capital plan to $18B+, and introducing 10-year
Slide 19: Serving Growing and Premium Jurisdictions – Texas
Executive kickoff SERVING GROWING AND PREMIUM JURISDICTIONS…. (1) Population Growth: 2010 to 2020 ~56%+ of 2021E Rate Base Dedicated to Texas th Houston is currently the 4 largest city in the U.S. and (1) is the only one growing among the top 4 cities (2) Houston ranks #1 in diversity in the U.S. Ho
Slide 20: Serving Growing and Premium Jurisdictions – Minnesota and Indiana
Executive kickoff SERVING GROWING AND PREMIUM JURISDICTIONS…. (1) Population Growth by State: 2010 to 2020 ~30% of 2021E Rate Base Dedicated to IN + MN MN IN Minnesota’s population outgrew the U.S. (1) 8% 5% average over the last decade Second to Minnesota, Indiana had the highest population growth
Slide 21: $40+ Billion of Sustainable Capital Investments Over 10 Years
Executive kickoff $40+ BILLION OF SUSTAINABLE CAPITAL INVESTMENTS OVER 10 YEARS…. ~$18+ Billion 5-Yr Capital Plan ~$4.7 ~$22 billion ~$3.8 ~$3.7 ~$3.5 ~$3.2 2021E 2022E 2023E 2024E 2025E 2026E – 2030E ….TO PROVIDE SAFE, RESILIENT, AFFORDABLE, AND CLEAN SERVICES FOR OUR CUSTOMERS Note: Refer to slide
Slide 22: Establishing a Path Towards Premium
Executive kickoff ESTABLISHING A PATH TOWARDS PREMIUM…. Through Sustainable Growth Sustainable, resilient, Sustainable Positive and Sustainable Growth for Impact on our affordable service Shareholders Environment for Customers ….FOR ALL STAKEHOLDERS Note: Refer to slide 2 for information on forward-
Slide 23: Integrating Industry-leading Net Zero Commitments
Integrating industry-leading Net Zero Commitments Integrating Industry-leading Net Zero Commitments Jason Wells Executive Vice President and Chief Financial Officer CenterPoint Energy Analyst Day – September 2021 23Integrating industry-leading Net Zero Commitments Integrating Industry-leading Net Ze
Slide 24: Establishing Industry-Leading Carbon Reduction Targets
Integrating industry-leading Net Zero commitments ESTABLISHING INDUSTRY-LEADING CARBON REDUCTION TARGETS Scope 3 Emissions Scope 1 & 2 Emissions Utility to announce Scope 3 carbon Utility with generation to announce st st reduction goal by 2035 that applies Net-Zero goal (Scope 1 & 2) by 2035 1 1 (1
Slide 25: Accelerate to Net Zero Scope 1 and 2 Emissions by 2035
Integrating industry-leading Net Zero commitments ACCELERATE TO NET ZERO SCOPE 1 AND 2 EMISSIONS BY 2035…. ~60% ~40% Actions Underway Future Actions (1) 5.2MM Annual MT 2020 Actual Retire coal unit Culley 3 coal unit Retire coal units Culley 2 by 2025 to be addressed in the next IRP AB Brown 1&2 and
Slide 26: Net Zero Goals Require Minimal Offsets
Integrating industry-leading Net Zero commitments NET ZERO GOALS REQUIRES MINIMAL OFFSETS Potential Scenario 5.2 MM Only ~10 -15% of net-zero goal is achieved through offsets or credits Annual MT of CO 2 Offset mechanism % of 2035 Emission Balance ROW management and owned property ~30% Ex: native pl
Slide 27: Industry-Leading Scope 3 Emission Reduction by 2035
Integrating industry-leading Net Zero commitments ESTABLISHING INDUSTRY LEADING SCOPE 3 EMISSION REDUCTION BY 2035 (1) Currently Underway New Actions 20MM Annual MT 2021 Estimate 20%-30% reduction by 2035 Energy Efficiency Commercial High efficiency Hydrogen Pilots RNG Offsets New Technology CCS Pil
Slide 28: Commitment to Governance and Executive Alignment on ESG
Integrating industry-leading Net Zero commitments COMMITMENT TO GOVERNANCE AND EXECUTIVE ALIGNMENT ON ESG Board ESG Oversight Refreshed and Diversified Board Establishing Independent Governance Governance committee will Newly established 55% become Governance, Independent Chairman are women or minor
Slide 29: Enhanced ESG Commitments and Reporting
Integrating industry-leading Net Zero commitments ENHANCED ESG COMMITMENTS AND OUR ESG REPORTING…. What’s New Launched a dedicated ESG website to provide regular updates Enhanced engagements with ESG Ratings firms What’s Next Integrating emission reduction goals into executive compensation (2022) Pr
Slide 30: Investing in Our Electric Business
Investing in our Electric business Investing in our Electric business Kenny Mercado EVP of Electric Utility CenterPoint Energy Analyst Day – September 2021 30Investing in our Electric business Investing in our Electric business Kenny Mercado EVP of Electric Utility CenterPoint Energy Analyst Day – S
Slide 31: Premium Jurisdictions – Electric
Investing in our Electric business PREMIUM JURISDICTIONS…. Houston Electric Value Proposition TX▪ ~2.6M Metered Customers ✓ Superior utility driven by $23B+ ▪ ~4,000+ mi of Transmission Line of sustainable capital investments through 2030 ▪ 55,000+ mi of Distribution Line ▪ ~1/4 of ERCOT Summer Peak
Slide 32: Sustainable Capital Investments – Electric
Investing in our Electric business SUSTAINABLE CAPITAL INVESTMENTS Investments for Future State by 2030E 2021E-2030E: $23B+ of Capital Other ~$11 Billion 4% System Growth and Improvement Supported by 2%+ Annual Customer Growth (1) $8 Billion+ Renewables + 14% System Resiliency and Reliability Growth
Slide 33: ~$11B to Enable Growth and Economic Development
Investing in our Electric business ~$11B TO ENABLE GROWTH AND ECONOMIC DEVELOPMENT…. 2021E-2030E Capital Dedicated to Growth and Improvement Transmission Distribution 32 new / 90 upgraded ~230 MW substations for capacity by 2030 (1) annual throughput growth 4,500+ miles of new underground residentia
Slide 34: ~$8B+ to Invest in Reliability and Resiliency
Investing in our Electric business ~$8B+ TO INVEST IN RELIABILITY AND RESILIENCY OF OUR SYSTEM…. Upgrading T&D system to address Creating a smarter system to Executing on new tools enabled by extreme weather conditions improve reliability recent legislation 2.6 million 280 miles ~$1B transmission mo
Slide 35: ~$3B+ of Capital Supporting Cleaner Energy Demands
Investing in our Electric business ~$3B+ OF CAPITAL SUPPORTING CLEANER ENERGY DEMANDS…. Direct 2035 1.1 GW Future Renewable (1) Net Zero Target Renewable Generation Integrated Resource Plan Investments supported by renewable t a r g e t e d to be online by end of 2024 to to address remaining coal fa
Slide 36: Focused and Disciplined Approach to Operational Excellence
Investing in our Electric business FOCUSED AND DISCIPLINED APPROACH TO OPERATIONAL EXCELLENCE… (2) Continuous Improvement and O&M Efficiency Examples O&M per Customer Actions Benefits $240 $235 p Testing and inspection efficiency $225 ▪ Continuous Improvement – $215 q 30%+ Truck rolls reduced for $2
Slide 37: Investing in Our Natural Gas Business
Investing in our Natural Gas business Investing in our Natural Gas business Scott Doyle EVP of Natural Gas CenterPoint Energy Analyst Day – September 2021 37Investing in our Natural Gas business Investing in our Natural Gas business Scott Doyle EVP of Natural Gas CenterPoint Energy Analyst Day – Sep
Slide 38: Premium Jurisdictions with Runway for Growth
Investing in our Natural Gas business PREMIUM JURISDICTIONS WITH RUNWAY FOR GROWTH…. Gas LDCs Value Proposition ✓ Stable Growth Driven by $16B+ IN OH of sustainable capital investments through 2030 MN ✓ Robust capital investments serving: (1) ▪ ~4.7mm Metered Customers ▪ Modern resiliency needs (2)
Slide 39: Sustainable Capital Investment – Natural Gas
Investing in our Natural Gas business SUSTAINABLE CAPITAL INVESTMENT…. (1) Investments for Future State by 2030E 2021E-2030E Capital: $16B+ Peak Shaving and Smart Metering Renewable Supply Technology 2% $14 Billion+ 4% of System modernization / improvement Growth / 10,000+ miles of legacy steel / pl
Slide 40: $14B+ for Resiliency and System Modernization
Investing in our Natural Gas business $14B+ FOR RESILIENCY AND SYSTEM MODERNIZATION…. Pipe Modernization Plan 1,063 Miles: 1,045 576 Plan to Average Eliminate cast iron by 2024 & 960 bare steel by 2025 miles/year for Pipeline Methane replacement Emissions (thousand metric tons) ~33% reduction >13,50
Slide 41: $1.7B+ of Capital for Growth and Improvements
Investing in our Natural Gas business $1.7B+ OF CAPITAL FOR GROWTH AND IMPROVEMENTS…. 2021E-2030E Capital Investments Supporting Customer Growth 800+ #1 Pipeline miles/ year for growth (1) in customer count in MN (2) 1%+ growth in MN Investments in Intelis Meters #1 25% (1) in customer count in IN c
Slide 42: Supporting Cleaner Energy Demands
Investing in our Natural Gas business SUPPORTING CLEANER ENERGY DEMANDS…. Driving a Cleaner Natural Gas System and Reducing Carbon Intensity H 2 Hydrogen Pilot (MN) Natural Gas Innovation Act (MN) ▪ 1MW Green Hydrogen pilot by 4Q 2021 ▪ Pathway for next generation fuels ▪ 2 projects under review ▪ I
Slide 43: Continuous Improvements
Investing in our Natural Gas business CONTINUOUS IMPROVEMENTS…. (2) Continuous Improvement Examples O&M per Customer Actions Benefits $160 $150 ▪ Align inspection q Reporting $145 $140 procedure with processing time $135 best practices (1) q 15%+ Truck rolls ▪ Standardize processes 2021E 2022E 2023E
Slide 44: Delivering Clean, Resilient and Affordable Services for Our Customers
Delivering clean, resilient and affordable services for our customers Delivering Clean, Resilient and Affordable Services for our Customers Gregory Knight EVP of Customer Transformation and Business Services CenterPoint Energy Analyst Day – September 2021 44Delivering clean, resilient and affordable
Slide 45: Investing for the Future
Delivering clean, resilient & affordable services for our customers INVESTING FOR THE FUTURE…. A premium utility is critical to meet the evolving needs and aspirations of a thriving community. It’s willing to make the investment and be the enabler that drives the future. A future that is: ✓ Sustaina
Slide 46: Meeting the Evolving Needs of Our Customers and Communities
Delivering clean, resilient & affordable services for our customers MEETING THE EVOLVING NEEDS OF OUR CUSTOMERS & COMMUNITIES… Drive Sustainability Resilient Now Drive Affordability and Safety and Equitable Economic Growth with Innovation ▪ Supporting energy transition ▪ Digital transformation and a
Slide 47: Customers Expect CenterPoint Energy to Lead
Delivering clean, resilient & affordable services for our customers CUSTOMERS EXPECT CENTERPOINT ENERGY TO LEAD… Green Fuels Renewables Gas Conservation Electric Vehicles (1) Target Innovation plan >1GW by 2024 3500% anticipated Programs in 2022 growth in adoption $19.5M customer bill st 1 Hydrogen
Slide 48: Collaborating for the Future: METRO
Delivering clean, resilient & affordable services for our customers COLLABORATING FOR THE FUTURE: METRO – 100% ZERO EMISSION BUS PROCUREMENT BY 2030 CenterPoint Energy is developing a targeted 10-year energy and infrastructure plan in support of METRO’s 2030 goal ▪ Established one of the strongest c
Slide 49: Collaborating for the Future: Minnesota and Indiana
Delivering clean, resilient & affordable services for our customers COLLABORATING FOR THE FUTURE: MINNESOTA AND INDIANA Fortune 500 Global Manufacturer Largest university system in Minnesota Headquartered in Evansville, IN Carbon neutrality by 2050 25% by 2025 (2) attained through multiyear project
Slide 50: Building for the Future
Delivering clean & resilient services for our customers BUILDING FOR THE FUTURE CenterPoint Energy Analyst Day – September 2021 50Delivering clean & resilient services for our customers BUILDING FOR THE FUTURE CenterPoint Energy Analyst Day – September 2021 50
Slide 51: Serving Constructive Regulatory Jurisdictions
Serving constructive regulatory jurisdictions Serving Constructive Regulatory Jurisdictions Jason Ryan SVP of Regulatory Services and Government Affairs CenterPoint Energy Analyst Day – September 2021 51Serving constructive regulatory jurisdictions Serving Constructive Regulatory Jurisdictions Jason
Slide 52: Commitment to Providing Affordable Electric Service
Serving constructive regulatory jurisdictions COMMITMENT TO PROVIDING AFFORDABLE ELECTRIC SERVICE…. Historic rates have remained affordable… …and we believe future rates will too 5 Year Average TX Historical (1) Bill Mitigants Electric Bill Change 2.2% 0.9% ▪ Transition Bond II and III Customer ende
Slide 53: Commitment to Providing Affordable Natural Gas Service
Serving constructive regulatory jurisdictions COMMITMENT TO PROVIDING AFFORDABLE NATURAL GAS SERVICE…. Historically ……and we believe future rates will be too affordable rates … Average Historic Impact of (1) Natural Gas Price Monthly Gas $73.9 ▪ 50% hedged supply in 2021 Customer $40.9 Rates Growth
Slide 54: Constructive Solutions
Serving constructive regulatory jurisdictions CONSTRUCTIVE SOLUTIONS…. ~80% Regulatory Highlights Stakeholder Benefits (1) of 10-year Capital plan recoverable through interim mechanisms Existing Mechanisms Traditional Reasonable cost recovery Rate case rate case for timely recovery of minimizes cust
Slide 55: Innovative Policy for Resilient and Clean Services
Serving constructive regulatory jurisdictions INNOVATIVE POLICY FOR RESILIENT AND CLEAN SERVICES…. Legislative Highlights Supporting Pillars of ESG Gas Jurisdictions Texas Indiana Minnesota (Except MN) Use of emergency generation Procurement of long lead-time items for widespread outages Securitizat
Slide 56: Sustainable Financial Growth
Sustainable financial growth Sustainable Financial Growth Jason Wells Executive Vice President and Chief Financial Officer CenterPoint Energy Analyst Day – September 2021 56Sustainable financial growth Sustainable Financial Growth Jason Wells Executive Vice President and Chief Financial Officer Cent
Slide 57: Sustainable Financial Goals
Sustainable financial growth SUSTAINABLE FINANCIAL GOALS…. Earnings per Share Efficient Financing Reaffirming 2021E Utility EPS Guidance: ✓ Utilizing $3B+ of expected after-tax proceeds $1.25 - $1.27 (1) to fund growth and paydown debt Establishing 2022E Utility EPS Guidance: ✓ Eliminating planned e
Slide 58: Committed to Fully Exiting Midstream
Sustainable financial growth (1) COMMITTED TO FULLY EXITING MIDSTREAM …. 50 million >40% End of 2022 monetization Contingent forward sale Target exit of midstream Anticipated by end of 2021 of Energy Transfer Moving to purely including ~$370M of Energy common units regulated utility Transfer preferr
Slide 59: $40+ Billion of Sustainable Capital Investments
Sustainable financial growth $40+ BILLION OF SUSTAINABLE CAPITAL INVESTMENTS…. $ in billions ~$18+ Billion 5-Yr Capital Plan ~$22 Billion Capital Recovery ~$4.7 ~$3.8 $16B+ ~$3.7 $1.9 ~$3.5 10-year ~$3.2 ~$9 billion Gas $1.4 $1.4 Capital $1.4 $1.5 ~80% of 10-year Capital plan $23B+ recoverable throu
Slide 60: Efficiently Funding Industry-Leading Growth
Sustainable financial growth EFFICIENTLY FUNDING INDUSTRY-LEADING GROWTH…. No Planned External Equity Issuance Needed through 2030 Funding Incremental Capital Funding Capital 2021E – 2025E 2026E – 2030E ~$2.3B ~$22B ~$0.3B Parent Debt Eliminated Incremental Gas LDC Proceeds ~$0.3B In line with ~20%
Slide 61: 2021E-2030E Rate Base Growth
Sustainable financial growth 2021E-2030E RATE BASE GROWTH…. $ in billions (1) ~9% Rate Base CAGR over 10-Year Plan Rate Base projection $37B+ Rate Base by 2030 2021E 42% $27.3 ~$15BE $25.4 58% by 2030 $22.6 $10.5 $19.7 $9.6 $18.5 $8.4 2030E $7.4 $7.8 40% $16.8 ~$22BE $15.8 60% $14.1 $12.3 $10.8 by 2
Slide 62: Initiating 2022E Utility Earnings Guidance
Sustainable financial growth INITIATING 2022E UTILITY EARNINGS GUIDANCE…. $0.02 – $0.03 $0.03 – $0.04 $0.07 – $0.08 $0.02 ▪ 2021E: Baseline Utility EPS of $1.25 - $1.27 ▪ 2022E: Initiating Utility EPS of $1.35 - $1.37 $1.25 - $1.27 $1.35 - $1.37 ▪ 8% Utility EPS annual growth through 2024E ▪ 6% - 8%
Slide 63: A Premium Dividend Growth Story
Sustainable financial growth A PREMIUM DIVIDEND GROWTH STORY… 6%-8% 6%-8% 8% 5%-7% 5%-7% 5%-7% 5%-7% Peer leading 8% Dividend per share growth target through 2024E 6-8% through 2030E (1) Premium Utility Peers CenterPoint ….DRIVING COMPELLING TOTAL RETURNS FOR SHAREHOLDERS Note: Refer to slide 2 for
Slide 64: Updated Financial Plan
Sustainable financial growth UPDATED FINANCIAL PLAN…. 2020 Analyst Day 2021 Analyst Day forecast forecast $16B+ $18B+ +$2B 5-year Capital Plan 5-year Capital Plan ~$25B ~$27B +$2B 2025E Rate Base 2025E Rate Base (1) $0.52 - $0.55 $0.40 (at 6%) +$0.12 to +$0.15 2020 - 2025E Utility EPS Growth 2020 -
Slide 65: Closing – Key Takeaways
Closing – Key takeaways Closing – Key Takeaways Dave Lesar President and Chief Executive Officer CenterPoint Energy Analyst Day – September 2021 65Closing – Key takeaways Closing – Key Takeaways Dave Lesar President and Chief Executive Officer CenterPoint Energy Analyst Day – September 2021 65
Slide 66: Establishing a Path Towards Premium
Closing – Key takeaways ESTABLISHING A PATH TOWARDS PREMIUM…. Through Sustainable Growth Sustainable, resilient, Sustainable Positive and Sustainable Growth for Impact on our affordable service Shareholders Environment for Customers ….FOR ALL STAKEHOLDERS Note: Refer to slide 2 for information on fo
Slide 67: Our New Premium Value Proposition
Closing – Key takeaways OUR NEW PREMIUM VALUE PROPOSITION Delivering industry-leading Utility EPS growth of 8% annually through 2024 and (1) 6-8% annually through 2030 ; targeting Dividend growth in line with Utility EPS growth Increasing 5-year Capital plan to $18B+, and introducing 10-year Capital
Slide 68: Appendix – Additional Materials
Appendix Additional Materials CenterPoint Energy Analyst Day – September 2021 68Appendix Additional Materials CenterPoint Energy Analyst Day – September 2021 68
Slide 69: 2021 Base Modeling Drivers
Appendix 2021 BASE MODELING DRIVERS (1) Asset Map Elec. Utility / Jurisdiction Rate Base 2021E Equity Content Allowed ROE A Minnesota Gas CEHE ~$8,700 42.5% 9.40% Ohio Gas (3) (3) (2) B SIGECO Electric ~$2,050 43.5% 10.40% ND Arkansas Gas Texas Gas MI MN (1) Gas Utility / Jurisdiction Rate Base 2021
Slide 70: 2021 Base Modeling Drivers (Cont.)
Appendix 2021 BASE MODELING DRIVERS (Cont.) Regulatory Net Income ~$775M (1) Other utility-related income ~$35M (2) Income from non-core businesses ~$25M Equity return on securitization bonds ~$30M (3) (4) Corporate allocations ~$(100M) Non-GAAP Net Income from Utility Operations ~$770M 2021 Average
Slide 71: 2022 Base Modeling Drivers
Appendix 2022 BASE MODELING DRIVERS (1) Asset Map Elec. Utility / Jurisdiction Rate Base 2022E Equity Content Allowed ROE (2) Minnesota Gas A CEHE ~$9,800 42.5% 9.40% Ohio Gas (4) (3) B SIGECO Electric ~$2,500 43.5% 10.40% ND Texas Gas Mississippi Gas MI MN (1) Gas Utility / Jurisdiction Rate Base 2
Slide 72: 2022 Base Modeling Drivers (Cont.)
Appendix 2022 BASE MODELING DRIVERS (Cont.) Regulatory Net Income ~$825M (1) Other utility-related income ~$50M (2) Income from non-core businesses ~$35M Equity return on securitization bonds ~$30M (3) (4) Corporate allocations ~$(75M) Non-GAAP Net Income from Utility Operations ~$865M 2022 Average
Slide 73: 5-Year Capital by Category
Appendix 5-YEAR CAPITAL BY CATEGORY Electric Natural Gas $ in billions $ in billions $2.8 $0.2 $1.9 $2.4 $0.4 $2.3 $0.3 $0.2 $0.1 $2.1 $0.2 $0.1 $1.5 $1.4 $0.1 $1.4 $1.4 $0.5 $0.4 $0.1 $0.2 $1.7 $0.2 $0.1 $0.1 $0.1 $0.4 $0.8 $0.4 $0.4 $1.1 $1.1 $0.2 ~$13B ~$9B $0.4 $0.2 $0.8 $0.2 $0.2 $0.9 $0.2 $1.0
Slide 74: 10-Year Capital by State
Appendix 10-YEAR CAPITAL BY STATE Electric Natural Gas ~1% ~17% ~22% ~33% (1) $23B+ $16B+ 2021E-2030E Capital 2021E-2030E Capital ~10% ~7% ~83% ~4% ~23% Indiana Ohio Louisiana Mississippi Minnesota Texas Texas Indiana Arkansas & Oklahoma Note: Refer to slide 2 for information on forward-looking stat
Slide 75: 10-Year Capital by Anticipated Recovery Mechanism
Appendix 10-YEAR CAPITAL BY ANTICIPATED RECOVERY MECHANISM Electric Natural Gas Traditional rate case ~3% Interim mechanisms Traditional with CPCN (2) rate case required ~10% Rate case with ~10% Forward Test Year ~23% $16B+ 2021-2030 Capital $23B+ $16B+ 2021E-2030E Capital 2021E-2030E Capital (3) In
Slide 76: Generation Project Update
Appendix GENERATION PROJECT UPDATE Delivering cleaner fuels to benefit our customers Targeted Recovery Project Structure Capacity (MW) Status In-service Mechanisms In Execution: Expected Rate case Gas CT Ownership 460 Q4 2024 Pending Approval investment: (PUP) ~$320 million CECA Troy Solar Ownership
Slide 77: Generation Project Timeline
Appendix GENERATION PROJECT TIMELINE Note: Refer to slide 2 for information on forward-looking statements. CenterPoint Energy Analyst Day – September 2021 77Appendix GENERATION PROJECT TIMELINE Note: Refer to slide 2 for information on forward-looking statements. CenterPoint Energy Analyst Day – Sep
Slide 78: Enabling Longer Term EV Opportunities
Appendix ENABLING LONGER TERM EV OPPORTUNITIES…. City of Houston EV car projection: Fleet conversion represents material upsides to plan Fleet = Houston Metro, Vehicle School fleets, other ~125k Potential: ~400k Equivalent demand vehicles by 2030 CenterPoint: ~ 100% of new homes conversion of light
Slide 79: Intelis Meter Technology
Appendix INTELIS METER TECHNOLOGY Improving reliability, safety, emissions and customer experience Current Meter Capability ▪ Auto-meter shutoff (high flow/temp) Current Meter Capability Enhanced ▪ Air detection if tampering/removal▪ Unparalleled ultrasonic meter accuracy Safety ▪ Gas shut-off abili
Slide 80: $23B+ Investment Driving Safety, Resiliency, and Growth
Appendix $23B+ INVESTMENT DRIVING SAFETY, RESILIENCY, AND GROWTH…. (1) Current State Expected by 2030E Growth +0.4M 2.7M metered customers metered customers added ~4,800 mi OH transmission lines ~1,300 mi OH transmission lines added/upgraded ~34,00 mi OH distribution lines ~2,200mi OH distribution l
Slide 81: $16B+ Investment Driving Safety, Resiliency, and Growth
Appendix $16B+ INVESTMENT DRIVING SAFETY, RESILIENCY, AND GROWTH…. (1) Current State Expected by 2030E +0.5M Growth 4.1M metered customers metered customers added 0 mi cast iron mains remaining ~100 mi cast iron mains Natural 0 mi bare steel mains remaining ~764 mi bare steel mains Resiliency ~8,343
Slide 82: Data Security Solutions
Appendix DATA SECURITY SOLUTIONS $10 million, 2-year initiatives to continuously improve Cyber Resiliency through improved network design, application hardening, governance, and new capabilities to our network Security Hardening Application Hardening/ Infrastructure Hardening Password Resets Network
Slide 83: Texas Legislative Highlights
Appendix TEXAS LEGISLATIVE HIGHLIGHTS Economic test for transmission lines Use of batteries ▪ Effective September 1, 2021▪ Effective September 1, 2021 ▪ Houston Electric can propose new transmission lines using ▪ Houston Electric can operate via capitalized leases electric a customer benefit test ra
Slide 84: Our Social Commitments
Appendix OUR SOCIAL COMMITMENTS Diversity and Inclusion Pillars Management Long Term Incentive Compensation includes D&I Metrics at least 10% of CNP Continue to outpace diversity employment trends in the sector foundation’s annual budget supports D&I giving 26% 35% 48% DIVERSE DIVERSE DIVERSE 9% dir
Slide 85: Standard Definitions for Scope 1, 2, and 3 Emissions
Appendix STANDARD DEFINITIONS FOR SCOPE 1, 2, AND 3 EMISSIONS Scope 1 Scope 2 Scope 3 (Direct source of emission from operations) (Indirect source of emission / (Indirect source of emission /end-user) company) Electric Generation: ▪ Primarily emissions generated from coal, Facilities consumption End
Slide 86: Reconciliation of Income and Diluted EPS to Adjusted
Appendix RECONCILIATION OF INCOME AND DILUTED EPS TO ADJUSTED INCOME AND ADJUSTED DILUTED EPS USED IN PROVIDING ANNUAL EARNINGS GUIDANCE Twelve Months Ended June 30, 2021 (1) (2) Midstream Corporate and CES & CIS (6) Utility Operations Investments Other (Disc. Operations) Consolidated Dollars in Dil
Slide 87: Endnotes: Slide Notes
Appendix Endnotes: Slide Notes (1) Market data as of 9/11/2021; Total assets as of 6/30/2021 (2) Net income represents trailing 12 months non-GAAP Utility net income. (3) As rated by S&P / Moody’s 3 (4) Data as of 6/30/2021 (5) Data as of 6/30/2021; Pending sale of AR and OK gas LDCs (6) Includes ~5
Slide 88: Endnotes: Slide Notes
Appendix Endnotes: Slide Notes (1) Peer selection based on highest average P/E multiple from 2011-2020 (excluding NEE, AWK, and ES); “Premium Utilities” include AEE, CMS, LNT, WEC, and XEL (2) Refers to CNP’s non-GAAP Utility EPS annual growth rate for 2021E – 2024E, compared to stated EPS growth gu
Slide 89: Endnotes: Slide Notes
Appendix Endnotes: Slide Notes (1) As measured from EIA form 176 for residential and commercial customers 27 (2) Emissions from AR and OK gas LDCs are included in 2020 but not in 2035 due to divestiture expected to close by end of 2021 (1) Refers to CNP and its annual proxy statement peers 28 (1) In
Slide 90: Endnotes: Slide Notes
Appendix Endnotes: Slide Notes (1) Assumes successful completion of ongoing commercial negotiations, regulatory approval and/or construction, among other things (2) Source: EVolve Houston and City of Houston’s electric vehicle adoption goal 47 (3) Includes customer count in AR and OK of ~530,000 cus
Slide 91: Endnotes: Slide Notes
Appendix Endnotes: Slide Notes (1) Refers to projected non-GAAP Utility EPS annual growth rate (2) Includes customer growth, rate relief, depreciation, interest expense, and other 62 (3) Includes one-time tax benefits, costs related to governance changes, and other one-time items (4) Excluding utili
Slide 92: Endnotes: Slide Notes
Appendix Endnotes: Slide Notes (1) Includes AFUDC income and energy efficiency bonus, net of below the line operating and maintenance expenses (2) Includes income from CenterPoint Energy Interstate Pipeline, Home Service Plus (reported within Natural Gas segment) and income from Energy Systems Group
Slide 93: Additional Information – Use of Non-GAAP Financial Measures
ADDITIONAL INFORMATION Use of Non-GAAP Financial Measures In this presentation and the oral statements made in connection herewith, CenterPoint Energy presents non-GAAP Utility net income, non-GAAP Utility earnings per share (“Utility EPS”) and non-GAAP long-term funds from operations (“FFO”) which