Not long after the Legislature authorized Texas utilities in 2021 to acquire mobile generators to hedge against another collapse in the electric grid, CenterPoint Energy leased some 500 megawatts of mobile power at an initial cost of about $200 million.
At issue are two lease contracts for which CenterPoint has already paid nearly $200 million to mobile generation power company Life Cycle Power. Under a state law passed following the deadly February freeze of 2021, CenterPoint cannot only recover from its customers the costs of leasing and operating its units, but also a rate of return, or profit, of 6.5 percent on every dollar it spends on leasing, operating and maintaining these mobile generation units.
Martin Narendorf Jr., CenterPoint Houston’s vice president of electric engineering and asset optimization, said had the utility had 500 megawatts of mobile generation during the February 2021 freeze, along with a handful of other technologies the company is acquiring, it would have been able to rotate outages.
– and ultimately selected a little-known company that did not have enough mobile generation units as recently as six months before CenterPoint signed the contract. Critics The company to which CenterPoint awarded both the short-term contract for the remainder of the 2021 hurricane season and last winter is Life Cycle Power. The company was registered in Texas in 2018 by John Thuma, who in 2012 was convicted of dumping wastewater from oil-and-gas operations
CenterPoint hurried to obtain mobile generation because similar units were being snatched up in California following a series of power outages and wildfires, said Narendorf. Other communities vulnerable to hurricanes along the Gulf Coast were starting to acquire them as well.