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On Fri, 25 Apr, 12:04 AM UTC
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CenterPoint to spend more to meet AI power demand despite fall in quarterly profit
April 24 (Reuters) - CenterPoint Energy (CNP.N), opens new tab reported a fall in first-quarter profit on Thursday, but the U.S. utility raised its capital expenditure plan to meet expected demand from data centers used for artificial intelligence technologies. A winter storm in January across the U.S. Gulf Coast brought major cities like Houston and New Orleans to a near-standstill and broke records for the coldest day across the regions. The ensuing damage to power lines and widespread outages increased the operating and maintenance (O&M) costs for utilities. CenterPoint said its O&M costs rose 5.4% from a year ago to $747 million during the quarter. Costs for natural gas, fuel and purchased power rose nearly 28% to $1 billion. But the company raised its 10-year capital expenditure plan through 2030 by $1 billion to $48.5 billion, expecting a surge in demand from AI companies. U.S. utilities have been adding billions of dollars to their capex plans as they field massive requests for new power capacity from Big Tech firms scouring the country for viable locations for new data centers. CenterPoint had raised its 10-year capital budget in the previous quarter as well. The utility said on Thursday that requests for new connections grew by nearly 7 gigawatts since the end of January, strengthening its "conviction in the robust economic outlook for (Texas) and the capital investment increase we announced today." CenterPoint provides electricity and natural gas to more than 7 million customers across Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas. The Houston, Texas-based company said its net income fell to $297 million, or 45 cents per share, in the quarter ended March 31, from $350 million, or 55 cents per share, a year ago. Reporting by Vallari Srivastava in Bengaluru; Editing by Sahal Muhammed Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:EnergyGas
[2]
CenterPoint to spend more to meet AI power demand despite fall in quarterly profit
(Reuters) -CenterPoint Energy reported a fall in first-quarter profit on Thursday, but the U.S. utility raised its capital expenditure plan to meet expected demand from data centers used for artificial intelligence technologies. A winter storm in January across the U.S. Gulf Coast brought major cities like Houston and New Orleans to a near-standstill and broke records for the coldest day across the regions. The ensuing damage to power lines and widespread outages increased the operating and maintenance (O&M) costs for utilities. CenterPoint said its O&M costs rose 5.4% from a year ago to $747 million during the quarter. Costs for natural gas, fuel and purchased power rose nearly 28% to $1 billion. But the company raised its 10-year capital expenditure plan through 2030 by $1 billion to $48.5 billion, expecting a surge in demand from AI companies. U.S. utilities have been adding billions of dollars to their capex plans as they field massive requests for new power capacity from Big Tech firms scouring the country for viable locations for new data centers. CenterPoint had raised its 10-year capital budget in the previous quarter as well. The utility said on Thursday that requests for new connections grew by nearly 7 gigawatts since the end of January, strengthening its "conviction in the robust economic outlook for (Texas) and the capital investment increase we announced today." CenterPoint provides electricity and natural gas to more than 7 million customers across Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas. The Houston, Texas-based company said its net income fell to $297 million, or 45 cents per share, in the quarter ended March 31, from $350 million, or 55 cents per share, a year ago. (Reporting by Vallari Srivastava in Bengaluru; Editing by Sahal Muhammed)
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CenterPoint Energy increases its 10-year capital expenditure plan by $1 billion to $48.5 billion, anticipating surge in demand from AI companies, despite reporting a fall in first-quarter profit due to increased costs from winter storm damage.
CenterPoint Energy, a major U.S. utility company, has announced a significant increase in its capital expenditure plan despite reporting a decline in first-quarter profits. The company is positioning itself to meet the growing power demands of artificial intelligence (AI) technologies, particularly from data centers 12.
CenterPoint Energy reported a decrease in net income for the first quarter of 2024, with profits falling to $297 million (45 cents per share) from $350 million (55 cents per share) in the same period last year. This decline was primarily attributed to increased operating and maintenance (O&M) costs, which rose by 5.4% to $747 million 12.
The company faced additional challenges due to a severe winter storm that hit the U.S. Gulf Coast in January. The storm caused widespread power outages and damage to infrastructure, leading to increased costs for natural gas, fuel, and purchased power, which surged by nearly 28% to $1 billion 12.
Despite these short-term setbacks, CenterPoint Energy is taking a long-term view by raising its 10-year capital expenditure plan. The company has increased its investment budget through 2030 by $1 billion, bringing the total to $48.5 billion. This decision is driven by the anticipated surge in demand from AI companies and their data centers 12.
The utility sector as a whole has been responding to the growing power needs of Big Tech firms, which are actively seeking locations for new data centers across the country. CenterPoint Energy's move aligns with this trend, as the company had already increased its 10-year capital budget in the previous quarter 12.
CenterPoint Energy reported a significant increase in requests for new power connections, with demand growing by nearly 7 gigawatts since the end of January. This surge in demand has reinforced the company's confidence in the economic prospects of Texas and justified the increased capital investment 12.
The company's CEO expressed optimism about the future, stating, "The robust economic outlook for Texas and the capital investment increase we announced today strengthen our conviction in the region's growth potential" 12.
As a major utility provider, CenterPoint Energy serves more than 7 million customers across six states: Indiana, Louisiana, Minnesota, Mississippi, Ohio, and Texas. The company's strategic investments are likely to have a significant impact on power infrastructure and availability in these regions 12.
This move by CenterPoint Energy highlights the growing influence of AI technologies on traditional infrastructure and underscores the need for utilities to adapt to changing energy demands in the digital age.
Major US utility companies are reporting a significant increase in power demand from data centers, driven by the rapid growth of artificial intelligence. This trend is expected to boost their revenues and necessitate substantial infrastructure investments.
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CenterPoint Energy partners with Technosylva and Neara to enhance electric grid resilience using AI and predictive analytics, aiming to mitigate impacts of extreme weather events.
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U.S. electric utilities are grappling with massive power requests from Big Tech companies for new AI data centers, leading to concerns about grid stability and potential overbuilding.
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U.S. energy infrastructure companies are experiencing unprecedented growth, driven by investor interest in stable returns and increasing power demand from AI technologies. The sector's fixed-fee model and strategic position in meeting future energy needs are attracting both institutional and retail investors.
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The US power industry is experiencing unprecedented M&A activity, driven by the surge in electricity demand from AI and data centers. This trend is attracting investors and reshaping the energy landscape.
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