CenterPoint touts $1.3B gain from selling stake in company accused of price gouging
June 8, 2022
This past year has been good to CenterPoint. Not so for its customers.
On top of soaring gas prices, Minnesotans who get their natural gas from CenterPoint Energy are on the hook for $466 million to cover five days of energy costs when prices surged during the 2021 winter storm that crippled Texas’ power grid.
Minnesotans are slated to pay an additional $7.44 a month on average for 63 months to pay for the gas used during the storm, while CenterPoint isn’t slated to feel any pain from that event, as CEO David Lesar told shareholders in May 2021.
In fact, the February 2021 storm, known as “Winter Storm Uri,” turned out to be good for Texas-based CenterPoint. At least in regards to a well-timed merger between one of its affiliates and another Texas company accused of price gouging consumers during the storm.
CenterPoint received $1.3 billion in net, after-tax proceeds as a result of the merger, as detailed in a recent report by the advocacy group Citizens Utility Board.
“We’re not saying that CenterPoint did something illegal or intentionally exploited that storm to rip off rate payers,” said Brian Edstrom, the author of the report. “But it’s just frustrating to us that we are hearing from a lot of people that are paying for these extra storm-related costs that they had no control over … meanwhile, (CenterPoint’s) parent company did well.”
The company’s stock price is up more than 20% from a year ago, and Lesar was rewarded with an unusually generous compensation package — $37.8 million in 2021, far more than his peers at other utilities and 366 times as much as the average CenterPoint employee. (Shareholders balked at his compensation package and voiced their disapproval in a non-binding vote in April, but the company didn’t claw back any of his pay.)
The merger involved a company CenterPoint owned a majority stake in called Enable and the behemoth Energy Transfer, which boasts that nearly a third of the nation’s natural gas and crude oil moves through its pipelines.
CenterPoint received $5 million as part of the deal, and its Enable shares became Energy Transfer shares. CenterPoint then promptly sold its Energy Transfer shares, which had appreciated 20% in value in no small part because of the lucrative winter storm.
Energy Transfer made $2.7 billion from the winter storm, and posted quarterly revenue billions higher than the previous year.
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