The Political Heavyweight at the Center of the Beryl Disaster
Houston residents and businesses are suing CenterPoint while politicians are reckoning with its failures.
by Yaseen al-Sheikh, More Perfect Union
The Houston-based utilities corporation CenterPoint Energy is finding itself on the receiving end of at least two class-action lawsuits over its failure to restore services in a timely manner to large swathes of Houston after Hurricane Beryl.
Both of these lawsuits independently seek more than $100 million in damages from CenterPoint as a result of losses incurred from sustained power outages and the storm-related deaths that resulted from the lack of electricity.
If awarded, they would be some of the largest settlements brought against a utility services company in Texas history. And the disastrous response has renewed scrutiny over the energy company’s heavy political influence, as well as the failure of Texas politicians to serve Houstonians and hold the company accountable.
CenterPoint is a Fortune 500 company that serves customers as far north as Minnesota, and it happens to enjoy a de facto monopoly over electricity services throughout much of East Texas, where it not only provides the electricity services but also owns the electrical poles and wires carrying the power for 2.6 million customers.
As a result, the company can net a significant profit when working with a lax set of regulations from state governments. CenterPoint flew by their first-quarter profit projections earlier this year as a result of an especially cold winter and hikes to electricity prices, and yet the company did not adequately invest in infrastructural upgrades.
In fact, a 2011 investigation showed that CenterPoint spent less on taxes than political lobbying to members of Congress and the Texas legislature. And when CenterPoint applied for a grant from the federal government intended for toughening up the electrical grid, federal officials found the grant to be shallow and lacking in detail.
CenterPoint has a history of making political contributions in Texas politics, with roughly $1.5 million being given to various politicians and PACs since 2022. The overwhelming majority of that money went to Republicans, with just $95,500 going to Democratic legislators. The rest has gone to Republican fundraising arms. CenterPoint CEO Jason Wells himself has made more than $65,000 in political contributions since the beginning of 2022, including $21,000 to Texans for Gov. Greg Abbott and $2,500 to Dade Phelan, the speaker of the Texas House.
More than two million customers, including homes, schools, and businesses lost vital electricity services as a result of Hurricane Beryl’s impact and hundreds of thousands of Houstonians remained without power for over a week. Data from the Texas Tribune shows that this means almost 90 percent of all of CenterPoint’s customers lost power for some period of time. With a heat advisory being out almost continuously for days on end during those first few days without power, this presented serious risks to people’s health. Heat-related deaths due to a lack of air conditioning or electricity in Houston have already been recorded, though the overall death toll at this time remains unclear.
CenterPoint’s communication with the public during this time was also lackluster, to say the least, with the outage maps being unreliable or even downright accessible to many users. Some Houstonians even turned towards a map showing which Whataburgers were open or closed to get a sense of where power had been restored.
Former mayoral candidate and lawyer Tony Buzbee filed one of the lawsuits on behalf of more than 100 local businesses, claiming that CenterPoint is responsible for the damages because of inadequate storm planning and infrastructural development.
“There’s 15,000 plus restaurants across the Houston-Galveston area. They employ almost 300,000 people in the restaurant industry,” Buzbee said, “When a restaurant is not open because it has no power…there’s some restaurateurs that can continue to pay their employees when they’re not operational, but most cannot.”
The second lawsuit was filed on behalf of residents who lost power for a significant amount of time, and along with it their food items and other important goods. The suit specifically alleges that CenterPoint oversees one of the country’s least reliable power grids and cites studies that show that power outages in Houston are more frequent and that the power supply is more unstable despite the company being aware of the fact that the area is more storm-prone.
During the outages, residents turned their anger on CenterPoint workers, with reports of threats and even shots fired at one crew of lineworkers. The company said in a statement last week that it’s “committed to doing a thorough review of our response to support our customers and our communities, especially when they need us most.”
Even politicians CenterPoint has backed have been unable to ignore the glaring failure. Abbott has called for an investigation into CenterPoint and demanded a plan for future preparedness to be presented in the near future, and hinted at more scrutiny over Centerpoint’s broad area of coverage, saying it’s “time to reevaluate whether or not CenterPoint should have such a large territory.”
But it remains to be seen if there will be any accountability imposed onto the utility company from the Republican’s business-friendly administration.
U.S. Rep. Sylvia Garcia of Houston, a Democrat who received $3,000 in contributions from CenterPoint’s PAC between the 2018 and 2020 cycles, sent a letter to CenterPoint blasting their failure to restore power in a timely manner and demanding answers about their lack of preparedness.
“As a resident of Houston and a CenterPoint customer, I am tired of CenterPoint’s excuses. Houstonians demand answers and want accountability” Garcia wrote. “The fourth largest city and the energy capital of the world cannot allow one of its most critical utilities to continue to fail millions of constituents in this way.”