CenterPoint Energy is pouring more than $4 billion into new transmission lines across the Houston region to keep pace with a wave of data center construction that company executives say is unlike anything they have seen before. The spending, unveiled during the company's third-quarter earnings call this week, comes as CenterPoint forecasts the Houston area will need 14 additional gigawatts of electric capacity by 2030 — enough, by the company's own estimate, to power roughly 3.5 million homes.
The new transmission investment is part of a broader capital plan overhaul. According to the Houston Chronicle, CenterPoint now plans to spend $38.7 billion on capital improvements by 2030, up from its previous estimate of roughly $34 billion, and the company is accelerating $1.5 billion of that investment to arrive sooner than originally scheduled. CenterPoint's updated 10-year plan, covering 2026 through 2035, has grown to approximately $70.7 billion from $66.7 billion, according to a company presentation cited by tradingkey.com, which also reported that five-year spending through 2030 climbed to $38.7 billion from $34.2 billion.
Company executives describe the scale of demand as unprecedented. CenterPoint Chief Financial Officer Christopher Foster characterized the growth that way, per the Houston Chronicle, while also telling investors that nearly all of the new infrastructure spending could ultimately be recovered by passing costs on to ratepayers. CenterPoint CEO Jason Wells told investors on the earnings call that Greater Houston is experiencing explosive growth and that the city is an excellent location for data centers, framing the build-out as a long-term bet on the region's appeal to large power users.
Who Foots the Bill for the Boom
The math behind the spending surge is significant on its own. Per industrialinfo.com, CenterPoint plans to invest about $26.1 billion in its Greater Houston electric business between 2026 and 2030 alone, and expects to energize at least 14 gigawatts of new customer demand in that window. CenterPoint has said the vast majority of that projected Houston-region demand is tied to data centers, and the company has identified more than a dozen transmission projects across the region intended to add load-serving capacity, the same outlet notes.
Jason Wells told investors that even $5.5 billion in additional transmission spending would not cover half of the demand expected over the next decade, underscoring how far ahead of current infrastructure the projected growth has run. He added that meeting rising demand will require continued transmission construction in the years ahead. CenterPoint reported third-quarter 2026 net income of $331 million, or 50 cents per diluted share, up from a $293 million profit in the third quarter of 2025, a jump the company has tied in part to its growth outlook — the utility's own figures put CenterPoint's net income gain at the center of a presentation that, as reported by utility industry outlets including Utility Dive, also touted at least $10 billion in additional investment opportunities through 2035 beyond the expanded plan, according to theglobeandmail.com.
CenterPoint officials have argued the data center build-out could actually reduce rates for most customers, provided large power users pay for their own grid connections and the transmission upgrades those connections require. The company says it cannot require companies to cover costs beyond directly connecting to the grid, a distinction that matters because any related rate increases still must be approved by the Public Utility Commission. Ratepayer advocates have questioned whether the company's spending will ultimately outweigh the cost of the new transmission lines, and some researchers have linked data center growth more broadly to higher residential electricity rates.
A Grid Under Scrutiny Before It's Even Built
Much of this expansion is unfolding against a backdrop of regulatory caution. Texas Governor Greg Abbott directed the Public Utility Commission and ERCOT in August 2026 to pause connecting data centers to the Texas grid until regulators could audit the projects already waiting in line. According to documents posted by ERCOT, the grid operator paused its Batch Zero study process, delayed final classification of large loads, and halted approvals to energize data centers or cryptocurrency-mining facilities rated at 75 megawatts or greater. ERCOT has said the classifications assigned so far are conditional, with final inclusion or exclusion decisions expected once it files its Batch Zero Eligibility Verification Report with the commission by December 10, 2026.
The scale of what regulators are trying to sort through is enormous. ERCOT has estimated that close to 90% of large loads awaiting grid connection are data centers, and separate reporting from Utility Dive put the total ERCOT interconnection queue at roughly 474 gigawatts of requests, with about 90% of those tied to data centers as well. ERCOT's preliminary long-term forecast, meanwhile, projects approximately 367,790 megawatts of demand across the ERCOT region by 2032 — though the grid operator has cautioned that figure is meant to inform transmission planning and resource-adequacy reporting rather than predict what will actually get built.
Houston Isn't Alone in This Fight
Houston is hardly the only region grappling with how to pay for the data center era. In northern Illinois, ComEd projects it will cost $3.1 billion to connect 30 data centers to the grid, split between $1.6 billion in transmission costs and $1.5 billion in distribution costs, according to Capitol News Illinois. Developers there have already paid $721 million in advance deposits, just under a quarter of the projected total.
Virginia has taken a different regulatory approach, requiring large electricity loads to pay 85% of transmission-capacity costs during ramp-up under its GS-5 tariff, according to the Belfer Center. The same analysis notes that Texas is separately planning more than $30 billion in transmission upgrades to accommodate large-scale electric growth, and that data center electricity usage nationally grew from just under 2% of U.S. demand in 2018 to about 4.4% in 2023, with projections suggesting it could reach 6.7% to 12% by 2028. Houston, for its part, is widely seen as likely to become a data center hub by the 2030s, a trajectory CenterPoint's spending plans are explicitly built around.
