CenterPoint Energy's $65 Billion CAPEX Plan and 2025 Earnings Guidance: A Deep Dive into Long-Term Shareholder Value Creation

In the evolving U.S. utility sector, CenterPoint Energy has emerged as a pivotal player with its ambitious $65 billion capital expenditure (CAPEX) plan spanning 2026 to 2035. This record investment, a 40% increase from its 2021 plan, underscores the company's strategic alignment with surging regional electric demand, particularly in Texas, where Houston's peak load is projected to double to 42 gigawatts (GWs) by the mid-2030s, according to a CenterPoint press release. Coupled with upgraded 2025 non-GAAP earnings per share (EPS) guidance and long-term growth targets, CenterPoint's roadmap raises critical questions about capital efficiency, debt sustainability, and its ability to translate infrastructure spending into shareholder value.

Strategic CAPEX Allocation and Earnings Momentum

CenterPoint's CAPEX plan is anchored in grid modernization, transmission upgrades, and resilience initiatives, with over $23 billion earmarked for Texas and Indiana electric operations between 2026 and 2030, according to a Panabee article. The company has also identified $10 billion in incremental investment opportunities, signaling flexibility to adapt to demand shocks, such as the rapid expansion of data centers and industrial electrification. For context, Texas alone has seen a 6 GW surge in interconnection queue demand since Q1 2025, driven by tech and manufacturing sectors, as noted in a Monexa analysis.

Financially, CenterPoint has raised its 2025 non-GAAP EPS guidance to $1.75–$1.77, reflecting 9% growth over 2024 results, and initiated 2026 guidance of $1.89–$1.91 (8% growth from 2025's midpoint), per the company press release. These figures position the company to achieve its long-term target of 7–9% annual EPS growth through 2035. Such momentum is underpinned by regulatory tailwinds, including Texas' approval of $200 million for temporary mobile generation costs, which accelerates cost recovery for grid upgrades, as reported by Panabee.

Capital Efficiency and Peer Comparisons

Capital efficiency remains a focal point for investors. CenterPoint's Return on Equity (ROE) of 8.76% and Return on Invested Capital (ROIC) of 3.95%, according to StockAnalysis statistics, lag behind peers like Eversource Energy and American Electric Power (AEP), which project EPS growth exceeding 8% in 2025, based on the Deloitte outlook. However, CenterPoint's CAPEX intensity—$5.3 billion allocated for 2025 alone—aligns with industry trends, as U.S. utilities collectively plan to spend $194 billion in 2025, driven by decarbonization and electrification, per Deloitte.

Debt sustainability, however, presents a nuanced picture. CenterPoint's debt-to-equity ratio of 2.03x and net debt-to-EBITDA of 5.97x TTM, according to StockAnalysis, suggest elevated leverage, though its investment-grade credit rating mitigates refinancing risks. By comparison, AEP's debt-to-equity ratio stands at 2.48x, according to Macrotrends data, indicating CenterPoint's relatively conservative balance sheet. The company's strategy to recycle capital—such as the pending $1 billion sale of its Ohio gas business—further enhances flexibility, allowing reinvestment in high-growth Texas markets, as Panabee notes.

Regulatory Risks and Sector-Wide Challenges

The U.S. utility sector faces a fragmented regulatory landscape, with states like Arizona, Iowa, and Kentucky recalibrating rate-setting frameworks and renewable mandates, as highlighted in an S&P Global analysis. For CenterPoint, Texas' regulatory environment is both a boon and a constraint. While the Public Utility Commission of Texas (PUCT) has supported cost recovery for grid resilience projects, delays in rate case approvals could strain cash flow. Nationally, Deloitte notes that utilities must navigate affordability pressures while funding $1.4 trillion in infrastructure needs from 2025 to 2030.

Long-Term Value Creation: Balancing Growth and Prudence

CenterPoint's ability to create shareholder value hinges on three factors:
1. Execution Risk: Delivering $65 billion in CAPEX without cost overruns or regulatory pushback.
2. Debt Management: Maintaining credit ratings amid rising interest expenses (up 12% year-over-year), according to StockAnalysis.
3. Demand Resilience: Sustaining load growth in Texas, where data centers and EV adoption are key drivers.

The company's recent operational improvements—such as a 50% reduction in customer outage minutes in Houston—signal progress in enhancing reliability, a critical factor for rate case success, per Monexa. However, investors must weigh these gains against sector-wide ROI pressures. The Electric Utilities industry reported a Q2 2025 ROI of 3.03%, below its average, as net income declined amid rising costs, according to CSIMarket data.

Conclusion

CenterPoint Energy's $65 billion CAPEX plan and upgraded earnings guidance reflect a bold bet on the future of U.S. energy infrastructure. While its capital efficiency metrics and debt profile are in line with industry norms, the company's long-term success will depend on its ability to navigate regulatory uncertainties, optimize project returns, and capitalize on Texas' electrification boom. For shareholders, the key takeaway is that CenterPoint's strategic investments are well-positioned to drive earnings growth, but disciplined execution and regulatory agility will be paramount in translating CAPEX into sustainable value.