DOE rejected Houston grid upgrades a year before Beryl outage

The Biden administration last year rejected a request from the Houston Power Company for $100 million to strengthen its power poles and cables against the kind of hurricane-force winds and flooding that knocked out power to millions this week, a utility document shows.

CenterPoint Energy has applied for money from a new $10.5 billion program from the Department of Energy that helps utilities, states and local agencies protect the electric grid from growing threats from extreme weather and climate change.

“I don’t understand how the grant application could have been rejected,” said Ed Hirs, an energy economist at the University of Houston. “This is the petrochemical part of America. I mean, for God’s sake, what is the DOE thinking?”

“A grant to CenterPoint to make service in and around Houston more resilient is truly a national security issue,” Hirs said.

CenterPoint has been criticized for widespread power outages caused by Hurricane Beryl, a Category 1 storm that hit the region early Monday, downing power poles and wires in the nation’s fourth-largest metropolitan area. CenterPoint said Thursday it had restored power to more than 1.1 million homes and businesses.

But more than a million customers remained without power as the region endured “extremely dangerous heat conditions,” according to the National Weather Service. The lack of air conditioning “will heighten the risk of heat-related illness,” the NWS said, noting that the heat index reached 106 degrees Fahrenheit on Thursday.

CenterPoint said its outages were “largely related” to damage Beryl caused to its distribution system — the same network of poles and cables for which it was seeking money from the DOE.

It’s unclear why the department rejected CenterPoint’s application. The DOE did not respond to questions. Federal departments and agencies routinely reject grant proposals because their programs have limited funds.

It’s also unclear how much CenterPoint would have bolstered its distribution system by the time Beryl struck if the DOE had awarded the company money in October.

CenterPoint said in an email Thursday: “This is a highly competitive process with applicants from across the country.” The company said it “incorporated DOE’s feedback” into a revised proposal that it resubmitted in January when the department launched a second round of funding under the $10.5 billion program.

CenterPoint disclosed the DOE’s rejection in a lengthy document it submitted to the Texas Public Utilities Commission in April, outlining plans to strengthen, or “harden,” its transmission and distribution system in the Houston area.

CenterPoint said in the filing that it had applied for a $100 million grant through the DOE’s new Network Resilience and Innovation Partnerships program “to fund high wind and flood mitigation projects.” It was the first time the rejection had been made public.

The DOE announced in October the 58 projects it approved to receive a total of $3.5 billion in an initial allocation. It did not list which applications were denied.

CenterPoint provides electricity to 2.8 million homes and businesses in a 5,000-square-mile area around Houston that includes major industrial ports, oil refineries and one of the nation’s largest petrochemical centers.

“There is such an anti-fossil fuel initiative with the Biden administration that anything that might remotely support the industry, second, third or fourth degree, is being ignored,” Hirs said.

“CenterPoint is clearly a national security issue,” Hirs added. “It’s the communications hub for the oil fields, petrochemicals and refineries.”

The 58 DOE-funded projects are spread across the U.S., led by utilities, states and cities. The largest grant, $464 million, went to the Minnesota Department of Commerce for transmission projects in seven Midwestern states.

Other large-scale projects are planned for eastern Oregon, Louisiana and Georgia. Energy Secretary Jennifer Granholm said in announcing the grants that they would bring more than 35 gigawatts of renewable energy to the grid.

A Texas utility company has received funding. CPS Energy received $30 million to improve its grid in the San Antonio area, about 200 miles west of Houston. DOE funds cover a portion (usually 50 percent) of the overall cost of a project.

The DOE grant program was included in the bipartisan Infrastructure Act of 2021, which includes hundreds of billions of dollars to combat climate change and its growing threat.

After the DOE rejected CenterPoint’s $100 million proposal, the company revised and resubmitted the application in January when the DOE opened a second funding round for grid resilience grants, the company said in its email. The revised proposal focuses on improving CenterPoint’s resilience to severe weather and using advanced modeling to identify vulnerable areas and elevating substations for flood protection.

In March, the DOE “encouraged” CenterPoint to expand its initial application to a “full grant application,” according to CenterPoint, which says it submitted the full application in April.

“I really hope that CenterPoint and the DOE can work together to get this project off the ground,” said Hirs of the University of Houston.

The DOE says on its website that grant recipients for the network’s second funding round will be announced later this year.

This story also appears in Climate thread.