CenterPoint's $4 Billion Plan Is Not Only a Houston Cost: How the Transmission Cost Recovery Factor Spreads Grid Builds Across ERCOT

On October 27, 2026, CenterPoint Energy raised its 10-year capital plan by $4.0 billion, to $70.7 billion, to serve faster demand growth in Greater Houston. For Texas commercial electricity buyers outside Houston, the part that matters is the transmission cost recovery factor (TCRF). ERCOT spreads every transmission owner's approved costs across all distribution utilities by peak load, so the transmission share of a Houston build can reach business bills in Dallas, Corpus Christi and Odessa once the lines are in service.

Key takeaways

CenterPoint raised its 10-year capital plan by $4.0 billion to $70.7 billion on October 27, 2026, citing Greater Houston demand.
ERCOT bills transmission costs statewide by 4CP load. CenterPoint's own system carried roughly a quarter of 2025 4CP load, so about three of every four CenterPoint transmission dollars are billed outside Houston.
Nothing reaches a bill until new lines enter CenterPoint's transmission cost of service. The next default TCRF resets are March 1 and September 1, 2027.
PUCT Project 58000 proposes replacing 4CP with 12CP. No rule had been adopted as of November 4, 2026.

What Happened

CenterPoint Energy reported third-quarter 2026 results on October 27, 2026 and said it had increased its 10-year capital investment plan by $4.0 billion, from $66.7 billion to $70.7 billion. It also accelerated another $1.5 billion of investment into 2026 through 2030 to support accelerating customer demand in the Greater Houston area, the same load growth we covered in our July report on CenterPoint's 12.2 GW of industrial load. Chief executive Jason Wells called it a "$4 billion capital plan increase to expand system capacity to accommodate growth." CenterPoint also said it expects that growth to drive approximately $5 billion in savings for Texas residential and commercial customers over the next decade. That savings figure is the company's projection, not a regulatory finding.

The release does not say how much of the new spending is transmission and how much is distribution, and that split decides who pays. Transmission costs are pooled statewide under the Public Utility Commission of Texas (PUCT) rule 16 TAC 25.192, and each utility passes the changes to retail customers under 16 TAC 25.193. CenterPoint's own factor was reset on September 1, 2026 in PUCT Docket 59825, and the PUCT is separately weighing a change to the allocation method itself in Project 58000.

What is the transmission cost recovery factor?

The transmission cost recovery factor is a delivery rider that lets a Texas distribution utility charge or credit its customers for changes in the wholesale transmission costs it is billed, measured against the transmission cost built into its base rates. It is not the whole transmission cost on your bill. Part of that cost sits in base delivery rates set in the utility's last rate case, and the TCRF captures what has moved since then.

Under 16 TAC 25.193, each investor-owned distribution utility in ERCOT (CenterPoint, Oncor, AEP Texas and TNMP) updates its TCRF on March 1 and September 1. Filings are due December 1 for the March update and June 1 for the September update, and the PUCT has 45 days to set the new factor. Each update includes a true-up, and the rule says a TCRF can never recover more than the utility's actual cost of wholesale transmission service. That is the default schedule. A utility can also move the factor under another PUCT-approved mechanism, as Oncor did on October 4 under its unified tracker.

How does a Houston transmission line reach a Dallas business bill?

A Houston transmission line reaches a Dallas business bill through ERCOT's postage-stamp pricing. Under 16 TAC 25.192(b)(1), each transmission owner's annual rate equals its PUCT-approved transmission cost of service (TCOS) divided by ERCOT's average coincident peak demand for June, July, August and September (4CP). Every distribution utility then pays that rate on its own prior-year 4CP demand, wherever the line was built.

The September 2026 numbers show how it works. In PUCT Docket 60089, the PUCT approved an interim CenterPoint TCOS update on September 23, 2026 that added $29,166,040 and brought CenterPoint's total TCOS to $808,990,691. Divided by ERCOT's 2025 4CP load of 80,874,021 kW, that produces CenterPoint's wholesale rate of $10.003097 per kW per year, or about $0.83 per kW per month. In the PUCT's 2026 transmission billing matrix (Docket 59080), CenterPoint's own distribution system carried about 20.2 million kW of that 80.9 million kW, roughly a quarter. So about three of every four dollars of CenterPoint's transmission revenue requirement are billed to other distribution providers, from Oncor and AEP Texas to TNMP and the city-owned and cooperative systems.

Here is our rule of thumb, from the same arithmetic. Every $100 million of added annual TCOS at any ERCOT transmission owner adds about $1.24 per kW-year to the statewide wholesale charge. The September 23 CenterPoint update alone added about $0.36 per kW-year. Roughly $7.3 million of that $29.2 million lands on CenterPoint's own distribution customers and roughly $21.9 million on the rest of ERCOT.

Two limits keep the math honest. Only facilities operated at 60 kilovolts or above count as transmission under 25.192(c), so distribution spending stays on Houston bills through CenterPoint's base rates and its distribution cost recovery factor (DCRF). And a capital plan is not a revenue requirement. A line reaches TCOS only after it is built and the PUCT approves an updated rate, so the $4.0 billion figure cannot be turned into a per-kW charge today.

What did CenterPoint's September 1 TCRF reset do to commercial classes?

CenterPoint's September 1, 2026 TCRF reset raised the rider for every commercial class except transmission-voltage service, with increases from 13.3 percent to 36.7 percent. The table compares the factors in effect before and after September 1 under Docket 59825 and the prior Docket 59042 tariff. The billing unit differs by meter type, and it matters as much as the rate.

Rate class	Billing unit	Effective March 1, 2026	Effective September 1, 2026	Change
Secondary, 10 kVA or less	per kWh	$0.008417	$0.011506	+36.7%
Secondary, over 10 kVA, IDR	per 4CP kVA	$4.968051	$6.177655	+24.3%
Secondary, over 10 kVA, non-IDR	per NCP kVA	$3.611260	$4.342591	+20.3%
Primary, IDR	per 4CP kVA	$4.512254	$5.243339	+16.2%
Primary, non-IDR	per NCP kVA	$5.797457	$6.569697	+13.3%
Transmission	per 4CP kVA	$5.733756	$5.048210	-12.0%

For a small account in the 10 kVA or less class using 1,500 kWh a month, the TCRF line rose from about $12.63 to about $17.26 a month. For an IDR account, the same 4CP demand now carries a rider 24.3 percent higher than it did through August.

Impact on Commercial Electricity Buyers in Texas

The impact on Texas commercial electricity buyers is real but delayed and indirect. Nothing in the October 27 plan changes a bill this year, and when it does, it arrives through the TCRF line of whichever of the four investor-owned utilities serves your meter. We see three channels.

Timing. New lines enter TCOS only when the PUCT approves an updated wholesale rate, and distribution utilities pass approved changes through at their next reset. The next default resets are March 1 and September 1, 2027, so a contract signed now for 24 or 36 months crosses at least four TCRF changes.

Billing unit. Small accounts pay the TCRF per kWh, larger non-IDR accounts per NCP kVA, and IDR accounts per 4CP kVA. An IDR meter that sheds load during the four summer peaks lowers its own billing unit, while a per-kWh account can only cut usage.

Statewide exposure. Because transmission costs are pooled, a Dallas or Corpus Christi business carries part of the Houston build, and a Houston business carries part of Oncor's 765 kV Permian Basin lines. The distribution side of each plan stays local, which is why riders like TNMP's DCRF only reach TNMP customers.

Is the 4CP method changing?

The 4CP method may change, but it has not changed yet. PUCT Project 58000, the rulemaking that implements Section 6 of Senate Bill 6, proposes replacing 4CP with 12CP, which would use ERCOT's peak in every month of the year instead of only the four summer months. The proposal for publication was approved July 9, 2026, comments were due August 11, and the PUCT's project schedule targets a recommended adoption order at a December 2026 open meeting. As of November 4, 2026, no rule has been adopted.

The proposal would also amend 25.192 and 25.193 and align the TCRF class allocation with 12CP. It would add a minimum billing demand for qualifying large loads that lasts at least 20 years. For a business that manages its summer peaks today, the practical point is that each peak would carry one-twelfth of the weight instead of one-quarter, so summer-only curtailment would likely be worth less under a 12CP rule. Our guide to the 2026 4CP season explains how those peaks are set today.

The Wires Pass-Through Check: Four Questions Before You Sign

Before you sign a Texas commercial electricity contract this winter, run it through the four questions we use to read the wires side of an offer, so a Houston headline neither scares you into a bad lock nor hides a cost your contract passes straight through.

1. Does the contract pass TDU charges through at cost or bundle them?

A pass-through contract moves with every TCRF reset. A bundled price usually holds delivery charges fixed unless the contract's regulatory-change clause allows a pass-through, and the provider prices that risk into the rate up front. Read the TDU charges clause and the Electricity Facts Label.

2. Which TCRF billing unit applies to your meter?

Check whether you are billed per kWh, per NCP kVA or per 4CP kVA. The unit tells you which lever, usage or peak demand, actually lowers the charge.

3. Does your term cross the March 1 and September 1, 2027 resets?

Any term that runs past March 1, 2027 does. Budget the TCRF line as a variable, not a fixed number.

4. If you manage 4CP today, what happens under 12CP?

If the PUCT adopts the 12CP proposal, summer peak shaving changes value. Avoid paying for a demand-response arrangement whose savings depend entirely on four summer intervals.

What You Should Do

You can turn this news into four concrete steps this week, whether your contract renews next month or you are only watching the market for a better entry point.

Find the TCRF line in the delivery charges on your latest bill and note the billing unit and the factor.
Read the TDU pass-through clause in your current contract and on the Electricity Facts Label of any new offer.
If your meter is IDR, ask for your 2026 4CP demand and plan next summer's curtailment knowing the method may change.
Compare current offers for your TDU territory before the March 1, 2027 reset.

Questions to Ask Your REP or Broker

When you call a provider about a renewal, these questions separate an offer that is clear about delivery charges from one that leaves the transmission cost recovery factor for you to discover on the first bill.

Are TDU delivery charges, including the TCRF, passed through at cost or included in the quoted rate?
If they are included, does the contract allow a price change when the TCRF or another delivery rider resets?
Which TCRF billing unit applies to this meter, and what was its 4CP or NCP demand last year?
How would delivery charges on this account change if the PUCT adopts 12CP in Project 58000?

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For the Houston picture, see CenterPoint commercial rates, and for every territory, see the Texas commercial rates by TDU.

Frequently Asked Questions

What is the transmission cost recovery factor on a Texas business electric bill?

The transmission cost recovery factor (TCRF) is a delivery rider that passes through changes in the wholesale transmission costs a Texas distribution utility is billed, measured against the transmission cost built into its base rates. Under 16 TAC 25.193 it resets on March 1 and September 1. CenterPoint's commercial factors rose 13.3 to 36.7 percent on September 1, 2026, except transmission-voltage service, which fell 12.0 percent.

Will CenterPoint's $4 billion plan raise business electricity bills in Dallas?

Possibly, and only in part. The transmission-voltage share of new CenterPoint spending enters its wholesale rate once lines are built and the PUCT approves an updated rate, and ERCOT's postage-stamp method bills that rate to every distribution utility, including Oncor, by peak load. CenterPoint's own system carried roughly a quarter of ERCOT's 2025 4CP load, so most of each CenterPoint transmission dollar is billed outside Houston. Distribution spending stays on Houston bills.

When does the TCRF change?

The default schedule under 16 TAC 25.193 is twice a year, on March 1 and September 1, with filings due December 1 and June 1. The next default resets are March 1 and September 1, 2027. A utility can also move the factor under another PUCT-approved mechanism, as Oncor did on October 4, 2026.

Will 12CP replace 4CP for transmission charges?

It may. PUCT Project 58000 proposes replacing 4CP with 12CP, which would use ERCOT's peak in each of the 12 months. The proposal was approved for publication on July 9, 2026, and the PUCT's schedule targets a recommended adoption order in December 2026. As of November 4, 2026, no rule has been adopted.