CenterPoint Energy innovation plan approved for implementation to help advance decarbonization efforts in Minnesota

CenterPoint Energy innovation plan approved for implementation to help advance decarbonization efforts in Minnesota

Wide-ranging plan approved by the Minnesota Public Utilities Commission expected to help reduce greenhouse gas emissions, promote job creation and leverage federal funding

Thursday-July-25-2024

Minneapolis - July 25, 2024 - Today, CenterPoint Energy, Minnesota's largest natural gas utility, received approval from the Minnesota Public Utilities Commission (PUC) to implement a diverse set of innovative pilot projects that aim to reduce greenhouse gas emissions and advance decarbonization efforts in Minnesota. The approved plan includes investments in made-in-Minnesota low- and zero-carbon gases like renewable natural gas and green hydrogen, as well as emerging technologies such as networked geothermal systems and onsite carbon capture.

The projects are part of a five-year innovation plan submitted under a landmark state energy law: the Natural Gas Innovation Act (NGIA). Passed with bipartisan support in 2021, the NGIA created a new regulatory framework for natural gas utilities to invest in renewable energy resources and innovative technologies to help reduce Minnesota's greenhouse gas emissions. CenterPoint is the first utility in Minnesota to file and have an innovation plan approved.

According to the U.S. Energy Information Administration, more than two-thirds of Minnesota households, or 1.5 million households, depend on natural gas for heating, in addition to natural gas supporting the operations of many businesses and industries in the state. CenterPoint provides natural gas service to more than 920,000 home and business customers in Minnesota.

"CenterPoint looks forward to implementing our innovation plan as part of our efforts to advance Minnesota's energy future," said Brad Steber, CenterPoint Energy's Vice President, Minnesota Gas. "Being in a cold climate state, we understand the need for readily available, cost-effective, safe and reliable energy solutions that keep us warm on winter's coldest days. We know that there is not one solution alone to meet our state's decarbonization goals, but we are excited to work to accelerate technologies that show promise for a cleaner tomorrow."

CenterPoint's innovation plan is expected to deliver significant benefits to Minnesota, including:

• Reducing or avoiding an estimated 1.2 million tons of carbon emissions over the lifetime of the projects - equivalent to the annual energy use of approximately 150,000 homes or 14% of total emissions from natural gas supplied to CenterPoint customers in Minnesota each year.
• Creating an estimated 3,000 full-time equivalent jobs over the pilot projects' lifetimes.
• Leveraging an estimated approximately $17 million or more in federal clean energy incentives (as applicable).
  
  

The total estimated budget to implement this plan is approximately $106 million over five years. The plan adds an estimated $1.50 per month to a standard residential monthly utility bill.

The plan includes 17 pilot projects and seven research-and-development projects. These projects will evaluate and deploy a wide variety of innovative resources and technologies. Key pilot projects include:

Made-in-Minnesota gas alternatives
Under NGIA, at least 50% of an innovation plan's total investments are required to be dedicated toward generating, purchasing or distributing natural gas alternatives. CenterPoint's innovation plan will invest in low-carbon, zero-carbon and even carbon-negativeenergy resources that can supplement or replace conventional natural gas, including:

• Renewable natural gas (RNG) is developed by recycling organic waste materials from farms, food waste, wastewater treatment facilities and other sources to produce pipeline-quality gas. CenterPoint plans to purchase RNG to help offset greenhouse gas emissions attributed to energy used by customers.
• Green hydrogen is produced by splitting water into oxygen and hydrogen using renewable electricity. It can be blended into the utility's natural gas supply or used directly in a dedicated system with industrial or large commercial customers. CenterPoint has a green hydrogen production facility pilot project that's been in operation in Minneapolis since 2022. The plan includes developing a second green-hydrogen production facility, which will use onsite solar panels and include a hydrogen storage system at a CenterPoint-owned property near Mankato, Minnesota.
  

Networked geothermal systems
CenterPoint plans to develop a networked geothermal system, also known as a thermal energy network, to provide building heating and cooling to a neighborhood currently served by the utility. A geothermal system uses a network of wells, water, pipes and pumps to pull heat out of the ground, delivering warmth to buildings in winter and pumping heat from those buildings back into the ground to provide cooling in summer. Additionally, CenterPoint will offer incentives available for large customers to partially offset costs to install and operate their own networked geothermal system.

Hybrid heating
The plan includes incentives for home and business customers to install hybrid heating systems that use electric heat pumps with supplemental natural gas heating for the coldest days with the goal of reducing customer energy costs and maintaining energy efficiency.

Industrial decarbonization
Through this plan, CenterPoint is seeking opportunities to help customers reduce their emissions in more difficult-to-decarbonize sectors. The plan includes incentives and other support to industrial customers intended to help improve efficiency and reduce emissions for high-heat processes such as glassmaking, concrete production and metal foundries. Technologies that could be leveraged depend on the type of business and may include electric heat pumps, onsite carbon capture, installing onsite green hydrogen production facilities and updating boilers to use up to 100% green hydrogen.

CenterPoint is committed to reducing greenhouse gas emissions, as demonstrated by its company-wide Net Zero goals by 2035 for its Scope 1 and certain Scope 2 greenhouse gas emissions. Also, CenterPoint is committed to helping residential and business customers reduce greenhouse gas emissions attributable to their end use of natural gas by 20-30% by 2035 (from a 2021 baseline). The total greenhouse gas emission reductions under this Scope 3 goal are comparable to those for the company's combined Scope 1 and 2 Net Zero goals.

To learn more about CenterPoint's efforts to advance Minnesota's energy future, visit CenterPointEnergy.com/FutureMN.

About CenterPoint Energy, Inc.
As the only investor owned electric and gas utility based in Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas. As of March 31, 2024, the company owned approximately $40 billion in assets. With approximately 9,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, visit CenterPointEnergy.com.

Forward Looking Statement:
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will" or other similar words are intended to identify forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. Any statements in this news release regarding future events, such as CenterPoint Energy's ability to execute on the innovation plan, including the planned scope of projects and anticipated benefits, and the associated extent of greenhouse gas emission reductions, advancement of decarbonization efforts and the number of jobs created by the innovation plan, the extent to which and timing of CenterPoint Energy's ability to recover costs to implement the innovation plan, the amount and expected impact to customer's bills and any other statements that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release speaks only as of the date of this release.

Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include, but are not limited to, risks and uncertainties relating to: Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include, but are not limited to, risks and uncertainties relating to: (1) CenterPoint's business strategies and strategic initiatives; (2) changes in market demand; (3) CenterPoint's ability to fund and invest planned capital and the timely recovery of CenterPoint's investments; (4) financial market conditions; (5) general economic and political conditions; (6) the timing and impact of regulatory proceedings and actions and legal proceedings; (7) effects of competition; (8) catastrophic events including public health threats; (9) weather variations and the impact of climate change; (10) changes in business plans; (11) continued disruptions to the global supply chain including volatility in commodity prices; (12) changes in technology; (13) legislative actions, including tax and developments related to the environment such as global climate change, air emissions, carbon, waste water discharges and the handling of coal combustion residuals; (14) CenterPoint Energy's ability to execute on its initiatives, targets and goals and operations and maintenance goals and (15) other factors discussed CenterPoint's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and CenterPoint's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, including in the "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" sections of such reports, and other reports CenterPoint or its subsidiaries may file from time to time with the Securities and Exchange Commission.

Net Zero Disclaimer
CenterPoint Energy's Scope 1 emissions estimates are calculated from emissions that directly come from its operations. CenterPoint Energy's Scope 2 emissions estimates are calculated from emissions that indirectly come from its energy usage, but because Texas is in an unregulated market, its Scope 2 estimates do not take into account Texas electric transmission and distribution assets in the line loss calculation and exclude emissions related to purchased power between 2024E-2026E. CenterPoint Energy's Scope 3 emissions estimates are based on the total natural gas supply delivered to residential and commercial customers as reported in the U.S. Energy Information Administration (EIA) Form EIA-176 reports and do not take into account the emissions of transport customers and emissions related to upstream extraction. While CenterPoint Energy believes that it has a clear path towards achieving its Net Zero greenhouse gas emissions (Scope 1 and certain Scope 2) by 2035 goals, its analysis and path forward required it to make a number of assumptions. These goals and underlying assumptions involve risks and uncertainties and are not guarantees. Should one or more of CenterPoint Energy's underlying assumptions prove incorrect, CenterPoint Energy's actual results and ability to achieve Net Zero Scope 1 and certain Scope 2 greenhouse gas emissions by 2035 could differ materially from its expectations. Certain of the assumptions that could impact CenterPoint Energy's ability to meet its Net Zero Scope 1 and certain Scope 2 greenhouse gas emissions goals include, but are not limited to: greenhouse gas emission levels; service territory size and capacity needs remaining in line with company expectations; regulatory approval of Indiana Electric's generation transition plan; impacts of future environmental regulations or legislation; impacts of future carbon pricing regulation or legislation, including a future carbon tax; price, availability and regulation of carbon offsets; price of fuel, such as natural gas; cost of energy generation technologies, such as wind and solar, natural gas and storage solutions; adoption of alternative energy by the public, including adoption of electric vehicles; rate of technology innovation with regards to alternative energy resources; CenterPoint Energy's ability to implement its modernization plans for its pipelines and facilities; CenterPoint Energy's ability to complete and implement generation alternatives to Indiana Electric's coal generation and retirement dates of Indiana Electric's coal facilities by 2035; CenterPoint Energy's ability to construct and/or permit new natural gas pipelines; CenterPoint Energy's ability to procure resources needed to build at a reasonable cost, the lack of or scarcity of resources and labor, the lack of any project cancellations, construction delays or overruns and CenterPoint Energy's ability to appropriately estimate costs of new generation; impact of any supply chain disruptions; changes in applicable standards, metrics, methodologies or frameworks; and enhancement of energy efficiencies.

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