Natural gas and electric utility CenterPoint Energy said on Monday it will consider “strategic options” for its pipeline company, Enable Midstream Partners, including a spinoff or sale.
“We believe that now is the right time to explore options for unlocking the value of our strategic investment, reflecting our continuous commitment to drive value for shareholders,” said Scott M. Prochazka, president and CEO of CenterPoint.
The decision follows at $363 million investment on Friday by CenterPoint in Enables preferred securities.
CenterPoint owns a 50% general partnership interest and 55.4% limited partnership interest in Enable, a publicly traded master limited partnership (MLP), which is jointly owned by OGE Energy, an electric utility serving Oklahoma and western Arkansas.
CenterPoint, which ranked fifth among distributors nationally in total gas customers with 3,373,814, according to the most-recent P&GJ 500 Report, also said it will explore the use of the real estate investment trust (REIT) business model for all or part of the utility businesses. REITs are companies, modeled after mutual funds, that own or finance income-producing real estate.
“The REIT structure has recently received significant attention in the regulated utility industry in Texas and could have substantial potential for CenterPoint,” Prochazka said. “We will continue to study the possibilities and monitor developments, including related regulatory proceedings and will present any findings to our shareholders at the appropriate time.”
Houston-based CenterPoint serves customers in Texas, Oklahoma, Arkansas, Louisiana, Minnesota and Mississippi.
By Michael Reed, Managing Editor, P&GJ