Texas natural gas case study, Houston, Texas. October 2026

Houston-area natural gas capacity: the main gas utility's own plan shows its cushion on the coldest day shrinking, with two large pipeline contracts ending in 2027

CenterPoint told the Railroad Commission of Texas in a rate filing of October 2023 that its 2023 reserve capacity for the Houston-Texas Coast division was 9.0% of its design hour estimate and was forecast to decrease each year, while its projected design hour requirement rises every year to January 2027. If its contracted capacity stays unchanged, that reserve would be 0.8% in January 2027 by our calculation, and the filing shows no approved or scheduled capacity addition.

9.0%CenterPoint's stated 2023 reserve capacity, as a share of its Houston-Texas Coast design hour estimate
0.8%January 2027 reserve as a share of design hour, if contracted capacity stays flat; calculated from CenterPoint figures
33.9%Houston Pipeline capacity as a share of CenterPoint's January 2023 design day; calculated from CenterPoint figures
3Planned natural gas-fired generators in the ten metro counties in EIA's September 2026 inventory

By Sam Strong, Vice President of Business Development, Discovery Energy. Technical review by Tara Dugger, Chief Operating Officer. Updated .

Metro used: the Houston-Pasadena-The Woodlands, TX metropolitan statistical area, as delineated in OMB Bulletin No. 23-01 (July 21, 2023): Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto and Waller counties. CenterPoint Energy Resources Corp. d/b/a CenterPoint Energy Entex and CenterPoint Energy Texas Gas (CenterPoint) lists customers in places across these counties, and its Houston and Texas Coast divisions are the record this page rests on. Texas Gas Service names Galveston among the places it serves, and its capacity is not in this record. Some figures below cover all of CenterPoint's Texas divisions and are labeled system context.1

Key takeaways

  • CenterPoint said in its October 2023 filing at the Commission that its 2023 reserve capacity for the Houston-Texas Coast division is 190,109 Dth, or 9.0% of its design hour estimate, and that reserve capacity is forecast to decrease each year as it adds customers and loads.3
  • CenterPoint's projected January design hour requirement for Houston-Texas Coast is 2,107,310 Dth in 2023 and 2,279,215 Dth in 2027; at the capacity implied by its 2023 reserve, the January 2027 reserve would be 18,204 Dth, 0.8% of the design hour requirement, by our calculation (illustrative, assumes no change in contracted capacity, which the filing does not say).3
  • CenterPoint's summary table for all its Texas divisions prints a percent reserve of 4.2% for January 2026, and its figures give 2.4% for January 2027 by our calculation; the company said a team is studying whether to seek additional pipeline capacity or rebalance contracts, and the record read shows no approved or scheduled addition. System context: the table covers all Texas divisions.4
  • CenterPoint's Houston Pipeline contract, 618,603 Dth per day in its 2023 Plan for the Houston Metro area and 33.9% of its January 2023 design day by our calculation, ends March 31, 2027, and its Gulf South agreements, 40.6% of its firm interstate pipeline capacity by our calculation, were extended only until April 30, 2027; the filing shows no replacement.25
  • CenterPoint operates five propane-air peak shaving facilities in the Houston Metro area with a total daily capacity of 55,000 MMBtu, and said it deployed them during Winter Storm Elliott in December 2022; the testimony describes no shortfall or curtailment.6
  • EIA's September 2026 generator inventory lists three planned natural gas-fired generators in the metro counties (Greens Bayou 6 and Cedar Bayou 5 under construction, Lone Star Power Station awaiting approvals), all planned for 2028; no filing read ties them to the pipelines that serve CenterPoint.9

Which parts of the record fall inside the Houston metro?

CenterPoint's filing lists its customers by place for the test year ended June 2023, in a Houston Division and a Texas Coast Division, including Bellaire, Sugar Land, Pearland and Baytown. By code, the 87 place rows in those two divisions hold 1,519,858 customers; USGS place names put 52.3% of those customers in a metro county, 0.4% unresolved or ambiguous, and 47.1% in unincorporated "environs" rows that name no county (calculated by code, illustrative). System context: the remaining 0.2% are in places outside the metro, such as Wharton and East Bernard.1

CenterPoint's witness said the company operates five propane-air peak shaving facilities in the Houston Metro area and that it has transportation contracts with thirteen pipeline companies and five gas storage contracts there. Texas Gas Service lists Galveston among the incorporated areas of its Central-Gulf Service Area, and the Index's utility crosswalk names other, smaller gas systems in the metro; the record read has no capacity figure for any of them.1

Where Item in the record
Inside the metro CenterPoint's Houston and Texas Coast division places named in Harris, Fort Bend, Brazoria, Montgomery and Galveston counties; the five propane-air sites "in the Houston Metro area"; the Houston-Texas Coast design day, design hour and reserve figures
Outside the metro, system context CenterPoint's all-Texas capacity table and procurement plan; its Beaumont-East Texas and South Texas divisions and places such as Wharton and East Bernard; the Kilby Power Plant air permit in Reeves County
Unclear The 47.1% of customers in environs rows with no county; which county each propane-air site is in; Texas Gas Service's share of Galveston County and the smaller gas systems named in the Index crosswalk

Record items classified by whether they fall inside the Houston metro (OMB delineation). Sources: CenterPoint Statement of Intent (October 2023), Exhibit B and testimony; USGS place names; Texas Gas Service Statement of Intent (June 2025).1

This boundary is enough to identify CenterPoint's Houston and Texas Coast divisions as the serving utility record for the metro, with these gaps: 47.1% of the customers in those divisions are in environs rows that name no county; the county of each propane-air site is not stated; and Texas Gas Service (Galveston) and the smaller gas systems in the metro have no capacity figure in the record.1

System context: CenterPoint's capacity table for January 2026 and January 2027 covers all its Texas divisions, and its Houston-Texas Coast figures are the most local the filing has, so this page uses the Houston figures where they exist and says so where it uses the statewide table.4

Has Houston had gas supply problems since 2020?

The filing documents no dated shortfall, emergency appeal or curtailment. CenterPoint's witness said Winter Storms Uri (February 2021) and Elliott (December 2022) each affected operations and required the company to monitor pressure, and that it deployed its propane-air facilities during Winter Storm Elliott. He said that during Winter Storm Uri the company did not experience design day or peak demand conditions, because electric outages reduced gas use and the facilities were not deployed. These are company statements.6

How much spare gas capacity does Houston have on the coldest day?

Major natural gas pipelines serving Houston N Houston Pipeline Houston Pipeline Kinder Morgan Texas Pipeline Kinder Morgan Texas Pipeline Gulf South Pipeline Gulf South Pipeline Other transmission pipelines in the EIA layer (interstate and intrastate; unlabeled) Pipeline named in a verified claim on this page (labeled, one color each; main lines only) Metro counties (boundary used on this page) Major highways (for orientation)
Figure 1. Major natural gas pipelines serving Houston. Simplified, not to scale. Discovery Energy illustration from EIA and U.S. Census data. Coastline, lakes and highways: Natural Earth (public domain).

CenterPoint sizes its pipeline capacity to a design hour requirement based on 54 heating degree days, which it described as the coldest hour temperature expected once every 30 years; its design day for January 2022 sales customers was 1,789,754 Dth per day at 47 heating degree days. It said its 2023 reserve for Houston-Texas Coast is 190,109 Dth, or 9.0% of the design hour estimate, and that reserve capacity is forecast to decrease each year.3

The filing prints a projection of the design day and design hour requirement for January of each year, and the stated 2023 reserve implies a capacity. The reserve columns below are our calculation, not CenterPoint figures:

January Design day (Dth) Design hour (Dth) Reserve if capacity stays at 2,297,419 Dth, share of design hour
2023 1,826,022 2,107,310 9.0% (stated: 190,109 Dth)
2024 1,862,675 2,149,610 6.9%
2025 1,900,178 2,192,890 4.8%
2026 1,937,573 2,236,046 2.7%
2027 1,974,980 2,279,215 0.8%

CenterPoint's projected January design day and design hour requirement, Houston-Texas Coast division (Exhibit BW-2). The reserve column is calculated by code as 2,297,419 (the 2023 design hour plus the stated 190,109 Dth reserve) minus each year's design hour, divided by that design hour; illustrative, because the filing does not say contracted capacity stays unchanged.3

CenterPoint's separate figure for the Houston Metro area in its 2023 Plan shows upstream pipeline capacity of 2,259,428 Dth per day, of which 166,763 Dth per day (7.4%) is on interstate pipelines and the rest on intrastate pipelines. The two filings' capacity bases differ, so the table above uses only the reserve CenterPoint itself stated for the design hour.2

System context: CenterPoint's summary for all its Texas divisions says total transportation capacity reserved on each pipeline is adequate to meet forecast design day demand, and its table for all divisions shows total system capacity of 2,802,351 Dth against a forecast design day of 2,548,977 Dth and a reserve of 253,374 Dth in January 2023, a percent reserve of 4.2% in January 2026 and a reserve of 64,858 Dth in January 2027, 2.4% of the forecast design day by our calculation. CenterPoint said that statewide reserve capacity declines over the next several years. The figures come from a table image and were checked against OCR text of the image.4

The Commission's June 2024 final order makes no finding on capacity, and CenterPoint's filing is the utility's own account.7

What is driving new natural gas demand?

CenterPoint's reserve forecast attributes the decline to adding customers and loads.3

A search of other official records found three planned natural gas-fired generators in the metro counties and no pipeline filing. EIA's September 2026 inventory lists Greens Bayou 6 in Harris County (447.0 MW, under construction, planned May 2028), Lone Star Power Station in San Jacinto County (467.3 MW, regulatory approvals pending, planned July 2028) and Cedar Bayou 5 in Chambers County (721.0 MW, under construction, planned August 2028). No filing read says which pipelines serve them, so they are reported but not counted as new load ahead of a fix. A search of Federal Energy Regulatory Commission notices in the Federal Register since January 2025 for each metro county with a pipeline docket found none, and TCEQ's page of pending air permit applications names none of the ten counties. System context: its one power plant application, the Kilby Power Plant, is in Reeves County, outside the metro.9

Are upgrades arriving in time?

The record read shows no capacity addition with a date and a budget. CenterPoint said a team of its employees is studying each service area and will make recommendations to either seek additional pipeline capacity or rebalance currently contracted capacities. Its five propane-air peak shaving facilities, 55,000 MMBtu per day in total, are already counted in its capacity and were described as ready to deploy.46

Two large contracts end within the three heating seasons ahead. CenterPoint said its contract with Houston Pipeline runs May 1, 2022 through March 31, 2027, and that in April 2022 it exercised its right of first refusal on all Gulf South agreements and extended them until April 30, 2027. By our calculation, Houston Pipeline's 618,603 Dth per day in the 2023 Plan is 33.9% of the January 2023 design day of 1,826,022 Dth (Houston Pipeline is an intrastate pipeline), and Gulf South's 67,763 Dth per day is 3.7% of the design day and 40.6% of the 166,763 Dth per day of interstate capacity. Its Kinder Morgan contracts run to March 31, 2032, beyond the window. The filing shows no replacement for the 2027 contracts; it was filed in October 2023, and a later renewal would not appear in it.25

System context: the contract terms and the reserve table are CenterPoint statements for its Texas divisions, and none of them adds capacity identified as serving the metro by a date.

What does this mean for business gas costs?

The record gives no cost figure for capacity by customer class, so none is given here. The Commission's June 2024 final order sets base rate revenue allocation factors for spreading any change in its interim rate adjustment among customer classes: Residential 88.5238%, General Service-Small 2.4027% and General Service-Large 9.0735%. Who bears the cost of any future capacity addition is not decided in the record read.7

Who gets gas first in a shortage?

CenterPoint said about 95% of its sales customers in Houston Gulf Coast are residential and that most of the remaining 5% are small commercial and industrial human needs customers; it said it does not sell gas to large volume customers that could be curtailed to free pipeline capacity for them, so it buys pipeline services sized to the greatest expected daily and hourly flow. Its proposed large volume tariff says gas taken after a curtailment order beyond the stated amount is unauthorized over-run gas billed at $10.00 per Mcf in addition to the monthly rate. The tariff pages read state no priority sequence among classes.8

Winter and market context

Context only, as of October 2026. It does not set the outlook level and makes no prediction of outages. Its sources are listed separately under Market and weather sources and are refreshed on the publication date.

NOAA's Climate Prediction Center said on October 15, 2026 that its November 2026 to January 2027 outlook gives the highest odds of warmer than normal conditions to Southeast Alaska, the upper Mississippi Valley and the Great Lakes, a discussion that names regions and not Texas counties.B1 The U.S. Energy Information Administration said on October 6, 2026 that it expects U.S. natural gas inventories to enter the winter heating season 2% above the previous five-year average.A1 These are national and regional facts, not statements about CenterPoint's system, and none of them is used to set the outlook on this page.

What is the outlook for Houston gas capacity through 2029?

Discovery Energy rates the outlook for Houston-area natural gas capacity through 2029 as Elevated (confidence: Medium): CenterPoint's own plan shows its Houston-Texas Coast reserve falling from 9.0% of its design hour estimate in 2023 with a forecast to decrease each year, a reserve that would be 0.8% in January 2027 at unchanged capacity by our calculation, and 4.2% for January 2026 across all its Texas divisions, against the 5% that the scale treats as thin, and the record read shows no approved or scheduled fix. CenterPoint said its reserved capacity is adequate to meet forecast design day demand, and the Commission's order made no capacity finding. Documented risk factors: expiring supply (F2), since CenterPoint's Houston Pipeline contract (33.9% of its January 2023 design day by our calculation, against the 10% test for a key contract) ends March 31, 2027 and its Gulf South agreements (40.6% of its interstate pipeline capacity by our calculation) end April 30, 2027, with no replacement shown in the filing; one factor does not raise the level. Concentration (F1) is not counted: CenterPoint's supply is spread across thirteen pipeline contracts, and a contract counted as expiring supply cannot also count as concentration. Three developments would change the assessment: CenterPoint's next gas procurement plan or rate case showing contracted capacity against the design hour requirement through 2029, including what replaces the Houston Pipeline and Gulf South contracts; any filing that adds pipeline, storage or peaking capacity for the Houston area with a date and a budget; any filing that ties the planned Greens Bayou 6, Cedar Bayou 5 or Lone Star gas-fired units to the pipelines serving CenterPoint.

Outlook levels, from least to most concern: Stable, Watch, Elevated, High, Severe. Levels describe the public record of capacity and supply risk; confidence is reported separately. They are qualitative assessments, not forecasts of outages.

What should Houston-area facilities check now?

  • Tariffs and charges, through a utility audit. Confirm each account is on the right rate class and tariff, and that riders, demand charges and capacity-related charges are billed correctly. Over 70% of the clients Discovery Energy has audited were billed incorrectly. An audit verifies tariffs and charges and recovers overcharges before winter costs rise.
  • Which utility, and which supply arrangement. Confirm whether each site is served by CenterPoint, Texas Gas Service or another gas system, and whether gas is bought from the utility or from a third-party supplier.
  • Your curtailment terms. Check each account's service class, contract maximum daily quantity and the over-run charge that applies after a curtailment order in the tariff.
  • Backup plans and fuel. Check that alternate-fuel and curtailment plans are current and feasible, and that fuel inventories and resupply arrangements are in place before December.
  • Upcoming proceedings. Track CenterPoint's next gas procurement plan or rate case, and what replaces the Houston Pipeline and Gulf South contracts after spring 2027.

Frequently asked questions

Will Houston businesses face natural gas shortages this winter?

The record does not show a shortage. CenterPoint's own filing, made in October 2023, says its Houston-Texas Coast reserve was 9.0% of its design hour estimate in 2023 and is forecast to decrease each year, and that its reserved capacity is adequate to meet forecast design day demand. This page makes no prediction about outages.

Does CenterPoint have enough capacity for its coldest hour?

CenterPoint said its 2023 reserve was 190,109 Dth, 9.0% of the design hour estimate. At that implied capacity, the January 2027 reserve would be 0.8% of the design hour requirement by our calculation (illustrative, assuming no change in contracted capacity). That is below the 5% the scale treats as thin, with no approved or scheduled fix shown, so the outlook is Elevated. The Commission's order made no finding on capacity.

Which large contracts end soon?

CenterPoint said its Houston Pipeline contract runs through March 31, 2027 and its Gulf South agreements through April 30, 2027. By our calculation the Houston Pipeline capacity is 33.9% of the January 2023 design day and the Gulf South capacity is 40.6% of CenterPoint's interstate pipeline capacity; the filing shows no replacement, and it predates any renewal.

Which gas utility serves the Houston area?

CenterPoint lists customers in places across the metro counties, including Sugar Land, Pearland, Baytown and Bellaire, and Texas Gas Service names Galveston. Check your bill or ask the utility which one serves a site.

Who is cut off first if gas is short?

CenterPoint said it does not sell gas to large volume customers that could be curtailed, and about 95% of its sales customers are residential. Its tariff pages read give an over-run charge of $10.00 per Mcf after a curtailment order but no priority sequence.

Is new gas-fired power adding gas demand in the metro?

EIA's September 2026 inventory lists three planned gas-fired generators in the metro counties for 2028. No filing read ties them to the pipelines that serve CenterPoint.

Related case studies

Discovery Energy publishes gas capacity case studies for other metros, using the same method and outlook scale.

Understand your capacity exposure

Discovery Energy reviews service elections, interruption terms and regulatory proceedings for organizations across the US and Canada, so capacity changes are understood before they reach the bill.

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Notes

  1. CenterPoint Energy Resources Corp. d/b/a CenterPoint Energy Entex and CenterPoint Energy Texas Gas, Statement of Intent in RRC Case OS-23-00015513 (filed October 30, 2023), Exhibit B customer counts by place (PDF 88, 89) and Wagaman direct testimony (PDF 1027, 1028); place-to-county matching by code from USGS GNIS Domestic Names, Texas; Texas Gas Service Statement of Intent in OS-25-00028202 (June 30, 2025), tariff territory (PDF 298). Utility filings. [HOU-01 to HOU-07, HOU-43] ↩
  2. Same filing, Wagaman testimony, Figure 1, Houston Metro Area Upstream Capacities, 2023 Plan (PDF 1029). Utility statement. [HOU-08 to HOU-12] ↩
  3. Same filing, Exhibit BW-2 (gas procurement plan excerpts), Houston-Texas Coast section (PDF 1107 to 1111). Utility statements. [HOU-13 to HOU-17] ↩
  4. Same filing, Exhibit BW-2, Texas overview (PDF 1094): summary, consolidated table for all Texas divisions (a table image, checked against OCR text) and statements on adding capacity. Utility statements, system-wide. [HOU-18 to HOU-23] ↩
  5. Same filing, Exhibit BW-2, upstream pipeline services (PDF 1110): contract terms. Utility statements. [HOU-26 to HOU-28] ↩
  6. Same filing, Wagaman testimony on propane-air peak shaving and winter storms (PDF 1038, 1042, 123). Utility statements. [HOU-24, HOU-25, HOU-29 to HOU-31] ↩
  7. Railroad Commission of Texas, Final Order and hearings letter in OS-23-00015513 (June 25, 2024), PDF 1 and 9 (scanned; checked against OCR text). A Commission order; it makes no capacity finding. [HOU-32, HOU-33] ↩
  8. Same filing, Exhibit BW-2 (PDF 1112) and the proposed large volume tariff (PDF 34). Utility statements and tariff. [HOU-34 to HOU-36] ↩
  9. EIA-860M inventory for September 2026 (Planned sheet), filtered to the ten metro counties by code; Federal Register API search of FERC notices since January 2025 by county phrase; TCEQ pending air permit applications page and the TCEQ notice for the Kilby Power Plant, computed by code (houston_calculations.csv). A notice that spells a place differently would be missed. [HOU-37 to HOU-40] ↩
  10. Not established, and left out of the page: dated supply events since 2020 beyond the Winter Storm Elliott deployment; how full the main pipelines were last winter (pipeline postings not captured; next capture about March 2027); the ERCOT generation interconnection queue by county (the report file could not be found by script) and approved data center projects (no official filing source found); CenterPoint's plan after the October 2023 filing; any capacity figure for Texas Gas Service or the smaller gas systems in the metro; a curtailment priority sequence; which county each propane-air site is in.

Market and weather sources

Public web sources saved and hashed on October 25, 2026. They are context, separate from the regulatory record cited in the Notes. The Climate Prediction Center issues its seasonal outlook once each month near mid-month; this section is refreshed on the publication date.

  1. A1. U.S. Energy Information Administration, press release, "EIA expects a mixed picture for winter fuel costs this year," October 6, 2026. Link ↩
  2. B1. NOAA Climate Prediction Center, Prognostic Discussion for Long-Lead Seasonal Outlooks, issued October 15, 2026. Link ↩

Sources

  1. Railroad Commission of Texas, Case OS-23-00015513, CenterPoint Energy Statement of Intent (October 30, 2023), Final Order and hearings letter No. 33 (June 25, 2024). Link
  2. Railroad Commission of Texas, Case OS-25-00028202, Texas Gas Service Company Statement of Intent (June 30, 2025). Link
  3. Office of Management and Budget, OMB Bulletin No. 23-01, Revised Delineations of Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas, July 21, 2023.
  4. U.S. Geological Survey, Geographic Names Information System, Domestic Names, Texas. Link
  5. U.S. Energy Information Administration, EIA-860M Preliminary Monthly Electric Generator Inventory, September 2026. Link
  6. Texas Commission on Environmental Quality, pending air permit applications and notice of public meeting for the Kilby Power Plant (June 2026). Link
  7. Federal Register, API search of Federal Energy Regulatory Commission notices by county. Link