Houston races to reinforce infrastructure as energy and water demands surge
Writer: Andrea Teran
June 2025 — As Houston’s population and industrial base continue to expand, the city faces urgent infrastructure challenges in both energy and water systems. Utilities and city officials are investing billions to enhance resilience, meet future demand, and rebuild public trust — but skepticism remains high among residents affected by chronic outages and rising utility bills.
CenterPoint Energy, the region’s primary electric utility, has warned that Houston’s peak electricity demand could surge by 50% by 2031. That increase, the equivalent of adding two metro San Antonios to the grid, is largely driven by growth in the energy, industrial, and medical sectors, including electrification efforts at the Port of Houston and Texas Medical Center.
To prepare, CenterPoint plans to invest roughly $20 billion in electric utility projects over five years across its Houston and Indiana operations. CenterPoint has already installed more than 26,000 hardened poles, buried over 400 miles of power lines, and deployed more than 5,000 “self-healing” devices that can automatically reroute power during faults. The utility has also launched over 100 weather monitoring stations and revamped its outage tracking system.
Despite these efforts, routine thunderstorms continue to trigger widespread outages — over 5,000 customers lost power during early June storms — underscoring ongoing reliability gaps. Residents and local officials have acknowledged improved responsiveness and communication, yet many remain concerned about the lack of transparency regarding where and how grid upgrades are being prioritized.
As the power grid works to keep pace, alternative solutions are gaining traction. “We are seeing micro-grids gaining acceptance due to the lack of power infrastructure,” said Sam Thigpen, CEO of Sapphire Gas Solutions, in an interview with Invest:. “We’re now in front of major hyperscale data centers discussing natural gas supply for their power generation needs while they wait on the grid connections. Our first few data center projects will go live this year, using LNG and CNG for power.”
Thigpen said the shift toward supporting off-grid power generation has been a strategic focus for Sapphire over the past year, responding to the constraints of Houston’s overburdened grid. “We knew it was going to take about a year to get in front of the right people, and it’s working. That’s exciting for us,” he added.
The infrastructure buildout comes with financial consequences. CenterPoint’s long-term capital expenditures are expected to be recovered through customer rate increases. While the Public Utility Commission of Texas recently approved a modest monthly rate reduction, public concern is mounting. The cost of living in Houston is increasingly shaped by rising utility bills, an issue compounded by ongoing infrastructure upgrades. According to a 2025 survey by the Kinder Institute for Urban Research, nearly 70% of Harris County residents who struggled with housing affordability in 2024 cited high utility costs as the leading factor. Electricity, gas, and water prices have surged, with the number of households paying over $250 per month for electricity nearly doubling between 2021 and 2023. Water bills rose by an average of 9% in 2024 under a multi-year ordinance funding sewer infrastructure improvements.
Parallel to energy upgrades, Houston’s $16.7 billion Capital Improvement Plan for FY 2026–2030 commits nearly $8.1 billion toward water and wastewater infrastructure — an increase of $2.2 billion from the previous plan. This includes $4.3 billion for improvements to the city’s water utility system and $3.8 billion dedicated to wastewater treatment facilities. The largest single project, a $2.1 billion overhaul of the 70-year-old East Water Purification Plant, aims to modernize facilities serving 1.9 million residents by 2034.
“With continued population growth and economic development, we expect the demand for water to increase,” Rick Guerrero, chief outreach and government affairs officer for the Houston-Galveston Area Council, told Invest:. “We are pleased that the governor and the legislature have made Texas water infrastructure and supply a priority in the 89th session. Through the work of our Water Resources Committee and Regional Flood Management Council, H-GAC is uniquely poised to bring voices and expertise from across the Gulf Coast to develop strategies and better prepare our region for the future.”
The city also plans to invest $2.6 billion through the Build Houston Forward initiative, which targets drainage, neighborhood stormwater management, and street rehabilitation. However, public trust in the program remains fragile. Protesters at recent City Council meetings alleged the misuse of drainage fees initially approved by voters in 2010 and 2018, calling for greater fiscal accountability.
Beyond physical upgrades, local leaders and nonprofit coalitions have strengthened Houston’s disaster recovery framework. The Greater Houston Disaster Alliance raised over $9 million in response to 2024’s back-to-back weather events, supporting more than 4,000 households. These efforts reduced emergency funding distribution timelines by nearly two weeks and prioritized underserved areas through data-informed strategies.
“The heart of Houston is its people,” Bryan Brown, president of the Energy Corridor, told Invest:. “With significant migration and immigration, the city attracts talent from everywhere, driven by its robust economy. Houstonians’ resilience and can-do attitude make the city special, especially in the face of challenges like tornadoes, floods, freezes, and power outages.”
For more information, please visit:
https://www.houstonpublicworks.org/
https://www.centerpointenergy.com/
https://www.houstonrecovery.org
