CenterPoint Energy

Economic moat assessment by component and weight. Efficient scale/regulatory franchise (weight 45 percent, score 90): wires and gas LDCs are natural monopolies with returns set by regulators; Houston Electric’s T&D network is non‑replicable and benefits from one of the strongest long‑term load growth outlooks in the US.

Indiana electric remains vertically integrated with a defined IRP path and multi‑decade service obligations. Switching costs/regulatory switching barriers (weight 25 percent, score 88): end‑customers cannot readily switch distributors; regulatory processes govern service territory and rates.

Texas resiliency mechanisms and securitization further anchor cost recovery, though political pressure can alter timing and scope. Cost advantage (weight 15 percent, score 60): scale and density in Houston (2.8 million+ meters) yield operating leverage, but allowed ROE caps upside and inflation/interest costs offset some benefits.

Intangibles/brand (weight 10 percent, score 35): brand contributes little to pricing; most value stems from regulated assets. Network effects (weight 5 percent, score 10): minimal.

Weighted result is approximately 82. Moat durability risks: extreme weather in the Gulf Coast, regulatory pushback in rate cases, and distributed resources shifting load profiles. Recent settlements and securitizations mitigate but do not eliminate these risks.