David J. Lesar
President and Chief Executive Officer at CenterPoint Energy
Thank you, Jackie. Good morning and thank you to everyone joining us for our third quarter 2022 earnings call. Before we get started today, I want to congratulate Jason Wells on this morning's announcement of his pending promotion to President and COO of CenterPoint Energy. Since joining our team a little over two years ago, he has demonstrated that he has the strategic vision, executive mindset, deep industry experience and operational knowledge to be a great leader. Equally important, he has the confidence and support of our organization, our Board and our shareholders. This promotion is a product of an ongoing and thoughtful succession planning process and executive development journey that has been a top priority of mine and our entire Board.
The Board and I have watched Jason grow as an executive over the last two years and believe now is the perfect time to expand his role within our organization. And for those of you who are wondering, I am not going anywhere. I look forward to continuing to mentor and support Jason in his new role and to working side by side to execute on our strategy. I know I speak for many of you when I say, well done, Jason. As you have seen from the press releases we issued this morning, this has been a very busy quarter at CenterPoint, and today's call may seem a bit like a mini Analyst Day update. When I became a CEO of CenterPoint nearly 2.5 years ago, the company needed to quickly establish a strategic path forward to, among other things, realign our relationships with our regulators, customers and investors.
We look to immediately set challenging but executable goals by which you could measure progress while collectively adopting a management mindset of over delivering on our commitments. I want to highlight what that has looked like here at CenterPoint over the last 2.5 years. So what we've achieved so far. First, we committed to achieving industry-leading non-GAAP EPS growth. Now including this quarter, we have met or exceeded that goal for 10 consecutive quarters. In addition, we have over delivered on that growth by raising our non-GAAP EPS guidance five times during that 2.5 years span and continue to reiterate that we will grow future earnings off of each new and higher base that we achieve.
Second, we committed to becoming a pure-play regulated utility that was not subjected to the earnings volatility of our now divested midstream investment. And now more than 95% of our earnings are derived from regulated utility operations. The approximately $1.3 billion of after-tax midstream sale proceeds exceeded your expectations and allowed us to reinvest the money into our regulated utility businesses for the benefit of our customers. Finally, we committed to funding our increased regulated utility investments without reliance on external equity issuances. This led to the sale of our Arkansas and Oklahoma LDCs for which we obtained a landmark valuation and then recycle those cash proceeds efficiently back into our regulated businesses, all for the benefit of our customers and investors.
Now let's look at today. We earned $0.32 in the third quarter on a non-GAAP basis. We are also reiterating full year 2022 non-GAAP EPS guidance of $1.37 to $1.39 per share, which represents a 9% growth rate at the midpoint versus the comparable 2021 non-GAAP Utility EPS of $1.27. And as Jason will discuss, we are also ahead of plan in terms of capital spend for 2022 in spite of supply chain pressures, and we've deployed more capital than anticipated. In addition, today, we are initiating our full year 2023 non-GAAP EPS guidance target range of $1.48 to $1.50. At the midpoint, this represents an additional 8% growth over our previously raised 2022 non-GAAP EPS guidance.
Beyond 2023, we continue to expect 8% non-GAAP EPS growth for 2024 and at the mid- to high end of 6% to 8% annually thereafter through 2030. I also want to point out that these earnings growth rate targets do not reflect any potential earnings from the $5.3 billion in incremental capital opportunities that we will discuss next. Our track record of over-delivering continues with today's announcement of what is now a third increase to our 2021 Analyst Day, $40 billion 10-year capital plan. We continue to anchor around this Analyst Day number to provide consistency, clarity and clearly mark goalpost for our investors to follow. Our new incremental capital opportunities are based on customer-driven investments that were developed through our increased stakeholder engagement strategy.
Our strategy initially kicked off with the City of Houston on our collective Resilient Now initiative under the leadership of Mayor Sylvester Turner. It has grown to include over 30 cities in some of our largest industrial customers. With their collective input, we have developed $5.3 billion in additional capital opportunities related to increased systems resiliency, reliability and grid modernization as well as to facilitate eventual EV adoption. Now there is a well-known saying that demographics is destiny. And in looking at its demographics, the City of Houston is destined for great things. As the only investor-owned utility headquartered in Texas, we are fortunate to serve customers in the City of Houston and its surrounding areas. The Houston area is one of the fastest growing and most ethnically diverse areas in the nation, averaging more than 2% annual population growth over the last three decades.
We believe that this diversity only strengthens Houston's future growth prospect, which benefits our customers and investors alike. Although Houston today is well known as the energy capital of the world, not as well known is that it's also home to one of the largest active ports in the nation in the Houston-based Texas Medical Center, which is the largest medical center in the world. For example, the Port of Houston is the largest port in the U.S. by waterborne tonnage and is also the U.S.'s largest exporter with over $140 billion of goods shipped annually. This is more than 35% greater than that of New York, the next largest U.S. shipping exporter. The Houston Ship Channel's Petrochem complex alone, both 272 chemical plants, refineries, and other industrial facilities, which generate about $800 billion a year in business annually.
Just this summer, an additional $1 billion project which started to widen and deepen the channel to support immense future growth. In addition, the Port Authority is now looking at electrifying its port operation. This will also benefit our customers and communities who live near the port by helping reduce submissions from idling cargo ships. Turning to the Texas Medical Center, or TMC. If this complex was standing on its own, would already be the 8th largest business district in the United States. And just last month, it was announced that the TMC would nearly double its size in the next five to 10 years. It is now anticipated that this doubling in size of the TMC will alone create over 100,000 new jobs. With a greater focus on the biosciences and biomanufacturing of critical medical products, the TMC should continue to attract diverse talent for years to come.
Today, it already sees roughly eight million patients every year. So much like the region, it continues to grow. Lastly, and perhaps the purest illustration of Houston's incredible organic growth, there are over 70,000 births in the Houston area alone last year. That's a new baby born every seven minutes. While Houston's natural growth and positioning in the Gulf Coast provides a clear competitive advantage, we are also mindful of our exposure to severe weather. Our Houston Electric customers know what's at stake, a day without power can equal a loss of up to $1.4 billion of GDP. This is one factor that drives the collective community desire for a more reliable and resilient energy supply. This desire has led to customer-driven investment opportunities that we will be folding into our 10-year capital plan through 2030.
For reasons to be discussed next, at this time, we are now only incorporating $2.3 billion of this additional $5.3 billion in capital into the balance of our existing 10-year investment plan through 2030. $1 billion of this is expected to be deployed by the end of 2025 and another $1.3 billion to be deployed by the end of 2030, all for the benefit of our customers. And while we are not updating our Analyst Day non-GAAP EPS guidance targets previously discussed, the deployment of this increased capital will clearly increase the potential future earnings power of the company. The initial $2.3 billion in capital now being added to our investment plan reflects the subset of opportunities, we believe we can currently and confidently execute efficiently and is comprised of the following: $1.6 billion to $1.8 billion of this new capital will be dedicated toward our distribution system resiliency, reliability and expanded grid modernization.
This also includes strategically undergrounding certain parts of our system, replacing poles with higher wind resistant ones and elevating parts of the grid, especially substations to help protect such structures from the threat of flood damage. We recognize our customers want more resiliency more quickly, which is why we have already jumped ahead and began some of these projects in 2022. For example, $300 million of the $1.6 billion to $1.8 billion related to this category of capital spend is expected to be completed by the end of this year. $600 million to $800 million of this new capital will be focused on transmission upgrades. As we've stated before, our Houston Electric service territory comprises just 2.5% of the geographic footprint of the state of Texas, but we consume nearly 25% and of ERCOT's peak summer load.
At the same time, our service territories need to import up to 60% of that load from generators outside our territory. This requirement to import a significant portion of the energy that is consumed in the Houston area, each and every day creates a risk of disruption. As this summer is illustrated, when Houston endures sustained high temperatures, statewide power generation can struggle to keep up with demand and the need for additional transmission lines to deliver a cheaper and more diverse power supply for our customers in the Houston area becomes even more apparent. On top of the $2.3 billion described above, we have separately identified other capital investment opportunities of $3 billion, which we will opportunistically integrate into our long-term capital plan.
These additional opportunities include even more grid modernization and system reliability investments as well as the increased investments for accelerated electrification in the Houston area, including EVs. As a reminder, we conservatively estimate that each light-duty EV brings approximately $80 in margin to us per year. The Houston area remains a laggard in the adoption with about 30,000 EVs on its roads today. None of the potential future earnings upside from additional EV penetration is reflected in our current earnings forecast. Furthermore, the $3 billion in additional future capital spend I mentioned earlier, does not fully include the potential impact of increased or accelerated EV adoption. With nearly five million cars in the Houston area, that is a lot of potential upside.
The remaining $3 billion of opportunities beyond the $2.3 billion that we've added to our investment plan through 2030, also provides capital upside and additional potential earnings power for us. However, as is our management team's history, we are taking a prudent approach and are not yet adding it to our capital plan. We will start to add these amounts incrementally to our planned capital spend once we are convinced, we can access the labor, nail down the availability of the equipment and deploy it to the benefit of our customers. In other words, we fully expect to include the $3 billion balance of the $5.3 billion of these other new capital opportunities on our plan when we believe we can operationally execute it, efficiently fund it and prudently recover it.
This approach is no different than our recent history of folding incremental capital into our plan once we are convinced, we can efficiently deploy it to benefit our customers. The customer benefits of our revised capital plan are exciting and tangible, enhancing both reliability and resiliency while also helping us to advance the restoration of service during outages. To summarize this capital spend. This will increase our current capital plan by $2.3 billion, which now totals nearly $43 billion through 2030. As I stated today, we are only including $2.3 billion of investments in our updated capital plan, which we believe we have the crews and materials can efficiently finance while remaining focused on overall affordability at the same time, customers are facing rising energy costs.
The remaining $3 billion will be folded in once it also meets that same criterion, which we believe will be achievable through prior securitization charges rolling off, our commitment to O&M discipline and the continued organic growth in our Houston Electric service territory. This increased capital investment will also contribute to our ongoing efforts to reduce O&M over the longer term, which will help continue to keep customer bills affordable. Included in our capital spend are grid modernization investments such as circuit reclosers and other smart grid investments that will reduce the number of truck rolls to restore power, which should translate into lower O&M costs that directly benefit our customers.
The benefit of O&M savings is exemplified by the fact that every dollar saved of O&M roughly translates to $8 that can be invested as capital for the benefit of customers. This ability to reduce O&M along with prior securitization charges coming off the bill in 2022 and 2024 and continued organic growth creates a perfect opportunity to invest incremental capital to the benefit of our customers while keeping customer charges affordable. We believe our continued O&M discipline in organically growing Houston customer base will also allow us to make these investments, while customer charge increases stay below the average historical level of inflation of 2%. This is in line with the increase to our charges that we've seen for our Houston Electric customers over the last 10 years, which averaged a little over 1% annually.
We also still expect to reduce our O&M by 1% to 2% per year on average over our 10-year plan. And in case you're wondering, this updated capital plan still does not require us to issue any additional external equity nor does it rely on the use of strategic proceeds from the sale of any additional regulated CenterPoint assets as our cash flow remains strong. This is a nice combination in a great position to be in today. Jason will walk you through our capital investment financing plan in a few minutes. Importantly, recovering our updated capital plan does not rely on any big bets as approximately 80% of the total plan can be recovered through interim regulatory mechanisms. And again, Jason will go into more detail on the funding and financial details of this in his section.
So in summary, before I turn the call over to Jason, our management team is committed to executing and what we believe is one of the most tangible growth stories in the industry, which is driven by the growth profile of our largest jurisdiction, the Houston area. Our customer-driven investments are focused on meeting our customers' desire for reliable and cleaner energy so they can continue to contribute to one of the country's strongest and fastest-growing economies. We will look to deliver on those investments while keeping customer charges affordable, targeting charge increases at or below an average of 2% annually through 2030. As we continue to engage with stakeholders, we believe additional customer-driven opportunities can be identified, and we look forward to furthering those customer discussions to help them achieve their own objectives.
We reiterate 2022 non-GAAP EPS guidance of $1.37 to $1.39, a 9% growth rate over 2021, while initiating 2023 non-GAAP EPS guidance of $1.48 to $1.50 per share, a further 8% growth. After that, we continue to target a further 8% growth through 2024 and at the mid- to high end of 6% to 8% annually thereafter through 2030 and industry-leading growth rate. As a result of customer-driven initiatives, we have identified $2.3 billion of new capital and $3 billion of future capital to increase resiliency, grid modernization as well as to facilitate expanded electrification that will drive additional potential earnings power. We believe our continued focus on over delivering on our commitments has served our customers and investors well and will continue into the future.
We are proud of our 10 consecutive quarters of execution and look to build on that streak while also delivering above expectations for the benefit of both our customers and our investors. Lastly, we remain focused on achieving our value proposition, which is striving for sustainable, resilient and affordable rates for our customers, sustainable earnings growth for our shareholders and a sustainable positive impact on the environment for our communities.
With that, I'll turn the call over to Jason.
