Christopher A. Foster
Executive Vice President & Chief Financial Officer at CenterPoint Energy
Before I get started on the financial results, Dave, thank you for your support of me as I saw to hit the ground running. And Jason, congratulations to you. Today, I'll cover three areas of focus. First, our Q3 results, including our positive revisions to 2023 non-GAAP EPS guidance and the initiation of 2024 non-GAAP EPS guidance. Second, our positively revised capital plan and corresponding financing plan. And third, I'll look at where we stand today with respect to our balance sheet.
Now, let's start with the financial results on Slide 7. As Dave mentioned in his headlines, with three quarters 2023 behind us, we now have the visibility and confidence to provide an upward revision to our full-year 2023 non-GAAP EPS guidance range from $1.48 to $1.50 per share to $1.49 to $1.51 per share. This increased guidance range reflects projected 9% growth over full-year 2022 actual non-GAAP EPS of $1.38 when using the midpoint. This would represent our third consecutive year of 9% growth.
On a GAAP EPS basis, we reported $0.40 for the third quarter of 2023. Our non-GAAP EPS results for the third quarter remove the results of our now divested non-regulated business, Energy Systems Group. On a non-GAAP basis, we also reported $0.40 for the third quarter of 2023 compared to $0.32 in the third quarter of 2022. Growth in rate recovery contributed $0.09, which was driven by the ongoing recovery of various interim mechanisms for which customer rates were updated earlier in the year, such as the transmission tracker or TCOS at Houston Electric and the Texas GRIPs also contributing.
And, as Jason noted earlier during the quarter, we began recovery of two separate mechanisms at Houston Electric, DCRF and TEEEF. In addition, we continue to see strong organic growth in the Houston area, extending the long-term trend of 1% to 2% average annual customer growth, which continues to benefit both customers and investors. Weather and usage were $0.05 favorable when compared to the same quarter of 2022, primarily driven by the historic summer heat in our Houston Electric service territory. This Q3, warmer weather impact partially offset the unfavorable cooler weather impact of $0.06 we experienced in Q1 and Q2 of this year.
O&M was flat for the third quarter and $0.02 favorable year-to-date when comparing to the first three quarters of 2022. And we remain laser-focused on reducing O&M by 1% to 2% per year on average, while executing our core work plan to meet our customers' needs. In fact, due to the favorable impact from the weather, we were able to increase Q3 spending on certain O&M items for the benefit of our customers. These O&M activities included accelerated vegetation management, which we see is prudent given the heightened recent drought conditions and other targeted projects that should help us improve safety and reliability for our customers.
Our consistent progress on O&M is clear. Over the last couple of years, we have been able to use hotter summers to increase our spend on O&M for the benefit of our customers. However, when looking at our current O&M trajectory, even with this increased spend, we are anticipating reducing controllable O&M by over 12% since 2021. These are excellent results for customers and investors alike. We continue to look for and execute on additional opportunities each year.
Closing out the earnings drivers for the quarter, favorability from rate recovery and weather were partially offset by an $0.08 increase in interest expense. The continued rising interest rate expense on short-term borrowings was the primary driver for this unfavorability when compared to the third quarter of last year. However, we continue to be opportunistic in reducing short-term floating-rate debt exposure. I'll discuss this in greater detail in just a moment.
Let me now focus a bit on our 2023 capital plan, which you can see here on Slide 8. The third quarter of 2023 represents yet another quarter of sound capital deployment execution as we invested $1.1 billion for the benefit of our customers and communities. This brings our year-to-date total investments to $3.4 billion year-to-date across our various service territories, or over 80% of 2023 capital plan. Additionally, as Dave mentioned in his headlines, we are now able to incorporate an additional $200 million of customer-focused investments in 2023, which increases our full-year 2023 capital plan from $4 billion to $4.2 billion.
Let me provide a little context around this update. This year saw a couple of operational factors beyond the second DCRF law that benefited us. First, we did not experience a temporary loss of our great frontline crews to mutual aid requests as they were not major weather events that activated that need. With those crews at the ready to execute more work, we were able to support our continued customer growth of over 2% in our Texas electric business, as well as advance some of our pipeline modernization work at our Texas gas business as opposed to waiting until next year. I'm proud of the team's ability to be nimble in this way as we continue to invest in safety, reliability and resiliency for our customers.
Now turning to our 2024 non-GAAP earnings guidance. As we enter the final quarter of 2023 with confidence in our ability to deliver strong full-year results, we are already looking into next year. And going forward, we would intend for our traditional rhythm to be to provide subsequent year non-GAAP EPS guidance for you in the third quarter of the prior year. And as a result, today we are initiating our 2024 non-GAAP EPS guidance range of $1.60 to a $1.63 per share. This would represent an 8% earnings growth over our now higher expected 2023 earnings midpoint. Beyond 2024, we continue to target the mid to-high end of 6% to 8% non-GAAP EPS growth through 2030.
We also target growing dividends in line with earnings. And as some of you may have noticed, we took the step to increase our dividend this quarter from $0.19 to $0.20, which represents a 10% increase over the last 12 months. One of the highest increases in this sector. Supporting this 2024 growth is our now revised capital plan. For 2024, we are targeting to deploy $3.7 billion of customer-driven capital to support the growth, resiliency and safety of our system for our customers. On top of the incremental $200 million added to the 2023 capital plan, we will add approximately $300 million of incremental capital to the existing $43.4 billion 10-year capital plan through 2030. This brings our new total amount to $43.9 billion. This $300 million is anticipated to be deployed in 2024 and 2025.
Allow me a minute to step-back and give all of you a feel for our thinking here on this upward revision. It's much like we said before, we need to be able to efficiently execute, fund and recover our costs as we think about including more capital for customers. This additional capital represents our move to take advantage of a few factors. First, we have the opportunity provided by the recent resiliency legislation that passed in the Texas Legislature, where we can start to pull some of that work into play soon. And the team has come a long way on better capital execution in recent years.
I want to take a moment and put in perspective just how far we've progressed in our capital plan since our last Analyst Day in 2021. The new $43.9 billion capital plan through 2030 is nearly 10% higher than the $40 billion plus plan we outlined when we hosted that Analyst Day and with our revised 2023 capital target, we will have deployed over $12.5 billion in capital since the beginning of 2021, over $1 billion more than our then market capitalization. Additionally, the five-year capital target of $18 billion plus communicated back in 2021, and which now stands at over $21 billion represents over a 16% increase in capital. At that same prior Analyst Day, we also announced that we did not need any equity to fund our $40 billion plus capital plan, nor did we need equity to fund the previous increases to $43.4 billion. And that was still the case when we referenced our most recent revision to $43.4 billion, in part due to the financing lift from the non-core ESG transaction we announced in the last quarter.
However, as we have previously said, as our capital plan grows and as we began to spend incremental capital beyond the $43.4 billion plan, equity or equity-like funding would be required. And the reason for this is simple. While we are committed to making customer-focused investments for safety, reliability and resiliency, we are equally committed to preserving a strong balance sheet.
As we go forward and evaluate acceleration of incremental growth capital additions to our plan, you should assume that we will fund in line with our consolidated capital structure. So it follows today that in order to efficiently fund the $500 million of incremental capital opportunities I discussed a moment ago, we anticipate initiating a modest ATM program in 2024 of approximately $250 million. Ultimately, we see this capital we highlighted today along with the ATM introducing additional flexibility for our future plans. And as we've said before, we will continue to evaluate efficient funding for future incremental capital that we formally fold into the plan. To be clear, any ATM program proceeds are dedicated to enhance growth and incremental capital investments. The equity issued under this program will in no way reduce our earnings growth targets through 2030.
As discussed, we continue to reaffirm our target of 8% next year and the mid-to-high-end of 6% to 8% thereafter through 2030. With our revised capital plan, we are still intently focused on delivering work affordably. We continue to target our customer delivery charges at Houston Electric to be equal to or less than historic inflation rate of 2%. We have confidence in our ability to achieve this through Houston's tremendous organic growth, securitization charges rolling-off the bill later next year and our plan to reduce O&M 1% to 2% per year on average.
A great example of our ability to keep customer charges manageable even as we make our system more resilient can be found in Q3. Even with the recovery of more than $700 million in investments in our temporary emergency generation now being included in customer rates, customer charges have increased at less than an annual average of 1%. We have a strong track record on bringing focus to affordability and smoothing of rates for our customers. Like Dave mentioned earlier, our average charge was $49 10 years ago, and it's averaging $49 today.
Finally. I will cover some of our financing and credit-related topics on Slide 9. As of the end of the third quarter, our calculated FFO to debt was 14.3%. This represents an expected increase from Q2 as the recovery of our investments accelerates going into the back half of the year. We anticipate this acceleration to continue through Q4 of this year as we will have a full-quarter of recovery on our DCRF and TEEEF investments that we indicated began on September 1st. We continue to target FFO to debt of 14% to 15%, which runs through 2030. And importantly, provide at least 100 basis points of cushion to our downgrade threshold of 13%.
As a reminder, we are carrying, approximately $400 million of debt at the parent, which was issued to fund our higher equity layer at Houston Electric and Texas gas, which we believe is the proper capitalization of these businesses. Another area in which we've seen improvement is the continued reduction of our exposure to floating rate debt. Through the third quarter, we reduced floating rate debt to approximately $1.8 billion. Which represents a 60% reduction from the beginning of 2023. We continue to be opportunistic in reducing this balance further and the convertible bond issuance during this quarter is a great example of capitalizing on opportunities. Our $1 billion convertible issuance allowed us to redeem our $800 million Series A preferred shares that were set to go floating during the quarter on September 1st of the year at nearly 90%. So, some good opportunistic savings were achieved there. The remaining approximately $200 million of convertible bond proceeds allowed us to pay down commercial paper contributing to the net reduction of floating rate debt exposure.
Lastly, after quarter closed, we issued $450 million of private placement notes at SIGECO. As we've noted in prior quarters, this was an opportunity to fund the entity on a standalone basis rather than relying on inter-company borrowings from the parent. On a go-forward basis, this should translate to a lower relative cost of borrowing versus the parent. And as a result, this reduced parent level debt-to-total borrowing by another 2%. This is a milestone as our final step of the Vectren financing integration.
We remain intensely focused on maintaining a strong balance sheet, especially in what appears to be a higher for longer interest rate environment. We have worked hard to build in additional conservatism in our long-term plan. And today shows another step of progressing that plan for our customers and investors. This shared focus on good planning is what we believe will allow us to continue to execute even in the face of continued headwinds.
With that, I'll now turn the call back over to Dave.
