Added · RECENT EVENTS

Large-Load Customers. The PUCT has begun the process of implementing Texas Senate Bill 6 through various rulemaking processes, focused on establishing financial, operational, and interconnection requirements for large-load customers to ensure grid reliability and prevent stranded infrastructure costs. On June 18, 2026, the PUCT approved ERCOT’s Batch Zero process for large-user connection requests with the stated goal of ensuring large electricity users like data centers only connect in quantities and locations the Texas grid can reliably support. Houston Electric estimates that approximately 14 gigawatts of its potential large-load customers are eligible to be considered part of ERCOT’s Batch Zero process, including the execution of Facilities Extension Agreements with Houston Electric and posting of financial security. The amount of gigawatts ultimately connected to the Houston Electric system, the actual amount of electricity ultimately used by these customers, and the ultimate timing of these additional load connections and energization, if at all, remain uncertain due to a variety of factors, including, but not limited to ERCOT approval into Batch Zero, including into base load or studied load, timing of construction, potential legislative, regulatory, and other government actions, and availability of materials. In the third quarter of 2026, customers provided or committed approximately $900 million in either contributions in aid of construction or financial security to Houston Electric, a portion of which may be returned to large-load customers depending on project outcomes and contractual requirements. These amounts will continue to change as projects move through ERCOT reviews, load allocations are refined, and customers either advance toward construction and energization or exit the process.