CenterPoint Energy Sells Ohio Gas Distribution Business to National Fuel for $2.62bn

U.S. utility giant CenterPoint Energy has agreed to sell its Ohio natural gas distribution unit to National Fuel Gas Company for $2.62 billion, marking the latest in a wave of divestments by utilities narrowing their focus on core regulated markets amid surging power demand.

The Houston-based utility said Tuesday that the sale includes approximately 5,900 miles of transmission and distribution pipelines serving about 335,000 metered customers across Ohio. CenterPoint said the deal, which represents about 1.9 times the business’s 2024 rate base, is expected to close in the fourth quarter of 2026, pending regulatory approvals.

Shares of National Fuel Gas fell 4.7% in morning trading following the announcement, while CenterPoint’s stock slipped marginally.

Chief Executive Officer Jason Wells said the sale aligns with CenterPoint’s long-term strategy to strengthen its balance sheet and reinvest in high-growth regulated electric and gas operations in states such as Texas, Indiana, and Minnesota.

The company said it expects to receive $1.42 billion of the proceeds in 2026 and the remainder in 2027. Analysts see the transaction as a key step in a broader restructuring across the U.S. utility sector as firms reposition for a new phase of electricity demand growth driven by data centers, AI computing, and electrification.

Scotiabank analysts said in a research note that the Ohio sale highlights CenterPoint’s progress toward its goal of achieving annual profit growth near 9%, among the fastest in the U.S. utilities sector.

The transaction gives National Fuel Gas an expanded footprint in Ohio and further diversifies its regulated utility portfolio, which already serves customers across western New York and Pennsylvania. For National Fuel, the acquisition represents a steady source of revenue and greater operational scale in the U.S. Midwest, helping to balance its exposure to natural gas exploration and production markets.

CenterPoint said it will continue to focus on regulated operations where it sees long-term demand and growth potential. The company delivers electricity and natural gas to more than seven million customers across six states — Indiana, Louisiana, Minnesota, Mississippi, Ohio, and Texas. In late September, the utility outlined a $65 billion capital spending plan for 2026 through 2035, focused primarily on grid modernization, energy reliability, and the expansion of electric infrastructure in high-growth markets.

That long-term investment plan reflects CenterPoint’s intent to position itself at the forefront of the accelerating energy transition in the United States, as rising industrial activity, electric vehicle charging, and data center demand reshape load patterns for utilities.

The sale of the Ohio gas distribution network is part of a wider industry trend among U.S. utilities that are selling or restructuring lower-growth assets to free up capital for projects tied to grid expansion, renewable energy integration, and reliability upgrades. Many of these companies are responding to the same pressures — rapid electrification, federal clean energy incentives, and increasing capital intensity of utility operations.

The Ohio sale is seen as a disciplined portfolio management consistent with our focus on regulated businesses where we can drive value through operational excellence and capital deployment.

Analysts see the deal as consistent with CenterPoint’s long-running strategic realignment that began several years ago when it started divesting non-core operations to focus on rate-regulated utilities with stable returns. Those efforts have helped the company streamline operations and reduce exposure to market volatility, particularly in unregulated businesses that carry higher earnings uncertainty.

National Fuel Gas, based in Williamsville, New York, operates an integrated model that includes exploration and production, pipeline and storage, gathering, and utility segments. By adding CenterPoint’s Ohio operations, it gains a new service area and approximately 335,000 additional customers. The company said the acquisition will broaden its regulated natural gas distribution base and contribute to steady earnings growth.

The $2.62 billion deal value, which includes the assumption of certain liabilities, is viewed as relatively modest compared to other recent utility asset transactions, denoting the mature and stable nature of Ohio’s gas distribution market. Still, the sale price provides CenterPoint with significant flexibility to fund upcoming capital programs and reduce leverage.

The timing of the sale, with proceeds spread across 2026 and 2027, also aligns with the company’s capital deployment cycle, ensuring sufficient liquidity for its $65 billion investment plan over the next decade.

For investors, the deal signals that CenterPoint is doubling down on its high-growth regulated markets, particularly Texas, where population and industrial expansion are driving record energy demand. Texas has emerged as a central pillar of CenterPoint’s strategy, given its role in power transmission for the rapidly growing Houston region and the state’s expanding industrial and data center corridor.

Scotiabank’s analysts said CenterPoint’s combination of growth prospects and disciplined financial management could make it one of the top performers among U.S. utilities in the coming years.

For National Fuel, the addition of the Ohio operations offers both stability and incremental growth at a time when natural gas demand in regulated markets remains strong. The company’s broader strategy has been to balance its commodity-sensitive upstream business with steady revenue from regulated utilities — and the CenterPoint assets fit neatly into that plan.

Once completed, the sale will cap a multiyear effort by CenterPoint to streamline its asset base and concentrate resources where it can deliver predictable returns and infrastructure expansion opportunities.