Scott M. Prochazka, the chief executive officer of CenterPoint Energy, was replaced Wednesday, just days after the Public Utility Commission approved a drastically reduced rate increase for the Houston utility.

The company said its board of directors named one of its members, John W. Somerhalder II, as interim CEO, and will launch a search for a permanent chief executive. In a statement, Milton Carroll, the executive chairman, said, "The board has determined that now is the right time for a new leader with a fresh strategic perspective to lead the company though its next phase of growth and value creation.”

Prochazka could not immediately be reached.

Prochazka’s sudden departure comes less than a week after the Public Utility Commission approved a deal that CenterPoint negotiated with big industrial electricity users and cities that will lower the utility’s profit margin from 10 percent to 9.4 percent. CenterPoint also agreed to accept a $13 million rate hike after asking Texas regulators for $161 million.

Complaints about power reliability from H-E-B, the San Antonio-based grocery chain, played a role in reducing CenterPoint’s allowable returns. The persistent problems were cited by administrative law judges who recommended the lower profit margin.

Somerhalder has worked in the energy industry for 40 years, including a stint as CEO and director of AGL Resources, a natural gas utility. He has been a director of CenterPoint since 2016.

ON HOUSTONCHRONICLE.COM: How H-E-B went head-to-head with CenterPoint to lower Houston electricity bills

Prochazka, who had led CenterPoint since 2014, guided the company through a period of growth that included last year’s acquisition of the Indiana utility Vectren in a $6 billion deal. In the third quarter, CenterPoint Energy reported profits of $241 million, up from $153 million a year earlier, while its revenues jumped to $2.7 billion from $2.2 billion.

Prochazka began working for CenterPoint in 2001. He was the company’s chief operating officer when he was chosen in 2013 to succeed then CEO David McClanahan.

lm.sixel@chron.com

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