Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

CERC participates in a “money pool” through which it can borrow or invest on a short-term basis. Funding needs are aggregated and external borrowing or investing is based on the net cash position. The net funding requirements of the money pool are expected to be met with borrowings under CenterPoint Energy’s revolving credit facility or the sale of CenterPoint Energy’s commercial paper. CERC had money pool borrowings of $383 million and $779 million at December 31, 2011 and 2012, respectively, which are included in accounts and notes payable —affiliated companies in the Consolidated Balance Sheets.  At December 31, 2012, CERC’s money pool borrowings had a weighted-average interest rate of 0.1%.

CERC had net interest expense related to affiliate borrowings of $2 million, less than $1 million and $4 million for the years ended December 31, 2010, 2011 and 2012, respectively.

CenterPoint Energy provides some corporate services to CERC. The costs of services have been charged directly to CERC using methods that management believes are reasonable. These methods include negotiated usage rates, dedicated asset assignment and proportionate corporate formulas based on operating expenses, assets, gross margin, employees and a composite of assets, gross margin and employees. These charges are not necessarily indicative of what would have been incurred had CERC not been an affiliate of CenterPoint Energy. Amounts charged to CERC for these services were $154 million, $164 million and $163 million for 2010, 2011 and 2012, respectively, and are included primarily in operation and maintenance expenses.

No dividends were paid to the parent in 2010, 2011 and 2012.