Regulatory Accounting

The following is a list of regulatory assets and liabilities reflected on the Registrants’ respective Consolidated Balance Sheets as of December 31, 2018 and 2017:



	December 31, 2018									December 31, 2017
	CenterPoint Energy			Houston Electric			CERC			CenterPoint Energy			Houston Electric			CERC
	(in millions)
Regulatory Assets:
Current regulatory assets (1)	$	77		$	—		$	77		$	130		$	—		$	130
Non-current regulatory assets:
Securitized regulatory assets	1,059			1,059			—			1,590			1,590			—
Unrecognized equity return (2)	(213		)	(213		)	—			(287		)	(287		)	—
Unamortized loss on reacquired debt	68			68			—			75			75			—
Pension and postretirement-related regulatory asset (3)	725			33			30			646			31			20
Hurricane Harvey restoration costs (4)	68			64			4			64			58			6
Regulatory assets related to TCJA (5)	33			23			10			48			33			15
Other long-term regulatory assets (6)	227			90			137			211			70			140
Total non-current regulatory assets	1,967			1,124			181			2,347			1,570			181
Total regulatory assets	2,044			1,124			258			2,477			1,570			311
Regulatory Liabilities:
Current regulatory liabilities (7)	38			17			21			24			22			2
Non-current regulatory liabilities:
Regulatory liabilities related to TCJA (5)	1,323			847			476			1,354			862			492
Estimated removal costs	886			269			617			878			285			593
Other long-term regulatory liabilities	316			182			134			232			116			116
Total non-current regulatory liabilities	2,525			1,298			1,227			2,464			1,263			1,201
Total regulatory liabilities	2,563			1,315			1,248			2,488			1,285			1,203
Total regulatory assets and liabilities, net	$	(519	)	$	(191	)	$	(990	)	$	(11	)	$	285		$	(892	)


(1)	Current regulatory assets are included in Prepaid expenses and other current assets in the Registrants’ respective Consolidated Balance Sheets.

(2)

The unrecognized equity return will be recognized as it is recovered in rates through 2024. During the years ended December 31, 2018, 2017 and 2016, Houston Electric recognized approximately $74 million, $42 million and $64 million, respectively, of the allowed equity return. The timing of Houston Electric’s recognition of the equity return will vary each period based on amounts actually collected during the period. The actual amounts recognized are adjusted at least annually to correct any over-collections or under-collections during the preceding 12 months.

(3)

Includes a portion of Houston Electric’s and CERC’s NGD’s actuarially determined pension and other postemployment expense in excess of the amount being recovered through rates that is being deferred for rate making purposes, of which $33 million and $4 million as of December 31, 2018, respectively, and $31 million and $7 million as of December 31, 2017, respectively, were not earning a return.

(4)

The Registrants suffered damage as a result of Hurricane Harvey, a major storm classified as a Category 4 hurricane on the Saffir-Simpson Hurricane Wind Scale, that first struck the Texas coast on Friday, August 25, 2017 and remained over the Houston area for the next several days. The unprecedented flooding from torrential amounts of rainfall accompanying the storm caused significant damage to or destruction of residences and businesses served by the Registrants. The Registrants deferred the uninsured storm restoration costs as management believed it was probable that such costs will be recovered through traditional rate adjustment mechanisms for capital costs and through the next base rate proceeding for operation and maintenance expenses. As a result, storm restoration costs did not materially affect the Registrants’ reported net income for 2017. The Registrants are not earning a return on Hurricane Harvey restoration costs.


(5)	The EDIT and deferred revenues will be recovered or refunded to customers as required by tax and regulatory authorities. See Note 15 for additional information.


(6)	Other long-term regulatory assets that are not earning a return were not material as of December 31, 2018 and 2017.


(7)	Current regulatory liabilities are included in Other current liabilities in each of the Registrants’ respective Consolidated Balance Sheets.