Related Party Transactions (Houston Electric and CERC)

Houston Electric and CERC participate in a money pool through which they 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. The table below summarizes money pool activity:



	December 31, 2018						December 31, 2017
	Houston Electric			CERC			Houston Electric			CERC
	(in millions)
Money pool investments (borrowings) (1)	$	(1	)	$	114		$	(60	)	$	(570	)
Weighted average interest rate	2.42		%	2.42		%	1.90		%	1.90		%


(1)	Included in Accounts and notes receivable (payable)–affiliated companies in Houston Electric’s and CERC’s Consolidated Balance Sheets.

Houston Electric and CERC affiliate-related net interest income (expense) were as follows:



	Year Ended December 31,
	2018				2017				2016
	Houston Electric		CERC		Houston Electric		CERC		Houston Electric			CERC
	(in millions)
Interest income (expense), net (1)	$	1	$	—	$	2	$	—	$	(4	)	$	—


(1)	Interest income is included in Other, net and interest expense is included in Interest and other finance charges on Houston Electric’s and CERC’s respective Statements of Consolidated Income.

CenterPoint Energy provides some corporate services to Houston Electric and CERC. The costs of services have been charged directly to Houston Electric and 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. Houston Electric provides certain services to CERC. These services are billed at actual cost, either directly or as an allocation and include fleet services, shop services, geographic services, surveying and right-of-way services, radio communications, data circuit management and field operations. Additionally, CERC provides certain services to Houston Electric. These services are billed at actual cost, either directly or as an allocation and include line locating and other miscellaneous services. These charges are not necessarily indicative of what would have been incurred had Houston Electric and CERC not been affiliates.

Amounts charged for these services were as follows and are included primarily in operation and maintenance expenses:



	Year Ended December 31,
	2018					2017					2016
	Houston Electric			CERC		Houston Electric			CERC		Houston Electric			CERC
	(in millions)
Corporate service charges	$	190		$	147	$	188		$	128	$	179		$	125
Net affiliate service charges (billings)	(17		)	17		(9		)	9		(8		)	8

The table below presents transactions among Houston Electric, CERC and their parent, Utility Holding.



	Year Ended December 31,
	2018				2017				2016
	Houston Electric		CERC		Houston Electric		CERC		Houston Electric		CERC
	(in millions)
Cash dividends paid to parent	$	209	$	360	$	180	$	601	$	135	$	643
Cash contribution from parent	200		960		—		38		374		72
Capital distribution to parent associated with the Internal Spin	—		1,473		—		—		—		—