Regulatory Accounting

The following is a list of regulatory assets and liabilities reflected on the Registrants’ respective Condensed Consolidated Balance Sheets:



	March 31, 2019									December 31, 2018
	CenterPoint Energy			Houston Electric			CERC			CenterPoint Energy			Houston Electric			CERC
Regulatory Assets:	(in millions)
Current regulatory assets (1)	$	36		$	—		$	36		$	77		$	—		$	77
Non-current regulatory assets:
Securitized regulatory assets	977			977			—			1,059			1,059			—
Unrecognized equity return (2)	(202		)	(202		)	—			(213		)	(213		)	—
Unamortized loss on reacquired debt	66			66			—			68			68			—
Pension and postretirement-related regulatory asset (3)	711			34			29			725			33			30
Hurricane Harvey restoration costs-not earning a return	68			64			4			68			64			4
Regulatory assets related to TCJA (4)	29			23			6			33			23			10
Other regulatory assets-not earning a return (5)	114			57			26			81			55			26
Other regulatory assets	466			37			115			146			35			111
Total non-current regulatory assets	2,229			1,056			180			1,967			1,124			181
Total regulatory assets	2,265			1,056			216			2,044			1,124			258
Regulatory Liabilities:
Current regulatory liabilities (6)	67			11			38			38			17			21
Non-current regulatory liabilities:
Regulatory liabilities related to TCJA (4)	1,628			841			456			1,323			847			476
Estimated removal costs	1,404			271			624			886			269			617
Other regulatory liabilities	417			160			153			316			182			134
Total non-current regulatory liabilities	3,449			1,272			1,233			2,525			1,298			1,227
Total regulatory liabilities	3,516			1,283			1,271			2,563			1,315			1,248
Total regulatory assets and liabilities, net	$	(1,251	)	$	(227	)	$	(1,055	)	$	(519	)	$	(191	)	$	(990	)


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

(2)

The unrecognized equity return will be recognized as it is recovered in rates through 2024. During the three months ended March 31, 2019 and 2018, Houston Electric recognized approximately $11 million and $21 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 $34 million and $3 million as of March 31, 2019, respectively, and $33 million and $4 million as of December 31, 2018, respectively, were not earning a return.


(4)	The EDIT and deferred revenues will be recovered or refunded to customers as required by tax and regulatory authorities.


(5)	Regulatory assets acquired in the Merger and not earning a return were recorded at fair value as of the Merger Date. Such fair value adjustments are recognized over time until the regulatory asset is recovered.


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