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Revenue Recognition
 6 Months Ended
Jun. 30, 2019
Revenue from Contract with Customer [Abstract]  
Revenue Recognition [Text Block] Revenue Recognition

In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Registrants expect to be entitled to receive in exchange for these goods or services.

The following tables disaggregate revenues by reportable segment and major source:

CenterPoint Energy
 
 
Three Months Ended June 30, 2019
 
 
Houston Electric T&D (1)
 
Indiana
 Electric Integrated (1)
 
Natural Gas Distribution (1)
 
Energy
Services (2)
 
Infrastructure Services (2)
 
Corporate and Other (2)
 
Total
 
 
(in millions)
Revenue from contracts
 
$
768

 
$
140

 
$
657

 
$
87

 
$
326

 
$
78

 
$
2,056

Derivatives income
 
—

 
—

 
—

 
768

 
—

 
—

 
768

Other (3)
 
(3
)
 
—

 
3

 
—

 
—

 
2

 
2

Eliminations
 
—

 
—

 
(10
)
 
(17
)
 
(1
)
 
—

 
(28
)
Total revenues
 
$
765

 
$
140

 
$
650

 
$
838

 
$
325

 
$
80

 
$
2,798

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2019
 
 
Houston Electric T&D (1)
 
Indiana
 Electric Integrated (1) (4)
 
Natural Gas Distribution (1) (4)
 
Energy
Services (2)
 
Infrastructure Services (2) (4)
 
Corporate and Other (2) (4)
 
Total
 
 
(in millions)
Revenue from contracts
 
$
1,458

 
$
223

 
$
2,063

 
$
260

 
$
472

 
$
119

 
$
4,595

Derivatives income
 
3

 
—

 
—

 
1,841

 
—

 
—

 
1,844

Other (3)
 
(7
)
 
—

 
(4
)
 
—

 
—

 
3

 
(8
)
Eliminations
 
—

 
—

 
(20
)
 
(81
)
 
(1
)
 
—

 
(102
)
Total revenues
 
$
1,454

 
$
223

 
$
2,039

 
$
2,020

 
$
471

 
$
122

 
$
6,329


 
 
Three Months Ended June 30, 2018
 
 
Houston Electric T&D (1)
 
Indiana
Electric Integrated (1)
 
Natural Gas Distribution (1)
 
Energy
Services (2)
 
Infrastructure Services (2)
 
Corporate and Other (2)
 
Total
 
 
(in millions)
Revenue from contracts
 
$
860

 
$
—

 
$
509

 
$
78

 
$
—

 
$
2

 
$
1,449

Derivatives income
 
—

 
—

 
—

 
782

 
—

 
—

 
782

Other (3)
 
(6
)
 
—

 
(14
)
 
—

 
—

 
2

 
(18
)
Eliminations
 
—

 
—

 
(8
)
 
(19
)
 
—

 
—

 
(27
)
Total revenues
 
$
854

 
$
—

 
$
487

 
$
841

 
$
—

 
$
4

 
$
2,186

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2018
 
 
Houston Electric T&D (1)
 
Indiana
Electric Integrated (1)
 
Natural Gas Distribution (1)
 
Energy
Services (2)
 
Infrastructure Services (2)
 
Corporate and Other (2)
 
Total
 
 
(in millions)
Revenue from contracts
 
$
1,621

 
$
—

 
$
1,695

 
$
256

 
$
—

 
$
3

 
$
3,575

Derivatives income
 
(4
)
 
—

 
—

 
1,889

 
—

 
—

 
1,885

Other (3)
 
(12
)
 
—

 
(47
)
 
—

 
—

 
5

 
(54
)
Eliminations
 
—

 
—

 
(18
)
 
(47
)
 
—

 
—

 
(65
)
Total revenues
 
$
1,605

 
$
—

 
$
1,630

 
$
2,098

 
$
—

 
$
8

 
$
5,341


(1)
Reflected in Utility revenues in the Condensed Statements of Consolidated Income.

(2)
Reflected in Non-utility revenues in the Condensed Statements of Consolidated Income.

(3)
Primarily consists of income from ARPs and leases. ARPs are contracts between the utility and its regulators, not between the utility and a customer. The Registrants recognize ARP revenue as other revenues when the regulator-specified conditions for recognition have been met. Upon recovery of ARP revenue through incorporation in rates charged for utility service to customers, ARP revenue is reversed and recorded as revenue from contracts with customers. The recognition of ARP revenues and the reversal of ARP revenues upon recovery through rates charged for utility service may not occur in the same period.

(4)
Reflects revenues from Vectren subsidiaries for the period from February 1, 2019 to June 30, 2019.

Houston Electric
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions)
Revenue from contracts
 
$
768

 
$
860

 
$
1,458

 
$
1,621

Other (1)
 
(3
)
 
(6
)
 
(7
)
 
(12
)
Total revenues
 
$
765

 
$
854

 
$
1,451

 
$
1,609


(1)
Primarily consists of income from ARPs and leases. ARPs are contracts between the utility and its regulators, not between the utility and a customer. The Registrants recognize ARP revenue as other revenues when the regulator-specified conditions for recognition have been met. Upon recovery of ARP revenue through incorporation in rates charged for utility service to customers, ARP revenue is reversed and recorded as revenue from contracts with customers. The recognition of ARP revenues and the reversal of ARP revenues upon recovery through rates charged for utility service may not occur in the same period.

CERC
 
 
Three Months Ended June 30,
 
 
2019
 
2018
 
 
Natural Gas Distribution (1)
 
Energy
 Services
 (2)
 
Other Operations (2)
 
Total
 
Natural Gas Distribution (1)
 
Energy
 Services
 (2)
 
Other Operations (2)
 
Total
 
 
(in millions)
Revenue from contracts
 
$
510

 
$
87

 
$
—

 
$
597

 
$
509

 
$
78

 
$
—

 
$
587

Derivatives income
 
—

 
768

 
—

 
768

 
—

 
782

 
—

 
782

Other (3)
 
3

 
—

 
—

 
3

 
(14
)
 
—

 
—

 
(14
)
Eliminations
 
(10
)
 
(16
)
 
—

 
(26
)
 
(8
)
 
(19
)
 
—

 
(27
)
Total revenues
 
$
503

 
$
839

 
$
—

 
$
1,342

 
$
487

 
$
841

 
$
—

 
$
1,328

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
2019
 
2018
 
 
Natural Gas Distribution (1)
 
Energy
 Services (2)
 
Corporate and Other (2)
 
Total
 
Natural Gas Distribution (1)
 
Energy
 Services (2)
 
Corporate and Other (2)
 
Total
 
 
(in millions)
Revenue from contracts
 
$
1,708

 
$
260

 
$
1

 
$
1,969

 
$
1,695

 
$
256

 
$
—

 
$
1,951

Derivatives income
 
—

 
1,841

 
—

 
1,841

 
—

 
1,889

 
—

 
1,889

Other (3)
 
—

 
—

 
—

 
—

 
(47
)
 
—

 
—

 
(47
)
Eliminations
 
(20
)
 
(80
)
 
—

 
(100
)
 
(18
)
 
(47
)
 
—

 
(65
)
Total revenues
 
$
1,688

 
$
2,021

 
$
1

 
$
3,710

 
$
1,630

 
$
2,098

 
$
—

 
$
3,728


(1)
Reflected in Utility revenues in the Condensed Statements of Consolidated Income.

(2)
Reflected in Non-utility revenues in the Condensed Statements of Consolidated Income.

(3)
Primarily consists of income from ARPs and leases. ARPs are contracts between the utility and its regulators, not between the utility and a customer. The Registrants recognize ARP revenue as other revenues when the regulator-specified conditions for recognition have been met. Upon recovery of ARP revenue through incorporation in rates charged for utility service to customers, ARP revenue is reversed and recorded as revenue from contracts with customers. The recognition of ARP revenues and the reversal of ARP revenues upon recovery through rates charged for utility service may not occur in the same period.

Revenues from Contracts with Customers

Houston Electric T&D (CenterPoint Energy and Houston Electric). Houston Electric distributes electricity to customers over time and customers consume the electricity when delivered. Revenue, consisting of both volumetric and fixed tariff rates set by state regulators, is recognized as electricity is delivered and represents amounts both billed and unbilled. Discretionary services requested by customers are provided at a point in time with control transferring upon the completion of the service. Revenue for discretionary services is recognized upon completion of service based on the tariff rates set by state regulators. Payments for electricity distribution and discretionary services are aggregated and received on a monthly basis. Houston Electric performs transmission services over time as a stand-ready obligation to provide a reliable network of transmission systems. Revenue is recognized upon time elapsed, and the monthly tariff rate set by state regulators. Payments are received on a monthly basis.

Indiana Electric Integrated (CenterPoint Energy). Indiana Electric generates, distributes and transmits electricity to customers over time, and customers consume the electricity when delivered. Revenue, consisting of both volumetric and fixed tariff rates set by state regulators, is recognized as electricity is delivered and represents amounts both billed and unbilled. Customers are billed monthly and payment terms, set by the regulator, require payment within a month of billing.

Natural Gas Distribution (CenterPoint Energy and CERC). Natural gas is distributed and transported to customers over time, and customers consume the natural gas when delivered. Revenue, consisting of both volumetric and fixed tariff rates set by the state governing agency for that service area, is recognized as natural gas is delivered and represents amounts both billed and unbilled. Discretionary services requested by the customer are satisfied at a point in time and revenue is recognized upon completion of service and the tariff rates set by the applicable state regulator. Payments of natural gas distribution, transportation and discretionary services are aggregated and received on a monthly basis.
Energy Services (CenterPoint Energy and CERC). The majority of CES natural gas sales contracts are considered a derivative, as the contracts typically have a stated minimum or contractual volume of delivery.

For contracts in which CES delivers the full requirement of the natural gas needed by the customer and a volume is not stated, a contract as defined under ASC 606 is created upon the customer’s exercise of its option to take natural gas. CES supplies natural gas to retail customers over time as customers consume the natural gas when delivered. For wholesale customers, CES supplies natural gas at a point in time because the wholesale customer is presumed to have storage capabilities. Control is transferred to both types of customers upon delivery of natural gas. Revenue is recognized on a monthly basis based on the estimated volume of natural gas delivered and the price agreed upon with the customer. Payments are received on a monthly basis.

AMAs are natural gas sales contracts under which CES also assumes management of a customer’s physical storage and/or transportation capacity. AMAs have two distinct performance obligations, which consist of natural gas sales and natural gas delivery because delivery could occur separate from the sale of natural gas (e.g., from storage to customer premises). Most AMAs’ natural gas sales performance obligations are accounted for as embedded derivatives. The transaction price is allocated between the sale of natural gas and the delivery based on the stand-alone selling price as stated in the contract. CES performs natural gas delivery over time as customers take delivery of the natural gas and recognizes revenue on an aggregated monthly basis based on the volume of natural gas delivered and the fees stated within the contract. Payments are received on a monthly basis.

Infrastructure Services (CenterPoint Energy). Infrastructure Services provides underground pipeline construction and repair services. The contracts are generally less than one year in duration and consist of fixed price, unit, and time and material customer contracts. Under unit or time and material contracts, Infrastructure Services performs construction and repair services under specific work-orders at prices established by master service agreements. The performance obligation is defined at the work-order level. These services are billed to customers monthly or more frequently for work completed based on units completed or the costs of time and material incurred and generally require payment within 30 days of billing. Infrastructure Services has the right to consideration from customers in an amount that corresponds directly with the performance obligation satisfied, and therefore recognizes revenue at a point in time in the amount to which it has the right to invoice, which results in accrued unbilled revenues at the end of each accounting period.

Under fixed price contracts, Infrastructure Services performs larger scale construction and repair services. Each contract is typically accounted for as a single performance obligation. Services performed under fixed price contracts are typically billed per the terms of the contract, which can range from completion of specific milestones to scheduled billing intervals. Billings occur monthly or more frequently for work completed and generally require payment within 30 days of billing. Revenue for fixed price contracts is recognized over time as control is transferred using the input method, considering costs incurred relative to total expected cost. Total expected cost is therefore a significant judgment affecting the amount and timing of revenue recognition. Infrastructure Services’ revenues are not subject to significant returns, refunds or warranty obligations.

Contract Balances. When the timing of delivery of service is different from the timing of the payments made by customers and when the right to consideration is conditioned on something other than the passage of time, the Registrants recognize either a contract asset (performance precedes billing) or a contract liability (customer payment precedes performance). Those customers that prepay are represented by contract liabilities until the performance obligations are satisfied. The Registrants’ contract assets are included in Accrued unbilled revenues in their Condensed Consolidated Balance Sheets. On an aggregate basis as of June 30, 2019, the Registrants’ contract assets primarily relate to contracts in the Infrastructure Services segment where revenue is recognized using the input method. The Registrants’ contract liabilities are included in Accounts payable and Other current liabilities in their Condensed Consolidated Balance Sheets. On an aggregate basis as of June 30, 2019, the Registrants’ contract liabilities primarily relate to ESG contracts where revenue is recognized using the input method.

The opening and closing balances of accounts receivable, other accrued unbilled revenue, contract assets and contract liabilities from contracts with customers for the six months ended June 30, 2019 are as follows:

CenterPoint Energy
 
Accounts Receivable
 
Other Accrued Unbilled Revenues
 
Contract
Assets
 
Contract Liabilities
 
(in millions)
Opening balance as of December 31, 2018 (1)
$
763

 
$
575

 
$
37

 
$
47

Closing balance as of June 30, 2019
831

 
362

 
56

 
54

Increase (decrease)
$
68

 
$
(213
)
 
$
19

 
$
7


(1)
Opening balances related to Vectren are as of February 1, 2019.

The amount of revenue recognized in the six-month period ended June 30, 2019 that was included in the opening contract liability was $38 million. The difference between the opening and closing balances of the contract liabilities primarily results from the timing difference between CenterPoint Energy’s performance and the customer’s payment.

Houston Electric
 
Accounts Receivable
 
Other Accrued Unbilled Revenues
 
Contract Liabilities
 
(in millions)
Opening balance as of December 31, 2018
$
234

 
$
110

 
$
3

Closing balance as of June 30, 2019
305

 
122

 
5

Increase
$
71

 
$
12

 
$
2


The amount of revenue recognized in the six-month period ended June 30, 2019 that was included in the opening contract liability was $2 million. The difference between the opening and closing balances of the contract liabilities primarily results from the timing difference between Houston Electric’s performance and the customer’s payment.

CERC
 
Accounts Receivable
 
Other Accrued Unbilled Revenues
 
(in millions)
Opening balance as of December 31, 2018
$
282

 
$
263

Closing balance as of June 30, 2019
191

 
87

Decrease
$
(91
)
 
$
(176
)

CERC does not have any opening or closing contract asset or contract liability balances.

Remaining Performance Obligations (CenterPoint Energy). The table below discloses (1) the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period for contracts and (2) when CenterPoint Energy expects to recognize this revenue. Such contracts include fixed price contracts in the Infrastructure Services reportable segment.
 
Rolling 12 Months
 
Thereafter
 
Total
 
(in millions)
Revenue expected to be recognized on contracts in place as of June 30, 2019:
 
 
 
 
 
Fixed price (bid)
$
317

 
$
—

 
$
317

 
$
317

 
$
—

 
$
317



Practical Expedients and Exemption. Sales taxes and other similar taxes collected from customers are excluded from the transaction price. For contracts for which revenue from the satisfaction of the performance obligations is recognized in the amount invoiced, the practical expedient was elected and revenue expected to be recognized on these contracts has not been disclosed.