Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Fair value, assets and liabilities measured on a recurring basis [Table Text Block]

The following tables present information about the Registrants’ assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 and indicate the fair value hierarchy of the valuation techniques utilized by the Registrants to determine such fair value.

CenterPoint Energy



	March 31, 2020											December 31, 2019
	Level 1		Level 2		Level 3		Netting (1)			Total		Level 1		Level 2		Level 3		Netting (1)			Total
Assets	(in millions)
Corporate equities	$	680	$	—	$	—	$	—		$	680	$	825	$	—	$	—	$	—		$	825
Investments, including money market funds (2)	48		—		—		—			48		49		—		—		—			49
Natural gas derivatives (3)(4)(5)	—		305		41		(133		)	213		—		250		42		(98		)	194
Hedged portion of gas imbalance payable	1		—		—		—			1		—		—		—		—			—
Total assets	$	729	$	305	$	41	$	(133	)	$	942	$	874	$	250	$	42	$	(98	)	$	1,068
Liabilities
Indexed debt securities derivative	$	—	$	758	$	—	$	—		$	758	$	—	$	893	$	—	$	—		$	893
Interest rate derivatives	—		26		—		—			26		—		10		—		—			10
Natural gas derivatives	—		23		—		—			23		—		22		—		—			22
Natural gas derivatives (3)(4)(5)	—		201		18		(183		)	36		—		195		24		(161		)	58
Hedged portion of natural gas inventory (5)	19		—		—		—			19		13		—		—		—			13
Hedged portion of gas imbalance receivable	2		—		—		—			2		—		—		—		—			—
Total liabilities	$	21	$	1,008	$	18	$	(183	)	$	864	$	13	$	1,120	$	24	$	(161	)	$	996

Houston Electric



	March 31, 2020										December 31, 2019
	Level 1		Level 2		Level 3		Netting		Total		Level 1		Level 2		Level 3		Netting		Total
Assets	(in millions)
Investments, including money market funds (2)	$	31	$	—	$	—	$	—	$	31	$	32	$	—	$	—	$	—	$	32
Total assets	$	31	$	—	$	—	$	—	$	31	$	32	$	—	$	—	$	—	$	32

CERC



	March 31, 2020											December 31, 2019
	Level 1		Level 2		Level 3		Netting (1)			Total		Level 1		Level 2		Level 3		Netting (1)			Total
Assets	(in millions)
Corporate equities	$	1	$	—	$	—	$	—		$	1	$	2	$	—	$	—	$	—		$	2
Investments, including money market funds (2)	11		—		—		—			11		11		—		—		—			11
Natural gas derivatives (3)(4)(5)	—		305		41		(133		)	213		—		250		42		(98		)	194
Hedged portion of gas imbalance payable	1		—		—		—			1		—		—		—		—			—
Total assets	$	13	$	305	$	41	$	(133	)	$	226	$	13	$	250	$	42	$	(98	)	$	207
Liabilities
Natural gas derivatives (3)(4)(5)	$	—	$	201	$	18	$	(183	)	$	36	$	—	$	195	$	24	$	(161	)	$	58
Hedged portion of natural gas inventory (5)	19		—		—		—			19		13		—		—		—			13
Hedged portion of gas imbalance receivable	2		—		—		—			2		—		—		—		—			—
Total liabilities	$	21	$	201	$	18	$	(183	)	$	57	$	13	$	195	$	24	$	(161	)	$	71


(1)	Amounts represent the impact of legally enforceable master netting arrangements that allow CenterPoint Energy and CERC to settle positive and negative positions and also include cash collateral posted with the same counterparties as follows:



	March 31, 2020				December 31, 2019
	CenterPoint Energy		CERC		CenterPoint Energy		CERC
	(in millions)
Cash collateral posted with the same counterparties	$	50	$	50	$	63	$	63


(2)	Amounts are included in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.


(3)	Natural gas derivatives include no material amounts related to physical forward transactions with Enable.

(4)

Level 1 natural gas derivatives include exchange-traded derivatives cleared by the CME, which deems that financial instruments cleared by the CME are settled daily in connection with posted cash payments. As a result of this exchange rule, CME-related derivatives are considered to have no fair value at the balance sheet date for financial reporting purposes and are presented in Level 1 net of posted cash; however, the derivatives remain outstanding and subject to future commodity price fluctuations until they are settled in accordance with their contractual terms. Derivative transactions cleared on exchanges other than the CME (e.g., the Intercontinental Exchange or ICE) continue to be reported on a gross basis.

(5)

Amounts are classified as held for sale in the Registrants’ respective Condensed Consolidated Balance Sheets.

Assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs [Table Text Block]

The following table presents additional information about assets or liabilities, including derivatives that are measured at fair value on a recurring basis for which CenterPoint Energy and CERC have utilized Level 3 inputs to determine fair value:



		Three Months Ended March 31,
		2020						2019
		CenterPoint Energy			CERC			CenterPoint Energy			CERC
	(in millions)
Beginning balance		$	18		$	18		$	30		$	30
Total gains (losses)		15			15			(1		)	(1		)
Total settlements		(10		)	(10		)	(15		)	(15		)
Transfers into Level 3		—			—			1			1
Transfers out of Level 3		—			—			(2		)	(2		)
Ending balance (1)		$	23		$	23		$	13		$	13

The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at the reporting date:
		$	14		$	14		$	(2	)	$	(2	)


(1)	CenterPoint Energy and CERC did not have significant Level 3 purchases or sales during the three months ended March 31, 2020 or 2019. The Level 3 assets and liabilities as of March 31, 2020 and 2019 are classified in the CenterPoint Energy’s and CERC’s respective Condensed Consolidated Balance Sheets as held for sale.

Estimated fair value of financial instruments, debt instruments [Table Text Block]

The fair values of cash and cash equivalents, investments in debt and equity securities classified as “trading” and short-term borrowings are estimated to be approximately equivalent to carrying amounts and have been excluded from the table below. The carrying amounts of non-trading derivative assets and liabilities and CenterPoint Energy’s ZENS indexed debt securities derivative are stated at fair value and are excluded from the table below. The fair value of each debt instrument is determined by multiplying the principal amount of each debt instrument by a combination of historical trading prices and comparable issue data. These liabilities, which are not measured at fair value in the Registrants’ Condensed Consolidated Balance Sheets, but for which the fair value is disclosed, would be classified as Level 2 in the fair value hierarchy.



	March 31, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in millions)
CenterPoint Energy
Long-term debt, including current maturities (1)	$	15,238	$	16,047	$	15,093	$	16,067
Houston Electric
Long-term debt, including current maturities (1)	$	4,888	$	5,368	$	4,950	$	5,457
CERC
Long-term debt, including current maturities	$	2,377	$	2,637	$	2,546	$	2,803

(1)

Includes Securitization Bonds debt.