Related Party Transactions (Houston Electric and CERC)

12 Months Ended

Dec. 31, 2019

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 CenterPoint Energy money pool activity:



	December 31, 2019						December 31, 2018
	Houston Electric			CERC			Houston Electric			CERC
	(in millions)
Money pool investments (borrowings) (1)	$	481		$	—		$	(1	)	$	114
Weighted average interest rate	1.98		%	1.98		%	2.42		%	2.42		%


(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,
	2019				2018				2017
	Houston Electric		CERC		Houston Electric		CERC		Houston Electric		CERC
	(in millions)
Interest income, net (1)	$	18	$	4	$	1	$	—	$	2	$	—


(1)	Interest income is included in Other income (expense), 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.

The Infrastructure Services Disposal Group provides pipeline construction and repair services to CERC’s NGD. Additionally, CERC, through the Energy Services Disposal Group, sells natural gas to Indiana Electric for use in electric generation activities. These transactions are now included in discontinued operations and are excluded from the disclosures below.

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



	Year Ended December 31,
	2019					2018					2017
	Houston Electric			CERC		Houston Electric			CERC		Houston Electric			CERC
	(in millions)
Corporate service charges	$	177		$	141	$	190		$	147	$	188		$	128
Net affiliate service charges (billings)	(8		)	8		(17		)	17		(9		)	9

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



	Year Ended December 31,
	2019				2018				2017
	Houston Electric		CERC		Houston Electric		CERC		Houston Electric		CERC
	(in millions)
Cash dividends paid to parent	$	376	$	120	$	209	$	360	$	180	$	601
Cash contribution from parent	590		129		200		960		—		38
Capital distribution to parent associated with the Internal Spin (1)	—		28		—		1,473		—		—

(1)

The capital distribution in 2019 associated with the Internal Spin is a result of the return to accrual for the periods of CERC’s ownership during 2018.