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Revenue Recognition
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition [Text Block] Revenue Recognition and Provision for Doubtful Accounts

Revenues from Contracts with Customers

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 revenues and related balances in the following tables exclude operating revenues and balances from the Energy Services Disposal Group and Infrastructure Services Disposal Group, which are reflected as discontinued operations and assets held for sale prior to the date of closing of each transaction. See Note 3 for further information.

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

CenterPoint Energy
 
 
Three Months Ended June 30, 2020
 
 
Houston Electric
 T&D
 
Indiana
 Electric Integrated
 
Natural Gas Distribution
 
Corporate
 and Other
 
Total
 
 
(in millions)
Revenue from contracts
 
$
722

 
$
128

 
$
632

 
$
84

 
$
1,566

Other (1)
 
(2
)
 
—

 
9

 
2

 
9

Total revenues
 
$
720

 
$
128

 
$
641

 
$
86

 
$
1,575

 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2020
 
 
Houston Electric
 T&D
 
Indiana
 Electric Integrated
 
Natural Gas Distribution
 
Corporate
 and Other
 
Total
 
 
(in millions)
Revenue from contracts
 
$
1,360

 
$
257

 
$
1,925

 
$
165

 
$
3,707

Other (1)
 
(2
)
 
—

 
34

 
3

 
35

Total revenues
 
$
1,358

 
$
257

 
$
1,959

 
$
168

 
$
3,742


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

 
$
140

 
$
663

 
$
78

 
$
1,649

Other (1)
 
(3
)
 
—

 
10

 
2

 
9

Total revenues
 
$
765

 
$
140

 
$
673

 
$
80

 
$
1,658

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

 
$
223

 
$
2,076

 
$
119

 
$
3,876

Other (1)
 
(4
)
 
—

 
12

 
3

 
11

Total revenues
 
$
1,454

 
$
223

 
$
2,088

 
$
122

 
$
3,887


(1)
Primarily consists of income from ARPs, weather hedge gains (losses) 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. Total lease income was $1 million and $1 million for the three months ended June 30, 2020 and 2019, respectively, and $2 million and $3 million for the six months ended June 30, 2020 and 2019, respectively.

(2)
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,
 
2020
 
2019
 
2020
 
2019
 
(in millions)
Revenue from contracts
$
722

 
$
768

 
$
1,360

 
$
1,458

Other (1)
(2
)
 
(3
)
 
(6
)
 
(7
)
Total revenues
$
720

 
$
765

 
$
1,354

 
$
1,451


(1)
Primarily consists of income from ARPs, weather hedge gains (losses) 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. Lease income was not significant for the three or six months ended June 30, 2020 and 2019.

CERC
 
 
Three Months Ended June 30,
 
 
2020
 
2019
 
 
Natural Gas Distribution
 
Corporate
and Other
 
Total
 
Natural Gas Distribution
 
Corporate
and Other
 
Total
 
 
(in millions)
Revenue from contracts
 
$
470

 
$
2

 
$
472

 
$
515

 
$
—

 
$
515

Other (1)
 
10

 
1

 
11

 
11

 
—

 
11

Total revenues
 
$
480

 
$
3

 
$
483

 
$
526

 
$
—

 
$
526

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
2020
 
2019
 
 
Natural Gas Distribution
 
Corporate
 and Other
 
Total
 
Natural Gas Distribution
 
Corporate
 and Other
 
Total
 
 
(in millions)
Revenue from contracts
 
$
1,451

 
$
5

 
$
1,456

 
$
1,720

 
$
1

 
$
1,721

Other (1)
 
37

 
1

 
38

 
17

 
—

 
17

Total revenues
 
$
1,488

 
$
6

 
$
1,494

 
$
1,737

 
$
1

 
$
1,738


(1)
Primarily consists of income from ARPs, weather hedge gains (losses) 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. Lease income was not significant for the three or six months ended June 30, 2020 and 2019.

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 the PUCT, 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 the PUCT. 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 the PUCT. 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). CERC distributes and transports     natural gas 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.

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. As of June 30, 2020, CenterPoint Energy’s contract assets primarily relate to ESG contracts 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. As of June 30, 2020, CenterPoint Energy’s 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 from continuing operations as of December 31, 2019 and June 30, 2020, respectively, are as follows:

CenterPoint Energy
 
Accounts Receivable
 
Other Accrued Unbilled Revenues
 
Contract
Assets
 
Contract Liabilities
 
(in millions)
Opening balance as of December 31, 2019
$
566

 
$
469

 
$
6

 
$
30

Closing balance as of June 30, 2020
565

 
276

 
16

 
26

Increase (decrease)
$
(1
)
 
$
(193
)
 
$
10

 
$
(4
)


The amount of revenue recognized in the six-month period ended June 30, 2020 that was included in the opening contract liability was $28 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, 2019
$
210

 
$
117

 
$
3

Closing balance as of June 30, 2020
282

 
125

 
5

Increase
$
72

 
$
8

 
$
2


The amount of revenue recognized in the six-month period ended June 30, 2020 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, 2019
$
222

 
$
249

Closing balance as of June 30, 2020
155

 
83

Decrease
$
(67
)
 
$
(166
)

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 energy performance and sustainable infrastructure services contracts of ESG, which are included in Corporate and Other.
 
Rolling 12 Months
 
Thereafter
 
Total
 
(in millions)
Revenue expected to be recognized on contracts in place as of June 30, 2020:
 
 
 
 
 
Corporate and Other
$
218

 
$
554

 
$
772

 
$
218

 
$
554

 
$
772



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.

Provision of Doubtful Accounts

The Registrants adopted ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and all related amendments on January 1, 2020 using a modified retrospective method. ASU 2016-13 replaces the “incurred loss” model with a CECL model for financial assets measured at amortized cost and for certain off-balance sheet credit exposures. Adoption of this standard did not have a material impact on the Registrants’ respective consolidated financial statements. CenterPoint Energy and CERC applied the $5 million cumulative-effect adjustment of the transition to opening retained earnings as of the effective date, which included $2 million related to the Energy Services Disposal Group. There was no material cumulative-effect adjustment for Houston Electric. The disclosures for periods prior to adoption will be presented in accordance with accounting standards in effect for those periods.

CenterPoint Energy and CERC segregate financial assets that fall under the scope of Topic 326, primarily trade receivables due in one year or less, into portfolio segments based on shared risk characteristics, such as geographical location and regulatory environment, for evaluation of expected credit losses. Historical and current information, such as average write-offs, are applied to each portfolio segment to estimate the allowance for losses on uncollectible receivables. Additionally, the allowance for losses on uncollectible receivables is adjusted for reasonable and supportable forecasts of future economic conditions, which can include changing weather, commodity prices, regulations, and macroeconomic factors, among others. Houston Electric had no material changes in its methodology to recognize losses on financial assets that fall under the scope of Topic 326, primarily due to the nature of its customers and regulatory environment. For a discussion of regulatory deferrals related to COVID-19, see Note 6.