Short-term Borrowings and Long-term Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Short-term Borrowings and Long-term Debt

Short-term Borrowings and Long-term Debt

	December 31, 2021				December 31, 2020
	Long-Term		Current (1)		Long-Term		Current (1)
	(in millions)
CenterPoint Energy:
ZENS due 2029 (2)	$	—	$	10	$	—	$	15
CenterPoint Energy senior notes 0.68% to 4.25% due 2024 to 2049	3,650		—		2,700		500
CenterPoint Energy variable rate term loan 0.865% due 2021	—		—		—		700
CenterPoint Energy pollution control bonds 5.125% due 2028 (3)	68		—		68		—
CenterPoint Energy commercial paper (4) (5)	1,400		—		1,078		—
VUHI senior notes 3.72% to 6.10% due 2023 to 2045 (6)	377		—		377		55
VUHI commercial paper (4) (5)	350		—		92		—
IGC senior notes 6.34% to 7.08% due 2025 to 2029	96		—		96		—
SIGECO first mortgage bonds 0.820% to 6.72% due 2022 to 2055 (7)	288		5		293		—
Other debt	4		3		6		12
Unamortized debt issuance costs	(23)		—		(17)		—
Unamortized discount and premium, net	(7)		—		(6)		—
Houston Electric debt (see details below)	4,975		520		4,406		613
CERC debt (see details below)	4,380		7		2,428		24
Total CenterPoint Energy debt	$	15,558	$	545	$	11,521	$	1,919

Houston Electric:
First mortgage bonds 9.15% due 2021	$	—	$	—	$	—	$	102
General mortgage bonds 2.25% to 6.95% due 2022 to 2051	4,712		300		3,912		300
Restoration Bond Company:
System restoration bonds 4.243% due 2022	—		70		69		66
Bond Company IV:
Transition bonds 3.028% due 2024	317		150		467		145
Unamortized debt issuance costs	(36)		—		(28)		—
Unamortized discount and premium, net	(18)		—		(14)		—
Total Houston Electric debt	$	4,975	$	520	$	4,406	$	613

CERC (8):
Short-term borrowings:
Inventory financing (9)	$	—	$	7	$	—	$	24
Total CERC short-term borrowings	—		7		—		24
Long-term debt:
Senior notes 0.62% to 6.625% due 2023 to 2047	$	3,500	$	—	$	2,100	$	—
Commercial paper (4) (5)	899		—		347		—
Unamortized debt issuance costs	(15)		—		(15)		—
Unamortized discount and premium, net	(4)		—		(4)		—
Total CERC long-term debt	4,380		—		2,428		—
Total CERC debt	$	4,380	$	7	$	2,428	$	24

(1)Includes amounts due or exchangeable within one year of the date noted.

(2)CenterPoint Energy’s ZENS obligation is bifurcated into a debt component and an embedded derivative component. For additional information regarding ZENS, see Note 12(b). As ZENS are exchangeable for cash at any time at the option of the holders, these notes are classified as a current portion of long-term debt.

(3)These pollution control bonds were secured by general mortgage bonds of Houston Electric as of December 31, 2021 and 2020 and are not reflected in Houston Electric’s consolidated financial statements because of the contingent nature of the obligations.

(4)Classified as long-term debt because the termination date of the facility that backstops the commercial paper is more than one year from the date noted.

(5)Commercial paper issued by CenterPoint Energy, CERC Corp. and VUHI has maturities up to 60 days, 30 days, and 30 days, respectively, and are backstopped by the respective issuer’s long-term revolving credit facility.

(6)The senior notes issued by VUHI are guaranteed by SIGECO, Indiana Gas and VEDO.

(7)The first mortgage bonds issued by SIGECO subject SIGECO’s properties to a lien under the related mortgage indenture as further discussed below.

(8)Issued by CERC Corp.

(9)Represents AMA transactions accounted for as an inventory financing. Outstanding obligations related to third-party AMAs associated with utility distribution service in Arkansas and Oklahoma of $36 million as of December 31, 2021 are reflected in current liabilities held for sale on CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets. For further information about AMAs, see Notes 4 and 16.

Long-term Debt

Debt Transactions. During 2021, the following debt instruments were issued or incurred:

Registrant	Issuance Date	Debt Instrument	Aggregate Principal Amount		Interest Rate	Maturity Date
		(in millions)
CERC	March 2021	Senior Notes	$	700	0.70%	2023
CERC	March 2021	Floating Rate Senior Notes	1,000		Three-month LIBOR plus 0.5%	2023
		Total CERC(1)	1,700
Houston Electric	March 2021	General Mortgage Bonds	400		2.35%	2031
Houston Electric	March 2021	General Mortgage Bonds	700		3.35%	2051
		Total Houston Electric (2)	1,100
CenterPoint Energy	May 2021	Senior Notes	500		1.45%	2026
CenterPoint Energy	May 2021	Senior Notes	500		2.65%	2031
CenterPoint Energy	May 2021	Floating Rate Senior Notes	700		SOFR plus 0.65%	2024
		Total CenterPoint Energy (3)	$	4,500

(1)In February 2021, CERC Corp. received financing commitments totaling $1.7 billion on a 364-day term loan facility to bridge any working capital needs related to the February 2021 Winter Storm Event. Total proceeds of the senior notes and floating rate senior note offerings, net of issuance expenses and fees, of approximately $1.69 billion were used for general corporate purposes, including to fund working capital. Upon the consummation of its senior notes offerings, in March 2021, CERC Corp. terminated all of the commitments for the 364-day term loan facility.

(2)Total proceeds, net of issuance expenses and fees, of approximately $1.08 billion were used for general limited liability company purposes, including capital expenditures and the repayment of outstanding debt discussed below and Houston Electric’s borrowings under the CenterPoint Energy money pool.

(3)Total proceeds, net of issuance expenses and fees, of approximately $1.69 billion, excluding amounts issued by Houston Electric and CERC, were used for general corporate purposes, including the repayment of outstanding debt discussed below and a portion of CenterPoint Energy’s outstanding commercial paper.

Debt Repayments and Redemptions. During 2021, the following debt instruments were repaid at maturity or redeemed, excluding scheduled principal payments of $211 million on the Securitization bonds:

Registrant	Repayment/Redemption Date	Debt Instrument	Aggregate Principal		Interest Rate	Maturity Date
			(in millions)
CERC (1)	December 2021	Senior Notes	$	300	3.55%	2023
		Total CERC	300
Houston Electric	March 2021	First Mortgage Bonds	102		9.15%	2021
Houston Electric (2)	May 2021	General Mortgage Bonds	300		1.85%	2021
		Total Houston Electric	402
CenterPoint Energy (3)	January 2021	Senior Notes	250		3.85%	2021
CenterPoint Energy (4)	May 2021	Term Loan	700		0.76%	2021
CenterPoint Energy (5)	June 2021	Senior Notes	500		3.60%	2021
CenterPoint Energy	November 2021	Senior Notes	55		4.67%	2021
CenterPoint Energy (6)	December 2021	Senior Notes	500		2.50%	2022
		Total CenterPoint Energy	$	2,707

(1)In December 2021, CERC provided notice of redemption and on December 30, 2021, CERC redeemed all of the outstanding senior notes of the series at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest and an applicable make-whole premium.

(2)In April 2021, Houston Electric provided notice of redemption and on May 1, 2021, Houston Electric redeemed all of the outstanding bonds of the series at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest.

(3)In December 2020, CenterPoint Energy provided notice of redemption of a portion of its outstanding $500 million aggregate principal amount of the series and on January 15, 2021, CenterPoint Energy redeemed $250 million aggregate principal amount of the series at a redemption price equal to 100% of the principal amount redeemed, plus accrued and unpaid interest and an applicable make-whole premium.

(4)In April 2021, CenterPoint Energy amended its existing term loan agreement by extending its maturity from May 15, 2021 to June 14, 2021. The outstanding LIBOR rate loan balance was prepaid in full at a price equal to 100% of the principal amount, plus accrued and unpaid interest, which was calculated based on the interest rate at maturity.

(5)In May 2021, CenterPoint Energy provided notice of redemption and on June 1, 2021, CenterPoint Energy redeemed all of the outstanding senior notes of the series at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest and an applicable make-whole premium.

(6)In December 2021, CenterPoint Energy provided notice of redemption and on December 30, 2021, CenterPoint Energy redeemed all of the outstanding senior notes of the series at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest and an applicable make-whole premium.

CenterPoint Energy and CERC recorded losses on early extinguishment of debt, including make-whole premiums and recognition of deferred debt related costs, in Interest expense and other finance charges on their respective Statements of Consolidated Income, of $53 million and $11 million, respectively, during the year ended December 31, 2021, and $2 million at both for the year ended December 31, 2020. No losses on early extinguishment of debt were recorded during the year ended December 31, 2019.

On January 14, 2022, CERC Corp. provided notice of redemption and on January 31, 2022, CERC Corp. redeemed $425 million aggregate principal amount of CERC’s outstanding Floating Rate Senior Notes due 2023 at a redemption price equal to 100% of the principal amount of the senior notes to be redeemed plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date.

Securitization Bonds. As of December 31, 2021, CenterPoint Energy and Houston Electric had special purpose subsidiaries consisting of the Bond Companies, which they consolidate. The consolidated special purpose subsidiaries are wholly-owned, bankruptcy remote entities that were formed solely for the purpose of purchasing and owning transition or system restoration property through the issuance of transition bonds or system restoration bonds and activities incidental thereto. These Securitization Bonds are payable only through the imposition and collection of “transition” or “system restoration” charges, as defined in the Texas Public Utility Regulatory Act, which are irrevocable, non-bypassable charges to

provide recovery of authorized qualified costs. CenterPoint Energy and Houston Electric have no payment obligations in respect of the Securitization Bonds other than to remit the applicable transition or system restoration charges they collect as set forth in servicing agreements among Houston Electric, the Bond Companies and other parties. Each special purpose entity is the sole owner of the right to impose, collect and receive the applicable transition or system restoration charges securing the bonds issued by that entity. Creditors of CenterPoint Energy or Houston Electric have no recourse to any assets or revenues of the Bond Companies (including the transition and system restoration charges), and the holders of Securitization Bonds have no recourse to the assets or revenues of CenterPoint Energy or Houston Electric.

Credit Facilities. In February 2021, each of CenterPoint Energy, Houston Electric, CERC Corp. and VUHI replaced their existing revolving credit facilities with new amended and restated credit facilities. The size of the CenterPoint Energy facility decreased from $3.3 billion to $2.4 billion, while the sizes of the Houston Electric, CERC Corp. and VUHI facilities remained unchanged.

The Registrants had the following revolving credit facilities as of December 31, 2021:

Execution  Date	Registrant	Size of Facility		Draw Rate of LIBOR plus (1)	Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio		Debt for Borrowed Money to Capital Ratio as of December 31, 2021 (2)	Termination  Date
		(in millions)
February 4, 2021	CenterPoint Energy	$	2,400	1.625%	65%	(3)	61.8%	February 4, 2024
February 4, 2021	CenterPoint Energy (4)	400		1.250%	65%		48.9%	February 4, 2024
February 4, 2021	Houston Electric	300		1.375%	67.5%	(3)	56.2%	February 4, 2024
February 4, 2021	CERC	900		1.250%	65%		60.6%	February 4, 2024
	Total	$	4,000

(1)Based on credit ratings as of December 31, 2021.

(2)As defined in the revolving credit facility agreement, excluding Securitization Bonds.

(3)For CenterPoint Energy and Houston Electric, the financial covenant limit will temporarily increase to 70% if Houston Electric experiences damage from a natural disaster in its service territory and CenterPoint Energy certifies to the administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed $100 million in a consecutive 12-month period, all or part of which Houston Electric intends to seek to recover through securitization financing. Such temporary increase in the financial covenant would be in effect from the date CenterPoint Energy delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of CenterPoint Energy’s certification or (iii) the revocation of such certification.

(4)This credit facility was issued by VUHI, is guaranteed by SIGECO, Indiana Gas and VEDO and includes a $20 million letter of credit sublimit. This credit facility backstops VUHI’s commercial paper program.

The Registrants, as well as the subsidiaries of CenterPoint Energy discussed above, were in compliance with all financial debt covenants as of December 31, 2021.

As of December 31, 2021 and 2020, the Registrants had the following revolving credit facilities and utilization of such facilities:

	December 31, 2021								December 31, 2020
Registrant	Loans		Letters of Credit		Commercial Paper		Weighted Average Interest Rate		Loans		Letters of Credit		Commercial Paper		Weighted Average Interest Rate
	(in millions, except weighted average interest rate)
CenterPoint Energy (1)	$	—	$	11	$	1,400	0.34	%	$	—	$	11	$	1,078	0.23	%
CenterPoint Energy (2)	—		—		350		0.21	%	—		—		92		0.22	%
Houston Electric	—		—		—		—	%	—		—		—		—	%
CERC	—		—		899		0.26	%	—		—		347		0.23	%
Total	$	—	$	11	$	2,649			$	—	$	11	$	1,517

(1)CenterPoint Energy’s outstanding commercial paper generally has maturities of 60 days or less.

(2)This credit facility was issued by VUHI and is guaranteed by SIGECO, Indiana Gas and VEDO.

Maturities. As of December 31, 2021, maturities of long-term debt, excluding the ZENS obligation and unamortized discounts, premiums and issuance costs, were as follows:

	CenterPoint Energy (1)		Houston  Electric (1)		CERC		Securitization Bonds
	(in millions)
2022	$	524	$	520	$	—	$	220
2023	2,113		356		1,700		156
2024	4,283		161		899		161
2025	51		—		—		—
2026	860		300		—		—

(1)These maturities include Securitization Bonds principal repayments on scheduled payment dates.

Liens. As of December 31, 2021, Houston Electric’s assets were subject to liens securing approximately $4.8 billion of general mortgage bonds outstanding under the General Mortgage, including approximately $68 million held in trust to secure pollution control bonds that mature in 2028 for which CenterPoint Energy is obligated. The general mortgage bonds that are held in trust to secure pollution control bonds are not reflected in Houston Electric’s consolidated financial statements because of the contingent nature of the obligations. Houston Electric may issue additional general mortgage bonds on the basis of retired bonds, 70% of property additions or cash deposited with the trustee. Houston Electric could issue approximately $4.6 billion of additional general mortgage bonds on the basis of retired bonds and 70% of property additions as of December 31, 2021.  No first mortgage bonds are outstanding under the Mortgage, and Houston Electric is contractually obligated to not issue any additional first mortgage bonds under the Mortgage and is undertaking actions to release the lien of the Mortgage.

As of December 31, 2021, SIGECO had approximately $293 million aggregate principal amount of first mortgage bonds outstanding. Generally, of SIGECO’s real and tangible property is subject to the lien of SIGECO’s mortgage indenture. SIGECO may issue additional bonds under its mortgage indenture up to 60% of currently unfunded property additions. As of December 31, 2021, approximately $1.4 billion of additional first mortgage bonds could be issued on this basis. However, SIGECO is also limited in its ability to issue additional bonds under its mortgage indenture due to certain provisions in its parent’s, VUHI, debt agreements.

Other. As of December 31, 2021, certain financial institutions agreed to issue, from time to time, up to $20 million of letters of credit on behalf of certain of Vectren’s subsidiaries in exchange for customary fees. These agreements to issue letters of credit expire on December 31, 2021. As of December 31, 2021, such financial institutions had issued $1 million of letters of credit on behalf of these subsidiaries. 

Houston Electric and CERC participate in a money pool through which they can borrow or invest on a short-term basis. For additional information, see Note 20.