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Revenue Recognition
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
In accordance with ASC 606, 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.

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.

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

CenterPoint Energy
Year Ended December 31, 2023
ElectricNatural Gas Corporate and Other Total
(in millions)
Revenue from contracts with customers
$4,275 $4,210 $127 $8,612 
Other (1)
15 69 3 87 
Eliminations
— (3)— (3)
Total revenues$4,290 $4,276 $130 $8,696 
Year Ended December 31, 2022
ElectricNatural GasCorporate and OtherTotal
(in millions)
Revenue from contracts with customers
$4,095 $4,969 $263 $9,327 
Other (1)
13 (23)4 (6)
Total revenues$4,108 $4,946 $267 $9,321 
Year Ended December 31, 2021
Electric Natural Gas Corporate and Other Total
(in millions)
Revenue from contracts with customers
$3,726 $4,281 $249 $8,256 
Other (1)
37 55 4 96 
Total revenues$3,763 $4,336 $253 $8,352 

(1)Primarily consists of income from ARPs and leases. Total lease income was $8 million, $7 million and $7 million for each of the years ended December 31, 2023, 2022 and 2021, respectively.

Houston Electric

Year Ended December 31,
202320222021
(in millions)
Revenue from contracts with customers
$3,684 $3,417 $3,117 
Other (1)
(7)(5)17 
Total revenues
$3,677 $3,412 $3,134 

(1)Primarily consists of income from ARPs and leases. Lease income was not significant for the years ended December 31, 2023, 2022, and 2021.

CERC
Year Ended December 31,
202320222021
(in millions)
Revenue from contracts with customers
$4,083 $4,816 $4,148 
Other (1)
66 (16)52 
Total revenues$4,149 $4,800 $4,200 

(1)Primarily consists of income from ARPs and leases. Lease income was $4 million, $3 million and $3 million, respectively, for the years ended December 31, 2023, 2022 and 2021.

Revenues from Contracts with Customers

Electric (CenterPoint Energy and Houston Electric). Houston Electric distributes electricity to customers over time and customers consume the electricity when delivered. 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, such as the PUCT and the IURC, 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 provided by Houston Electric 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 regulator. Payments are received on a monthly basis. Indiana Electric customers are billed monthly and payment terms, set by the regulator, require payment within a month of billing.
Natural Gas (CenterPoint Energy and CERC). CenterPoint Energy and CERC distribute and transport 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 provided at a point in time with control transferring upon completion of the service. Revenue for discretionary services is recognized upon completion of service based on 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 and contract liabilities are included in Accounts payable and Other current liabilities in their Consolidated Balance Sheets. CenterPoint Energy’s contract assets and contract liabilities primarily related to Energy Systems Group contracts where revenue was recognized using the input method prior to the sale of Energy Systems Group that was completed on June 30, 2023.

The opening and closing balances of accounts receivable, other accrued unbilled revenue, contract assets and contract liabilities from contracts with customers are as follows:

CenterPoint Energy
Accounts ReceivableOther Accrued Unbilled Revenues
Contract
Assets (1)
Contract Liabilities (1)
(in millions)
Opening balance as of December 31, 2022
$858 $764 $4 $45 
Closing balance as of December 31, 2023
652 516 — 2 
Increase (decrease)$(206)$(248)$(4)$(43)

(1) Decrease primarily related to the completed sale of Energy Systems Group on June 30, 2023.

The amount of revenue recognized in the year ended December 31, 2023 that was included in the opening contract liability was $2 million.

Houston Electric
Accounts ReceivableOther Accrued Unbilled RevenuesContract Liabilities
(in millions)
Opening balance as of December 31, 2022$271 $142 $2 
Closing balance as of December 31, 2023275 142 2 
Increase
$4 $— $— 

The amount of revenue recognized in the year ended December 31, 2023 that was included in the opening contract liability was $2 million.

CERC
Accounts ReceivableOther Accrued
Unbilled Revenues
(in millions)
Opening balance as of December 31, 2022$478 $573 
Closing balance as of December 31, 2023330 329 
Decrease
$(148)$(244)

CERC does not have any opening or closing contract asset or contract liability balances.
Remaining Performance Obligations (CenterPoint Energy). Following the completed sale of Energy Systems Group on June 30, 2023, CenterPoint Energy had no remaining performance obligations.

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.

Allowance for Credit Losses and Bad Debt Expense

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, see Note 7.

The table below summarizes the Registrants’ bad debt expense amounts for 2023, 2022 and 2021, net of regulatory deferrals, including those related to COVID-19:
 Year Ended December 31,
 202320222021
 CenterPoint EnergyHouston ElectricCERCCenterPoint EnergyHouston ElectricCERCCenterPoint EnergyHouston ElectricCERC
(in millions)
Bad debt expense$18 $— $16 $20 $— $17 $12 $— $10 
Bad debt expense deferred as regulatory asset — — — — — — 16 8 8