XML 50 R29.htm IDEA: XBRL DOCUMENT v3.24.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Assets and liabilities that are recorded at fair value in the Registrants’ Condensed Consolidated Balance Sheets are categorized based upon the level of judgment associated with the inputs used to measure their value. Hierarchical levels, as defined below and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities, are as follows:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. The types of assets carried at Level 1 fair value generally are exchange-traded derivatives and equity securities.

Level 2: Inputs, other than quoted prices included in Level 1, are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets and inputs other than quoted prices that are observable for the asset or liability. Fair value assets and liabilities that are generally included in this category are derivatives with fair values based on inputs from actively quoted markets. A market approach is utilized to value the Registrants’ Level 2 natural gas derivative assets or liabilities. CenterPoint Energy’s Level 2 indexed debt securities derivative is valued using an option model and a discounted cash flow model, which uses projected dividends on the ZENS-Related Securities and a discount rate as observable inputs.

Level 3: Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Unobservable inputs reflect the Registrants’ judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. The Registrants develop these inputs based on the best information available, including the Registrants’ own data.

The Registrants determine the appropriate level for each financial asset and liability on a quarterly basis.
The following tables present information about the Registrants’ assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 and indicate the fair value hierarchy of the valuation techniques utilized by the Registrants to determine such fair value.

CenterPoint Energy
June 30, 2024December 31, 2023

Level 1		Level 2Level 3Total
Level 1		Level 2Level 3Total
Assets(in millions)
Equity securities$477 $— $— $477 $541 $— $— $541 
Investments, including money market funds (1)35 — — 35 31 — — 31 
Total assets$512 $— $— $512 $572 $— $— $572 
Liabilities    
Indexed debt securities derivative$— $538 $— $538 $— $605 $— $605 
Natural gas derivatives — 5 — 5 — 12 — 12 
Total liabilities$— $543 $— $543 $— $617 $— $617 

Houston Electric
June 30, 2024December 31, 2023

Level 1		Level 2Level 3Total
Level 1		Level 2Level 3Total
Assets(in millions)
Investments, including money market funds (1)$20 $— $— $20 $14 $— $— $14 
Total assets$20 $— $— $20 $14 $— $— $14 

CERC
June 30, 2024December 31, 2023

Level 1		Level 2Level 3Total
Level 1		Level 2Level 3Total
Assets(in millions)
Investments, including money market funds (1)$15 $— $— $15 $15 $— $— $15 
Total assets$15 $— $— $15 $15 $— $— $15 
Liabilities    
Natural gas derivatives$— $4 $— $4 $— $11 $— $11 
Total liabilities$— $4 $— $4 $— $11 $— $11 
(1)Amounts are included in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

Items Measured at Fair Value on a Nonrecurring Basis

As a result of classifying the Louisiana and Mississippi natural gas LDC businesses as held for sale, CenterPoint Energy and CERC used a market approach consisting of contractual sales price adjusted for estimated working capital and other contractual purchase price adjustments to determine the fair value of the businesses classified as held for sale, which are Level 2 inputs. Neither CenterPoint Energy nor CERC recognized any gains or losses upon classification as held for sale during the three and six months ended June 30, 2024. See Note 3 for further information.

Estimated Fair Value of Financial Instruments

The fair values of cash and cash equivalents, investments in debt and equity securities measured at fair value 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.
 June 30, 2024December 31, 2023
CenterPoint Energy (1)Houston Electric (1)CERCCenterPoint Energy (1)Houston Electric (1)CERC
Long-term debt, including current maturities(in millions)
Carrying amount$19,118 $8,005 $4,584 $18,609 $7,587 $4,670 
Fair value17,750 6,961 4,413 17,804 6,917 4,627 
(1)Includes Securitization Bonds, as applicable.