Related Party Transactions and Major Customers

3 Months Ended

Mar. 31, 2017

Related Party Transactions and Major Customers

(a) Related Party Transactions

Houston Electric participates in a money pool through which it 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. Houston Electric had investments in the money pool of $203 million and $96 million as of March 31, 2017 and December 31, 2016, respectively, which are included in accounts and notes receivable-affiliated companies, in the Condensed Consolidated Balance Sheets. As of March 31, 2017, Houston Electric’s money pool investments had a weighted-average interest rate of 1.25%.

Houston Electric had affiliate related net interest income of $1 million and net interest expense of $1 million for the three months ended March 31, 2017 and 2016, respectively.

CenterPoint Energy provides some corporate services to Houston Electric. The costs of services have been charged directly to Houston Electric 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. 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. Additionally, Houston Electric provides a number of 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. These charges are not necessarily indicative of what would have been incurred had Houston Electric not been an affiliate. Amounts charged to and by Houston Electric for these services were as follows and are included primarily in operation and maintenance expenses:



	Three Months Ended March 31,
	2017			2016
	(in millions)
Corporate service charges	$	42		$	45
Charges from CERC for services provided	2			1
Billings to CERC for services provided	(3		)	(4		)

(b) Major Customers

Houston Electric’s transmission and distribution revenues from major customers are as follows:



	Three Months Ended March 31,
	2017		2016
	(in millions)
Affiliates of NRG	$	152	$	145
Affiliates of Energy Future Holdings Corp.	47		45