Property, Plant and Equipment

(a) Property, Plant and Equipment

Property, plant and equipment includes the following:



		December 31, 2018						December 31, 2017
	Weighted Average Useful Lives	Property, Plant and Equipment, Gross		Accumulated Depreciation & Amortization		Property, Plant and Equipment, Net		Property, Plant and Equipment, Gross		Accumulated Depreciation & Amortization		Property, Plant and Equipment, Net
CenterPoint Energy	(in years)	(in millions)
Electric Transmission & Distribution	35	$	12,148	$	3,746	$	8,402	$	11,496	$	3,633	$	7,863
Natural Gas Distribution	28	7,257		2,128		5,129		6,735		1,968		4,767
Energy Services	27	121		43		78		102		35		67
Other property	26	741		306		435		698		338		360
Total		$	20,267	$	6,223	$	14,044	$	19,031	$	5,974	$	13,057
Houston Electric
Electric Transmission	45	$	3,077	$	650	$	2,427	$	2,767	$	620	$	2,147
Electric Distribution	33	7,524		2,553		4,971		7,178		2,522		4,656
Other transmission & distribution property	18	1,547		543		1,004		1,551		491		1,060
Total		$	12,148	$	3,746	$	8,402	$	11,496	$	3,633	$	7,863
CERC
Natural Gas Distribution	28	$	7,257	$	2,128	$	5,129	$	6,735	$	1,968	$	4,767
Energy Services	27	121		43		78		102		35		67
Other property	23	53		34		19		51		33		18
Total		$	7,431	$	2,205	$	5,226	$	6,888	$	2,036	$	4,852

(b) Depreciation and Amortization

The following table presents depreciation and amortization expense for 2018, 2017 and 2016:



	Year Ended December 31,
	2018						2017						2016
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Depreciation	$	626	$	342	$	264	$	619	$	354	$	243	$	607	$	349	$	230
Amortization of securitized regulatory assets	531		531		—		329		329		—		455		455		—
Other amortization	86		44		29		88		41		36		64		34		19
Total	$	1,243	$	917	$	293	$	1,036	$	724	$	279	$	1,126	$	838	$	249

The Registrants recorded AROs associated with the removal of asbestos and asbestos-containing material in its buildings, including substation building structures. CenterPoint Energy and Houston Electric also recorded AROs relating to treated wood poles for electric distribution, distribution transformers containing PCB (also known as Polychlorinated Biphenyl), and underground fuel storage tanks. CenterPoint Energy and CERC also recorded AROs relating to gas pipelines abandoned in place. The estimates of future liabilities were developed using historical information, and where available, quoted prices from outside contractors.

A reconciliation of the changes in the ARO liability recorded in Other non-current liabilities on each of the Registrants’ respective Consolidated Balance Sheets is as follows:



	December 31, 2018									December 31, 2017
	CenterPoint Energy			Houston Electric			CERC			CenterPoint Energy		Houston Electric		CERC
	(in millions)
Beginning balance	$	281		$	35		$	243		$	205	$	33	$	169
Accretion expense (1)	10			1			9			8		1		7
Revisions in estimates (2)	(33		)	(2		)	(31		)	68		1		67
Ending balance	$	258		$	34		$	221		$	281	$	35	$	243


(1)	Reflected in Regulatory assets on each of the Registrants’ respective Consolidated Balance Sheets.

(2)

In 2018, CenterPoint Energy and CERC reflected a decrease in their respective ARO liability which is primarily attributable to increases in the long-term interest rates used for discounting in the ARO calculation. In 2017, CenterPoint Energy and CERC reflected an increase in their respective ARO liability which is primarily attributable to decreases in the long-term interest rates used for discounting in the ARO calculation.