Income Taxes (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The Registrants reported the following effective tax rates:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
CenterPoint Energy (1)	19	%	24	%	15	%	26	%
Houston Electric (2)	18	%	20	%	18	%	21	%
CERC - Continuing operations (3) (4)	13	%	5	%	14	%	29	%
CERC - Discontinued operations (5)	n/a		23	%	n/a		24	%

(1)

CenterPoint Energy’s lower effective tax rate for the three and nine months ended September 30, 2019 compared to the same periods for 2018 was primarily due to the following: an increase in the amount of amortization of the net regulatory EDIT liability; the effect of state tax law changes that resulted in the remeasurement of state deferred taxes; and the impact of changes in valuation allowances on certain state net operating losses.


(2)	Houston Electric’s lower effective tax rate for the three and nine months ended September 30, 2019 compared to the same periods for 2018 was primarily due to an increase in the amount of amortization of the net regulatory EDIT liability.

(3)

CERC’s higher effective tax rate on loss from continuing operations for the three months ended September 30, 2019 compared to the same period for 2018 was primarily due to a decrease in the amount of amortization of the net regulatory EDIT liability, which was partially offset by the absence of a change in the valuation allowance on certain state net operating losses in the three months ended September 30, 2019, the effects of which are compounded by the book loss in the three months ended September 30, 2019.


(4)	CERC’s lower effective tax rate on income from continuing operations for the nine months ended September 30, 2019 compared to the same period for 2018 was primarily due to an increase in the amount of amortization of the net regulatory EDIT liability, which was partially offset by the impact of changes in the valuation allowances on certain state net operating losses in 2019.


(5)	CERC’s effective tax rate on income from discontinued operations for the three and nine months ended September 30, 2018 was a result of the 21% federal income tax rate plus allocable state income taxes. There are no comparable periods in 2019 since the Internal Spin was completed in the third quarter of 2018.