Stock-Based Incentive Compensation Plans and Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure of Stock-Based Incentive Compensation Plans and Employee Benefit Plans [Abstract]

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan

The following table summarizes CenterPoint Energy’s expenses related to LTIPs for 2021, 2020 and 2019:

	Year Ended December 31,
	2021		2020		2019
	(in millions)
LTIP compensation expense (1)	$	48	$	38	$	28
Income tax benefit recognized	11		9		7
Actual tax benefit realized for tax deductions	4		5		12

(1)Amounts presented in the table above are included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income and shown prior to any amounts capitalized.

Share-Based Compensation, Activity

The following tables summarize CenterPoint Energy’s LTIP activity for 2021:

	Year Ended December 31, 2021
	Shares (Thousands)	Weighted-Average Grant Date Fair Value		Remaining Average Contractual Life (Years)	Aggregate Intrinsic Value (2) (Millions)
Performance Awards (1)
Outstanding and nonvested as of December 31, 2020	3,900	$	26.58
Granted	2,095	21.89
Forfeited or canceled	(1,017)	26.44
Vested and released to participants	(315)	26.79
Outstanding and nonvested as of December 31, 2021	4,663	$	24.48	1.2	$	90
Stock Unit Awards
Outstanding and nonvested as of December 31, 2020	1,289	$	25.71
Granted	1,609	24.20
Forfeited or canceled	(91)	26.23
Vested and released to participants	(440)	25.26
Outstanding and nonvested as of December 31, 2021	2,367	$	24.75	1.4	$	66

 

(1)Reflects maximum performance achievement.

(2)Reflects the impact of current expectations of achievement and stock price.

Share-Based Compensation Arrangement By Award, Weighted Average Grant Date Fair Value, Grant Date Intrinsic Value, and Vested Grant Date Fair Value

The weighted average grant date fair values per unit of awards granted were as follows for 2021, 2020 and 2019:

	Year Ended December 31,
	2021		2020		2019
	(in millions, except for per unit amounts)
Performance Awards
Weighted-average grant date fair value per unit of awards granted	$	21.89	$	23.82	$	31.16
Total intrinsic value of awards received by participants	7		9		36
Vested grant date fair value	8		9		20
Stock Unit Awards
Weighted-average grant date fair value per unit of awards granted	$	24.20	$	21.53	$	31.07
Total intrinsic value of awards received by participants	11		12		15
Vested grant date fair value	11		12		9

Schedule of Net Benefit Costs

CenterPoint Energy’s net periodic cost includes the following components relating to pension, including the non-qualified benefit plans:

	Year Ended December 31,
	2021		2020		2019
	(in millions)
Service cost (1)	$	39	$	43	$	40
Interest cost (2)	59		75		96
Expected return on plan assets (2)	(103)		(112)		(105)
Amortization of prior service cost (2)	—		—		9
Amortization of net loss (2)	36		41		52
Settlement cost (2) (3)	38		2		2
Curtailment gain (2) (4)	—		—		(1)
Net periodic cost	$	69	$	49	$	93

 

(1)Amounts presented in the table above are included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals and amounts capitalized.

(2)Amounts presented in the table above are included in Other, net in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals.

(3)A one-time, non-cash settlement cost is required when the total lump sum distributions or other settlements of plan benefit obligations during a plan year exceed the service cost and interest cost components of the net periodic cost for that year. In 2021, 2020 and 2019, CenterPoint Energy recognized non-cash settlement cost due to lump sum settlement payments.

(4)A curtailment gain or loss is required when the expected future services of a significant number of employees are reduced or eliminated for the accrual of benefits. In 2019, CenterPoint Energy recognized a pension curtailment gain related to employees who were terminated after the Merger Date.

Postretirement benefits are accrued over the active service period of employees. The net postretirement benefit cost includes the following components:

	Year Ended December 31,
	2021						2020						2019
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Service cost (1)	$	2	$	—	$	1	$	2	$	—	$	1	$	3	$	1	$	1
Interest cost (2)	9		4		3		11		5		3		15		7		5
Expected return on plan assets (2)	(4)		(3)		(1)		(5)		(4)		(1)		(5)		(4)		(1)
Amortization of prior service cost (credit) (2)	(4)		(5)		1		(4)		(5)		1		(5)		(6)		1
Net postretirement benefit cost (credit)	$	3	$	(4)	$	4	$	4	$	(4)	$	4	$	8	$	(2)	$	6

(1)Amounts presented in the table above are included in Operation and maintenance expense in each of the Registrants’ respective Statements of Consolidated Income, net of regulatory deferrals and amounts capitalized.

(2)Amounts presented in the table above are included in Other, net in each of the Registrants’ respective Statements of Consolidated Income, net of regulatory deferrals.

Schedule of Assumptions Used

CenterPoint Energy used the following assumptions to determine net periodic cost relating to pension benefits:

	Year Ended December 31,
	2021		2020		2019
Discount rate	2.45	%	3.20	%	4.35	%
Expected return on plan assets	5.00		5.75		6.00
Rate of increase in compensation levels	5.05		4.95		4.60

The following assumptions were used to determine net periodic cost relating to postretirement benefits:

	Year Ended December 31,
	2021						2020						2019
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
Discount rate	2.50	%	2.50	%	2.50	%	3.25	%	3.25	%	3.25	%	3.20	%	3.20	%	3.20	%
Expected return on plan assets	3.20		3.30		2.85		3.95		4.05		3.35		4.60		4.70		4.15

Schedule of Net Pension and Post-retirement Benefit Costs

The following table summarizes changes in the benefit obligation, plan assets, the amounts recognized in the Consolidated Balance Sheets as well as the key assumptions of CenterPoint Energy’s pension plans. The measurement dates for plan assets and obligations were December 31, 2021 and 2020.

	December 31,
	2021			2020
	(in millions, except for actuarial assumptions)
Change in Benefit Obligation
Benefit obligation, beginning of year	$	2,507		$	2,453
Service cost	38			43
Interest cost	59			75
Benefits paid	(285)			(207)
Actuarial (gain) loss (1)	(22)			143
Plan amendment	1			—
Benefit obligation, end of year	2,298			2,507
Change in Plan Assets
Fair value of plan assets, beginning of year	2,135			2,005
Employer contributions	61			86
Benefits paid	(285)			(207)
Actual investment return	161			251
Fair value of plan assets, end of year	2,072			2,135
Funded status, end of year	$	(226)		$	(372)
Amounts Recognized in Balance Sheets
Non-current assets	$	6		$	—
Current liabilities-other	(7)			(8)
Other liabilities-benefit obligations	(225)			(364)
Net liability, end of year	$	(226)		$	(372)
Actuarial Assumptions
Discount rate (2)	2.80		%	2.45		%
Expected return on plan assets (3)	5.00			5.00
Rate of increase in compensation levels	4.95			5.05
Interest crediting rate	2.25			2.25

(1)Significant sources of gain for 2021 include the increase in discount rate from 2.45% to 2.80%, and actual return on plan assets exceeding expected return on assets during 2021.

(2)The discount rate assumption was determined by matching the projected cash flows of CenterPoint Energy’s plans against a hypothetical yield curve of high-quality corporate bonds represented by a series of annualized individual discount rates from one-half to 99 years.

(3)The expected rate of return assumption was developed using the targeted asset allocation of CenterPoint Energy’s plans and the expected return for each asset class.

The following table summarizes changes in the benefit obligation, plan assets, the amounts recognized in consolidated balance sheets and the key assumptions of the postretirement plans. The measurement dates for plan assets and benefit obligations were December 31, 2021 and 2020.

	December 31,
	2021									2020
	CenterPoint Energy			Houston Electric			CERC			CenterPoint Energy			Houston Electric			CERC
	(in millions, except for actuarial assumptions)
Change in Benefit Obligation
Benefit obligation, beginning of year	$	366		$	168		$	105		$	356		$	162		$	102
Service cost	2			—			1			2			—			1
Interest cost	9			4			3			11			5			3
Participant contributions	7			2			2			6			2			2
Benefits paid	(21)			(9)			(6)			(22)			(10)			(6)
Early Retiree Reinsurance Program	20			—			11			—			—			—
Plan amendment	—			5			—			—			—			—
Actuarial (gain) loss (1)	(47)			(22)			(11)			13			9			3
Benefit obligation, end of year	336			148			105			366			168			105
Change in Plan Assets
Fair value of plan assets, beginning of year	134			106			28			128			101			27
Employer contributions	7			1			3			10			3			3
Participant contributions	7			2			2			6			2			2
Benefits paid	(21)			(9)			(6)			(22)			(10)			(6)
Actual investment return	5			4			1			12			10			2
Fair value of plan assets, end of year	132			104			28			134			106			28
Funded status, end of year	$	(204)		$	(44)		$	(77)		$	(232)		$	(62)		$	(77)
Amounts Recognized in Balance Sheets
Current liabilities — other	$	(7)		$	—		$	(3)		$	(9)		$	—		$	(3)
Other liabilities — benefit obligations	(197)			(44)			(73)			(223)			(62)			(74)
Net liability, end of year	$	(204)		$	(44)		$	(76)		$	(232)		$	(62)		$	(77)
Actuarial Assumptions
Discount rate (2)	2.85		%	2.85		%	2.85		%	2.50		%	2.50		%	2.50		%
Expected return on plan assets (3)	3.22			3.32			2.86			3.20			3.30			2.85
Medical cost trend rate assumed for the next year - Pre-65	6.00			6.00			6.00			5.25			5.25			5.25
Medical/prescription drug cost trend rate assumed for the next year - Post-65	18.71			18.71			18.71			19.70			19.70			19.70
Prescription drug cost trend rate assumed for the next year - Pre-65	8.00			8.00			8.00			7.50			7.50			7.50
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.50			4.50			4.50			4.50			4.50			4.50
Year that the cost trend rates reach the ultimate trend rate - Pre-65	2029			2029			2029			2028			2028			2028
Year that the cost trend rates reach the ultimate trend rate - Post-65	2030			2030			2030			2029			2029			2029

(1)Significant sources of gain for 2021 include updated claims and demographic experience and the increase in discount rate from 2.50% to 2.85%.

(2)The discount rate assumption was determined by matching the projected cash flows of the plans against a hypothetical yield curve of high-quality corporate bonds represented by a series of annualized individual discount rates from one-half to 99 years.

(3)The expected rate of return assumption was developed using the targeted asset allocation of the plans and the expected return for each asset class.

Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets

The following table displays pension benefits related to CenterPoint Energy’s pension plans that have accumulated benefit obligations in excess of plan assets:

	December 31,
	2021				2020
	Pension (Qualified)		Pension (Non-qualified)		Pension (Qualified)		Pension (Non-qualified)
	(in millions)
Accumulated benefit obligation	$	2,216	$	62	$	2,427	$	68
Projected benefit obligation	2,237		62		2,440		68
Fair value of plan assets	2,072		—		2,135		—

Schedule of Accumulated Other Comprehensive Income (Loss)

Amounts recognized in accumulated other comprehensive loss (gain) consist of the following:

	December 31,
	2021						2020
	Pension Benefits		Postretirement Benefits				Pension Benefits		Postretirement Benefits
	CenterPoint Energy		CenterPoint Energy		CERC		CenterPoint Energy		CenterPoint Energy		CERC
	(in millions)
Unrecognized actuarial loss (gain)	$	99	$	(23)	$	(18)	$	109	$	(14)	$	(12)
Unrecognized prior service cost	—		13		12		—		7		7
Net amount recognized in accumulated other comprehensive loss (gain)	$	99	$	(10)	$	(6)	$	109	$	(7)	$	(5)

Changes in accumulated comprehensive income (loss) are as follows:

	Year Ended December 31,
	2021						2020
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Beginning Balance	$	(90)	$	—	$	10	$	(98)	$	(15)	$	10
Other comprehensive income (loss) before reclassifications:
Remeasurement of pension and other postretirement plans	16		—		—		(12)		—		—
Other comprehensive income (loss) from unconsolidated affiliates	3		—		—		(2)		—		—
Amounts reclassified from accumulated other comprehensive loss:
Prior service cost (1)	1		—		1		—		—		1
Actuarial losses (1)	7		—		—		7		—		—
Settlement (2)	4		—		—		—		—		—
Reclassification of deferred loss from cash flow hedges realized in net income	2		—		—		—		—		—
Reclassification of deferred loss from cash flow hedges to regulatory assets (3)	—		—		—		19		19		—
Tax benefit (expense)	(7)		—		(1)		(4)		(4)		(1)
Net current period other comprehensive income (loss)	26		—		—		8		15		—
Ending Balance	$	(64)	$	—	$	10	$	(90)	$	—	$	10

(1)Amounts are included in the computation of net periodic cost and are reflected in Other, net in each of the Registrants’ respective Statements of Consolidated Income.

(2)Amounts presented represent a one-time, non-cash settlement cost (benefit), prior to regulatory deferrals, which are required when the total lump sum distributions or other settlements of plan benefit obligations during a plan year exceed the service cost and interest cost components of the net periodic cost for that year. Amounts presented in the table above are included in Other income (expense), net in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals.

(3)The cost of debt approved by the PUCT as part of Houston Electric’s Stipulation and Settlement Agreement included unrealized gains and losses on interest rate hedges. Accordingly, deferred gains and losses on interest rate hedges were reclassified to regulatory assets or liabilities, as appropriate.

Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss)

The changes in plan assets and benefit obligations recognized in other comprehensive income during 2021 are as follows:

	Pension Benefits		Postretirement Benefits
	CenterPoint Energy		CenterPoint Energy		CERC
	(in millions)
Net loss (gain)	$	1	$	(2)	$	—
Amortization of net loss	(7)		—		—
Amortization of prior service cost	—		(1)		(1)
Settlement	(4)		—		—
Total recognized in comprehensive income	$	(10)	$	(3)	$	(1)
Total recognized in net periodic costs and Other comprehensive income	$	59	$	—	$	3

Target Allocation of Plan Assets

As part of the investment strategy discussed above, CenterPoint Energy maintained the following weighted average allocation targets for its pension plans as of December 31, 2021:

	Minimum		Maximum
U.S. equity	17	%	27	%
International equity	9	%	19	%
Real estate	2	%	8	%
Fixed income	54	%	64	%
Cash	—	%	2	%

As part of the investment strategy discussed above, the Registrants maintained the following weighted average allocation targets for the postretirement plans as of December 31, 2021:

	CenterPoint Energy				Houston Electric				CERC
	Minimum		Maximum		Minimum		Maximum		Minimum		Maximum
U.S. equities	13	%	23	%	13	%	23	%	15	%	25	%
International equities	3	%	13	%	3	%	13	%	2	%	12	%
Fixed income	69	%	79	%	69	%	79	%	68	%	78	%
Cash	—	%	2	%	—	%	2	%	—	%	2	%

Schedule of Allocation of Plan Assets

The following tables set forth by level, within the fair value hierarchy (see Note 10), CenterPoint Energy’s pension plan assets at fair value as of December 31, 2021 and 2020:

	Fair Value Measurements as of December 31,
	2021								2020
	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
	(in millions)
Cash	$	26	$	—	$	—	$	26	$	29	$	—	$	—	$	29
Corporate bonds:
Investment grade or above	—		833		—		833		—		767		—		767
Equity securities:
U.S. companies	89		—		—		89		76		—		—		76
Cash received as collateral from securities lending	80		—		—		80		81		—		—		81
U.S. treasuries and government agencies	285		—		—		285		225		—		—		225
Mortgage backed securities	—		7		—		7		—		5		—		5
Asset backed securities	—		3		—		3		—		3		—		3
Municipal bonds	—		40		—		40		—		43		—		43
Mutual funds (2)	—		—		—		—		301		—		—		301
International government bonds	—		20		—		20		—		18		—		18
Obligation to return cash received as collateral from securities lending	(80)		—		—		(80)		(81)		—		—		(81)
Total investments at fair value	$	400	$	903	$	—	$	1,303	$	631	$	836	$	—	$	1,467
Investments measured by net asset value per share or its equivalent (1) (2)							769								668
Total Investments							$	2,072							$	2,135

(1)Represents investments in common collective trust funds.

(2)The amounts invested in mutual funds and common collective trust funds were allocated as follows:

	As of December 31,
	2021		2020
	Common Collective Trust Funds		Mutual Funds		Common Collective Trust Funds
International equities	41	%	14	%	37	%
U.S. equities	58	%	55	%	3	%
Real estate	—	%	5	%	1	%
Fixed income	1	%	27	%	59	%

The following table presents mutual funds by level, within the fair value hierarchy, the Registrants’ postretirement plan assets at fair value as of December 31, 2021 and 2020:

	Fair Value Measurements as of December 31,
	2021								2020
	Mutual Funds
	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
	(in millions)
CenterPoint Energy	$	133	$	—	$	—	$	133	$	134	$	—	$	—	$	134
Houston Electric	105		—		—		105		106		—		—		106
CERC	28		—		—		28		28		—		—		28

The amounts invested in mutual funds were allocated as follows:

	As of December 31,
	2021						2020
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
Fixed income	72	%	73	%	71	%	74	%	74	%	72	%
U.S. equities	20	%	19	%	22	%	19	%	18	%	21	%
International equities	8	%	8	%	7	%	7	%	8	%	7	%

Benefit Plan Contributions

The Registrants made the following contributions in 2021 and expect to make the following minimum contributions in 2022 to the indicated benefit plans below:

	Contributions in 2021						Expected Minimum Contributions in 2022
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Qualified pension plans	$	53	$	—	$	—	$	—	$	—	$	—
Non-qualified pension plans	8		—		—		7		—		—
Postretirement benefit plans	7		1		3		8		1		3

Schedule of Expected Benefit Payments

The following benefit payments are expected to be paid by the pension and postretirement benefit plans:

	Pension Benefits		Postretirement Benefits
	CenterPoint Energy		CenterPoint Energy		Houston Electric		CERC
	(in millions)
2022	$	166	$	16	$	7	$	4
2023	168		17		8		5
2024	167		18		9		5
2025	167		19		9		5
2026	163		20		9		6
2027-2031	730		103		48		30

Defined Contribution Plan Disclosures

CenterPoint Energy allocates the savings plan benefit expense to Houston Electric and CERC related to their respective employees. The following table summarizes the Registrants’ savings plan benefit expense for 2021, 2020 and 2019:

	Year Ended December 31,
	2021						2020						2019
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Savings plan benefit  expenses (1)	$	58	$	20	$	18	$	58	$	18	$	19	$	58	$	18	$	18

(1)Amounts presented in the table above are included in Operation and maintenance expense in the Registrants’ respective Statements of Consolidated Income and shown prior to any amounts capitalized.

Other Benefit Plans

Expenses related to other benefit plans were recorded as follows:

	Year Ended December 31,
	2021						2020						2019
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Postemployment benefits	$	3	$	1	$	2	$	1	$	1	$	—	$	2	$	1	$	1
Deferred compensation plans	3		—		—		4		1		—		4		1		—

Amounts related to other benefit plans were included in Benefit Obligations in the Registrants’ accompanying Consolidated Balance Sheets as follows:

	December 31, 2021						December 31, 2020
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Postemployment benefits	$	8	$	3	$	5	$	8	$	3	$	5
Deferred compensation plans	40		6		3		43		7		2
Split-dollar life insurance arrangements	29		1		—		32		1		—

Other Employee Matters

As of December 31, 2021, the Registrants’ employees were covered by collective bargaining agreements as follows:

		Percentage of Employees Covered
	Agreement Expiration	CenterPoint Energy		Houston Electric		CERC
IBEW Local 66	May 2023	15	%	54	%	—	%
OPEIU Local 12	December 2025	2	%	—	%	3	%
Gas Workers Union Local 340	April 2025	5	%	—	%	12	%
IBEW Locals 1393 and USW Locals 12213 & 7441	December 2023	3	%	—	%	—	%
IBEW Locals 949	December 2025	3	%	—	%	7	%
USW Locals 13-227	June 2022	5	%	—	%	14	%
USW Locals 13-1	July 2022	—	%	—	%	1	%
IBEW Local 702	June 2022	3	%	—	%	—	%
Teamsters Local 135	October 2024	—	%	—	%	—	%
UWUA Local 175	October 2024	1	%	—	%	—	%
Total		37	%	54	%	37	%

Negotiations are currently in progress for the collective bargaining agreements scheduled to expire in 2022 and are expected to be completed before the respective expirations.