Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Registrants reported the following effective tax rates:

	Three Months Ended March 31,
	2022		2021
CenterPoint Energy - Continuing operations (1)	27	%	15	%
CenterPoint Energy - Discontinued operations	—	%	23	%
Houston Electric (2)	22	%	13	%
CERC (3)	26	%	22	%

(1)CenterPoint Energy’s higher effective tax rate on income from continuing operations for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily driven by the impact of the non-deductible goodwill associated with the sale of the Natural Gas businesses in Arkansas and Oklahoma, and a decrease in EDIT amortization of the net regulatory EDIT liability.

(2)Houston Electric’s higher effective tax rate for the three months ended March 31, 2022 compared to the same period in 2021 was primarily driven by a decrease in the amount of amortization of the net regulatory EDIT liability.

(3)CERC’s higher effective tax rate for the three months ended March 31, 2022 compared to the same period ended March 31, 2021 was primarily driven by the impact of the non-deductible goodwill associated with the sale of the Natural Gas businesses in Arkansas and Oklahoma, and an increase in EDIT amortization of the net regulatory EDIT liability.

CenterPoint Energy reported a net uncertain tax liability, inclusive of interest and penalties, of $4 million as of March 31, 2022. The Registrants believe that it is reasonably possible that a decrease of up to $3 million in unrecognized tax benefits may occur in the next 12 months as a result of a lapse of statutes on older exposures, a tax settlement, and/or a resolution of open audits.

Tax Audits and Settlements. Tax years through 2018 have been audited and settled with the IRS for CenterPoint Energy. For the 2019-2022 tax years, the Registrants are participants in the IRS’s Compliance Assurance Process. Vectren’s pre-Merger

2014-2019 tax years are currently under audit by the IRS.