Short-term Borrowings and Long-term Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Short-term Borrowings and Long-term Debt

Short-term Borrowings and Long-term Debt

	December 31, 2022				December 31, 2021
	Long-Term		Current (1)		Long-Term		Current (1)
	(in millions)
CenterPoint Energy:
ZENS due 2029 (2)	$	—	$	7	$	—	$	10
CenterPoint Energy senior notes 1.45% to 4.61% due 2024 to 2049	3,050		—		3,650		—
CenterPoint Energy pollution control bonds 5.125% due 2028 (3)	68		—		68		—
CenterPoint Energy commercial paper (4) (5)	1,770		—		1,400		—
VUH senior notes (see Debt Exchange below)	—		—		377		—
VUH commercial paper (4) (5)	—		—		350		—
SIGECO first mortgage bonds 0.875% to 6.72% due 2024 to 2055 (6)	277		11		288		5
Other debt	—		4		4		3
Unamortized debt issuance costs	(15)		—		(23)		—
Unamortized discount and premium, net	(6)		—		(7)		—
Houston Electric debt (see details below)	6,197		156		4,975		520
CERC third party debt (see details below)	3,495		1,842		4,476		7
Total CenterPoint Energy debt	$	14,836	$	2,020	$	15,558	$	545

Houston Electric:
General mortgage bonds 2.35% to 6.95% due 2026 to 2052 (8)	$	6,112	$	—	$	4,712	$	300
Other	1		—		—		—
Restoration Bond Company:
System restoration bonds 4.243% due 2022	—		—		—		70
Bond Company IV:
Transition bonds 3.028% due 2024	161		156		317		150
Unamortized debt issuance costs	(50)		—		(36)		—
Unamortized discount and premium, net	(27)		—		(18)		—
Total Houston Electric debt	$	6,197	$	156	$	4,975	$	520

CERC (7):
Short-term borrowings:
Inventory financing (9)	$	—	$	11	$	—	$	7
Term loan	—		500		—		—
Total CERC short-term borrowings	—		511		—		7
Long-term debt:
Senior notes 0.70% to 6.625% due 2023 to 2047	$	2,620	$	1,331	$	3,500	$	—
Indiana Gas senior notes 6.34% to 7.08% due 2025 to 2029	96		—		96		—
Commercial paper (4) (5)	805		—		899		—
Unamortized debt issuance costs	(22)		—		(15)		—
Unamortized discount and premium, net	(4)		—		(4)		—
Total CERC third-party long-term debt	3,495		1,331		4,476		—
Indiana Gas and VEDO notes payable to CenterPoint Energy	—		—		1,076		—
Total CERC debt	$	3,495	$	1,842	$	5,552	$	7

(1)Includes amounts due or exchangeable within one year of the date noted.

(2)CenterPoint Energy’s ZENS obligation is bifurcated into a debt component and an embedded derivative component. For additional information regarding ZENS, see Note 11(b). As ZENS are exchangeable for cash at any time at the option of the holders, these notes are classified as a current portion of long-term debt.

(3)These pollution control bonds were secured by general mortgage bonds of Houston Electric as of December 31, 2022 and 2021 and are not reflected in Houston Electric’s consolidated financial statements because of the contingent nature of the obligations.

(4)Classified as long-term debt because the termination date of the facility that backstops the commercial paper is more than one year from the date noted.

(5)Commercial paper issued by CenterPoint Energy and CERC Corp. has maturities up to 60 days and 30 days, respectively, and are backstopped by the respective issuer’s long-term revolving credit facility. The VUH credit facility was terminated in connection with the Restructuring, as discussed below, and VUH no longer issues commercial paper.

(6)The first mortgage bonds issued by SIGECO subject SIGECO’s properties to a lien under the related mortgage indenture as further discussed below.

(7)Issued by CERC Corp.

(8)The general mortgage bonds issued by Houston Electric subject Houston Electric’s properties to a lien under the General Mortgage as further discussed below.

(9)Represents AMA transactions accounted for as an inventory financing. Outstanding obligations related to third-party AMAs associated with utility distribution service in Arkansas and Oklahoma of $36 million as of December 31, 2021 are reflected in current liabilities held for sale on CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets. For further information about AMAs, see Notes 4 and 15.

Debt Transactions

Debt Issuances. During 2022, the following debt instruments were issued or incurred:

Registrant	Issuance Date	Debt Instrument	Aggregate Principal Amount		Interest Rate	Maturity Date
		(in millions)
Houston Electric	February 2022	General Mortgage Bonds (1)	$	300	3.00%	2032
Houston Electric	February 2022	General Mortgage Bonds (1)	500		3.60%	2052
Houston Electric	September 2022	General Mortgage Bonds (2)	500		4.45%	2032
Houston Electric	September 2022	General Mortgage Bonds (2)	300		4.85%	2052
		Total Houston Electric (1)	1,600
CERC	June 2022	Senior Notes (3)	500		4.40%	2032
CERC	August 2022	Term Loan (4)	500		SOFR (5) + 0.70%	2023
		Total CERC	1,000
		Total CenterPoint Energy	$	2,600

(1)Total proceeds, net of discounts and issuance expenses and fees, of approximately $784 million were used for general limited liability company purposes, including capital expenditures and the repayment of all or a portion of Houston Electric’s borrowings under the CenterPoint Energy money pool.

(2)Total proceeds, net of discounts and issuance expenses and fees, of approximately $789 million were used for general limited liability company purposes, including capital expenditures, the repayment of all or a portion of Houston Electric’s borrowings under the CenterPoint Energy money pool and the redemption of outstanding general mortgage bonds discussed below.

(3)Total proceeds, net of discounts and issuance expenses and fees, of approximately $495 million were used for general corporate purposes, including the issuance by CERC Corp.’s current subsidiaries, Indiana Gas and VEDO, of intercompany notes to CERC Corp. in June 2022; these subsidiaries used the funds to repay intercompany debt owed to VUH in connection with the Restructuring in June 2022.

(4)Total proceeds, net of discounts and issuance expenses and fees, of approximately $500 million were used for general corporate purposes, including the repayment of CERC’s outstanding commercial paper balances. The term loan is reflected in short-term borrowings on CenterPoint Energy’s and CERC’s Consolidated Balance Sheets.

(5)As defined in the term loan agreement, which includes an adjustment of 0.10% per annum.

On February 16, 2023, CERC Corp. entered into a $500 million term loan agreement. Borrowings under the term loan agreement bear interest at CERC Corp.’s option, at a rate equal to either (i) Term SOFR (as defined in the term loan agreement), which includes an adjustment of 0.10% per annum plus a margin of 0.85% or (ii) the alternate base rate (as defined in the term loan agreement). CERC Corp. borrowed the full $500 million at closing and intends to use the proceeds thereof for general corporate purposes, including the repayment of a portion of its outstanding commercial paper. The maturity date for the borrowings under the term loan agreement is February 15, 2024.

Debt Exchange. As a part of the Restructuring, on May 27, 2022, CERC Corp. and VUH completed an exchange with holders of VUH PPNs whereby CERC Corp. issued new senior notes with an aggregate principal amount of $302 million to such holders in exchange for all of their outstanding VUH PPNs with an aggregate principal amount of $302 million. The new CERC Corp. senior notes have the same principal amount, interest rate, and payment and maturity dates as the VUH PPNs for which they were exchanged. As a result of the exchange, CERC Corp. became the creditor for the PPNs originally issued by VUH, and CERC Corp. received $302 million of cash from VUH on June 30, 2022 in full repayment of the VUH PPNs. Orders received from the IURC and PUCO allowed for the reissuance of existing debt of Indiana Gas and VEDO to CERC, the continued amortization of existing issuance expenses and discounts, and the treatment of any potential exchange fees as discounts to be amortized over the life of the debt.

On September 6, 2022, CERC Corp. and VUH announced that CERC Corp. had commenced an offer to eligible holders to exchange any and all outstanding 6.10% senior notes due 2035 issued by Vectren Utility Holdings, Inc. (predecessor of VUH) for (1) up to $75 million aggregate principal amount of new senior notes issued by CERC Corp. and (2) cash. On October 5, 2022, in connection with the settlement of the exchange offer, CERC Corp. issued $75 million aggregate principal amount of 6.10% senior notes due 2035 in exchange for all outstanding VUH senior notes. The new CERC Corp. senior notes issued in the exchange offer have the same interest rate and payment and maturity dates as the VUH notes for which they were exchanged.

Debt Repayments and Redemptions. During 2022, the following debt instruments were repaid at maturity or redeemed, excluding scheduled principal payments of $220 million on the Securitization bonds:

Registrant	Repayment/Redemption Date	Debt Instrument	Aggregate Principal		Interest Rate	Maturity Date
			(in millions)
CERC (1)	January 2022	Floating Rate Senior Notes	$	425	Three-month LIBOR plus 0.5%	2023
		Total CERC	425
Houston Electric	August 2022	General Mortgage Bonds	300		2.25%	2022
Houston Electric (2)	October 2022	General Mortgage Bonds	200		5.60%	2023
		Total Houston Electric	500
CenterPoint Energy (3)	January 2022	First Mortgage Bonds	5		0.82%	2022
CenterPoint Energy (4)	March 2022	Senior Notes	250		3.85%	2024
CenterPoint Energy (5)	March 2022	Senior Notes	350		4.25%	2028
		Total CenterPoint Energy	$	1,530

(1)In January 2022, CERC provided notice of partial redemption, and on January 31, 2022, CERC redeemed a portion ($425 million) of the outstanding $1 billion aggregate principal amount of the series at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest on the principal amount being redeemed.

(2)In September 2022, Houston Electric provided notice of redemption, and on October 17, 2022, Houston Electric redeemed $200 million aggregate principal amount, plus accrued and unpaid interest of approximately $3 million and an applicable make-whole premium of approximately $2 million, for a total redemption price of $205 million.

(3)First Mortgage Bonds issued by SIGECO.

(4)In March 2022, CenterPoint Energy provided notice of redemption, and on March 30, 2022, CenterPoint Energy redeemed all of the remaining outstanding senior notes of the series at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest of approximately $2 million, the write off of issuance costs of $1 million and an applicable make-whole premium of approximately $7 million for a total redemption price of $260 million.

(5)In March 2022, CenterPoint Energy provided notice of partial redemption, and on March 30, 2022, CenterPoint Energy redeemed a portion ($350 million) of the outstanding $500 million aggregate principal amount of the series at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest of approximately $6 million, the write off of issuance costs of $3 million and an applicable make-whole premium of approximately $34 million for a total redemption price of $393 million.

CenterPoint Energy and CERC recorded losses on early extinguishment of debt, including make-whole premiums and recognition of deferred debt related costs, in Interest expense and other finance charges on their respective Statements of Consolidated Income, of $47 million and $-0-, respectively, during the year ended December 31, 2022, and $53 million and $11 million, respectively for the year ended December 31, 2021, and $2 million for both for the year ended December 31, 2020. Houston Electric recorded a loss on early extinguishment of debt of $2 million during the year ended December 31, 2022, which was recorded as a regulatory asset.

On December 16, 2022, SIGECO provided notice of redemption and on January 17, 2023, SIGECO redeemed $11 million aggregate principal amount of SIGECO’s outstanding first mortgage bonds due 2044 at a redemption price equal to 100% of the principal amount of the first mortgage bonds to be redeemed plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date.

Securitization Bonds. As of December 31, 2022, CenterPoint Energy and Houston Electric had special purpose subsidiaries consisting of the Bond Companies, which they consolidate. The consolidated special purpose subsidiaries are wholly-owned, bankruptcy remote entities that were formed solely for the purpose of purchasing and owning transition or system restoration property through the issuance of transition bonds or system restoration bonds and activities incidental thereto. These Securitization Bonds are payable only through the imposition and collection of “transition” or “system restoration” charges, as defined in the Texas Public Utility Regulatory Act, which are irrevocable, non-bypassable charges to provide recovery of authorized qualified costs. On August 15, 2022, Restoration Bond Company repaid in full its last outstanding system restoration bonds. CenterPoint Energy and Houston Electric have no payment obligations in respect of the Securitization Bonds other than to remit the applicable transition or system restoration charges they collect as set forth in

servicing agreements among Houston Electric, the Bond Companies and other parties. Each special purpose entity is the sole owner of the right to impose, collect and receive the applicable transition or system restoration charges securing the bonds issued by that entity. Creditors of CenterPoint Energy or Houston Electric have no recourse to any assets or revenues of the Bond Companies (including the transition charges), and the holders of Securitization Bonds have no recourse to the assets or revenues of CenterPoint Energy or Houston Electric.

Credit Facilities. On June 30, 2022, in connection with the Restructuring, VUH repaid in full all outstanding indebtedness and terminated all remaining commitments and other obligations under its $400 million amended and restated credit agreement dated as of February 4, 2021. VUH did not incur any penalties in connection with the early termination.

On December 6, 2022, CenterPoint Energy, Inc. and its wholly owned subsidiaries, Houston Electric and CERC, replaced their existing revolving credit facilities with three revolving credit facilities totaling $3.75 billion in aggregate commitments. In addition, SIGECO entered into a new revolving credit facility totaling an additional $250 million in aggregate commitments. The aggregate amount of commitments among the four credit facilities total $4.0 billion.

The Registrants had the following revolving credit facilities as of December 31, 2022:

Execution  Date	Registrant	Size of Facility		Draw Rate of SOFR plus (1)	Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio		Debt for Borrowed Money to Capital Ratio as of December 31, 2022 (2)	Termination  Date
		(in millions)
December 6, 2022	CenterPoint Energy	$	2,400	1.500%	65%	(3)	61.8%	December 6, 2027
December 6, 2022	CenterPoint Energy (4)	250		1.125%	65%		45.2%	December 6, 2027
December 6, 2022	Houston Electric	300		1.250%	67.5%	(3)	54.4%	December 6, 2027
December 6, 2022	CERC	1,050		1.125%	65%		49.9%	December 6, 2027
	Total	$	4,000

(1)Based on credit ratings as of December 31, 2022.

(2)As defined in the revolving credit facility agreement, excluding Securitization Bonds.

(3)For CenterPoint Energy and Houston Electric, the financial covenant limit will temporarily increase to 70% if Houston Electric experiences damage from a natural disaster in its service territory and CenterPoint Energy certifies to the administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed $100 million in a consecutive 12-month period, all or part of which Houston Electric intends to seek to recover through securitization financing. Such temporary increase in the financial covenant would be in effect from the date CenterPoint Energy delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of CenterPoint Energy’s certification or (iii) the revocation of such certification.

(4)This credit facility was issued by SIGECO.

The Registrants, as well as the subsidiaries of CenterPoint Energy discussed above, were in compliance with all financial debt covenants as of December 31, 2022.

As of December 31, 2022 and 2021, the Registrants had the following revolving credit facilities and utilization of such facilities:

	December 31, 2022										December 31, 2021
Registrant	Size of Facility		Loans		Letters of Credit		Commercial Paper		Weighted Average Interest Rate		Size of Facility		Loans		Letters of Credit		Commercial Paper		Weighted Average Interest Rate
	(in millions, except weighted average interest rate)
CenterPoint Energy (1)	$	2,400	$	—	$	11	$	1,770	4.71	%	$	2,400	$	—	$	11	$	1,400	0.34	%
CenterPoint Energy (2)	—		—		—		—		—	%	400		—		—		350		0.21	%
Houston Electric	300		—		—		—		—	%	300		—		—		—		—	%
CERC	1,050		—		—		805		4.67	%	900		—		—		899		0.26	%
SIGECO	250		—		—		—		—	%	—		—		—		—		—	%
Total	$	4,000	$	—	$	11	$	2,575			$	4,000	$	—	$	11	$	2,649

(1)CenterPoint Energy’s outstanding commercial paper generally has maturities of 60 days or less.

(2)This credit facility was issued by VUH and was terminated in connection with the Restructuring, as discussed above.

Maturities. As of December 31, 2022, maturities of long-term debt through 2027, excluding the ZENS obligation and unamortized discounts, premiums and issuance costs, were as follows:

	CenterPoint Energy (1)		Houston  Electric (1)		CERC		Securitization Bonds
	(in millions)
2023	$	1,999	$	156	$	1,832	$	156
2024	1,384		161		—		161
2025	51		—		10		—
2026	860		300		60		—
2027	2,901		300		831		—

(1)These maturities include Securitization Bonds principal repayments on scheduled payment dates.

Liens. As of December 31, 2022, Houston Electric’s assets were subject to liens securing approximately $6.2 billion of general mortgage bonds outstanding under the General Mortgage, including approximately $68 million held in trust to secure pollution control bonds that mature in 2028 for which CenterPoint Energy is obligated. The general mortgage bonds that are held in trust to secure pollution control bonds are not reflected in Houston Electric’s consolidated financial statements because of the contingent nature of the obligations. Houston Electric may issue additional general mortgage bonds on the basis of retired bonds, 70% of property additions or cash deposited with the trustee. Houston Electric could issue approximately $4.9 billion of additional general mortgage bonds on the basis of retired bonds and 70% of property additions as of December 31, 2022.  No first mortgage bonds are outstanding under the M&DOT, and Houston Electric is contractually obligated to not issue any additional first mortgage bonds under the M&DOT and is undertaking actions to release the lien of the M&DOT and terminate the M&DOT.

As of December 31, 2022, SIGECO had approximately $288 million aggregate principal amount of first mortgage bonds outstanding. Generally, all of SIGECO’s real and tangible property is subject to the lien of SIGECO’s mortgage indenture. As of December 31, 2022, SIGECO was permitted to issue additional bonds under its mortgage indenture up to 60% of then currently unfunded property additions and approximately $1.4 billion of additional first mortgage bonds could be issued on this basis. The mortgage indenture was amended and restated effective as of January 1, 2023 which, among other things, permits SIGECO to issue additional bonds up to 70% of currently unfunded property additions.

Other. As of December 31, 2022, certain financial institutions agreed to issue, from time to time, up to $20 million of letters of credit on behalf of certain of Vectren’s subsidiaries in exchange for customary fees. These agreements to issue letters of credit expire on February 1, 2024. As of December 31, 2022, such financial institutions had issued less than $1 million of letters of credit on behalf of these subsidiaries.

Houston Electric and CERC participate in a money pool through which they can borrow or invest on a short-term basis. For additional information, see Note 19.