Related Party Transactions (Houston Electric and CERC)

12 Months Ended

Dec. 31, 2022

Related Party Transactions (Houston Electric and CERC) Houston Electric and CERC participate in a money pool through which they can borrow or invest on a short-term basis. Funding needs are aggregated and external borrowing or investing is based on the net cash position. The net funding requirements of the money pool are expected to be met with borrowings under CenterPoint Energy’s revolving credit facility or the sale of CenterPoint Energy’s commercial paper.

The table below summarizes money pool activity:


	December 31, 2022						December 31, 2021
	Houston Electric			CERC			Houston Electric			CERC
	(in millions, except interest rates)
Money pool investments (borrowings) (1)	$	(642)		$	—		$	(512)		$	(224)
Weighted average interest rate	4.75		%	4.75		%	0.34		%	0.34		%

(1)Included in Accounts and notes receivable (payable)–affiliated companies in Houston Electric’s and CERC’s Consolidated Balance Sheets.

Houston Electric and CERC affiliate-related net interest income (expense) were as follows:


	Year Ended December 31,
	2022				2021				2020
	Houston Electric		CERC		Houston Electric		CERC (1)		Houston Electric		CERC (1)
	(in millions)
Interest income (expense), net (2)	$	—	$	(18)	$	—	$	(38)	$	—	$	(35)

(1)Includes affiliate-related net interest expense of Indiana Gas and VEDO to reflect the Restructuring.

(2)Interest income is included in Other, net and interest expense is included in Interest and other finance charges on Houston Electric’s and CERC’s respective Statements of Consolidated Income.

CenterPoint Energy provides some corporate services to Houston Electric and CERC. The costs of services have been charged directly to Houston Electric and CERC using methods that management believes are reasonable. These methods include negotiated usage rates, dedicated asset assignment and proportionate corporate formulas based on operating expenses, assets, gross margin, employees and a composite of assets, gross margin and employees. Houston Electric provides certain services to CERC. These services are billed at actual cost, either directly or as an allocation and include fleet services, shop services, geographic services, surveying and right-of-way services, radio communications, data circuit management and field operations. Additionally, CERC provides certain services to Houston Electric. These services are billed at actual cost, either directly or as an allocation and include line locating and other miscellaneous services. These charges are not necessarily indicative of what would have been incurred had Houston Electric and CERC not been affiliates.

Amounts charged for these services are included primarily in Operation and maintenance expenses:


	Year Ended December 31,
	2022				2021				2020
	Houston Electric		CERC		Houston Electric		CERC		Houston Electric		CERC
	(in millions)
Corporate service charges	$	167	$	237	$	189	$	257	$	197	$	232
Net affiliate service charges (billings)	15		(15)		(7)		7		(16)		16

The table below presents transactions among Houston Electric, CERC and their parent, Utility Holding.


	Year Ended December 31,
	2022				2021				2020
	Houston Electric		CERC		Houston Electric		CERC		Houston Electric		CERC
	(in millions)
Cash dividends paid to parent	$	316	$	124	$	—	$	—	$	551	$	128
Cash dividend paid to parent related to the sale of the Arkansas and Oklahoma Natural Gas businesses	—		720		—		—		—		—
Cash contribution from parent	1,143		289		130		140		62		337
Net assets acquired in the Restructuring (1)	—		2,345		—		—		—		—
Capital distribution to parent associated with the sale of CES	—		—		—		—		—		286
Non-cash capital contribution from parent in payment for property, plant and equipment below	38		54		—		—		—		—
Cash paid to parent for property, plant and equipment below	65		61		—		—		—		—
Property, plant and equipment from parent (2)	103		115		—		—		36		23

(1)The Restructuring was a common control transaction that required the recasting of financial information to the earliest period presented. Therefore, the net asset transfer is not reflected during the current period on CERC’s Condensed Statements of Consolidated Changes in Equity.

(2)Property, plant and equipment purchased from CenterPoint Energy at its net carrying value on the date of purchase.