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

12 Months Ended

Dec. 31, 2022

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 2022, 2021 and 2020:

	Year Ended December 31,
	2022		2021		2020
	(in millions)
LTIP compensation expense (1)	$	51	$	48	$	38
Income tax benefit recognized	12		11		9
Actual tax benefit realized for tax deductions	6		4		5

(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 2022

	Year Ended December 31, 2022
	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, 2021	4,663	$	24.48
Granted	1,781	28.12
Forfeited or canceled	(856)	29.92
Vested and released to participants	(431)	31.20
Outstanding and nonvested as of December 31, 2022	5,157	$	24.26	1.0	$	106
Stock Unit Awards
Outstanding and nonvested as of December 31, 2021	2,367	$	24.75
Granted	441	28.44
Forfeited or canceled	(60)	24.98
Vested and released to participants	(452)	28.35
Outstanding and nonvested as of December 31, 2022	2,296	$	25.03	0.9	$	69

 

(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 2022, 2021 and 2020:

	Year Ended December 31,
	2022		2021		2020
	(in millions, except for per unit amounts)
Performance Awards
Weighted-average grant date fair value per unit of awards granted	$	28.12	$	21.89	$	23.82
Total intrinsic value of awards received by participants	13		7		9
Vested grant date fair value	13		8		9
Stock Unit Awards
Weighted-average grant date fair value per unit of awards granted	$	28.44	$	24.20	$	21.53
Total intrinsic value of awards received by participants	14		11		12
Vested grant date fair value	13		11		12

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,
	2022		2021		2020
	(in millions)
Service cost (1)	$	29	$	39	$	43
Interest cost (2)	73		59		75
Expected return on plan assets (2)	(87)		(103)		(112)
Amortization of net loss (2)	31		36		41
Settlement cost (2) (3)	126		38		2
Net periodic cost	$	172	$	69	$	49

 

(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 2022, 2021 and 2020, CenterPoint Energy recognized non-cash settlement cost due to lump sum settlement payments. The transfer of assets related to the 2022 Annuity Lift-Out is considered a lump sum settlement payment.

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

	Year Ended December 31,
	2022						2021						2020
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Service cost (1)	$	2	$	—	$	1	$	2	$	—	$	1	$	2	$	—	$	1
Interest cost (2)	9		4		3		9		4		3		11		5		4
Expected return on plan assets (2)	(5)		(4)		(1)		(4)		(3)		(1)		(5)		(4)		(1)
Amortization of prior service cost (credit) (2)	(3)		(4)		2		(4)		(5)		1		(4)		(5)		1
Amortization of net loss (2)	(4)		(2)		(1)		—		—		—		—		—		—
Net postretirement benefit cost (credit)	$	(1)	$	(6)	$	4	$	3	$	(4)	$	4	$	4	$	(4)	$	5

(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,
	2022		2021		2020
Discount rate	2.80	%	2.45	%	3.20	%
Expected return on plan assets	5.00		5.00		5.75
Rate of increase in compensation levels	4.95		5.05		4.95

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

	Year Ended December 31,
	2022						2021						2020
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
Discount rate	2.85	%	2.85	%	2.85	%	2.50	%	2.50	%	2.50	%	3.25	%	3.25	%	3.25	%
Expected return on plan assets	3.22		3.32		2.86		3.20		3.30		2.85		3.95		4.05		3.35

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, 2022 and 2021.

	December 31,
	2022			2021
	(in millions, except for actuarial assumptions)
Change in Benefit Obligation
Benefit obligation, beginning of year	$	2,298		$	2,507
Service cost	29			38
Interest cost	73			59
Benefits paid (4)	(509)			(285)
Actuarial (gain) loss (1)	(338)			(22)
Plan amendment	—			1
Benefit obligation, end of year	1,553			2,298
Change in Plan Assets
Fair value of plan assets, beginning of year	2,072			2,135
Employer contributions	35			61
Benefits paid (4)	(509)			(285)
Actual investment return	(386)			161
Fair value of plan assets, end of year	1,212			2,072
Funded status, end of year	$	(341)		$	(226)
Amounts Recognized in Balance Sheets
Non-current assets	$	—		$	6
Current liabilities-other	(7)			(7)
Other liabilities-benefit obligations	(334)			(225)
Net liability, end of year	$	(341)		$	(226)
Actuarial Assumptions
Discount rate (2)	5.15		%	2.80		%
Expected return on plan assets (3)	6.50			5.00
Rate of increase in compensation levels	4.99			4.95
Interest crediting rate	3.00			2.25

(1)Significant sources of gain for 2022 include the increase in discount rate from 2.80% to 5.15%, partially offset by significant sources of loss that include expected return on assets exceeding actual return on plan assets during 2022.

(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.

(4)Benefits paid for 2022 includes $136 million related to the 2022 Annuity Lift-Out.

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, 2022 and 2021.

	December 31,
	2022									2021
	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	$	336		$	148		$	118		$	366		$	168		$	122
Service cost	2			—			1			2			—			1
Interest cost	9			4			3			9			4			3
Participant contributions	6			2			3			7			2			3
Benefits paid	(20)			(7)			(8)			(21)			(9)			(8)
Early Retiree Reinsurance Program	—			—			—			20			—			11
Plan amendment	3			—			2			—			5			—
Actuarial (gain) loss (1)	(73)			(32)			(27)			(47)			(22)			(14)
Benefit obligation, end of year	263			115			92			336			148			118
Change in Plan Assets
Fair value of plan assets, beginning of year	132			104			29			134			106			28
Employer contributions	8			1			4			7			1			4
Participant contributions	6			2			3			7			2			3
Benefits paid	(20)			(7)			(8)			(21)			(9)			(8)
Actual investment return	(17)			(16)			(3)			5			4			2
Fair value of plan assets, end of year	109			84			25			132			104			29
Funded status, end of year	$	(154)		$	(31)		$	(67)		$	(204)		$	(44)		$	(89)
Amounts Recognized in Balance Sheets
Current liabilities — other	$	(7)		$	—		$	(4)		$	(7)		$	—		$	(4)
Other liabilities — benefit obligations	(147)			(31)			(64)			(197)			(44)			(85)
Net liability, end of year	$	(154)		$	(31)		$	(68)		$	(204)		$	(44)		$	(89)
Actuarial Assumptions
Discount rate (2)	5.15		%	5.15		%	5.15		%	2.85		%	2.85		%	2.85		%
Expected return on plan assets (3)	3.66			3.75			3.35			3.22			3.32			2.86
Medical cost trend rate assumed for the next year - Pre-65	6.50			6.50			6.50			6.00			6.00			6.00
Medical/prescription drug cost trend rate assumed for the next year - Post-65	23.66			23.66			23.66			18.71			18.71			18.71
Prescription drug cost trend rate assumed for the next year - Pre-65	8.00			8.00			8.00			8.00			8.00			8.00
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	2032			2032			2032			2029			2029			2029
Year that the cost trend rates reach the ultimate trend rate - Post-65	2032			2032			2032			2030			2030			2030

(1)Significant sources of gain for 2022 include updated life insurance rates and the increase in discount rate from 2.85% to 5.15%, offset by significant sources of loss including an increase in crediting rate and updated claims.

(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,
	2022				2021
	Pension (Qualified)		Pension (Non-qualified)		Pension (Qualified)		Pension (Non-qualified)
	(in millions)
Accumulated benefit obligation	$	1,497	$	51	$	2,216	$	62
Projected benefit obligation	1,502		51		2,237		62
Fair value of plan assets	1,212		—		2,072		—

Schedule of Accumulated Other Comprehensive Income (Loss)

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

	December 31,
	2022						2021
	Pension Benefits		Postretirement Benefits				Pension Benefits		Postretirement Benefits
	CenterPoint Energy		CenterPoint Energy		CERC		CenterPoint Energy		CenterPoint Energy		CERC
	(in millions)
Unrecognized actuarial loss (gain)	$	70	$	(36)	$	(28)	$	99	$	(23)	$	(18)
Unrecognized prior service cost	—		13		11		—		13		12
Net amount recognized in accumulated other comprehensive loss (gain)	$	70	$	(23)	$	(17)	$	99	$	(10)	$	(6)

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

	Year Ended December 31,
	2022						2021
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Beginning Balance	$	(64)	$	—	$	10	$	(90)	$	—	$	10
Other comprehensive income (loss) before reclassifications:
Remeasurement of pension and other postretirement plans	(40)		—		10		16		—		—
Other comprehensive income (loss) from unconsolidated affiliates	—		—		—		3		—		—
Amounts reclassified from accumulated other comprehensive loss:
Prior service cost (1)	(1)		—		(1)		1		—		1
Actuarial losses (1)	8		—		1		7		—		—
Settlement (2)	67		—		—		4		—		—
Reclassification of deferred loss from cash flow hedges realized in net income	1		—		—		2		—		—
Tax benefit (expense)	(2)		—		(4)		(7)		—		(1)
Net current period other comprehensive income (loss)	33		—		6		26		—		—
Ending Balance	$	(31)	$	—	$	16	$	(64)	$	—	$	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.

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 2022 are as follows:

	Pension Benefits		Postretirement Benefits
	CenterPoint Energy		CenterPoint Energy		CERC
	(in millions)
Net loss (gain)	$	45	$	(13)	$	(16)
Amortization of net loss	(7)		(1)		(1)
Amortization of prior service cost	—		1		1
Settlement	(67)		—		—
Total recognized in comprehensive income	$	(29)	$	(13)	$	(16)
Total recognized in net periodic costs and Other comprehensive income	$	142	$	(19)	$	(15)

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, 2022:

	Minimum		Maximum
U.S. equity	17	%	27	%
International equity	9	%	19	%
Real estate	2	%	11	%
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, 2022:

	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, 2022 and 2021:

	Fair Value Measurements as of December 31,
	2022								2021
	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
	(in millions)
Cash	$	7	$	—	$	—	$	7	$	26	$	—	$	—	$	26
Corporate bonds:
Investment grade or above	—		467		—		467		—		833		—		833
Equity securities:
U.S. companies	29		—		—		29		89		—		—		89
Cash received as collateral from securities lending	47		—		—		47		80		—		—		80
U.S. treasuries and government agencies	163		—		—		163		285		—		—		285
Mortgage backed securities	—		6		—		6		—		7		—		7
Asset backed securities	—		2		—		2		—		3		—		3
Municipal bonds	—		24		—		24		—		40		—		40
Mutual funds (2)	—		—		—		—		—		—		—		—
International government bonds	—		10		—		10		—		20		—		20
Obligation to return cash received as collateral from securities lending	(47)		—		—		(47)		(80)		—		—		(80)
Total investments at fair value	$	199	$	509	$	—	$	708	$	400	$	903	$	—	$	1,303
Investments measured by net asset value per share or its equivalent (1) (2)							504								769
Total Investments							$	1,212							$	2,072

(1)Represents investments in pooled investment funds and common collective trust funds.

(2)The amounts invested in pooled investment funds were allocated to real estate. The amounts invested common collective trust funds were allocated as follows:

	As of December 31,
	2022		2021
	Common Collective Trust Funds		Common Collective Trust Funds
International equities	40	%	41	%
U.S. equities	56	%	58	%
Fixed income	4	%	1	%

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, 2022 and 2021:

	Fair Value Measurements as of December 31,
	2022								2021
	Mutual Funds
	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
	(in millions)
CenterPoint Energy	$	109	$	—	$	—	$	109	$	133	$	—	$	—	$	133
Houston Electric	84		—		—		84		105		—		—		105
CERC	25		—		—		25		28		—		—		28

The amounts invested in mutual funds were allocated as follows:

	As of December 31,
	2022						2021
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
Fixed income	74	%	74	%	74	%	72	%	73	%	71	%
U.S. equities	18	%	17	%	20	%	20	%	19	%	22	%
International equities	8	%	8	%	6	%	8	%	8	%	7	%

Benefit Plan Contributions

The Registrants made the following contributions in 2022 and are required to make the following minimum contributions in 2023 to the indicated benefit plans below:

	Contributions in 2022						Expected Minimum Contributions in 2023
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Qualified pension plans	$	27	$	—	$	—	$	—	$	—	$	—
Non-qualified pension plans	8		—		—		7		—		—
Postretirement benefit plans	8		1		4		8		1		4

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)
2023	$	134	$	15	$	6	$	6
2024	138		17		7		6
2025	137		18		8		6
2026	134		19		9		7
2027	134		20		9		7
2028-2032	608		106		49		35

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 2022, 2021 and 2020:

	Year Ended December 31,
	2022						2021						2020
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Savings plan benefit  expenses (1)	$	72	$	23	$	22	$	58	$	20	$	23	$	58	$	18	$	25

(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,
	2022						2021						2020
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Postemployment benefits	$	4	$	1	$	1	$	3	$	1	$	2	$	1	$	1	$	—
Deferred compensation plans	1		—		—		3		—		—		4		1		—

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

	December 31, 2022						December 31, 2021
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Postemployment benefits	$	9	$	3	$	4	$	8	$	3	$	5
Deferred compensation plans	28		4		1		40		6		4
Split-dollar life insurance arrangements	22		1		—		29		1		—

Other Employee Matters

As of December 31, 2022, 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	16	%	54	%	—	%
OPEIU Local 12	December 2025	2	%	—	%	2	%
Gas Workers Union Local 340	April 2025	5	%	—	%	13	%
IBEW Locals 1393 and USW Locals 12213 & 7441	December 2023	3	%	—	%	8	%
IBEW Locals 949	December 2025	3	%	—	%	8	%
USW Locals 13-227	June 2027	6	%	—	%	14	%
USW Locals 13-1	July 2027	—	%	—	%	1	%
IBEW Local 702	June 2025	3	%	—	%	—	%
Teamsters Local 135/215	September 2024	—	%	—	%	—	%
UWUA Local 175	October 2024	1	%	—	%	4	%
Total		39	%	54	%	50	%

The collective bargaining agreements with IBEW 1393, USW 12213, USW 7441 related to Natural Gas employees are scheduled to expire in December 2023 and the collective bargaining agreement with IBEW 66 related to Houston Electric employees is scheduled to expire in May 2023; negotiations of these agreements are expected to be completed before the respective expirations.