CENTERPOINT ENERGY HOUSTON ELECTRIC LLC
For the period ended Mar 31, 2026. Filed Apr 23, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 23, 2026
CNP$40.66+1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-23.
0001130310-25-000137
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsRecent EventsCertain Factors Affecting Future EarningsLiquidity and Capital ResourcesCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-23.
0001130310-26-000028
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsRecent EventsConsolidated Results of OperationsResults of Operations by Reportable SegmentCertain Factors Affecting Future EarningsLiquidity and Capital ResourcesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 162 previous paragraphs and 142 current paragraphs.
80 unchanged; 35 reworded; 24 added; 44 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 19 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
Treasury Notice 2026-7. On February 18, 2026, Treasury Notice 2026-7 was issued. This notice allows an election to modify the computation of AFSI by including an adjustment to deduct certain repair and maintenance costs that are capitalized in the applicable financial statement.
Current report
TEEEF. In June 2025, Houston Electric entered into the ERCOT Transaction, subject to PUCT approval, to release its 15 large (27 MW to 32 MW) TEEEF units to ERCOT at CPS Energy facilities to serve the greater San Antonio region until March 2027 unless terminated earlier pursuant to the provisions of the ERCOT Transaction, reduce its TEEEF fleet capacity and reduce its rates to reflect removal of the large TEEEF units from its fleet. Following the completion of service in the San Antonio area, Houston Electric anticipates that it would complete one or more future transactions involving its large TEEEF units. As the large TEEEF units would not be available to serve Houston Electric customers during such time, Houston Electric plans to continue to not charge customers for these units for any future periods. In November 2025, Houston Electric proposed to remove its five medium (5.7 MW) TEEEF units and to remove the associated lease costs from its rates effective January 1, 2026. On April 10, 2026, Houston Electric requested continued abatement until April 24, 2026 due to continued settlement discussions. For additional information, see Note 6 to the Interim Condensed Financial Statements.
Current report
•an increase in net income of $22 million for the Natural Gas reportable segment, as further discussed below; and
Current report
•an increase in net loss of $35 million for the Corporate and Other reportable segment, primarily due to the impact of accrued income tax expense offset in other segments.
Current report
TEEEF (CenterPoint Energy and Houston Electric)
Current report
For information about TEEEF, see Note 6 to the Interim Condensed Financial Statements.
Current report
F.B. Culley Unit 2 (CenterPoint Energy)
Current report
While Indiana Electric’s 2025 IRP (similar to previous IRPs) preferred portfolios included the retirement of F.B. Culley Unit 2, a coal-fired generation unit, by the end of 2025, the U.S. Department of Energy issued emergency 202(c) orders (the “DOE Order”) in December 2025 and March 2026 directing Indiana Electric to continue operating the unit through June 21, 2026. Indiana Electric has filed a complaint with the FERC to request creation of a cost recovery/cost allocation mechanism. On March 19, 2026, FERC directed MISO to adopt a tariff amendment that would authorize the F.B. Culley unit to recover costs across load-serving entities situated in MISO’s north and central local reliability zones, otherwise known as MISO North and Central. A separate filing will be made at a later date with the FERC to seek recovery of all costs incurred to comply with the U.S. Department of Energy’s emergency 202(c) orders. Indiana Electric has also filed an application with the IURC in Cause No. 46350 to recover any compliance costs associated with the emergency 202(c) orders that are not recovered through the FERC proceedings. On April 15, 2026, Indiana Electric filed a Motion to Intervene in the United States Court of Appeals for the D.C. Circuit in response to the Public Interest Organizations’ appeal of the DOE Order. Indiana Electric intervened as the owner of F.B. Culley 2 that is the subject of the DOE Order representing Indiana Electric’s authority to recover the costs it has incurred to comply with the DOE Order.
Current report
Indiana Legislation (CenterPoint Energy)
Current report
Senate Enrolled Act 240 Surplus Interconnection Service (SIS) defines SIS as any portion of service that has not been used and is not reasonably expected to be needed; the use of which would result in the total amount of interconnection service at the point of interconnection remaining the same. The new law requires an electric utility to include an analysis of the potential for SIS to meet the immediate needs for capacity and energy at the utility-owned facilities in integrated resource plans. It also requires the IURC to consider whether a utility that has filed for approval of a certificate of public convenience and necessity has conducted a SIS analysis and whether the proposed construction will allow for the use of SIS.
Current report
House Enrolled Act 1002, a multi-faceted bill aimed at improving the affordability of electric rates, would do the following:
Current report
•beginning in 2026, require an electric utility to file a multi-year rate plan according to a prescribed schedule;
Current report
•apply a customer affordability performance metric and a service restoration performance metric to each year of the multi-year rate plan and use such metric to provide financial rewards or penalties based on the electricity supplier’s measured performance of the metric;
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•require an electric utility to offer a low income customer assistance program by July 1, 2026 to be funded by at least 0.2% of jurisdictional revenues for residential customers and allow the utility to seek recovery of eligible program costs;
Current report
•prohibit an electric utility from terminating service to any customer on a day forecasted by the National Weather Service to have a heat index of at least 95 degrees Fahrenheit;
Current report
•modify the IURC’s authority related to use of emergency powers;
Current report
•apply a levelized billing plan to residential customers who are eligible and have applied for the Low Income Housing Energy Assistance Program; and
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•require an electric utility to report certain residential customer data to the Office of the Utility Consumer Counselor on a quarterly basis.
Current report
Pursuant to House Enrolled Act 1002, Indiana Electric is required to file a multi-year rate case in January 2028.
Current report
•Senate Bill 231, effective June 20, 2025, provides that, on or after the effective date, TDUs may only enter into, renew or extend leases for TEEEF units with a maximum generation capacity 5 or fewer MW and that are rapidly deployable, and that they may enter into leases without prior PUCT preapproval (as required by the TEEEF Rule) in the case of an emergency or if the lease includes a provision allowing for the alteration of the lease based on applicable PUCT orders or rules.
Current report
The issue of climate change has received focus at the state, federal and international level, and there are trends and uncertainties relating to GHG emissions and climate-related regulations and compliance that affect the Registrants. On February 18, 2026, the US EPA rescinded the 2009 endangerment finding in relation to GHG standards for mobile sources. Uncertainties remain as to the effect of the rescission on the GHG standards for fossil fuel-fired power plants, which are similarly being challenged on judicial review, and the effects of the rescission on preemption of state law. Compliance costs and other effects associated with climate change, reductions in GHG emissions and obtaining renewable energy sources remain uncertain; nevertheless, any new regulation or legislation relating to climate change will likely result in an increase in compliance costs. CenterPoint Energy will continue to monitor regulatory activity regarding GHG emission standards that may affect its business. Currently, CenterPoint Energy does not purchase carbon credits. In connection with its energy transition goals, CenterPoint Energy is expected to purchase carbon credits in the future; however, CenterPoint Energy does not currently expect the number of credits, or cost for those credits, to be material.
Current report
•increased costs of certain goods, materials or services due to, among other things, supply chain disruptions, inflation, labor shortages, scarcity of materials and changes in U.S. or foreign trade policy (including tariffs or other trade actions);
Current report
•the timing and outcome of rate actions regarding our recovery of costs and ability to make a reasonable return on investment;
Removed paragraphs (44)
Previous report
CenterPoint Energy Board Leadership Structure Changes. On October 8, 2025, the Board unanimously appointed Jason P. Wells, Chief Executive Officer and President of CenterPoint Energy, to serve as Chair of the Board, effective immediately. Mr. Wells has served as a director on the Board since January 5, 2024. In addition, the Board approved the creation of a Lead Director of the Board position and the independent directors of the Board unanimously appointed independent director Christopher H. Franklin to serve as the Lead Director of the Board, effective immediately.
Previous report
One Big Beautiful Bill Act (OBBBA) and Executive Order 14315. On July 4, 2025, the OBBBA was signed into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 and numerous changes to the energy tax credits initially introduced and expanded under the IRA. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Additionally, on July 7, 2025, President Trump issued Executive Order 14315, which relates to the implementation of such changes to energy tax credits. The Registrants are evaluating the OBBBA for the effect on their future financial results, and the Registrants will consider the impacts of the OBBBA and Executive Order 14315, as well as related guidance, on any future generation projects, including any BTAs or PPAs, as applicable. As a result of the Registrants having limited generation activities qualifying for tax credits under the IRA, the Registrants do not expect material impacts resulting from the changes to the IRA.
Previous report
Temporary Generation. In June 2025, Houston Electric entered into definitive documentation, subject to PUCT approval, with relevant parties to release the 15 large 27 MW to 32 MW TEEEF units to the San Antonio area for a period of up to two years, during which time Houston Electric will not receive revenue or profit from ERCOT and will also not charge Houston-area customers for these TEEEF units while they are in San Antonio serving ERCOT. On July 9, 2025, the PUCT referred this docket to the SOAH. Following various preliminary orders, the SOAH set the prehearing conference for November 12, 2025 and set the hearing on the merits for November 13 through November 14, 2025. For additional information, see Note 6 to the Interim Condensed Financial Statements.
Previous report
Debt Transactions. In October 2025, CenterPoint Energy completed cash tender offers for up to (i) $300 million aggregate purchase price of certain of CenterPoint Energy’s outstanding senior notes, ranging from 2.65% to 3.70% due 2030 to 2049, and (ii) $200 million aggregate purchase price of certain of Houston Electric’s general mortgage bonds, ranging from 4.25% to
Previous report
•an increase in net income of $41 million for the Natural Gas reportable segment, as further discussed below; and
Previous report
•an increase in net loss of $8 million for Corporate and Other, primarily due to increased borrowing costs.
Previous report
Nine months ended September 30, 2025 compared to nine months ended September 30, 2024
Previous report
•an increase in net income of $25 million for the Natural Gas reportable segment, as further discussed below; and
Previous report
•an increase in net loss of $18 million for Corporate and Other, primarily due to a $34 million after-tax expense associated with increased borrowing costs partially offset by a $21 million after-tax gain on early extinguishment of debt with proceeds from the divestiture of the Louisiana and Mississippi natural gas LDCs. The remaining variance is primarily driven by an increase in income tax expense. See Note 3 and Note 9 for additional detail.
Previous report
(1)Decrease in number of metered customers is primarily attributable to customer accounts associated with the divestiture of the Louisiana and Mississippi natural gas LDCs. See Note 3 for additional detail.
Previous report
(1)Decrease in number of metered customers is primarily attributable to customer accounts associated with the divestiture of the Louisiana and Mississippi natural gas LDCs. See Note 3 for additional detail.
Previous report
(1)Excludes expenditures for the restoration costs associated with the May 2024 Storm Events.
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(2)Represents cash requirements associated with the estimated storm restoration costs for the remainder of 2025.
Previous report
For more information regarding the May 2024 Storm Events and Hurricane Beryl, see Note 6 and Note 9 to the Interim Condensed Financial Statements.
Previous report
For information about Houston Electric’s TEEEF, see Note 6 to the Interim Condensed Financial Statements.
Previous report
For additional information about the May 2024 Storm Events, see Note 6 to the Interim Condensed Financial Statements.
Previous report
Indiana Electric has pursued PTCs for solar projects following the passage of the IRA. On February 7, 2023, Indiana Electric filed a CPCN with the IURC to approve an amended BTA to purchase the 191 MW Posey Solar project. Indiana Electric requested that project costs, net of PTCs, be recovered in rate base rather than a levelized rate, through base rates or the CECA mechanism, depending on which provides more timely recovery. On September 6, 2023, the IURC issued an order approving the CPCN. On March 7, 2025, SIGECO completed the acquisition of Posey Solar from Arevon for a purchase price of approximately $357 million. Subsequent to the acquisition, and pursuant to the Posey Solar Merger Agreement, Posey Solar was merged into SIGECO. The Posey Solar project was placed in service in the second quarter of 2025 and is currently being recovered through base rates. In the applicable rate case, the IURC approved Indiana Electric’s request to convey PTCs to customers through the new tax adjustment rider. For further information, see Note 3 to the Interim Condensed Financial Statements.
Previous report
On January 10, 2023, Indiana Electric filed a CPCN with the IURC to acquire a wind energy generating facility located in the central region of MISO through a BTA, and on June 6, 2023, the IURC issued an order approving the CPCN, thereby authorizing Indiana Electric to purchase the wind generating facility. In August 2025, due to changing project considerations and concerns about customer affordability, Indiana Electric exited negotiations relating to this wind energy generating facility.
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Indiana Electric sought approval in February 2021 for a 100 MW solar PPA with Clenera LLC in Warrick County, Indiana. The request accounted for increased cost of debt related to this PPA, which provides equivalent equity return to offset imputed debt during the 25-year life of the PPA. In October 2021, the IURC approved the Warrick County solar PPA but denied the request to preemptively offset imputed debt in the PPA cost. Due to rising project costs caused by inflation and supply chain issues affecting the energy industry, Clenera LLC and Indiana Electric were compelled to renegotiate terms of the agreement to increase the PPA price. On January 17, 2023, Indiana Electric filed a request with the IURC to amend the previously approved PPA with certain modifications. Revised purchase power costs are requested to be recovered through the fuel adjustment clause proceedings over the term of the amended PPA. On May 30, 2023, the IURC approved the Warrick County solar amended PPA; however, due to MISO interconnection study delays and estimated interconnection cost increases, on April 24, 2025, Indiana Electric provided notice that it was exercising its right to terminate the PPA, which terminated all further obligations of Indiana Electric with respect to the project.
Previous report
On April 14, 2025, Indiana Electric filed with the IURC seeking approval to purchase 170 MW of wind power under a 25-year PPA with an affiliate of NextEra Energy, Inc., which is developing a wind project in Tama County, Iowa. On June 3, 2025, an amendment to the PPA was filed with the IURC requesting an extension of the PPA’s term from 25 to 27 years. The facility is targeted to be in operation by the fourth quarter of 2025. Indiana Electric expects a decision from the IURC in the fourth quarter of 2025. If Indiana Electric’s request is approved, the power purchase costs will be recovered through the fuel adjustment clause proceedings over the term of the PPA.
Previous report
On June 17, 2021, Indiana Electric filed a CPCN with the IURC seeking approval to construct two natural gas combustion turbines to replace portions of its existing coal-fired generation fleet. On June 28, 2022, the IURC approved the CPCN. The estimated $334 million turbine facility is being constructed at the previous site of the A.B. Brown power plant in Posey County, Indiana and is expected to provide a combined output of 460 MW. Indiana Electric received approval for depreciation expense and post in-service carrying costs to be deferred in a regulatory asset until the date Indiana Electric’s base rates include a return on and recovery of depreciation expense on the facility. A new approximately 23.5-mile pipeline was constructed and is operated by Texas Gas Transmission, LLC to supply natural gas to the turbine facility. FERC granted a certificate to construct the pipeline on October 20, 2022. On January 7, 2025, the United States Court of Appeals for the D.C. Circuit affirmed the FERC’s order granting the certificate. Indiana Electric granted its contractor a full notice to proceed to construct the turbines on December 9, 2022. In the second quarter of 2025, 230 MW of the facility was placed in service, and, due to a transformer manufacturing issue, the remaining 230 MW of the facility was placed in service in the third quarter of 2025. On February 6, 2025, the EPC contractor for Indiana Electric’s proposed natural gas combustion turbines provided a notice to Indiana Electric that the EPC contractor was identifying the impacts of the proposed tariffs on the project and intended to seek an equitable adjustment to the contract price for the project. Indiana Electric received approval from the IURC on February 3, 2025, to recover for each combustion turbine by adjusting base rates as they are placed in service. The first turbine and second turbine are currently being recovered in base rates that were updated on June 17, 2025 and October 1, 2025, respectively.
Previous report
Stewart-West Bay Transmission Project (CenterPoint Energy and Houston Electric)
Previous report
On April 30, 2025, Houston Electric filed a CCN application with the PUCT for approval to replace a portion of a 138 kV double circuit transmission line in Galveston County, Texas that connects Houston Electric’s Stewart and West Bay substations. On June 27, 2025, an order was issued dismissing all opposing parties from the proceeding. On August 11, 2025, a notice of approval of Houston Electric’s application was issued. The project is estimated to cost approximately $105 million, but the actual capital cost of the project will depend on construction costs and other factors. Completion of construction and energization of the line is anticipated to occur in the third quarter of 2027.
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•Senate Bill 231, effective June 20, 2025, revises the types of temporary generation units that may be used by a utility to have a maximum generation capacity of not more than 5 MW and be rapidly deployable.
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•Senate Bill 482, effective September 1, 2025, results in increased penalties for assaulting a utility worker to a third-degree felony, equal to assaulting a first responder, and for harassing a utility worker to a Class A misdemeanor.
Previous report
Solar Panel Issues (CenterPoint Energy)
Previous report
CenterPoint Energy’s solar projects have been impacted, and any future solar projects may be impacted, by delays and/or increased costs. The potential delays and inflationary cost pressures communicated from the developers of our solar projects have been primarily due to (i) unavailability of solar panels and other uncertainties related to DOC investigation(s), (ii) the December 2021 Uyghur Forced Labor Prevention Act on solar modules and other products manufactured in China’s Xinjiang Uyghur Autonomous Region and (iii) persistent general global supply chain and labor availability issues. On April 21, 2025, the DOC announced its final affirmative determinations in the antidumping and countervailing duty investigations, determining that imports of silicon photovoltaic cells from Cambodia, Malaysia, Thailand and Vietnam are being dumped into the U.S. market and receiving countervailable subsidies. On May 20, 2025, the ITC announced its final determination that a U.S. industry is materially injured by reason of imports of silicon photovoltaic cells from Malaysia and Vietnam and a U.S. industry is threatened with material injury by reason of imports of silicon photovoltaic cells from Cambodia and Thailand. As a result of such determinations, the DOC has imposed certain duty rates on imports of silicon photovoltaic cells from Cambodia, Malaysia, Thailand and Vietnam. On July 1, 2025, the DOC initiated an investigation to determine the effects on national security of imports of polysilicon and its derivatives under Section 232 of the Trade Expansion Act of 1962. On August 7, 2025, based on a petition filed by the American Alliance for Solar Manufacturing Trade, the DOC announced the initiation of antidumping and countervailing duty investigations of silicon photovoltaic cells from India, Indonesia, and the Lao People’s Democratic Republic. On September 2, 2025, the ITC announced its preliminary determination that there is a reasonable indication that a U.S. industry is materially injured by reason of imports of silicon photovoltaic cells from India, Indonesia and the Lao People’s Democratic Republic. The DOC is expected to announce its preliminary determinations for the antidumping and countervailing duty investigations by the end of 2025. Furthermore, in 2025, the U.S. government has announced and, in certain cases, rescinded, multiple tariffs on several foreign jurisdictions and imports into the United States. These tariffs, as well as new legislation, tariffs, bans, retaliatory trade measures or related governmental action, have already, and may continue to, further negatively impact the supply of solar panels. In addition to supply reductions, these or similar duties, legislation, tariffs, bans and other measures have and may in the future also put upward pressure on prices of these solar energy products, which may reduce our ability to acquire these items in a timely and cost-efficient manner. These impacts have resulted, and may continue to resul…
Excerpt shortened here; the source contains the full paragraph.
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Transmission and Distribution System Resiliency Plan (CenterPoint Energy and Houston Electric)
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Following feedback from customers, external experts and other stakeholders, including elected officials and local agencies, Houston Electric filed a revised SRP with the PUCT on January 31, 2025 for review and approval. The filed SRP proposed to invest approximately $5.75 billion over a three-year period from 2026 to 2028 for transmission and distribution infrastructure, information technology and cybersecurity assets and event response capability. This plan proposed 39 resiliency-enhancing measures and a microgrid pilot program to be implemented over the three-year period. The SRP as filed had an estimated capital cost of approximately $5.54 billion and an estimated operations and maintenance expense of approximately $211 million. Approximately $2.17 billion of such cost was for transmission-related investments, and approximately $3.58 billion was for distribution-related investments. Intervenor testimony was filed on April 8, 2025, and PUCT staff testimony was filed on April 15, 2025. On June 12, 2025, Houston Electric announced that it had reached a settlement agreement with parties to its SRP, which provides for approximately $3.18 billion in distribution-related investments. The proposed transmission investments were removed from the SRP and will be implemented as appropriate outside of the SRP process. The agreement also includes the deferral of more than $240 million of the approximate $3.18 billion in SRP costs until the second half of 2029, which will help reduce the bill impact for customers by spreading costs over a four-year period instead of three years. Once approved, and while some cost recovery would be deferred into 2029, it is expected that all SRP work agreed upon in the settlement agreement will be completed in the proposed 2025 to 2028 timeframe. On July 31, 2025, Houston Electric delivered a presentation on the SRP at a PUCT open meeting, and on August 8, 2025, Houston Electric responded to a PUCT memo dated July 30, 2025 that requested additional information. On August 21, 2025, the SRP was additionally discussed at a PUCT open meeting and the PUCT requested further clarification related to the vegetation management resiliency measure included in the SRP. On September 11, 2025, the PUCT granted Houston Electric a window to file supplemental evidence related to the vegetation management measure included in the SRP on or before October 13, 2025. Houston Electric filed such supplemental evidence on October 6, 2025. The PUCT staff must file a recommendation on the sufficiency of the supplemental evidence by October 27, 2025. A decision from the PUCT is anticipated in the fourth quarter of 2025.
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Minnesota Gas Rate Case. On November 1, 2023, CERC filed an application with the MPUC requesting an adjustment to delivery charges in 2024 and 2025 for the natural gas business in Minnesota. The requested increase is approximately 6.5% or $85 million for 2024 and an additional approximately 3.7% or $52 million for 2025. The need for a rate change is primarily driven by continuing investment in the safety and reliability of the natural gas system, including new Intelis natural gas meters that feature an integrated safety shutoff valve, changes to depreciation rates that better reflect the actual life and salvage characteristics of assets and changes in other costs to serve customers. The request reflects a proposed 10.3% ROE on a 52.5% equity ratio. Interim rates for 2024 of $69 million, subject to refund, were implemented as of January 1, 2024. A request for interim rates of $33 million for 2025 was filed on September 30, 2024, approved at the December 3, 2024 hearing and approved by an order issued December 20, 2024. A unanimous settlement agreement was filed on November 25, 2024. The settlement provided for an increase of $60.8 million for 2024 and an additional $42.7 million for 2025. The parties agreed to an overall cost of capital of 7.07% for 2024 and 2025. The ALJ filed a report on February 13, 2025 recommending that the MPUC approve the settlement agreement. As required by the December 20, 2024 order, the difference between 2024 interim rates and the settled amount of $60.8 million was refunded to customers in March 2025. Exceptions to the ALJ report were filed on April 18, 2025. On May 29, 2025, the MPUC approved the settlement agreement. A final order approving the settlement agreement was issued by the MPUC on June 27, 2025 and final rates were implemented on September 1, 2025.
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Houston Electric Rate Case. On March 6, 2024, Houston Electric filed an application with the PUCT requesting authority to change rates and charges for electric transmission and distribution service. The requested increase was approximately $17 million (1%) for retail customers and $43 million (6.6%) for wholesale transmission service, excluding TCRF and rate case expenses. The need for a rate increase was primarily driven by continuing investment that has been made to support customer growth and to bolster the safety and reliability of Houston Electric’s transmission and distribution system. The request reflected a proposed 10.4% ROE and a 45% equity ratio. Errata testimony was filed to correct minor errors included in the initial filing, which reduced the requested increase to $56 million compared to then-current rates. Houston Electric reached a settlement agreement with certain parties and submitted the agreement to the PUCT on January 29, 2025. The settlement reflects a $47 million reduction in annual revenues and a 9.65% ROE and a weighted average cost of capital of 6.606% based upon an as-filed 4.29% cost of debt, an agreed ROE of 9.65% and an agreed regulatory capital structure of 56.75% long-term debt and 43.25% equity. A final order approving the settlement agreement was issued by the PUCT on March 13, 2025. Final retail delivery rates were implemented on April 28, 2025. Final wholesale transmission rates were superseded by interim TCOS rates that went into effect on the same date.
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Ohio Gas Rate Case. CEOH filed its Application and Standard Filing Requirement in October 2024 and the related testimony in November 2024. The filing seeks a revenue requirement increase of approximately $100 million based on a requested ROE of 10.4% and an equity percentage of 54.13%. The need for a rate increase was primarily driven by continuing investment in the safety and reliability of the natural gas system. On May 16, 2025, the PUCO staff filed its staff report recommending a revenue requirement range of $340.8 million to $350.3 million and a net increase of $25.1 million to $34.6 million based on an ROE range from 9.05% to 10.07% with a capitalization ratio of 52.3% common equity and 47.7% long-term debt. The PUCO staff recommendation includes amortization over 49 years and 65 years for CEP and DRR regulatory assets, respectively, compared to CEOH’s proposal to amortize over seven years. On June 16, 2025, CEOH filed objections to the PUCO staff report and supplemental testimony. On July 11, 2025, CEOH filed a stipulation and recommendation that outlined the agreed upon terms between CEOH, the Federal Executive Agencies, Ohio Energy Group, the City of Dayton, the Retail Energy Supply Association, Interstate Gas Supply, LLC and the PUCO staff. One intervening party to the case, Spire Marketing, Inc., is a non-opposing party, while another intervening party to the case, the Office of the Ohio Consumers’ Counsel, filed its testimony in opposition to the stipulation and recommendation on July 29, 2025. The stipulation and recommendation included a revenue requirement of $371.3 million, which would result in a revenue requirement increase of $59.6 million based on a rate of return of 7.1% comprised of a ROE of 9.85% with a capitalization ratio of 52.9% common equity, 47.1% long-term debt at a cost of debt of 4.02%. The stipulation and recommendation amortization periods for CEP and DRR regulatory assets within base rates and within the rider mechanisms is 15 years. The stipulation and recommendation included an extension of the CEP rider and DRR through 2029 investment with revised residential caps for dollars per month per customer ranging from $2.75 for 2025 investment to $9.95 for 2029 investment for the CEP rider, and from $2.56 for 2025 investment to $7.69 for 2029 investment for DRR. The evidentiary hearing commenced on July 21, 2025. The stipulating parties were crossed by the Office of the Ohio Consumers’ Counsel on July 28 and August 4, 2025, and the Office of the Ohio
Previous report
Consumers’ Counsel was crossed by the stipulating parties on July 29 and August 5, 2025. On July 29, 2025, a PUCO local public hearing was conducted. The parties filed initial briefs on August 26, 2025, and reply briefs on September 9, 2025. A final order is expected no sooner than the first quarter of 2026.
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In 2025, the U.S. government has announced and, in certain cases, rescinded, multiple tariffs on several foreign jurisdictions and imports into the United States. For example, in March 2025, the U.S. government imposed a 25% tariff on steel imports (increased an additional 25% in June 2025), and in April 2025, the U.S. government announced a baseline tariff of 10% on products imported from most countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China. In August 2025, the U.S. government imposed a 25% tariff on India in response to its continued importation of Russian oil, which is in addition to the pre-existing 25% individualized reciprocal tariff on India. Increased tariffs by the United States have led, and may continue to lead, to the imposition of retaliatory tariffs or other measures taken by foreign jurisdictions, which may in turn lead to additional tariffs imposed or measures taken by the United States. In August 2025, however, the U.S. Court of Appeals for the Federal Circuit ruled that many of the tariffs imposed under the Trump Administration exceed presidential authority and therefore are invalid, though the decision has been stayed pending U.S. Supreme Court review. This ruling introduces additional uncertainty as to the scope and durability of existing and future tariff measures. While the U.S. government has announced various trade deals, many such agreements are preliminary and may be subject to change. Further, any future disagreement between the U.S. government and other countries over the implementation of trade deals or any failure to obtain required governmental approvals or otherwise reach a final agreement could result in prolonged uncertainty regarding the scope and duration of such trade actions by the U.S. government and other countries. Such announcements, rescissions of tariffs on foreign jurisdictions and other trade actions have increased uncertainty regarding the ultimate effects of the tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect the Registrants’ ability to access the capital markets, contribute to inflation in the markets in which the Registrants operate, increase commodity cost volatility, impact availability of goods and materials or otherwise negatively impact the global supply chain. The Registrants are continuing to monitor the economic effects of such announcements and developments, as well as the Registrants’ ability to mitigate their related impacts, but costs and other effects associated with the tariffs remain uncertain.
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Reworded paragraphs (35)
Previous wording
The following combined discussion and analysis should be read in combination with the Interim Condensed Financial Statements contained in this combined Form 10-Q and the Registrants’ combined 2024 Form 10-K. When discussing CenterPoint Energy’s consolidated financial information, it includes the results of Houston Electric and CERC, which, along with CenterPoint Energy, are collectively referred to as the Registrants. Unless the context indicates otherwise, specific references to Houston Electric and CERC also pertain to CenterPoint Energy. In this combined Form 10-Q, the terms “our,” “we” and “us” are used as abbreviated references to CenterPoint Energy, Inc. together with its consolidated subsidiaries, including Houston Electric and CERC, unless otherwise stated. No Registrant makes any representations as to the information related solely to CenterPoint Energy or the subsidiaries of CenterPoint Energy other than itself.
Current wording
The following combined discussion and analysis should be read in combination with the Interim Condensed Financial Statements contained in Item 1 herein and the Registrants’ combined 2025 Form 10-K. The discussion of CenterPoint Energy’s consolidated financial information includes the results of CenterPoint Energy Houston Electric, LLC and CenterPoint Energy Resources Corp., which, along with CenterPoint Energy, Inc. are collectively referred to as the Registrants. Where appropriate, information relating to a specific Registrant has been segregated and labeled as such. Unless the context indicates otherwise, specific references to Houston Electric and CERC also pertain to CenterPoint Energy. In this combined Form 10-Q, the terms “our,” “we” and “us” are used as abbreviated references to CenterPoint Energy, Inc. together with its consolidated subsidiaries, including Houston Electric and CERC, unless otherwise stated. No Registrant makes any representation as to the information relating to the other Registrants or the subsidiaries of CenterPoint Energy, Inc. other than itself or its subsidiaries.
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CenterPoint Energy Appointment of Chief Operating Officer. On July 21, 2025, CenterPoint Energy announced the appointment of Jesus Soto, Jr. to the position of Executive Vice President and Chief Operating Officer of CenterPoint Energy, effective August 11, 2025.
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CenterPoint Energy Appointment of Chief Accounting Officer. On February 23, 2026, CenterPoint Energy announced the appointment of Russell K. Wright to the position of Vice President and Chief Accounting Officer of CenterPoint Energy, effective March 2, 2026.
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10-Year Capital Plan. On September 29, 2025, CenterPoint Energy announced a new 10-year capital plan to invest $65 billion from 2026 through 2035, inclusive of a $2 billion increase in planned capital expenditures through 2030. The new plan is expected to advance economic growth, enhance the experience of the Registrants’ customers and deliver consistent value for stakeholders across the Registrants’ jurisdictions.
Current wording
Updated 10-Year Capital Plan. On February 19, 2026, CenterPoint Energy announced an increase in the 10-year capital plan of $500 million to reflect total capital expenditures of approximately $65.5 billion through 2035.The plan is expected to advance economic growth, enhance the experience of the Registrants’ customers and deliver consistent value for stakeholders across the Registrants’ jurisdictions.
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4.50% due 2044 to 2049. Additionally, in October 2025, CenterPoint Energy issued $700 million aggregate principal amount of 5.950% Fixed-to-Fixed Reset Rate Junior Subordinated Notes, Series D, due 2056. For information about debt transactions to date in 2025, see Note 9 and Note 16 to the Interim Condensed Financial Statements.
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Debt Transactions. For information about debt transactions to date in 2026, see Note 9 to the Interim Condensed Financial Statements.
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Net income (loss) for the three and nine months ended September 30, 2025 and 2024 was as follows:
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Net income (loss) for the three months ended March 31, 2026 and 2025 was as follows:
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Net income increased $100 million primarily due to the following items:
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Net income increased $19 million primarily due to the following items:
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•an increase in net income of $67 million for the Electric reportable segment, as further discussed below;
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•an increase in net income of $32 million for the Electric reportable segment, as further discussed below;
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The following discussion of CenterPoint Energy’s results of operations is separated into two reportable segments, Electric and Natural Gas.
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The following discussion of CenterPoint Energy’s results of operations is further separated into two reportable segments, Electric and Natural Gas.
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The following table provides variance explanations for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 as well as for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 by major income statement caption for CenterPoint Energy’s Electric reportable segment:
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The following table provides variance explanations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 by major income statement caption for CenterPoint Energy’s Electric reportable segment:
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The following table provides variance explanations for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 as well as for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 by major income statement caption for CenterPoint Energy’s Natural Gas reportable segment:
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The following table provides variance explanations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 by major income statement caption for CenterPoint Energy’s Natural Gas reportable segment:
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The following table provides variance explanations for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 as well as for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 by major income statement caption for Houston Electric:
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The following table provides variance explanations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 by major income statement caption for Houston Electric:
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The following table provides variance explanations for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 as well as for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 by major income statement caption for CERC:
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The following table provides variance explanations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 by major income statement caption for CERC:
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For information on other developments, factors and trends that may impact the Registrants’ future earnings, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Certain Factors Affecting Future Earnings” in Item 7 of Part II and “Risk Factors” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K, and “Cautionary Statement Regarding Forward-Looking Information” in this combined Form 10-Q.
Current wording
For information on other developments, factors and trends that may impact the Registrants’ future earnings, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Certain Factors Affecting Future Earnings” in Part II, Item 7 and “Risk Factors” in Part I, Item 1A of the Registrants’ combined 2025 Form 10-K, and “Cautionary Statement Regarding Forward-Looking Information” in this combined Form 10-Q.
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The following table summarizes the Registrants’ cash flows by category during the nine months ended September 30, 2025 and 2024:
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The following table summarizes the Registrants’ cash flows by category for the period presented:
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Operating Activities. The following items contributed to increased (decreased) net cash provided by operating activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:
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Operating Activities. The following items contributed to increased (decreased) net cash provided by operating activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:
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Investing Activities. The following items contributed to (increased) decreased net cash used in investing activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:
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Investing Activities. The following items contributed to (increased) decreased net cash used in investing activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:
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Financing Activities. The following items contributed to (increased) decreased net cash provided by (used in) financing activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:
Current wording
Financing Activities. The following items contributed to (increased) decreased net cash provided by (used in) financing activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:
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The liquidity and capital requirements of the Registrants are affected primarily by results of operations, capital expenditures, storm restoration costs, debt service requirements, tax payments, working capital needs and various regulatory actions. Future capital expenditures (other than expenditures associated with the May 2024 Storm Events) are expected to primarily relate to investment in infrastructure. These capital expenditures are anticipated to enhance reliability and safety, increase resiliency and expand our systems through value-added projects. In addition to dividend payments on CenterPoint Energy’s Common Stock and interest payments on debt, the Registrants’ principal anticipated cash requirements for the remainder of 2025 include the following:
Current wording
The liquidity and capital requirements of the Registrants are affected primarily by results of operations, capital expenditures, storm restoration costs, debt service requirements, tax payments, working capital needs and various regulatory actions. Future capital expenditures are expected to primarily relate to investments in infrastructure. These capital expenditures are anticipated to enhance the safety, reliability and resiliency of our systems and deliver consistent value for stakeholders across the Registrants’ jurisdictions. In addition to dividend payments on CenterPoint Energy’s Common Stock and interest payments on debt, the Registrants’ principal anticipated cash requirements for the remainder of 2026 include the following:
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The Registrants expect that anticipated cash needs for the remainder of 2025 will be met with available cash flow from operations, as well as cash flows from financing (such as issuances of equity securities upon physical settlement of outstanding forward sale agreements and borrowings under credit facilities, commercial paper issuances or other sources). At this time, CenterPoint Energy does not anticipate the need for further sales of shares of Common Stock under the Equity Distribution Agreement. The issuance of securities in the capital markets and borrowings under additional credit facilities and term loans may not, however, be available on acceptable terms. The Registrants may also, from time to time, redeem, repurchase or otherwise acquire their outstanding debt securities through open market purchases, tender offers or pursuant to the terms of such securities.
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The Registrants expect that anticipated cash needs for the remainder of 2026 will be met with available cash flow from operations, proceeds from the sale of our Ohio natural gas LDC business, as well as cash flows from financing (such as issuances of debt securities and equity securities upon physical settlement of outstanding forward sale agreements and borrowings under credit facilities, commercial paper issuances or other sources). At this time, CenterPoint Energy does not anticipate the need for further sales of shares of Common Stock under the Equity Distribution Agreement. The issuance of securities in the capital markets and borrowings under additional credit facilities and term loans may not, however, be available on acceptable terms. The Registrants may, from time to time, redeem, repurchase or otherwise acquire their outstanding debt securities through open market purchases, tender offers or pursuant to the terms of such securities.
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For additional information about Hurricane Beryl, see Note 6 to the Interim Condensed Financial Statements.
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For additional information about the recovery of costs incurred in connection with Hurricane Beryl, see Note 6 to the Interim Condensed Financial Statements.
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On August 25, 2021, Indiana Electric filed with the IURC seeking approval to purchase 185 MW of solar power, under a 15-year PPA, from Oriden, which is developing a solar project in Vermillion County, Indiana, and 150 MW of solar power, under a 20-year PPA, from Origis, which is developing a solar project in Knox County, Indiana. On May 4, 2022, the IURC issued an order approving Indiana Electric to enter into both PPAs. In March 2022, when the results of the MISO interconnection study were completed, Origis advised Indiana Electric that the costs to construct the solar project in Knox County, Indiana had increased. The increase was largely driven by escalating commodity and supply chain costs impacting manufacturers worldwide. In August 2022, Indiana Electric and Origis entered into an amended PPA, which reiterated the terms contained in the 2021 PPA with certain modifications. On February 22, 2023, the IURC approved the Knox County solar amended PPA; however, due to MISO interconnection delays, the project in-service date has been delayed from 2024 to 2026. On January 17, 2023, Indiana Electric filed a request with the IURC to amend the previously approved PPA with Oriden with certain modifications. Revised purchase power costs were approved to be recovered through the fuel adjustment clause proceedings over the term of the amended PPA with Oriden. On May 30, 2023, the IURC approved the Vermillion County solar amended PPA; however, due to MISO interconnection study delays, the developer disclosed the project in-service date would be delayed to 2028. On May 9, 2025, Indiana Electric and Oriden terminated the PPA.
Current wording
On August 25, 2021, Indiana Electric filed with the IURC seeking approval to purchase 150 MW of solar power, under a 20-year PPA, from Origis, which is developing a solar project in Knox County, Indiana. On May 4, 2022, the IURC issued an order approving Indiana Electric to enter into the Knox County PPA. In March 2022, when the results of the MISO interconnection study were completed, Origis advised Indiana Electric that the costs to construct the solar project in Knox County, Indiana had increased largely due to escalating commodity and supply chain costs impacting manufacturers worldwide. In August 2022, Indiana Electric and Origis entered into an amended PPA, which reiterated the terms contained in the 2021 PPA with certain modifications. On February 22, 2023, the IURC approved the Knox County solar amended PPA; however, due to MISO interconnection delays, the project in-service date was delayed from 2024 to 2026. The facility became operational on February 27, 2026. The power purchase costs will be recovered through the fuel adjustment clause proceedings over the term of the PPA.
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•House Bill 4384, effective June 20, 2025, allows LDCs to recover post in-service carry costs (PISCC) in GRIP filings. This allows LDCs to defer for future recovery as a regulatory asset PISCC, depreciation associated with unrecovered gross plant and ad valorem taxes associated with unrecovered gross plant.
Current wording
•House Bill 4384, effective June 20, 2025, allows LDCs to recover post in-service carry costs (PISCC) in GRIP filings. This allows LDCs to defer for future recovery as a regulatory asset PISCC, depreciation expense and ad valorem taxes associated with unrecovered gross plant.
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The Registrants are routinely involved in rate change applications before state regulatory authorities. Those applications include general rate cases, where the entire cost of service of the utility is assessed and reset. In addition, the Registrants are periodically involved in proceedings to adjust their capital tracking mechanisms (e.g., CSIA, DCRF, DRR, GRIP, TCOS, ECA, CECA and TDSIC), their decoupling mechanisms (e.g., decoupling and SRC), and their energy efficiency cost trackers (e.g., CIP, DSMA, EECRF, EEFC and EEFR).
Current wording
The Registrants are routinely involved in rate change applications before state regulatory authorities. Those applications include general rate cases, where the entire cost of service of the utility is assessed and reset. In addition, the Registrants are periodically involved in proceedings to adjust their capital tracking mechanisms (e.g., CSIA, DCRF, CEP, DRR, GRIP, TCOS, ECA, CECA and TDSIC), their decoupling mechanisms (e.g., decoupling and SRC), and their energy efficiency cost trackers (e.g., CIP, DSMA, EECRF, EEFC and EEFR).
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Greenhouse Gas and Climate-Related Regulation and Compliance (CenterPoint Energy)
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GHG Emissions and Climate-Related Regulation and Compliance (CenterPoint Energy)
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Changes in the U.S. presidential administration and significant expected increases in electric demand, as announced by organizations such as ERCOT and MISO, have shifted the energy landscape in the United States. Since taking office, President Trump has issued a series of executive orders and presidential memoranda that seek to increase investment in fossil fuel infrastructure, including by directing all heads of federal agencies to identify and begin the processes to suspend, revise or rescind all agency actions that are determined to be unduly burdensome on the identification, development or use of domestic energy resources, with particular attention to oil, natural gas, hydropower, biofuels, critical mineral and nuclear energy resources. Additionally, on July 4, 2025, the OBBBA was signed into law, which includes numerous changes to the energy tax credits initially introduced and expanded under the IRA, including accelerated phase outs for certain credits. Further, on July 7, 2025, President Trump issued Executive Order 14315, which relates to the implementation of such changes to energy tax credits. This shift in federal domestic energy policy has resulted in uncertainty with respect to the scope and speed of future renewable generation infrastructure development and the role that existing renewable generation will play in support of the U.S. energy grid. The long-term impacts of this domestic energy policy shift are uncertain, including with respect to impacts on the development of, and consequently the availability of, alternative energy sources (such as solar energy, including private solar, wind energy, microturbines, fuel cells, energy-efficient buildings and energy storage devices). Additionally, it is unclear whether, and if so how, the new domestic energy policy, including the potential suspension, revision or rescission of regulations restricting emissions (including methane emissions), will affect consumers’ and companies’ energy use, adoption of alternative energy sources or decisions to expand their facilities, including natural gas facilities.
Current wording
There are climate risk trends and uncertainties that affect the Registrants. Changes in the U.S. presidential administration and significant expected increases in electric demand, as announced by organizations such as ERCOT and MISO, have shifted the energy landscape in the United States. This shift in federal domestic energy policy has resulted in uncertainty with respect to the scope and speed of future renewable generation infrastructure development and the role that existing renewable generation will play in support of the U.S. energy grid. The long-term impacts of this domestic energy policy shift are also uncertain, including with respect to impacts on the development of, and consequently the availability of, alternative energy sources (such as solar energy, including private solar, wind energy, microturbines, fuel cells, energy-efficient buildings and energy storage devices). Additionally, it is unclear whether, and if so how, the new domestic energy policy, including the potential suspension, revision or rescission of regulations restricting emissions (including methane emissions), and the repeal of the Endangerment Finding, will affect consumers’ and companies’ energy use, adoption of alternative energy sources or decisions to expand their facilities, including natural gas facilities.
Previous wording
On May 17, 2023, the Registrants filed a joint shelf registration statement with the SEC registering indeterminate principal amounts of Houston Electric’s general mortgage bonds, CERC Corp.’s senior debt securities and CenterPoint Energy’s senior debt securities and junior subordinated debt securities and an indeterminate number of shares of Common Stock, shares of preferred stock, depositary shares, as well as stock purchase contracts and equity units. The joint shelf registration statement will expire on May 17, 2026. For information related to the Registrants’ debt issuances in 2025, see Note 9 to the Interim Condensed Financial Statements.
Current wording
On May 17, 2023, the Registrants filed a joint shelf registration statement with the SEC registering indeterminate principal amounts of Houston Electric’s general mortgage bonds, CERC Corp.’s senior debt securities and CenterPoint Energy’s senior debt securities and junior subordinated debt securities and an indeterminate number of shares of Common Stock, shares of preferred stock, depositary shares, as well as stock purchase contracts and equity units. The joint shelf registration statement will expire on May 17, 2026. For information related to the Registrants’ issuances of securities to date in 2026, see Note 9 to the Interim Condensed Financial Statements.
Previous wording
Additionally, for information related to shares of Common Stock sold pursuant to the forward sale agreements and the Equity Distribution Agreement in 2025, see Note 15 to the Interim Condensed Financial Statements.
Current wording
For information related to shares of Common Stock sold pursuant to the forward sale agreements and the Equity Distribution Agreement in 2025, see Note 15 to the Interim Condensed Financial Statements. No shares of Common Stock were sold or issued pursuant to a forward sale agreement or the Equity Distribution Agreement during the three months ended March 31, 2026.
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The Registrants participate in a money pool through which they and certain of their subsidiaries 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 CenterPoint Energy 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.
Current wording
The Registrants participate in a money pool through which they and certain of their subsidiaries 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 CenterPoint Energy 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 net funding requirements of the
Previous wording
The interest rate on borrowings under the credit facilities is based on each respective borrower’s credit ratings. As of October 20, 2025, Moody’s, S&P and Fitch had assigned the following credit ratings to the borrowers:
Current wording
The interest rate on borrowings under the credit facilities is based on the respective credit rating of each borrower. As of April 15, 2026, Moody’s, S&P and Fitch had assigned the following credit ratings to the borrowers:
Previous wording
Pipeline tariffs and contracts typically provide that if the credit ratings of a shipper or the shipper’s guarantor drop below a threshold level, which is generally investment grade ratings from both Moody’s and S&P, cash or other collateral may be demanded from the shipper in an amount equal to the sum of three months’ charges for pipeline services plus the unrecouped cost of any lateral built for such shipper. If the credit ratings of CERC Corp. decline below the applicable threshold levels, CERC might need to provide cash or other collateral of up to $293 million as of September 30, 2025. The amount of collateral will depend on seasonal variations in transportation levels.
Current wording
Pipeline tariffs and contracts typically provide that if the credit ratings of a shipper or the shipper’s guarantor drop below a threshold level, which is generally investment grade ratings from both Moody’s and S&P, cash or other collateral may be demanded from the shipper in an amount equal to the sum of three months’ charges for pipeline services plus the unrecouped cost of any lateral built for such shipper. If the credit ratings of CERC Corp. decline below the applicable threshold levels, CERC might need to provide cash or other collateral of up to $233 million as of March 31, 2026. The amount of collateral will depend on seasonal variations in transportation levels.
Previous wording
If CenterPoint Energy’s creditworthiness were to drop such that ZENS holders thought CenterPoint Energy’s liquidity was adversely affected or the market for the ZENS were to become illiquid, some ZENS holders might decide to exchange their ZENS for cash. Funds for the payment of cash upon exchange could be obtained from the sale of the shares of ZENS-Related Securities that CenterPoint Energy owns or from other sources. CenterPoint Energy owns shares of ZENS-Related Securities equal to approximately 100% of the reference shares used to calculate its obligation to the holders of the ZENS. ZENS exchanges result in a cash outflow because tax deferrals related to the ZENS and shares of ZENS-Related Securities would typically cease when ZENS are exchanged or otherwise retired and shares of ZENS-Related Securities are sold. The ultimate tax liability related to the ZENS and ZENS-Related Securities continues to increase by the amount of the tax benefit realized each year, and there could be a significant cash outflow when the taxes are paid as a result of the retirement or exchange of the ZENS. If all ZENS had been exchanged for cash on September 30, 2025, deferred taxes of approximately $861 million would have been payable in 2025. If all the ZENS-Related Securities had been sold on September 30, 2025, capital gains taxes of approximately $87 million would have been payable in 2025 based on 2025 tax rates in effect. As of September 30, 2025, CenterPoint Energy had both net operating loss and CAMT carryforwards available from its filed 2024 federal income tax return that can be applied to largely offset the cash outflow that would result from a retirement or exchange of the ZENS. For additional information about ZENS, see Note 8 to the Interim Condensed Financial Statements.
Current wording
If CenterPoint Energy’s creditworthiness were to drop such that ZENS holders thought CenterPoint Energy’s liquidity was adversely affected or the market for the ZENS were to become illiquid, some ZENS holders might decide to exchange their ZENS for cash. Funds for the payment of cash upon exchange could be obtained from the sale of the shares of ZENS-Related Securities that CenterPoint Energy owns or from other sources. CenterPoint Energy owns shares of ZENS-Related Securities equal to approximately 100% of the reference shares used to calculate its obligation to the holders of the ZENS. ZENS exchanges result in a cash outflow because tax deferrals related to the ZENS and shares of ZENS-Related Securities would typically be reversed when ZENS are exchanged or otherwise retired and shares of ZENS-Related Securities are sold. The ultimate tax liability related to the ZENS and ZENS-Related Securities continues to increase by the amount of the tax benefit realized each year, and there could be a cash outflow when the taxes are paid as a result of the retirement or exchange of the ZENS. If all ZENS had been exchanged for cash on March 31, 2026, deferred taxes of approximately $911 million would have been payable in 2026, subject to reduction on account of available net operating loss carryforwards and CAMT carryforwards. If all the ZENS-Related Securities had been sold on March 31, 2026, capital gains taxes of approximately $81 million would have been payable in 2026 based on 2026 tax rates in effect. As of March 31, 2026, CenterPoint Energy had both net operating loss and CAMT carryforwards available from its filed 2024 federal income tax return that can be applied to largely offset the cash outflow that would result from a retirement or exchange of the ZENS. For additional information about ZENS, see Note 8 to the Interim Condensed Financial Statements.
Previous wording
From time to time, the Registrants consider the acquisition or the disposition of assets or businesses or possible joint ventures, strategic initiatives or other joint ownership arrangements with respect to assets or businesses. Any determination to take action in this regard will be based on market conditions and opportunities existing at the time, and accordingly, the timing, size or success of any efforts and the associated potential capital commitments are unpredictable. The Registrants may seek to fund all or part of any such efforts with proceeds from debt and/or equity issuances. Debt or equity financing may not, however, be available to the Registrants at that time due to a variety of events, including, among others, maintenance of our credit ratings, industry conditions, general economic conditions, market conditions and market perceptions. CenterPoint Energy has increased its planned capital expenditures in its Electric and Natural Gas businesses multiple times over the recent years to support rate base growth and may continue to do so in the future. The Registrants may continue to explore asset sales as a means to efficiently finance a portion of its increased capital expenditures in the future, subject to the considerations listed above. For further information, see Note 3 to the Interim Condensed Financial Statements.
Current wording
From time to time, the Registrants consider the acquisition or the disposition of assets or businesses or possible joint ventures, strategic initiatives or other joint ownership arrangements with respect to assets or businesses. Any determination to take action in this regard will be based on market conditions and opportunities existing at the time, and accordingly, the timing, size or success of any efforts and the associated potential capital commitments are unpredictable. The Registrants may seek to fund all or part of any such efforts with proceeds from debt and/or equity issuances. Debt or equity financing may not, however, be available to the Registrants at that time due to a variety of events, including, among others, maintenance of our credit ratings, industry conditions, general economic conditions, market conditions and market perceptions. As announced in February 2026, CenterPoint Energy has increased its planned capital expenditures in its Electric and Natural Gas businesses pursuant to its new 10-year capital plan, which calls for investment of at least $65.5 billion through 2035, and CenterPoint Energy may continue to increase such planned capital investments in the future. The Registrants may continue to explore asset sales as a means to efficiently finance a portion of their increased capital expenditures in the future, subject to the considerations listed above. For further information, see Note 3 to the Interim Condensed Financial Statements.
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Ohio Securities Purchase Agreement. On October 20, 2025, CenterPoint Energy, through CERC Corp., entered into the Ohio Securities Purchase Agreement to sell all of the issued and outstanding equity interests in CEOH. The proposed transaction is expected to close in the fourth quarter of 2026. For further information, see Note 16 the Interim Condensed Financial Statements.
Current wording
On October 20, 2025, CenterPoint Energy, through CERC Corp., entered into the Ohio Securities Purchase Agreement to sell all of the issued and outstanding equity interests in CEOH for total consideration of approximately $2.62 billion, subject to adjustment as set forth in the Ohio Securities Purchase Agreement. The transaction is expected to close in the fourth quarter of 2026, subject to the satisfaction of customary closing conditions. For further information, see Note 3 to the Interim Condensed Financial Statements.
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•various legislative, executive or regulatory actions at the federal, state and local levels, including actions in response to Hurricane Beryl and actions pertaining to trade (including tariffs, bans, retaliatory trade measures taken against the United States or related governmental action);
Current wording
•various legislative, executive or regulatory actions at the federal, state and local levels, including actions in response to Hurricane Beryl and actions pertaining to U.S. or foreign trade policy (including tariffs or other trade actions) or other geopolitical matters;
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•slower customer payments and increased write-offs of receivables due to higher natural gas prices, changing economic conditions, public health threats or severe weather events, such as the May 2024 Storm Events and Hurricane Beryl (CenterPoint Energy and CERC);
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•slower customer payments and increased write-offs of receivables due to higher natural gas prices, changing economic conditions, public health threats or severe weather events, such as the May 2024 Storm Events and Hurricane Beryl;
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Hurricane Beryl (CenterPoint Energy and Houston Electric)
Current report — wording carried from elsewhere
Indiana Electric is evaluating legislation passed in 2026, including the following pieces of legislation that became law in Indiana’s 124th General Assembly:
Current report — wording carried from elsewhere
CERC money pool are expected to be met with borrowings under CERC’s revolving credit facility or the sale of CERC’s
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Net income increased $17 million primarily due to the following items:
Previous report — wording carried elsewhere
•an increase in net income of $10 million for the Electric reportable segment, as further discussed below;
Previous report — wording carried elsewhere
On October 20, 2025, CenterPoint Energy, through CERC Corp., entered into the Ohio Securities Purchase Agreement to sell all of the issued and outstanding equity interests in CEOH. The proposed transaction is expected to close in the fourth quarter of 2026. For further information, see Note 16 to the Interim Condensed Financial Statements.