Cover and table of contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K


(Mark One)
☑			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020
OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			FOR THE TRANSITION PERIOD FROM TO


	Registrant, State or Other Jurisdiction of Incorporation or Organization
Commission file number	Address of Principal Executive Offices, Zip Code and Telephone Number			I.R.S. Employer Identification No.

1-31447	CenterPoint Energy, Inc.			74-0694415
	(a Texas corporation)
	1111 Louisiana
	Houston,	Texas	77002
	(713)	207-1111

1-3187	CenterPoint Energy Houston Electric, LLC			22-3865106
	(a Texas limited liability company)
	1111 Louisiana
	Houston,	Texas	77002
	(713)	207-1111

1-13265	CenterPoint Energy Resources Corp.			76-0511406
	(a Delaware corporation)
	1111 Louisiana
	Houston,	Texas	77002
	(713)	207-1111


Securities registered pursuant to Section 12(b) of the Act:
Registrant	Title of each class	Trading symbol(s)	Name of each exchange on which registered
CenterPoint Energy, Inc.	Common Stock, $0.01 par value	CNP	New York Stock Exchange
			Chicago Stock Exchange
CenterPoint Energy, Inc.	Depositary shares, each representing a 1/20th interest in a share of 7.00% Series B Mandatory Convertible Preferred Stock, $0.01 par value	CNP/PB	New York Stock Exchange
CenterPoint Energy Houston Electric, LLC	9.15% First Mortgage Bonds due 2021	n/a	New York Stock Exchange
CenterPoint Energy Houston Electric, LLC	6.95% General Mortgage Bonds due 2033	n/a	New York Stock Exchange
CenterPoint Energy Resources Corp.	6.625% Senior Notes due 2037	n/a	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.


CenterPoint Energy, Inc.	Yes	þ	No o
CenterPoint Energy Houston Electric, LLC	Yes	þ	No o
CenterPoint Energy Resources Corp.	Yes	þ	No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.


CenterPoint Energy, Inc.	Yes o	No	þ
CenterPoint Energy Houston Electric, LLC	Yes o	No	þ
CenterPoint Energy Resources Corp.	Yes o	No	þ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


CenterPoint Energy, Inc.	Yes	þ	No o
CenterPoint Energy Houston Electric, LLC	Yes	þ	No o
CenterPoint Energy Resources Corp.	Yes	þ	No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


CenterPoint Energy, Inc.	Yes	þ	No o
CenterPoint Energy Houston Electric, LLC	Yes	þ	No o
CenterPoint Energy Resources Corp.	Yes	þ	No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


	Large accelerated filer	Accelerated filer	Non-accelerated filer	Smaller reporting company	Emerging growth company
CenterPoint Energy, Inc.	þ	o	o	☐	☐
CenterPoint Energy Houston Electric, LLC	o	o	þ	☐	☐
CenterPoint Energy Resources Corp.	o	o	þ	☐	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


CenterPoint Energy, Inc.	Yes	☐	No þ
CenterPoint Energy Houston Electric, LLC	Yes	☐	No þ
CenterPoint Energy Resources Corp.	Yes	☐	No þ

The aggregate market values of the voting stock held by non-affiliates of the Registrants as of June 30, 2020 are as follows:


CenterPoint Energy, Inc. (using the definition of beneficial ownership contained in Rule 13d-3 promulgated pursuant to Securities Exchange Act of 1934 and excluding shares held by directors and executive officers)						$10,142,624,694
CenterPoint Energy Houston Electric, LLC						None
CenterPoint Energy Resources Corp.						None

Indicate the number of shares outstanding of each of the issuers’ classes of common stock as of February 22, 2021:


CenterPoint Energy, Inc.	551,579,922	shares of common stock outstanding, excluding 166 shares held as treasury stock
CenterPoint Energy Houston Electric, LLC	1,000	common shares outstanding, all held by Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy, Inc.
CenterPoint Energy Resources Corp.	1,000	shares of common stock outstanding, all held by Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy, Inc.

CenterPoint Energy Houston Electric, LLC and CenterPoint Energy Resources Corp. meet the conditions set forth in general instruction I(1)(a) and (b) of Form 10-K and are therefore filing this Form 10-K with the reduced disclosure format specified in General Instruction I(2) of Form 10-K.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement relating to the 2020 Annual Meeting of Shareholders of CenterPoint Energy, which will be filed with the Securities and Exchange Commission within 120 days of December 31, 2020, are incorporated by reference in Item 10, Item 11, Item 12, Item 13 and Item 14 of Part III of this Form 10-K.

TABLE OF CONTENTS


PART I
		Page
Item 1.	Business	1
Item 1A.	Risk Factors	20
Item 1B.	Unresolved Staff Comments	40
Item 2.	Properties	41
Item 3.	Legal Proceedings	43
Item 4.	Mine Safety Disclosures	43
PART II
Item 5.	Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	43
Item 6.	Selected Financial Data	43
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	86
Item 8.	Financial Statements and Supplementary Data	88
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	189
Item 9A.	Controls and Procedures	190
Item 9B.	Other Information	192
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	192
Item 11.	Executive Compensation	193
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	193
Item 13.	Certain Relationships and Related Transactions, and Director Independence	193
Item 14.	Principal Accounting Fees and Services	193
PART IV
Item 15.	Exhibits and Financial Statement Schedules	194
Item 16.	Form 10-K Summary	194


GLOSSARY
ACE						Affordable Clean Energy
ADFIT						Accumulated deferred federal income taxes


AFUDC						Allowance for funds used during construction
AGC						Alcoa Generating Corporation, a subsidiary of Alcoa, Inc.

AMAs						Asset Management Agreements
AMI						Advanced Metering Infrastructure
AMS						Advanced Metering System
APSC						Arkansas Public Service Commission
ARAM						Average rate assumption method

ARO						Asset retirement obligation
ARP						Alternative revenue program
ASC						Accounting Standards Codification
ASU						Accounting Standards Update
AT&T						AT&T Inc.
AT&T Common						AT&T common stock
Bailey to Jones Creek Project						A transmission project in the greater Freeport, Texas area, which includes enhancements to two existing substations and the construction of a new 345 kV double-circuit line to be located in the counties of Brazoria, Matagorda and Wharton

Bcf						Billion cubic feet


Bond Companies						Bond Company III, Bond Company IV and Restoration Bond Company, each a wholly-owned, bankruptcy remote entity formed solely for the purpose of purchasing and owning transition or system restoration property through the issuance of Securitization Bonds

Bond Company III						CenterPoint Energy Transition Bond Company III, LLC, a wholly-owned subsidiary of Houston Electric
Bond Company IV						CenterPoint Energy Transition Bond Company IV, LLC, a wholly-owned subsidiary of Houston Electric

CARES Act						Coronavirus Aid, Relief, and Economic Security Act
CCR						Coal Combustion Residuals

CECA						Clean Energy Cost Adjustment
CECL						Current expected credit losses
CEIP						CenterPoint Energy Intrastate Pipelines, LLC, a wholly-owned subsidiary of CERC Corp.
CenterPoint Energy						CenterPoint Energy, Inc., and its subsidiaries
CERC Corp.						CenterPoint Energy Resources Corp.
CERC						CERC Corp., together with its subsidiaries
CERCLA						Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
CES						CenterPoint Energy Services, Inc. (now known as Symmetry Energy Solutions, LLC), previously a wholly-owned subsidiary of CERC Corp. until its divestiture on June 1, 2020

Change in Control Plan						CenterPoint Energy Change in Control Plan (As Amended and Restated Effective May 1, 2017)
Charter Common						Charter Communications, Inc. common stock


CIP						Conservation Improvement Program

CNG						Compressed natural gas
CNP Midstream						CenterPoint Energy Midstream, Inc., a wholly-owned subsidiary of CenterPoint Energy
Code						The Internal Revenue Code of 1986, as amended
CODM						Chief Operating Decision Maker, who is each Registrant’s Chief Operating Executive
Common Stock						CenterPoint Energy, Inc. common stock, par value $0.01 per share
Compensation Committee						Compensation Committee of the Board of Directors of CenterPoint Energy
COVID-19						Novel coronavirus disease 2019, and any mutations or variants thereof, and related global outbreak that was subsequently declared a pandemic by the World Health Organization
COVID-19 ERP						COVID-19 Electricity Relief Program

CPP						Clean Power Plan


GLOSSARY
CSIA						Compliance and System Improvement Adjustment

CVR						Conservation Voltage Reduction
DA						Distribution Automation
DCRF						Distribution Cost Recovery Factor
Dodd-Frank Act						Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
DOT						U.S. Department of Transportation
DRR						Distribution Replacement Rider
DSMA						Demand Side Management Adjustment
Dth						Dekatherms
EBITDA						Earnings before income taxes, depreciation and amortization
ECA						Environmental Cost Adjustment
EDF Renewables						EDF Renewables Development, Inc.

EDIT						Excess deferred income taxes
EECR						Energy Efficiency Cost Recovery
EECRF						Energy Efficiency Cost Recovery Factor
EEFC						Energy Efficiency Funding Component
EEFR						Energy Efficiency Funding Rider
EGT						Enable Gas Transmission, LLC
EIN						Employer Identification Number
ELG						Effluent Limitation Guidelines

Elk GP Merger Sub						Elk GP Merger Sub LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of Energy Transfer
Elk Merger Sub						Elk Merger Sub LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of Energy Transfer
Enable						Enable Midstream Partners, LP
Enable GP						Enable GP, LLC, a Delaware limited liability company and the general partner of Enable
Enable Merger						The proposed merger of Elk Merger Sub with and into Enable and the merger of Elk GP Merger Sub with and into Enable GP, in each case on the terms and subject to the conditions set forth in the Enable Merger Agreement, with Enable and Enable GP surviving as wholly-owned subsidiaries of Energy Transfer
Enable Merger Agreement						Agreement and Plan of Merger by and among Energy Transfer, Elk Merger Sub LL, Elk GP Merger Sub, Enable, Enable GP and, solely for the purposes of Section 2.1(a)(i) therein, Energy Transfer GP, and solely for the purposes of Section 1.1(b)(i) therein, CenterPoint Energy
Enable Series A Preferred Units						Enable’s 10% Series A Fixed-to-Floating Non-Cumulative Redeemable Perpetual Preferred Units, representing limited partner interests in Enable

Energy Services						Offered competitive variable and fixed-priced physical natural gas supplies primarily to commercial and industrial customers and electric and natural gas utilities through CES and CEIP
Energy Services Disposal Group						Substantially all of the businesses within CenterPoint Energy’s and CERC’s Energy Services reporting unit that were sold under the Equity Purchase Agreement
Energy Transfer						Energy Transfer LP, a Delaware limited partnership
Energy Transfer GP						LE GP, LLC, a Delaware limited liability company and sole general partner of Energy Transfer
Energy Transfer Series G Preferred Units						Energy Transfer Series G Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units
EPA						Environmental Protection Agency
EPAct of 2005						Energy Policy Act of 2005
Equity Purchase Agreement						Equity Purchase Agreement, dated as of February 24, 2020, by and between CERC Corp. and Symmetry Energy Solutions Acquisition (f/k/a Athena Energy Services Buyer, LLC)
ERCOT						Electric Reliability Council of Texas
ERCOT ISO						ERCOT Independent System Operator
ERISA						Employee Retirement Income Security Act of 1974
ERO						Electric Reliability Organization

iii


GLOSSARY
ESG						Energy Systems Group, LLC, a wholly-owned subsidiary of Vectren
ESPC						Energy Savings Performance Contracting
FAC						Fuel Adjustment Clause
February 2021 Winter Storm Event						The extreme and unprecedented winter weather event in February 2021 resulting in electricity generation supply shortages, including in Texas, and natural gas supply shortages and increased wholesale prices of natural gas in the United States, primarily due to prolonged freezing temperatures.
FERC						Federal Energy Regulatory Commission
FIP						Funding Improvement Plan
First Amendment						First Amendment to the Change in Control Plan, effective March 1, 2021
Fitch						Fitch Ratings, Inc.
Form 10-Q						Quarterly Report on Form 10-Q
FPA						Federal Power Act
FRP						Formula Rate Plan


GHG						Greenhouse gases

GRIP						Gas Reliability Infrastructure Program
GWh						Gigawatt-hours

HLPSA						Hazardous Liquid Pipeline Safety Act of 1979
Houston Electric						CenterPoint Energy Houston Electric, LLC and its subsidiaries
HVAC						Heating, ventilation and air conditioning
IBEW						International Brotherhood of Electrical Workers
ICA						Interstate Commerce Act of 1887
ICPA						Inter-Company Power Agreement
IDEM						Indiana Department of Environmental Management

Indiana Electric						Operations of SIGECO’s electric transmission and distribution services, and includes its power generating and wholesale power operations
Indiana Gas						Indiana Gas Company, Inc., a wholly-owned subsidiary of Vectren
Indiana North						Gas operations of Indiana Gas
Indiana South						Gas operations of SIGECO
Indiana Utilities						Indiana Electric, Indiana North and Indiana South, collectively
Infrastructure Services						Provided underground pipeline construction and repair services through VISCO and its wholly-owned subsidiaries, Miller Pipeline, LLC and Minnesota Limited, LLC
Infrastructure Services Disposal Group						Businesses within the Infrastructure Services reporting unit that were sold under the Securities Purchase Agreement
Internal Spin						CERC’s contribution of its equity investment in Enable to CNP Midstream (detailed in Note 11 to the consolidated financial statements)
IRP						Integrated Resource Plan
IRS						Internal Revenue Service
IURC						Indiana Utility Regulatory Commission
kV						Kilovolt
KW						Kilowatt
LDC						Local Distribution Company
LIBOR						London Interbank Offered Rate
LNG						Liquefied natural gas
LPSC						Louisiana Public Service Commission
LTIPs						Long-term incentive plans

MCRA						MISO Cost and Revenue Adjustment

Merger						The merger of Merger Sub with and into Vectren on the terms and subject to the conditions set forth in the Merger Agreement, with Vectren continuing as the surviving corporation and as a wholly-owned subsidiary of CenterPoint Energy, Inc., which closed on the Merger Date
Merger Agreement						Agreement and Plan of Merger, dated as of April 21, 2018, among CenterPoint Energy, Vectren and Merger Sub


GLOSSARY
Merger Date						February 1, 2019
Merger Sub						Pacer Merger Sub, Inc., an Indiana corporation and wholly-owned subsidiary of CenterPoint Energy
MES						CenterPoint Energy Mobile Energy Solutions, Inc., a wholly-owned subsidiary of CERC Corp.
MGP						Manufactured gas plant
MISO						Midcontinent Independent System Operator
MLP						Master Limited Partnership

MMcf						Million cubic feet
Moody’s						Moody’s Investors Service, Inc.

MP2018						2018 pension mortality improvement scale developed annually by the Society of Actuaries
MP2019						2019 pension mortality improvement scale developed annually by the Society of Actuaries
MPSC						Mississippi Public Service Commission
MPUC						Minnesota Public Utilities Commission
MRT						Enable Mississippi River Transmission, LLC
Mva						Megavolt amperes
MW						Megawatt

NECA						National Electrical Contractors Association
NERC						North American Electric Reliability Corporation

NGA						Natural Gas Act of 1938

NGLs						Natural gas liquids
NGPA						Natural Gas Policy Act of 1978
NGPSA						Natural Gas Pipeline Safety Act of 1968

NOLs						Net operating losses
NRG						NRG Energy, Inc.

NYSE						New York Stock Exchange
OCC						Oklahoma Corporation Commission
OGE						OGE Energy Corp.
OPGW						Optical Ground Wire
OPEIU						Office & Professional Employees International Union
OVEC						Ohio Valley Electric Corporation

PBRC						Performance Based Rate Change


PHMSA						Pipeline and Hazardous Materials Safety Administration

Pipes Act						Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2020
PowerTeam Services						PowerTeam Services, LLC, a Delaware limited liability company, now known as Artera Services, LLC
PRPs						Potentially responsible parties
PSR Amendments						Federal Pipeline Safety Regulations Amendments
PUCO						Public Utilities Commission of Ohio
PUCT						Public Utility Commission of Texas
Railroad Commission						Railroad Commission of Texas
RCRA						Resource Conservation and Recovery Act of 1976
RCRA Mechanism						Reliability Cost and Revenue Adjustment mechanism
Registrants						CenterPoint Energy, Houston Electric and CERC, collectively
Reliant Energy						Reliant Energy, Incorporated
REP						Retail electric provider
Restoration Bond Company						CenterPoint Energy Restoration Bond Company, LLC, a wholly-owned subsidiary of Houston Electric


ROE						Return on equity

ROU						Right of use


GLOSSARY
RRA						Rate Regulation Adjustment

RSP						Rate Stabilization Plan
SEC						Securities and Exchange Commission
SESH						Southeast Supply Header, LLC
Securities Purchase Agreement						Securities Purchase Agreement, dated as of February 3, 2020, by and among VUSI, PowerTeam Services and, solely for purposes of Section 10.17 of the Securities Purchase Agreement, Vectren
Securitization Bonds						Transition and system restoration bonds
Series A Preferred Stock						CenterPoint Energy’s Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share
Series B Preferred Stock						CenterPoint Energy’s 7.00% Series B Mandatory Convertible Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share
Series C Preferred Stock						CenterPoint Energy’s Series C Mandatory Convertible Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share
STIP						Short-term Incentive Plan
SIGECO						Southern Indiana Gas and Electric Company, a wholly-owned subsidiary of Vectren
SOFR						Secured Overnight Financing Rate
S&P						S&P Global Ratings, a division of S&P Global Inc.
SRC						Sales Reconciliation Component
Symmetry Energy Solutions Acquisition						Symmetry Energy Solutions Acquisition, LLC, a Delaware limited liability company (f/k/a Athena Energy Services Buyer, LLC) and subsidiary of Energy Capital Partners, LLC
TBD						To be determined

TCJA						Tax reform legislation informally called the Tax Cuts and Jobs Act of 2017
TCOS						Transmission Cost of Service
TCRF						Transmission Cost Recovery Factor
TDSIC						Transmission, Distribution and Storage System Improvement Charge
TDU						Transmission and distribution utility



Texas RE						Texas Reliability Entity
TSCR						Tax Savings Credit Rider


UESC						Utility Energy Services Contract
USW						United Steelworkers Union
Utility Holding						Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy

VCC						Vectren Capital Corp., a wholly-owned subsidiary of Vectren
Vectren						Vectren Corporation, a wholly-owned subsidiary of CenterPoint Energy as of the Merger Date
VEDO						Vectren Energy Delivery of Ohio, Inc., a wholly-owned subsidiary of Vectren
VIE						Variable interest entity
VISCO						Vectren Infrastructure Services Corporation, formerly a wholly-owned subsidiary of Vectren
Vistra Energy Corp.						Texas-based energy company focused on the competitive energy and power generation markets, whose major subsidiaries include Luminant and TXU Energy
VRP						Voluntary Remediation Program
VUHI						Vectren Utility Holdings, Inc., a wholly-owned subsidiary of Vectren
VUSI						Vectren Utility Services, Inc., a wholly-owned subsidiary of Vectren

ZENS						2.0% Zero-Premium Exchangeable Subordinated Notes due 2029
ZENS-Related Securities						As of both December 31, 2020 and 2019, consisted of AT&T Common and Charter Common
2019 Form 10-K						Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as filed with the SEC on February 27, 2020, as recast in the Registrants’ Current Report on Form 8-K dated May 18, 2020, and filed with the SEC on May 19, 2020

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

From time to time the Registrants make statements concerning their expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. You can generally identify forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “target,” “will” or other similar words.

The Registrants have based their forward-looking statements on management’s beliefs and assumptions based on information reasonably available to management at the time the statements are made. The Registrants caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, the Registrants cannot assure you that actual results will not differ materially from those expressed or implied by the Registrants’ forward-looking statements. In this Form 10-K, unless context requires otherwise, the terms “our,” “we” and “us” are used as abbreviated references to CenterPoint Energy, Inc. together with its consolidated subsidiaries, including Houston Electric, CERC and Vectren.

Some of the factors that could cause actual results to differ from those expressed or implied by the Registrants’ forward-looking statements are described under “Risk Factors” in Item 1A and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Certain Factors Affecting Future Earnings” and “ — Liquidity and Capital Resources — Other Matters — Other Factors That Could Affect Cash Requirements” in Item 7 of this report, which discussions are incorporated herein by reference.

You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and the Registrants undertake no obligation to update or revise any forward-looking statements.

SUMMARY OF RISK FACTORS

An investment in CenterPoint Energy’s securities involves a significant degree of risk. Below is a summary of certain risk factors to consider in evaluating CenterPoint Energy as well as its Common Stock and preferred stock. However, this list is not exhaustive. Before investing in CenterPoint Energy, carefully consider the risk factors discussed or referenced below and in Item 1A. “Risk Factors” of this combined report on Form 10-K. If any of the risks discussed below and in Item 1A. “Risk Factors” were actually to occur, CenterPoint Energy’s, Houston Electric’s and CERC’s business, financial condition, results of operations or cash flows could be materially adversely affected. In that case, CenterPoint Energy might not be able to pay dividends on its Common Stock or preferred stock, or the trading price of its Common Stock or preferred stock could decline.

Risk Factors Associated with Our Consolidated Financial Condition

If we are unable to arrange future financings on acceptable terms, our ability to finance our capital expenditures or refinance outstanding indebtedness could be limited.
If CenterPoint Energy redeems the ZENS prior to their maturity in 2029, its ultimate tax liability and redemption payments would result in significant cash payments, which would adversely impact its cash flows. Similarly, a significant amount of exchanges of ZENS by ZENS holders could adversely impact CenterPoint Energy’s cash flows.
Dividend requirements associated with CenterPoint Energy’s Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock subject it to certain risks.

Risk Factors Affecting Electric Generation, Transmission and Distribution Businesses (CenterPoint Energy and Houston Electric)

Rate regulation of Houston Electric’s and Indiana Electric’s businesses may delay or deny their ability to earn an expected return and fully recover their costs.
Disruptions at power generation facilities owned by third parties or directives issued by regulatory authorities could interrupt Houston Electric’s sales of transmission and distribution services.
Indiana Electric’s execution of its generation transition plan, including its IRP, and its regulated power supply operations are subject to various risks, including timely recovery of capital investments, increased costs and facility outages or shutdowns.
Houston Electric and Indiana Electric, as a member of ERCOT and MISO, respectively, could be subject to higher costs for system improvements, as well as fines or other sanctions as a result of FERC mandatory reliability standards.

vii

Houston Electric’s receivables are primarily concentrated in a small number of REPs, and any delay or default in such payments could adversely affect Houston Electric’s cash flows, financial condition and results of operations.
In connection with the February 2021 Winter Storm Event, there have been calls for reform of the Texas electric market, which, if implemented, could have material adverse impacts on Houston Electric.

Risk Factors Affecting Natural Gas’ Business (CenterPoint Energy and CERC)

Rate regulation of Natural Gas may delay or deny its ability to earn an expected return and fully recover its costs.
Access to natural gas supplies and pipeline transmission and storage capacity are essential components of reliable service for Natural Gas’ customers.
Natural Gas is subject to fluctuations in notional natural gas prices, which could affect the ability of its suppliers and customers to meet their obligations or otherwise adversely affect CERC’s liquidity, results of operations and financial condition.
A decline in CERC’s credit rating could result in CERC having to provide collateral under its shipping arrangements or to purchase natural gas, which consequently would increase its cash requirements and adversely affect its financial condition.
Natural Gas must compete with alternate energy sources, which could result in less natural gas delivered and have an adverse impact on CERC’s results of operations, financial condition and cash flows.

Risk Factors Affecting ESG’s Business (CenterPoint Energy)

ESG’s business has performance and warranty obligations, some of which are guaranteed by CenterPoint Energy.

Risk Factors Affecting Our Businesses and/or CenterPoint Energy’s Interests in Enable Midstream Partners, LP

We are subject to operational and financial risks and liabilities arising from environmental laws and regulations, including regulation of CCR and climate change legislation as well as other risks related to the implementation of our carbon emissions reduction targets. We could also experience reduced demand for our services, including certain local initiatives to prohibit new natural gas service and increase electrification initiatives.
The February 2021 Winter Storm Event has caused severe disruptions to our customers and our markets in certain of our jurisdictions and could have a material adverse impact to our financial condition, results of operations, cash flows and liquidity.
CenterPoint Energy may be unable to effectively complete the integration of the businesses acquired in the Merger, including the integration of technology systems, for which significant time and resources have been allocated thereto.
Our revenues and results of operations are seasonal.
Climate changes could adversely impact financial results from our businesses and result in more frequent and more severe weather events that could adversely affect our results of operations.
Aging infrastructure may lead to increased costs and disruptions in operations that could negatively impact our financial results.
Our businesses will continue to have to adapt to technological change and may not be successful or may have to incur significant expenditures to adapt to technological change.
We are exposed to risks related to reduction in energy consumption due to factors such as unfavorable economic conditions in our service territories and changes in customers’ perceptions from incidents of other utilities involving natural gas pipelines.

Risk Factors Affecting CenterPoint Energy’s Interests in Enable Midstream Partners, LP (CenterPoint Energy)

CenterPoint Energy’s cash flows will be adversely impacted if it receives less cash distributions from Enable than it currently expects, whether as a result of Enable’s performance or otherwise, or if it reduces its ownership in Enable.
We cannot be certain of the precise value of any merger consideration we may receive in the Enable Merger because the exchange ratio is fixed and the market price of Energy Transfer’s common units may fluctuate.

General Risk Factors Affecting Our Businesses and/or CenterPoint Energy’s Interests in Enable Midstream Partners, LP

Cyberattacks, physical security breaches, acts of terrorism or other disruptions could adversely impact our reputation, results of operations, financial condition and/or cash flows.
We face risks related to COVID-19 and other health epidemics and outbreaks, including economic, regulatory, legal, workforce and cyber security risks, which could adversely impact our financial condition, results of operations, cash flows and liquidity.

viii

PART I

Next: Item 1. Business