CenterPoint Energy (CNP) 10-K risk factor changes: FY2023 vs FY2022

Unless the context indicates otherwise, where appropriate, information relating to a specific registrant has been segregated and labeled as such and [added: specific references to Houston Electric and CERC in this section also pertain to CenterPoint Energy.]

See Note 7 to the consolidated financial statements and “— Houston Electric’s use of [removed: temporary] [added: TEEEF] ...” for further information.

Additionally, Indiana Electric’s generating facilities and the generating facilities that supply the power transmitted by Houston Electric [added: and Indiana Electric] are subject to operational risks that have and may in the future result in unscheduled plant outages, unanticipated operation and maintenance expenses and increased purchase power costs.

Such open market purchases [added: have and] may [added: again] result in increased costs and [removed: may] have an adverse impact on our [removed: operations.][added: operations, financial condition, results of operations and cash flows.]

These operational risks can arise from circumstances such as facility shutdowns or malfunctions due to equipment failure or operator error; aging infrastructure; interruption of fuel supply or increased prices of fuel as contracts expire and inflation [removed: rates rise;] [added: rises;] disruptions in the delivery of electricity; inability to comply with regulatory or permit requirements; labor disputes; or natural disasters, all of which could adversely affect Indiana Electric’s and Houston Electric’s [removed: business.][added: businesses.]

In 2021 and part of 2022, Indiana Electric experienced coal supply shortages due to labor shortages that the coal industry [removed: is experiencing.][added: experienced.]

See “— [removed: Continued disruptions] [added: Disruptions] to the [added: global] supply...”

As of December 31, [removed: 2022,] [added: 2023,] Houston Electric provided electric delivery service to approximately [removed: 64] [added: 65] REPs.

[added: Adverse economic] conditions, [removed: such as] [added: including, but not limited to,] the impact of COVID-19, the February 2021 Winter Storm [removed: Event,] [added: Event or other extreme weather (which may result in abnormal power prices),] structural problems in the market served by ERCOT, [added: mismanagement by the REPs,] inflation or financial difficulties of one or more [removed: REPs] [added: REPs,] have and may in the future impair the ability of these REPs to pay for Houston Electric’s services or cause them to delay such payments.

A significant portion of Houston Electric’s billed receivables from REPs are from affiliates of NRG and Vistra Energy Corp. Houston Electric’s aggregate billed receivables balance from REPs as of December 31, [removed: 2022] [added: 2023] was [removed: $252] [added: $253] million.

Approximately 39% and [removed: 18%] [added: 20%] of this amount was owed by affiliates of NRG and Vistra Energy Corp., respectively.

Indiana Electric’s execution of its generation transition plan, including its IRP, [removed: are] [added: is] subject to various risks, including timely recovery of capital investments and increased costs and risks related to the timing and cost of development and/or construction of new generation facilities.

The IURC may delay providing comments on Indiana Electric’s [added: most recent] IRP, requiring Indiana Electric to either wait for comments or proceed to [removed: implement its IRP without IURC comments.]

If Indiana Electric is unable to implement its generation transition plan, it may have an adverse effect on CenterPoint Energy’s ability to execute on its net zero and carbon emission goals, its [added: goal to exit the coal plants that Indiana Electric operates by the end of 2027, its] growth strategy, achieve [added: its] financial [removed: targets,] [added: goals,] and otherwise impact results of operations and cash flows.

For additional information, see “— [removed: Continued disruptions] [added: Disruptions] to the [added: global] supply...” Furthermore, we have begun to acquire and/or develop additional solar and wind facilities as part of our capital plan.

However, we have not yet entered into definitive agreements with developers for the acquisition and/or development of all of the additional projects, and we face significant competition with other bidders for a limited number of such generation facilities that developers plan to construct and for solar [added: panels.]

If [removed: an affirmative finding is made by] the DOC [added: imposes tariffs on solar panels as a result of its findings] or other additional measures are imposed, our business, financial condition and results of operations may be adversely affected.

Houston Electric [added: believes it] is in compliance with the requirements applicable to it.

If any additional protections are required in the [removed: future,] [added: future as a result of additional extreme weather events or other causes,] complying with these new protections may increase the cost of electricity, which could adversely affect Houston Electric’s results of operations.

For further information on Houston Electric’s regulatory proceedings, see “— Rate regulation of [removed: Houston Electric’s...”][added: Registrants’ Electric...”]

There are [removed: significant] uncertainties whether any further [removed: market structure or governance] changes will result from these [added: discussions or other efforts.]

Houston Electric’s use of TEEEF is subject to various risks, including [removed: related] failure to obtain and deploy sufficient TEEEF resources, potential performance issues and allegations about Houston Electric’s deployment of the resources (including the planning, execution, and effectiveness of the same), regulatory and environmental requirements, and timely recovery of capital.

If Houston Electric is [removed: otherwise] unable to deploy a sufficient number of TEEEF [added: resources] in time to respond to a particular event; if [removed: the] TEEEF [added: resources] fail to perform as intended; if Houston Electric is otherwise unable to provide back-up generation resources and restore power as intended; or if the use of TEEEF [added: resources] or their failure to perform causes or is alleged to cause any personal injury, property damage, or other damage or loss due to allegations [removed: it] [added: Houston Electric] failed to deploy such units reasonably or effectively and failed to respond to particular power outages, Houston Electric could be subject to claims, demands, litigation, liability, regulatory scrutiny, and loss of reputation.

While Houston Electric has insurance coverage and indemnity rights for its use of [removed: TEEEF,] [added: TEEEF resources,] if its insurers or indemnitors fail to meet their indemnity obligations, Houston Electric could be liable for personal injury, property damage, or other damage or loss.

As noted above, the legislation prescribes specific and limited use for [removed: the] TEEEF, and Houston Electric’s TEEEF have limited generation capacity, such that in future events customers could still be without power despite deployment of [removed: the TEEEF.][added: TEEEF resources.]

Further, [removed: the] TEEEF [added: resources] are subject to various environmental regulations and permitting requirements, which could have an impact on Houston Electric’s ability to use these units.

If Houston Electric is unable to recover any or all of its TEEEF [removed: costs, it could have an adverse impact on its] [added: costs our] financial condition, results of operations and cash [removed: flows.][added: flows may be adversely affected.]

For further information, see “— Rate [removed: Regulation] [added: regulation] of [removed: Houston Electric’s...”,] [added: Registrants’ Electric...”,] “— Our insurance coverage may not...” and “— We are subject to operational...”

Additionally, a significant disruption, whether through reduced intrastate and interstate pipeline transmission or storage capacity or other events affecting natural gas supply, including, but not limited to, operational failures, hurricanes, tornadoes, floods, severe winter weather conditions, [added: wildfires,] acts of [removed: terrorism] [added: terrorism, human error] or cyberattacks or changes in legislative or regulatory requirements, could also adversely affect Natural Gas’ businesses.

Natural Gas is subject to fluctuations in natural gas prices, which could affect the ability of its suppliers and customers to meet their obligations or may impact its [removed: operations] [added: operations,] which could adversely affect CERC’s financial condition, results of operations and cash flows.

We are exposed to risks related to reduction in energy consumption due to factors such as changes in customers’ perceptions from incidents of other [removed: utilities involving natural gas pipelines.][added: utilities.]

Declines in demand for electricity and natural gas in our service territories due to pipeline incidents of other utilities, increased electricity and natural gas prices as experienced during the February 2021 Winter Storm Event and [added: during periods of persisting high inflation or] economic downturns, among other factors, could reduce overall usage and lessen cash flows, especially as industrial customers reduce production and, therefore, consumption of electricity and natural gas.

[removed: Energy] [added: CenterPoint Energy’s previously owned Energy] Systems [removed: Group’s] [added: Group] business has performance and warranty obligations, some of which are guaranteed by CenterPoint Energy.

[removed: In] [added: Prior to June 30, 2023 and as part of] the normal course of [added: its] business, Energy Systems Group [removed: issues] [added: issued] performance bonds and other forms of assurance that [removed: commit] [added: committed] it to operate facilities, pay vendors or subcontractors and support warranty obligations.

As the parent [removed: company,] [added: company prior to the closing of the sale,] CenterPoint Energy or Vectren [removed: has, and will, from time to time guarantee] [added: guaranteed certain of] its subsidiaries’ commitments.

[removed: These] [added: When Energy Systems Group was wholly owned by CenterPoint Energy, these] guarantees [removed: do] [added: did] not represent incremental consolidated [removed: obligations;] [added: obligations, but] rather, [removed: they represent parental] [added: these] guarantees [added: represented guarantees] of [removed: subsidiary] [added: Energy Systems Group’s] obligations to allow [removed: the subsidiary the flexibility] [added: it] to conduct business without posting other forms of [removed: collateral.][added: assurance.]

Neither CenterPoint Energy nor Vectren has been called upon to satisfy any obligations pursuant to these parental guarantees to [removed: date.][added: date, but may be required to do so in the future.]

[removed: Houston Electric,] Indiana Electric and CERC each [removed: plan to file] [added: filed] rate cases during 2023.

Such additional measures may adversely impact the [removed: Registrant’s] [added: Registrants’] businesses and could have an adverse effect on their financial condition, results of operations and cash flows.

The rates that Registrants’ Electric and Natural Gas businesses are allowed to charge may not match their costs at any given time, a situation referred to as “regulatory lag.” Regulatory lag has been and may be exaggerated in the future under certain circumstances, such as increasing inflation rates like those experienced in [removed: 2022.][added: 2022 and continuing into 2023.]

ERCOT and MISO have and may in the future issue directives requiring members to implement controlled outages as a result of an emergency or reliability issues, and Houston Electric has faced and may in the future face challenges to their planning and preparation for such directives and their implementation of Load Shed, including, for example, allegations that they had discretion as to how to shed load and which customers experienced outages and the duration of those outages.

As a result, claims and lawsuits could be filed against Houston Electric and Indiana Electric for personal injury, property damage or other damage or loss as a result of their respective Load Shed planning, preparation, implementation, and decisions in order to meet the directives of ERCOT and MISO, respectively.

For example, in June 2022, Culley 3, a coal-fired generation unit, experienced a boiler feed pump turbine failure that caused the unit to be out of service for nearly nine months.

In this time frame, CenterPoint Energy purchased energy on the open market and those purchases are currently being challenged at the IURC by multiple intervenors.

See “— Disruptions to the global supply...” As Indiana Electric continues its generation transition and more renewable energy sources come online, Indiana Electric’s generating facilities may experience unanticipated disruptions as a result of renewable supply shortages, including, but not limited to, due to cloudy or windless days.

Additionally, such disruptions could adversely affect its ability to deliver electricity to its customers and adversely impact Indiana Electric’s financial condition, results of operations and cash flows.

The operations of Houston Electric and Indiana Electric are subject to the usual hazards associated with high-voltage electricity transmission, including inclement weather, natural disasters, mechanical failure, contact with electrified facilities by people, equipment, and debris, unscheduled downtime, equipment interruptions, contamination, remediation, explosions, fires,

chemical spills, discharges or releases of toxic or hazardous substances, and other environmental risks.

Such hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment, and environmental damage, and may result in suspension of operations, disruption of service to customers, and the imposition of civil or criminal penalties.

Houston Electric and Indiana Electric maintain property and casualty insurance but are not fully insured against all potential hazards incident to their businesses.

Applicable PUCT regulations significantly limit the extent to which Houston Electric can apply normal commercial terms to otherwise seek credit protection from firms desiring to provide retail electric service in its service territory, and Houston Electric thus remains at risk for payments relating to services provided prior to any shift to another REP or provider of last resort.

Indiana Electric is continuing its plan to transition generation resources away from coal-fired generation to a more sustainable portfolio of resources, including renewables, and ultimately a goal to exit the coal plants that Indiana Electric operates by the end of 2027, as reflected in its most recent IRP submitted to the IURC in May 2023.

implement its IRP without IURC comments.

For example, the developers of a 130 MW Pike County Solar project have informed Indiana Electric that, due to delays in the MISO interconnection queue and inflationary pressures, costs have exceeded the agreed upon levels in the BTA.

We and the developers are actively evaluating possible cost impacts to the project, which may lead to a refile for approval of the project with the IURC and further delay the completion of the project.

If Indiana Electric is not able to reach a mutually acceptable solution with the developers of the Pike County Solar project, Indiana Electric may seek to terminate the project.

On August 18, 2023, the DOC announced its final determination that five of the eight companies investigated were attempting to bypass U.S. duties by doing minor processing in Southeast Asian countries before shipment to the United States.

The occurrence of extreme weather events, including winter storms and record hot temperatures, or other causes could lead to additional reforms to the Texas electric market, some measure of which, if implemented, could have an adverse impact on Houston Electric.

In addition, the PUCT and ERCOT continue to review the appropriate reliability standard and market design for the Texas electric market.

In 2023, the Texas legislature amended the law to allow wider use of TEEEF.

In April 2023, the PUCT approved revenue recovery of $39 million of TEEEF costs incurred in 2021, and in October 2023, an agreement with intervenors was reached with respect to Houston Electric’s second TEEEF filing for revenue recovery of $153 million ($114 million incremental to the prior filing) of TEEEF costs incurred through December 31, 2022, and the agreement was approved by PUCT in February 2024.

Despite the recovery of these TEEEF costs in the past, there can be no assurances that Houston Electric will be able to recover future TEEEF costs.

Wildfires have the potential to negatively affect communities within Houston Electric’s and Indiana Electric’s service territories and the surrounding areas, as well as Houston Electric’s and Indiana Electric’s vast network of electric transmission and distribution lines and facilities.

The possibility of wildfires and the risk of damage to our network and facilities resulting therefrom may be exacerbated by severe weather events and the effects of climate change.

For more information regarding climate related risks, see “ — Climate change could adversely impact ...” The continued expansion of the wildland-urban interface has also increased wildfire risk to communities in our service territories.

While we proactively take steps to mitigate wildfire risk in the areas of our electrical assets, wildfire risk is always present.

Houston Electric or Indiana Electric could be held liable for damages incurred as a result of wildfires or incur reputational harm if it was determined that they were caused by or enhanced due to any fault of Houston Electric or Indiana Electric.

Wildfires could also lead to significant financial distress and further increased costs for wildfire insurance or lack of availability thereof.

Furthermore, any damage caused to our assets, loss of service to our customers, or liability imposed as a result of wildfires could negatively impact Houston Electric’s or Indiana Electric’s financial condition, results of operations, and cash flows.

Houston Electric and CERC, with respect to its Ohio gas territory, each plan to file a rate case during 2024.

Additionally, decisions from regulators are typically subject to appeal, and any such appeal could further exacerbate regulatory lag and lead to additional uncertainty associated with rate case proceedings.

For further information on rate case proceedings and interim rate adjustment mechanisms, see

We face risks related to project siting, financing, construction, permitting, governmental approvals, public opposition, and the negotiation of project development agreements that may impede our development and operating activities.

Houston Electric, Indiana Electric and CERC own, develop, construct, manage and operate electric generation, transmission and distribution facilities or natural gas distribution facilities, as applicable.

A key component of our growth is our ability to construct and operate these facilities.

As part of these operations, we must periodically apply for licenses and permits from various local, state, federal and other regulatory authorities and abide by their respective conditions.

We have previously experienced delays in receiving approval with regards to certain permits and licenses, and have had investigations and enforcement actions with regards to certain of our projects, which have caused delays to our projects in the past.

Should we in the future be unsuccessful in obtaining necessary licenses or permits on acceptable terms or resolving third-party challenges to such licenses or permits, should there be a delay in obtaining or renewing necessary licenses or permits, or should regulatory authorities initiate any associated investigations or enforcement actions or impose related penalties or disallowances, our future net income and cash flows could be reduced and our financial condition could be impacted.

Any failure to negotiate successful project development agreements for new facilities with third parties could also have adverse effects.

Additionally, our projects have faced and may in the future face opposition from individuals, community organizations, environmental and other activist groups, and other public-interest entities.

specific references to Houston Electric and CERC in this section also pertain to CenterPoint Energy.

ERCOT and MISO have and may in the future issue directives requiring members to implement controlled outages as a result of an emergency or reliability issues.

For example, in December 2022, the A.B. Brown 1 and 2 generating units were offline at various times over an approximately week and a half period due to complications as a result of Winter Storm Elliott.

If Indiana Electric is unable to meet its generation capacity it would be required to buy its energy on the open market, which is what occurred during Winter Storm Elliott when A.B. Brown 1 and 2 went offline.

During the outage in Winter Storm Elliott, Indiana Electric had an increase in cost due to open market purchases because Indiana Electric would have been able to generate electricity at a lower rate than the costs incurred to purchase the electricity on the open market.

Adverse economic

Indiana Electric is now preparing a new IRP to be filed in 2023 for which it has conducted a request for proposals to identify the cost of generating resources, including renewables, thermal and demand-side resources, and short-term capacity to meet the future needs of its electric customers.

For example, we, along with our developers of the Posey solar project, have announced plans to downsize the Posey solar project from 300 MW to 191 MW because of supply chain issues experienced in the energy industry, rising cost of commodities and community feedback.

Indiana Electric will also seek recovery of costs related to the amendments of the Posey agreement.

panels.

In December 2022, the DOC issued its preliminary findings noting that circumvention was occurring in each of the four countries.

If an affirmative finding is made by the DOC, it could impose duties on imports of solar cells and panels from Cambodia, Malaysia, Thailand and Vietnam with both forward-looking and retroactive application.

In the aftermath of the February 2021 Winter Storm Event, there have been calls for reform of the Texas electric market, some measure of which, if implemented, could have an adverse impact on Houston Electric.

Various governmental and regulatory agencies and other entities have called for or are conducting inquiries and investigations into the February 2021 Winter Storm Event and the efforts made by various entities to prepare for, and respond to, this event, including the electricity generation shortfall issues.

Such agencies and entities include the United States Congress, FERC, NERC, Texas RE, ERCOT, Texas government entities and officials such as the Texas Governor’s office, the Texas Legislature, the Texas Attorney General, the PUCT, the City of Houston and other municipal and county entities in Houston Electric’s service area, among other entities.

In addition to questions around preparation and response, some federal and other officials, as well as members of the public and media, have called for reviews and reforms of the Texas electric market, including whether it should continue to be governed by ERCOT or instead be subject to FERC jurisdiction and regulation by joining an ISO such as MISO, as well as the division of the market between power generators, TDUs (such as Houston Electric) and REPs.

discussions.

Additionally, Houston Electric’s recovery of its costs for TEEEF is not certain.

In April 2022, Houston Electric sought to recover its costs for TEEEF through a DCRF application.

In July 2022, Houston Electric amended its filing to include the TEEEF cost in a separate rider and intervenors filed testimony in September 2022 challenging the acquisition and deployment of TEEEF.

On January 27, 2023, the administrative law judges issued a proposal for decision recommending that the leasing of the TEEEF was not prudent or reasonable and necessary and that the PUCT deny recovery of all of the TEEEF costs.

The PUCT is expected to consider the proposal for decision on March 9, 2023.

Energy Systems Group (CenterPoint Energy)

Energy Systems Group’s operations could be adversely affected by a number of factors.

Energy Systems Group’s business results are dependent on a number of factors.

The industry in which Energy Systems Group operates is competitive and many of the contracts are subject to a bidding process.

Should Energy Systems Group be unsuccessful in bidding contracts (for example, federal Indefinite Delivery/Indefinite Quantity contracts), results of operations could be impacted.

Through competitive bidding, the volume of contracted work could vary significantly from year to year.

Further, to the extent there are unanticipated cost increases in completion of the contracted work or issues arise where amounts due for work performed may not be collected, the profit margin realized on any single project could be reduced.

Changes in legislation and regulations impacting the sectors in which the customers served by Energy Systems Group operate could adversely impact operating results.

Additionally, Energy Systems Group’s business is subject to other risks including, but not

limited to, the following: the discontinuation of the federal ESPC and UESC programs; increases in tax liability, such as due to changes in legislation or the interpretation of existing guidelines; the inability of customers to finance projects; failure to appropriately design, construct or operate projects; increased project delays and backlogs, particularly in the federal sector, increases in costs and shortages in supply materials and other factors; cancellation of projects by customers or reductions in the scope of the projects; and obligations related to warranties, guarantees and other contractual and legal obligations.

For instance, CenterPoint Energy and CERC have filed for securitization of natural gas costs in Texas, received commission approval and issuance of a financing order in 2022, and expect the Texas Public Financing Authority to issue customer rate relief bonds in first half of 2023.

If the issuance of such securitization bonds is delayed, we may not be able

In November 2022, CERC filed a petition for reconsideration with the MPUC and the MPUC issued a written order denying the petition on January 6, 2023.

For example, Indiana Electric has determined that two ponds, one at F.B. Culley and one at A.B. Brown, were required to be closed under the CCR Rule.

Indiana Electric has timely filed extension requests under the CCR Rule.

If Indiana Electric does not receive approval of these or future extension requests, Indiana Electric may have increased and potentially significant operational costs in connection with the accelerated implementation of an alternative ash disposal system.

consumption of natural gas or electricity or prevent the use of certain fuel types.

CERC also expects to receive approximately $1.1 billion in proceeds from the issuance of customer rate relief bonds by Texas Public Financing Authority in the first half of 2023 to reimburse CERC’s natural gas costs incurred as a result of the February 2021 Winter Storm Event.

CenterPoint Energy’s operating subsidiaries own and operate electric transmission, distribution and generation and natural gas distribution [removed: facilities, and provide energy performance contracting and sustainable infrastructure services.][added: facilities.]

As of December 31, [removed: 2022,] [added: 2023,] CenterPoint Energy’s reportable segments were Electric, Natural Gas, and Corporate and Other.

- The Corporate and Other reportable segment includes energy performance contracting and sustainable infrastructure services [added: by Energy Systems Group through June 30, 2023, the date of the sale of Energy Systems Group,] and [removed: other] corporate support operations that support CenterPoint Energy’s business operations.

Pursuant to this business strategy and in light of the nature of our businesses, significant amounts of capital [removed: investment, as] [added: investment are] reflected in our current capital plan, which [removed: was] [added: has] increased [removed: in 2022] to [removed: fund additional investments in system resiliency, reliability, and grid modernization, is required.][added: nearly $44 billion through 2030, a nearly 10% increase from the original 10-year plan.]

These investments are not only intended to meet our customers’ current needs, but are also in anticipation for further organic growth and load growth from increased electrification in our service [removed: territories, including via increased electric vehicle adoption.][added: territories.]

To fund these capital investments, we rely on internally generated cash, borrowings under our credit facilities, proceeds from commercial paper, cash proceeds from strategic transactions (such as the sale of our Arkansas and Oklahoma LDC [removed: businesses),] [added: businesses in 2022] and [added: our Energy Systems Group divestiture in 2023), and] issuances of [added: equity and] debt in the capital markets to satisfy these capital needs.

[removed: A reduction in our ratings generally would increase our] borrowing costs [removed: for new issuances of debt, as well as borrowing costs] under our existing revolving credit facilities, and may prevent us from accessing the commercial paper markets.

Disruptions in the financial markets along with [added: high or] rising interest rates can also affect the availability of new capital on terms we consider attractive.

In accordance with applicable regulations, CenterPoint Energy, Houston Electric and CERC are making, and will continue to make, significant capital investments in their service territories under our capital plan to help operate and maintain [removed: a] safer, more reliable and growing electric and natural gas systems.

The current economic environment (e.g., [removed: increasing] [added: sustained higher] interest [removed: rates,] [added: rates and] higher relative levels of inflation in the United States) discussed further below could result in heightened regulatory scrutiny as these regulatory agencies seek to reduce the financial impact of utility bills on customers.

Rising inflation and [added: sustained high] interest rates and a recessionary environment could potentially adversely impact CenterPoint Energy’s ability to execute on its 10-year capital plan.

The inability to execute on our capital plan may result in lost [removed: future revenues for CenterPoint Energy.]

For information related to our pending and completed regulatory proceedings to date in [removed: 2022] [added: 2023] and to date in [removed: 2023,] [added: 2024,] see “—Liquidity and Capital Resources —Regulatory Matters” below.

For information about debt transactions in [removed: 2022,] [added: 2023,] see Note 13 to the consolidated financial statements.

For [removed: additional] [added: further] information, see Note [removed: 13] [added: 21] to the consolidated financial statements.

For [removed: additional] [added: further] information, see Note [removed: 1] [added: 12] to the consolidated financial statements.

For [removed: more] [added: further] information, see Note [removed: 11] [added: 21] to the consolidated financial statements.

[removed: Sale of Natural Gas Businesses. On] [added: | Nine days in] January [removed: 10, 2022, CERC Corp. completed the sale of its] [added: 2022 for] Arkansas and Oklahoma Natural Gas [removed: businesses.][added: businesses due to sale | | | | | | 2 | | | | | | 66 | | |]

For [removed: additional information regarding discontinued operations and divestitures,] [added: further information,] see Note [removed: 4] [added: 21] to the consolidated financial statements.

- CenterPoint Energy’s business strategies and strategic initiatives, restructurings, including the [added: completed] Restructuring, joint ventures and acquisitions or dispositions of assets or businesses, including the [removed: completed] [added: proposed] sale of our [removed: Natural Gas businesses in Arkansas] [added: Louisiana] and [removed: Oklahoma] [added: Mississippi natural gas local distribution company businesses,] and [removed: our exit of] the [removed: midstream sector,] [added: completed sale of Energy Systems Group,] which we cannot assure will have the anticipated benefits to us;

- industrial, commercial and residential growth in our service territories and changes in market demand, including the [removed: demand for our non-utility products and services and] effects of energy efficiency measures and demographic patterns;

- timely and appropriate rate actions that allow [added: and authorize requested and timely] recovery of costs and a reasonable return on investment, including the timing and amount of [removed: the] recovery of Houston Electric’s TEEEF [removed: leases;][added: leases, and requested or favorable adjustments to rates and approval of other requested items as part of base rate proceedings;]

- [removed: future] economic conditions in regional and national markets, including [removed: inflation,] [added: changes to inflation] and [added: interest rates, and instability of banking institutions, and] their effect on sales, prices and costs;

- weather variations and other natural phenomena, including the impact of severe weather events on [removed: operations] [added: operations, capital] and [removed: capital,] [added: legislation] such as [removed: impacts from] [added: in connection with] the February 2021 Winter Storm Event;

- volatility in the markets for natural gas as a result of, among other factors, armed conflicts, including the conflict in [removed: Ukraine] [added: the Middle East] and [added: any broader related conflict, and] the [added: conflict in Ukraine, and the] related sanctions on certain Russian entities;

- [removed: continued] disruptions to the global supply chain, including [added: volatility in commodity prices, and] tariffs and other legislation impacting the supply chain, that could prevent CenterPoint Energy from securing the resources needed to, among other things, fully execute on its 10-year capital plan or achieve its net zero and carbon emissions reduction goals;

- non-payment for our services due to financial distress of our customers and the ability of [removed: REPs] [added: our customers, including REPs,] to satisfy their obligations to CenterPoint [removed: Energy and] [added: Energy,] Houston [removed: Electric, including] [added: Electric and CERC, and] the negative impact on such ability related to adverse economic conditions and severe weather events;

- public health threats, such as COVID-19, and their effect on our operations, business and financial condition, our industries and the communities we serve, U.S. and world financial markets and supply chains, potential regulatory actions and changes in customer and stakeholder [removed: behaviors] [added: behavior] relating thereto;

- direct or indirect effects on our facilities, resources, operations and financial condition resulting from terrorism, [removed: cyber attacks] [added: cyberattacks] or intrusions, data security breaches or other attempts to disrupt our businesses or the businesses of third parties, or other catastrophic events such as fires, ice, earthquakes, explosions, leaks, floods, droughts, hurricanes, tornadoes and other severe weather events, pandemic health events or other occurrences;

- tax legislation, including the effects of the [removed: CARES Act and the] IRA (which includes but is not limited to any potential changes to tax rates, [added: CAMT imposed,] tax credits and/or interest deductibility), as well as any changes in tax laws under the current [removed: administration,] [added: or future administrations,] and uncertainties involving state commissions’ and local municipalities’ regulatory requirements and determinations regarding the treatment of EDIT and our rates;

- matters affecting regulatory approval, legislative actions, construction, implementation of necessary technology or other issues with respect to major capital projects that result in delays or cancellation or in [removed: cost overruns] [added: costs] that cannot be recouped in rates;

- impacts from CenterPoint Energy’s pension and postretirement benefit plans, such as the investment performance and increases to net periodic costs as a result of plan settlements and changes in [added: assumptions, including] discount rates;

- commercial bank and financial market conditions, [added: including disruptions in the banking industry,] our access to capital, the cost of such capital, and the results of our financing and refinancing efforts, including availability of funds in the debt capital markets;

- timely and appropriate regulatory actions, which include actions allowing [removed: securitization, such as the anticipated issuance of customer rate relief bonds by the Texas Public Financing Authority,] [added: securitization] for any hurricanes or other severe weather events, or natural disasters or other recovery of costs, including stranded [removed: coal] [added: coal-fired] generation asset costs;

- acquisition and merger or divestiture activities involving us or our industry, including the ability to successfully complete merger, acquisition and divestiture [removed: plans;][added: plans such as the proposed sale of our Louisiana and Mississippi natural gas local distribution company businesses;]

- our ability to [removed: recruit,] [added: attract,] effectively [removed: transition] [added: transition, motivate] and retain management and key employees and maintain good labor relations;

- CenterPoint Energy’s ability to execute on its [added: strategy,] initiatives, targets and goals, including its net zero and carbon emissions reduction goals and its operations and maintenance expenditure goals;

- other factors discussed in “Risk Factors” in Item 1A of [added: Part I of] this report and in other reports that the Registrants file from time to time with the SEC.

Income [removed: (loss)] available to common shareholders for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] was as follows:

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2022] [added: 2023] to [removed: 2021] [added: 2022] | | | | | | [removed: 2021] [added: 2022] to [removed: 2020] [added: 2021] | | |

*Subsequent Events.* On February 19, 2024, CenterPoint Energy, through its subsidiary CERC Corp., entered into the LAMS Asset Purchase Agreement to sell its Louisiana and Mississippi natural gas local distribution company businesses.

We continue to execute on our strategic goals for our businesses which were set in 2021.

These include our ten-year capital plan from 2021 through 2030, a focus on targeting controllable operations and maintenance savings for the benefit of our customers, prudent capital funding including divestitures of non-core assets, and net zero and carbon emission reduction goals.

Our focus continues to be on the growth of our regulated utility businesses including our electric and gas utility operations, which comprise over 95% of our earnings for the year ended December 31, 2023.

These investments include a focus on additional system resiliency, reliability, and grid modernization.

A reduction in our ratings generally would increase our borrowing costs for new issuances of debt, as well as

While greater than 80% of CenterPoint Energy’s projected consolidated investments are expected to be recovered through interim capital recovery trackers or rate cases based on a forward test year, the balance is expected to be recovered through base rate cases.

CERC’s Texas and Minnesota gas jurisdictions along with Indiana Electric have filed rates cases during 2023, and Houston Electric intends to file a rate case in early 2024 and CERC’s Ohio jurisdiction intends to file a rate case in the second half of 2024.

The outcome of these base rate proceedings will determine, among other things, the ability to recover certain capital investments within those jurisdictions.

CenterPoint Energy and CERC have weather normalization or other rate mechanisms that largely mitigate the impact of weather on Natural Gas in Indiana, Louisiana, Mississippi, Minnesota and Ohio, as applicable.

CenterPoint Energy’s and CERC’s Natural Gas in Texas and CenterPoint Energy’s electric operations in Texas and Indiana do not have such mechanisms, although fixed customer charges are historically higher in Texas for Natural Gas compared to its other jurisdictions.

As a result, fluctuations from normal weather may have a positive or negative effect on CenterPoint Energy’s and CERC’s Natural Gas’ results in Texas and on CenterPoint Energy’s electric operations’ results in its Texas and Indiana service territories.

future revenues for CenterPoint Energy.

Series A Preferred Stock Redemption. On September 1, 2023, CenterPoint Energy redeemed all of the outstanding shares of Series A Preferred Stock for cash of $800 million at a redemption price of $1,000 per share, plus accumulated and unpaid dividends thereon to, but excluding, the redemption date.

Divestiture of Energy Systems Group. On May 21, 2023, Vectren Energy Services entered into an Equity Purchase Agreement to sell all of the outstanding limited liability company interests of Energy Systems Group to ESG Holdings Group, for a purchase price of $157 million, subject to customary adjustments set forth in the Equity Purchase Agreement, including adjustments based on Energy Systems Group’s net working capital at closing, indebtedness, cash and cash equivalents and transaction expenses.

The transaction closed on June 30, 2023 for $154 million in cash, subject to finalization of the purchase price adjustment.

Regulatory Proceedings. On March 23, 2023, CenterPoint Energy and CERC, collectively, received approximately $1.1 billion in proceeds from the customer rate relief bonds issued by the Texas Public Financing Authority related to the February 2021 Winter Storm Event.

On April 5, 2023, a final order was issued approving the $39 million revenue requirement from Houston Electric’s 2021 investment in TEEEF.

On April 5, 2023, Houston Electric filed its second TEEEF filing requesting a TEEEF revenue requirement of $188 million or a net increase in TEEEF revenues of approximately $149 million.

On August 28, 2023 the State Office of Administrative Hearings issued an Order setting interim rates to collect an annual revenue requirement at the filed amount.

On September 26, 2023, intervenors filed testimony with various recommendations including extending the amortization period.

A settlement was reached with parties that incorporated an 8 1/2 year amortization period and a TEEEF revenue requirement of $153 million based on the December 31, 2022 balance with interim rates effective December 15, 2023.

The State Office of Administrative Hearings ALJ approved the revised interim rates and the settlement was approved by the PUCT in its order issued on February 1, 2024.

On June 29, 2023, Indiana Electric received the net securitization proceeds of $337 million from the issuance and sale of the SIGECO Securitization Bonds to reimburse or pay for qualified costs approved by the IURC related to the completed retirement of its A.B. Brown coal-fired generation facilities.

Debt Transactions. In 2023, CenterPoint Energy issued or borrowed a combined $6.0 billion in new debt, including Houston Electric’s issuance of $1.4 billion aggregate principal amount of general mortgage bonds, CERC’s issuance of $1.5 billion aggregate principal amount of senior notes and a $500 million term loan, SIGECO Securitization Subsidiary’s issuance of $341 million aggregate principal amount of SIGECO Securitization Bonds, SIGECO’s issuance of $650 million aggregate principal amount of first mortgage bonds, and CenterPoint Energy’s issuance of $1.0 billion aggregate principal amount of convertible senior notes, $400 million aggregate principal amount of senior notes and a $250 million term loan.

During 2023, CenterPoint Energy repaid or redeemed a combined $3.0 billion of debt, including CERC’s repayment of $1.0 billion of term loans and $1.332 billion of senior notes maturing in 2023, CenterPoint Energy’s repayment of its

$250 million term loan and $350 million of its floating rate senior notes and SIGECO’s early redemption of $91 million of first mortgage bonds, excluding scheduled principal payments on Securitization Bonds.

CenterPoint Energy Leadership Transition. On March 15, 2023, CenterPoint Energy announced the appointment of Christopher A.

Foster to the position of Executive Vice President and Chief Financial Officer, effective May 5, 2023.

On September 27, 2023, CenterPoint Energy appointed Kristie L.

Colvin to the position of Senior Vice President and Chief Accounting Officer of CenterPoint Energy and its affiliated subsidiaries, effective October 5, 2023.

On October 26, 2023, CenterPoint Energy announced the retirement of Dave Lesar and appointment of Jason Wells to the position of President and Chief Executive Officer, effective January 5, 2024.

Subsequent Events*.* On January 10, 2024, CenterPoint Energy entered into an Equity Distribution Agreement with certain financial institutions with respect to the offering and sale from time to time of shares of Common Stock, having an aggregate gross sales price of up to $500 million.

Sales of Common Stock may be made by any method permitted by applicable law and deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933.

CenterPoint Energy may also enter into one or more forward sales agreements pursuant to master forward confirmations.

The offer and sale of Common Stock under the Equity Distribution Agreement will terminate upon the earliest of (1) the sale of all Common Stock subject to the Equity Distribution Agreement, (2) termination of the Equity Distribution Agreement, or (3) May 17, 2026.

As of February 20, 2024, CenterPoint Energy has not issued any shares of Common Stock under the Equity Distribution Agreement and has not entered into any forward sale agreements.

Additionally, on February 19, 2024, CenterPoint Energy, through its subsidiary CERC Corp., entered into the LAMS Asset Purchase Agreement to sell its Louisiana and Mississippi natural gas local distribution company businesses.

The transaction is expected to close in the first quarter of 2025.

2023 Compared to 2022

CenterPoint Energy completed the Restructuring on June 30, 2022, whereby the equity interests in Indiana Gas and VEDO, both subsidiaries it acquired in its acquisition of Vectren on February 1, 2019, were transferred from VUH to CERC Corp. As a result, Indiana Gas and VEDO became wholly owned subsidiaries of CERC Corp. to better align CenterPoint Energy’s organizational structure with management and financial reporting and to fund future capital investments more efficiently.

The Restructuring was a non-cash common control acquisition by CERC.

As a result, CERC acquired these businesses at CenterPoint Energy’s historical basis in these entities and prior year amounts were recast to reflect the Restructuring as if it occurred at the earliest period presented for which CenterPoint Energy had common control.

The Restructuring did not impact CenterPoint Energy’s carrying basis in any entity, its allocation of goodwill to its reporting units, or its segment presentation.

Neither CenterPoint Energy nor CERC recognized any gains or losses in connection with the Restructuring.

SIGECO was not acquired by CERC and remains a subsidiary of VUH.

In 2021, we announced strategic goals for our businesses, including our ten-year capital plan, and net zero and carbon emission reduction goals.

Our focus on the growth of our regulated utility businesses led to the previously announced Enable Merger in December 2021 and CenterPoint Energy’s subsequent complete divestiture of its remaining Energy Transfer Common Units and Energy Transfer Series G Preferred Units in February and March 2022.

As a result of these transactions, over 95% of our earnings are now derived from regulated utility operations.

This increased level of scrutiny could result in the disallowance (in part or in whole) of CenterPoint Energy and its subsidiaries from recovering on certain capital investments.

CenterPoint Energy’s, Houston Electric’s and CERC’s compliance expenses may also increase as a result of preventative measures required under these regulations.

Consequently, new rates in the areas they serve are necessary to recover

these increasing costs.

Houston Electric, Indiana Electric and CERC plan to file rate cases during 2023.

For example, we, along with the developer of the project, announced plans in January 2022 to downsize the solar array to be built in Posey County, Indiana due to supply chain issues experienced in the energy industry, rising cost of commodities and community feedback.

Regulatory Proceedings. The commissioners of the MPUC held deliberations in August 2022 regarding CERC’s natural gas cost prudency review case related to the February 2021 Winter Storm Event.

As a result, the MPUC disallowed recovery of approximately $36 million of jurisdictional gas costs incurred during the event (or about 8.7% of the total of such costs incurred by CERC) and CERC’s regulatory asset balance was reduced to reflect the disallowance.

Houston Electric filed its DCRF application with the PUCT on April 5, 2022, and subsequently amended such filing on July 1, 2022 to show mobile generation in a separate Rider TEEEF, seeking recovery of deferred costs and the applicable return as of December 31, 2021 under these lease agreements of approximately $200 million.

The annual revenue increase requested for these lease agreements is

approximately $57 million.

On January 27, 2023, the administrative law judges issued a proposal for decision recommending that the leasing of the TEEEF was not prudent or reasonable and necessary and that the PUCT deny recovery of all of the TEEEF costs.

The PUCT is expected to consider the proposal for decision on March 9, 2023.

Debt Transactions. In 2022, Houston Electric issued $1.6 billion, and CERC issued or borrowed $1.0 billion in new debt, excluding the debt exchanges discussed below.

CenterPoint Energy repaid or redeemed a combined $1.53 billion of debt, including CERC’s redemption of $425 million of debt and CEHE’s redemption of $500 million of debt, but excluding scheduled principal payments on Securitization Bonds.

Debt Exchange. As a part of the Restructuring, on May 27, 2022, CERC Corp. and VUH completed an exchange with holders of VUH PPNs whereby CERC Corp. issued new senior notes with an aggregate principal amount of $302 million in return for all of their outstanding VUH PPNs with an aggregate principal amount of $302 million.

On October 5, 2022, in connection with the settlement of an exchange offer, CERC Corp. issued $75 million aggregate principal amount of 6.10% senior notes due 2035 in exchange for all remaining outstanding VUH senior notes.

Restructuring. CenterPoint Energy completed the Restructuring on June 30, 2022, whereby the equity interests in Indiana Gas and VEDO, each of which were acquired in its acquisition of Vectren on February 1, 2019, were transferred from VUH to CERC Corp. As a result, Indiana Gas and VEDO became wholly owned subsidiaries of CERC Corp. to better align CenterPoint Energy’s organizational structure with management and financial reporting and to fund future capital investments more efficiently.

Credit Facilities. On December 6, 2022, CenterPoint Energy, Inc. and its wholly owned subsidiaries, Houston Electric and CERC, replaced their existing revolving credit facilities with three revolving credit facilities totaling $3.75 billion in aggregate commitments.

In addition, SIGECO entered into a new revolving credit facility totaling an additional $250 million in aggregate commitments.

The aggregate amount of commitments among the four credit facilities total $4.0 billion.

On June 30, 2022, in connection with the Restructuring, VUH repaid in full all outstanding indebtedness and terminated all remaining commitments and other obligations under its $400 million amended and restated credit agreement dated as of February 4, 2021.

Sale of Energy Transfer Equity Securities. In 2022, CenterPoint Energy sold its remaining Energy Transfer Common Units and Energy Transfer Series G Preferred Units for net proceeds of $702 million.

- increases in commodity prices;

- changes in rates of inflation;

- non-payment for our services due to financial distress of our customers;

- the transition to a replacement for the LIBOR benchmark interest rate;

- the development of new opportunities and the performance of projects undertaken by Energy Systems Group, which are subject to, among other factors, the level of success in bidding contracts and cancellation and/or reductions in the scope of projects by customers, and obligations related to warranties, guarantees and other contractual and legal obligations;

- a decrease in income available to common shareholders of $104 million for Corporate and Other, primarily due to net gain of $97 million on Energy Transfer equity securities in 2021 discussed further in Note 11 to the consolidated financial statements, a $28 million pre-tax payment related to the impact of Board-implemented governance changes announced in July 2021, approximately $51 million unfavorable income tax impact primarily driven by CARES Act benefit in 2020, and approximately $33 million of CenterPoint Energy Inc. debt redemption charges in 2021; partially offset by approximately $15 million of lower interest expense as a result of the debt redemptions and a decrease in income allocated to preferred shareholders of $58 million due to the conversion of Series C Preferred Stock to Common Stock during 2020 and $22 million primarily due to the conversion of Series B Preferred Stock to Common Stock during 2021; and

- an increase in income of $2,074 million from discontinued operations, discussed further in Note 4 to the consolidated financial statements.

| Goodwill Impairment (1) | | | — | | | | | | — | | | | | | 185 | | | | | | — | | | | | | 185 | | |

As of December 31, [removed: 2022,] [added: 2023,] the Registrants had outstanding long-term debt and lease obligations and CenterPoint Energy had obligations under its ZENS that subject them to the risk of loss associated with movements in market interest rates.

CenterPoint Energy’s floating rate obligations aggregated [removed: $4.5] [added: $1.9] billion and $4.5 billion as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

If the floating interest rates were to increase by [removed: 10%] [added: 100 basis points] from December 31, [removed: 2022] [added: 2023] rates, CenterPoint Energy’s combined interest expense would increase by approximately $19 million annually.

[removed: CenterPoint Energy] [added: CERC] has no floating rate notes maturing in [removed: 2023, other than the CERC floating rate notes discussed below.][added: 2024.]

Houston Electric did not have any floating rate obligations as of either December 31, [removed: 2022] [added: 2023] or [removed: 2021.][added: 2022.]

CERC’s floating rate obligations aggregated [removed: $1.4 billion] [added: $484 million] and [removed: $1.9] [added: $1.4] billion as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

If the floating interest rates were to increase by [removed: 10%] [added: 100 basis points] from December 31, [removed: 2022] [added: 2023] rates, CERC’s combined interest expense would increase by approximately [removed: $7] [added: $5] million annually.

[removed: CERC] [added: CenterPoint Energy] has [removed: $575] [added: $350] million [added: aggregate principal amount] of floating rate notes maturing in [removed: 2023] [added: 2024] that will be refinanced at current rates.

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] CenterPoint Energy had outstanding fixed-rate debt (excluding indexed debt securities) aggregating [removed: $12.5] [added: $16.9] billion and [removed: $11.7] [added: $12.5] billion, respectively, in principal amount and having a fair value of [removed: $11.1] [added: $16.1] billion and [removed: $13.0] [added: $11.1] billion, respectively.

[added: However, the fair value of these instruments would increase by] approximately [removed: $510] [added: $635] million if interest rates were to decline by 10% from their levels as of December 31, [removed: 2022.][added: 2023.]

[removed: CenterPoint Energy] [added: CERC] has no fixed-rate senior notes maturing in [removed: 2023, other than the CERC senior notes discussed below.][added: 2024.]

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] Houston Electric had outstanding fixed-rate debt aggregating [removed: $6.4] [added: $7.7] billion and [removed: $5.5] [added: $6.4] billion, respectively, in principal amount and having a fair value of approximately [removed: $5.6] [added: $7] billion and [removed: $6.3] [added: $5.6] billion, respectively.

However, the fair value of these instruments would increase by approximately [removed: $315] [added: $374] million if interest rates were to decline by 10% from their levels as of December 31, [removed: 2022.][added: 2023.]

Houston Electric has no fixed-rate general mortgage bonds maturing in [removed: 2023.][added: 2024.]

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] CERC had outstanding fixed-rate debt aggregating [removed: $3.5] [added: $4.2] billion and [removed: $2.5] [added: $3.5] billion, respectively, in principal amount and having a fair value of [removed: $3.3] [added: $4.2] billion and [removed: $2.8] [added: $3.3] billion, respectively.

However, the fair value of these instruments would increase by approximately [removed: $126] [added: $152] million if interest rates were to decline by 10% from their levels at December 31, [removed: 2022.][added: 2023.]

[removed: CERC] [added: CenterPoint Energy] has [removed: $757] [added: $500] million of fixed-rate senior notes [added: and $23 million of SIGECO first mortgage bonds] maturing in [removed: 2023] [added: 2024] that will be refinanced at current rates.

The debt component of [removed: $7] [added: $5] million at December 31, [removed: 2022] [added: 2023] was a fixed-rate obligation and, therefore, did not expose CenterPoint Energy to the risk of loss in earnings due to changes in market interest rates.

[removed: However,] the fair value of the debt component would increase by approximately $1 million if interest rates were to decline by 10% from levels at December 31, [removed: 2022.][added: 2023.]

Changes in the fair value of the derivative component, a [removed: $578] [added: $605] million recorded liability at December 31, [removed: 2022,] [added: 2023,] are recorded in CenterPoint Energy’s Statements of Consolidated Income and, therefore, it is exposed to changes in the fair value of the derivative component as a result of changes in the underlying risk-free interest rate.

If the risk-free interest rate were to increase by 10% from December 31, [removed: 2022] [added: 2023] levels, the fair value of the derivative component liability would decrease by approximately $1 million, which would be recorded as an unrealized gain in CenterPoint Energy’s Statements of Consolidated Income.

A decrease of 10% from the December 31, [removed: 2022] [added: 2023] aggregate market value of these shares would result in a net loss of less than $1 million, which would be recorded as a loss on debt securities in CenterPoint Energy’s Statements of Consolidated Income.

As of December 31, [removed: 2022,] [added: 2023,] the recorded fair value of non-trading energy derivative [removed: assets] [added: liability] was [removed: $11] [added: $12] million for CenterPoint Energy’s utility natural gas operations in Indiana, which is offset by a regulatory asset.

However,

In 2023, SIGECO expects to remarket $186 million of tax-exempt debt at then market rates due to mandatory purchase or mandatory tender for purchase provisions.

On September 1, 2023, CenterPoint Energy’s Series A Preferred Stock will convert from a fixed rate dividend rate to a floating rate per annum equal to three month U.S. dollar LIBOR (or alternative benchmark rate) plus 3.270%.

For further information regarding CenterPoint Energy’s Series A Preferred Stock, see Note 12 to the consolidated financial statements.

However, the fair value of these instruments would increase by

Each registrant makes no representation as to information relating exclusively to the other [removed: registrants.][added: registrants or the subsidiaries of CenterPoint Energy other than itself or its subsidiaries.]

CenterPoint Energy’s operating subsidiaries own and operate electric transmission, distribution and generation facilities and natural gas distribution [removed: facilities and provide energy services and other related activities.][added: facilities.]

[added: As of December 31, 2023,] CenterPoint Energy’s indirect, wholly-owned subsidiaries include:

- Houston [removed: Electric] [added: Electric, which] provides electric transmission service to transmission service customers in the ERCOT region and distribution service to REPs serving the Texas gulf coast area that includes the city of Houston.

- CERC [removed: Corp.] [added: Corp., which] (i) directly owns and operates natural gas distribution systems in Louisiana, Minnesota, Mississippi and Texas, (ii) indirectly, through Indiana Gas and VEDO, owns and operates natural gas distribution systems in Indiana and Ohio, respectively, and (iii) owns and operates permanent pipeline connections through interconnects with various interstate and intrastate pipeline companies through CEIP.

- [removed: SIGECO] [added: SIGECO, which] provides energy delivery services to electric and natural gas customers located in and near Evansville in southwestern Indiana and owns and operates electric generation assets to serve its electric customers and optimizes those assets in the wholesale power market.

As of December 31, [removed: 2022,] [added: 2023,] CenterPoint Energy’s reportable segments were [removed: Electric and] [added: Electric,] Natural [removed: Gas.][added: Gas and Corporate and Other.]

[removed: *Discontinued Operations.*] For a discussion of discontinued operations and divestitures, see Note 4 to the consolidated financial statements.

For [removed: additional information about the segments,] [added: further information,] see Note [removed: 17] [added: 21] to the consolidated financial statements.

[added: *Discontinued Operations.*] From time to time, we consider the acquisition or the disposition of assets or businesses.

We make available free of charge on our Internet website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the [removed: Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such reports with, or furnish them to, the SEC.]

The Securitization Bonds [added: issued by Bond Company IV] are repaid through charges imposed on customers in Houston Electric’s service territory.

For further discussion of the Securitization Bonds [added: issued by Bond Company IV] and the outstanding balances as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] see Note 13 to the consolidated financial statements.

The table below reflects the number of REPs and metered customers in Houston Electric’s service area as of December 31, [removed: 2022:][added: 2023:]

As of December 31, [removed: 2022,] [added: 2023,] Indiana Electric supplied electric service to the following:

Total load and the related reserve margin at the time of the system summer peak on [removed: June 13, 2022,] [added: August 25, 2023,] is presented below in MW, except for reserve margin at peak.

| Generating capability | | | [removed: 1,212] [added: 1,205] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Purchase supply (effective capacity) [added: (1)] | | | [removed: 36] [added: 659] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Interruptible contracts & direct load control | | | [removed: 9] [added: 4] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total power supply capacity | | | [removed: 1,257] [added: 1,868] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Reserve margin at peak | | | [removed: 23] [added: 83] | | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

The winter peak load for the [removed: 2021-2022] [added: 2022-2023] season of approximately [removed: 758] [added: 785] MW occurred on [removed: January 10,] [added: December 23,] 2022.

| Origis | | | | | | Knox County, Indiana | | | | | | [removed: 2024] [added: 2025] | | | | | | 150 | | | | | | 20 | | |

Major suppliers are those that account for greater than 10% of Indiana Electric’s coal [removed: purchases and were as follows for the year ended December 31, 2022:][added: purchases.]

| Total of major suppliers | | | [removed: 99] [added: 62] | | % | [added: | | | 73 | | % |]

The table below presents information related to coal purchases during the year ended December 31, [removed: 2022] [added: 2023] and coal inventory as of December 31, [removed: 2022.][added: 2023.]

| Coal purchased for generating electricity | | | [removed: 2,398,365] [added: 1,945,593] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Average cost of coal per ton | | | [removed: $58.32] [added: $55.26] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fuel Type | | | | | | Provider | | | | | | Location | | | | | | Contract Expiration | | | | | | Capacity (MW) | | | | | | Purchased in [removed: 2022 (in] [added: 2023 (in] GWh) | | |

| Coal | | | | | | OVEC (1) | | | | | | Indiana and Ohio | | | | | | n/a | | | | | | 32 | | | | | | [removed: 179] [added: 186] | | |

| Wind | | | | | | Benton County Wind Farm, LLC | | | | | | Benton County, Indiana | | | | | | 2028 | | | | | | 30 | | | | | | [removed: 86] [added: 76] | | |

| Wind | | | | | | Fowler Ridge II Wind Farm, LLC | | | | | | Benton/Tippecanoe Counties, Indiana | | | | | | 2029 | | | | | | 50 | | | | | | [removed: 147] [added: 116] | | |

MISO related activity for the year ended December 31, [removed: 2022] [added: 2023] was as follows:

| Net purchases (1) | | | [removed: 388] [added: 397] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net sales (2) | | | [removed: 883] [added: 510] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

As of December 31, [removed: 2022,] [added: 2023,] Indiana Electric had interconnections with Louisville Gas and Electric Company, Duke Energy Shared Services, Inc., Indianapolis Power & Light Company, Hoosier Energy Rural Electric Cooperative, Inc. and Big Rivers Electric Corporation providing the ability to simultaneously interchange approximately [removed: 750] [added: 645] MW during peak load periods.

[added: As a result, interchange capability varies based on] regional transmission system configuration, generation dispatch, seasonal facility ratings and other factors.

Indiana Electric is in compliance with reliability standards promulgated by [removed: the] NERC.

CenterPoint Energy’s and CERC’s Natural Gas engage in regulated intrastate natural gas sales [added: to,] and natural gas transportation and storage [removed: for] [added: for,] residential, commercial, industrial and transportation customers.

CenterPoint Energy’s and CERC’s Natural Gas also provided services in Minnesota consisting of residential appliance repair and maintenance services along with HVAC equipment sales and home repair protection plans to natural gas customers in Indiana, Mississippi, Ohio and Texas through a third party as of December 31, [removed: 2022.][added: 2023.]

For a description of CenterPoint Energy’s reportable segments, see Note 17.

*Subsequent Events.* On February 19, 2024, CenterPoint Energy, through its subsidiary CERC Corp., entered into the LAMS Asset Purchase Agreement to sell its Louisiana and Mississippi natural gas local distribution company businesses.

The transaction is expected to close in the first quarter of 2025.

Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such reports with, or furnish them to, the SEC.

| Texas gulf coast | | | 65 | | | | | | 2,455,309 | | | | | | 308,226 | | | | | | 2,763,535 | | |

| Southwestern Indiana | | | 133,201 | | | | | | 19,292 | | | | | | 152,493 | | |

(1)Indiana Electric procured bi-lateral capacity contracts starting in the 2023-2024 MISO planning year to support the generation transition.

These contracts were procured before MISO moved to a seasonal construct, which allowed several generating units to receive accreditation in the summer season that would not have received any accreditation under MISO's previous annual construct.

This resulted in a reserve margin that is higher than normal in the summer, but was limited to the summer season.

For the year ended December 31, 2023, Sunrise LLC accounted for 98% of Indiana Electric’s coal purchases, with the remaining 2% being purchased from other suppliers.

| Coal inventory as of December 31, 2023 | | | 345,784 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | 112 | | | | | | 378 | | |

*SIGECO Securitization Subsidiary*

SIGECO has a special purpose subsidiary, SIGECO Securitization Subsidiary, which it consolidates.

This consolidated special purpose subsidiary is a wholly-owned, bankruptcy remote entity that was formed solely for the purpose of facilitating the securitization financing of qualified costs in the second quarter of 2023 associated with the completed retirement of SIGECO’s A.B. Brown coal generation facilities through the issuance of SIGECO Securitization Bonds.

The obligations of the SIGECO Securitization Bonds are repaid through charges imposed on customers in Indiana Electric’s service territory.

For further discussion of the SIGECO Securitization Bonds and the outstanding balance as of December 31, 2023, see Note 13 to the consolidated financial statements.

On February 19, 2024, CenterPoint Energy, through its subsidiary CERC Corp., entered into the LAMS Asset Purchase Agreement to sell its Louisiana and Mississippi natural gas local distribution company businesses.

The transaction is expected to close in the first quarter of 2025.

| Indiana (Indiana Gas) | | | 597,315 | | | | | | 55,171 | | | | | | 652,486 | | |

| Louisiana | | | 230,833 | | | | | | 16,204 | | | | | | 247,037 | | |

| Minnesota | | | 848,909 | | | | | | 72,634 | | | | | | 921,543 | | |

| Mississippi | | | 122,306 | | | | | | 13,140 | | | | | | 135,446 | | |

| Ohio | | | 308,622 | | | | | | 24,543 | | | | | | 333,165 | | |

| Texas | | | 1,797,403 | | | | | | 111,543 | | | | | | 1,908,946 | | |

| Total CERC Natural Gas | | | 3,905,388 | | | | | | 293,235 | | | | | | 4,198,623 | | |

| Total CenterPoint Energy Natural Gas | | | 4,010,113 | | | | | | 303,841 | | | | | | 4,313,954 | | |

CenterPoint Energy’s Corporate and Other also consisted of energy performance contracting and sustainable infrastructure services by Energy Systems Group through June 30, 2023, the date of the sale of Energy Systems Group.

distribution rates for a majority of large commercial and industrial customers are primarily based on peak demand.

A proposed rule was published on May 18, 2023.

Additional sections of the PIPES Act directed PHMSA to develop regulations requiring natural gas distribution operators to identify and address specific risks associated with piping materials with known issues.

Over-pressurization, extreme weather and geohazards require certain actions associated with emergency response and require operators to identify and maintain certain records associated with system operating characteristics and controls.

A proposed rule was published on September 7, 2023.

The PIPES Act of 2023 was approved by the House Transportation and Infrastructure Committee on December 6, 2023 to reauthorize PHMSA’s safety programs for the next four years.

On May 11, 2023, the EPA announced proposed emission limits and guidelines for carbon dioxide from fossil fuel-fired power plants under Section 111 of the Clean Air Act which, if finalized, apply new GHG performance standards for those existing coal-fired units expected to continue operation beyond December 31, 2029.

We will continue to evaluate the applicability of the rule to the existing and new gas-fired generating units, but would note that CenterPoint Energy does not currently have plans to operate any of its coal-fired units beyond December 2029.

Because Texas is an

Nevertheless, Houston Electric’s and Indiana Electric’s revenues could be adversely affected to the extent any resulting regulatory action has the effect of reducing consumption of electricity by ultimate consumers within their respective service territories.

Likewise, incentives to conserve energy or to use energy sources other than natural gas could result in a decrease in demand for the Registrants’ services.

For example, Minnesota has enacted the Natural Gas Innovation Act that seeks to provide customers with access to renewable energy resources and innovative technologies, with the goal of reducing GHG emissions.

- Energy Systems Group provides energy performance contracting and sustainable infrastructure services, such as renewables, distributed generation and combined heat and power projects.

| Texas gulf coast | | | 64 | | | | | | 2,402,329 | | | | | | 304,269 | | | | | | 2,706,598 | | |

| Southwestern Indiana | | | 132,402 | | | | | | 19,249 | | | | | | 151,651 | | |

| | | | 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Sunrise LLC | | | 88 | | % |

| Peabody Coal Sales LLC | | | 11 | | % |

The remaining 1% of coal purchases were spot purchases.

| Coal inventory as of December 31, 2022 | | | 420,750 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | 112 | | | | | | 412 | | |

As a result, interchange capability varies based on

See the detail of customers by state below.

On January 10, 2022, CERC Corp. completed the sale of its Arkansas and Oklahoma Natural Gas businesses.

CenterPoint Energy completed the Restructuring on June 30, 2022, whereby the equity interests in Indiana Gas and VEDO, were transferred from VUH to CERC Corp. As a result, Indiana Gas and VEDO became wholly owned subsidiaries of CERC Corp. to better align CenterPoint Energy’s organizational structure with management and financial reporting and to fund future capital investments more efficiently.

| Indiana (Indiana Gas) | | | 590,048 | | | | | | 54,957 | | | | | | 645,005 | | |

| Louisiana | | | 232,040 | | | | | | 16,279 | | | | | | 248,319 | | |

| Minnesota | | | 839,278 | | | | | | 72,239 | | | | | | 911,517 | | |

| Mississippi | | | 122,054 | | | | | | 13,169 | | | | | | 135,223 | | |

| Ohio | | | 305,741 | | | | | | 24,388 | | | | | | 330,129 | | |

| Texas | | | 1,770,565 | | | | | | 110,152 | | | | | | 1,880,717 | | |

| Total CERC Natural Gas | | | 3,859,726 | | | | | | 291,184 | | | | | | 4,150,910 | | |

| Total CenterPoint Energy Natural Gas | | | 3,964,221 | | | | | | 301,834 | | | | | | 4,266,055 | | |

| Total of major suppliers | | | 59 | | % | | | | 58 | | % |

CenterPoint Energy’s

For amounts outstanding under these AMAs, see Notes 4 and 13 to the consolidated financial statements.

CenterPoint Energy’s Corporate and Other consists of energy performance contracting and sustainable infrastructure services, such as renewables, distributed generation and combined heat and power projects, through Energy Systems Group, and other corporate support operations that support CenterPoint Energy’s business operations.

In exchange for payment of fees, these franchises give Houston

Section 114 focuses on processes and procedures to eliminate or reduce emissions during normal operations.

A proposed rule is currently expected to be released by March 31, 2023.

The EPA has announced it plans on issuing new GHG emissions rules in the future.

For more information regarding CenterPoint Energy’s net zero and carbon emission reduction goals and their

2023.

The potential impact of the revisions to the “waters of the United States” regulations on the Registrants’ business, liabilities, compliance obligations or profits and revenues is uncertain at this time.

The inability to take these extensions may result in increased and potentially significant operational costs in connection with the accelerated implementation of an alternative ash disposal system or adversely impact Indiana Electric’s future operations.

Failure to comply with these requirements could also result in an enforcement proceeding, including the imposition of fines and penalties.

| Electric | | | | | | 3,038 | | | | | | 2,681 | | | | | | — | | | | | | 1,639 | | | | | | 1,446 | | | | | | — | | |

| Natural Gas | | | | | | 3,583 | | | | | | — | | | | | | 3,296 | | | | | | 1,691 | | | | | | — | | | | | | 1,635 | | |

| Total | | | | | | 8,986 | | | | | | 2,681 | | | | | | 3,296 | | | | | | 3,469 | | | | | | 1,446 | | | | | | 1,635 | | |

For a discussion of material legal and regulatory proceedings, including environmental legal proceedings that involve a governmental authority as a party and that the Registrants reasonably believe would result in $1,000,000 or more of monetary sanctions, exclusive of interest and costs, under federal, state and local laws that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment, affecting the Registrants, please read “Business — Regulation” and “Business — Environmental Matters” in Item 1 of this report, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Regulatory Matters” in Item 7 of [added: Part II of] this report and Note 15(d) to the consolidated financial statements, which information is incorporated herein by reference.

| | | | FOR THE FISCAL YEAR ENDED DECEMBER 31, [removed: 2022] [added: 2023] | | |

The aggregate market values of the voting stock held by non-affiliates of the Registrants as of June 30, [removed: 2022] [added: 2023] 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) | | | | | | [removed: $18,490,009,390] [added: $18,251,183,835] | | |

Indicate the number of shares outstanding of each of the issuers’ classes of common stock as of February [removed: 9, 2023:][added: 12, 2024:]

| CenterPoint Energy, Inc. | | | [removed: 629,788,724] [added: 631,594,706] | | | shares of common stock outstanding, excluding 166 shares held as treasury stock | | |

Portions of the definitive proxy statement relating to the [removed: 2023] [added: 2024] Annual Meeting of Shareholders of CenterPoint Energy, which will be filed with the Securities and Exchange Commission within 120 days of December 31, [removed: 2022,] [added: 2023,] are incorporated by reference in Item 10, Item 11, Item 12, Item 13 and Item 14 of Part III of this Form 10-K.

| Item 1. | | | | | | Business | | | | | | [removed: [1](#i901cdf5c434a4670a16ce50f2e127cee_19)] [added: [1](#ibfc1be5c9d824d31beefeac81ae19c2a_19)] | | |

| Item 1A. | | | | | | Risk Factors | | | | | | [removed: [17](#i901cdf5c434a4670a16ce50f2e127cee_43)] [added: [18](#ibfc1be5c9d824d31beefeac81ae19c2a_43)] | | |

| Item 1B. | | | | | | Unresolved Staff Comments | | | | | | [removed: [36](#i901cdf5c434a4670a16ce50f2e127cee_46)] [added: [38](#ibfc1be5c9d824d31beefeac81ae19c2a_46)] | | |

| Item 2. | | | | | | Properties | | | | | | [removed: [36](#i901cdf5c434a4670a16ce50f2e127cee_49)] [added: [40](#ibfc1be5c9d824d31beefeac81ae19c2a_49)] | | |

| Item 3. | | | | | | Legal Proceedings | | | | | | [removed: [40](#i901cdf5c434a4670a16ce50f2e127cee_52)] [added: [43](#ibfc1be5c9d824d31beefeac81ae19c2a_55)] | | |

| Item 4. | | | | | | Mine Safety Disclosures | | | | | | [removed: [40](#i901cdf5c434a4670a16ce50f2e127cee_55)] [added: [43](#ibfc1be5c9d824d31beefeac81ae19c2a_58)] | | |

| Item 5. | | | | | | Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | | | | [removed: [40](#i901cdf5c434a4670a16ce50f2e127cee_61)] [added: [43](#ibfc1be5c9d824d31beefeac81ae19c2a_64)] | | |

| Item 7. | | | | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | | | | [removed: [41](#i901cdf5c434a4670a16ce50f2e127cee_70)] [added: [44](#ibfc1be5c9d824d31beefeac81ae19c2a_73)] | | |

| Item 7A. | | | | | | Quantitative and Qualitative Disclosures About Market Risk | | | | | | [removed: [76](#i901cdf5c434a4670a16ce50f2e127cee_112)] [added: [82](#ibfc1be5c9d824d31beefeac81ae19c2a_115)] | | |

| Item 8. | | | | | | Financial Statements and Supplementary Data | | | | | | [removed: [78](#i901cdf5c434a4670a16ce50f2e127cee_115)] [added: [84](#ibfc1be5c9d824d31beefeac81ae19c2a_118)] | | |

| Item 9. | | | | | | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | | | | | [removed: [176](#i901cdf5c434a4670a16ce50f2e127cee_268)] [added: [172](#ibfc1be5c9d824d31beefeac81ae19c2a_274)] | | |

| Item 9A. | | | | | | Controls and Procedures | | | | | | [removed: [176](#i901cdf5c434a4670a16ce50f2e127cee_271)] [added: [172](#ibfc1be5c9d824d31beefeac81ae19c2a_277)] | | |

| Item 9B. | | | | | | Other Information | | | | | | [removed: [179](#i901cdf5c434a4670a16ce50f2e127cee_274)] [added: [175](#ibfc1be5c9d824d31beefeac81ae19c2a_280)] | | |

| Item 9C. | | | | | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | | | | | [removed: [179](#i901cdf5c434a4670a16ce50f2e127cee_274)] [added: [175](#ibfc1be5c9d824d31beefeac81ae19c2a_280)] | | |

| Item 10. | | | | | | Directors, Executive Officers and Corporate Governance | | | | | | [removed: [179](#i901cdf5c434a4670a16ce50f2e127cee_283)] [added: [176](#ibfc1be5c9d824d31beefeac81ae19c2a_289)] | | |

| Item 11. | | | | | | Executive Compensation | | | | | | [removed: [180](#i901cdf5c434a4670a16ce50f2e127cee_286)] [added: [176](#ibfc1be5c9d824d31beefeac81ae19c2a_292)] | | |

| Item 12. | | | | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | | | | [removed: [180](#i901cdf5c434a4670a16ce50f2e127cee_289)] [added: [177](#ibfc1be5c9d824d31beefeac81ae19c2a_295)] | | |

| Item 13. | | | | | | Certain Relationships and Related Transactions, and Director Independence | | | | | | [removed: [180](#i901cdf5c434a4670a16ce50f2e127cee_292)] [added: [177](#ibfc1be5c9d824d31beefeac81ae19c2a_298)] | | |

| Item 14. | | | | | | Principal Accounting Fees and Services | | | | | | [removed: [180](#i901cdf5c434a4670a16ce50f2e127cee_295)] [added: [177](#ibfc1be5c9d824d31beefeac81ae19c2a_301)] | | |

| Item 15. | | | | | | Exhibits and Financial Statement Schedules | | | | | | [removed: [181](#i901cdf5c434a4670a16ce50f2e127cee_301)] [added: [178](#ibfc1be5c9d824d31beefeac81ae19c2a_307)] | | |

| Item 16. | | | | | | Form 10-K Summary | | | | | | [removed: [181](#i901cdf5c434a4670a16ce50f2e127cee_304)] [added: [178](#ibfc1be5c9d824d31beefeac81ae19c2a_310)] | | |

| [removed: Asset] [added: AROK Asset] Purchase Agreement | | | | | | Asset Purchase Agreement, dated as of April 29, 2021, by and between CERC Corp. and Southern Col Midco, LLC, a Delaware limited liability company and an affiliate of Summit Utilities, Inc. | | |

| Compensation Committee | | | | | | Compensation Committee of the Board [removed: of Directors of CenterPoint Energy] | | |

| February 2021 Winter Storm Event | | | | | | The extreme and unprecedented winter weather event in February 2021 [added: (also known as Winter Storm Uri)] 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. | | |

| MPSC | | | | | | Mississippi Public Service [removed: Commission] [added: Corporation] | | |

| Securitization Bonds | | | | | | Transition and system restoration bonds [added: issued by the Bond Companies and SIGECO Securitization Bonds issued by the SIGECO Securitization Subsidiary] | | |

| Series A Preferred Stock | | | | | | CenterPoint Energy’s [added: previously outstanding] 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 [added: previously outstanding] 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 [added: previously outstanding] Series C Mandatory Convertible Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share | | |

| [removed: VISCO] [added: Vectren Energy Services] | | | | | | Vectren [removed: Infrastructure] [added: Energy] Services Corporation, [removed: formerly] [added: an Indiana corporation and] a wholly-owned subsidiary of [removed: Vectren] [added: CenterPoint Energy] | | |

| Vistra Energy Corp. | | | | | | Texas-based energy company focused on the competitive energy and power generation [removed: markets, whose major subsidiaries include Luminant and TXU Energy] [added: markets.] | | |

| ZENS-Related Securities | | | | | | As of December 31, [added: 2023 and December 31,] 2022, consisted of AT&T Common, Charter Common and WBD Common [removed: and as of December 31, 2021, consisted of AT&T Common and Charter Common] | | |

| [removed: 2021] [added: 2022] Form 10-K | | | | | | Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2021] [added: 2022] | | |

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 [added: Part II of] this report, which discussions are incorporated herein by reference.

| Item 1C. | | | | | | Cybersecurity | | | | | | [38](#ibfc1be5c9d824d31beefeac81ae19c2a_2361) | | |

| Item 6. | | | | | | \[Reserved\] | | | | | | [44](#ibfc1be5c9d824d31beefeac81ae19c2a_67) | | |

| AI | | | | | | Artificial intelligence | | |

| ATM Forward Purchasers | | | | | | Bank of America, N.A., Barclays Bank PLC, Citibank, N.A., Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, Mizuho Markets Americas LLC, MUFG Securities EMEA plc and Royal Bank of Canada | | |

| ATM Forward Sellers | | | | | | BofA Securities, Inc. Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Mizuho Securities USA LLC, MUFG Securities Americas Inc. and RBC Capital Markets, LLC | | |

| ATM Managers | | | | | | BofA Securities, Inc., Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Mizuho Securities USA LLC, MUFG Securities Americas Inc. and RBC Capital Markets, LLC | | |

| Board | | | | | | CenterPoint Energy’s Board of Directors | | |

| CAMT | | | | | | Corporate Alternative Minimum Tax | | |

| CCN | | | | | | Certificate of Convenience and Necessity | | |

| Convertible Notes | | | | | | CenterPoint Energy’s 4.25% Convertible Senior Notes due 2026 | | |

| EIA | | | | | | U.S. Energy Information Administration | | |

| Equity Distribution Agreement | | | | | | Equity Distribution Agreement, dated as of January 10, 2024, by and between CenterPoint Energy, the ATM Managers, the ATM Forward Purchasers and the ATM Forward Sellers | | |

| Equity Purchase Agreement | | | | | | Equity Purchase Agreement, dated as of May 21, 2023, by and between Vectren Energy Services and ESG Holdings Group | | |

| ESG Holdings Group | | | | | | ESG Holdings Group, LLC a Delaware limited liability company, and an affiliate of Oaktree Capital Management | | |

| FASB | | | | | | Financial Accounting Standards Board | | |

| LAMS Asset Purchase Agreement | | | | | | Asset Purchase Agreement, dated as of February 19, 2024, by and among CERC Corp. and the LAMS Buyers | | |

| LAMS Buyers | | | | | | Delta Utilities No. LA, LLC, a Delaware limited liability company, Delta Utilities S. LA, LLC, a Delaware limited liability company, Delta Utilities MS, LLC, a Delaware limited liability company, and Delta Shared Services Co., LLC, a Delaware limited liability company | | |

| MMBtu | | | | | | One million British thermal units | | |

| SIGECO Securitization Bonds | | | | | | SIGECO Securitization Subsidiary’s Series 2023-A Senior Secured Securitization Bonds | | |

| SIGECO Securitization Subsidiary | | | | | | SIGECO Securitization I, LLC, a direct, wholly-owned subsidiary of SIGECO | | |

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| Topic 326 | | | | | | Accounting Standards Update 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | | |

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- The occurrence of extreme weather events, including winter storms and record hot temperatures, or other causes could lead to additional reforms to the Texas electric market, some measure of which, if implemented, could have an adverse impact on Houston Electric.

| Item 6. | | | | | | Selected Financial Data | | | | | | [40](#i901cdf5c434a4670a16ce50f2e127cee_64) | | |

| AFSI | | | | | | Adjusted financial statement income | | |

| AMI | | | | | | Advanced Metering Infrastructure | | |

| 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 located in the counties of Brazoria, Matagorda and Wharton | | |

| EBITDA | | | | | | Earnings before income taxes, depreciation and amortization | | |

| 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) | | |

| ESPC | | | | | | Energy Savings Performance Contract | | |

| 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 | | |

| OGE | | | | | | OGE Energy Corp. | | |

| PowerTeam Services | | | | | | PowerTeam Services, LLC, a Delaware limited liability company, now known as Artera Services, LLC | | |

| READY | | | | | | CenterPoint Energy’s serious injury and fatality prevention model. READY stands for Recognize, Evaluate, Anticipate, Define, Yes | | |

| Reliant Energy | | | | | | Reliant Energy, Incorporated | | |

| 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 | | |

| 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 | | |

| UESC | | | | | | Utility Energy Services Contract | | |

| VUH PPNs | | | | | | VUH’s private senior guaranteed notes | | |

| VUSI | | | | | | Vectren Utility Services, Inc., a wholly-owned subsidiary of Vectren | | |

- In the aftermath of the February 2021 Winter Storm Event, there have been calls for reform of the Texas electric market, some measure of which, if implemented, could have an adverse impact on Houston Electric.

*Energy Systems Group* (CenterPoint Energy)

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

- Global or regional health pandemics, epidemics or similar public health threats could negatively impact our business, outlook, financial condition, results of operations and liquidity.

Our processes for assessing, identifying, and managing material risks from cybersecurity threats are part of our overall enterprise risk management system and processes.

Enterprise risks, including cybersecurity risks, and their associated mitigations are reviewed at least annually by senior management and the Board of Directors.

Throughout the year, we regularly assess our cybersecurity program and continue to invest in hardening and maturing our cybersecurity measures as further described below.

*Managing Material Risks & Integrated Overall Risk Management*

As a foundation of this approach, we have implemented a layered governance structure to help assess, identify, and manage cybersecurity risks.

It starts with our internal Cybersecurity Operations Center (CSOC), which routinely analyzes threat information from external sources, monitors network activity, and responds to potential security incidents.

In addition, our cybersecurity and privacy policies encompass incident response procedures and information security governance.

As part of our ongoing assessment of our cybersecurity program, we monitor and make adjustments, as necessary, in support of compliance with current and emerging cybersecurity and privacy laws, regulations and guidance applicable to us in jurisdictions where we do business (including NERC CIP reliability standards and TSA security directives), as further described in Item 1A “Risk Factors.” Our internal audit team conducts regular internal security audits and vulnerability assessments of CenterPoint Energy’s systems and user data security practices.

In addition, CenterPoint Energy’s cybersecurity program is increasingly leveraging intelligence-sharing capabilities about emerging threats within the energy industry, across other industries, with specialized vendors, and through public-private partnerships with U.S. government intelligence agencies.

By engaging with utility-specific organizations, CenterPoint Energy benefits from quality analysis and rapid sharing of security information across the energy sector.

Such intelligence helps allow for better detection and prevention of emerging cyber threats before they materialize.

Just as it tests its policies and plans internally, CenterPoint Energy also engages in external exercises such as the bi-annual GridEx Security Exercise to evaluate and address the preparedness of the industry as a whole.

*Oversee Third-Party Risk*

We conduct security risk assessments on proposed software, hardware, and third-party technology solutions used by CenterPoint Energy, including a diligence review of enterprise and security architecture, vendor security, and a privacy impact assessment when deemed appropriate.

These assessments evaluate these technologies prior to deployment in CenterPoint Energy’s network environment.

Further, we maintain a vendor risk management program, a component of which assesses the maturity of certain third parties and their cybersecurity and data privacy programs to help protect information shared with approved third parties.

We also leverage third-party cybersecurity ratings of companies to inform our risk rating when conducting these assessments.

Additionally, CenterPoint Energy imposes contractual obligations on vendors and other third-party business partners related to privacy, confidentiality, and data security based on their access to our data and systems and the nature and sensitivity of the data and systems.

Such contractual provisions may specify the measures and safeguards that the parties must implement to protect our data from unauthorized access use, disclosure, modification, or destruction.

*Engage Third Parties on Risk Management*

We also undergo periodic external security audits, vulnerability assessments, and penetration testing of CenterPoint Energy’s systems and user data security practice, conducted by third-party consultants.

We also conduct tabletop exercises to

test our incident response processes.

Further, as discussed below, we engage third parties to provide guidance and support to our cybersecurity management team.

*Risks from Cybersecurity Threats*

As described in Item 1A “Risk Factors,” our operations rely on the secure processing, storage, and transmission of confidential, sensitive, and other information within our computer systems and networks.

Computer viruses, hackers, employee or vendor incidents, and other external hazards could expose our information systems—and those of our third parties who process our data, provide access to systems, or that have access to our systems—to security breaches, cybersecurity incidents or other disruptions, any of which could materially and adversely affect our business, reputation, results of operations and financial condition, and subject us to possible legal claims and liability.

While we have experienced cybersecurity incidents in the past, to date none have materially affected us, including our business strategy, results of operations or financial condition.

Governance

As part of our overall risk management approach, we prioritize the identification and management of cybersecurity risks at several levels, including Board oversight, executive commitment, management support, and employee training.

*Board of Directors Oversight*

As of December 2023, our Audit Committee, comprised of independent directors from our Board, oversees the Board’s responsibilities relating to CenterPoint Energy’s cybersecurity and data privacy programs, including cybersecurity risk management.

Prior to December 2023, our Governance, Environmental and Sustainability Committee, comprised of independent directors from our Board, oversaw cybersecurity responsibilities.

As part of their risk oversight responsibilities, the applicable committee received quarterly reports from our Executive Vice President and General Counsel, or representatives from our cybersecurity or data privacy groups, and periodic reports from our third party consultants.

Based on these reports, the applicable committee reported to the Board regarding certain cybersecurity or data privacy related items, including, among other items, CenterPoint Energy’s progress in maturing its cybersecurity program, results of audits, penetration and vulnerability testing of CenterPoint Energy’s cybersecurity program, the cybersecurity landscape and emerging threats, status of ongoing initiatives and strategies, incident reports and learnings from any cybersecurity events, compliance with regulatory requirements and industry standards, data privacy matters, and the cybersecurity budget.

*Risk Management Personnel*

Since January 2023, our cybersecurity program has been overseen by our Executive Vice President and General Counsel.

Our Executive Vice President and General Counsel has significant risk management, governance and litigation experience.

We believe these skills are needed in leadership of our cybersecurity program to help ensure that risk management, legal, disclosure and governance perspectives are considered in the design of our cybersecurity program and in evaluating and responding to potential cyber incidents.

CenterPoint Energy currently engages a third-party consultant, who reports directly to the Executive Vice President and General Counsel, to provide Chief Information Security Officer (CISO) advisory services.

The following discussion is based on the Registrants’ businesses as of December 31, [removed: 2022.][added: 2023.]

Its properties consist primarily of high-voltage electric transmission lines and poles, distribution lines, substations, service centers, service wires, telecommunications [removed: network] [added: networks] and meters.

[removed: -] [added: All real and tangible properties of Indiana Electric, subject to certain exclusions, are currently subject to] the lien of the Amended and Restated Mortgage Indenture dated as of January 1, 2023, between SIGECO (Indiana Electric) and Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company), as Trustee.

*Electric Lines - Transmission and Distribution.* As of December 31, [removed: 2022,] [added: 2023,] Houston Electric and Indiana Electric owned and operated the following electric transmission and distribution lines:

| 345 kV | | | | | | 1,445 | | | | | | — | | | | | | [removed: 48] [added: 49] | | | | | | 15 | | |

[removed: *Generating Capacity.*] As of December 31, [removed: 2022,] [added: 2023,] Indiana Electric had [removed: 1,212] [added: 727] MW of installed generating capacity, as set forth in the following table.

| [removed: A.B.] Brown [removed: (1)] [added: (2)] | | | | | | [removed: 1] [added: 3] | | | | | | Posey County | | | | | | [removed: 1979] [added: 1991] | | | | | | [removed: 245] [added: 80] | | |

| Warrick [removed: (2)] [added: (1)] | | | | | | 4 | | | | | | Warrick County | | | | | | 1970 | | | | | | 150 | | |

| Total Coal Capacity | | | | | | | | | | | | | | | | | | | | | | | | [removed: 995] [added: 510] | | |

| Total Generating Capacity [removed: (4)] [added: (3)] | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1,212] [added: 727] | | |

[removed: (2)SIGECO] [added: (1)SIGECO] and AGC own a 300 MW unit at the Warrick Power Plant as tenants in common.

[removed: (3)Brown] [added: (2)Brown] Unit 3 is also equipped to burn oil.

[removed: (4)Excludes] [added: (3)Excludes] 1.5% participation in OVEC.

*Solar.* Indiana Electric entered into [removed: a] [added: an amended and restated] BTA to build a [removed: 300] [added: 191] MW solar array in Posey County, [removed: Indiana, which was subsequently downsized to 191 MW.][added: Indiana.]

*Mobile Generation.* As allowed by a law enacted by the Texas legislature after the February 2021 Winter Storm [removed: Event,] [added: Event and amended in 2023,] Houston Electric is leasing TEEEF that can aid in restoring power to customers during certain [removed: widespread] [added: significant] power outages that are impacting its distribution system.

As of December 31, [removed: 2022,] [added: 2023,] Houston Electric leased 505 MW of TEEEF.

| Houston Electric | | | [removed: 239] [added: 13] | | | | | | [removed: 72,050] [added: 375] | | |

| Indiana Electric | | | [removed: 110] [added: 6] | | | | | | [removed: 6,906] [added: 70] | | |

| Total CenterPoint Energy | | | [removed: 349] [added: 19] | | | | | | [removed: 78,956] [added: 445] | | |

| Houston Electric | | | [removed: 13] [added: 240] | | | | | | [removed: 320] [added: 72,806] | | |

| Indiana Electric | | | [removed: 6] [added: 108] | | | | | | [removed: 50] [added: 6,913] | | |

| Total CenterPoint Energy | | | [removed: 19] [added: 348] | | | | | | [removed: 370] [added: 79,719] | | |

As of December 31, [removed: 2022,] [added: 2023,] CenterPoint Energy’s and CERC’s Natural Gas owned and operated the following natural gas facilities:

| Underground Natural Gas Storage Facility | | | 8 | | | | | | 43 | | | | | | 14 | | | | | | [removed: 331] [added: 305] | | |

| Propane Air-Gas Manufacturing Plant | | | 16 | | | | | | [removed: 234,000] [added: 247,000] | | | | | | [removed: 14,100,000] [added: 14.1] | | | | | | [removed: 1,290,000] [added: 1,228,000] | | |

| LNG Plant Facility | | | 1 | | | | | | 72,000 | | | | | | [removed: 12,000,000] [added: 12.0] | | | | | | [removed: 1,000,000] [added: 1,010,000] | | |

The table below reflects CenterPoint Energy’s and CERC’s Natural Gas contracted upstream storage services as of December 31, [removed: 2022:][added: 2023:]

| Upstream Storage Service | | | | | | [removed: 92] [added: 84] | | | | | | [removed: 2,322] [added: 2,241] | | |

[removed: As of December 31, 2022,] CenterPoint Energy’s and CERC’s Natural Gas owned [removed: approximately 84,000 and 81,000 linear miles, respectively, of natural gas distribution and transmission mains, respectively,] [added: mains] varying in size from one-half inch to 24 inches in diameter.

CenterPoint Energy’s and CERC’s Natural Gas [removed: in] Indiana and Ohio [removed: includes approximately 22,000 and 19,000 miles, respectively, of distribution and transmission mains, all of which] [added: mains] are located in Indiana and Ohio except for, in the case of CenterPoint Energy, pipeline facilities extending from points in northern Kentucky to points in southern Indiana so that gas may be transported to Indiana and sold or transported to customers in Indiana.

As of December 31, [removed: 2022,] [added: 2023,] CenterPoint Energy and CERC, through CEIP, owned and operated over 217 miles of intrastate pipeline in Louisiana and Texas.

| 69 kV | | | | | | 132 | | | | | | 2 | | | | | | 567 | | | | | | — | | |

| 138 kV | | | | | | 2,333 | | | | | | 24 | | | | | | 420 | | | | | | 9 | | |

| Total | | | | | | 3,910 | | | | | | 26 | | | | | | 1,036 | | | | | | 24 | | |

| Distribution lines | | | | | | 29,270 | | | | | | 27,267 | | | | | | 7,266 | | | | | | — | | |

*Generating Capacity.* In 2023, SIGECO completed the planned retirement of its A.B. Brown Units 1 & 2.

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

SIGECO exited joint operations of Warrick 4 on January 1, 2024.

| | | | As of December 31, 2023 | | | | | | | | |

| | | | As of December 31, 2023 | | | | | | | | |

The table below reflects the approximate total linear miles of CenterPoint Energy’s and CERC’s Natural Gas distribution and transmission mains owned as of December 31, 2023:

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | CenterPoint Energy | | | | | | CERC | | |

| All Locations | | | | | | 84,000 | | | | | | 81,000 | | |

| Indiana and Ohio | | | | | | 22,000 | | | | | | 19,000 | | |

All real and tangible properties of Indiana Electric, subject to certain exclusions, are currently subject to:

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 69 kV | | | | | | 213 | | | | | | 2 | | | | | | 566 | | | | | | — | | |

| 138 kV | | | | | | 2,290 | | | | | | 24 | | | | | | 407 | | | | | | 9 | | |

| Total | | | | | | 3,948 | | | | | | 26 | | | | | | 1,021 | | | | | | 24 | | |

| Distribution lines | | | | | | 29,057 | | | | | | 28,611 | | | | | | 4,615 | | | | | | 2,583 | | |

| Generation Source | | | | | | Unit No. | | | | | | Location | | | | | | Date in Service | | | | | | Capacity (MW) | | |

| A.B. Brown (1) | | | | | | 2 | | | | | | Posey County | | | | | | 1986 | | | | | | 240 | | |

| Brown (3) | | | | | | 3 | | | | | | Posey County | | | | | | 1991 | | | | | | 80 | | |

(1)A.B. Brown Units 1 & 2 are expected to be retired by the end of 2023.

| | | | As of December 31, 2022 | | | | | | | | |

As of February [removed: 9, 2023,] [added: 12, 2024,] CenterPoint Energy’s common stock was held by approximately [removed: 23,939] [added: 22,703] shareholders of record.

CenterPoint Energy’s common stock is listed on the NYSE and [added: NYSE] Chicago [removed: Stock Exchange] and is traded under the symbol “CNP.”

During the quarter ended December 31, [removed: 2022,] [added: 2023,] none of CenterPoint Energy’s equity securities registered pursuant to Section 12 of the Securities Exchange Act of [removed: 1934] [added: 1934, as amended,] were purchased by or on behalf of CenterPoint Energy or any “affiliated purchasers,” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of [removed: 1934.][added: 1934, as amended.]

As of February [removed: 9, 2023,] [added: 12, 2024,] all of Houston Electric’s 1,000 outstanding common shares were held by Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy.

As of February [removed: 9, 2023,] [added: 12, 2024,] all of CERC Corp.’s 1,000 outstanding shares of common stock were held by Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy.

Not applicable.

To the Shareholders and [added: the] Board of Directors of

We have audited the accompanying consolidated balance sheets of CenterPoint Energy, Inc. and subsidiaries (the "Company") as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related statements of consolidated income, comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 17, 2023,] [added: 20, 2024,] expressed an unqualified opinion on the Company's internal control over financial reporting.

Impact of Rate Regulation on the Financial Statements — Refer to [removed: Notes 2, 4 and] [added: Note] 7 to the financial statements

Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered [removed: by] [added: in] rates.

[added: While the Company has indicated it] expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve: (1) full recovery of the costs of providing utility service, or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.

We identified rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about [added: certain] affected account balances and disclosures and the high degree of subjectivity involved in assessing the impact of [removed: future] regulatory actions on the financial statements.

Our audit procedures related to the [added: potential] uncertainty of decisions by the Commissions included the following, among others:

- We evaluated the Company’s disclosures related to the [removed: impacts] [added: effects] of rate [removed: regulation, including the balances] [added: regulation by testing certain] recorded [added: balances] and [added: evaluating] regulatory developments.

- [removed: We read relevant] [added: For certain] regulatory [removed: orders issued by] [added: matters, we inspected] the [removed: Commissions for] [added: Company’s filings with] the [removed: Company] [added: Commissions] and [removed: other public utilities, regulatory statutes, interpretations, procedural memorandums,] [added: the] filings [removed: made] [added: with the Commissions] by [removed: intervenors, and other publicly available information] [added: intervenors] to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions’ treatment of similar costs under similar circumstances.

We evaluated [removed: the] [added: relevant] external information and compared [added: it] to [removed: management’s] [added: certain] recorded regulatory asset and liability balances for completeness.

| | | | Year Ended December 31, | | | [removed: | | |] [added: Year Ended December 31,] | | | | | | | | |

| | | | [removed: 2022] | | | [removed: | | | 2021] [added: 2022 (1)] | | | | | | [removed: 2020] [added: 2021] | | |

| Utility revenues | | | $ | [removed: 9,018] [added: 8,524] | | | | | $ | [removed: 8,042] [added: 9,018] | | | | | $ | [removed: 7,049] [added: 8,042] | |

| Non-utility revenues | | | [removed: 303] [added: 172] | | | | | | [removed: 310] [added: 303] | | | | | | [removed: 369] [added: 310] | | |

| Total | | | [removed: 9,321] [added: 8,696] | | | | | | [removed: 8,352] [added: 9,321] | | | | | | [removed: 7,418] [added: 8,352] | | |

| Utility natural gas, fuel and purchased power | | | [removed: 2,887] [added: 2,061] | | | | | | [removed: 2,127] [added: 2,887] | | | | | | [removed: 1,488] [added: 2,127] | | |

| Non-utility cost of revenues, including natural gas | | | [removed: 204] [added: 99] | | | | | | [removed: 208] [added: 204] | | | | | | [removed: 257] [added: 208] | | |

| Operation and maintenance | | | [removed: 2,833] [added: 2,850] | | | | | | [removed: 2,810] [added: 2,833] | | | | | | [removed: 2,744] [added: 2,810] | | |

| Depreciation and amortization | | | [removed: 1,288] [added: 1,401] | | | | | | [removed: 1,316] [added: 1,288] | | | | | | [removed: 1,189] [added: 1,316] | | |

| Taxes other than income taxes | | | [removed: 543] [added: 525] | | | | | | [removed: 528] [added: 543] | | | | | | [removed: 516] [added: 528] | | |

| Goodwill impairment | | | — | | | | | | [removed: —] [added: 84] | | | | | | [removed: 185] [added: —] | | |

| Total | | | [removed: 7,755] [added: 6,936] | | | | | | [removed: 6,989] [added: 7,755] | | | | | | [removed: 6,379] [added: 6,989] | | |

| Operating Income | | | [removed: 1,566] [added: 1,760] | | | | | | [removed: 1,363] [added: 1,566] | | | | | | [removed: 1,039] [added: 1,363] | | |

| Gain (loss) on equity securities | | | [removed: (227)] [added: 31] | | | | | | [removed: (172)] [added: (227)] | | | | | | [removed: 49] [added: (172)] | | |

| Gain (loss) on indexed debt securities | | | [removed: 325] [added: (27)] | | | | | | [removed: 50] [added: 325] | | | | | | [removed: (60)] [added: 50] | | |

| Gain [added: (loss)] on sale | | | [removed: 303] [added: (13)] | | | | | | [removed: 8] [added: 303] | | | | | | [removed: —] [added: 8] | | |

| Interest expense and other finance charges | | | [removed: (511)] [added: (684)] | | | | | | [removed: (508)] [added: (511)] | | | | | | [removed: (501)] [added: (508)] | | |

| Interest expense on Securitization Bonds | | | [removed: (13)] [added: (17)] | | | | | | [removed: (21)] [added: (13)] | | | | | | [removed: (28)] [added: (21)] | | |

| Other income (expense), net | | | [removed: (26)] [added: 37] | | | | | | [removed: 58] [added: (26)] | | | | | | [removed: 64] [added: 58] | | |

| Total | | | [removed: (149)] [added: (673)] | | | | | | [removed: (585)] [added: (149)] | | | | | | [removed: (476)] [added: (585)] | | |

| Income from Continuing Operations Before Income Taxes | | | [removed: 1,417] [added: 1,087] | | | | | | [removed: 778] [added: 1,417] | | | | | | [removed: 563] [added: 778] | | |

| Income tax expense | | | [removed: 360] [added: 170] | | | | | | [removed: 110] [added: 360] | | | | | | [removed: 80] [added: 110] | | |

| Income from Continuing Operations | | | [removed: 1,057] [added: 917] | | | | | | [removed: 668] [added: 1,057] | | | | | | [removed: 483] [added: 668] | | |

| Income [removed: (Loss)] from Discontinued Operations (net of tax expense [removed: (benefit)] of $-0-, [removed: $201,] [added: $-0-,] and [removed: $(333),] [added: $201,] respectively) | | | — | | | | | | [removed: 818] [added: —] | | | | | | [removed: (1,256)] [added: 818] | | |

| [removed: Net Income (Loss)] [added: Net income (loss)] | | | [added: | | | | | | 917 | | | | | | | | | | | |] 1,057 | | | | | | [removed: 1,486] | | | | | | [removed: (773)] [added: 1,486] | | |

| Income allocated to preferred shareholders | | | [removed: 49] [added: 50] | | | | | | [removed: 95] [added: 49] | | | | | | [removed: 176] [added: 95] | | |

| Income [removed: (Loss)] Available to Common Shareholders | | | $ | [removed: 1,008] [added: 867] | | | | | $ | [removed: 1,391] [added: 1,008] | | | | | $ | [removed: (949)] [added: 1,391] | |

| Basic earnings per common share - continuing operations | | | $ | [removed: 1.60] [added: 1.37] | | | | | $ | [removed: 0.97] [added: 1.60] | | | | | $ | [removed: 0.58] [added: 0.97] | |

- We read relevant regulatory orders issued by the Commissions, regulatory statutes, filings made by the Company and intervenors, and other external information.

| Income allocated to preferred shareholders | | | 50 | | | | | | 49 | | | | | | 95 | | |

| Property, Plant and Equipment: | | | | | | | | | | | |

| Property, plant and equipment | | | 40,396 | | | | | | 37,728 | | |

| Less: accumulated depreciation and amortization | | | 10,543 | | | | | | 10,585 | | |

| VIE Securitization Bonds, net | | | 320 | | | | | | 161 | | |

| Net income | | | $ | 917 | | | | | $ | 1,057 | | | | | $ | 1,486 | |

| Depreciation and amortization | | | 1,401 | | | | | | 1,288 | | | | | | 1,316 | | |

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered in rates.

The PUCT’s regulation of rates is

We identified rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about certain affected account balances and disclosures and the high degree of subjectivity involved in assessing the impact of regulatory actions on the financial statements.

- We evaluated the Company’s disclosures related to the effects of rate regulation by testing certain recorded balances and evaluating regulatory developments.

- We read relevant regulatory orders issued by the PUCT, regulatory statutes, filings made by the Company and intervenors, and other external information.

We evaluated relevant external information and compared it to certain recorded regulatory asset and liability balances for completeness.

| Interest expense on Securitization Bonds | | | (8) | | | | | | (13) | | | | | | (21) | | |

| Property, plant and equipment | | | 19,515 | | | | | | 17,753 | | |

| Less: accumulated depreciation and amortization | | | 4,469 | | | | | | 4,292 | | |

| Depreciation and amortization | | | 748 | | | | | | 670 | | | | | | 642 | | |

| Payment of obligation for finance lease | | | — | | | | | | (485) | | | | | | (179) | | |

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Impact of Rate Regulation on the Financial Statements — Refer to Note 7 to the financial statements

Regulatory decisions can have an impact on the recovery of costs, the rate

of return earned on investment, and the timing and amount of assets to be recovered in rates.

We identified rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about certain affected account balances and disclosures and the high degree of subjectivity involved in assessing the impact of regulatory actions on the financial statements.

Our audit procedures related to the potential uncertainty of decisions by the Commissions included the following, among others:

- We evaluated the Company’s disclosures related to the effects of rate regulation by testing certain recorded balances and evaluating regulatory developments.

- We read relevant regulatory orders issued by the Commissions, regulatory statutes, filings made by the Company and intervenors, and other external information.

We evaluated relevant external information and compared it to certain recorded regulatory asset and liability balances for completeness.

- For certain regulatory matters, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions’ treatment of similar costs under similar circumstances.

/s/ DELOITTE & TOUCHE LLP

February 20, 2024

| Taxes receivable | | | 101 | | | | | | 12 | | |

| Property, Plant and Equipment: | | | | | | | | | | | |

| Property, plant and equipment | | | 15,672 | | | | | | 14,379 | | |

| Less: accumulated depreciation and amortization | | | 4,169 | | | | | | 3,973 | | |

| Non-trading derivative liabilities | | | 8 | | | | | | — | | |

| Non-trading derivative liabilities | | | 3 | | | | | | — | | |

| Depreciation and amortization | | | 493 | | | | | | 448 | | | | | | 483 | | |

| Taxes receivable | | | (89) | | | | | | — | | | | | | (28) | | |

While the Company has indicated it

- We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred and deferred as regulatory assets, and (2) refunds or future reductions in rates that should be reported as regulatory liabilities.

We also tested the effectiveness of management’s controls over the initial recognition of amounts as regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.

- For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.

- We evaluated management’s assertion that no indicators of impairment were identified in connection with the Company's property, plant, and equipment.

We inspected the capital projects budget and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.

We inspected minutes of the board of directors and regulatory orders and other filings with the Commissions to identify any evidence that may contradict management’s assertion regarding probability of a disallowance of long-lived assets.

- We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects and inquired of management to assess whether capitalized costs are probable of disallowance.

- We obtained an analysis from management and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management’s assertion that amounts are probable of recovery or a future reduction in rates.

February 17, 2023

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

See Combined Notes to Consolidated Financial Statements

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Current assets held for sale | | | — | | | | | | 2,338 | | |

| Current liabilities held for sale | | | — | | | | | | 562 | | |

| Goodwill impairment and loss from reclassification to held for sale | | | — | | | | | | — | | | | | | 175 | | |

| Distributions from unconsolidated affiliates in excess of cumulative earnings | | | — | | | | | | — | | | | | | 80 | | |

| Borrowings from revolving credit facilities | | | — | | | | | | — | | | | | | 1,050 | | |

| Repayments of revolving credit facilities | | | — | | | | | | — | | | | | | (1,050) | | |

| Proceeds from issuance of Series C Preferred stock, net | | | — | | | | | | — | | | | | | 723 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Issuances of Series C Preferred Stock, net of issuance costs | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | | | | | 723 | | |

| Issuances of Common Stock, net of issuance costs | | | | | | | | | — | | | | | | | | | | | | 1 | | | | | | | | | | | | 672 | | |

| Recognition of beneficial conversion feature | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 32 | | |

| Amortization of beneficial conversion feature | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (32) | | |

| Adoption of ASU 2016-13 | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (7) | | |

While the Company has indicated it expects to recover costs

- For regulatory matters in process, we inspected the Company’s filings with the PUCT and the filings with the PUCT by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.

We inspected minutes of the board of directors and regulatory orders and other filings with the PUCT to identify any evidence that may contradict management’s assertion regarding probability of a disallowance of long-lived assets.

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES

(An Indirect, Wholly-Owned Subsidiary of CenterPoint Energy, Inc.)

| Net income | | | | | | | | | 510 | | | | | | | | | | | | 381 | | | | | | | | | | | | 334 | | |

recovery of the costs of providing utility service, or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.

| Loss from Discontinued Operations (net of tax benefit of $—, $—, and $(2), respectively) | | | — | | | | | | — | | | | | | (66) | | |

| Current assets held for sale | | | — | | | | | | 2,084 | | |

| Current portion of long-term debt | | | 1,331 | | | | | | — | | |

| Goodwill impairment and loss from reclassification to held for sale | | | — | | | | | | — | | | | | | 93 | | |

| Capital distribution to parent associated with the sale of CES | | | — | | | | | | — | | | | | | (286) | | |

| Capital distribution to parent associated with the sale of CES | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (286) | | |

| Adoption of ASU 2016-13 | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (5) | | |

Based on those evaluations, the principal executive officer and principal financial officer, in each case, concluded that the disclosure controls and procedures were effective as of December 31, [removed: 2022] [added: 2023] to provide assurance that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

There has been no change in the Registrants’ internal controls over financial reporting that occurred during the three months ended December 31, [removed: 2022] [added: 2023] that has materially affected, or is reasonably likely to materially affect, the Registrants’ internal controls over financial reporting.

Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the [removed: company’s] [added: Registrants’] principal executive and principal financial officers and effected by [removed: the company’s] [added: CenterPoint Energy’s] board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

- Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the [removed: company;][added: Registrants;]

- Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the [removed: company] [added: Registrants] are being made only in accordance with authorizations of management and directors of the [removed: company;] [added: Registrants;] and

- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the [removed: company’s] [added: Registrants’] assets that could have a material effect on the financial statements.

Based on the Registrants’ evaluation under the framework in *Internal Control — Integrated Framework* (2013), the Registrants’ management has concluded, in each case, that their internal control over financial reporting was effective as of December 31, [removed: 2022.][added: 2023.]

Deloitte & Touche LLP, CenterPoint Energy’s independent registered public accounting firm, has issued an attestation report on the effectiveness of CenterPoint Energy’s internal control over financial reporting as of December 31, [removed: 2022] [added: 2023] which is set forth below.

We have audited the internal control over financial reporting of CenterPoint Energy, Inc. and subsidiaries (the “Company”) as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2022,] [added: 2023,] of the Company and our report dated February [removed: 17, 2023,] [added: 20, 2024,] expressed an unqualified opinion on those financial statements.

February 20, 2024

February 17, 2023

The foregoing [removed: summary] [added: description of the terms of the Bylaws] does not purport to be complete and is [added: subject to, and] qualified in its entirety [removed: by] [added: by,] reference to the [removed: Term Loan Agreement.][added: complete text of the Bylaws.]

[removed: Compensatory] [added: *Compensatory] Arrangements of Certain Officers (CenterPoint [removed: Energy)][added: Energy)*]

On February 15, [removed: 2023,] [added: 2024,] the Compensation Committee approved new forms of award agreement under CenterPoint Energy’s LTIP for restricted stock unit awards and performance unit [removed: awards for the President and Chief Operating Officer.][added: awards.]

The description of the forms of award agreement are qualified in their entirety by reference to the full text of the respective form award agreement, which are included as Exhibits [removed: 10(ee)(9) and 10(ee)(10) hereto] [added: 10(cc)(13), 10(cc)(14),] and [removed: incorporated by reference.][added: 10(cc)(15).]

*Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year (CenterPoint Energy)*

On February 16, 2024, CenterPoint Energy filed the following statements of resolutions with the Secretary of State of the State of Texas for the purpose of deleting the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock from CenterPoint Energy’s Restated Articles of Incorporation:

- Statement of Resolutions Deleting Series of Shares designated Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock of CenterPoint Energy, Inc. (the Series A Statement of Resolutions);

- Statement of Resolutions Deleting Series of Shares designated 7.00% Series B Mandatory Convertible Preferred Stock of CenterPoint Energy, Inc. (the Series B Statement of Resolutions); and

- Statement of Resolutions Deleting Series of Shares designated Series C Mandatory Convertible Preferred Stock of CenterPoint Energy, Inc. (the Series C Statement of Resolutions and, collectively with the Series A Statement of Resolutions and the Series B Statement of Resolutions, the Statements of Resolutions).

None of the previously issued shares of Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock remained outstanding prior to filing the Statements of Resolutions.

Effective upon filing, the Statements of Resolutions deleted all references to the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock contained in CenterPoint Energy’s Restated Articles of Incorporation.

The shares that were designated to such series were returned to the status of authorized but unissued shares of preferred stock, par value $0.01 per share, of CenterPoint Energy, without designation as to series.

Copies of the Series A Statement of Resolutions, the Series B Statement of Resolutions and the Series C Statement of Resolutions are filed as Exhibits 3(m), 3(n) and 3(o), respectively, and are incorporated herein by reference.

Effective February 16, 2024, the Board amended and restated CenterPoint Energy’s bylaws (the Bylaws).

The Bylaws include, among other things, the following changes:

- revise procedures and disclosure for the nomination of directors and the submission of proposals for consideration at meetings of the shareholders of CenterPoint Energy, including, among other things, (x) consolidating the advance notice provisions applicable to all proposals (i.e., director nominations, proposals to amend CenterPoint Energy’s bylaws, proposals to remove directors and all other proposals (other than “proxy access” nominations and shareholder proposals made pursuant to Section 14a-8 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)) into a single section and (y) adding a requirement that a shareholder seeking to nominate director(s) at an annual meeting deliver to CenterPoint Energy reasonable evidence that it has complied with the requirements of Rule 14a-19 of the Exchange Act within eight business days of the meeting;

- clarify that for the applicability of the majority voting standard for uncontested elections of directors, an election remains “contested” (and the plurality voting standard applies) even if the Board determines that a shareholder’s nomination notice does not comply with the advance notice bylaws;

- adopt a forum selection bylaw to provide that the U.S. federal district courts shall be the exclusive forum for the resolution of claims under the Securities Act of 1933, as amended; and

- make certain administrative, modernizing, clarifying and conforming changes, including (x) making updates to reflect amendments to the Texas Business Organizations Code, as amended, (y) expressly providing that meetings of shareholders may be held in whole or in part by means of remote communications in accordance with applicable law and (z) adopting gender-neutral terms when referring to particular positions, offices or title holders, including the adoption of the title Chair in place of Chairman.

The Bylaws, along with a copy marked to show changes from the prior version, are included as Exhibits 3(h) and 3(i), respectively, to this Annual Report on Form 10-K and incorporated by reference herein.

The newly approved forms of award agreement for officers and director employees revise and simplify the retirement provisions by adopting a single retirement provision that provides the opportunity for full vesting if the award was granted prior to the calendar year of the participant’s retirement or pro-rata vesting if the award was granted in the calendar year of the participants retirement, in all cases subject to achievement of the relevant performance metrics.

To be eligible for such retirement vesting, the participant must (i) be at least 55 years old with a sum of age and years of service of 65 or greater, (ii) provide at least three months’ written notice (or reasonable advance written notice for officers subject to Section 16 of the Exchange Act) of retirement, and (iii) provide a comprehensive transition plan.

In addition, for officers subject to Section 16 of the Exchange Act, eligibility for retirement vesting is subject to approval by the Compensation Committee.

In addition, the newly approved forms of award agreement revised the non-solicitation and confidentiality provisions to reflect changes in the law.

On February 15, 2024, the Compensation Committee also approved 3-year ratable vesting for annual restricted stock unit awards under which one third (1/3) of the underlying units vest and are payable as of the first three anniversaries of the grant date, subject to the participant’s continued employment and achievement of the applicable performance goal.

The Compensation Committee also approved a price-to-earnings (P/E) modifier to performance share unit awards under the Company’s LTIP based on total shareholder return.

Under the P/E modifier, if CenterPoint Energy’s P/E ratio ranks in the top quartile of CenterPoint Energy’s peer group, a P/E modifier will apply that provides for a minimum 75% payout level for the award regardless of the level of total shareholder return performance achieved.

This vesting schedule and the P/E modifier does not apply to previously granted awards.

*Rule 10b5-1 Trading Arrangements*

During the three months ended December 31, 2023, no director or officer of CenterPoint Energy, Houston Electric or CERC adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

Entry into a Material Definitive Agreement and Creation of a Direct Financial Obligation

On February 16, 2023, CERC Corp. entered into a $500 million Term Loan Agreement among Mizuho Bank, Ltd., as administrative agent, and the banks party thereto.

CERC Corp. borrowed the full $500 million at closing and intends to use the proceeds thereof for general corporate purposes, including the repayment of a portion of its outstanding commercial paper.

The maturity date for the borrowings under the Term Loan Agreement is February 15, 2024.

Borrowings under the Term Loan Agreement bear interest, at CERC Corp.’s option, at a rate equal to either (i) Term SOFR (as defined in the Term Loan Agreement), which includes an adjustment of 0.10% per annum plus a margin of 0.85% or (ii) the Alternate Base Rate (as defined in the Term Loan Agreement).

The Term Loan Agreement contains certain covenants, including a covenant that requires CERC Corp. not to exceed a specified ratio of debt to consolidated capitalization (excluding, among other things, non-cash reductions to net income).

Borrowings under the Term Loan Agreement may be voluntarily prepaid without penalty or premium, other than customary breakage costs related to prepayments of loans that bear interest based on Term SOFR.

The Term Loan Agreement also provides a mechanism to replace Term SOFR or other then-applicable interest rate benchmark if it is no longer available.

Borrowings under the Term Loan Agreement are subject to acceleration upon the occurrence of events of default that CERC Corp. considers customary.

The Term Loan Agreement also provides for the payment of customary fees, including administrative agent fees and other fees.

Mizuho Bank, Ltd. participates in the credit facilities of CERC Corp., the other Registrants and SIGECO.

The Term Loan Agreement described above is filed as Exhibit 10.1(kk) to this Annual Report and is incorporated by reference herein.

The newly approved forms of award agreement provide for the continuing vesting of Mr. Wells’ restricted stock units and performance units, subject to the actual achievement of applicable performance objectives, if he is not promoted to Chief Executive Officer by January 1, 2025 and after such date, if he is terminated without cause or resigns.

For CenterPoint Energy, the information called for by Item 10, to the extent not set forth in “Information About Our Executive Officers” in Item [removed: 1,] [added: 1 of Part I of this report,] will be set forth in the definitive proxy statement relating to CenterPoint Energy’s [removed: 2023] [added: 2024] annual meeting of shareholders pursuant to SEC Regulation 14A.

For CenterPoint Energy, the information called for by Item 11 will be set forth in the definitive proxy statement relating to CenterPoint Energy’s [removed: 2023] [added: 2024] annual meeting of shareholders pursuant to SEC Regulation 14A.

For CenterPoint Energy, the information called for by Item 12 will be set forth in the definitive proxy statement relating to CenterPoint Energy’s [removed: 2023] [added: 2024] annual meeting of shareholders pursuant to SEC Regulation 14A.

For CenterPoint Energy, the information called for by Item 13 will be set forth in the definitive proxy statement relating to CenterPoint Energy’s [removed: 2023] [added: 2024] annual meeting of shareholders pursuant to SEC Regulation 14A.

For CenterPoint Energy, the information called for by Item 14 will be set forth in the definitive proxy statement relating to CenterPoint Energy’s [removed: 2023] [added: 2024] annual meeting of shareholders pursuant to SEC Regulation 14A.

Aggregate fees billed to Houston Electric and CERC during the [removed: year] [added: years] ended December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] by their principal accounting firm, Deloitte & Touche LLP, are set forth below.

| Audit fees (1) | | | $ | [removed: 708,180] [added: 843,661] | | | | | $ | [removed: 965,700] [added: 1,155,700] | | | | | $ | [removed: 650,344] [added: 708,180] | | | | | $ | [removed: 963,833] [added: 965,700] | |

| Audit-related fees (2) | | | [removed: 435,000] [added: 530,000] | | | | | | [removed: 559,000] [added: 410,000] | | | | | | [removed: 347,000] [added: 435,000] | | | | | | [removed: 152,000] [added: 559,000] | | |

| Total audit and audit-related fees | | | [removed: 1,143,180] [added: 1,373,661] | | | | | | [removed: 1,524,700] [added: 1,565,700] | | | | | | [removed: 997,344] [added: 1,143,180] | | | | | | [removed: 1,115,833] [added: 1,524,700] | | |

| Total fees | | | $ | [removed: 1,143,180] [added: 1,373,661] | | | | | $ | [removed: 1,524,700] [added: 1,565,700] | | | | | $ | [removed: 997,344] [added: 1,143,180] | | | | | $ | [removed: 1,115,833] [added: 1,524,700] | |

(1)For [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] amounts include fees for services provided by the principal accounting firm relating to the integrated audit of financial statements and internal control over financial reporting, statutory audits, attest services, and regulatory filings.

(2)For [removed: 2022] [added: 2023] and [removed: 2021, includes] [added: 2022, amounts include] fees for consultations concerning financial accounting and reporting standards and various agreed-upon or expanded procedures related to accounting records to comply with financial accounting or regulatory reporting matters.

| | | | 2023 | | | | | | | | | | | | 2022 | | | | | | | | |

| | | | 2022 | | | | | | | | | | | | 2021 | | | | | | | | |

| Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | | | [removed: [78](#i901cdf5c434a4670a16ce50f2e127cee_115)] [added: [84](#ibfc1be5c9d824d31beefeac81ae19c2a_118)] | | |

| Statements of Consolidated [added: Comprehensive] Income for the Three Years Ended December 31, 2022 | | | [removed: [81](#i901cdf5c434a4670a16ce50f2e127cee_121)] [added: [1](#ibfc1be5c9d824d31beefeac81ae19c2a_145)] | | |

| Statements of Consolidated [removed: Comprehensive] Income for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [82](#i901cdf5c434a4670a16ce50f2e127cee_124)] [added: [86](#ibfc1be5c9d824d31beefeac81ae19c2a_124)] | | |

| Consolidated Balance Sheets as of December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] | | | [removed: [83](#i901cdf5c434a4670a16ce50f2e127cee_127)] [added: [88](#ibfc1be5c9d824d31beefeac81ae19c2a_130)] | | |

| Statements of Consolidated Cash Flows for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [85](#i901cdf5c434a4670a16ce50f2e127cee_130)] [added: [90](#ibfc1be5c9d824d31beefeac81ae19c2a_133)] | | |

| Statements of Consolidated Changes in Equity for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [86](#i901cdf5c434a4670a16ce50f2e127cee_133)] [added: [91](#ibfc1be5c9d824d31beefeac81ae19c2a_136)] | | |

| Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | | | [removed: [87](#i901cdf5c434a4670a16ce50f2e127cee_136)] [added: [92](#ibfc1be5c9d824d31beefeac81ae19c2a_139)] | | |

| Statements of Consolidated Income for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [89](#i901cdf5c434a4670a16ce50f2e127cee_139)] [added: [94](#ibfc1be5c9d824d31beefeac81ae19c2a_142)] | | |

| Statements of Consolidated Comprehensive Income for the Three Years Ended December 31, [removed: 2021] [added: 2023] | | | [removed: [90](#i901cdf5c434a4670a16ce50f2e127cee_142)] [added: [87](#ibfc1be5c9d824d31beefeac81ae19c2a_127)] | | |

| Consolidated Balance Sheets as of December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] | | | [removed: [91](#i901cdf5c434a4670a16ce50f2e127cee_145)] [added: [95](#ibfc1be5c9d824d31beefeac81ae19c2a_148)] | | |

| Statements of Consolidated Cash Flows for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [93](#i901cdf5c434a4670a16ce50f2e127cee_148)] [added: [97](#ibfc1be5c9d824d31beefeac81ae19c2a_151)] | | |

| Statements of Consolidated Changes in Equity for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [93](#i901cdf5c434a4670a16ce50f2e127cee_148)] [added: [97](#ibfc1be5c9d824d31beefeac81ae19c2a_151)] | | |

| Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | | | [removed: [95](#i901cdf5c434a4670a16ce50f2e127cee_154)] [added: [99](#ibfc1be5c9d824d31beefeac81ae19c2a_157)] | | |

| Statements of Consolidated Income for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [97](#i901cdf5c434a4670a16ce50f2e127cee_157)] [added: [101](#ibfc1be5c9d824d31beefeac81ae19c2a_160)] | | |

| Statements of Consolidated Comprehensive Income for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [98](#i901cdf5c434a4670a16ce50f2e127cee_160)] [added: [102](#ibfc1be5c9d824d31beefeac81ae19c2a_163)] | | |

| Consolidated Balance Sheets as of December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] | | | [removed: [99](#i901cdf5c434a4670a16ce50f2e127cee_163)] [added: [103](#ibfc1be5c9d824d31beefeac81ae19c2a_166)] | | |

| Statements of Consolidated Cash Flows for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [101](#i901cdf5c434a4670a16ce50f2e127cee_166)] [added: [105](#ibfc1be5c9d824d31beefeac81ae19c2a_169)] | | |

| Statements of Consolidated Changes in Equity for the Three Years Ended December 31, [removed: 2022] [added: 2023] | | | [removed: [102](#i901cdf5c434a4670a16ce50f2e127cee_169)] [added: [106](#ibfc1be5c9d824d31beefeac81ae19c2a_172)] | | |

| Combined Notes to Consolidated Financial Statements | | | [removed: [103](#i901cdf5c434a4670a16ce50f2e127cee_172)] [added: [107](#ibfc1be5c9d824d31beefeac81ae19c2a_175)] | | |

The financial statements of Enable Midstream Partners, LP required pursuant to Rule 3-09 of Regulation S-X are included in this filing for CenterPoint Energy as [removed: Exhibits 99.1 and 99.2.][added: Exhibit 99.1.]

*(a)(2) Financial Statement Schedules for the Three Years Ended December 31, [removed: 2022*][added: 2023*]

See Index of Exhibits beginning on page [removed: 182,] [added: 179,] which index also includes the management contracts or compensatory plans or arrangements required to be filed as exhibits to this Form 10-K by Item 601(b)(10)(iii) of Regulation S-K.