Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF CENTERPOINT ENERGY, INC. AND SUBSIDIARIES

The following combined discussion and analysis should be read in combination with the Interim Condensed Financial Statements contained in this combined Form 10-Q and the Registrants’ combined 2024 Form 10-K. When discussing CenterPoint Energy’s consolidated financial information, it includes the results of Houston Electric and CERC, which, along with CenterPoint Energy, are collectively referred to as the Registrants. Unless the context indicates otherwise, specific references to Houston Electric and CERC also pertain to CenterPoint Energy. In this combined Form 10-Q, the terms “our,” “we” and “us” are used as abbreviated references to CenterPoint Energy, Inc. together with its consolidated subsidiaries, including Houston Electric and CERC, unless otherwise stated. No Registrant makes any representations as to the information related solely to CenterPoint Energy or the subsidiaries of CenterPoint Energy other than itself.

RECENT EVENTS

Equity Distribution Agreement. In April 2025, CenterPoint Energy entered into forward sale agreements with counterparties relating to 3,277,764 shares and 680,902 shares of Common Stock at an initial forward price of $36.29 and $36.72, respectively. For additional information, see Note 15 and Note 16 to the Interim Condensed Financial Statements.

Divestiture of Louisiana and Mississippi Natural Gas Businesses. On March 31, 2025, CenterPoint Energy, through its subsidiary CERC Corp., completed the sale of its Louisiana and Mississippi natural gas LDC businesses for approximately $1.2 billion, subject to adjustment as set forth in the LAMS Asset Purchase Agreement, including adjustments based on net working capital, regulatory assets and liabilities and capital expenditures at closing. For information about this transaction, see Note 3 to the Interim Condensed Financial Statements.

Acquisition of Posey Solar. On March 7, 2025, SIGECO acquired 100% of the equity interests in Posey Solar, which was constructing a 191 MW solar array in Posey County, Indiana, for approximately $357 million. For information about this transaction, see Note 3 to the Interim Condensed Financial Statements.

Regulatory Proceedings. For further information, see Note 6 to the Interim Condensed Financial Statements. For information related to our pending and completed regulatory proceedings to date in 2025, see “Liquidity and Capital Resources —Regulatory Matters” below.

Debt Transactions. For information about debt transactions to date in 2025, see Note 9 to the Interim Condensed Financial Statements.

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CENTERPOINT ENERGY CONSOLIDATED RESULTS OF OPERATIONS

For information regarding factors that may affect the future results of our consolidated operations, see “Risk Factors” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K.

Net income for the three months ended March 31, 2025 and 2024 was as follows:

												Three Months Ended March 31,
																								2025						2024						Favorable (Unfavorable)
																								(in millions)
Electric																								$	108					$	121					$	(13)
Natural Gas																								228						283						(55)
Total Utility Operations																								336						404						(68)
Corporate and Other (1)																								(39)						(54)						15
Total CenterPoint Energy																								$	297					$	350					$	(53)

(1)Includes unallocated corporate costs, interest income and interest expense and intercompany eliminations.

Three months ended March 31, 2025 compared to three months ended March 31, 2024

Net income decreased $53 million primarily due to the following items:

• a decrease in net income of $13 million for the Electric reportable segment, as further discussed below;

• a decrease in net income of $55 million for the Natural Gas reportable segment, as further discussed below; and

• an increase in net income of $15 million for Corporate and Other, primarily due to the favorable impact of accrued income tax benefits offset in other segments. This increase was partially offset by $14 million associated with increased borrowing costs.

Income Tax Expense. For a discussion of effective tax rate per period, see Note 10 to the Interim Condensed Financial Statements.

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CENTERPOINT ENERGY’S RESULTS OF OPERATIONS BY REPORTABLE SEGMENT

CenterPoint Energy’s CODM views net income as the measure of profit or loss for the reportable segments. Segment results include inter-segment interest income and expense, which may result in inter-segment profit and loss.

The following discussion of CenterPoint Energy’s results of operations is separated into two reportable segments, Electric and Natural Gas.

Electric (CenterPoint Energy)

For information regarding factors that may affect the future results of operations of CenterPoint Energy’s Electric reportable segment, see “Risk Factors — Risk Factors Affecting Operations — Electric Generation, Transmission and Distribution,” “— Risk Factors Affecting Regulatory, Environmental and Legal Risks,” “— Risk Factors Affecting Financial, Economic and Market Risks,” “— Risk Factors Affecting Safety and Security Risks” and “— General and Other Risks” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K.

The following table provides summary data of CenterPoint Energy’s Electric reportable segment:

									Three Months Ended March 31,
																					2025						2024						Favorable (Unfavorable)
																					(in millions, except operating statistics)
Revenues																					$	1,066					$	1,049					$	17
Expenses:
Utility natural gas, fuel and purchased power																					74						43						(31)
Operation and maintenance																					484						475						(9)
Depreciation and amortization																					210						226						16
Taxes other than income taxes																					78						78						—
Total expenses																					846						822						(24)
Operating Income																					220						227						(7)
Other Income (Expense):
Interest expense and other finance charges																					(101)						(91)						(10)
Other income, net																					14						16						(2)
Income Before Income Taxes																					133						152						(19)
Income tax expense																					25						31						6
Net Income																					$	108					$	121					$	(13)
Throughput (in GWh):
Residential																					6,643						5,963						11		%
Total																					24,749						23,063						7		%
Weather (percentage of normal weather for service area):
Cooling degree days																					138		%				104		%				34		%
Heating degree days																					105		%				91		%				14		%
Number of metered customers at end of period:
Residential																					2,651,381						2,604,026						2		%
Total																					2,983,906						2,932,702						2		%

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The following table provides variance explanations for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 by major income statement caption for CenterPoint Energy’s Electric reportable segment:

									Favorable (Unfavorable)
									(in millions)
Revenues
Transmission Revenues, including TCOS and TCRF, inclusive of costs billed by transmission providers, partially offset in operation and maintenance below												$	(10)
Customer rates and the impact of the change in rate design												16
Customer growth												7
Cost of fuel and purchased power, offset in utility natural gas, fuel and purchased power below												31
Energy efficiency, offset in operation and maintenance below												(3)
Miscellaneous revenues, including service connections and off-system sales												(8)
Equity return, related to the annual true-up of transition charges for amounts over or under collected in prior periods												(8)
Weather, efficiency improvements and other usage impacts												24
Bond Companies and SIGECO Securitization Subsidiary, offset in other line items below												(32)
Total												$	17
Utility natural gas, fuel and purchased power
Cost of purchased power, offset in revenues above												$	(27)
Cost of fuel, including coal, natural gas, and fuel oil, offset in revenues above												(4)
Total												$	(31)
Operation and maintenance
Transmission costs billed by transmission providers, offset in revenues above												$	6
Contract services												2
Corporate support services												(9)
Labor and benefits												(1)
Bond Companies and SIGECO Securitization Subsidiary, offset in other line items												1
Energy efficiency, offset in revenues above												(1)
All other operation and maintenance expense, including materials and supplies and insurance												(7)
Total												$	(9)
Depreciation and amortization
Ongoing additions to plant-in-service												$	(15)
Bond Companies and SIGECO Securitization Subsidiary, offset in other line items												31
Total												$	16
Interest expense and other finance charges
Changes in outstanding debt												$	(19)
Other, primarily AFUDC and impacts of regulatory deferrals												8
Bond Companies and SIGECO Securitization Subsidiary, offset in other line items above												1
Total												$	(10)
Other income, net
Other income, including AFUDC - Equity												$	(1)
Bond Companies and SIGECO Securitization Subsidiary, offset in other line items above												(1)
Total												$	(2)

Income Tax Expense. For a discussion of effective tax rate per period by Registrant, see Note 10 to the Interim Condensed Financial Statements.

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Natural Gas (CenterPoint Energy)

For information regarding factors that may affect the future results of operations of CenterPoint Energy’s Natural Gas reportable segment, see “Risk Factors — Risk Factors Affecting Operations — Natural Gas,” “— Risk Factors Affecting Regulatory, Environmental and Legal Risks,” “— Risk Factors Affecting Financial, Economic and Market Risks,” “— Risk Factors Affecting Safety and Security Risks” and “— General and Other Risks” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K.

The following table provides summary data of CenterPoint Energy’s Natural Gas reportable segment:

									Three Months Ended March 31,
																					2025						2024						Favorable (Unfavorable)
																					(in millions, except operating statistics)
Revenues																					$	1,853					$	1,570					$	283
Expenses:
Utility natural gas and fuel																					933						744						(189)
Non-utility cost of revenues, including natural gas																					1						1						—
Operation and maintenance																					265						234						(31)
Depreciation and amortization																					147						132						(15)
Taxes other than income taxes																					74						65						(9)
Total expenses																					1,420						1,176						(244)
Operating Income																					433						394						39
Other Income (Expense):
Loss on sale																					(43)						—						(43)
Interest expense and other finance charges																					(59)						(51)						(8)
Other income, net																					2						3						(1)
Income Before Income Taxes																					333						346						(13)
Income tax expense																					105						63						(42)
Net Income																					$	228					$	283					$	(55)
Throughput (in Bcf):
Residential																					118						74						59		%
Commercial and Industrial																					149						101						48		%
Total																					267						175						53		%
Weather (percentage of 10-year average for service area):
Heating degree days																					99		%				82		%				17		%
Number of metered customers at end of period:
Residential																					4,079,888						4,026,029						1		%
Commercial and Industrial																					306,075						303,018						1		%
Total																					4,385,963						4,329,047						1		%

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The following table provides variance explanations for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 by major income statement caption for CenterPoint Energy’s Natural Gas reportable segment:

												Favorable (Unfavorable)
												(in millions)
Revenues
Cost of natural gas, offset in utility natural gas and fuel below												$	189
Energy efficiency and other pass-through, offset in operation and maintenance below												17
Gross receipts tax, offset in taxes other than income taxes below												6
Non-volumetric and miscellaneous revenue												2
Weather and usage												23
Customer growth												4
Non-utility revenues												3
Customer rates and impact of the change in rate design												39
Total												$	283
Utility natural gas and fuel
Cost of natural gas, offset in revenues above												$	(189)
Total												$	(189)
Operation and maintenance
All other operations and maintenance expense, including bad debt expense												$	(5)
Contract services												(2)
Labor and benefits												(5)
Corporate support services												(2)
Energy efficiency and other pass-through, offset in revenues above												(17)
Total												$	(31)
Depreciation and amortization
Ongoing additions to plant-in-service												$	(15)
Total												$	(15)
Taxes other than income taxes
Gross receipts tax, offset in revenues above												$	(6)
Incremental capital projects placed in service, and the impact of updated property tax rates												(3)
Total												$	(9)
Loss on sale
Loss on sale of Louisiana and Mississippi natural gas LDC businesses												$	(43)
Total												$	(43)
Interest expense and other finance charges
Other, primarily AFUDC and impacts of regulatory deferrals												$	(1)
Changes in outstanding debt												(7)
Total												$	(8)
Other income, net
Other income, including AFUDC - Equity												$	(1)
Total												$	(1)

Income Tax Expense. For a discussion of effective tax rate per period by Registrant, see Note 10 to the Interim Condensed Financial Statements.

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HOUSTON ELECTRIC CONSOLIDATED RESULTS OF OPERATIONS

Houston Electric’s CODM views net income as the measure of profit or loss for its single reportable segment. Houston Electric’s results of operations are affected by seasonal fluctuations in the demand for electricity. Houston Electric’s results of operations are also affected by, among other things, the actions of various governmental authorities having jurisdiction over rates Houston Electric charges, debt service costs, income tax expense, Houston Electric’s ability to collect receivables from REPs and Houston Electric’s ability to recover its regulatory assets. For more information regarding factors that may affect the future results of operations of Houston Electric’s business, see “Risk Factors — Risk Factors Affecting Operations — Electric Generation, Transmission and Distribution,” “— Risk Factors Affecting Regulatory, Environmental and Legal Risks,” “— Risk Factors Affecting Financial, Economic and Market Risks,” “— Risk Factors Affecting Safety and Security Risks” and “— General and Other Risks” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K and in Part II, Item 1A of this combined Form 10-Q.

The following table provides summary data of Houston Electric’s single reportable segment:

									Three Months Ended March 31,
																					2025						2024						Favorable (Unfavorable)
																					(in millions, except operating statistics)
Revenues:
TDU																					$	884					$	868					$	16
Bond Companies																					—						33						(33)
Total revenues																					884						901						(17)
Expenses:
Operation and maintenance, excluding Bond Companies																					448						437						(11)
Depreciation and amortization, excluding Bond Companies																					179						167						(12)
Taxes other than income taxes																					75						75						—
Bond Companies																					—						32						32
Total expenses																					702						711						9
Operating Income																					182						190						(8)
Other Income (Expense):
Interest expense and other finance charges																					(86)						(76)						(10)
Interest expense on Securitization Bonds																					—						(1)						1
Other income, net																					8						11						(3)
Income Before Income Taxes																					104						124						(20)
Income tax expense																					20						25						5
Net Income																					$	84					$	99					$	(15)
Throughput (in GWh):
Residential																					6,274						5,624						12		%
Total																					23,802						22,005						8		%
Weather (percentage of 10-year average for service area):
Cooling degree days																					137		%				104		%				33		%
Heating degree days																					106		%				92		%				14		%
Number of metered customers at end of period:
Residential																					2,517,224						2,470,925						2		%
Total																					2,830,184						2,780,362						2		%

The following table provides variance explanations for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 by major income statement caption for Houston Electric:

												Favorable (Unfavorable)
												(in millions)
Revenues
Transmission Revenues, including TCOS and TCRF, inclusive of costs billed by transmission providers, partially offset in operation and maintenance below												$	(10)
Customer rates and the impact of the change in rate design												14
Customer growth												5
Energy efficiency, partially offset in operations and maintenance below												1
Miscellaneous revenues												(2)
Equity return, related to the annual true-up of transition charges for amounts over or under collected in prior periods												(8)
Weather, efficiency improvements and other usage impacts												16
Bond Companies, offset in other line items below												(33)
Total												$	(17)
Operation and maintenance, excluding Bond Companies
Transmission costs billed by transmission providers, offset in revenues above												$	6
Contract services												—
All other operation and maintenance expense, including materials and supplies and insurance												(7)
Corporate support services												(8)
Energy efficiency, offset in revenues above												(1)
Labor and benefits												(1)
Total												$	(11)
Depreciation and amortization, excluding Bond Companies
Ongoing additions to plant-in-service												$	(12)
Total												$	(12)
Bond Companies expense
Operations and maintenance and depreciation expense, offset in revenues above												$	32
Total												$	32
Interest expense and other finance charges
Changes in outstanding debt												$	(18)
Other, primarily AFUDC and impacts of regulatory deferrals												8
Total												$	(10)
Interest expense on Securitization Bonds
Lower outstanding principal balance, offset in revenues above												$	1
Total												$	1
Other income, net
Other income, including AFUDC - Equity												$	(3)
Total												$	(3)

Income Tax Expense. For a discussion of effective tax rate per period, see Note 10 to the Interim Condensed Financial Statements.

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CERC CONSOLIDATED RESULTS OF OPERATIONS

CERC’s CODM views net income as the measure of profit or loss for its single reportable segment. CERC’s results of operations are affected by seasonal fluctuations in the demand for natural gas. CERC’s results of operations are also affected by, among other things, the actions of various federal, state and local governmental authorities having jurisdiction over rates CERC charges, debt service costs and income tax expense, CERC’s ability to collect receivables from customers and CERC’s ability to recover its regulatory assets. For more information regarding factors that may affect the future results of operations for CERC’s business, see “Risk Factors — Risk Factors Affecting Operations — Natural Gas,” “— Risk Factors Affecting Regulatory, Environmental and Legal Risks,” “— Risk Factors Affecting Financial, Economic and Market Risks,” “— Risk Factors Affecting Safety and Security Risks” and “— General and Other Risks” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K.

									Three Months Ended March 31,
																					2025						2024						Favorable (Unfavorable)
																					(in millions, except operating statistics)
Revenues																					$	1,788					$	1,512					$	276
Expenses:
Utility natural gas																					909						724						(185)
Non-utility cost of revenues, including natural gas																					1						1						—
Operation and maintenance																					256						226						(30)
Depreciation and amortization																					142						127						(15)
Taxes other than income taxes																					73						64						(9)
Total expenses																					1,381						1,142						(239)
Operating Income																					407						370						37
Other Income (Expense):
Gain on sale																					52						—						52
Interest expense and other finance charges																					(56)						(49)						(7)
Other income, net																					2						3						(1)
Income Before Income Taxes																					405						324						81
Income tax expense																					100						60						(40)
Net Income																					$	305					$	264					$	41
Throughput (in Bcf):
Residential																					115						71						62		%
Commercial and Industrial																					136						93						46		%
Total																					251						164						53		%
Weather (percentage of 10-year average for service area):
Heating degree days																					99		%				82		%				17		%
Number of metered customers at end of period:
Residential																					3,974,567						3,921,286						1		%
Commercial and Industrial																					295,417						292,398						1		%
Total																					4,269,984						4,213,684						1		%

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The following table provides variance explanations for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 by major income statement caption for CERC:

												Favorable (Unfavorable)
												(in millions)
Revenues
Cost of natural gas, offset in utility natural gas below												$	185
Energy efficiency and other pass-through, offset in operation and maintenance below												17
Gross receipts tax, offset in taxes other than income taxes below												6
Non-volumetric and miscellaneous revenue												2
Weather and usage												23
Customer growth												4
Non-utility revenues												3
Customer rates												36
Total												$	276
Utility natural gas
Cost of natural gas, offset in revenues above												$	(185)
Total												$	(185)
Operation and maintenance
All other operations and maintenance expense, including bad debt expense												$	(4)
Contract services												(3)
Labor and benefits												(4)
Corporate support services												(2)
Energy efficiency and other pass-through, offset in revenues above												$	(17)
Total												$	(30)
Depreciation and amortization
Ongoing additions to plant-in-service												$	(15)
Total												$	(15)
Taxes other than income taxes
Gross receipts tax, offset in revenues above												$	(6)
Incremental capital projects placed in service, and the impact of updated property tax rates												(3)
Total												$	(9)
Gain on sale
Gain on sale of Louisiana and Mississippi natural gas LDC businesses												$	52
Total												$	52
Interest expense and other finance charges
Other, primarily AFUDC and impacts of regulatory deferrals												$	(1)
Changes in outstanding debt												(6)
Total												$	(7)
Other income, net
Other income, including AFUDC - Equity												$	(1)
Total												$	(1)

Income Tax Expense. For a discussion of effective tax rate per period, see Note 10 to the Interim Condensed Financial Statements.

CERTAIN FACTORS AFFECTING FUTURE EARNINGS

For information on other developments, factors and trends that may impact the Registrants’ future earnings, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Certain Factors Affecting Future Earnings” in Item 7 of Part II and “Risk Factors” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K, and “Cautionary Statement Regarding Forward-Looking Information” in this combined Form 10-Q.

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LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

The following table summarizes the Registrants’ cash flows by category during the three months ended March 31, 2025 and 2024:

			Three Months Ended March 31,
			2025																		2024
			CenterPoint Energy						Houston Electric						CERC						CenterPoint Energy						Houston Electric						CERC
			(in millions)
Cash provided by (used in):
Operating activities			$	410					$	8					$	578					$	538					$	241					$	378
Investing activities			(234)						(409)						(360)						(844)						(795)						(289)
Financing activities			1,053						404						(219)						376						587						(73)

Operating Activities. The following items contributed to increased (decreased) net cash provided by operating activities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024:

			CenterPoint Energy						Houston Electric						CERC
			(in millions)
Changes in net income after adjusting for non-cash items			$	(156)					$	(13)					$	(76)
Changes in working capital			(196)						(203)						(25)
Changes in current regulatory assets and liabilities			161						(2)						172
Changes in non-current regulatory assets and liabilities			49						7						50
Higher pension contribution			(61)						—						—
Other			75						(22)						79
			$	(128)					$	(233)					$	200

Investing Activities. The following items contributed to (increased) decreased net cash used in investing activities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024:

			CenterPoint Energy						Houston Electric						CERC
			(in millions)
Payment for asset acquisition			$	(357)					$	—					$	—
Net change in capital expenditures			$	(193)					$	(142)					$	(8)
Net change in notes receivable from affiliated companies			—						544						(1,223)
Proceeds from divestiture			1,219						—						1,219
Other			(59)						(16)						(59)
			$	610					$	386					$	(71)

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Financing Activities. The following items contributed to (increased) decreased net cash provided by (used in) financing activities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024:

			CenterPoint Energy						Houston Electric						CERC
			(in millions)
Net changes in commercial paper outstanding			$	412					$	—					$	(155)
Net changes in proceeds from issuances of Common Stock			(3)						—						—
Net changes in long-term debt and term loans outstanding, excluding commercial paper			278						102						(10)
Net changes in debt issuance costs			(5)						(2)						—
Net changes in short-term borrowings			1						—						1
Increased payment of Common Stock dividends			(17)						—						—
Change in contribution from parent			—						(230)						—
Change in dividend to parent			—						(54)						18
Other			11						1						—
			$	677					$	(183)					$	(146)

Future Sources and Uses of Cash

The liquidity and capital requirements of the Registrants are affected primarily by results of operations, capital expenditures, storm restoration costs, debt service requirements, tax payments, working capital needs and various regulatory actions. Capital expenditures (other than expenditures associated with the May 2024 Storm Events and Hurricane Beryl) are expected to be used for investment in infrastructure. These capital expenditures are anticipated to enhance reliability and safety, increase resiliency and expand our systems through value-added projects. In addition to dividend payments on CenterPoint Energy’s Common Stock and interest payments on debt, the Registrants’ principal anticipated cash requirements for the remainder of 2025 include the following:

						CenterPoint Energy						Houston Electric						CERC
						(in millions)
Estimated capital expenditures (1)						$	3,764					$	2,139					$	1,080
Estimated restoration costs associated with May 2024 Storm Events (2)						32						32						—
Scheduled principal payments on Securitization Bonds						13						—						—
Expected contributions to pension plans and other post-retirement plans						55						1						3

(1)Excludes expenditures for the restoration costs associated with the May 2024 Storm Events.

(2)Represents cash requirements associated with the estimated storm restoration costs for the remainder of 2025.

The Registrants expect that anticipated cash needs for the remainder of 2025 will be met with available cash flow from operations, as well as cash flows from financing (such as incremental bond issuances including securitization, borrowings under credit facilities, commercial paper issuances or other sources) and investing activities (such as proceeds from divestitures). Such activities may include the issuance of securities in the capital markets as well as proceeds from divestitures. The issuance of securities in the capital markets and borrowings under additional credit facilities and term loans may not, however, be available on acceptable terms. The Registrants may also, from time to time, redeem, repurchase or otherwise acquire their outstanding debt securities through open market purchases, tender offers or pursuant to the terms of such securities.

For more information regarding the May 2024 Storm Events and Hurricane Beryl, see Note 6 to the Interim Condensed Financial Statements.

Off-Balance Sheet Arrangements

Other than Houston Electric’s general mortgage bonds issued as collateral for tax-exempt long-term debt of CenterPoint Energy as discussed in Note 9 and guarantees as discussed in Note 11(c) to the Interim Condensed Financial Statements, the Registrants have no off-balance sheet arrangements.

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Regulatory Matters

Houston Electric TEEEF

For information about Houston Electric’s TEEEF, see Note 6 to the Interim Condensed Financial Statements.

Hurricane Beryl

For additional information about Hurricane Beryl, see Note 6 to the Interim Condensed Financial Statements.

May 2024 Storm Events

For additional information about the May 2024 Storm Events, see Note 6 to the Interim Condensed Financial Statements.

Indiana Electric CPCN (CenterPoint Energy)

BTAs

On February 7, 2023, Indiana Electric filed a CPCN with the IURC to approve an amended BTA to purchase the 191 MW Posey Solar project. With the passage of the IRA, Indiana Electric can now pursue PTCs for solar projects. Indiana Electric requested that project costs, net of PTCs, be recovered in rate base rather than a levelized rate, through base rates or the CECA mechanism, depending on which provides more timely recovery. On September 6, 2023, the IURC issued an order approving the CPCN. On March 7, 2025, SIGECO completed the acquisition of Posey Solar from Arevon for a purchase price of approximately $357 million. Subsequent to the acquisition, and pursuant to the Posey Solar Merger Agreement, Posey Solar was merged into SIGECO. The Posey Solar project is expected to be placed in service in the second quarter of 2025 and recovered through base rates. For further information, see Note 3 to the Interim Condensed Financial Statements.

On January 10, 2023, Indiana Electric filed a CPCN with the IURC to acquire a wind energy generating facility with installed capacity of 200 MWs through a BTA, consistent with its 2019/2020 IRP that calls for up to 300 MWs of wind generation. The wind project is located in MISO’s Central Region. Indiana Electric received approval from the IURC to recover the costs of the wind facility via the CECA mechanism, which is expected to be placed in service by the end of 2026. On June 6, 2023, the IURC issued an order approving the CPCN, thereby authorizing Indiana Electric to purchase the wind generating facility. However, as of the date of the filing of this combined Form 10-Q, Indiana Electric has not entered into any definitive agreement relating to this wind energy generating facility, and it is not certain that a definitive agreement will be entered into at all.

PPAs

Indiana Electric sought approval in February 2021 for a 100 MW solar PPA with Clenera LLC in Warrick County, Indiana. The request accounted for increased cost of debt related to this PPA, which provides equivalent equity return to offset imputed debt during the 25-year life of the PPA. In October 2021, the IURC approved the Warrick County solar PPA but denied the request to preemptively offset imputed debt in the PPA cost. Due to rising project costs caused by inflation and supply chain issues affecting the energy industry, Clenera LLC and Indiana Electric were compelled to renegotiate terms of the agreement to increase the PPA price. On January 17, 2023, Indiana Electric filed a request with the IURC to amend the previously approved PPA with certain modifications. Revised purchase power costs are requested to be recovered through the fuel adjustment clause proceedings over the term of the amended PPA. On May 30, 2023, the IURC approved the Warrick County solar amended PPA; however, due to MISO interconnection study delays and estimated interconnection cost increases, Indiana Electric and Clenera LLC have entered into discussions regarding the future of the project, which is expected to result in the termination of the PPA.

On August 25, 2021, Indiana Electric filed with the IURC seeking approval to purchase 185 MW of solar power, under a 15-year PPA, from Oriden, which is developing a solar project in Vermillion County, Indiana, and 150 MW of solar power, under a 20-year PPA, from Origis, which is developing a solar project in Knox County, Indiana. On May 4, 2022, the IURC issued an order approving Indiana Electric to enter into both PPAs. In March 2022, when the results of the MISO interconnection study were completed, Origis advised Indiana Electric that the costs to construct the solar project in Knox County, Indiana had increased. The increase was largely driven by escalating commodity and supply chain costs impacting manufacturers worldwide. In August 2022, Indiana Electric and Origis entered into an amended PPA, which reiterated the terms contained in the 2021 PPA with certain modifications. On February 22, 2023, the IURC approved the Knox County solar amended PPA; however, due to MISO interconnection delays, the project in-service date will be delayed from 2024 to 2026. On January 17, 2023, Indiana Electric filed a request with the IURC to amend the previously approved PPA with Oriden with

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certain modifications. Revised purchase power costs were approved to be recovered through the fuel adjustment clause proceedings over the term of the amended PPA with Oriden. On May 30, 2023, the IURC approved the Vermillion County solar amended PPA; however, due to MISO interconnection study delays, the developer disclosed the project in-service date would be delayed to 2028. As of March 31, 2025, Indiana Electric and Oriden had entered into additional discussions regarding the future of the solar project in Vermillion County, Indiana, which is expected to result in the termination of the PPA.

On May 1, 2024, Indiana Electric filed with the IURC seeking approval to purchase 147 MW of wind power under a 25-year PPA with an affiliate of NextEra Energy, Inc., which is developing a wind project in Knox County, Illinois. On November 6, 2024, the IURC approved the Knox County wind PPA, which provided for the recovery of the purchase power costs through the fuel adjustment clause proceedings over the term of the PPA. The facility is targeted to be in operation in early 2026.

On April 14, 2025, Indiana Electric filed with the IURC seeking approval to purchase 170 MW of wind power under a 25-year PPA with an affiliate of NextEra Energy, Inc., which is developing a wind project in Tama County, Iowa. The facility is targeted to be in operation by the fourth quarter of 2025. Indiana Electric expects a decision from the IURC in the fourth quarter of 2025. If Indiana Electric’s request is approved, the power purchase costs will be recovered through the fuel adjustment clause proceedings over the term of the PPA.

Natural Gas Combustion Turbines

On June 17, 2021, Indiana Electric filed a CPCN with the IURC seeking approval to construct two natural gas combustion turbines to replace portions of its existing coal-fired generation fleet. On June 28, 2022, the IURC approved the CPCN. The estimated $334 million turbine facility is being constructed at the previous site of the A.B. Brown power plant in Posey County, Indiana and is expected to provide a combined output of 460 MW. Indiana Electric received approval for depreciation expense and post in-service carrying costs to be deferred in a regulatory asset until the date Indiana Electric’s base rates include a return on and recovery of depreciation expense on the facility. A new approximately 23.5 mile pipeline is constructed and operated by Texas Gas Transmission, LLC to supply natural gas to the turbine facility. FERC granted a certificate to construct the pipeline on October 20, 2022. On January 7, 2025, the United States Court of Appeals for the D.C. Circuit affirmed the FERC’s order granting the certificate. Indiana Electric granted its contractor a full notice to proceed to construct the turbines on December 9, 2022. It is expected that 230 MW of the facility will be operational in the second quarter of 2025, and, due to a transformer manufacturing issue, that the remaining 230 MW of the facility will be operational in the third quarter of 2025. On February 6, 2025, the EPC contractor for Indiana Electric’s proposed natural gas combustion turbines provided a notice to Indiana Electric that the EPC contractor was identifying the impacts of the proposed tariffs on the project and intended to seek an equitable adjustment to the contract price for the project. Indiana Electric received approval from the IURC on February 3, 2025, to recover for each combustion turbine by adjusting base rates as they are placed in service.

Texas Legislation (CenterPoint Energy, Houston Electric and CERC)

The Registrants will monitor the 89th Texas Legislature for legislation that may impact their businesses.

Solar Panel Issues (CenterPoint Energy)

CenterPoint Energy’s current and future solar projects have been impacted by delays and/or increased costs. The potential delays and inflationary cost pressures communicated from the developers of our solar projects have been primarily due to (i) unavailability of solar panels and other uncertainties related to DOC antidumping and countervailing duties investigation(s), (ii) the December 2021 Uyghur Forced Labor Prevention Act on solar modules and other products manufactured in China’s Xinjiang Uyghur Autonomous Region and (iii) persistent general global supply chain and labor availability issues. On May 15, 2024, based on a petition filed by the American Alliance for Solar Manufacturing Trade Committee, the DOC announced the initiation of antidumping and countervailing duty investigations of silicon photovoltaic cells from Cambodia, Malaysia, Thailand, and Vietnam. On October 1, 2024, the DOC’s preliminary countervailing duty determination affirmed the petition and established preliminary duty rates. Subsequently, on November 29, 2024, the DOC announced its preliminary affirmative determination in the antidumping investigation and established preliminary dumping rates. On April 21, 2025, the DOC announced its final affirmative determinations in the antidumping and countervailing duty investigations, determining that imports of silicon photovoltaic cells from the aforementioned countries are being dumped into the U.S. market and receiving countervailable subsidies. The International Trade Commission (the “ITC”) has until June 2, 2025 to make its final injury determination. If the ITC makes an affirmative country-specific final injury determination, the DOC will impose certain duty rates on imports of silicon photovoltaic cells from the aforementioned countries. Furthermore, in 2025, the U.S. government has announced and, in certain cases, rescinded, multiple tariffs on several foreign jurisdictions and imports into the United States. Increased tariffs by the United States have led, and may continue to lead, to the imposition of retaliatory tariffs or other measures taken by foreign jurisdictions, which may in turn lead to additional tariffs imposed or measures taken by the United States. These tariffs, as well as new legislation, tariffs, bans, retaliatory trade measures or related governmental action, have

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already, and may continue to, further negatively impact the supply of solar panels. In addition to supply reductions, these or similar duties, legislation, tariffs, bans and other measures have and may in the future also put upward pressure on prices of these solar energy products, which may reduce our ability to acquire these items in a timely and cost-efficient manner. These impacts have resulted, and may continue to result in, cost increases for certain projects, and such impacts may require that we seek additional regulatory review and approvals. Additionally, significant changes to project costs and schedules as a result of these factors could impact the viability of the projects. For more information regarding potential delays, cancellations and supply chain disruptions, see “Risk Factors” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K.

Transmission and Distribution System Resiliency Plan (CenterPoint Energy and Houston Electric)

Following feedback from customers, external experts and other stakeholders, including elected officials and local agencies, Houston Electric filed a revised SRP with the PUCT on January 31, 2025 for review and approval. The SRP proposes to invest approximately $5.75 billion over a three-year period from 2026 to 2028 for transmission and distribution infrastructure, information technology and cybersecurity assets and event response capability. This plan proposes 39 resiliency-enhancing measures and a microgrid pilot program to be implemented over the three-year period. The SRP has an estimated capital cost of approximately $5.54 billion and an estimated operations and maintenance expense of approximately $211 million. Approximately $2.17 billion of such cost is for transmission-related investments, and approximately $3.58 billion is for distribution-related investments. Intervenor testimony was filed on April 8, 2025, and PUCT staff testimony was filed on April 15, 2025. All parties have agreed to mediation led by the State Office of Administrative Hearings on April 29, 2025. Houston Electric’s rebuttal is due by May 1, 2025. A hearing on the merits is scheduled for May 12, 2025 through May 14, 2025 and a decision from the PUCT is anticipated in the third quarter of 2025.

Rate Change Applications

The Registrants are routinely involved in rate change applications before state regulatory authorities. Those applications include general rate cases, where the entire cost of service of the utility is assessed and reset. In addition, Registrants are periodically involved in proceedings to adjust its capital tracking mechanisms (e.g., CSIA, DCRF, DRR, GRIP, TCOS, ECA, CECA and TDSIC), its decoupling mechanism (e.g., decoupling and SRC), and its energy efficiency cost trackers (e.g., CIP, DSMA, EECRF, EEFC and EEFR).

Minnesota Gas Rate Case. On November 1, 2023, CERC filed an application with the MPUC requesting an adjustment to delivery charges in 2024 and 2025 for the natural gas business in Minnesota. The requested increase is approximately 6.5% or $85 million for 2024 and an additional approximately 3.7% or $52 million for 2025. The need for a rate change is primarily driven by continuing investment in the safety and reliability of the natural gas system, including new Intelis natural gas meters that feature an integrated safety shutoff valve, changes to depreciation rates that better reflect the actual life and salvage characteristics of assets, and changes in other costs to serve customers. The request reflects a proposed 10.3% ROE on a 52.5% equity ratio. Interim rates for 2024 of $69 million, subject to refund, were implemented as of January 1, 2024. A request for interim rates of $33 million for 2025 was filed on September 30, 2024, approved at the December 3, 2024 hearing and approved by an order issued December 20, 2024. A unanimous settlement agreement was filed on November 25, 2024. The settlement provided for an increase of $60.8 million for 2024 and an additional $42.7 million for 2025. The parties agreed to an overall cost of capital of 7.07% for 2024 and 2025. The ALJ filed a report on February 13, 2025 recommending that the MPUC approve the settlement agreement. As required by the December 20, 2024 order, the difference between 2024 interim rates and the settled amount of $60.8 million was refunded to customers in March 2025. Exceptions to the ALJ report were filed on April 18, 2025. The anticipated decision date of the rate case is July 1, 2025.

Houston Electric Rate Case. On March 6, 2024, Houston Electric filed an application with the PUCT requesting authority to change rates and charges for electric transmission and distribution service. The requested increase was approximately $17 million (1%) for retail customers and $43 million (6.6%) for wholesale transmission service, excluding TCRF and rate case expenses. The need for a rate increase was primarily driven by continuing investment that has been made to support customer growth and to bolster the safety and reliability of Houston Electric’s transmission and distribution system. The request reflected a proposed 10.4% ROE and a 45% equity ratio. Errata testimony was filed to correct minor errors included in the initial filing which reduced the requested increase to $56 million compared to then-current rates. Houston Electric reached a settlement agreement with certain parties and submitted the agreement to the PUCT on January 29, 2025. The settlement reflects a $47 million reduction in annual revenues and a 9.65% ROE and a weighted average cost of capital of 6.606% based upon an as-filed 4.29% cost of debt, an agreed ROE of 9.65% and an agreed regulatory capital structure of 56.75% long-term debt and 43.25% equity. A final order approving the settlement agreement was issued by the PUCT on March 13, 2025.

Ohio Gas Rate Case. CEOH filed its Application and Standard Filing Requirement in October 2024 and the related testimony in November 2024. The filing seeks a revenue requirement increase of approximately $100 million based on a requested return on equity of 10.4% and an equity percentage of 45.87%. The need for a rate increase was primarily driven by

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continuing investment in the safety and reliability of the natural gas system. A final order is expected no sooner than the first quarter of 2026.

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The table below reflects significant applications pending or completed since the Registrants’ combined 2024 Form 10-K was filed with the SEC through the date of the filing of this combined Form 10-Q:

Mechanism						Annual Increase (Decrease) (1) (in millions)						Filing Date						Effective Date						Approval Date						Additional Information
CenterPoint Energy and Houston Electric (PUCT)
Rate Case						$	(47)					March 2024						April 2025						March 2025						See discussion above under Houston Electric Rate Case.
TCOS						$	64					February 2025						TBD						TBD						Based on the net change in invested capital since its last base rate proceeding of approximately $614 million for the period January 1, 2024 through December 31, 2024.
DCRF						$	123					February 2025						TBD						TBD						Based on the net change in distribution invested capital since its last base rate proceeding of approximately $1 billion for the period January 1, 2024 through December 31, 2024, for an incremental revenue increase of $123 million adjusted for load growth.
TEEEF						$	(24)					April 2025						TBD						TBD						Seeks approval of: (1) a proposal to release Houston Electric’s 15 large 32 MW TEEEF units to ERCOT and CPS Energy beginning on or around May 1, 2025 to address a potential shortfall and Load Shed risk and provide support to the San Antonio region; (2) a corresponding reduction to the capacity of the Houston Electric TEEEF fleet; and (3) a reduction and update to Houston Electric’s rider TEEEF rate to reflect the removal of the 15 large 32 MW TEEEF units from Houston Electric’s TEEEF fleet. Houston Electric will make no revenue or profit from ERCOT for the time period when the 15 large 32 MW TEEEF units are in the San Antonio area being dispatched by ERCOT.
CenterPoint Energy and CERC - Beaumont/East Texas, South Texas, Houston and Texas Coast (Railroad Commission)
Tax Act Rider						$	20					August 2024						TBD						TBD						Resulting from the Texas Gas Rate Case, the first Tax Act Rider Calculation was filed on August 1, 2024 pursuant to Docket No. OS-23-00015513 to recover the effects of the Inflation Reduction Act (“Tax Act 2022”) and certain other tax-related costs for rates to become effective January 1, 2025. These effects include the return on the CAMT deferred tax asset (“DTA”) resulting from the Tax Act 2022, income tax credits resulting from the Tax Act 2022, and the return on the increment or decrement in the NOL DTA included in rate base and in the standard service base revenue requirement approved in the Texas Gas Rate Case. CERC believes its filing is consistent with the Tax Act Rider tariff approved in Docket No. OS-23-00015513. On October 1, 2024, certain parties filed comments disputing the application. Briefings were filed with an ALJ in November 2024. A hearing on the merits was held on February 21, 2025 and continued on March 21, 2025. On March 21, 2025, a Unanimous Settlement Agreement was filed. On April 11, 2025, a Proposal for Decision (PFD) was issued. The Railroad Commission is scheduled to consider the PFD at the May 13, 2025 open meeting.
GRIP						$	71					February 2025						TBD						TBD						Based on net change in invested capital of $446 million.
CenterPoint Energy and CERC - Minnesota (MPUC)
Rate Case						$	136					November 2023						TBD						TBD						See discussion above under Minnesota Gas Rate Case.
CenterPoint Energy - Indiana South - Gas (IURC)
CSIA						$	2					April 2025						TBD						TBD						Requested an increase of $11.6 million to rate base, which reflects approximately $1.5 million annual increase in current revenues, of which 80% is included in the mechanism and 20% is deferred until the next rate case. The mechanism also includes a change in (over)/under recovery variance of $1.9 million. The OUCC will file testimony on June 3, 2025. Indiana South rebuttal is due June 17, 2025. The hearing is scheduled for June 30, 2025.
CenterPoint Energy and CERC - Indiana North - Gas (IURC)
CSIA						$	9					April 2025						TBD						TBD						Requested an increase of $94.9 million to rate base, which reflects approximately $8.6 million annual increase in current revenues, of which 80% is included in the mechanism and 20% is deferred until the next rate case. The mechanism also includes a change in (over)/under recovery variance of $5 million. The OUCC will file testimony on June 3, 2025. Indiana North rebuttal is due June 17, 2025. The hearing is scheduled for June 30, 2025.
CenterPoint Energy and CERC - Ohio - Gas (PUCO)
Rate Case						$	100					October 2024						TBD						TBD						See discussion above under Ohio Gas Rate Case.

(1)Represents proposed increases (decreases) when effective date and/or approval date is not yet determined. Approved rates could differ materially from proposed rates.

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Tariffs

In 2025, the U.S. government has announced and, in certain cases, rescinded, multiple tariffs on several foreign jurisdictions and imports into the United States. For example, in March 2025, the U.S. government imposed a 25% tariff on steel imports, and in April 2025, the U.S. government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States have led, and may continue to lead, to the imposition of retaliatory tariffs or other measures taken by foreign jurisdictions, which may in turn lead to additional tariffs imposed or measures taken by the United States. Additionally, the announcement and rescission of tariffs on foreign jurisdictions has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect the Registrants’ ability to access the capital markets, contribute to inflation in the markets in which the Registrants operate, increase commodity cost volatility, impact availability of goods and materials, or otherwise negatively impact the global supply chain. The Registrants are continuing to monitor the economic effects of such announcements and developments, as well as the Registrants’ ability to mitigate their related impacts, but costs and other effects associated with the tariffs remain uncertain.

Greenhouse Gas and Climate-Related Regulation and Compliance (CenterPoint Energy)

There has been increasing attention at the local, state and international levels to the issue of climate risk. There has been a recent shift, however, in climate policy at the federal level in the United States. On January 20, 2025, President Trump signed an executive order to withdraw the United States from the Paris Agreement, which will take effect on January 27, 2026. Additionally, in January 2025, President Trump signed a series of executive orders that, among other things, (i) call upon the EPA to submit a report on the continuing applicability of its endangerment finding for GHGs under the Clean Air Act and issue guidance on the “social cost of carbon” to consider whether such metric should be eliminated, (ii) direct federal executive departments and agencies to initiate a regulatory freeze for certain rules that have not taken effect, pending review by the newly appointed agency head, (iii) temporarily halt certain federal government agencies from issuing approvals, permits and loans for wind projects pending the completion of certain assessments and reviews and (iv) pause the disbursement of funds appropriated through the IRA and the Infrastructure Investments and Jobs Act. In response to the series of executive orders, on March 12, 2025, the EPA announced 31 regulatory actions, including the reconsideration of certain regulations and standards under the Clean Air Act and other air-related rules such as the 2009 endangerment finding authorizing the EPA to regulate GHG emissions under the Clean Air Act, the mandatory GHG Reporting Program, GHG emissions limits for the oil and gas sector adopted by the prior administration, and the rules regulating GHG emissions from new gas-fired combustion turbines and existing coal, oil and gas-fired steam generating units. On March 14, 2025, President Trump signed a Joint Resolution of Disapproval under the Congressional Review Act to prohibit the IRA’s waste methane emissions charge rules, which were finalized in November 2024, from taking effect.

On March 6, 2024, the SEC adopted final rules that require the Registrants to disclose certain climate-related information in registration statements and annual reports. Litigation challenging the rules was filed by multiple parties in multiple jurisdictions, which was consolidated and assigned to the U.S. Court of Appeals for the Eighth Circuit. On April 4, 2024, the SEC announced it was voluntarily delaying the implementation of the climate disclosure rules while the U.S. Court of Appeals considered the litigation, and on March 27, 2025, the SEC voted to end the defense of the rules in the litigation.

CenterPoint Energy’s net zero emissions goals are aligned with Indiana Electric’s generation transition plan and are expected to position Indiana Electric to comply with anticipated future regulatory requirements related to GHG emissions reductions. Houston Electric, in contrast to some electric utilities including Indiana Electric, does not generate electricity, other than through TEEEF, and thus is not directly exposed to the risk of high capital costs and regulatory uncertainties that face electric utilities that burn fossil fuels to generate electricity. 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. Further, certain local government bodies have introduced or are considering requirements and/or incentives to reduce energy consumption by certain specified dates. For example, Minneapolis has adopted carbon emission reduction goals in an effort to decrease reliance on natural gas. Additionally, cities in Minnesota within CenterPoint Energy’s Natural Gas operational footprint are considering initiatives to eliminate natural gas use in buildings and focus on electrification. Also, Minnesota cities may consider seeking legislative authority for the ability to enact voluntary enhanced energy standards for all development projects. These initiatives could have a significant impact on CenterPoint Energy and its operations, and this impact could increase if other cities and jurisdictions in its service area enact similar initiatives. Further, our third-party suppliers, vendors and partners may also be impacted by climate-related laws and regulations, which could impact CenterPoint Energy’s business by, among other things, causing permitting and construction

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delays, project cancellations or increased project costs passed on to CenterPoint Energy. Conversely, regulatory actions that effectively promote the consumption of natural gas because of its lower emissions characteristics relative to other fossil fuels would be expected to benefit CenterPoint Energy and CERC and their natural gas-related businesses. At this time, however, we cannot quantify the magnitude of the impacts from possible new regulatory actions related to GHG emissions, either positive or negative, on the Registrants’ businesses.

Compliance costs and other effects associated with climate risk, reductions in GHG emissions and obtaining renewable energy sources remain uncertain. Although the amount of compliance costs remains uncertain, any new climate-related regulation or legislation will likely result in an increase in compliance costs. While the requirements of a federal or state rule remain uncertain, CenterPoint Energy will continue to monitor regulatory activity regarding GHG emission standards that may affect its business. Currently, CenterPoint Energy does not purchase carbon credits. In connection with its net zero and GHG emissions reduction goals, CenterPoint Energy expects to purchase carbon credits in the future; however, CenterPoint Energy does not currently expect the number of credits, or cost for those credits, to be material.

Climate Risk Trends and Uncertainties

Recent changes in the U.S. presidential administration and significant expected increases in electric demand, as announced by organizations such as ERCOT and MISO, have shifted the energy landscape in the United States. Since taking office, President Trump has issued a series of executive orders and presidential memoranda that seek to increase investment in fossil fuel infrastructure, including by directing all heads of federal agencies to identify and begin the processes to suspend, revise or rescind all agency actions that are determined to be unduly burdensome on the identification, development or use of domestic energy resources, with particular attention to oil, natural gas, hydropower, biofuels, critical mineral and nuclear energy resources. This shift in federal domestic energy policy has resulted in uncertainty with respect to the scope and speed of future renewable generation infrastructure development and the role that existing renewable generation will play in support of the U.S. energy grid. The long-term impacts of this domestic energy policy shift are uncertain, including with respect to impacts on the regulatory framework relating to the development of, and consequently the availability of, alternative energy sources (such as private solar, microturbines, fuel cells, energy-efficient buildings and energy storage devices). Additionally, it is unclear whether, and if so how, the new domestic energy policy, including the potential suspension, revision or rescission of regulations restricting emissions (including methane emissions), will affect consumers’ and companies’ energy use, adoption of alternative energy sources or decisions to expand their facilities, including natural gas facilities.

Nevertheless, as alternative energy technologies become a more cost-competitive option over time, whether through cost effectiveness or government incentives and subsidies, certain customers may choose to meet their own energy needs and subsequently decrease usage of the Registrants’ systems and services, which may result in, among other things, Indiana Electric’s generating facilities becoming less competitive and economical. Further, continued evolution of investor sentiment related to the use of fossil fuels has had, and may continue to have, significant impacts on CenterPoint Energy’s electric generation and natural gas businesses. For example, because Indiana Electric currently relies on coal for a portion of its generating capacity, certain financial institutions choose not to participate in CenterPoint Energy’s financing arrangements. Conversely, demand for the Registrants’ services may increase as a result of customer adoption of alternative energy sources and responses to climate risk. For example, the expected expansion of energy export facilities, including hydrogen facilities, and electrification of industrial processes and transport and logistics, among others, in our service territories could lead to an increase in demand for electricity, resulting in increased usage of CenterPoint Energy’s systems and services. Any negative opinions with respect to CenterPoint Energy’s environmental practices or its ability to meet the challenges posed by climate risk formed by regulators, customers, investors, legislators or other stakeholders could harm its reputation.

Indiana Electric’s 2019/2020 IRP identified a preferred portfolio that retires 730 MW of coal-fired generation facilities and replaces these resources with a mix of generating resources composed primarily of renewables, including solar, wind, and solar with storage, supported by dispatchable natural gas combustion turbines including a pipeline to serve such natural gas generation. Indiana Electric continues to execute on its 2019/2020 IRP and has received initial approvals for 626 MWs of the 700-1,000 MWs of solar generation and 200 MWs of the 300 MWs of wind generation identified within Indiana Electric’s 2019/2020 IRP through a combination of BTAs and PPAs. Additionally, as reflected in its 10-year capital plan announced in September 2021, CenterPoint Energy anticipates spending over $3 billion in energy investments and enablement, which may be used to support, among other things, renewable energy generation. CenterPoint Energy believes its planned investments in renewable energy generation, natural-gas fired electric generating units and corresponding planned reductions in its GHG emissions support efforts to provide its customers with lower-cost, lower-emissions energy options while supporting the Company’s GHG emissions reduction goals. Indiana Electric’s 2022/2023 IRP, which was submitted to the IURC in May 2023, was conducted to identify an appropriate generation resource portfolio to satisfy the needs of its customers and comply with environmental regulations. The proposed preferred portfolio under the 2022/2023 IRP was the second evolution to the generation transition plan to move away from coal-fired generation to a more cost-effective and lower-emission portfolio of resources. Indiana Electric’s 2022/2023 IRP proposed preferred portfolio called for the conversion of its last remaining coal

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unit, F.B. Culley Unit 3, to natural gas and to add a significant amount of additional renewable resources through 2033. Indiana Electric has since received approval for a PPA for 147 MWs of wind generation consistent with the preferred portfolio identified in the 2022/2023 IRP. Additionally, in February 2025, Indiana Electric launched its 2025 IRP process to set its long-term strategy for electric generation and power needs for its customers. The conversion of F.B. Culley Unit 3 to natural gas has been paused and will be reevaluated in the 2025 IRP process. For more information regarding CenterPoint Energy’s net zero and GHG emissions reduction goals and the risks associated with them, see “Risk Factors — Risk Factors Affecting Regulatory, Environmental and Legal Risks — CenterPoint Energy is subject to operational and financial risks...” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K.

To the extent climate risk result in warmer temperatures in the Registrants’ service territories, financial results from the Registrants’ businesses could be adversely impacted. For example, CenterPoint Energy’s and CERC’s Natural Gas could be adversely affected through lower natural gas sales. On the other hand, warmer temperatures in CenterPoint Energy’s and Houston Electric’s electric service territory may increase revenues from transmission and distribution and generation through increased demand for electricity used for cooling. Another possible result of climate risk is more frequent and more severe weather events, such as hurricanes, tornadoes, floods, microbursts, severe winter weather conditions, including ice storms, wildfires, thunderstorms, high winds, hail, derecho events, or extreme temperatures, including such storms as the February 2021 Winter Storm Event, the May 2024 Storm Events and Hurricane Beryl. Since many of the Registrants’ facilities are located along or near the Texas Gulf Coast, increased or more severe weather events could increase costs to repair damaged facilities and restore service to customers. CenterPoint Energy’s current 10-year capital plan includes capital expenditures to maintain reliability and safety and increase resiliency of its systems as climate risk may result in more frequent significant weather events. To the extent adverse weather conditions affect the Registrants’ suppliers, results from their energy delivery businesses may suffer. For example, in Texas, the February 2021 Winter Storm Event caused an electricity generation shortage that was severely disruptive to Houston Electric’s service territory and the wholesale generation market and also caused a reduction in available natural gas capacity. Additionally, the May 2024 Storm Events and Hurricane Beryl caused significant damage to Houston Electric’s electric delivery system and resulted in electric service interruptions peaking at an estimated 922,000 customers and more than 2.1 million customers, respectively. When the Registrants cannot deliver electricity or natural gas to customers, or customers cannot receive services, the Registrants’ financial results can be impacted by lost revenues, and they generally must seek approval from regulators to recover restoration costs. To the extent the Registrants are unable to recover those costs, or if higher rates resulting from recovery of such costs result in reduced demand for services, the Registrants’ future financial results may be adversely impacted. Further, as the intensity and frequency of significant weather events continues, it may impact our ability to secure cost-efficient insurance.

Other Matters

Credit Facilities

The Registrants may draw on their respective revolving credit facilities from time to time to provide funds used for general corporate and limited liability company purposes, including to backstop CenterPoint Energy’s and CERC’s commercial paper programs. The facilities may also be utilized to obtain letters of credit. For further details related to the Registrants’ revolving credit facilities, see Note 9 to the Interim Condensed Financial Statements.

Based on the consolidated debt to capitalization covenant in the Registrants’ revolving credit facilities, the Registrants would have been permitted to utilize the full capacity of such revolving credit facilities, which aggregated approximately $4.0 billion as of March 31, 2025. As of April 21, 2025, the Registrants had the following revolving credit facilities and utilization of such facilities:

												Amount Utilized as of April 21, 2025
Registrant						Size of Facility						Loans						Letters of Credit						Commercial Paper						Weighted Average Interest Rate						Termination Date
						(in millions)
CenterPoint Energy						$	2,400					$	—					$	—					$	315					4.57%						December 6, 2028
CenterPoint Energy (1)						250						—						—						—						—%						December 6, 2028
Houston Electric						300						—						—						—						—%						December 6, 2028
CERC						1,050						—						—						80						4.56%						December 6, 2028
Total						$	4,000					$	—					$	—					$	395

(1)This credit facility was issued by SIGECO.

The borrowers are currently in compliance with the various business and financial covenants in the four revolving credit facilities.

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Debt Transactions

For detailed information about the Registrants’ debt transactions to date in 2025, see Note 9 to the Interim Condensed Financial Statements.

Securities Registered with the SEC

On May 17, 2023, the Registrants filed a joint shelf registration statement with the SEC registering indeterminate principal amounts of Houston Electric’s general mortgage bonds, CERC Corp.’s senior debt securities and CenterPoint Energy’s senior debt securities and junior subordinated debt securities and an indeterminate number of shares of Common Stock, shares of preferred stock, depositary shares, as well as stock purchase contracts and equity units. The joint shelf registration statement will expire on May 17, 2026. For information related to the Registrants’ debt issuances in 2025, see Note 9 to the Interim Condensed Financial Statements.

Additionally, for information related to shares of Common Stock sold pursuant to the Equity Distribution Agreement in 2025, see Note 15 and Note 16 to the Interim Condensed Financial Statements.

Temporary Investments

As of April 21, 2025, the Registrants had no temporary investments.

Money Pool

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

The table below summarizes CenterPoint Energy money pool activity by Registrant as of April 21, 2025:

			Weighted Average Interest Rate						Houston Electric						CERC (1)
									(in millions)
Money pool investments (borrowings)			4.62%						$	(94)					$	920

(1)Includes a portion of the proceeds from the sale of CERC Corp.’s Louisiana and Mississippi natural gas LDC businesses.

Impact on Liquidity of a Downgrade in Credit Ratings

The interest rate on borrowings under the credit facilities is based on each respective borrower’s credit ratings. As of April 21, 2025, Moody’s, S&P and Fitch had assigned the following credit ratings to the borrowers:

												Moody’s												S&P												Fitch
Registrant						Borrower/Instrument						Rating						Outlook (1)						Rating						Outlook (2)						Rating						Outlook (3)
CenterPoint Energy						CenterPoint Energy Senior Unsecured Debt						Baa2						Negative						BBB						Negative						BBB						Negative
CenterPoint Energy						Vectren Corp. Issuer Rating						n/a						Negative						BBB+						Negative						n/a						n/a
CenterPoint Energy						SIGECO Senior Secured Debt						A1						Stable						A						Negative						n/a						n/a
Houston Electric						Houston Electric Senior Secured Debt						A2						Negative						A						Negative						A						Negative
CERC						CERC Corp. Senior Unsecured Debt						A3						Stable						BBB+						Negative						A-						Negative
CERC						Indiana Gas Senior Unsecured Debt						n/a						n/a						BBB+						Negative						n/a						n/a

(1)A Moody’s rating outlook is an opinion regarding the likely direction of an issuer’s rating over the medium term.

(2)An S&P outlook assesses the potential direction of a long-term credit rating over the intermediate to longer term.

(3)A Fitch rating outlook indicates the direction a rating is likely to move over a one- to two-year period.

The Registrants cannot assure that the ratings set forth above will remain in effect for any given period of time or that one or more of these ratings will not be lowered or withdrawn entirely by a rating agency. The Registrants note that these credit

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ratings are included for informational purposes and are not recommendations to buy, sell or hold the Registrants’ securities and may be revised or withdrawn at any time by the rating agency. Each rating should be evaluated independently of any other rating. Any future reduction or withdrawal of one or more of the Registrants’ credit ratings could have a material adverse impact on the Registrants’ ability to obtain short- and long-term financing, the cost of such financings and the execution of the Registrants’ commercial strategies.

A decline in credit ratings could increase borrowing costs under the Registrants’ revolving credit facilities. If the Registrants’ credit ratings had been downgraded one notch by S&P and Moody’s from the ratings that existed as of March 31, 2025, the impact on the borrowing costs under the four revolving credit facilities would have been insignificant. A decline in credit ratings would also increase the interest rate on long-term debt to be issued in the capital markets and could negatively impact the Registrants’ ability to complete capital market transactions and to access the commercial paper market. Additionally, a decline in credit ratings could increase cash collateral requirements and reduce earnings of CenterPoint Energy’s and CERC’s Natural Gas reportable segments.

Pipeline tariffs and contracts typically provide that if the credit ratings of a shipper or the shipper’s guarantor drop below a threshold level, which is generally investment grade ratings from both Moody’s and S&P, cash or other collateral may be demanded from the shipper in an amount equal to the sum of three months’ charges for pipeline services plus the unrecouped cost of any lateral built for such shipper. If the credit ratings of CERC Corp. decline below the applicable threshold levels, CERC might need to provide cash or other collateral of up to $314 million as of March 31, 2025. The amount of collateral will depend on seasonal variations in transportation levels.

ZENS and Securities Related to ZENS (CenterPoint Energy)

If CenterPoint Energy’s creditworthiness were to drop such that ZENS holders thought CenterPoint Energy’s liquidity was adversely affected or the market for the ZENS were to become illiquid, some ZENS holders might decide to exchange their ZENS for cash. Funds for the payment of cash upon exchange could be obtained from the sale of the shares of ZENS-Related Securities that CenterPoint Energy owns or from other sources. CenterPoint Energy owns shares of ZENS-Related Securities equal to approximately 100% of the reference shares used to calculate its obligation to the holders of the ZENS. ZENS exchanges result in a cash outflow because tax deferrals related to the ZENS and shares of ZENS-Related Securities would typically cease when ZENS are exchanged or otherwise retired and shares of ZENS-Related Securities are sold. The ultimate tax liability related to the ZENS and ZENS-Related Securities continues to increase by the amount of the tax benefit realized each year, and there could be a significant cash outflow when the taxes are paid as a result of the retirement or exchange of the ZENS. If all ZENS had been exchanged for cash on March 31, 2025, deferred taxes of approximately $806 million would have been payable in 2025. If all the ZENS-Related Securities had been sold on March 31, 2025, capital gains taxes of approximately $99 million would have been payable in 2025 based on 2025 tax rates in effect. For additional information about ZENS, see Note 8 to the Interim Condensed Financial Statements.

Cross Defaults

Under the Registrants’ respective revolving credit facilities, a payment default on, or a non-payment default, event or condition that permits acceleration of, any indebtedness for borrowed money and certain other specified types of obligations (including guarantees) exceeding $125 million by the borrower or any of their respective significant subsidiaries will cause a default under such borrower’s respective credit facility or term loan agreement. Under SIGECO’s revolving credit facility, a payment default on, or a non-payment default, event or condition that permits acceleration of, any indebtedness for borrowed money and certain other specific types of obligations (including guarantees) exceeding $75 million by SIGECO or any of its significant subsidiaries will cause a default under SIGECO’s credit facility. A default by CenterPoint Energy would not trigger a default under its subsidiaries’ debt instruments or revolving credit facilities.

Possible Acquisitions, Divestitures and Joint Ventures

From time to time, the Registrants consider the acquisition or the disposition of assets or businesses or possible joint ventures, strategic initiatives or other joint ownership arrangements with respect to assets or businesses. Any determination to take action in this regard will be based on market conditions and opportunities existing at the time, and accordingly, the timing, size or success of any efforts and the associated potential capital commitments are unpredictable. The Registrants may seek to fund all or part of any such efforts with proceeds from debt and/or equity issuances. Debt or equity financing may not, however, be available to the Registrants at that time due to a variety of events, including, among others, maintenance of our credit ratings, industry conditions, general economic conditions, market conditions and market perceptions. CenterPoint Energy has increased its planned capital expenditures in its Electric and Natural Gas businesses multiple times over the recent years to support rate base growth and may continue to do so in the future. The Registrants may continue to explore asset sales as a means to

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efficiently finance a portion of its increased capital expenditures in the future, subject to the considerations listed above. For further information, see Note 3 to the Interim Condensed Financial Statements.

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 LDC businesses for approximately $1.2 billion, subject to adjustment as set forth in the LAMS Asset Purchase Agreement, including adjustments based on net working capital, regulatory assets and liabilities and capital expenditures at closing. The transaction closed on March 31, 2025. On March 7, 2025, SIGECO acquired 100% of the equity interests in Posey Solar, which is constructing a 191 MW solar array in Posey County, Indiana, for approximately $357 million. For further information, see Note 3 to the Interim Condensed Financial Statements.

Collection of Receivables from REPs (CenterPoint Energy and Houston Electric)

Houston Electric’s receivables from the distribution of electricity are collected from REPs that supply the electricity Houston Electric distributes to their customers. Before conducting business, a REP must register with the PUCT and must meet certain financial qualifications. Nevertheless, adverse economic conditions, weather events such as the February 2021 Winter Storm Event, structural problems in the market served by ERCOT or financial difficulties of one or more REPs could impair the ability of these REPs to pay for Houston Electric’s services or could cause them to delay such payments. Houston Electric depends on these REPs to remit payments on a timely basis, and any delay or default in payment by REPs could adversely affect Houston Electric’s cash flows. In the event of a REP default, Houston Electric’s tariff provides a number of remedies, including the option for Houston Electric to request that the PUCT suspend or revoke the certification of the REP. Applicable regulatory provisions require that customers be shifted to another REP or a provider of last resort if a REP cannot make timely payments. However, Houston Electric remains at risk for payments related to services provided prior to the shift to the replacement REP or the provider of last resort. If a REP were unable to meet its obligations, it could consider, among various options, restructuring under the bankruptcy laws, in which event such REP might seek to avoid honoring its obligations and claims might be made against Houston Electric involving payments it had received from such REP. If a REP were to file for bankruptcy, Houston Electric may not be successful in recovering accrued receivables owed by such REP that are unpaid as of the date the REP filed for bankruptcy. However, PUCT regulations authorize utilities, such as Houston Electric, to defer bad debts resulting from defaults by REPs for recovery in future rate cases, subject to a review of reasonableness and necessity.

Other Factors that Could Affect Cash Requirements

In addition to the above factors, the Registrants’ liquidity and capital resources could also be negatively affected by:

• cash collateral requirements that could exist in connection with certain contracts, including weather hedging arrangements, and natural gas purchases, natural gas price and natural gas storage activities of CenterPoint Energy’s and CERC’s Natural Gas reportable segment;

• acceleration of payment dates on certain gas supply contracts, under certain circumstances, as a result of increased natural gas prices, and concentration of natural gas suppliers (CenterPoint Energy and CERC);

• increased costs related to the acquisition of natural gas (CenterPoint Energy and CERC);

• increased costs of certain goods, materials or services due to tariffs or trade restrictions imposed by the U.S. government, the imposition of retaliatory tariffs or other measures, and any effect on trading relationships between the United States and other countries;

• increases in interest expense in connection with debt refinancings and borrowings under credit facilities or term loans or the use of alternative sources of financings, including financings due to the May 2024 Storm Events and Hurricane Beryl;

• various legislative, executive or regulatory actions at the federal, state and local levels, including such actions in response to the May 2024 Storm Events and Hurricane Beryl;

• incremental collateral, if any, that may be required due to regulation of derivatives (CenterPoint Energy);

• the ability of REPs, including REP affiliates of NRG and Vistra Energy Corp., to satisfy their obligations to CenterPoint Energy and Houston Electric;

• slower customer payments and increased write-offs of receivables due to higher natural gas prices, changing economic conditions, public health threats or severe weather events, such as the May 2024 Storm Events and Hurricane Beryl (CenterPoint Energy and CERC);

• the satisfaction of any obligations pursuant to guarantees;

• the outcome of litigation, including litigation related to the February 2021 Winter Storm Event and Hurricane Beryl;

• contributions to pension and postretirement benefit plans;

• recovery of any losses under applicable insurance policies;

• restoration costs and revenue losses resulting from future natural disasters such as hurricanes or other severe weather events and the timing of and amounts sought for recovery of such restoration costs; and

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• various other risks identified in “Risk Factors” in Part I, Item 1A of the Registrants’ combined 2024 Form 10-K, which are incorporated herein by reference, in Part II, Item 1A of this combined Form 10-Q, and in other reports that the Registrants file from time to time with the SEC.

Certain Contractual Limits on Our Ability to Issue Securities and Borrow Money

Certain provisions in certain note purchase agreements relating to debt issued by CERC have the effect of restricting the amount of secured debt issued by CERC and debt issued by subsidiaries of CERC Corp. Additionally, Houston Electric and SIGECO are limited in the amount of mortgage bonds they can issue by the General Mortgage and SIGECO’s mortgage indenture, respectively. For information about the total debt to capitalization financial covenants in the Registrants’ and SIGECO’s revolving credit facilities, see Note 9 to the Interim Condensed Financial Statements.

CRITICAL ACCOUNTING POLICIES

A critical accounting policy is one that is both important to the presentation of the Registrants’ financial condition and results of operations and requires management to make difficult, subjective or complex accounting estimates. An accounting estimate is an approximation made by management of a financial statement element, item or account in the financial statements. Accounting estimates in the Registrants’ historical consolidated financial statements measure the effects of past business transactions or events, or the present status of an asset or liability. The accounting estimates described below require the Registrants to make assumptions about matters that are highly uncertain at the time the estimate is made. Additionally, different estimates that the Registrants could have used or changes in an accounting estimate that are reasonably likely to occur could have a material impact on the presentation of their financial condition, results of operations or cash flows. The circumstances that make these judgments difficult, subjective and/or complex have to do with the need to make estimates about the effect of matters that are inherently uncertain. Estimates and assumptions about future events and their effects cannot be predicted with certainty. The Registrants base their estimates on historical experience and on various other assumptions that they believe to be reasonable under the circumstances, the results of which form the basis for making judgments. These estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Registrants’ operating environment changes. Our critical accounting policies that we deemed the most material in nature were reported in our combined 2024 Form 10-K. There has been no material changes with regard to these critical accounting policies.