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8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 20, 2019

 

 

CENTERPOINT ENERGY, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Texas   1-31447   74-0694415

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

1111 Louisiana

Houston, Texas

   77002
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (713) 207-1111

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

  ☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).

Emerging Growth Company  ☐

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

 

 

 

Item 7.01

Regulation FD Disclosure.

On March 20, 2019, CenterPoint Energy, Inc. (“CenterPoint Energy”) updated its electric operations and natural gas distribution regulatory information slide presentations, which are posted on the Investor Relations page of its website under Regulatory Information, to provide additional clarification on traditional and non-traditional equity capitalization structures within CenterPoint Energy’s Indiana jurisdictions as well as the base year noted for certain historical rate cases. Copies of the updated electric operations and natural gas distribution regulatory information slide presentations are furnished as Exhibits 99.1 and 99.2, respectively, and incorporated herein by reference.

Exhibit 99.1 and Exhibit 99.2 are furnished, not filed, pursuant to Item 7.01. Accordingly, none of the information will be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, as amended, and the information in Exhibits 99.1 and 99.2 will not be incorporated by reference into any registration statement filed by CenterPoint Energy under the Securities Act of 1933, as amended, unless specifically identified as being incorporated by reference.

 

Item 9.01

Financial Statements and Exhibits.

Exhibit 99.1 and Exhibit 99.2 are furnished, not filed, pursuant to Item 7.01. Accordingly, none of the information will be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, as amended, and the information in Exhibit 99.1 and Exhibit 99.2 will not be incorporated by reference into any registration statement filed by CenterPoint Energy under the Securities Act of 1933, as amended, unless specifically identified as being incorporated by reference.

(d)    Exhibits.

 

EXHIBIT

NUMBER

   

EXHIBIT DESCRIPTION

99.1    Electric Operations Regulatory Information Slide Presentation
99.2    Natural Gas Distribution Regulatory Information Slide Presentation

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

.     CENTERPOINT ENERGY, INC.
Date: March 20, 2019     By:  

/s/ Kristie L. Colvin

      Kristie Colvin
      Senior Vice President and Chief Accounting Officer
EX-99.1

Exhibit 99.1 REGULATORY INFORMATION ELECTRIC OPERATIONS MARCH 2019Exhibit 99.1 REGULATORY INFORMATION ELECTRIC OPERATIONS MARCH 2019

(1,2) RECOVERY MECHANISMS HOUSTON ELECTRIC – T&D (3) Authorized Capital Structure Authorized ROE Rate Case Base Year Estimated Year-End 2018 Rate Base 55% Debt / 45% Equity 10.00% 2009 $6,059 (Millions) Mechanism Definition/Description Mechanism, which can be used twice per year, that allows a transmission service provider to update their Interim Transmission Cost of Service wholesale transmission rates to reflect changes in invested capital, depreciation, federal income tax and other adjustment (TCOS) associated taxes as well as changed loads. Semi-annual mechanism where a distribution service provider charges or credits their customers for the Transmission Cost Recovery Factor amount of approved wholesale transmission cost changes billed by a transmission service provider. Includes (TCRF) an adjustment provision which serves as a true-up by matching expenses to revenues. New TCRF charges st st take effect on March 1 and September 1 . Annual mechanism that provides for the adjustment of an electric utility’s rates for changes in certain distribution costs such as distribution plant, distribution intangible plant, and communication equipment. Capital investments may not include generation, transmission, or indirect corporate costs or capitalized O&M. Distribution Cost Recovery Factor Prudency/reasonableness of investment determined in next rate case unless a good cause exception is st th (DCRF) requested and approved. Annual filing is due between April 1 and the 8 with rates going into effect on st September 1 . A filing will be denied if an electric utility is earning more than its authorized rate of return using weather-normalized data. An electric utility shall not apply for a DCRF while a comprehensive base-rate proceeding for the electric utility is pending. Annual mechanism that allows timely recovery of the reasonable costs of providing energy efficiency programs. This mechanism will give a utility the opportunity to recover revenues equal to the sum of the utility's forecasted efficiency program costs, the EE incentive amount that it earned for the prior year, any Energy Efficiency Cost Recovery Factor adjustment for past over- or under-recovery of energy efficiency revenues, previous year's proceeding rate (EECRF) case expenses, and the allocated share of the Evaluations, Measurement, and Verification (EM&V) costs. The EE incentive equals 1% of the net benefits for every 2% that the demand reduction goal has been exceeded, with a maximum incentive of 10%. Securitization financing can be used for system restoration costs of $100 million or more, incurred by an System Restoration Cost (SRC) electric utility following weather-related events or natural disasters. CenterPoint Energy Houston Electric T&D Tariff webpage: http://www.centerpointenergy.com/en-us/Corp/Pages/rates-and-tariffs-electric.aspx?sa=ho&au=res (1) Pension expense deferral allowed for variance between actual pension expense and the amount reflected in rates; reconciled in future rate cases (2) Bad debt deferral allowed for defaults by Retail Electric Providers (REPs); reconciled in future rate cases (3) Projected year-end rate base is the total rate base for the year and not just the amount that has been reflected in rates; Amounts shown may differ from regulatory filings investors.centerpointenergy.com 2(1,2) RECOVERY MECHANISMS HOUSTON ELECTRIC – T&D (3) Authorized Capital Structure Authorized ROE Rate Case Base Year Estimated Year-End 2018 Rate Base 55% Debt / 45% Equity 10.00% 2009 $6,059 (Millions) Mechanism Definition/Description Mechanism, which can be used twice per year, that allows a transmission service provider to update their Interim Transmission Cost of Service wholesale transmission rates to reflect changes in invested capital, depreciation, federal income tax and other adjustment (TCOS) associated taxes as well as changed loads. Semi-annual mechanism where a distribution service provider charges or credits their customers for the Transmission Cost Recovery Factor amount of approved wholesale transmission cost changes billed by a transmission service provider. Includes (TCRF) an adjustment provision which serves as a true-up by matching expenses to revenues. New TCRF charges st st take effect on March 1 and September 1 . Annual mechanism that provides for the adjustment of an electric utility’s rates for changes in certain distribution costs such as distribution plant, distribution intangible plant, and communication equipment. Capital investments may not include generation, transmission, or indirect corporate costs or capitalized O&M. Distribution Cost Recovery Factor Prudency/reasonableness of investment determined in next rate case unless a good cause exception is st th (DCRF) requested and approved. Annual filing is due between April 1 and the 8 with rates going into effect on st September 1 . A filing will be denied if an electric utility is earning more than its authorized rate of return using weather-normalized data. An electric utility shall not apply for a DCRF while a comprehensive base-rate proceeding for the electric utility is pending. Annual mechanism that allows timely recovery of the reasonable costs of providing energy efficiency programs. This mechanism will give a utility the opportunity to recover revenues equal to the sum of the utility's forecasted efficiency program costs, the EE incentive amount that it earned for the prior year, any Energy Efficiency Cost Recovery Factor adjustment for past over- or under-recovery of energy efficiency revenues, previous year's proceeding rate (EECRF) case expenses, and the allocated share of the Evaluations, Measurement, and Verification (EM&V) costs. The EE incentive equals 1% of the net benefits for every 2% that the demand reduction goal has been exceeded, with a maximum incentive of 10%. Securitization financing can be used for system restoration costs of $100 million or more, incurred by an System Restoration Cost (SRC) electric utility following weather-related events or natural disasters. CenterPoint Energy Houston Electric T&D Tariff webpage: http://www.centerpointenergy.com/en-us/Corp/Pages/rates-and-tariffs-electric.aspx?sa=ho&au=res (1) Pension expense deferral allowed for variance between actual pension expense and the amount reflected in rates; reconciled in future rate cases (2) Bad debt deferral allowed for defaults by Retail Electric Providers (REPs); reconciled in future rate cases (3) Projected year-end rate base is the total rate base for the year and not just the amount that has been reflected in rates; Amounts shown may differ from regulatory filings investors.centerpointenergy.com 2

RECOVERY MECHANISMS AND FILINGS INDIANA ELECTRIC - INTEGRATED (1) Authorized Capital Structure Authorized ROE Rate Case Base Year Estimated Year-End 2018 Rate Base (1) Ratemaking: 43% Equity 12 months ended 10.40% $1,623 (Millions) Traditional: 50% Equity June 2009 Mechanism Definition/Description Recovers approved capital investments (return on and of) and related costs associated with Company's TDSIC capital investment plan as provided by Indiana statute for the purposes of safety, reliability, system Transmission, Distribution, and modernization, or economic development. Filings are made semi-annually to recover historical investments. Storage System Improvement Indiana statute provides for rate recovery of 100% of the costs, inclusive of return, related to these capital Charge (TDSIC) investments and related operating expenses, with 80% of the costs, including a return, recovered via tracking mechanism and 20% of the costs deferred and recovered in the next base rate proceeding. The adjustment mechanism is capped at an annual increase in retail revenues of not more than 2%. Annual filing to recover capital investments (return on and of) and related costs associated with solar investments. Clean Energy Cost Adjustment Three solar projects are currently approved, with one 50MW project pending approval. Filings made annually to (CECA) include historical investments. Demand Side Management (DSM) / Energy Efficiency program that provides for cost recovery of program and administrative expenses, as well as Lost Revenue Adjustment performance incentives for reaching energy savings goals. The program includes recovery of lost margin Mechanism (LRAM) associated with approved conservation programs. Federally mandated compliance capital investments (SB 251) and certain environmental capital investments (SB Federal Mandates under Indiana 29 or Environmental Cost Adjustment) can be recovered outside of a base rate proceeding via tracking Senate Bills 251 and 29 mechanisms authorized by Indiana statue, inclusive of return, as well as related operating expenses. Fuel Adjustment Clause (FAC) Incurred fuel and purchased power cost is a pass through expense that is fully recovered in customer rates. Statute mandates are base rate case prior to the end of the TDSIC Plan, which is a 7 year plan. A rate case is Rate Case (Future) planned to be filed by the end of 2023. (1) The Indiana Commission historically utilizes a ratemaking capital structure to determine the utility’s capitalization. Certain liabilities that are deducted from rate base under the traditional approach of calculating the rate of return are included in the capital structure in Indiana. These liabilities include accumulated deferred income taxes, customer deposits, and pension and post-retirement benefits liabilities investors.centerpointenergy.com 3RECOVERY MECHANISMS AND FILINGS INDIANA ELECTRIC - INTEGRATED (1) Authorized Capital Structure Authorized ROE Rate Case Base Year Estimated Year-End 2018 Rate Base (1) Ratemaking: 43% Equity 12 months ended 10.40% $1,623 (Millions) Traditional: 50% Equity June 2009 Mechanism Definition/Description Recovers approved capital investments (return on and of) and related costs associated with Company's TDSIC capital investment plan as provided by Indiana statute for the purposes of safety, reliability, system Transmission, Distribution, and modernization, or economic development. Filings are made semi-annually to recover historical investments. Storage System Improvement Indiana statute provides for rate recovery of 100% of the costs, inclusive of return, related to these capital Charge (TDSIC) investments and related operating expenses, with 80% of the costs, including a return, recovered via tracking mechanism and 20% of the costs deferred and recovered in the next base rate proceeding. The adjustment mechanism is capped at an annual increase in retail revenues of not more than 2%. Annual filing to recover capital investments (return on and of) and related costs associated with solar investments. Clean Energy Cost Adjustment Three solar projects are currently approved, with one 50MW project pending approval. Filings made annually to (CECA) include historical investments. Demand Side Management (DSM) / Energy Efficiency program that provides for cost recovery of program and administrative expenses, as well as Lost Revenue Adjustment performance incentives for reaching energy savings goals. The program includes recovery of lost margin Mechanism (LRAM) associated with approved conservation programs. Federally mandated compliance capital investments (SB 251) and certain environmental capital investments (SB Federal Mandates under Indiana 29 or Environmental Cost Adjustment) can be recovered outside of a base rate proceeding via tracking Senate Bills 251 and 29 mechanisms authorized by Indiana statue, inclusive of return, as well as related operating expenses. Fuel Adjustment Clause (FAC) Incurred fuel and purchased power cost is a pass through expense that is fully recovered in customer rates. Statute mandates are base rate case prior to the end of the TDSIC Plan, which is a 7 year plan. A rate case is Rate Case (Future) planned to be filed by the end of 2023. (1) The Indiana Commission historically utilizes a ratemaking capital structure to determine the utility’s capitalization. Certain liabilities that are deducted from rate base under the traditional approach of calculating the rate of return are included in the capital structure in Indiana. These liabilities include accumulated deferred income taxes, customer deposits, and pension and post-retirement benefits liabilities investors.centerpointenergy.com 3

ESTIMATED FILING TIMELINE ELECTRIC OPERATIONS 2019 2020 2021 Jurisdiction Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 DCRF DCRF Houston TCOS TCOS TCOS TCOS Electric T&D Rate Case TDSIC-4 TDSIC-5 TDSIC-6 TDSIC-7 TDSIC-8 TDSIC-9 Indiana CECA-1 CECA-2 CECA-3 Electric ECA ECA Integrated 2022 2023 Jurisdiction Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 DCRF DCRF Houston Electric TCOS TCOS TCOS TCOS Rate Case Proceeding (RC) T&D Mechanisms TDSIC-10 TDSIC-11 TDSIC-12 TDSIC-13 Indiana CECA-4 CECA-5 Electric ECA ECA Integrated Rate Case Note: Rate filings and timelines are subject to change and may be impacted by factors such as regulatory, legislative and economic factors investors.centerpointenergy.com 4ESTIMATED FILING TIMELINE ELECTRIC OPERATIONS 2019 2020 2021 Jurisdiction Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 DCRF DCRF Houston TCOS TCOS TCOS TCOS Electric T&D Rate Case TDSIC-4 TDSIC-5 TDSIC-6 TDSIC-7 TDSIC-8 TDSIC-9 Indiana CECA-1 CECA-2 CECA-3 Electric ECA ECA Integrated 2022 2023 Jurisdiction Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 DCRF DCRF Houston Electric TCOS TCOS TCOS TCOS Rate Case Proceeding (RC) T&D Mechanisms TDSIC-10 TDSIC-11 TDSIC-12 TDSIC-13 Indiana CECA-4 CECA-5 Electric ECA ECA Integrated Rate Case Note: Rate filings and timelines are subject to change and may be impacted by factors such as regulatory, legislative and economic factors investors.centerpointenergy.com 4

EX-99.2

Exhibit 99.2 REGULATORY INFORMATION NATURAL GAS DISTRIBUTION MARCH 2019Exhibit 99.2 REGULATORY INFORMATION NATURAL GAS DISTRIBUTION MARCH 2019

REGULATORY OVERVIEW NATURAL GAS DISTRIBUTION Authorized Capital Authorized Rate Case Estimated Year End Footnotes State Structure ROE Base Year 2018 Rate Base The Arkansas Public Service Commission employs a Modified Balance Sheet Approach (MBSA) to determine a Equity (MBSA): 31% (1) (1) utility's capitalization structure. Certain liabilities that are Arkansas 9.50% 2015 $ 518 Equity (Traditional): 48.5% (1) deducted from rate base under the traditional approach of calculating the rate of return are included in the capital structure under the MBSA. These liabilities include Indiana Equity (Ratemaking): 49% accumulated deferred income taxes, customer deposits, and (2) 10.20% 2006 $ 1 ,424 North current, accrued and other liabilities Equity (Traditional): 56% The Indiana Commission historically utilizes a Ratemaking capital structure to determine the utility’s capitalization. Indiana Equity (Ratemaking): 47% 12 Months ended Certain liabilities that are deducted from rate base under (2) 10.15% $ 381 South March 2006 (2) the traditional approach of calculating the rate of return are Equity (Traditional): 55% included in the capital structure in Indiana. For Indiana North and Indiana South, these liabilities include North Louisiana - 2003 accumulated deferred income taxes, customer deposits, and Louisiana 48% Debt / 52% Equity 9.95% $ 156 pension and post-retirement benefits liabilities South Louisiana - 2002 Forward test year was October 2017 - September 2018 (3) MN Does not have a Key metrics include unregulated services in Minnesota ROR: (3) (4) Minnesota specificed cap structure or 2016 $ 1,111 (4) consisting of residential appliance repair and maintenance 7.12% services along with heating, ventilating and air conditioning ROE (HVAC) equipment sales (5) Blended test year was June-August 2007 actual, September Mississippi 50% Debt / 50% Equity 9.59% 1995 $ 131 2007 - May 2008 budgeted OCC approved a joint stipulation in July 2016 that provides (6) for an allowed ROE of 10% and a capital structure of 54.96% common equity, 0.04% preferred, and 45% debt effective (5) Ohio 2008 49% Debt / 51% Equity 10.60% $ 790 for the 2016 calendar year Blended weighted average of Beaumont/East Texas, South (7) Texas, Houston and Texas Coast (6) (6) Oklahoma 45% Debt / 55% Equity 10.00% 2004 $ 65 Projected year-end rate base is the total rate base for the year and not just the amount that has been reflected in rates; Amounts shown Beaumont/E. TX 2011 South Texas 2017 may differ from regulatory filings (5) (7) Texas 44.5% Debt / 55.5% Equity 9.67% $ 1,227 Houston 2016 Texas Coast 2016 investors.centerpointenergy.com 2REGULATORY OVERVIEW NATURAL GAS DISTRIBUTION Authorized Capital Authorized Rate Case Estimated Year End Footnotes State Structure ROE Base Year 2018 Rate Base The Arkansas Public Service Commission employs a Modified Balance Sheet Approach (MBSA) to determine a Equity (MBSA): 31% (1) (1) utility's capitalization structure. Certain liabilities that are Arkansas 9.50% 2015 $ 518 Equity (Traditional): 48.5% (1) deducted from rate base under the traditional approach of calculating the rate of return are included in the capital structure under the MBSA. These liabilities include Indiana Equity (Ratemaking): 49% accumulated deferred income taxes, customer deposits, and (2) 10.20% 2006 $ 1 ,424 North current, accrued and other liabilities Equity (Traditional): 56% The Indiana Commission historically utilizes a Ratemaking capital structure to determine the utility’s capitalization. Indiana Equity (Ratemaking): 47% 12 Months ended Certain liabilities that are deducted from rate base under (2) 10.15% $ 381 South March 2006 (2) the traditional approach of calculating the rate of return are Equity (Traditional): 55% included in the capital structure in Indiana. For Indiana North and Indiana South, these liabilities include North Louisiana - 2003 accumulated deferred income taxes, customer deposits, and Louisiana 48% Debt / 52% Equity 9.95% $ 156 pension and post-retirement benefits liabilities South Louisiana - 2002 Forward test year was October 2017 - September 2018 (3) MN Does not have a Key metrics include unregulated services in Minnesota ROR: (3) (4) Minnesota specificed cap structure or 2016 $ 1,111 (4) consisting of residential appliance repair and maintenance 7.12% services along with heating, ventilating and air conditioning ROE (HVAC) equipment sales (5) Blended test year was June-August 2007 actual, September Mississippi 50% Debt / 50% Equity 9.59% 1995 $ 131 2007 - May 2008 budgeted OCC approved a joint stipulation in July 2016 that provides (6) for an allowed ROE of 10% and a capital structure of 54.96% common equity, 0.04% preferred, and 45% debt effective (5) Ohio 2008 49% Debt / 51% Equity 10.60% $ 790 for the 2016 calendar year Blended weighted average of Beaumont/East Texas, South (7) Texas, Houston and Texas Coast (6) (6) Oklahoma 45% Debt / 55% Equity 10.00% 2004 $ 65 Projected year-end rate base is the total rate base for the year and not just the amount that has been reflected in rates; Amounts shown Beaumont/E. TX 2011 South Texas 2017 may differ from regulatory filings (5) (7) Texas 44.5% Debt / 55.5% Equity 9.67% $ 1,227 Houston 2016 Texas Coast 2016 investors.centerpointenergy.com 2

(1) RECOVERY MECHANISMS AND FILINGS NATURAL GAS DISTRIBUTION Jurisdiction Mechanism Definition/Description Recovery of a performance incentive and incremental costs associated with energy efficiency programs Energy Efficiency Rider (EE) approved by the Public Service Commission. Annual mechanism for capital and expense recovery based on a fully projected test year, with a true-up Arkansas Formula Rate Plan (FRP) Rider component, using the same ROE and class apportionments approved in 15-098-U. An annual mechanism used to normalize the impact of heating degree day variations between November 1 Weather Normalization Adjustment (WNA) and April 30. CenterPoint Energy Arkansas Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Services/Pages/rates-and-tariffs-AR.aspx Mechanism that will adjust rates up or down if CenterPoint's return on equity (ROE) is more than 50 basis Rate Stabilization Plan (RSP) points above or below the allowed ROE. Rates will be increased (decreased) by the amount necessary to North and South increase (decrease) the earned ROE to equal the allowed ROE. Louisiana An annual mechanism used to normalize the impact of heating degree day variations between November 1 Weather Normalization Adjustment (WNA) and April 30. CenterPoint Energy Louisiana Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Services/Pages/rates-and-tariffs-LA.aspx Recovery of an incentive and incremental Conservation Improvement Program costs as approved by the MN Conservation Improvement Program (CIP) Public Utility Commission. Tracking mechanism to ensure recovery of actual property tax paid by the Company pursuant to the applicable annual Truth-in-Taxation statements, less the amount included in rates, and less any amounts recovered in Minnesota Minnesota Property Tax Tracker litigation that the Company has filed or may file regarding its property tax assessments. Revenue stabilization mechanism used to adjust revenues impacted by changes in natural gas Revenue Decoupling Rider consumption, including usage and weather. CenterPoint Energy Minnesota Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Corp/Pages/rates-and-tariffs-MN.aspx (1) In addition to rate mechanisms listed, Natural Gas Distribution’s incurred natural gas cost is a pass through expense that is fully recovered in customer rates in all jurisdictions investors.centerpointenergy.com 3(1) RECOVERY MECHANISMS AND FILINGS NATURAL GAS DISTRIBUTION Jurisdiction Mechanism Definition/Description Recovery of a performance incentive and incremental costs associated with energy efficiency programs Energy Efficiency Rider (EE) approved by the Public Service Commission. Annual mechanism for capital and expense recovery based on a fully projected test year, with a true-up Arkansas Formula Rate Plan (FRP) Rider component, using the same ROE and class apportionments approved in 15-098-U. An annual mechanism used to normalize the impact of heating degree day variations between November 1 Weather Normalization Adjustment (WNA) and April 30. CenterPoint Energy Arkansas Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Services/Pages/rates-and-tariffs-AR.aspx Mechanism that will adjust rates up or down if CenterPoint's return on equity (ROE) is more than 50 basis Rate Stabilization Plan (RSP) points above or below the allowed ROE. Rates will be increased (decreased) by the amount necessary to North and South increase (decrease) the earned ROE to equal the allowed ROE. Louisiana An annual mechanism used to normalize the impact of heating degree day variations between November 1 Weather Normalization Adjustment (WNA) and April 30. CenterPoint Energy Louisiana Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Services/Pages/rates-and-tariffs-LA.aspx Recovery of an incentive and incremental Conservation Improvement Program costs as approved by the MN Conservation Improvement Program (CIP) Public Utility Commission. Tracking mechanism to ensure recovery of actual property tax paid by the Company pursuant to the applicable annual Truth-in-Taxation statements, less the amount included in rates, and less any amounts recovered in Minnesota Minnesota Property Tax Tracker litigation that the Company has filed or may file regarding its property tax assessments. Revenue stabilization mechanism used to adjust revenues impacted by changes in natural gas Revenue Decoupling Rider consumption, including usage and weather. CenterPoint Energy Minnesota Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Corp/Pages/rates-and-tariffs-MN.aspx (1) In addition to rate mechanisms listed, Natural Gas Distribution’s incurred natural gas cost is a pass through expense that is fully recovered in customer rates in all jurisdictions investors.centerpointenergy.com 3

(1) RECOVERY MECHANISMS AND FILINGS NATURAL GAS DISTRIBUTION Jurisdiction Mechanism Definition/Description Mechanism that will adjust rates up or down if CenterPoint's earned return on equity is more than 100 basis points above or below the allowed return on equity. If earned returns are more than 100 basis points above the allowed return, a portion Rate Regulation Adjustment of the earned return that is greater than the allowed return plus 50 basis points shall be shared on a 75%/25% basis (RRA) between the customers and CenterPoint. If earned returns are more than 100 basis points below the allowed return, base rates shall be increased for the amount necessary, in total, to restore the return of equity to the allowed return. Mississippi Weather Normalization An annual mechanism used to normalize the impact of heating degree day variations between November 1 and April 30. Adjustment (WNA) Energy Efficiency Cost An annual mechanism used to recover incremental energy efficiency program costs approved by the MPSC. Recovery Rider (EECR) Supplemental Growth A pilot program designed to encourage industrial development and job creation by providing an incentive to extend gas Rider pilot (SG) service to industrial projects which are otherwise not feasible to fund CenterPoint Energy Mississippi Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Services/Pages/rates-and-tariffs-MS.aspx Mechanism that will adjust rates up or down if CenterPoint's earned return on equity is more than 50 basis points above or below the allowed return on equity. If earned returns are more than 50 basis points above the allowed return, the portion of Performance Based Rate the earned return that is greater than 50 basis points above the allowed return shall be shared on a 75%/25% basis Change Plan (PBRC) between the customers and CenterPoint. If earned returns are more than 50 basis points under the allowed return, base rates shall be increased for the amount necessary, in total, to restore the return of equity to the allowed return. Oklahoma Recovery of a performance incentive and incremental costs associated with energy efficiency programs approved by the Energy Efficiency Rider (EE) Public Service Commission. Weather Normalization An annual mechanism used to normalize the impact of heating degree day variations between November 1 and May 31. Adjustment (WNA) CenterPoint Energy Oklahoma Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Services/Pages/rates-and-tariffs-OK.aspx Gas Reliability Infrastructure Recovery mechanism that allows an annual interim rate adjustment to recover the return on new capital investment made Program (GRIP) in the preceding year plus associated depreciation expense and property taxes. Texas Commission Rule Recovery of capital investment necessary to comply with Commission Rule §8.209, which requires gas distribution (2) Texas TAC §8.209 operators to develop and implement a risk-based program for the removal or replacement of distribution facilities. Texas Safety and System Recovery of operations and maintenance expense related to third-party pipeline integrity work needed to meet the Integrity Deferred company’s obligation to provide a safe and reliable service and comply with state and federal pipeline safety regulations. Regulatory Asset (SSI) CenterPoint Energy Texas Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Corp/Pages/rates-and-tariffs-TX.aspx (1) In addition to rate mechanisms listed, Natural Gas Distribution’s incurred natural gas cost is a pass through expense that is fully recovered in customer rates in all jurisdictions (2) Pension expense deferral allowed for variance between actual pension expense and the amount reflected in rates; reconciled in future rate cases investors.centerpointenergy.com 4(1) RECOVERY MECHANISMS AND FILINGS NATURAL GAS DISTRIBUTION Jurisdiction Mechanism Definition/Description Mechanism that will adjust rates up or down if CenterPoint's earned return on equity is more than 100 basis points above or below the allowed return on equity. If earned returns are more than 100 basis points above the allowed return, a portion Rate Regulation Adjustment of the earned return that is greater than the allowed return plus 50 basis points shall be shared on a 75%/25% basis (RRA) between the customers and CenterPoint. If earned returns are more than 100 basis points below the allowed return, base rates shall be increased for the amount necessary, in total, to restore the return of equity to the allowed return. Mississippi Weather Normalization An annual mechanism used to normalize the impact of heating degree day variations between November 1 and April 30. Adjustment (WNA) Energy Efficiency Cost An annual mechanism used to recover incremental energy efficiency program costs approved by the MPSC. Recovery Rider (EECR) Supplemental Growth A pilot program designed to encourage industrial development and job creation by providing an incentive to extend gas Rider pilot (SG) service to industrial projects which are otherwise not feasible to fund CenterPoint Energy Mississippi Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Services/Pages/rates-and-tariffs-MS.aspx Mechanism that will adjust rates up or down if CenterPoint's earned return on equity is more than 50 basis points above or below the allowed return on equity. If earned returns are more than 50 basis points above the allowed return, the portion of Performance Based Rate the earned return that is greater than 50 basis points above the allowed return shall be shared on a 75%/25% basis Change Plan (PBRC) between the customers and CenterPoint. If earned returns are more than 50 basis points under the allowed return, base rates shall be increased for the amount necessary, in total, to restore the return of equity to the allowed return. Oklahoma Recovery of a performance incentive and incremental costs associated with energy efficiency programs approved by the Energy Efficiency Rider (EE) Public Service Commission. Weather Normalization An annual mechanism used to normalize the impact of heating degree day variations between November 1 and May 31. Adjustment (WNA) CenterPoint Energy Oklahoma Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Services/Pages/rates-and-tariffs-OK.aspx Gas Reliability Infrastructure Recovery mechanism that allows an annual interim rate adjustment to recover the return on new capital investment made Program (GRIP) in the preceding year plus associated depreciation expense and property taxes. Texas Commission Rule Recovery of capital investment necessary to comply with Commission Rule §8.209, which requires gas distribution (2) Texas TAC §8.209 operators to develop and implement a risk-based program for the removal or replacement of distribution facilities. Texas Safety and System Recovery of operations and maintenance expense related to third-party pipeline integrity work needed to meet the Integrity Deferred company’s obligation to provide a safe and reliable service and comply with state and federal pipeline safety regulations. Regulatory Asset (SSI) CenterPoint Energy Texas Rate & Tariff webpage: http://www.centerpointenergy.com/en-us/Corp/Pages/rates-and-tariffs-TX.aspx (1) In addition to rate mechanisms listed, Natural Gas Distribution’s incurred natural gas cost is a pass through expense that is fully recovered in customer rates in all jurisdictions (2) Pension expense deferral allowed for variance between actual pension expense and the amount reflected in rates; reconciled in future rate cases investors.centerpointenergy.com 4

(1) RECOVERY MECHANISMS AND FILINGS NATURAL GAS DISTRIBUTION Jurisdiction Mechanism Description Recovers approved capital investments (return on and of) and related costs associated with both Transmission, Distribution, and Storage System Improvement (TDSIC) and federally mandated compliance capital investment as provided by Indiana statutes for the purposes of safety, reliability, system modernization, or economic development. Filings are made semi- Compliance and System Improvement annually to recover historical investments . Indiana statute provides for rate recovery of 100% Adjustment (CSIA) of the costs, inclusive of return, related to these capital investments and related operating expenses, with 80% of the costs, including a return, recovered via a tracking mechanism and 20% of the costs deferred and recovered in the next base rate proceeding. The adjustment Gas - Indiana mechanism is capped at an annual increase in retail revenues of not more than 2%. (2 Jurisdictions) Gas conservation program and recovery mechanism for the costs associated with these Demand Side Management (DSM) and programs (the Energy Efficiency Rider). Within the Energy Efficiency Rider, Decoupling was Decoupling established to recover the base margin per customer approved by the Commission in the last base rate case. Statute mandates are base rate case prior to the end of the TDSIC Plan, which is a 7 year Rate Case (Future) plan. A rate case is planned to be filed by the end of 2020. Other Recovery of unaccounted for gas and the gas cost portion of bad debt expense. Recovers approved capital investments (return on and of) and related costs associated with a Bare Steel and Cast Iron Replacement Program. Filings are made annually to include Distribution Replacement Rider (DRR) historical investments. The Order limits the resulting DRR fixed charge per month for residential and small general service customers to specific graduated levels. Defers impacts of the capital expenditure program not covered by the DRR, as well as expenditures necessary to comply with PUCO rules, regulations, orders, and system Ohio House Bill 95 (HB95) expansion to certain new customers. Contains a prospective bill impact evaluation on the cumulative deferrals. Gas - Ohio A settlement was filed in January 2019 with a majority of parties. The settlement supports straight-fixed-variable rate design continuation for residential customers and expansion to Rate Case (Pending) small commercial customers. The settlement also supports the extension of the DRR, continuation of HB 95 deferrals, and a new mechanism to recover future deferrals over the life of the investments. An order is expected later in 2019. Rate Case (Future) Rate case required to be filed, per the pending settlement, by the end of 2024. Recovery of leak repair costs; bad debt expense; energy efficiency program costs; and costs Other associated with managing those that supply customers natural gas. (1) In addition to rate mechanisms listed, Natural Gas Distribution’s incurred natural gas cost is a pass through expense that is fully recovered in customer rates in all jurisdictions. In Ohio, the utility does not supply natural gas to customers. investors.centerpointenergy.com 5(1) RECOVERY MECHANISMS AND FILINGS NATURAL GAS DISTRIBUTION Jurisdiction Mechanism Description Recovers approved capital investments (return on and of) and related costs associated with both Transmission, Distribution, and Storage System Improvement (TDSIC) and federally mandated compliance capital investment as provided by Indiana statutes for the purposes of safety, reliability, system modernization, or economic development. Filings are made semi- Compliance and System Improvement annually to recover historical investments . Indiana statute provides for rate recovery of 100% Adjustment (CSIA) of the costs, inclusive of return, related to these capital investments and related operating expenses, with 80% of the costs, including a return, recovered via a tracking mechanism and 20% of the costs deferred and recovered in the next base rate proceeding. The adjustment Gas - Indiana mechanism is capped at an annual increase in retail revenues of not more than 2%. (2 Jurisdictions) Gas conservation program and recovery mechanism for the costs associated with these Demand Side Management (DSM) and programs (the Energy Efficiency Rider). Within the Energy Efficiency Rider, Decoupling was Decoupling established to recover the base margin per customer approved by the Commission in the last base rate case. Statute mandates are base rate case prior to the end of the TDSIC Plan, which is a 7 year Rate Case (Future) plan. A rate case is planned to be filed by the end of 2020. Other Recovery of unaccounted for gas and the gas cost portion of bad debt expense. Recovers approved capital investments (return on and of) and related costs associated with a Bare Steel and Cast Iron Replacement Program. Filings are made annually to include Distribution Replacement Rider (DRR) historical investments. The Order limits the resulting DRR fixed charge per month for residential and small general service customers to specific graduated levels. Defers impacts of the capital expenditure program not covered by the DRR, as well as expenditures necessary to comply with PUCO rules, regulations, orders, and system Ohio House Bill 95 (HB95) expansion to certain new customers. Contains a prospective bill impact evaluation on the cumulative deferrals. Gas - Ohio A settlement was filed in January 2019 with a majority of parties. The settlement supports straight-fixed-variable rate design continuation for residential customers and expansion to Rate Case (Pending) small commercial customers. The settlement also supports the extension of the DRR, continuation of HB 95 deferrals, and a new mechanism to recover future deferrals over the life of the investments. An order is expected later in 2019. Rate Case (Future) Rate case required to be filed, per the pending settlement, by the end of 2024. Recovery of leak repair costs; bad debt expense; energy efficiency program costs; and costs Other associated with managing those that supply customers natural gas. (1) In addition to rate mechanisms listed, Natural Gas Distribution’s incurred natural gas cost is a pass through expense that is fully recovered in customer rates in all jurisdictions. In Ohio, the utility does not supply natural gas to customers. investors.centerpointenergy.com 5

ESTIMATED FILING TIMELINE NATURAL GAS DISTRIBUTION 2019 2020 2021 2022 2023 Jurisdiction Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Houston Gas GRIP GRIP GRIP GRIP GRIP RC g Texas Coast GRIP GRIP GRIP GRIP GRIP RC g South Texas GRIP GRIP GRIP GRIP GRIP Beaumont / East Texas GRIP Rate Case GRIP GRIP GRIP Minnesota Rate Case (Interim Rates) Rate Case (Interim Rates) Arkansas & Texarkana TX FRP FRP FRP FRP FRP PBRC PBRC PBRC PBRC PBRC Oklahoma RSP RSP RSP RSP Louisiana RSP g RRA RRA RRA RRA RRA Mississippi CSIA-10 CSIA-11 CSIA-12 CSIA-13 CSIA-14 CSIA-1 (Phase II) CSIA-2 (Phase II) CSIA-3 (Phase II) CSIA-4 (Phase II) Indiana North DSM/Decoupling Ext Rate Case CSIA-10 CSIA-11 CSIA-12 CSIA-13 CSIA-14 CSIA-1 (Phase II) CSIA-2 (Phase II) CSIA-3 (Phase II) CSIA-4 (Phase II) Indiana South DSM/Decoupling Ext Rate Case Rate Case Rate Case Ohio DRR DRR DRR DRR DRR Note: Rate filings and timelines are subject to change and may be Rate Case Proceeding (RC) impacted by factors such as regulatory, legislative and economic factors Mechanisms Note 2: Items with an g may continue into 2024 investors.centerpointenergy.com 6ESTIMATED FILING TIMELINE NATURAL GAS DISTRIBUTION 2019 2020 2021 2022 2023 Jurisdiction Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Houston Gas GRIP GRIP GRIP GRIP GRIP RC g Texas Coast GRIP GRIP GRIP GRIP GRIP RC g South Texas GRIP GRIP GRIP GRIP GRIP Beaumont / East Texas GRIP Rate Case GRIP GRIP GRIP Minnesota Rate Case (Interim Rates) Rate Case (Interim Rates) Arkansas & Texarkana TX FRP FRP FRP FRP FRP PBRC PBRC PBRC PBRC PBRC Oklahoma RSP RSP RSP RSP Louisiana RSP g RRA RRA RRA RRA RRA Mississippi CSIA-10 CSIA-11 CSIA-12 CSIA-13 CSIA-14 CSIA-1 (Phase II) CSIA-2 (Phase II) CSIA-3 (Phase II) CSIA-4 (Phase II) Indiana North DSM/Decoupling Ext Rate Case CSIA-10 CSIA-11 CSIA-12 CSIA-13 CSIA-14 CSIA-1 (Phase II) CSIA-2 (Phase II) CSIA-3 (Phase II) CSIA-4 (Phase II) Indiana South DSM/Decoupling Ext Rate Case Rate Case Rate Case Ohio DRR DRR DRR DRR DRR Note: Rate filings and timelines are subject to change and may be Rate Case Proceeding (RC) impacted by factors such as regulatory, legislative and economic factors Mechanisms Note 2: Items with an g may continue into 2024 investors.centerpointenergy.com 6