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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Tax Expense | The components of the Registrant’s income tax expense (benefit) were as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (in millions)
CenterPoint Energy - Continuing Operations |  |  |  |  |
Current income tax expense (benefit): |  |  |  |  |
Federal | $ | 106 |  |  | $ | 294 |  |  | $ | — |
State | 33 |  |  | 46 |  |  | (28) |
Total current expense (benefit) | 139 |  |  | 340 |  |  | (28) |
Deferred income tax expense (benefit): |  |  |  |  |
Federal | 119 |  |  | 16 |  |  | 78 |
State | (88) |  |  | 4 |  |  | 60 |
Total deferred expense | 31 |  |  | 20 |  |  | 138 |
Total income tax expense | $ | 170 |  |  | $ | 360 |  |  | $ | 110 |
CenterPoint Energy - Discontinued Operations |  |  |  |  |
Current income tax expense: |  |  |  |  |
Federal | $ | — |  |  | $ | — |  |  | $ | 91 |
State | — |  |  | — |  |  | 35 |
Total current expense | — |  |  | — |  |  | 126 |
Deferred income tax expense (benefit): |  |  |  |  |
Federal | — |  |  | — |  |  | 127 |
State | — |  |  | — |  |  | (52) |
Total deferred expense (benefit) | — |  |  | — |  |  | 75 |
Total income tax expense (benefit) | $ | — |  |  | $ | — |  |  | $ | 201 |
Houston Electric |  |  |  |  |
Current income tax expense (benefit): |  |  |  |  |
Federal | $ | (26) |  |  | $ | 23 |  |  | $ | 22 |
State | 34 |  |  | 16 |  |  | 22 |
Total current expense | 8 |  |  | 39 |  |  | 44 |
Deferred income tax expense (benefit): |  |  |  |  |
Federal | 159 |  |  | 86 |  |  | 31 |
State | 1 |  |  | — |  |  | 1 |
Total deferred expense (benefit) | 160 |  |  | 86 |  |  | 32 |
Total income tax expense | $ | 168 |  |  | $ | 125 |  |  | $ | 76 |
CERC - Continuing Operations |  |  |  |  |
Current income tax expense (benefit): |  |  |  |  |
Federal | $ | 12 |  |  | $ | 30 |  |  | $ | — |
State | 3 |  |  | 28 |  |  | (25) |
Total current expense (benefit) | 15 |  |  | 58 |  |  | (25) |
Deferred income tax expense (benefit): |  |  |  |  |
Federal | 95 |  |  | 164 |  |  | 67 |
State | (136) |  |  | 14 |  |  | 34 |
Total deferred expense (benefit) | (41) |  |  | 178 |  |  | 101 |
Total income tax expense (benefit) | $ | (26) |  |  | $ | 236 |  |  | $ | 76 |
Reconciliation of Expected Federal Income Tax Expense to Actual | A reconciliation of income tax expense (benefit) using the federal statutory income tax rate to the actual income tax expense and resulting effective income tax rate is as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (in millions)
CenterPoint Energy - Continuing Operations (1) (2) (3) |  |  |  |  |
Income before income taxes | $ | 1,087 |  |  | $ | 1,417 |  |  | $ | 778 |
Federal statutory income tax rate | 21 | % |  | 21 | % |  | 21 | %
Expected federal income tax expense | 228 |  |  | 298 |  |  | 163 |
Increase (decrease) in tax expense resulting from: |  |  |  |  |
State income tax expense, net of federal income tax | 25 |  |  | 46 |  |  | 63 |
State valuation allowance, net of federal income tax | — |  |  | — |  |  | (15) |
State law change, net of federal income tax | (69) |  |  | — |  |  | (23) |
Equity AFUDC | (13) |  |  | (8) |  |  | (6) |
Excess deferred income tax amortization | (44) |  |  | (51) |  |  | (75) |
Goodwill impairment | — |  |  | 84 |  |  | — |
Sale of Energy Systems Group | 28 |  |  | — |  |  | — |
Other, net | 15 |  |  | (9) |  |  | 3 |
Total | (58) |  |  | 62 |  |  | (53) |
Total income tax expense | $ | 170 |  |  | $ | 360 |  |  | $ | 110 |
Effective tax rate | 16 | % |  | 25 | % |  | 14 | %
CenterPoint Energy - Discontinued Operations (4) |  |  |  |  |
Income before income taxes | $ | — |  |  | $ | — |  |  | $ | 1,019 |
Federal statutory income tax rate | — | % |  | — | % |  | 21 | %
Expected federal income tax expense | — |  |  | — |  |  | 214 |
Increase (decrease) in tax expense resulting from: |  |  |  |  |
State income tax expense, net of federal income tax | — |  |  | — |  |  | 14 |
State law change, net of federal income tax | — |  |  | — |  |  | (27) |
Total | — |  |  | — |  |  | (13) |
Total income tax expense | $ | — |  |  | $ | — |  |  | $ | 201 |
Effective tax rate | — | % |  | — | % |  | 20 | %
Houston Electric (5) (6) (7) |  |  |  |  |
Income before income taxes | $ | 761 |  |  | $ | 635 |  |  | $ | 457 |
Federal statutory income tax rate | 21 | % |  | 21 | % |  | 21 | %
Expected federal income tax expense | 160 |  |  | 133 |  |  | 96 |
Increase (decrease) in tax expense resulting from: |  |  |  |  |
State income tax expense, net of federal income tax | 27 |  |  | 13 |  |  | 18 |
Excess deferred income tax amortization | (17) |  |  | (18) |  |  | (41) |
Other, net | (2) |  |  | (3) |  |  | 3 |
Total | 8 |  |  | (8) |  |  | (20) |
Total income tax expense | $ | 168 |  |  | $ | 125 |  |  | $ | 76 |
Effective tax rate | 22 | % |  | 20 | % |  | 17 | %
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (in millions)
CERC - Continuing Operations (8) (9) (10) |  |  |
Income before income taxes | $ | 486 |  |  | $ | 961 |  |  | $ | 466 |
Federal statutory income tax rate | 21 | % |  | 21 | % |  | 21 | %
Expected federal income tax expense | 102 |  |  | 202 |  |  | 98 |
Increase (decrease) in tax expense resulting from: |  |  |  |  |
State income tax expense, net of federal income tax | (40) |  |  | 35 |  |  | 31 |
State law change, net of federal income tax | (66) |  |  | — |  |  | (9) |
State valuation allowance, net of federal income tax | — |  |  | — |  |  | (15) |
Goodwill impairment | — |  |  | 30 |  |  | — |
Excess deferred income tax amortization | (23) |  |  | (28) |  |  | (30) |
Other, net | 1 |  |  | (3) |  |  | 1 |
Total | (128) |  |  | 34 |  |  | (22) |
Total income tax expense (benefit) | $ | (26) |  |  | $ | 236 |  |  | $ | 76 |
Effective tax rate | (5) | % |  | 25 | % |  | 16 | %
(1)Recognized a $69 million benefit for the impact of state apportionment changes that resulted in the remeasurement of state deferred taxes of the unitary group, a $44 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, a $13 million benefit for the impact of AFUDC equity, and a $28 million expense for the gain on the Energy Systems Group sale. (2)Recognized a $51 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, an $8 million benefit for the impact of AFUDC equity, and a $84 million expense for the goodwill impairment on the Arkansas and Oklahoma Natural Gas business sale. (3)Recognized a $75 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, a $23 million benefit for the impact of state law changes that resulted in the remeasurement of state deferred taxes in those jurisdictions, a $6 million benefit for the impact of AFUDC equity, and a $15 million benefit for the impact of a change in the NOL carryforward period in Louisiana from 20 years to an indefinite period allowing for the release of the valuation allowance on certain Louisiana NOLs. (4)Recognized a $27 million benefit for the impact of state law changes that resulted in the remeasurement of state deferred taxes in those jurisdictions. (5)Recognized a $17 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions. (6)Recognized a $18 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions. (7)Recognized a $41 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions. (8)Recognized a $66 million benefit for the impact of state apportionment changes that resulted in the remeasurement of state deferred taxes of the unitary group, and a $23 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions. (9)Recognized a $28 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, and a $30 million expense for the goodwill impairment on the Arkansas and Oklahoma Natural Gas business sale. (10)Recognized a $9 million benefit for the impact of state law changes that resulted in the remeasurement of state deferred taxes in those jurisdictions, a $30 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, and a $15 million benefit for the impact of a change in the NOL carryforward period in Louisiana from 20 years to an indefinite period allowing for the release of the valuation allowance on certain Louisiana NOLs.
Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows:
| December 31,
| 2023 |  | 2022
| (in millions)
CenterPoint Energy |  |  |
Deferred tax assets: |  |  |
Benefits and compensation | $ | 131 |  |  | $ | 121 |
Regulatory liabilities | 365 |  |  | 378 |
Loss and credit carryforwards | 76 |  |  | 84 |
Asset retirement obligations | 96 |  |  | 95 |
Other | 124 |  |  | 49 |
Valuation allowance | (10) |  |  | (10) |
Total deferred tax assets | 782 |  |  | 717 |
Deferred tax liabilities: |  |  |
Property, plant and equipment | 3,580 |  |  | 3,228 |
Regulatory assets | 401 |  |  | 601 |
Investment in ZENS and equity securities related to ZENS | 788 |  |  | 722 |
Other | 92 |  |  | 152 |
Total deferred tax liabilities | 4,861 |  |  | 4,703 |
Net deferred tax liabilities | $ | 4,079 |  |  | $ | 3,986 |
Houston Electric |  |  |
Deferred tax assets: |  |  |
Benefits and compensation | $ | 10 |  |  | $ | 10 |
Regulatory liabilities | 176 |  |  | 184 |
Asset retirement obligations | 6 |  |  | 6 |
Other | 18 |  |  | 13 |
Total deferred tax assets | 210 |  |  | 213 |
Deferred tax liabilities: |  |  |
Property, plant and equipment | 1,497 |  |  | 1,330 |
Regulatory assets | 119 |  |  | 112 |
Total deferred tax liabilities | 1,616 |  |  | 1,442 |
Net deferred tax liabilities | $ | 1,406 |  |  | $ | 1,229 |
CERC |  |  |
Deferred tax assets: |  |  |
Benefits and compensation | $ | 21 |  |  | $ | 9 |
Regulatory liabilities | 145 |  |  | 151 |
Loss and credit carryforwards | 276 |  |  | 466 |
Asset retirement obligations | 86 |  |  | 86 |
Other | 65 |  |  | 25 |
Total deferred tax assets | 593 |  |  | 737 |
Deferred tax liabilities: |  |  |
Property, plant and equipment | 1,602 |  |  | 1,427 |
Regulatory assets | 171 |  |  | 381 |
Other | 66 |  |  | 191 |
Total deferred tax liabilities | 1,839 |  |  | 1,999 |
Net deferred tax liabilities | $ | 1,246 |  |  | $ | 1,262 |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of CenterPoint Energy’s beginning and ending balance of unrecognized tax benefits, excluding interest and penalties, for 2023 and 2022 are as follows:
| Year Ended December 31,
| 2023 |  | 2022
| (in millions)
Balance, beginning of year | $ | 26 |  |  | $ | 3 |
Increases related to tax positions of prior years | — |  |  | 26 |
Decreases related to tax positions of prior years | — |  |  | (3) |
Lapse of statute of limitations | (1) |  |  | — |
Balance, end of year | $ | 25 |  |  | $ | 26 |

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