Document and Entity Information
Document and Entity Information - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 26, 2017 | Jun. 30, 2016 | |
Entity Information [Line Items] | |||
Entity Registrant Name | CENTERPOINT ENERGY HOUSTON ELECTRIC LLC | ||
Entity Central Index Key | 48,732 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 1,000 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 |
CONDENSED STATEMENTS OF CONSOLI
CONDENSED STATEMENTS OF CONSOLIDATED INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | $ 843 | $ 909 | $ 2,233 | $ 2,328 |
Expenses: | ||||
Operation and maintenance | 344 | 339 | 1,043 | 1,001 |
Depreciation and amortization | 193 | 253 | 525 | 659 |
Taxes other than income taxes | 59 | 59 | 177 | 173 |
Total | 596 | 651 | 1,745 | 1,833 |
Operating Income | 247 | 258 | 488 | 495 |
Other Income (Expense): | ||||
Interest and other finance charges | (32) | (32) | (97) | (94) |
Interest on securitization bonds | (18) | (23) | (58) | (70) |
Other, net | 4 | 5 | 13 | 14 |
Total | (46) | (50) | (142) | (150) |
Income Before Income Taxes | 201 | 208 | 346 | 345 |
Income tax expense | 71 | 72 | 123 | 121 |
Net Income | $ 130 | $ 136 | $ 223 | $ 224 |
CONDENSED STATEMENTS OF CONSOL3
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net income | $ 130 | $ 136 | $ 223 | $ 224 |
Other comprehensive income: | ||||
Net deferred gain (loss) from cash flow hedges (net of tax of $-0-, $1, $-0- and $-0-) | 0 | 2 | (1) | 1 |
Total | 0 | 2 | (1) | 1 |
Comprehensive income | $ 130 | $ 138 | $ 222 | $ 225 |
CONDENSED STATEMENTS OF CONSOL4
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Tax expense (benefit) on net deferred gains (losses) from cash flow hedges | $ 0 | $ 1 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents ($200 and $340 related to VIEs, respectively) | $ 200 | $ 341 |
Accounts and notes receivable ($65 and $52 related to VIEs, respectively), less bad debt reserve of $1 and $1, respectively | 333 | 225 |
Accounts and notes receivable–affiliated companies | 73 | 101 |
Accrued unbilled revenues | 129 | 106 |
Inventory | 137 | 134 |
Taxes receivable | 0 | 6 |
Other ($31 and $40 related to VIEs, respectively) | 55 | 66 |
Total current assets | 927 | 979 |
Property, Plant and Equipment: | ||
Property, plant and equipment | 11,256 | 10,840 |
Less: accumulated depreciation and amortization | 3,593 | 3,443 |
Property, plant and equipment, net | 7,663 | 7,397 |
Other Assets: | ||
Regulatory assets ($1,690 and $1,919 related to VIEs, respectively) | 1,663 | 1,793 |
Other | 36 | 42 |
Total other assets | 1,699 | 1,835 |
Total Assets | 10,289 | 10,211 |
Current Liabilities: | ||
Current portion of VIE securitization bonds long-term debt | 432 | 411 |
Accounts payable | 255 | 145 |
Accounts and notes payable–affiliated companies | 40 | 88 |
Taxes accrued | 100 | 106 |
Interest accrued | 46 | 68 |
Other | 115 | 90 |
Total current liabilities | 988 | 908 |
Other Liabilities: | ||
Deferred income taxes, net | 2,039 | 2,003 |
Benefit obligations | 145 | 148 |
Regulatory liabilities | 428 | 530 |
Other | 53 | 51 |
Total other liabilities | 2,665 | 2,732 |
Long-term Debt: | ||
VIE securitization bonds, net | 1,500 | 1,867 |
Other, net | 2,884 | 2,587 |
Total long-term debt, net | 4,384 | 4,454 |
Commitments and Contingencies (Note 8) | ||
Member’s Equity: | ||
Common stock | 0 | 0 |
Paid-in capital | 1,696 | 1,696 |
Retained earnings | 556 | 420 |
Accumulated other comprehensive income | 0 | 1 |
Total member’s equity | 2,252 | 2,117 |
Total Liabilities and Member’s Equity | $ 10,289 | $ 10,211 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents | $ 200 | $ 341 |
Bad debt reserve | 1 | 1 |
Accounts and notes receivable, net | 333 | 225 |
Other | 55 | 66 |
Regulatory assets | 1,663 | 1,793 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Cash and Cash Equivalents | 200 | 340 |
Accounts and notes receivable, net | 65 | 52 |
Other | 31 | 40 |
Regulatory assets | $ 1,690 | $ 1,919 |
CONDENSED STATEMENTS OF CONSOL7
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows from Operating Activities: | ||
Net income | $ 223 | $ 224 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 525 | 659 |
Amortization of deferred financing costs | 10 | 10 |
Deferred income taxes | 29 | (51) |
Changes in other assets and liabilities: | ||
Accounts and notes receivable, net | (131) | (141) |
Accounts receivable/payable–affiliated companies | (49) | 103 |
Inventory | (3) | (5) |
Accounts payable | 105 | 3 |
Taxes receivable | 6 | 59 |
Interest and taxes accrued | (28) | (9) |
Net regulatory assets and liabilities | (149) | (70) |
Other current assets | 2 | 3 |
Other current liabilities | 25 | 24 |
Other assets | 2 | 9 |
Other liabilities | (1) | 3 |
Other, net | (4) | (1) |
Net cash provided by operating activities | 562 | 820 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (603) | (655) |
Decrease in notes receivable–affiliated companies | 29 | 0 |
Decrease (increase) in restricted cash of Bond Companies | 8 | (2) |
Other, net | 2 | 13 |
Net cash used in investing activities | (564) | (644) |
Cash Flows from Financing Activities: | ||
Proceeds from long-term debt, net | 298 | 600 |
Payments of long-term debt | (347) | (527) |
Decrease in short-term notes payable–affiliated companies | 0 | (183) |
Dividend to parent | (87) | (54) |
Debt issuance costs | (3) | (6) |
Net cash used in financing activities | (139) | (170) |
Net Increase (Decrease) in Cash and Cash Equivalents | (141) | 6 |
Cash and Cash Equivalents at Beginning of Period | 341 | 264 |
Cash and Cash Equivalents at End of Period | 200 | 270 |
Cash Payments/Receipts: | ||
Interest, net of capitalized interest | 176 | 178 |
Income taxes, net | 76 | 82 |
Non-cash transactions: | ||
Accounts payable related to capital expenditures | $ 70 | $ 52 |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation [Text Block] | Background and Basis of Presentation General. Included in this Form 10-Q are the Interim Condensed Financial Statements of Houston Electric. The Interim Condensed Financial Statements are unaudited, omit certain financial statement disclosures and should be read with the 2016 Form 10-K. Background. Houston Electric is an indirect, wholly-owned subsidiary of CenterPoint Energy, Inc., a public utility holding company. Houston Electric provides electric transmission and distribution services to REPs serving over 2.4 million metered customers in the Texas Gulf Coast area that includes the city of Houston. As of September 30, 2017 , Houston Electric had the following subsidiaries: Bond Company II, Bond Company III, Restoration Bond Company and Bond Company IV. As of September 30, 2017 , Houston Electric had VIEs consisting of the Bond Companies, which it consolidates. The consolidated VIEs are wholly-owned, bankruptcy-remote, special purpose entities that were formed specifically for the purpose of securitizing transition and system restoration-related property. Creditors of Houston Electric have no recourse to any assets or revenues of the Bond Companies. The bonds issued by these VIEs are payable only from and secured by transition and system restoration property, and the bondholders have no recourse to the general credit of Houston Electric. Basis of Presentation. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Houston Electric’s Interim Condensed Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the respective periods. Amounts reported in Houston Electric’s Condensed Statements of Consolidated Income are not necessarily indicative of amounts expected for a full-year period due to the effects of, among other things, (a) seasonal fluctuations in demand for energy, (b) timing of maintenance and other expenditures and (c) acquisitions and dispositions of businesses, assets and other interests. Houston Electric consists of a single reportable business segment: Electric Transmission & Distribution. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements [Text Block] | New Accounting Pronouncements In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value and to recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. It does not change the guidance for classifying and measuring investments in debt securities and loans. ASU 2016-01 also changes certain disclosure requirements and other aspects related to recognition and measurement of financial assets and financial liabilities. ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. As of the first reporting period in which the guidance is adopted, a cumulative-effect adjustment to beginning retained earnings will be made, with two features that will be adopted prospectively. Houston Electric does not believe this standard will have a material impact on its financial position, results of operations, cash flows and disclosures. In 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02) and related amendments. ASU 2016-02 provides a comprehensive new lease model that requires lessees to recognize assets and liabilities for most leases and would change certain aspects of lessor accounting. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. A modified retrospective adoption approach is required. Houston Electric is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. In 2016, the FASB issued ASUs which amended ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . ASU 2014-09, as amended, provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner that depicts the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. Early adoption is permitted, and entities have the option of using either a full retrospective or a modified retrospective adoption approach. Houston Electric is currently evaluating its revenue streams under these ASUs and has not yet identified any significant changes as the result of these new standards. A substantial amount of Houston Electric’s revenues are tariff based, which we do not anticipate will be significantly impacted by these ASUs. Houston Electric expects to adopt these ASUs on January 1, 2018 using the modified retrospective adoption approach. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 provides clarifying guidance on the classification of certain cash receipts and payments in the statement of cash flows and eliminates the variation in practice related to such classifications. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. A retrospective adoption approach is required. Houston Electric is currently assessing the impact that this standard will have on its statement of cash flows. In November 2016, the FASB issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. As a result, the statement of cash flows will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. ASU 2016-18 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. A retrospective adoption approach is required. This standard will not have an impact on Houston Electric’s financial position, results of operations, and disclosures, but it will have an impact on the presentation of the statement of cash flows. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01). ASU 2017-01 revises the definition of a business. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then under ASU 2017-01, the asset or group of assets is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs to be more closely aligned with how outputs are described in ASC 606. ASU 2017-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted in certain circumstances. A prospective adoption approach is required. ASU 2017-01 could have a potential impact on Houston Electric’s accounting for future acquisitions. In February 2017, the FASB issued ASU No. 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (ASU 2017-05). ASU 2017-05 clarifies when and how to apply ASC 610-20 Gains and Losses from the Derecognition of Nonfinancial Assets , which was issued as part of ASU 2014-09 Revenue from Contracts with Customers (Topic 606). ASU 2017-05 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Companies can elect a retrospective or modified retrospective approach to adoption. Houston Electric does not believe this standard will have a material impact on its financial position, results of operations, cash flows and disclosures. In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07). ASU 2017-07 requires an employer to report the service cost component of the net periodic pension cost and postretirement benefit cost in the same line item(s) as other employee compensation costs arising from services rendered during the period; all other components will be presented separately from the line item(s) that includes the service cost and outside of any subtotal of operating income. In addition, only the service cost component will be eligible for capitalization in assets. ASU 2017-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components and prospectively for the capitalization of the service cost component. The adoption of this guidance is expected to result in an increase to operating income and a decrease to other income. Prospectively, other components previously capitalized in assets will be recorded as regulatory assets. Houston Electric does not believe this standard will have a material impact on its financial position, results of operations, cash flows and disclosures. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). ASU 2017-12 expands an entity’s ability to hedge nonfinancial and financial risk components and reduce complexity in fair value hedges of interest rate risk. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness, eases certain documentation and assessment requirements, and updates the presentation and disclosure requirements. ASU 2017-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. A cumulative-effect adjustment to eliminate the separate measurement of ineffectiveness upon adoption is required for existing cash flow and net investment hedges. Presentation and disclosure guidance should be applied prospectively. Houston Electric is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. Management believes that other recently issued standards, which are not yet effective, will not have a material impact on Houston Electric’s consolidated financial position, results of operations or cash flows upon adoption. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans [Text Block] | Employee Benefit Plans Houston Electric’s employees participate in CenterPoint Energy’s postretirement benefit plan. Houston Electric’s net periodic cost includes the following components relating to postretirement benefits: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Service cost $ — $ — $ — $ 1 Interest cost 3 2 7 8 Expected return on plan assets (1 ) (1 ) (3 ) (4 ) Amortization of prior service credit (2 ) (1 ) (4 ) (2 ) Curtailment gain (1) — — — (3 ) Net periodic cost (2) $ — $ — $ — $ — (1) A curtailment gain or loss is required when the expected future services of a significant number of current employees are reduced or eliminated for the accrual of benefits. In May 2016, Houston Electric entered into a renegotiated collective bargaining agreement with the IBEW Local Union 66 that provides that for Houston Electric union employees covered under the agreement who retire on or after January 1, 2017, retiree medical and prescription drug coverage will be provided exclusively through the NECA/IBEW Family Medical Care Plan in exchange for the payment of monthly premiums as determined under the agreement. As a result, the accrued postretirement benefits related to such future Houston Electric union retirees were eliminated. In 2016, Houston Electric recognized a curtailment gain of $3 million as an accelerated recognition of the prior service credit that would otherwise be recognized in future periods. (2) Net periodic cost in this table is before considering amounts subject to overhead allocations for capital expenditure projects or for amounts subject to deferral for regulatory purposes. Houston Electric expects to contribute approximately $9 million to its postretirement benefit plan in 2017 , of which approximately $2 million and $7 million were contributed during the three and nine months ended September 30, 2017 , respectively. |
Regulatory Accounting
Regulatory Accounting | 9 Months Ended |
Sep. 30, 2017 | |
Regulatory Assets and Liabilities, Other Disclosures [Abstract] | |
Regulatory Accounting [Text Block] | Regulatory Accounting Equity Return. As of September 30, 2017 , Houston Electric has not recognized an allowed equity return of $299 million because such return will be recognized as it is recovered in rates. During the three months ended September 30, 2017 and 2016 , Houston Electric recognized approximately $13 million and $22 million , respectively, of the allowed equity return not previously recognized. During the nine months ended September 30, 2017 and 2016 , Houston Electric recognized approximately $30 million and $52 million , respectively, of the allowed equity return not previously recognized. Hurricane Harvey. Houston Electric’s electric delivery system suffered damage as a result of Hurricane Harvey, a major storm classified as a Category 4 hurricane on the Saffir-Simpson Hurricane Wind Scale, that first struck the Texas coast on Friday, August 25, 2017 and remained over the Houston area for the next several days. The unprecedented flooding from torrential amounts of rainfall accompanying the storm caused significant damage to or destruction of residences and businesses served by Houston Electric. Currently, Houston Electric estimates that total costs to restore the electric delivery facilities damaged as a result of Hurricane Harvey will range from $110 million to $120 million and estimates that the total restoration costs covered by insurance will be approximately $35 million . Houston Electric will defer the uninsured storm restoration costs as management believes it is probable that such costs will be recovered through traditional rate adjustment mechanisms for capital costs and through the next rate proceeding for operation and maintenance expenses. As of September 30, 2017, Houston Electric recorded an increase of $4 million in property, plant and equipment and $73 million in regulatory assets, net of $23 million in insurance receivables recorded, for restoration costs incurred. As a result, storm restoration costs should not materially affect Houston Electric’s reported net income for 2017. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements [Text Block] | Fair Value Measurements Assets and liabilities that are recorded at fair value in the Condensed Consolidated Balance Sheets are categorized based upon the level of judgment associated with the inputs used to measure their value. Hierarchical levels, as defined below and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities, are as follows: Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. The types of assets carried at Level 1 fair value are investments listed in active markets. As of September 30, 2017 and December 31, 2016 , Houston Electric held Level 1 investments of $50 million and $59 million , respectively, which were primarily investments in money market funds and are included in other current assets and other assets in the Condensed Consolidated Balance Sheets. Level 2: Inputs, other than quoted prices included in Level 1, are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. Houston Electric had no Level 2 assets or liabilities as of either September 30, 2017 or December 31, 2016 . Level 3: Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Unobservable inputs reflect Houston Electric’s judgments about the assumptions market participants would use in determining fair value. Houston Electric had no Level 3 assets or liabilities as of either September 30, 2017 or December 31, 2016 . Houston Electric determines the appropriate level for each financial asset and liability on a quarterly basis and recognizes transfers between levels at the end of the reporting period. For the nine months ended September 30, 2017 , there were no transfers between levels. Estimated Fair Value of Financial Instruments The fair values of cash and cash equivalents and short-term borrowings are estimated to be approximately equivalent to carrying amounts and have been excluded from the table below. The fair value of each debt instrument is determined by multiplying the principal amount of each debt instrument by a combination of historical trading prices and comparable issue data. These liabilities, which are not measured at fair value in the Condensed Consolidated Balance Sheets, but for which the fair value is disclosed, would be classified as Level 2 in the fair value hierarchy. September 30, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Financial liabilities: (in millions) Long-term debt $ 4,816 $ 5,077 $ 4,865 $ 5,079 |
Related Party Transactions and
Related Party Transactions and Major Customers | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Major Customers [Text Block] | Related Party Transactions and Major Customers (a) Related Party Transactions Houston Electric participates in a money pool through which it 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 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. Houston Electric had investments in the money pool of $67 million and $96 million as of September 30, 2017 and December 31, 2016 , respectively, which are included in accounts and notes receivable-affiliated companies, in the Condensed Consolidated Balance Sheets. As of September 30, 2017 , Houston Electric’s money pool investments had a weighted-average interest rate of 1.44% . Houston Electric had affiliate related net interest income of $-0- and $1 million for the three and nine months ended September 30, 2017 , respectively, and net interest expense of $1 million and $4 million for the three and nine months ended September 30, 2016 , respectively. CenterPoint Energy provides some corporate services to Houston Electric. The costs of services have been charged directly to Houston Electric using methods that management believes are reasonable. These methods include negotiated usage rates, dedicated asset assignment and proportionate corporate formulas based on operating expenses, assets, gross margin, employees and a composite of assets, gross margin and employees. CERC provides certain services to Houston Electric. These services are billed at actual cost, either directly or as an allocation and include line locating and other miscellaneous services. Additionally, Houston Electric provides a number of services to CERC. These services are billed at actual cost, either directly or as an allocation and include fleet services, shop services, geographic services, surveying and right-of-way services, radio communications, data circuit management and field operations. These charges are not necessarily indicative of what would have been incurred had Houston Electric not been an affiliate. Amounts charged to and by Houston Electric for these services were as follows and are included primarily in operation and maintenance expenses: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Corporate service charges $ 41 $ 43 $ 127 $ 131 Charges from CERC for services provided 2 2 5 5 Billings to CERC for services provided (3 ) (4 ) (11 ) (11 ) (b) Major Customers Houston Electric’s transmission and distribution revenues from major customers are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Affiliates of NRG $ 221 $ 223 $ 540 $ 527 Affiliates of Vistra Energy Corp. 72 71 172 166 |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Long-term Debt [Text Block] | Long-term Debt Debt Issuances. During the nine months ended September 30, 2017 , Houston Electric issued the following general mortgage bonds: Issuance Date Aggregate Principal Amount Interest Rate Maturity Date (in millions) January 2017 $ 300 3.00% 2027 The proceeds from the issuance of these bonds were used to repay short-term debt and for general limited liability company purposes. Revolving Credit Facility. In June 2017, Houston Electric entered into an amendment to its revolving credit facility to extend the termination date thereof from March 3, 2021 to March 3, 2022 and to terminate the swingline loan subfacility thereunder. No changes were made to the aggregate commitments under the revolving credit facility. As of September 30, 2017 and December 31, 2016 , Houston Electric had the following revolving credit facility and utilization of such facility: September 30, 2017 December 31, 2016 Size of Facility Loans Letters of Credit Loans Letters of Credit (in millions) $ 300 $ — $ 4 $ — $ 4 Execution Date Size of Facility Draw Rate of LIBOR plus (1) Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio (2) Debt for Borrowed Money to Capital Ratio as of September 30, 2017 (3) Termination Date (4) (in millions) March 3, 2016 $ 300 1.125% 65% 49% March 3, 2022 (1) Based on current credit ratings. (2) The financial covenant limit will temporarily increase from 65% to 70% if Houston Electric experiences damage from a natural disaster in its service territory and Houston Electric certifies to the administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed $100 million in a consecutive 12 -month period, all or part of which Houston Electric intends to seek to recover through securitization financing. Such temporary increase in the financial covenant would be in effect from the date Houston Electric delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of Houston Electric’s certification or (iii) the revocation of such certification. (3) As defined in the revolving credit facility agreement, excluding Securitization Bonds. (4) Amended on June 16, 2017 to extend the termination date as noted above. Houston Electric was in compliance with all financial debt covenants as of September 30, 2017 . Hedging of Interest Expense for Future Debt Issuances. In January 2017, Houston Electric entered into forward interest rate agreements with several counterparties, having an aggregate notional amount of $150 million . These agreements were executed to hedge, in part, volatility in the 10-year U.S. treasury rate by reducing Houston Electric’s exposure to variability in cash flows related to interest payments of Houston Electric’s $300 million issuance of fixed rate debt in January 2017. These forward interest rate agreements were designated as cash flow hedges. Accordingly, the effective portion of realized losses associated with the agreements, which totaled approximately $0.5 million , is a component of accumulated other comprehensive income in 2017 and will be amortized over the life of the bonds. Other. As of both September 30, 2017 and December 31, 2016 , Houston Electric had issued $118 million of general mortgage bonds as collateral for long-term debt of CenterPoint Energy. These bonds are not reflected in the consolidated financial statements because of the contingent nature of the obligations. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies [Text Block] | Commitments and Contingencies Legal Matters Gas Market Manipulation Cases . CenterPoint Energy, Houston Electric or their predecessor, Reliant Energy, and certain of their former subsidiaries have been named as defendants in certain lawsuits described below. Under a master separation agreement between CenterPoint Energy and a former subsidiary, RRI, CenterPoint Energy and its subsidiaries are entitled to be indemnified by RRI and its successors for any losses, including certain attorneys’ fees and other costs, arising out of these lawsuits. In May 2009, RRI sold its Texas retail business to a subsidiary of NRG and RRI changed its name to RRI Energy, Inc. In December 2010, Mirant Corporation merged with and became a wholly-owned subsidiary of RRI, and RRI changed its name to GenOn. In December 2012, NRG acquired GenOn through a merger in which GenOn became a wholly-owned subsidiary of NRG. None of the sale of the retail business, the merger with Mirant Corporation, or the acquisition of GenOn by NRG alters RRI’s (now GenOn’s) contractual obligations to indemnify CenterPoint Energy and its subsidiaries, including Houston Electric, for certain liabilities, including their indemnification obligations regarding the gas market manipulation litigation. A large number of lawsuits were filed against numerous gas market participants in a number of federal and western state courts in connection with the operation of the natural gas markets in 2000–2002. CenterPoint Energy and its affiliates have since been released or dismissed from all such cases. CES, a subsidiary of CERC Corp., was a defendant in a case now pending in federal court in Nevada alleging a conspiracy to inflate Wisconsin natural gas prices in 2000–2002. On May 24, 2016, the district court granted CES’s motion for summary judgment, dismissing CES from the case. The plaintiffs have appealed that ruling. CenterPoint Energy and CES intend to continue vigorously defending against the plaintiffs’ claims. In June 2017, GenOn and various affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code. CenterPoint Energy, CERC, and CES submitted proofs of claim in the bankruptcy proceedings to protect their indemnity rights. If GenOn were unable to meet its indemnity obligations or satisfy a liability that has been assumed in the gas market manipulation litigation, then Houston Electric, CenterPoint Energy or CERC could incur liability and be responsible for satisfying the liability. Houston Electric does not expect the ultimate outcome of the case against CES to have a material adverse effect on its financial condition, results of operations or cash flows. Environmental Matters Asbestos. Some facilities owned by Houston Electric contain or have contained asbestos insulation and other asbestos-containing materials. CenterPoint Energy and its subsidiaries, including Houston Electric, are from time to time named, along with numerous others, as defendants in lawsuits filed by a number of individuals who claim injury due to exposure to asbestos, and CenterPoint Energy anticipates that additional claims may be asserted in the future. Although their ultimate outcome cannot be predicted at this time, Houston Electric does not expect these matters, either individually or in the aggregate, to have a material adverse effect on its financial condition, results of operations or cash flows. Other Environmental. From time to time, Houston Electric identifies the presence of environmental contaminants during its operations or on property where its predecessor companies have conducted operations. Other such sites involving contaminants may be identified in the future. Houston Electric has and expects to continue to remediate identified sites consistent with its legal obligations. From time to time, Houston Electric has received notices from regulatory authorities or others regarding its status as a potentially responsible party in connection with sites found to require remediation due to the presence of environmental contaminants. In addition, Houston Electric has been named from time to time as a defendant in litigation related to such sites. Although the ultimate outcome of such matters cannot be predicted at this time, Houston Electric does not expect these matters, either individually or in the aggregate, to have a material adverse effect on its financial condition, results of operations or cash flows. Other Proceedings Houston Electric is involved in other legal, environmental, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies regarding matters arising in the ordinary course of business. From time to time, Houston Electric is also a defendant in legal proceedings with respect to claims brought by various plaintiffs against broad groups of participants in the energy industry. Some of these proceedings involve substantial amounts. Houston Electric regularly analyzes current information and, as necessary, provides accruals for probable and reasonably estimable liabilities on the eventual disposition of these matters. Houston Electric does not expect the disposition of these matters to have a material adverse effect on its financial condition, results of operations or cash flows. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes [Text Block] | Income Taxes The effective tax rate reported for the three months ended September 30, 2017 and 2016 was 35% . The effective tax rates reported for the nine months ended September 30, 2017 was 36% compared to 35% for the same period in 2016. Houston Electric reported no uncertain tax liability as of September 30, 2017 and expects no significant change to the uncertain tax liability over the next twelve months. CenterPoint Energy’s consolidated federal income tax returns have been audited and settled through 2015. For the 2016 and 2017 tax years, CenterPoint Energy is a participant in the IRS’s Compliance Assurance Process. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Defined Benefit Plans Disclosures [Table Text Block] | Houston Electric’s employees participate in CenterPoint Energy’s postretirement benefit plan. Houston Electric’s net periodic cost includes the following components relating to postretirement benefits: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Service cost $ — $ — $ — $ 1 Interest cost 3 2 7 8 Expected return on plan assets (1 ) (1 ) (3 ) (4 ) Amortization of prior service credit (2 ) (1 ) (4 ) (2 ) Curtailment gain (1) — — — (3 ) Net periodic cost (2) $ — $ — $ — $ — (1) A curtailment gain or loss is required when the expected future services of a significant number of current employees are reduced or eliminated for the accrual of benefits. In May 2016, Houston Electric entered into a renegotiated collective bargaining agreement with the IBEW Local Union 66 that provides that for Houston Electric union employees covered under the agreement who retire on or after January 1, 2017, retiree medical and prescription drug coverage will be provided exclusively through the NECA/IBEW Family Medical Care Plan in exchange for the payment of monthly premiums as determined under the agreement. As a result, the accrued postretirement benefits related to such future Houston Electric union retirees were eliminated. In 2016, Houston Electric recognized a curtailment gain of $3 million as an accelerated recognition of the prior service credit that would otherwise be recognized in future periods. (2) Net periodic cost in this table is before considering amounts subject to overhead allocations for capital expenditure projects or for amounts subject to deferral for regulatory purposes. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The fair values of cash and cash equivalents and short-term borrowings are estimated to be approximately equivalent to carrying amounts and have been excluded from the table below. The fair value of each debt instrument is determined by multiplying the principal amount of each debt instrument by a combination of historical trading prices and comparable issue data. These liabilities, which are not measured at fair value in the Condensed Consolidated Balance Sheets, but for which the fair value is disclosed, would be classified as Level 2 in the fair value hierarchy. September 30, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Financial liabilities: (in millions) Long-term debt $ 4,816 $ 5,077 $ 4,865 $ 5,079 |
Related Party Transactions an19
Related Party Transactions and Major Customers (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | CenterPoint Energy provides some corporate services to Houston Electric. The costs of services have been charged directly to Houston Electric using methods that management believes are reasonable. These methods include negotiated usage rates, dedicated asset assignment and proportionate corporate formulas based on operating expenses, assets, gross margin, employees and a composite of assets, gross margin and employees. CERC provides certain services to Houston Electric. These services are billed at actual cost, either directly or as an allocation and include line locating and other miscellaneous services. Additionally, Houston Electric provides a number of services to CERC. These services are billed at actual cost, either directly or as an allocation and include fleet services, shop services, geographic services, surveying and right-of-way services, radio communications, data circuit management and field operations. These charges are not necessarily indicative of what would have been incurred had Houston Electric not been an affiliate. Amounts charged to and by Houston Electric for these services were as follows and are included primarily in operation and maintenance expenses: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Corporate service charges $ 41 $ 43 $ 127 $ 131 Charges from CERC for services provided 2 2 5 5 Billings to CERC for services provided (3 ) (4 ) (11 ) (11 ) |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Houston Electric’s transmission and distribution revenues from major customers are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Affiliates of NRG $ 221 $ 223 $ 540 $ 527 Affiliates of Vistra Energy Corp. 72 71 172 166 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Debt [Table Text Block] | Debt Issuances. During the nine months ended September 30, 2017 , Houston Electric issued the following general mortgage bonds: Issuance Date Aggregate Principal Amount Interest Rate Maturity Date (in millions) January 2017 $ 300 3.00% 2027 |
Schedule of Line of Credit Facilities [Table Text Block] | Revolving Credit Facility. In June 2017, Houston Electric entered into an amendment to its revolving credit facility to extend the termination date thereof from March 3, 2021 to March 3, 2022 and to terminate the swingline loan subfacility thereunder. No changes were made to the aggregate commitments under the revolving credit facility. As of September 30, 2017 and December 31, 2016 , Houston Electric had the following revolving credit facility and utilization of such facility: September 30, 2017 December 31, 2016 Size of Facility Loans Letters of Credit Loans Letters of Credit (in millions) $ 300 $ — $ 4 $ — $ 4 Execution Date Size of Facility Draw Rate of LIBOR plus (1) Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio (2) Debt for Borrowed Money to Capital Ratio as of September 30, 2017 (3) Termination Date (4) (in millions) March 3, 2016 $ 300 1.125% 65% 49% March 3, 2022 (1) Based on current credit ratings. (2) The financial covenant limit will temporarily increase from 65% to 70% if Houston Electric experiences damage from a natural disaster in its service territory and Houston Electric certifies to the administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed $100 million in a consecutive 12 -month period, all or part of which Houston Electric intends to seek to recover through securitization financing. Such temporary increase in the financial covenant would be in effect from the date Houston Electric delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of Houston Electric’s certification or (iii) the revocation of such certification. (3) As defined in the revolving credit facility agreement, excluding Securitization Bonds. (4) Amended on June 16, 2017 to extend the termination date as noted above. |
Background and Basis of Prese21
Background and Basis of Presentation (Details) customer in Millions | Sep. 30, 2017customer |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of metered customers | 2.4 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - Other Postretirement Benefit Plans [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | $ 0 | $ 0 | $ 0 | $ 1 | |
Interest cost | 3 | 2 | 7 | 8 | |
Expected return on plan assets | (1) | (1) | (3) | (4) | |
Amortization of prior service credit | (2) | (1) | (4) | (2) | |
Curtailment gain (1) | [1] | 0 | 0 | 0 | (3) |
Net periodic cost (2) | [2] | 0 | $ 0 | 0 | $ 0 |
Expected contribution to postretirement benefit plan in current year | 9 | ||||
Total contribution to the plan during the period | $ 2 | $ 7 | |||
[1] | A curtailment gain or loss is required when the expected future services of a significant number of current employees are reduced or eliminated for the accrual of benefits. In May 2016, Houston Electric entered into a renegotiated collective bargaining agreement with the IBEW Local Union 66 that provides that for Houston Electric union employees covered under the agreement who retire on or after January 1, 2017, retiree medical and prescription drug coverage will be provided exclusively through the NECA/IBEW Family Medical Care Plan in exchange for the payment of monthly premiums as determined under the agreement. As a result, the accrued postretirement benefits related to such future Houston Electric union retirees were eliminated. In 2016, Houston Electric recognized a curtailment gain of $3 million as an accelerated recognition of the prior service credit that would otherwise be recognized in future periods. | ||||
[2] | Net periodic cost in this table is before considering amounts subject to overhead allocations for capital expenditure projects or for amounts subject to deferral for regulatory purposes. |
Regulatory Accounting (Details)
Regulatory Accounting (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Amount of allowed equity return on the true-up balance that has not been recognized | $ 299 | $ 299 | |||
Amount of allowed equity return on the true-up balance that was recognized in the period | 13 | $ 22 | 30 | $ 52 | |
Recorded increase in regulatory assets | 1,663 | 1,663 | $ 1,793 | ||
Hurricane Harvey [Member] | |||||
Estimated restoration costs covered by insurance | 35 | 35 | |||
Recorded increase in property, plant and equipment | 4 | 4 | |||
Recorded increase in regulatory assets | 73 | 73 | |||
Recorded insurance receivables | 23 | 23 | |||
Hurricane Harvey [Member] | Minimum [Member] | |||||
Estimated costs to restore damaged facilities | 110 | 110 | |||
Hurricane Harvey [Member] | Maximum [Member] | |||||
Estimated costs to restore damaged facilities | $ 120 | $ 120 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Transfer of Level 1 to Level 2 assets | $ 0 | |
Transfer of Level 2 to Level 1 assets | 0 | |
Transfer of Level 1 to Level 2 liabilities | 0 | |
Transfer of Level 2 to Level 1 liabilities | 0 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Fair value of investments | 50,000,000 | $ 59,000,000 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Fair value of assets or liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Fair value of assets or liabilities | 0 | 0 |
Carrying Amount [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Long-term debt | 4,816,000,000 | 4,865,000,000 |
Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Long-term debt | $ 5,077,000,000 | $ 5,079,000,000 |
Related Party Transactions an25
Related Party Transactions and Major Customers (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Investments in money pool | $ 67 | $ 67 | $ 96 | ||
Affiliate related net interest income (expense) | 0 | $ (1) | 1 | $ (4) | |
Revenues from major customers | 843 | 909 | 2,233 | 2,328 | |
Affiliates of NRG Energy, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenues from major customers | 221 | 223 | 540 | 527 | |
Affiliates of Vistra Energy Corp. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenues from major customers | 72 | 71 | 172 | 166 | |
Operation And Maintenance Expense [Member] | CenterPoint Energy [Member] | |||||
Related Party Transaction [Line Items] | |||||
Corporate service charges | 41 | 43 | 127 | 131 | |
Operation And Maintenance Expense [Member] | CERC Corp [Member] | |||||
Related Party Transaction [Line Items] | |||||
Corporate service charges | 2 | 2 | 5 | 5 | |
Other revenues from transactions with related party | $ (3) | $ (4) | $ (11) | $ (11) | |
Investments [Member] | |||||
Related Party Transaction [Line Items] | |||||
Weighted average interest rate of money pool investments | 1.44% | 1.44% |
Long-term Debt (Details)
Long-term Debt (Details) $ in Millions | Jan. 12, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||||
Size of credit facility | $ 300 | $ 300 | ||
General mortgage bonds used as collateral | 118 | 118 | ||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term line of credit | 0 | 0 | ||
Letter of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term line of credit | $ 4 | $ 4 | ||
Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage on limitation of debt to total capitalization under covenant | [1] | 65.00% | ||
Ratio of indebtedness to net capital | [2] | 0.49 | ||
Percentage on limitation of debt to total capitalization under covenant amended | 70.00% | |||
System restoration costs threshold for increase in permitted debt to EBITDA covenant ratio | $ 100 | |||
Consecutive period for system restoration costs to exceed $100 million (in months) | 12 | |||
Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on LIBOR | [3] | 1.125% | ||
Treasury Lock [Member] | January [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt issued | $ 300 | |||
Aggregate notional amount | 150 | |||
Effective portion of realized losses | $ 0.5 | |||
Bonds General Mortgage Due 2027 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt issued | $ 300 | |||
Interest rate of debt issued | 3.00% | |||
Maturity date of debt issued | Feb. 1, 2027 | |||
[1] | The financial covenant limit will temporarily increase from 65% to 70% if Houston Electric experiences damage from a natural disaster in its service territory and Houston Electric certifies to the administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed $100 million in a consecutive 12-month period, all or part of which Houston Electric intends to seek to recover through securitization financing. Such temporary increase in the financial covenant would be in effect from the date Houston Electric delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of Houston Electric’s certification or (iii) the revocation of such certification. | |||
[2] | As defined in the revolving credit facility agreement, excluding Securitization Bonds. | |||
[3] | Based on current credit ratings. |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 35.00% | 35.00% | 36.00% | 35.00% |