Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026, for CenterPoint Energy, Inc. (CNP) and its wholly-owned subsidiaries, CenterPoint Energy Houston Electric, LLC (Houston Electric) and CenterPoint Energy Resources Corp. (CERC). The company operates regulated electric transmission and distribution systems in Texas and Indiana, and natural gas distribution systems in Texas, Indiana, Minnesota, and Ohio. As of June 30, 2026, the Ohio natural gas business (CEOH) is classified as "held for sale" pending a $2.62 billion transaction expected to close in Q4 2026.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | CenterPoint Energy (Consolidated) | Houston Electric | CERC |
|---|---|---|---|
| Total Revenues | $5,127 million | $2,158 million | $2,457 million |
| Net Income | $560 million | $298 million | $312 million |
| Diluted EPS | $0.84 | N/A | N/A |
| Operating Cash Flow | $1,060 million | $460 million | $765 million |
| Capital Expenditures | $2,568 million | $1,686 million | $836 million |
| Total Debt (Long-term + Current) | $24,642 million | $11,543 million | $5,069 million |
| Cash & Equivalents | $49 million | $39 million | $0 million |
Material Changes vs. Prior Period
- Revenue Growth: Consolidated revenues increased 5.4% to $5.127 billion (vs. $4.864 billion in 2025), driven primarily by the Electric segment (+14.4%) due to rate design changes, transmission revenue, and securitization bond activity. The Natural Gas segment saw a 2.4% revenue decline due to the divestiture of Louisiana and Mississippi businesses in March 2025 and lower weather-normalized usage.
- Net Income: Consolidated net income rose 13.1% to $560 million (vs. $495 million in 2025). The Electric segment contributed a $98 million increase in net income, while the Natural Gas segment increased by $16 million. Corporate and Other net loss widened by $49 million, impacted by non-recurring tax benefits in 2025 and mark-to-market losses on ZENS-related securities.
- Operating Expenses: Depreciation and amortization increased significantly ($868 million vs. $733 million) due to ongoing plant additions and amortization of regulatory assets. Operation and maintenance expenses rose to $1.508 billion, reflecting higher labor, benefits, and contract service costs.
- Divestitures: The company recognized a $43 million loss on the sale of Louisiana and Mississippi natural gas businesses in the prior year (2025), which did not recur in 2026. Proceeds from divestitures were $0 in 2026 compared to $1.219 billion in 2025.
Guidance, Outlook, and Risks
- Capital Plan Update: In July 2026, the company increased its 10-year capital plan by $1.2 billion to approximately $66.7 billion through 2035 to support grid reliability and large-load customer connections (e.g., data centers).
- Regulatory Matters:
- TEEEF: Houston Electric filed a stipulation to remove 15 large and 5 medium temporary emergency electric energy facilities (TEEEF) units from its fleet, potentially reducing revenue requirements by $112 million pending PUCT approval.
- Hurricane Beryl: Restoration Bond Company III issued $1.193 billion in securitization bonds in February 2026 to recover storm restoration costs. Litigation regarding the storm remains pending, with the company unable to estimate potential losses.
- Ohio Divestiture: The sale of the Ohio natural gas business to National Fuel Gas Company is expected to close in Q4 2026, subject to regulatory approvals.
- Legal & Environmental Risks: Significant litigation continues regarding the February 2021 Winter Storm Event and Hurricane Beryl. The company faces potential exposure from gross negligence claims, though many negligence claims have been dismissed. Environmental remediation costs for Manufactured Gas Plant (MGP) sites are estimated between $9 million and $50 million for CenterPoint Energy.
- Market Risks: The company holds ZENS-Related Securities (AT&T, Charter, WBD) to hedge indexed debt. A $151 million unrealized loss on these securities was recorded in Q2 2026. A pending merger involving WBD could alter the reference shares for the ZENS.
Investor Verification Checklist
- Ohio Divestiture Closing: Verify the final closing date and any working capital adjustments for the $2.62 billion sale of the Ohio natural gas business.
- TEEEF Rate Impact: Monitor the PUCT's final order on the removal of large and medium TEEEF units and the resulting $112 million revenue reduction.
- Large-Load Interconnections: Track the progress of the 14 GW of potential large-load customer connections in Texas and the associated $900 million in contributions in aid of construction.
- Legal Exposure: Review updates on the Multi-District Litigation (MDL) regarding Hurricane Beryl and the Winter Storm Event, specifically the status of gross negligence claims and insurance coverage disputes.
- Capital Expenditure Execution: Assess the company's ability to fund the updated $66.7 billion 10-year capital plan without diluting equity or downgrading credit ratings.