CenterPoint Energy(CNP) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended March 31, 2025, was $297 million, a decrease of $53 million compared to $350 million in the same period of 2024[202]. - Total utility operations net income decreased by $68 million, from $404 million in Q1 2024 to $336 million in Q1 2025[202]. - Electric segment revenues increased to $1,066 million in Q1 2025 from $1,049 million in Q1 2024, while net income decreased by $13 million to $108 million[207]. - Natural Gas segment revenues rose significantly to $1,853 million in Q1 2025, up $283 million from $1,570 million in Q1 2024, but net income decreased by $55 million to $228 million[210]. - Houston Electric's total revenues decreased by $17 million to $884 million for the three months ended March 31, 2025, with a notable increase in residential throughput by 12%[215]. - CERC's revenues increased by $276 million to $1.788 billion for the three months ended March 31, 2025, driven by customer growth and weather impacts[219]. - Houston Electric's net income decreased by $15 million to $84 million for the three months ended March 31, 2025, impacted by higher interest expenses[215]. - CERC's operating income improved by $37 million to $407 million for the three months ended March 31, 2025, despite increased utility natural gas costs[219]. - CERC reported a gain on sale of $52 million for the three months ended March 31, 2025, contributing positively to net income[219]. Customer Metrics - The total number of metered residential customers increased by 2% to 2,651,381 as of March 31, 2025, compared to 2,604,026 in the previous year[207]. - Houston Electric's number of metered customers increased by 2% to 2,830,184 at the end of the period[215]. Capital Expenditures and Investments - Estimated capital expenditures for 2025 are projected at $3,764 million, with $2,139 million allocated for Houston Electric and $1,080 million for CERC[226]. - CenterPoint Energy anticipates spending over $3 billion in energy investments to support renewable energy generation and reduce GHG emissions, aligning with its net zero emissions goals[260]. - Indiana Electric's 2019/2020 Integrated Resource Plan (IRP) includes retiring 730 MW of coal-fired generation and replacing it with 626 MW of solar and 200 MW of wind generation, with further approvals pending[260]. - The proposed Transmission and Distribution System Resiliency Plan involves an investment of approximately $5.75 billion over three years, with $5.54 billion in capital costs and $211 million in operations and maintenance expenses[245]. Financing Activities - Financing activities provided $1,053 million in Q1 2025, compared to $376 million in Q1 2024, indicating a significant increase in financing cash flow[225]. - Net changes in commercial paper outstanding increased by $412 million in Q1 2025, reflecting a strategic shift in financing[225]. - CenterPoint Energy expects to meet its cash needs for the remainder of 2025 through operational cash flow and financing activities, including potential bond issuances[228]. Regulatory and Legislative Matters - CenterPoint Energy plans to monitor the 89th Texas Legislature for any legislation that may impact its business operations[242]. - The Minnesota Gas Rate Case requests a delivery charge adjustment of approximately 6.5% or $85 million for 2024 and an additional 3.7% or $52 million for 2025, driven by safety and reliability investments[247]. - Houston Electric's rate case seeks an increase of approximately $17 million (1%) for retail customers and $43 million (6.6%) for wholesale transmission service, reflecting ongoing investments in system reliability[248]. - The Ohio Gas Rate Case seeks a revenue requirement increase of approximately $100 million based on a requested return on equity of 10.4%[249]. - The anticipated decision date for the Minnesota Gas Rate Case is July 1, 2025, following a unanimous settlement agreement filed on November 25, 2024[247]. Operational Challenges - CenterPoint Energy's solar projects face delays and increased costs due to unavailability of solar panels and supply chain issues, with potential impacts on project viability[243]. - The company anticipates restoration costs associated with the May 2024 Storm Events to be approximately $32 million for the remainder of 2025[226]. Credit and Debt Management - As of April 21, 2025, the Registrants had approximately $4.0 billion in revolving credit facilities, with a utilization of $395 million[264]. - The weighted average interest rate for borrowings in the CenterPoint Energy money pool was 4.62%, with Houston Electric borrowing $94 million and CERC borrowing $920 million[271]. - CenterPoint Energy's credit ratings as of April 21, 2025, included Baa2 (Moody's), BBB (S&P), and BBB (Fitch) with a negative outlook from all three agencies[272]. - A downgrade in credit ratings could increase borrowing costs under revolving credit facilities, but the impact would have been insignificant if downgraded one notch as of March 31, 2025[275]. Economic and Market Conditions - In 2025, the U.S. government imposed a 25% tariff on steel imports and a baseline tariff of 10% on products from all countries, leading to increased uncertainty in economic conditions and potential impacts on capital market access and commodity costs[252]. - The shift in U.S. energy policy under the current administration has created uncertainty regarding the future of renewable generation infrastructure development[258]. - The impact of climate-related regulations on compliance costs remains uncertain, with expectations of increased costs due to new regulations[257].