CenterPoint Energy(CNP) - 2021 Q2 - Quarterly Report

Financial Performance - CenterPoint Energy reported an income available to common shareholders of $221 million for the three months ended June 30, 2021, compared to $59 million for the same period in 2020, an increase of $162 million [313]. - For the six months ended June 30, 2021, income available to common shareholders increased by $1,724 million, primarily due to the impairment of investment in Enable in 2020 and favorable income tax impacts in 2021 [316]. - The total utility operations segment saw an increase in income available to common shareholders of $63 million, driven by rate relief and reduced impact from COVID-19 [314]. Revenue Growth - Electric segment revenues increased to $937 million for the three months ended June 30, 2021, up from $848 million in the same period in 2020, reflecting a $89 million increase [324]. - CenterPoint Energy's Natural Gas segment reported revenues of $740 million for the three months ended June 30, 2021, an increase of $96 million (15%) compared to $644 million in the same period of 2020 [329]. - Houston Electric reported total revenues of $786 million for the three months ended June 30, 2021, an increase of $66 million (9.2%) compared to $720 million for the same period in 2020 [335]. Customer Metrics - The number of metered customers at the end of the period increased by 2% to 2,783,920 compared to 2,716,522 in the previous year [324]. - The number of residential customers at the end of the period was 4,334,297, reflecting a 1% increase from 4,282,921 in the prior year [329]. - The number of metered customers at the end of the period was 2,634,108, reflecting a growth of 3% from 2,567,699 in the previous year [335]. Operating Income - CenterPoint Energy's operating income for the Electric segment was $201 million for the three months ended June 30, 2021, compared to $180 million in the same period in 2020, an increase of $21 million [324]. - Operating income for the Natural Gas segment increased to $91 million, a rise of $25 million (38%) compared to $66 million in the same quarter of 2020 [329]. - Operating income rose to $64 million for the three months ended June 30, 2021, compared to $42 million in the same period of 2020, an increase of $22 million or 52.4% [341]. Expenses - CenterPoint Energy's total expenses for the Electric segment increased to $692 million for the three months ended June 30, 2021, compared to $636 million in the same period in 2020 [324]. - Operating and maintenance expenses, excluding Bond Companies, were $389 million, an increase of $27 million (7.5%) from $362 million in the prior year [335]. - Interest expense decreased by $4 million to $34 million, compared to $38 million in the prior year [331]. Capital Expenditures and Financing - Capital expenditures for the six months ended June 30, 2021, were $(105) million, a decrease from $(187) million in the same period of 2020, reflecting a favorable variance of $82 million [349]. - Estimated capital expenditures for CenterPoint Energy are projected to be $1.897 billion, with $894 million allocated for Houston Electric and $632 million for CERC [352]. - CenterPoint Energy plans to finance anticipated cash needs through borrowings under credit facilities, long-term debt issuance, and cash flows from operations [356]. Regulatory and Rate Cases - CenterPoint Energy filed a base rate case with the IURC seeking a revenue increase of approximately $29 million, with a proposed return on equity of 10.15% [374]. - A settlement agreement recommended a revenue decrease of $6 million based on a 9.8% ROE and an overall after-tax rate of return of 6.16% on the same total rate base of approximately $1,611 million [375]. - The Texas legislature enacted Senate Bill 3, establishing weatherization and power grid requirements, and Senate Bill 415, allowing TDUs to contract for electric energy storage systems [378]. Natural Gas Costs and Recovery - CenterPoint Energy incurred approximately $2.1 billion in incremental costs for natural gas supplies due to the February 2021 Winter Storm Event, with $2.0 billion attributed to CERC [353]. - The total estimated incremental natural gas costs for recovery across various states amount to $2.099 billion, with Texas accounting for $1.082 billion [367]. - The company expects to recover costs related to the February 2021 Winter Storm Event over a five-year period in Arkansas, with recovery applications filed in multiple states [359]. Debt and Credit Ratings - CenterPoint Energy's senior unsecured debt is rated Baa2 by Moody's and BBB by S&P, both with a stable outlook [401]. - A downgrade in credit ratings could increase borrowing costs under the revolving credit facilities, but the impact would have been insignificant if downgraded one notch as of June 30, 2021 [403]. - CenterPoint Energy's revolving credit facilities aggregated approximately $4 billion as of June 30, 2021, with a total utilization of $1.731 billion [393]. Environmental Goals and Compliance - CenterPoint Energy's corporate carbon emission goals aim for a 50% reduction in GHG emissions by 2035, aligning with regulatory expectations [390]. - The company is currently unable to predict the future of the CPP or ACE Rule under the Biden Administration, which may impact its regulatory compliance strategies [389]. - Regulatory authority allows CenterPoint Energy to lock in pricing for up to 50% of annual natural gas purchases, mitigating commodity price risk [435].