CENTERPOINT ENERGY INCCNP
CENTERPOINT ENERGY INC Leases Disclosure
Leases
In 2021, Houston Electric entered into a temporary short-term lease and long-term leases for TEEEF. The short-term lease agreement expired on December 31, 2022. Effective January 1, 2023, all TEEEF assets were leased under the long-term lease agreement. Expenses associated with the short-term lease, including carrying costs, are deferred to a regulatory asset and totaled $78 million and $89 million as of December 31, 2025 and 2024, respectively.
The long-term lease agreement includes up to 519 MW of TEEEF, all of which was delivered as of December 31, 2022, triggering lease commencement at delivery, with an initial term ending in 2029 for all TEEEF leases. The remaining finance lease liability associated with the commenced long-term TEEEF agreement was not significant as of December 31, 2025 and 2024 and relates to removal costs that will be incurred at the end of the lease term. As of December 31, 2025, Houston Electric had secured a first lien on all the assets leased under the prepayment agreement. For TEEEF units included within the rate-regulated utilities, expenses associated with the long-term lease, including variable costs associated with the operation and maintenance of the TEEEF assets, depreciation expense on the right of use asset and carrying costs, are deferred to a regulatory asset as a recoverable cost under the 2021 Texas legislation and totaled $123 million and $158 million as of December 31, 2025 and 2024, respectively. For further discussion of the regulatory impacts, see Note 7.
The components of lease cost, included in Operation and maintenance expense on the Registrants’ respective Statements of Consolidated Income, are as follows for the periods presented:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| CenterPoint Energy | Houston Electric | CERC | CenterPoint Energy | Houston Electric | CERC | CenterPoint Energy | Houston Electric | CERC | |||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating lease cost | $ | 8 | $ | 3 | $ | 2 | $ | 6 | $ | 3 | $ | 2 | $ | 6 | $ | 3 | $ | 2 | |||||||||||||||||||||||||||||||||||
| Short-term lease cost | 26 | 25 | — | 12 | 11 | — | 31 | 30 | — | ||||||||||||||||||||||||||||||||||||||||||||
Total lease cost (1) | $ | 34 | $ | 28 | $ | 2 | $ | 18 | $ | 14 | $ | 2 | $ | 37 | $ | 33 | $ | 2 | |||||||||||||||||||||||||||||||||||
(1) For TEEEF units included within the rate-regulated utilities, CenterPoint Energy and Houston Electric defer finance lease costs for TEEEF to Regulatory assets for recovery rather than to Depreciation and amortization in the Statements of Consolidated Income. For the year ended December 31, 2025, CenterPoint Energy and Houston Electric recognized $59 million of finance lease cost within Depreciation and amortization in the Statements of Consolidated Income, which represents the period of time certain TEEEF units were not eligible for regulatory deferral.
The components of lease income were as follows for the periods presented:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| CenterPoint Energy | Houston Electric | CERC | CenterPoint Energy | Houston Electric | CERC | CenterPoint Energy | Houston Electric | CERC | |||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating lease income | $ | 9 | $ | — | $ | 6 | $ | 7 | $ | — | $ | 5 | $ | 6 | $ | 1 | $ | 4 | |||||||||||||||||||||||||||||||||||
| Variable lease income | 1 | — | — | 1 | — | — | 2 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Total lease income | $ | 10 | $ | — | $ | 6 | $ | 8 | $ | — | $ | 5 | $ | 8 | $ | 1 | $ | 4 | |||||||||||||||||||||||||||||||||||
Supplemental balance sheet information related to leases was as follows as of the dates presented:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| CenterPoint Energy | Houston Electric | CERC | CenterPoint Energy | Houston Electric | CERC | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Operating ROU assets (1) | $ | 61 | $ | 5 | $ | 14 | $ | 27 | $ | 5 | $ | 15 | |||||||||||||||||||||||
| Finance ROU assets (2) | 335 | 335 | — | 430 | 430 | — | |||||||||||||||||||||||||||||
| Total leased assets | $ | 396 | $ | 340 | $ | 14 | $ | 457 | $ | 435 | $ | 15 | |||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
| Current operating lease liability (3) | $ | 5 | $ | 2 | $ | — | $ | 3 | $ | 1 | $ | 1 | |||||||||||||||||||||||
| Non-current operating lease liability (4) | 57 | 2 | 14 | 25 | 3 | 14 | |||||||||||||||||||||||||||||
| Total leased liabilities (5) | $ | 62 | $ | 4 | $ | 14 | $ | 28 | $ | 4 | $ | 15 | |||||||||||||||||||||||
(1)Included in in the Registrants’ respective Consolidated Balance Sheets, net of accumulated amortization.
(2)Included in in the Registrants’ respective Consolidated Balance Sheets, net of accumulated amortization.
(3)Included in Other in the Registrants’ respective Consolidated Balance Sheets.
(4)Included in in the Registrants’ respective Consolidated Balance Sheets.
(5)Finance lease liabilities were not material as of December 31, 2025 or 2024.
As of the dates presented, the weighted-average remaining lease term and weighted-average discount rate for the Registrants’ finance and operating leases were as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| CenterPoint Energy | Houston Electric | CERC | CenterPoint Energy | Houston Electric | CERC | ||||||||||||||||||||||||||||||
| Weighted-average remaining lease term (in years) - operating leases | 27.2 | 7.3 | 20.9 | 17.7 | 2.9 | 20.6 | |||||||||||||||||||||||||||||
| Weighted-average discount rate - operating leases | 5.47 | % | 4.65 | % | 5.09 | % | 4.92 | % | 4.11 | % | 5.03 | % | |||||||||||||||||||||||
| Weighted-average remaining lease term (in years) - finance leases | 3.5 | 3.5 | — | 4.5 | 4.5 | — | |||||||||||||||||||||||||||||
| Weighted-average discount rate - finance leases | 3.60 | % | 3.60 | % | — | 3.60 | % | 3.60 | % | — | |||||||||||||||||||||||||
As of December 31, 2025, finance lease liabilities were not significant to the Registrants. As of December 31, 2025, maturities of operating lease liabilities were as follows:
| CenterPoint Energy | Houston Electric | CERC | |||||||||||||||
| (in millions) | |||||||||||||||||
| 2026 | $ | 6 | $ | 2 | $ | 1 | |||||||||||
| 2027 | 5 | 1 | 1 | ||||||||||||||
| 2028 | 4 | — | 1 | ||||||||||||||
| 2029 | 4 | — | 1 | ||||||||||||||
| 2030 | 3 | — | 1 | ||||||||||||||
| Thereafter | 108 | 2 | 19 | ||||||||||||||
| Total lease payments | 130 | 5 | 24 | ||||||||||||||
| Less: Interest | 68 | 1 | 10 | ||||||||||||||
| Present value of lease liabilities | $ | 62 | $ | 4 | $ | 14 | |||||||||||
As of December 31, 2025, future minimum finance lease payments to be received were not significant to the Registrants. As of December 31, 2025, maturities of undiscounted operating lease payments to be received were as follows:
| CenterPoint Energy | Houston Electric | CERC | |||||||||||||||
| (in millions) | |||||||||||||||||
| 2026 | $ | 9 | $ | — | $ | 6 | |||||||||||
| 2027 | 9 | — | 7 | ||||||||||||||
| 2028 | 4 | — | 2 | ||||||||||||||
| 2029 | 1 | — | — | ||||||||||||||
| 2030 | 1 | — | — | ||||||||||||||
| Thereafter | 3 | — | — | ||||||||||||||
| Total lease payments to be received | $ | 27 | $ | — | $ | 15 | |||||||||||
Other information related to leases is as follows for the periods presented:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| CenterPoint Energy | Houston Electric | CERC | CenterPoint Energy | Houston Electric | CERC | CenterPoint Energy | Houston Electric | CERC | |||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating cash flows from operating leases included in the measurement of lease liabilities | $ | 6 | $ | 2 | $ | 1 | $ | 5 | $ | 2 | $ | 2 | $ | 5 | $ | 2 | $ | 2 | |||||||||||||||||||||||||||||||||||
See Note 17 for information on ROU assets obtained in exchange for operating lease liabilities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2022 | Feb 17, 2023 | |
| 2019 | Feb 27, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.