v3.25.3
Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Registrants reported the following effective tax rates:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
CenterPoint Energy (1)
(2)%21 %14 %18 %
Houston Electric (2)
18 %19 %19 %19 %
CERC (3)
(222)%21 %11 %20 %

(1)CenterPoint Energy’s lower effective tax rate for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily driven by a $74 million net benefit from state apportionment changes, resulting in a remeasurement of state deferred taxes. This benefit is partially offset by the impact of non-deductible goodwill associated with the sale of the Louisiana and Mississippi natural gas LDC businesses. CenterPoint Energy’s lower effective tax rate for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily driven by a $74 million net benefit from state apportionment changes, resulting in a remeasurement of state deferred taxes. This benefit is partially offset by the impact of non-deductible goodwill associated with the sale of the Louisiana and Mississippi natural gas LDC businesses and the absence of impacts associated with the state deferred tax remeasurement and valuation allowance related to the Louisiana and Mississippi natural gas LDC businesses recorded in 2024 upon classification as held for sale. For additional detail, see Note 3.
(2)Houston Electric’s lower effective tax rate for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily driven by a decrease in state income taxes.
(3)CERC’s lower effective tax rate for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily driven by a $73 million net benefit from state apportionment changes, resulting in a remeasurement of state deferred taxes. This benefit is partially offset by the impact of non-deductible goodwill associated with the sale of the Louisiana and Mississippi natural gas LDC businesses. CERC’s lower effective tax rate for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily driven by a $73 million net benefit from state apportionment changes, resulting in a remeasurement of state deferred taxes. This benefit is partially offset by the impact of non-deductible goodwill associated with the sale of the Louisiana and Mississippi natural gas LDC businesses and the absence of impacts associated with the state deferred tax remeasurement and valuation allowance related to the Louisiana and Mississippi natural gas LDC businesses recorded in 2024 upon classification as held for sale. For additional detail, see Note 3.

CenterPoint Energy reported a net uncertain tax liability, inclusive of interest and penalties, of $30 million as of September 30, 2025. The Registrants believe that it is reasonably possible that the Registrants will recognize a $11 million tax benefit, including penalties and interest, in the next 12 months as a result of a lapse of statutes on older exposures, a tax settlement, and/or a resolution of open audits.
Tax Audits and Settlements. Tax years through 2022 have been audited and settled with the IRS for CenterPoint Energy. For tax years 2023, 2024 and 2025, the Registrants are participants in the IRS’s Compliance Assurance Process.