CenterPoint Energy Announces Completion of VUHI Restructuring to Enable More Efficient Funding of Capital Investments for the Benefit of Customers

CenterPoint Energy, Inc. (NYSE: CNP) or “CenterPoint” today announced it has achieved the final milestone in realigning its corporate structure after its acquisition of Vectren Corporation in 2019 to fund future capital investments more efficiently and better align with the company’s management and financial reporting. Included in the transaction was a successful exchange of $302 million Vectren Utility Holdings, Inc. (VUHI) private placement notes for new private placements notes issued by CenterPoint Energy Resources Corp. (CERC).

The exchange permitted the transfer of Indiana Gas Company and Vectren Electric Delivery of Ohio to CERC, thereby consolidating CenterPoint’s natural gas distribution businesses, with the exception of Southern Indiana Gas and Electric Company (SIGECO), under one subsidiary. As a result, those entities will be financed through CERC going forward. The greater scale and stronger credit profile of CERC should benefit our customers through lower future financing costs on an ongoing basis, resulting in anticipated customer savings over the long term.

In addition, the exchange is a step on the path to enabling SIGECO to securitize costs related to the planned retirement of coal facilities by removing certain restrictive covenants previously contained in the VUHI private placement notes. The securitization supports generation transition capital investment plans and should result in a decrease of the associated retirement costs of those assets by up to $60 million (as of the filing date of the application for the financing order to securitize such costs), when compared to traditional rate making, thereby benefitting SIGECO’s customers.

“We are excited to complete this strategic transaction, which will allow us to more efficiently finance our natural gas system improvements at CERC and our generation transition investments at SIGECO through the public debt markets in the future, thereby reducing the reliance on parent debt and intercompany borrowings,” said EVP and Chief Financial Officer Jason Wells.

Wells continued, “The reduction of parent debt and intercompany borrowings is another step of delivering on our long-term growth plan and delivering value for our customers and investors.”

CenterPoint completed the restructuring on June 30, 2022.

About CenterPoint Energy, Inc.

As the only investor owned electric and gas utility based in Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas. As of March 31, 2022, the company owned approximately $35 billion in assets. With approximately 8,900 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, visit CenterPointEnergy.com.

Forward-looking Statements

This news release includes, and the earnings conference call will include, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will" or other similar words are intended to identify forward-looking statements. Examples of forward-looking statements in this news release include statements regarding financing CERC, Indiana Gas Company, Vectren Energy Delivery of Ohio, and Southern Indiana Gas and Electric Company, lower future financing costs, anticipated customer savings, securitization related to our generation transition plans and related customer savings, and reduction in parent company debt and reliance on intercompany borrowings. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements.

Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include, but are not limited to, risks and uncertainties relating to: (1) CenterPoint Energy’s potential business strategies and strategic initiatives, restructurings, joint ventures and acquisitions or dispositions of assets or businesses, including the completed sale of our Natural Gas businesses in Arkansas and Oklahoma, exit from midstream and transfer of Indiana Gas Company and Vectren Energy Delivery of Ohio to CERC, which we cannot assure you will have the anticipated benefits to us; (2) industrial, commercial and residential growth in CenterPoint Energy’s service territories and changes in market demand; (3) CenterPoint Energy's ability to fund and invest planned capital, and timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment, including those related to Indiana Electric’s generation transition plan as part of its more recent IRP; (4) financial market and general economic conditions, including access to debt and equity capital and the effect on sales, prices and costs; (5) continued disruptions to the global supply chain and increases in commodity prices; (6) actions by credit rating agencies, including any potential downgrades to credit ratings; (7) the timing and impact of regulatory proceedings and actions and legal proceedings, including those related to Houston Electric’s mobile generation; (8) legislative decisions, including tax and developments related to the environment such as global climate change, air emissions, carbon, waste water discharges and the handling of coal combustion residuals, among others, and CenterPoint Energy’s Net Zero and carbon emissions reduction goals; (9) the impact of the COVID-19 pandemic; (10) the recording of impairment charges; (11) weather variations and CenterPoint Energy’s ability to mitigate weather impacts, including impacts from the February 2021 winter storm event; (12) changes in business plans; (13) CenterPoint Energy’s ability to execute on its initiatives, targets and goals, including its Net Zero and carbon emissions reduction goals and operations and maintenance goals; and (14) other factors discussed CenterPoint Energy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, including in the “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Information” sections of such reports, and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.

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