HOUSTON–(BUSINESS WIRE)–CenterPoint Energy 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 private placement notes for new private placements notes issued by CenterPoint Energy Resources Corp.
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.
