Moody’s Ratings upgraded CenterPoint Energy Resources Corp. (CERC) to A2 from A3 on Thursday, citing the utility’s strengthened credit profile following improvements in its parent company’s financial standing. The upgrade reflects CERC’s reduced dependence on CenterPoint Energy, Inc. (CNP), whose senior unsecured rating was affirmed at Baa2 with a stable outlook.
The rating action also included positive outlook revisions for CNP’s subsidiaries. CenterPoint Energy Houston Electric, LLC saw its outlook changed to stable from negative, while its Baa1 senior unsecured rating was maintained. Moody’s attributed the stabilization to improved liquidity and financial metrics across CNP’s regulated utilities.
CERC’s commercial paper rating was affirmed at Prime-2, and the company is no longer considered constrained by its parent following CNP’s outlook change. The upgrade follows CNP’s cash flow to debt ratio reaching 13.2% over the 12 months ended June 30, 2026, up from 12.3% at year-end 2025. Moody’s noted this was the first time CNP exceeded 13% since Hurricane Beryl disrupted operations in July 2024.
Houston Electric’s financial position also strengthened, with its cash flow to debt ratio improving to 15.1% over the same period, compared with 12.7% at year-end 2025. The utility benefits from regulatory mechanisms allowing it to recover 98% of its capital costs, supporting its financial resilience.
CNP plans to invest $34.2 billion across its operations from 2026 to 2030, with Houston Electric earmarking $21.6 billion for grid modernization and infrastructure upgrades. The company’s Ohio gas local distribution unit sale, announced in October 2025 for an expected $2.4 billion in net proceeds, is slated to close in the fourth quarter of 2026. Proceeds will be used to reduce debt in CERC’s capital structure.
