CenterPoint Energy 2009 Annual Report Download - page 36

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14
Waskom Gas Processing Company. CenterPoint Energy Gas Processing Company, a wholly-owned, indirect
subsidiary of CERC (CEGP), owns a 50% general partnership interest in Waskom Gas Processing Company
(Waskom). Waskom owns a gas processing plant located in East Texas. The plant is capable of processing
approximately 285 MMcf per day of natural gas.
Assets
CERC’s field services business owns and operates approximately 3,700 miles of gathering lines and processing
plants that collect, treat and process natural gas from approximately 140 separate systems located in major
producing fields in Arkansas, Louisiana, Oklahoma and Texas.
Competition
CERC's field services business competes with other companies in the natural gas gathering, treating and
processing business. The principal elements of competition are rates, terms of service and reliability of services.
CERC's field services business competes indirectly with other forms of energy, including electricity, coal and fuel
oils. The primary competitive factor is price, but recently, environmental considerations have grown in importance
when consumers consider other forms of energy. Changes in the availability of energy and pipeline capacity, the
level of business activity, conservation and governmental regulations, the capability to convert to alternative fuels,
and other factors, including weather, affect the demand for natural gas in areas we serve and the level of competition
for gathering, treating, and processing services. In addition, competition among forms of energy is affected by
commodity pricing levels and influences the level of drilling activity and demand for our gathering operations.
Other Operations
Our Other Operations business segment includes office buildings and other real estate used in our business
operations and other corporate operations that support all of our business operations.
Financial Information About Segments
For financial information about our segments, see Note 14 to our consolidated financial statements, which note is
incorporated herein by reference.
REGULATION
We are subject to regulation by various federal, state and local governmental agencies, including the regulations
described below.
Federal Energy Regulatory Commission
The FERC has jurisdiction under the Natural Gas Act and the Natural Gas Policy Act of 1978, as amended, to
regulate the transportation of natural gas in interstate commerce and natural gas sales for resale in interstate
commerce that are not first sales. The FERC regulates, among other things, the construction of pipeline and related
facilities used in the transportation and storage of natural gas in interstate commerce, including the extension,
expansion or abandonment of these facilities. The rates charged by interstate pipelines for interstate transportation
and storage services are also regulated by the FERC. The Energy Policy Act of 2005 (Energy Act) expanded the
FERC’s authority to prohibit market manipulation in connection with FERC-regulated transactions and gave the
FERC additional authority to impose significant civil and criminal penalties for statutory violations and violations of
the FERC’s rules or orders and also expanded criminal penalties for such violations. Our competitive natural gas
sales and services subsidiary markets natural gas in interstate commerce pursuant to blanket authority granted by the
FERC.
CERC's natural gas pipeline subsidiaries may periodically file applications with the FERC for changes in their
generally available maximum rates and charges designed to allow them to recover their costs of providing service to
customers (to the extent allowed by prevailing market conditions), including a reasonable rate of return. These rates