CenterPoint Energy 2009 Annual Report Download - page 69

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47
transmission rate increase implemented in November 2008, the impact of Hurricane Ike in 2008 ($17 million),
revenues from implementation of AMS ($33 million) and higher revenues due to customer growth ($17 million)
from the addition of over 29,000 new customers, partially offset by declines in energy demand
($27 million). Operation and maintenance expenses increased $71 million primarily due to higher transmission costs
billed by transmission providers ($18 million), increased operating and maintenance expenses that were postponed
in 2008 as a result of Hurricane Ike restoration efforts ($10 million), higher pension and other employee benefit
costs ($10 million), expenses related to AMS ($14 million) and a gain on a land sale in 2008 ($9 million). Increased
depreciation expense related to increased investment in AMS ($7 million) was offset by other declines in
depreciation and amortization, primarily due to asset retirements. Taxes other than income taxes increased
$7 million primarily as a result of a refund in 2008 of prior years’ state franchise taxes ($5 million). Changes in
pension expense over our 2007 base year amount are being deferred until our next general rate case pursuant to
Texas law.
2008 Compared to 2007. Our Electric Transmission & Distribution business segment reported operating income
of $545 million for 2008, consisting of $407 million from the TDU, exclusive of an additional $5 million from the
CTC, and $133 million related to transition bond companies. For 2007, operating income totaled $561 million,
consisting of $400 million from the TDU, exclusive of an additional $42 million from the CTC, and $119 million
related to transition bond companies. Revenues for the TDU increased in 2008 due to customer growth, with over
30,000 metered customers added ($23 million), increased usage ($15 million) in part caused by favorable weather
experienced, increased transmission-related revenues ($21 million) and increased revenues from ancillary services
($5 million), partially offset by reduced revenues due to Hurricane Ike ($17 million) and the settlement of the final
fuel reconciliation in 2007 ($5 million). Operation and maintenance expense increased primarily due to higher
transmission costs ($43 million), the settlement of the final fuel reconciliation in 2007 ($13 million) and increased
support services ($13 million), partially offset by a gain on sale of land ($9 million) and normal operating and
maintenance expenses that were postponed as a result of Hurricane Ike restoration efforts ($10 million).
Depreciation and amortization increased $34 million primarily due to amounts related to the CTC ($30 million),
which were offset by similar amounts in revenues. Taxes other than income taxes declined $21 million primarily as
a result of the Texas margin tax being classified as an income tax for financial reporting purposes in 2008
($19 million) and a refund of prior years’ state franchise taxes ($5 million).
Natural Gas Distribution
The following table provides summary data of our Natural Gas Distribution business segment for 2007, 2008 and
2009 (in millions, except throughput and customer data):
Year Ended December 31,
2007 2008 2009
Revenues ..................................................................................... $ 3,759 $ 4,226 $ 3,384
Expenses:
N
atural gas ................................................................................ 2,683 3,124 2,251
Operation and maintenance ...................................................... 579 589 639
Depreciation and amortization .................................................. 155 157 161
Taxes other than income taxes .................................................. 124 141 129
Total expenses..................................................................... 3,541 4,011 3,180
Operating Income ........................................................................ $ 218 $ 215 $ 204
Throu
g
hput (in Bcf):
Residential ................................................................................ 172 175 173
Commercial and industrial ....................................................... 232 236 233
Total Throughpu
t
................................................................ 404 411 406
N
umber of customers at end of period:
Residential .......................................................................... 2,961,110 2,987,222 3,002,114
Commercial and industrial .................................................. 249,877 248,476 244,101
Total .................................................................................... 3,210,987 3,235,698 3,246,215
2009 Compared to 2008. Our Natural Gas Distribution business segment reported operating income of
$204 million for 2009 compared to $215 million for 2008. Operating income declined ($11 million) primarily as a
result of increased pension expense ($37 million) and higher labor and other benefit costs ($16 million), partially