CenterPoint Energy 2014 Annual Report Download - page 40

regulated rates or otherwise, or any such recovery may not be timely granted. Therefore, CenterPoint Houston may not be able to restore any loss
of, or damage to, any of its transmission and distribution properties without negative impact on its results of operations, financial condition and
cash flows.
Enable’
s operations are subject to all of the risks and hazards inherent in the gathering, processing, transportation and storage of natural gas
and crude oil, including:
We and OGE currently have general liability and property insurance in place to cover certain of Enable’
s facilities in amounts that we
consider appropriate. Such policies are subject to certain limits and deductibles. These risks could result in substantial losses due to personal
injury and/or loss of life, severe damage to and destruction of property, plant and equipment and pollution or other environmental damage. These
risks may also result in curtailment or suspension of Enable’
s operations. A natural disaster or other hazard affecting the areas in which Enable
operates could have a material adverse effect on Enable’
s operations. Enable is not fully insured against all risks inherent in its business. Enable
currently has general liability and property insurance in place to cover certain of its facilities in amounts that Enable considers appropriate. Such
policies are subject to certain limits and deductibles. Enable does not have business interruption insurance coverage for all of its operations.
Insurance coverage may not be available in the future at current costs or on commercially reasonable terms, and the insurance proceeds received
for any loss of, or any damage to, any of Enable’
s facilities may not be sufficient to restore the loss or damage without negative impact on its
results of operations and its ability to make cash distributions.
We, CenterPoint Houston and CERC could incur liabilities associated with businesses and assets that we have transferred to others.
Under some circumstances, we, CenterPoint Houston and CERC could incur liabilities associated with assets and businesses we,
CenterPoint Houston and CERC no longer own. These assets and businesses were previously owned by Reliant Energy, Incorporated (Reliant
Energy), a predecessor of CenterPoint Houston, directly or through subsidiaries and include:
In connection with the organization and capitalization of RRI (now GenOn), that company and its subsidiaries assumed liabilities associated
with various assets and businesses Reliant Energy transferred to them. RRI also agreed to indemnify, and cause the applicable transferee
subsidiaries to indemnify, us and our subsidiaries, including CenterPoint Houston and CERC, with respect to liabilities associated with the
transferred assets and businesses. These indemnity provisions were intended to place sole financial responsibility on RRI and its subsidiaries for
all liabilities associated with the current and historical businesses and operations of RRI, regardless of the time those liabilities arose. If RRI
(now GenOn) were unable to satisfy a liability that has been so assumed in circumstances in which Reliant Energy and its subsidiaries were not
released from the liability in connection with the transfer, we, CenterPoint Houston or CERC could be responsible for satisfying the liability.
Prior to the distribution of our ownership in RRI to our shareholders, CERC had guaranteed certain contractual obligations of what became
RRI’
s trading subsidiary. When the companies separated, RRI agreed to secure CERC against obligations under the guarantees RRI had been
unable to extinguish by the time of separation. Pursuant to such agreement, as amended in December 2007, RRI (now GenOn) agreed to provide
to CERC cash or letters of credit as security against CERC’s obligations under its
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•
damage to pipelines and plants, related equipment and surrounding properties caused by hurricanes, tornadoes, floods, fires and other
natural disasters, acts of terrorism and actions by third parties;
•
inadvertent damage from construction, vehicles, farm and utility equipment;
•
leaks of natural gas, crude oil and other hydrocarbons or losses of natural gas and crude oil as a result of the malfunction of equipment
or facilities;
•
ruptures, fires and explosions; and
•
other hazards that could also result in personal injury and loss of life, pollution and suspension of operations.
•
merchant energy, energy trading and REP businesses transferred to RRI or its subsidiaries in connection with the organization and
capitalization of RRI prior to its initial public offering in 2001 and now owned by affiliates of NRG; and
•
Texas electric generating facilities transferred to a subsidiary of Texas Genco Holdings, Inc. (Texas Genco) in 2002, later sold to a third
party and now owned by an affiliate of NRG.