CenterPoint Energy 2014 Annual Report Download - page 92

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(a) Property, Plant and Equipment
Property, plant and equipment includes the following:
(b) Depreciation and Amortization
The following table presents depreciation and amortization expense for 2014 , 2013 and 2012 (in millions).
(c) Asset Retirement Obligations
A reconciliation of the changes in the asset retirement obligation (ARO) liability is as follows (in millions):
CenterPoint Energy recorded asset retirement obligations associated with the removal of asbestos and asbestos-
containing material in its
buildings, including substation building structures. CenterPoint Energy also recorded asset retirement obligations relating to gas pipelines
abandoned in place, treated wood poles for electric distribution, distribution transformers containing PCB (also known as Polychlorinated
Biphenyl), and underground fuel storage tanks. The estimates of future liabilities were developed using historical information, and where
available, quoted prices from outside contractors.
The increase of $37 million
in the ARO from the revision of estimate in 2014 is primarily attributable to a reduction of the estimated service
lives of steel and plastic pipe. The decrease of $35 million
in the ARO from the revision of estimate in 2013 is primarily attributable to a
decrease in the future expected cash flows associated with the retirement of steel pipe.
83
(3)
Property, Plant and Equipment
Weighted Average
Useful Lives
December 31,
(Years)
2014
2013
(in millions)
Electric Transmission & Distribution 31
$
9,393
$
8,741
Natural Gas Distribution 33
5,235
4,694
Energy Services 27
84
82
Other property 22
646
621
Total
15,358
14,138
Accumulated depreciation and amortization:
Electric Transmission & Distribution
3,050
2,907
Natural Gas Distribution
1,493
1,324
Energy Services
31
28
Other property
282
286
Total accumulated depreciation and amortization
4,856
4,545
Property, plant and equipment, net
$
10,502
$
9,593
2014
2013
2012
Depreciation expense
$
521
$
531
$
562
Amortization expense
492
423
488
Total depreciation and amortization expense
$
1,013
$
954
$
1,050
December 31,
2014
2013
Beginning balance
$
134
$
164
Accretion expense
5
5
Revisions in estimates of cash flows
37
(35
)
Ending balance
$
176
$
134