CenterPoint Energy 2005 Annual Report Download - page 10

NATURAL GAS DISTRIBUTION
OUR GAS DISTRIBUTION BUSINESS TURNED IN ANOTHER SOLID YEAR, ADDING 44,000 NEW
CUSTOMERS. This continued our record of expanding our customer base every year since 1992. While our customer
base grew, higher natural gas prices made it difficult for some of our customers to pay their bills, leading to significantly
higher bad debt expense. Operating income for the year was $175 million, down slightly from the previous year.
To improve financial performance, we are focused on enhancing our operating model, capturing growth in our
service area and obtaining rate relief where necessary.
CONSISTENT PERFORMANCE IS THE RESULT OF CONTINUOUS
IMPROVEMENT: In 2005, we made significant strides in improving
efficiency, reliability and customer service by:
• Creating a single Customer Service organization through
implementation of an automated system that will standardize
our call centers and billing processes
• Completing our mobile data roll-out, which uses laptop
computers in service trucks for more efficient dispatching
and improved response times
• Signing long-term agreements with our affiliate, CenterPoint
Energy Gas Transmission (CEGT), for gas transportation
and storage in Arkansas and Oklahoma that will help
provide price stability for customers
• Receiving federal regulatory approval of several long-term
service agreements for pipeline capacity and transportation
services with the Northern Natural Gas Company that,
beginning in 2007, will save our Minnesota customers millions
of dollars in annual gas costs over the next 15 years.
MAINTAINING THE PACE THROUGH RATE RELIEF: We remain committed
to achieving our allowed rate of return and will seek rate relief when
the costs of providing service rises beyond our ability to offset them
through operational improvements. Last year, we received rate relief
in Texas and Minnesota. We also made some improvements in rate
design. Our long-term goal for gas rates is to recover our fixed costs
through a monthly customer charge and variable costs through
volumetric charges. In our view, this will help foster proper energy
conservation and efficiency objectives without negatively impacting
the company’s ability to recover costs.
AWARD-WINNING YEAR: After replacing about 30,000 service lines
in 35 Minnesota communities in only seven months, the North
Metro Mayors Association recognized us with its Outstanding
Business of the Year Award. The project was the result of a
company and state investigation that determined a previous
service line owner had improperly installed mechanical couplings
on some of the lines.
We ranked second overall in the Midwest – and first in Price
and Value and Customer Service – in the J.D. Power and
Associates annual survey of natural gas utilities. The U.S.
Environmental Protection Agency also recognized us as a Best
Workplace for Commuters in Minneapolis.
In addition, we exceeded employee safety goals in our southern
gas operations in recordable incidents, preventable vehicle
collisions and lost-time incidents. In Minnesota, we reduced the
recordable injury rate and lost-time injury rate.
[8] CENT ERPOINT E NERGY 2 0 05 AN N UA L R E PO R T