CenterPoint Energy 2008 Annual Report Download - page 118

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96
(b) Lease Commitments
The following table sets forth information concerning the Company’s obligations under non-cancelable long-term
operating leases at December 31, 2008, which primarily consist of rental agreements for building space, data
processing equipment and vehicles (in millions):
2009 ................................................................
$ 14
2010 ................................................................
12
2011 ................................................................
11
2012 ................................................................
7
2013 ................................................................
6
2014 and beyond................................
25
Total ................................................................
$ 75
Total lease expense for all operating leases was $56 million, $48 million and $46 million during 2006, 2007 and
2008, respectively.
(c) Other Commitments
In December 2008, the Company entered into an agreement to purchase software licenses, support and
maintenance over the next five years. As of December 31, 2008, payment obligations under this agreement are
$5 million in 2009, $7 million in 2010, $6 million in 2011, $6 million in 2012 and $6 million in 2013.
In 2007, CenterPoint Energy Gas Transmission Company (CEGT) completed phases one and two of its Carthage
to Perryville pipeline project with a total capacity of 1.25 billion cubic feet (Bcf) per day. In 2008, CEGT
completed the Phase III expansion of the Carthage to Perryville pipeline which increased total capacity to 1.5 Bcf
per day. During the four-year period subsequent to the in-service date of the pipeline, XTO Energy, CEGT’s anchor
shipper, can request, and subject to mutual negotiations that meet specific financial parameters and to FERC
approval, CEGT would construct a 67-mile extension from CEGT’s Perryville hub to an interconnect with Texas
Eastern Gas Transmission at Union Church, Mississippi. CEGT filed with FERC on December 5, 2008 to increase
the Carthage to Perryville capacity to approximately 1.9 Bcf per day. The expansion includes a new compressor
unit at two of CEGT’s existing stations and is currently projected to be placed in service in the second quarter of
2010.
(d) Legal, Environmental and Other Regulatory Matters
Legal Matters
RRI Indemnified Litigation
The Company, CenterPoint Houston or their predecessor, Reliant Energy, Incorporated (Reliant Energy), and
certain of their former subsidiaries are named as defendants in several lawsuits described below. Under a master
separation agreement between the Company and Reliant Energy, Inc. (formerly Reliant Resources, Inc.) (RRI), the
Company and its subsidiaries are entitled to be indemnified by RRI for any losses, including attorneys’ fees and
other costs, arising out of the lawsuits described below under ―Gas Market Manipulation Cases,‖ and ―Electricity
Market Manipulation Cases.‖ Pursuant to the indemnification obligation, RRI is defending the Company and its
subsidiaries to the extent named in these lawsuits. Although the ultimate outcome of these matters cannot be
predicted at this time, the Company has not considered it necessary to establish reserves related to this litigation.
Gas Market Manipulation Cases. A large number of lawsuits were filed against numerous gas market participants
in a number of federal and western state courts in connection with the operation of the natural gas markets in 2000-
2001. The Company’s former affiliate, RRI, was a participant in gas trading in the California and Western markets.
These lawsuits, many of which have been filed as class actions, allege violations of state and federal antitrust laws.
Plaintiffs in these lawsuits are seeking a variety of forms of relief, including, among others, recovery of
compensatory damages (in some cases in excess of $1 billion), a trebling of compensatory damages, full
consideration damages and attorneys’ fees. The Company and/or Reliant Energy were named in approximately 30 of