CenterPoint Energy 2008 Annual Report Download - page 39

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• clean up or decommission waste disposal areas, fuel storage and management facilities and other locations
and facilities.
Failure to comply with these laws and regulations may trigger a variety of administrative, civil and criminal
enforcement measures, including the assessment of monetary penalties, the imposition of remedial actions, and the
issuance of orders enjoining future operations. Certain environmental statutes impose strict, joint and several
liability for costs required to clean up and restore sites where hazardous substances have been disposed or otherwise
released. Moreover, it is not uncommon for neighboring landowners and other third parties to file claims for
personal injury and property damage allegedly caused by the release of hazardous substances or other waste
products into the environment.
The trend in environmental regulation is to place more restrictions and limitations on activities that may affect the
environment, and thus there can be no assurance as to the amount or timing of future expenditures for environmental
compliance or remediation, and actual future expenditures may be different from the amounts we currently
anticipate. We try to anticipate future regulatory requirements that might be imposed and plan accordingly to remain
in compliance with changing environmental laws and regulations and to minimize the costs of such compliance.
Based on current regulatory requirements and interpretations, we do not believe that compliance with federal,
state or local environmental laws and regulations will have a material adverse effect on our business, financial
position, results of operations or cash flows. In addition, we believe that our current environmental remediation
activities will not materially interrupt or diminish our operational ability. We cannot assure you, however, that future
events, such as changes in existing laws, the promulgation of new laws, or the development or discovery of new
facts or conditions will not cause us to incur significant costs. The following is a discussion of all material
environmental and safety laws and regulations that relate to our operations. We believe that we are in substantial
compliance with all of these environmental laws and regulations.
Global Climate Change
In recent years, there has been increasing public debate regarding the potential impact on global climate change
by various ―greenhouse gases‖ such as carbon dioxide, a byproduct of burning fossil fuels, and methane, the
principal component of the natural gas that we transport and deliver to customers. Legislation to regulate emissions
of greenhouse gases has been introduced in Congress, and there has been a wide-ranging policy debate, both
nationally and internationally, regarding the impact of these gases and possible means for their regulation. Some of
the proposals would require industries such as the utility industry to meet stringent new standards requiring
substantial reductions in carbon emissions. Those reductions could be costly and difficult to implement. Some
proposals would provide for credits to those who reduce emissions below certain levels and would allow those
credits to be traded and/or sold to others. While there is growing consensus that some form of global climate change
program will be adopted, it is too early to determine when, and in what form, a regulatory scheme regarding
greenhouse gas emissions will be adopted or what specific impacts a new regulatory scheme might have on us and
our subsidiaries. However, as a distributor and transporter of natural gas and consumer of natural gas in its pipeline
and gathering businesses, CERC’s revenues, operating costs and capital requirements could be adversely affected as
a result of any regulatory scheme that would reduce consumption of natural gas if ultimately adopted. Our electric
transmission and distribution business, unlike most electric utilities, does not generate electricity and thus is not
directly exposed to the risk of high capital costs and regulatory uncertainties that face electric utilities that are in the
business of generating electricity. Nevertheless, CenterPoint Houston’s revenues could be adversely affected to the
extent any resulting regulatory scheme has the effect of reducing consumption of electricity by ultimate consumers
within its service territory.
Air Emissions
Our operations are subject to the federal Clean Air Act and comparable state laws and regulations. These laws
and regulations regulate emissions of air pollutants from various industrial sources, including our processing plants
and compressor stations, and also impose various monitoring and reporting requirements. Such laws and regulations
may require that we obtain pre-approval for the construction or modification of certain projects or facilities expected
to produce air emissions or result in the increase of existing air emissions, obtain and strictly comply with air
permits containing various emissions and operational limitations, or utilize specific emission control technologies to