CenterPoint Energy 2008 Annual Report Download - page 64

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2008 Compared to 2007. Our Electric Transmission & Distribution business segment reported operating income
of $545 million for 2008, consisting of $407 million from our regulated electric transmission and distribution utility
operations (TDU), exclusive of an additional $5 million from the competition transition charge (CTC), and
$133 million related to transition bond companies. For 2007, operating income totaled $561 million, consisting of
$400 million from the TDU, exclusive of an additional $42 million from the CTC, and $119 million related to
transition bond companies. Revenues for the TDU increased due to customer growth, with over 30,000 metered
customers added in 2008 ($23 million), increased usage ($15 million) in part caused by favorable weather
experienced in 2008, increased transmission-related revenues ($21 million) and increased revenues from ancillary
services ($5 million), partially offset by reduced revenues due to Hurricane Ike ($17 million) and the settlement of
the final fuel reconciliation in 2007 ($5 million). Operation and maintenance expense increased primarily due to
higher transmission costs ($43 million), the settlement of the final fuel reconciliation in 2007 ($13 million) and
increased support services ($13 million), partially offset by a gain on sale of land ($9 million) and normal operating
and maintenance expenses that were postponed as a result of Hurricane Ike restoration efforts ($10 million).
Depreciation and amortization increased $34 million primarily due to amounts related to the CTC ($30 million),
which were offset by similar amounts in revenues. Taxes other than income taxes declined $21 million primarily as
a result of the Texas margin tax being classified as an income tax for financial reporting purposes in 2008
($19 million) and a refund of prior years’ state franchise taxes ($5 million).
2007 Compared to 2006. Our Electric Transmission & Distribution business segment reported operating income
of $561 million for 2007, consisting of $400 million from the TDU, exclusive of an additional $42 million from the
CTC, and $119 million related to transition bond companies. For 2006, operating income totaled $576 million,
consisting of $395 million from the TDU, exclusive of an additional $55 million from the CTC, and $126 million
related to transition bond companies. Revenues increased due to growth ($22 million), with over 53,000 metered
customers added in 2007, higher transmission-related revenues ($22 million), increased miscellaneous service
charges ($15 million), increased demand ($7 million), interest on settlement of the final fuel reconciliation
($4 million) and a one-time charge in the second quarter of 2006 related to the resolution of the unbundled cost of
service order ($32 million). These increases were partially offset by the rate reduction resulting from the 2006 rate
case settlement that was implemented in October 2006 ($41 million) and lower CTC return resulting from the
reduction in the allowed interest rate on the unrecovered CTC balance from 11.07% to 8.06% in 2006 ($13 million).
Operation and maintenance expense increased primarily due to higher transmission costs ($25 million), the absence
of a gain on the sale of property in 2006 ($13 million), and increased expenses, primarily related to low income and
energy efficiency programs as required by the 2006 rate case settlement ($8 million), partially offset by settlement
of the final fuel reconciliation ($13 million).
Natural Gas Distribution
The following table provides summary data of our Natural Gas Distribution business segment for 2006, 2007 and
2008 (in millions, except throughput and customer data):
Year Ended December 31,
2006
2007
2008
Revenues ................................................................................................
$ 3,593
$ 3,759
$ 4,226
Expenses:
Natural gas ................................................................................................
2,598
2,683
3,124
Operation and maintenance ................................................................
594
579
589
Depreciation and amortization................................................................
152
155
157
Taxes other than income taxes................................................................
125
124
141
Total expenses................................................................................................
3,469
3,541
4,011
Operating Income ................................................................................................
$ 124
$ 218
$ 215
Throughput (in Bcf):
Residential ................................................................................................
152
172
175
Commercial and industrial ................................................................
224
232
236
Total Throughput ................................................................................................
376
404
411
Number of customers at period end:
Residential ................................................................................................
2,926,483
2,961,110
2,987,222
Commercial and industrial ................................................................
246,351
249,877
248,476
Total ................................................................................................
3,172,834
3,210,987
3,235,698