CenterPoint Energy 2008 Annual Report Download - page 9

Download and view the complete annual report

Please find page 9 of the 2008 CenterPoint Energy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

energy consumption and usage patterns
will be made available to our customers.
Pilot studies across the country indicate
substantial reductions in electricity usage
are possible once consumers understand
their usage on a real-time basis and are
given tools to respond. This new system
is expected to take five years to fully deploy
at an estimated cost of $640 million. We will
recover our investment through a special
tariff that has been approved by the Public
Utility Commission of Texas.
Despite increased energy conservation,
demand for electricity and, therefore, the
demand for clean natural gas, is expected
to increase. This will, in turn, drive the need
for infrastructure to get new gas supplies
to market. Some of the most prolific new
natural gas reserves are being produced
from unconventional sources in Arkansas,
Louisiana, Oklahoma and Texas. Over the
last several years, we have made record
investments in our gas gathering, processing
and pipeline facilities and are well positioned
to serve these new drilling areas and meet
growing demand. We will continue to pursue
new investment opportunities in and around
our service territory.
THE CHALLENGES FOR 2009
As we write this letter, the country faces
considerable challenges. Financial markets
are in turmoil. The nation is in a recession
that is expected to impact economic
growth at least through this year and,
most likely, into 2010. Your company is not
immune to the impact of these conditions.
Overall customer growth in our electric
and gas utilities service territories is
expected to be modest, at best, in 2009.
Energy markets are also being impacted,
creating uncertainty about the timing of
some projects. The steep decline in the
stock market last year took its toll on the
value of the assets in our pension plans.
As a result, non-cash pension expense
will increase approximately $88 million,
pressuring our 2009 earnings.
We have worked hard to strengthen our
liquidity and cash flow to weather these
conditions, and we are closely managing
our spending given these uncertain
economic times. While we expect 2009 to
be challenging, we are well positioned and
are committed to the long-term growth of
your company.
In closing, we once again want to thank
our employees for their hard work and
dedication. We are extremely proud of their
outstanding efforts in 2008.
You can be assured that we will continue to
work hard to earn your trust. We appreciate
your confidence, and we will keep striving
to increase the value of your investment.
Sincerely,
Milton Carroll
Chairman
David M. McClanahan
President and CEO
PAGE 7
BOARD OF DIRECTORS
[FRONT ROW, LEFT TO RIGHT]
Robert T. O’Connell
Derrill Cody
Janiece M. Longoria
Milton Carroll
David M. McClanahan
Susan O. Rheney
[BACK ROW: LEFT TO RIGHT]
Peter S. Wareing
Sherman M. Wolff
O. Holcombe Crosswell
Michael E. Shannon
Thomas F. Madison
Donald R. Campbell
Michael P. Johnson