CenterPoint Energy 2009 Annual Report Download - page 127

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105
(c) Lease Commitments
The following table sets forth information concerning CenterPoint Energy’s obligations under non-cancelable
long-term operating leases at December 31, 2009, which primarily consist of rental agreements for building space,
data processing equipment and vehicles (in millions):
2010 ..............................................
.
$12
2011 ..............................................
.
13
2012 ..............................................
.
9
2013 ..............................................
.
6
2014 ..............................................
.
4
2015 and beyon
d
...........................
.
7
Total .........................................
.
$51
Total lease expense for all operating leases was $48 million, $46 million and $37 million during 2007, 2008 and
2009, respectively.
(d) Other Commitments
In December 2008, CenterPoint Energy entered into an agreement to purchase software licenses, support and
maintenance over the next five years. As of December 31, 2009, payment obligations under this agreement are
$7 million in 2010, $6 million in 2011, $6 million in 2012 and $6 million in 2013.
Long-Term Gas Gathering and Treating Agreements. In September 2009, CenterPoint Energy Field Services, Inc.
(CEFS), a wholly-owned natural gas gathering and treating subsidiary of CERC Corp., entered into long-term
agreements with an indirect wholly-owned subsidiary of EnCana Corporation (EnCana) and an indirect wholly-
owned subsidiary of Royal Dutch Shell plc (Shell) to provide gathering and treating services for their natural gas
production from certain Haynesville Shale and Bossier Shale formations in Louisiana. CEFS also acquired jointly-
owned gathering facilities from EnCana and Shell in De Soto and Red River parishes in northwest Louisiana. Each
of the agreements includes acreage dedication and volume commitments for which CEFS has rights to gather Shell’s
and EnCana’s natural gas production from the dedicated areas.
In connection with the agreements, CEFS commenced gathering and treating services utilizing the acquired
facilities. CEFS is expanding the acquired facilities in order to gather and treat up to 700 million cubic feet (MMcf)
per day of natural gas. If EnCana or Shell elect, CEFS will further expand the facilities in order to gather and treat
additional future volumes. The construction necessary to reach the contractual capacity of 700 MMcf per day
includes more than 200 miles of gathering lines, nearly 25,500 horsepower of compression and over 800 MMcf per
day of treating capacity.
CEFS estimates that the purchase of existing facilities and construction to gather 700 MMcf per day will cost up
to $325 million. If EnCana and Shell elect expansion of the project to gather and process additional future volumes
of up to 1 Bcf per day, CEFS estimates that the expansion would cost as much as an additional $300 million and
EnCana and Shell would provide incremental volume commitments. Funds for construction are being provided from
anticipated cash flows from operations, lines of credit or proceeds from the sale of debt or equity securities. As of
December 31, 2009, approximately $176 million has been spent on this project, including the purchase of existing
facilities.
(e) Legal, Environmental and Other Regulatory Matters
Legal Matters
Gas Market Manipulation Cases. CenterPoint Energy, 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 CenterPoint Energy and RRI (formerly known as
Reliant Resources, Inc. and Reliant Energy, Inc.), CenterPoint Energy and its subsidiaries are entitled to be
indemnified by RRI for any losses, including attorneys’ fees and other costs, arising out of these lawsuits. Pursuant