CenterPoint Energy 2009 Annual Report Download - page 14

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12
INFRASTRUCTURE
TODAY’S
Our interstate pipelines business had a
good year in the face of falling demand
and commodities prices. Operating
income declined to $256 million in 2009
compared to $293 million in 2008, including
the one-time sale of $18 million of storage assets
and a $7 million write-down associated with
pipeline assets removed from service in 2008.
Additionally, we recognized equity income of
$7 million from our 50 percent interest in a jointly
owned pipeline in 2009, compared to $36 million
in 2008. Higher revenue from new contracts
on our Carthage to Perryville pipeline and new
deliveries to gas-fired power generators drove
earnings last year. ese revenues were offset
by the effects of lower ancillary services, higher
pension and other operating expenses in 2009.
Overall, we believe our 2009 results demonstrate
the strengths of our fee-based service model.
ese services, which provide a steady stream
of income largely independent of commodity
prices and transport volumes, provided us a stable
earnings foundation.
We bring clean-burning natural gas from prolific
shale fields and conventional basins to market.
By adding compression to increase capacity on
our 172-mile Carthage to Perryville pipeline,
we increased overall throughput and margin by
$28 million. We also signed contracts to provide
natural gas service to new power generation
customers, including a new power generation
facility in Arkansas. ese contracts increased our
margins from power customers by $20 million in
2009. Last fall, we announced a joint agreement
with NextEra US Gas Assets, an affiliate of FPL
Group, to pursue the development of another
pipeline that will move additional Haynesville
Shale production to markets through CenterPoint
Energy’s Perryville Hub.
Looking ahead, our pipelines are very well
positioned to take advantage of increased
drilling activity in unconventional shale areas.
We remain ready to make smart investments in
new development opportunities that leverage
our strong customer relationships and growing
reputation for solid project execution.
I N T E R S T A T E P I P E L I N E S