CenterPoint Energy 2009 Annual Report Download - page 51

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These regulatory frameworks could have adverse effects on CERC’s ability to conduct its utility operations, to
finance its business and to provide cost-effective utility service. In addition, if more than one state adopts restrictions
on similar activities, it may be difficult for CERC and us to comply with competing regulatory requirements.
The revenues and results of operations of CERC’s interstate pipelines and field services businesses could be
adversely impacted by new environmental regulations governing the withdrawal, storage and use of surface
water or groundwater necessary for hydraulic fracturing of wells and the protection of water supplies in the
areas in and around shale fields.
CERC’s interstate pipelines and field services businesses largely rely on natural gas sourced in the various supply
basins located in the Mid-continent region of the United States. To extract natural gas from the shale fields in this
area, producers have historically used a process called hydraulic fracturing. Recently, new environmental
regulations governing the withdrawal, storage and use of surface water or groundwater necessary for hydraulic
fracturing of wells and the protection of water supplies in the areas in and around the shale fields have been
considered by the federal government. If enacted, such regulations could increase operating costs of the producers
in these regions or cause delays, interruptions or termination of drilling operations, all of which could result in a
decrease in demand for the services provided by CERC’s interstate pipelines and field services businesses in the
shale fields, which could have an adverse effect on CERC’s results of operations, financial condition and cash flows.
Risk Factors Associated with Our Consolidated Financial Condition
If we are unable to arrange future financings on acceptable terms, our ability to refinance existing indebtedness
could be limited.
As of December 31, 2009, we had $10.1 billion of outstanding indebtedness on a consolidated basis, which
includes $3.0 billion of non-recourse transition and system restoration bonds. As of December 31, 2009,
approximately $1.2 billion principal amount of this debt is required to be paid through 2012. This amount excludes
principal repayments of approximately $831 million on transition and system restoration bonds, for which a
dedicated revenue stream exists, but includes $290 million of pollution control bonds issued on our behalf which we
purchased in January 2010 (and which may be remarketed) and $45 million of debentures redeemed in January
2010. Our future financing activities may be significantly affected by, among other things:
• the resolution of the true-up proceedings, including, in particular, the results of appeals to the Texas
Supreme Court regarding rulings obtained to date;
• general economic and capital market conditions;
• credit availability from financial institutions and other lenders;
• investor confidence in us and the markets in which we operate;
• maintenance of acceptable credit ratings;
• market expectations regarding our future earnings and cash flows;
• market perceptions of our ability to access capital markets on reasonable terms;
• our exposure to RRI in connection with its indemnification obligations arising in connection with its
separation from us; and
• provisions of relevant tax and securities laws.
As of December 31, 2009, CenterPoint Houston had outstanding approximately $2.5 billion aggregate principal
amount of general mortgage bonds, including approximately $527 million held in trust to secure pollution control
bonds for which we are obligated and approximately $229 million held in trust to secure pollution control bonds for