CenterPoint Energy 2009 Annual Report Download - page 53

Download and view the complete annual report

Please find page 53 of the 2009 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 150

  • 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
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150

31
• limiting or prohibiting construction activities in sensitive areas such as wetlands, coastal regions, or areas
inhabited by endangered species;
• requiring remedial action to mitigate pollution conditions caused by our operations, or attributable to
former operations; and
• enjoining the operations of facilities deemed in non-compliance with permits issued pursuant to such
environmental laws and regulations.
In order to comply with these requirements, we may need to spend substantial amounts and devote other
resources from time to time to:
• construct or acquire new equipment;
• acquire permits for facility operations;
• modify or replace existing and proposed equipment; and
• clean up or decommission waste disposal areas, fuel storage and management facilities and other locations
and facilities.
Failure to comply with these laws and regulations may trigger a variety of administrative, civil and criminal
enforcement measures, including the assessment of monetary penalties, the imposition of remedial actions, and the
issuance of orders enjoining future operations. Certain environmental statutes impose strict, joint and several
liability for costs required to clean up and restore sites where hazardous substances have been disposed or otherwise
released. Moreover, it is not uncommon for neighboring landowners and other third parties to file claims for
personal injury and property damage allegedly caused by the release of hazardous substances or other waste
products into the environment.
Our insurance coverage may not be sufficient. Insufficient insurance coverage and increased insurance costs
could adversely impact our results of operations, financial condition and cash flows.
We currently have general liability and property insurance in place to cover certain of our facilities in amounts
that we consider appropriate. Such policies are subject to certain limits and deductibles and do not include business
interruption coverage. Insurance coverage may not be available in the future at current costs or on commercially
reasonable terms, and the insurance proceeds received for any loss of, or any damage to, any of our facilities may
not be sufficient to restore the loss or damage without negative impact on our results of operations, financial
condition and cash flows.
In common with other companies in its line of business that serve coastal regions, CenterPoint Houston does not
have insurance covering its transmission and distribution system, other than substations, because CenterPoint
Houston believes it to be cost prohibitive. In the future, CenterPoint Houston may not be able to recover the costs
incurred in restoring its transmission and distribution properties following hurricanes or other natural disasters
through issuance of storm restoration bonds or a change in its regulated rates or otherwise, or any such recovery may
not be timely granted. Therefore, CenterPoint Houston may not be able to restore any loss of, or damage to, any of
its transmission and distribution properties without negative impact on its results of operations, financial condition
and cash flows.
We, CenterPoint Houston and CERC could incur liabilities associated with businesses and assets that we have
transferred to others.
Under some circumstances, we, CenterPoint Houston and CERC could incur liabilities associated with assets and
businesses we, CenterPoint Houston and CERC no longer own. These assets and businesses were previously owned
by Reliant Energy, Incorporated (Reliant Energy), a predecessor of CenterPoint Houston, directly or through
subsidiaries and include: