CenterPoint Energy 2010 Annual Report Download - page 57

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Climate change legislation and regulatory initiatives could result in increased operating costs and reduced
demand for our services.
Legislation to regulate emissions of GHGs has been introduced in Congress, and there has been a wide-ranging
policy debate, both nationally and internationally, regarding the impact of these gases and possible means for their
regulation. In addition, efforts have been made and continue to be made in the international community toward the
adoption of international treaties or protocols that would address global climate change issues, such as the United
Nations Climate Change Conference in Copenhagen in 2009. Also, the EPA has undertaken new efforts to collect
information regarding GHG emissions and their effects. Following a finding by the EPA that certain GHGs
represent an endangerment to human health, the EPA proposed to expand its regulations relating to those emissions
and has adopted rules imposing permitting and reporting obligations that we expect to be applicable to certain of our
operations. The results of the permitting and reporting requirements could lead to further regulation of these GHGs
by the EPA It is too early to determine whether, or in what form, further regulatory action regarding GHG
emissions will be adopted or what specific impacts a new regulatory action might have on us and our subsidiaries.
Action by the EPA to impose new regulations and standards regarding GHG emissions is underway and appears
likely to result in new standards and regulatory requirements. As a distributor and transporter of natural gas and
consumer of natural gas in its pipeline and gathering businesses, CERC’s revenues, operating costs and capital
requirements could be adversely affected as a result of any regulatory action that would require installation of new
control technologies or a modification of its operations or would have the effect of reducing the consumption of
natural gas. Our electric transmission and distribution business, in contrast to some electric utilities, does not
generate electricity and thus is not directly exposed to the risk of high capital costs and regulatory uncertainties that
face electric utilities that burn fossil fuels to generate electricity. Nevertheless, CenterPoint Houston’s revenues
could be adversely affected to the extent any resulting regulatory action has the effect of reducing consumption of
electricity by ultimate consumers within its service territory. Likewise, incentives to conserve energy or use energy
sources other than natural gas could result in a decrease in demand for our services.
Climate changes could result in more frequent severe weather events which could affect the results of operations
of our businesses.
To the extent climate changes occur, our businesses may be adversely impacted, though we believe any such
impacts are likely to occur very gradually and hence would be difficult to quantify with specificity. To the extent
global climate change results in warmer temperatures in our service territories, financial results from our natural gas
distribution businesses could be adversely affected through lower gas sales, and our gas transmission and field
services businesses could experience lower revenues. Another possible climate change is more frequent and more
severe weather events, such as hurricanes or tornadoes. Since many of our facilities are located along or near the
Gulf Coast, increased or more severe hurricanes or tornadoes can increase our costs to repair damaged facilities and
restore service to our customers. When we cannot deliver electricity or natural gas to customers or our customers
cannot receive our services, our financial results can be impacted by lost revenues, and we generally must seek
approval from regulators to recover restoration costs. To the extent we are unable to recover those costs, or if higher
rates resulting from our recovery of such costs result in reduced demand for our services, our future financial results
may be adversely impacted.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties
Character of Ownership
We own or lease our principal properties in fee, including our corporate office space and various real property.
Most of our electric lines and gas mains are located, pursuant to easements and other rights, on public roads or on
land owned by others.