CenterPoint Energy 2013 Annual Report Download - page 133

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(c) Lease Commitments
The following table sets forth information concerning CenterPoint Energy’s obligations under non-cancelable long-term
operating leases at December 31, 2013, which primarily consist of rental agreements for building space, data processing equipment,
compression equipment and rights of way (in millions):
2014 ..................................................................... $ 6
2015 ..................................................................... 4
2016 ..................................................................... 4
2017 ..................................................................... 2
2018 ..................................................................... 2
2019 and beyond.................................................. 3
Total................................................................... $ 21
Total lease expense for all operating leases was $21 million, $27 million and $43 million during 2013, 2012 and 2011,
respectively.
(d) 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 have been named as defendants in certain lawsuits described below.
Under a master separation agreement between CenterPoint Energy and a former subsidiary, Reliant Resources, Inc. (RRI),
CenterPoint Energy and its subsidiaries are entitled to be indemnified by RRI and its successors for any losses, including certain
attorneys’ fees and other costs, arising out of these lawsuits. In May 2009, RRI sold its Texas retail business to a subsidiary of
NRG Energy, Inc. (NRG) and RRI changed its name to RRI Energy, Inc. In December 2010, Mirant Corporation merged with and
became a wholly owned subsidiary of RRI, and RRI changed its name to GenOn Energy, Inc. (GenOn). In December 2012, NRG
acquired GenOn through a merger in which GenOn became a wholly owned subsidiary of NRG. None of the sale of the retail
business, the merger with Mirant Corporation, or the acquisition of GenOn by NRG alters RRI’s (now GenOn’ s) contractual
obligations to indemnify CenterPoint Energy and its subsidiaries, including CenterPoint Houston, for certain liabilities, including
their indemnification obligations regarding the gas market manipulation litigation, nor does it affect the terms of existing guarantee
arrangements for certain GenOn gas transportation contracts discussed below.
A large number of lawsuits were filed against numerous gas market participants in a number of federal and western state
courts in connection with the operation of the natural gas markets in 2000-2002. CenterPoint Energy’s former affiliate, RRI, was
a participant in gas trading in the California and Western markets. These lawsuits, many of which were filed as class actions, allege
violations of state and federal antitrust laws. Plaintiffs in these lawsuits are seeking a variety of forms of relief, including, among
others, recovery of compensatory damages (in some cases in excess of $1 billion), a trebling of compensatory damages, full
consideration damages and attorneys’ fees. CenterPoint Energy and/or Reliant Energy were named in approximately 30 of these
lawsuits, which were instituted between 2003 and 2009. CenterPoint Energy and its affiliates have since been released or dismissed
from all but one such case. CenterPoint Energy Services, Inc. (CES), a subsidiary of CERC Corp., is a defendant in a case now
pending in federal court in Nevada alleging a conspiracy to inflate Wisconsin natural gas prices in 2000-2002. In July 2011, the
court issued an order dismissing the plaintiffs’ claims against other defendants in the case, each of whom had demonstrated FERC
jurisdictional sales for resale during the relevant period, based on federal preemption. The plaintiffs appealed this ruling to the
United States Court of Appeals for the Ninth Circuit, which reversed the trial court’s dismissal of the plaintiffs’ claims. In August
2013, the other defendants filed a petition for review with the U.S. Supreme Court. CenterPoint Energy believes that CES is not
a proper defendant in this case and will continue to pursue a dismissal. CenterPoint Energy does not expect the ultimate outcome
of this matter to have a material impact on its financial condition, results of operations or cash flows.
Environmental Matters
Manufactured Gas Plant Sites. CERC and its predecessors operated manufactured gas plants (MGPs) in the past. In Minnesota,
CERC has completed remediation on two sites, other than ongoing monitoring and water treatment. There are five remaining sites
in CERC’s Minnesota service territory. CERC believes that it has no liability with respect to two of these sites.
As of December 31, 2013, CERC had recorded a liability of $14 million for remediation of these Minnesota sites. The
estimated range of possible remediation costs for the sites for which CERC believes it may have responsibility was $6 million to