We are a public utility holding company. Our operating subsidiaries own and operate
electric transmission and distribution facilities and natural gas distribution
facilities and own interests in Enable Midstream Partners, LP (Enable) as described
below. Our indirect wholly owned subsidiaries include:
CenterPoint Energy Houston Electric, LLC (CenterPoint Houston), which engages
in the electric transmission and distribution business in a 5,000-square mile
area of the Texas Gulf Coast that includes the city of Houston; and
CenterPoint Energy Resources Corp. (CERC Corp. and, together with its subsidiaries,
CERC), which owns and operates natural gas distribution systems in six states
(Gas Operations). A wholly owned subsidiary of CERC Corp. offers variable and
fixed-price physical natural gas supplies primarily to commercial and industrial
customers and electric and gas utilities. CERC Corp. also owned approximately
58.3% of the limited partner interests in Enable, an unconsolidated partnership
jointly controlled with OGE Energy Corp., which owns, operates and develops
natural gas and crude oil infrastructure assets.
Our reportable business segments are Electric Transmission & Distribution,
Natural Gas Distribution, Energy Services, Midstream Investments and Other Operations.
From time to time, we consider the acquisition or the disposition of assets
or businesses.
The ERCOT market operates under the reliability standards set by the North American
Electric Reliability Council. The Texas Utility Commission has primary jurisdiction
over the ERCOT market to ensure the adequacy and reliability of electricity
supply across the states main interconnected power transmission grid. The ERCOT
independent system operator (ERCOT ISO) is responsible for maintaining reliable
operations of the bulk electric power supply system in the ERCOT market. Its
responsibilities include ensuring that electricity production and delivery are
accurately accounted for among the generation resources and wholesale buyers
and sellers. Unlike certain other regional power markets, the ERCOT market is
not a centrally dispatched power pool, and the ERCOT ISO does not procure energy
on behalf of its members other than to maintain the reliable operations of the
transmission system. Members are responsible for contracting sales and purchases
of power bilaterally. The ERCOT ISO also serves as agent for procuring ancillary
services for those who elect not to provide their own
ancillary services.
CenterPoint Houstons electric transmission business supports the operation
of the ERCOT ISO and all ERCOT members. The transmission business has planning,
design, construction, operation and maintenance responsibility for the portion
of the transmission grid and for the load-serving substations it owns, primarily
within its certificated area. The transmission business is participating with
the ERCOT ISO and other ERCOT utilities to plan, design, obtain regulatory approval
for and construct new transmission lines necessary to increase bulk power transfer
capability and to remove existing constraints on the ERCOT transmission grid.
Customers
CenterPoint Houstons customers consist of municipalities, electric cooperatives,
other distribution companies and approximately 43 retail electric providers
in its certificated service area. CenterPoint Houston serves nearly all of the
Houston/Galveston metropolitan area. Each retail electric provider is licensed
by, and must meet creditworthiness criteria established by, the Texas Utility
Commission. Two of these retail electric providers are subsidiaries of Reliant
Resources.
Competition
There are no other transmission and distribution utilities in CenterPoint Houstons
service area. In order for another provider of transmission and distribution
services to provide such services in CenterPoint Houstons territory, it would
be required to obtain a certificate of convenience and necessity in proceedings
before the Texas Utility Commission and, depending on the location of the facilities,
may also be required to obtain franchises from
one or more municipalities.
CERC competes primarily with alternate energy sources such as electricity and
other fuel sources. In some areas, intrastate pipelines, other gas distributors
and marketers also compete directly for gas sales to end users. In addition,
as a result of federal regulatory changes affecting interstate pipelines, natural
gas marketers operating on these pipelines may be able to bypass CERCs facilities
and market and sell and/or transport natural gas directly to commercial and
industrial customers.
Our pipelines and gathering business competes with other interstate and intrastate
pipelines and gathering companies in the transportation and storage of natural
gas. The principal elements of competition among pipelines are rates, terms
of service, and flexibility and reliability of service. Our pipelines and gathering
business competes indirectly with other forms of energy available to its customers,
including electricity, coal and fuel oils.