1. ©2006 CenterPoint Energy Proprietary May 20071 Version 1 1 Distribution Project Management Project Overview SWEDE Conference San Antonio, Texas May 11,2007

2. May 2007 2 ©2006 CenterPoint Energy Proprietary Distribution Project Management (DPM) was created in order to: Distribution Project Management Provide project management oversight on major projects Gain efficiencies and improve collaborative efforts Provide single point of contact and coordination over URD subdivision projects (electric, street lighting and gas) Provide consistencies in the areas of design and the application of service extension standards

3. May 2007 3 ©2006 CenterPoint Energy Proprietary Business Concept Distribution Project Management will receive plans from various groups, i.e. internally through Engineering, Planning, Joint Use or Service Centers, externally from Developers, City, State TX DOT, Developer, Metro, etc. Distribution Project Management will be responsible for tracking, scheduling, coordinating, designing, budget control, permits, logistics, customer notification, outage coordination, assignment of construction forces, quality assurance and work order completion of project. Responsibility of Group will include Underground Residential Distribution (including associated residential street lighting and gas), Street Lighting (decorative, governmental and all maintenance) Overhead Infrastructure Development Projects, Overhead Road Widening Projects, Overhead Line Relocations, Distribution Line Clearance and Contract Services.

4. May 2007 4 ©2006 CenterPoint Energy Proprietary Objectives Recognize operational efficiencies through consolidation of activities Improve communication and construction efforts regarding infrastructure projects Provide consistency to repeat customers, including Developers, Cities, State, TX DOT, Metro and large customers Reduce Cost Per Lot in URD applications Reduce Cost Per Foot in Overhead applications Achieve CenterPoint Energy’s Business Strategy of “One Company”

5. May 2007 5 ©2006 CenterPoint Energy Proprietary Risks Increased Span of Control results in less oversight Transition of existing projects to new group Goals misalignment of various operating groups Less employees to share peak work loads & EOP assignments Employees become specialized in an activity and lose flexibility Learning Curve – Need time to train individuals to perform new functions Increased drive time

6. May 2007 6 ©2006 CenterPoint Energy Proprietary Opportunities Gain Efficiencies and Improve Collaboration Efforts –Through consolidation and specialization operational efficiencies will be recognized –Increased project management control – One group overseeing project types rather than 12 service centers battling for resources –Improved consistency – Developers, Cities, State and TX DOT will be handled in a more consistent manner due to the consolidated effort –Collaboration – All areas of infrastructure development will reside within Projects Group resulting in improved communication and timing

7. May 2007 7 ©2006 CenterPoint Energy Proprietary Key Performance Indicators Complete all top 10% circuit tree trimming between October 1 and March 31 Reduce new overhead construction cost per foot Reduce URD cost per lot (fully loaded) Achieve need date performance greater than 75% Achieve material planned versus actual variance less than 8% Achieve material returns less than 5% TECO (back-office complete) 90% of all work orders within 45 day of field completion

8. May 2007 8 ©2006 CenterPoint Energy Proprietary Key Performance Indicators Reduce overhead and underground street light installation cost per lamp Reduce the distribution line mile cost to trim as compared to 2005 and 2006 Respond to 95% of street light orders (SLOs) within 48 hours of notification Respond to 75% of street light cable cuts and knockdowns within 21 days of notification Achieve an average of 35 days from walk to energize on URD joint trench projects Achieve DPM safety metric for LTI, RIR, PVI

9. May 2007 9 ©2006 CenterPoint Energy Proprietary DPM Functional Areas Distribution Project Management currently has responsibility over five main functional areas: –Underground Residential Development (URD) –Overhead Projects –Street Lighting Design and Maintenance –Line Clearance Operations (Tree Trimming) –Contract Administration

10. May 2007 10 ©2006 CenterPoint Energy Proprietary Organizational Structure URDOverhead Lighting Design and Maintenance Distribution Project Management Chris Oliver Supervisor (281) 561-3214 Herman Haude Supervisor (713) 945-4959 Carlton Porter Supervisor (713) 945-3764 Frank Jeanes Director (713) 207-5858 Line Clearance Operations (Tree Trimming) Ron Britt Supervisor (713) 945-4731

11. May 2007 11 ©2006 CenterPoint Energy Proprietary Staffing Levels URD Group –1 Supervisor –20 Service Consultants –3 Quality Assurance Coordinators –3 Administration Overhead Group –1 Supervisor –9 Service Consultants –3 Quality Assurance Coordinators –3 Administration Street Lighting Group –1 Supervisor –5 Service Consultants –1 Street Lighting Maintenance Coordinator –2 Administration Line Clearance Operations –1 Supervisor –9 Foresters

12. May 2007 12 ©2006 CenterPoint Energy Proprietary Underground Residential Development (URD) The URD team manages the following types of projects: –Residential Subdivision Projects All Joint Trench projects and all URD projects greater than 10 lots –Apartment Projects –Town Home Projects Non-Overhead service projects –Condominium Projects Single Phase Underground projects Non-High-rise projects

13. May 2007 13 ©2006 CenterPoint Energy Proprietary Overhead Projects The Overhead team manages the following types of projects: –Distribution Development Projects - Planned System infrastructure development projects –Distribution Development Projects – Unplanned Projects associated with URD projects –Road Widening Projects –Relocation Projects Greater than five poles

14. May 2007 14 ©2006 CenterPoint Energy Proprietary Street Lighting The Street Lighting team manages the following types of projects: –Decorative Lighting Design Projects –Governmental Lighting Design Projects –System Rehabilitation Projects –Street Light Maintenance

15. May 2007 15 ©2006 CenterPoint Energy Proprietary Gas Design The responsibility for Gas design and project management is being integrated into the URD portion of the Distribution Projects Management team. Full roll-out will be completed by July 1, 2007. Upon integration, team responsibilities will include coordination of the following: –Consolidated Joint Trench Projects –Short ties to connect Joint Trench Projects to main gas distribution lines

16. May 2007 16 ©2006 CenterPoint Energy Proprietary Physical Work Locations Distribution Project Management personnel will be located in one of three regional offices: South Houston Regional Office 4700 S. Shaver (Between Hwy. 3 and Allen Genoa) Houston, TX 77034 Sugar Land Regional Office 13300 W. Bellfort (Between S. Dairy Ashford and Eldridge) Houston, TX 77099 Greenspoint Regional Office 2301 Gears Rd. (Between Veterans Memorial and T.C. Jester) Houston, TX 77067

17. May 2007 17 ©2006 CenterPoint Energy Proprietary Geographic Areas of Responsibility Sugar Land Region Office –Sugar Land Service Area –Fort Bend Service Area –Bellaire Service Area –Spring Branch Service Area –Katy Service Area

18. May 2007 18 ©2006 CenterPoint Energy Proprietary Geographic Areas of Responsibility South Houston Region Office –South Houston Service Area –Baytown Service Area –Galveston Service Area –Hiram Clarke Service Area

19. May 2007 19 ©2006 CenterPoint Energy Proprietary Geographic Areas of Responsibility Greenspoint Region Office –Greenspoint Service Area –Humble Service Area –Cypress Service Area

20. May 2007 20 ©2006 CenterPoint Energy Proprietary Additional Responsibilities Distribution Projects Management personnel will also be responsible for the assignment, scheduling and construction coordination of all Service Center originated work that will be assigned to a contractor.

21. May 2007 21 ©2006 CenterPoint Energy Proprietary Transitional State Street Lighting design and project management coordination within subdivisions is being integrated into the URD projects group. Gas design and project management coordination within subdivisions, exclusive of large feeder mains, is being integrate into the URD projects group.

22. May 2007 22 ©2006 CenterPoint Energy Proprietary Implementation Timeline 10/04/06 - Notification of personnel of new work locations and job assignments 10/09/06 – Begin project file clean-up and organization in preparation of move. This includes notification to developers 10/19/06 & 10/20/06 – Physical move of individuals and project files to new locations 10/23/06 – DPM is Open for Business 01/02/07 – Begin Street Lighting and Gas training (two months at each location) 07/02/07 – Full Operation in all aspects of project plan

23. May 2007 23 ©2006 CenterPoint Energy Proprietary Questions ?