1. 810_02 Invoice “Emergency Change Control” Request CenterPoint Energy July 14, 2004

2. Reason for Request On June 21, 2004 the Public Utility Commission of Texas began hearings concerning CenterPoint Energy’s True-up filing, with an order possible by August 28, 2004 In parallel with these proceedings, CenterPoint Energy (CNP) is preparing for the outcome of this proceeding, which will include changes in our tariffs. CenterPoint Energy has identified four new transition charges that will need to be clearly identified in the 810_02 Invoice to the Retailer and which may ultimately become charges passed on to the Retail Customer.

3. The Issue Currently, in the 810_02 there is only one code used for Transition Charge Off Allowances (DSC001) and only one Transition Charge (MSC029). CenterPoint would add two new Transition Charge-Off Allowances (COA) and two new Transition Charges (TC), for a total of three COAs and three TCs. Each Transition Charge Off Allowance and Transition Charge would have it’s own bill calculations or formula to be applied to every invoice to the Competitive Retailer.

4. Recommendation CenterPoint Energy is requesting RMS approval of an “Emergency Change Control” to add four new codes in the SAC04 of the Texas SET 810_02 Invoice transaction. If this recommendation is approved, immediately RMS would instruct Texas SET to approve an “Emergency Change Control” at the earliest Texas SET meeting and/or Change Control Conference Call to add the following SAC04 codes and any necessary gray box language to the Texas SET 810_02 transaction that would be needed to add clarity: DSC002 – Transition Charge-Off Allowance (COA2) DSC003 – Transition Charge-Off Allowance (COA3) MSC036 – Transition Charge (TC2) MSC037 – Transition Charge (TC3)

5. Benefits Clear identification of the each charge as they are applied to the Invoice for billing inquiries from Retailer to Retail Customer concerning these new charges. Clear identification of the charge amounts based upon the applicable SAC04 Code in conjunction with the approved Tariffs and calculations. Quick and easy reporting for both CR and TDSP using their internal systems by creating a query where the selection criteria used is the actual SAC 04 Code. Reduces Time needed for Training

6. Why Emergency Change? In order to balance schedules (MIMO v2.0 along with this and other projects) and due to an accelerated time table because of: PUCT hearings have started and order is possible by August 28, 2004 Time needed for Market participants to complete IT Development, System Testing, and Implementation Time needed for training TDSP to CR and CR to Internal Call Center and Revenue Accounting personnel. Time needed to communicate these changes to all of CenterPoint Energy’s trading partners weeks prior to implementation.

7. Other Alternatives Considered? Use four different SAC04 codes currently found in the TX SET 810_02 Implementation Guide that are not being utilized by CenterPoint Energy? Use four different SAC04 codes currently found in the TX SET 810_02 Implementation Guide that are not being utilized by CenterPoint Energy? There are approximately 170 SAC04 Codes currently in the 810_02, but using a number of these currently unutilized codes would result in numerous training issues and market confusion, as codes would be used by different TDSPs for different purposes.  In CNP’s Opinion: This is not a true market solution, but is a work-around.

8. Other Alternatives Considered? Totalize or Summarize the charges under existing codes either DCS001 & MSC029 that are currently in the TX SET 810_02? Totalize or Summarize the charges under existing codes either DCS001 & MSC029 that are currently in the TX SET 810_02? Each Transition Charge-Off Allowance and Transition Charge has its own bill calculations and formula. Totalizing would limit the ability of a Retailer or Retail customer, especially Large Commercial or Industrial customers to validate billed amounts. Also, this solution would likely not comply with the securitization order.  In CNP’s Opinion: This is also a work- around, and is not workable in the long run.

9. Other Alternatives Considered? Loop the current DCS001 and MSC029 multiple times, but show text descriptions identifying the difference. Loop the current DCS001 and MSC029 multiple times, but show text descriptions identifying the difference. CNP already loops multiple rates due to our rate structure. Additional TCs would result in looping 12 - 15 times for a single customer, increasing confusion and difficulty in identifying individual charges. One of the recommendations from the 810/867 Taskforce was to modify the current Texas SET 810_02 Invoice to include new codes that are more descriptive for the type of service that is actually represented at that premise or for that specific ESI ID. This information should be readily available in one place and on one transaction. (4CP, NCP, KVAR, Ratchet, and/or Power Factor adjustments). CenterPoint Energy agrees with the 810/867 recommendation to use appropriate codes rather than additional looping.

10. Questions and Answers CNP