1. 1 10% Worst Performing Circuits Reliability Program SWEDE Conference San Antonio, TX May 10, 2007 Kenton M. Brannan, P.E. kenton.brannan@centerpointenergy.com

2. 2 10% Circuit Reliability Program Historical Approach Enhanced Process –Identification of Probable 10% Circuits –Circuit Evaluation & Improvements –Reliability Oversight Committee –Documentation Procedure Tree Trim Process Notable Changes Process Assessment Anticipated Process Enhancements

3. 3 Historical Approach 10% Circuit Standard –Performance measured from Jan 1 to Dec 31 –Prefer to have improvements made by Jan 1 CNP’s Historical Approach –Circuit reviews began in 4 th Quarter –Infrared and Tree Trim processes separate from 10% circuit review –No specific deadlines to complete action plans –Differing methods among service centers

4. 4 Enhanced Process Identification of Probable 10% Circuits –Begins upon conclusion of 2 nd Quarter with June YTD circuit performance data –Data available for analysis by mid-July –Begin with top 30 circuits from SAIDI/SAIFI lists –Confidence level: ≈ 25% of top 10 % circuits –≈ 15 circuits are added each month until year end –Final 10% circuits (≈ 40) are identified by mid- January from year end data

5. 5 Enhanced Process Circuit Evaluation & Improvements – 90 Days –90 day timeframe begins on date of identification as probable 10% circuit –1 st 45 days Perform root cause analysis and develop action plan to improve circuit performance Attempt to achieve “Reduce-To” values –2 nd 45 days Complete field work called for in action plan

6. 6 Enhanced Process Reliability Oversight Committee –Consists of engineering and operations personnel –Evaluates proposed action plans (within 1 st 45 days) Documentation Procedure –Progress tracked via MS SharePoint –Reports Circuit Level Summary Report System Reliability Dashboards

7. Circuit Level Summary Report

9. 9 Tree Trim Process Focus –10% Circuits – 4 th quarter of the previous year and 1 st quarter of the new year –All Circuits – 2 nd and 3 rd quarters 4 th quarter Selection Criteria –Information on probable 10% circuits –Outage data due to vegetation & wind –time since last trim –Emphasis on 10% circuits with highest priority given to repeat and 300% circuits

10. 10 Timeline

11. 11 Notable Changes Timeframe –Begin closely analyzing probable 10% circuits in July rather than October or November Infrared Process –Increase current inspection cycle from 3 years to 5 –5 year system focus (≈ 300 circuits/year) –Additional focus on 10% circuits (≈ 200 circuits) Tree Trim –New process has been enhanced to incorporate the 10% circuits in the proactive tree trimming strategy

12. 12 Process Assessment Root cause analysis & circuit work is being completed earlier in the year as compared to past years Reliability Oversight Committee –Identifying synergies –Sharing of resources occurring Process very effective thus far

13. 13 Anticipated Process Enhancements Identify probable 300% circuits before 2 nd Q ends Refine target SAIDI and SAIFI values using historical values and statistical methods Abandon MS SharePoint and move to SAP/Business Warehouse