1 CenterPoint Energy Response RMS Update January 14, 2008 CenterPoint Energy’s Update on Usage & Invoices Backlog

2 First, an Apology  For the inconveniences that you, your company, your personnel, and your Retail Customers have endured throughout the weeks and months following Hurricane Ike.  We at CenterPoint Energy understand those frustrations and the Market’s need for a very quick, as well as accurate, resolution to the issue of backlogged 867_03 Usage and 810_02 Invoice transactions.  We too consider this issue to be of the Highest Priority, which will require our best staff working extra hours until all backlog issues are resolved.

3 What Caused this Backlog? A percentage of ESI-IDs “failed” in our billing systems due to the actual true-up readings indicating the usage was outside of the system usage edit parameters. This required that each of these accounts be manually reviewed, corrected as necessary, verified and manually billed in the system to generate 867_03 Monthly Usage and 810_02 Invoice transactions. The missing 867_03 Usage and 810_02 Invoices are all consequences of Hurricane Ike.  The estimation of usage based upon best available data during the extensive outage.  The destruction of meters which required the installation of replacement meters without using the normal exchange process

4 What have we learned? The top four reasons that accounted for 75% of the unbilled ESI IDs were: High kWH Usage indicated Negative Readings Current meter reading is less than previous meter reading Changes found with meter data Example: New meter installed with no meter information on old/previous meter Premises identified as unable to receive electric service and should be billed for zero usage and zero amounts.

5 Some Processes Worked! In the aftermath of Hurricane Ike, CenterPoint Energy instituted some custom billing scripts that enabled us to provide on-time billing of more than 350,000 accounts that had initially failed routine validation; therefore, these accounts were never recorded in the exception reports. These custom billing scripts prevented what could have been a much larger issue for the Market. Of 306,000 ESI IDs- 89% were automatically corrected in November Of 172,000 ESI IDs - 30% were automatically corrected in December

6 Current Backlog Numbers as of Monday, January 12, 2009 DATE EXCEPTIONS % of BILLING 1/12/09 15, %

7 What are you doing to Resolve this Issue! Increased work hours from 50 hours per week to 60 hours per week. We are projecting a daily completion of a minimum of 2,400 ESI IDs. (This projection is based on 16 FTE’s working 10 hours per day which includes the retention of resource assistance from other business areas.)  Assign 13 personnel to work ESI IDs that are older than 10 days; concentrating on the oldest and working towards current.  Assign 3 personnel to work daily rejects  Addressing approximately 100 “mailbox” issues daily relating to billing disputes and PUC complaints. Missing usage is being addressed as we work the backlog. Continue utilizing automated billing scripts for incoming cycle reading failures

8 What is our projected timeline? CenterPoint Energy’s Electric Revenue Billing department is currently concentrating their efforts and priority on the oldest unbilled accounts, including still working new issues daily, and we are committed to an accomplishment date of no later than January 20, 2009, the projected backlog will be reduced to 10, 000 (<0.5%) There is a light at the end of this tunnel and we have made this commitment to the Market that we will get there.

Questions? 9