8-KRegulation FDOther EventsExhibits & Filings

CENTERPOINT ENERGY INC 8-K Report, Regulation FD Disclosure (Aug 23, 2006)

Filed August 23, 2006For Securities:CNP

Summary

CenterPoint Energy, Inc. (CNP) announced a significant development in its midstream energy infrastructure segment through a joint venture. Southeast Supply Header, LLC, a partnership between CenterPoint Energy and Duke Energy Gas Transmission (DEGT), has secured a substantial transportation agreement with Florida Power and Light Company (FPL) for its proposed natural gas pipeline. This agreement, covering approximately half of the pipeline's projected 1 billion cubic feet per day capacity, marks a key step in de-risking the project and ensuring future revenue streams. The pipeline aims to transport natural gas from East Texas and North Louisiana to growing U.S. markets, connecting to the Perryville Hub in Louisiana and extending to Gulfstream Natural Gas System. The project is progressing through regulatory approvals, with applications expected for FERC in November 2006 and construction slated for late 2007, targeting an in-service date of mid-2008. Investor focus should be on the successful acquisition of remaining shippers and the timely regulatory approvals from the Florida Public Service Commission and FERC.

Key Highlights

  • 1Southeast Supply Header, LLC (a CNP joint venture with DEGT) signed a firm transportation service agreement with Florida Power and Light Company (FPL).
  • 2The agreement secures transportation for approximately half of the proposed pipeline's 1 billion cubic feet per day capacity.
  • 3The proposed pipeline will transport natural gas from East Texas/North Louisiana to growing U.S. markets.
  • 4The pipeline project is expected to be in service by mid-2008.
  • 5Regulatory filings with FERC are expected in November 2006.
  • 6Construction is anticipated to commence in November 2007, pending approvals.
  • 7The agreement with FPL is contingent on FPL obtaining cost recovery approval from the Florida Public Service Commission (FPSC).

Frequently Asked Questions

The agreement with FPL is crucial as it commits to using approximately half of the proposed pipeline's capacity. This provides a significant revenue stream anchor for the project, reduces financial risk, and signals confidence in the pipeline's market demand.

The project faces two main regulatory hurdles: approval from the Florida Public Service Commission (FPSC) for FPL to recover its costs associated with the agreement, which is expected in Fall 2006, and approval from the Federal Energy Regulatory Commission (FERC) for the pipeline itself, with an application expected in November 2006.

The pipeline is expected to be in service by mid-2008. The regulatory application with FERC is planned for November 2006, with construction anticipated to begin in November 2007, assuming all necessary approvals are obtained.

Yes, the agreement with FPL covers only about half of the projected 1 billion cubic feet per day capacity. Southeast Supply Header, LLC is actively in discussions with other interested shippers to secure contracts for the remaining capacity.