1 1-24-04 WP/Figure JNP-4B

Qualified Costs Components

Original Amount ($000)

Description

NBV Gen Assets excl Exc Mitig&Environ.

Excess Mitigation Refunded

Market Value Generation Assets

Environmental Expenditures

Regulatory Assets (SFAS 109)

Deferred Debits (SFAS 71)

Above Market Purchase Power Costs

CTC on GLO Tariff

True-up of Capacity Auction Proceeds + Interest

Final Fuel Balance

Price To Beat True-up

Interest

ADFIT Reduction

Securitization Costs Total

$3,379.717 $469,684

($3,417,428)

$71 7.63

$150,473

$25,279

$48,344

($984)

$1,059,134

($75,253) ($1 76,600)

$121,028

($1 10,499)

$21.782

$2,212,311

CNP's Statewide Stranded Costs > $5 Billion $0

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PUC DOCKET NO. 21665 FTNANCING ORDER PAGE 40 OF 71

76. Using the pmdures described in Finding of Fact No. 75, $1,803,000 of the $740 million

approved for securitization in this Fmcing Order was allocated to Texas-New Mexico Power

(TNMP). This amount is to be recovefed fnnn TNMP out of existing base rates during the

remaining term of the TNMP contract. No portion of this amount will be included in any true-up

adjustment.

- >

77. The Settlement Agreement included the following initial WS: CIasS RAAF

Residential 35.5763% MGS

LGS

LOS-A

LOS-B SCP

Non-Metered Lighting Standby Electric Service -Distribution

Intemptible Service Supplemental- Distribution

Standby Elecaic Service-Transmission htemptible Service 30-Minute Notice

Interruptible Service lO-h!linute Notice

Interruptible Service Instantaneous Inkmptible Service Supplemental-Transmission Standby Intemptible Service

3 1.054496

17.4076%

5.2845%

3.4886%

3.6578% 0.2536%- 0.0304% 0-0606%

03718%

1.075296

1.37208

0.1294%

0.0769%

0.1609%

Total lOO.OODO%

78. As of the date for customcz choice under PURA 839.102, new customers will be

assigned to the transition change classes listed above based on the definitions and proceduns

described in Schedule TC.

823

Blank Page

824

1 1-24-04 Calculation of Phase-in TC2 Charges

TC2 Billing Group

Residential

MGS-D MGS-T

LGS-D LGS-T LOS-A

LOS-B Lighting SCP

SES-D SES-T IS-30

IS-10 IS1 ISS-D

ISS-T SBI Total

TC2 Allocator

31.5813%

33.2241% 0.2146% 19.0397%

0.1405% 5.14 1 0%

3.600 1 Yo

0.4350% 3.0481%

0.0290% 0.3353% 0.9048%

1.7702%

0.1 815% 0.0673%

0.0859% 0.2016%

100.0000%

Qualified Cost by TC2 Billing Group ( TC2 Allocator

* First Year Revenue Requirement )

$14,212

$14,951

$97 $8,568

$63 $2,3 13

$1,620 $196

$1,372

$13 $151

$407 $797

$82

$30 $3 9 $9 1

$45,000

Billing Determinants

23,431,239,212

18,813,557,252

862,090 26,498,086

116,601 9 3 10,43 1

3,847,042

272,373,119 4,030,645

166,259

1,156,382 2,601,863 7,867,985

467,070 130,968 150,161

3,265,140 42,577,840,306

WP I Fig JNP-5 I Phase-in Charges

TC2 Charges

( First Year Revenue Requirement I Billing

Determinants )

$0.000607 $0.000795 $0.112018 $0.323339

$0.542234

$0.243254 $0.421 114

$0.000719 $0.340304

$0.078492

$0.130480 $0.156488 $0.101244

$0.174867 $0.23 1240 $0.257424 $0.027784

$1 kWh $lkWh $IkW $ I kVa S/kW $/kW $lkW $ / kWh $lkW $IkW $lkW SIkW $/kW $lkW $ikW $IkW SIkW

825

11-24-04

TC2 Billing Group

Residential

MGS-D MGS-T LGS-D LGS-T

LOS-A

LOS-B Lighting

SCP SES-D SES-T

IS-30 IS-10

IS1 ISS-D ISS-T SBI Total

Calculation of Level Rate Charges

TC2 Atlocator

31.5813% 33.224 1 %

0.2146%

19.0397% 0.1405% 5.1410%

3.6001% 0.4350% 3.0481% 0.0290% 0.3353%

0.9048% 1.7702Yo

0.1815%

0.0673% 0.0859% 0.201 6%

100.0000%

Qualified Cost by TC2 Billing Group ( TC2 Allocator

* First Year Revenue Requirement )

$60,901

$64,069

$414 $36,716

$271 $9,914 $6,942

$839 $5,878

$56

$647 $1,745 $3,414

$350 $130 $166

$389 $192,839

Billing Determinants

23,43 1,239,2 12 18,813,557,252

862,090

26,498,086 116,601

9 3 10,43 1

3,847,042 272,373,119

4,030,645

166,259 1,156,382 2,601,863 7,867,985

467,070 130,968 150,161

3,265,140

42,577,840,306

WP 1 Fig JNP-5 / Level Rate Charges

Level Rate Charges

( First Year Revenue Requirement I Billing

Determinants )

$0.002599 $0.003405 $0.480033

$1.385606 $2.323636 $1.04241 7

$1.804603 $0.003080

$1.458306

$0.336362 $0.559147 $0.670598

$0.433863 $0.749357

$0.990932 $1.103 138

$0.1 19065

$ / kWh $ / k w h $ /kW

$ I kVa % / k W $ / k W $ / k W $ I kWh $ / k W

$ / k W

$ / k W S I k W $ l k W

$ /kW $ / k W $ / k W $ / k W

826

827

P r

828

829

830

WORKPAPERS TO SCHEDULES

831

832

833

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CenterPoint Energy Houston Electric Expected Securitization Amount

True Up Balance at August - Phase-in Structure

Schedule 2A

1 Requested Amount

2 ADFlT Benefit on Applicable Assets

3 Projected Qualified Cost

4

5 Applicable Assets ADFIT Rate

Secunlization Amount (mduding ADFIT Benefits)

" 1 0 :"L

Tme-up Final Order

Schedule 4

Schedule 6'

a 2,300,888.664

@ (110,890,081~

@@

Q

2,189,998,583

@ 22,000,000

2,211,998,583

13.5% Schedule 3 Line 11 divided by Line 1

838

CenterPoint Energy Houston Electric Worst Case Securitization Amount

True Up Balance at August - Phase-in Structure

1 Requested Amount

2 ADFIT Benefit on Applicable Assets

3 Projected Qualified Cost

4

5 Applicable Assets ADFIT Rate

Securitization Amount (induding ADFIT Benefits)

Interest on securitized balance Upfront Costs Securitizalion Financing - Nominal Dollars - Exduding Financing Costs

Securitization Finandng - Nominal Dcllars - Including Upfront Costs

True-up Final Order

Schedule 3 Line 11 divided by Line 1

Schedule 28

a 2,300,888,664

2,113,535,393 @ 22,000.000@

A b 2.1 35,535,393

13.5%

2,094,792,744 @ 43.580.275 Q

4,186,747,862 @

@ 4,230,328,136

839

1

2

3

4

5

6

7

8

9

10

Centerpoint Energy Houston Electric Expected Case Applicable Accumulated Deferred Federal Income Taxes

True Up Balance at August - Phase-in Structure Gmss

Accumulated Deferred Federal Income Taxes (ADFIT) True-up Original Filing Sch.lX for Applicable Assets

Adjustment to ADFIT Item 1 EMC Refunded through August 2004 Item 2 Depreciation 2002-2003 Item 3 Less Fuel Under Recovery Balance as of 12/31/01 Item 4 Plus Final Fuel Over Recovery Balance as of 8/31/04 Adjusted ADFIT

Docket 29526 Original Fig JSB-9

(49,188,087) (75,252,748)

T ~ e - u p Final Order TNe-Up Original Filing Sch.lX True Up Final Order Line 1 plus sum Line 2

Schedule 3

Adjusting ADFIT

@ 867,783.937

164,389,370 164,389.370 (132,447,350) (132.447.350)

(17.21 5.830) (1 7.21 5.830) (26.338.462) (26.338.462)

856.171.664

Other True-up Items ADFIT Item 1 Final Fuel Over Recovery Balance as of 8/31/04 Item 2 Equity AFUDC and Debt AFUDC FAS109

ADFIT Associated with Net Book Value of Generation Assets

26.338.462 (141.162.927) (141,162,927)

741 347.199

True Up Final Order T r u w p Original Filing WP IX-1.1

Line 3 minus sum Line 4

Net Book Value of Generalion Assets

Total Stranded Cost

Percentage of Total Stranded Cost to Net Book Value of Generation Assets

Applicable ADFIT to Stranded Cost

Plus Other True-up Items ADFIT Item 1 Fuel Over Recovery Balance at August 2004 Item 2 Equity AFUDC and Debt AFUDC FAS109

11 Applicable Accumulated Deferred Federal Income Taxes

Note: Per Final Order in Docket No. 29526 Net, Verifiable Non-mitigable Stranded Cost Market Value Net Book Va lued Generation Assets

True-up Final Order(see note below)

T N W p Final Order(see note below)

Line 7 divided by Line 6

Line 5 times Line 8

4 4.639.674.602

8 1,222246,380

28.3%

195,295,793

(26.338.462) 141.162.927 41.162.927

True Up Final Order

Line 9 plus sum Line 10

@ 1,222.246.380 B 3.417.428.222 4.639.674.602 A

310.120.258 00 0

840

Centerpoint Energy Houston Electric Expected Case ADFIT Benefit on Applica True Up Balance at August - Phase-in Structure

Period

ft- Applicable ADFIT @I 310,120,258 I

0.583 1.583 2.583 3.583 4.583 5.583 6.583 7.583 8.583 9.583 10.58 11.58 12.58 13.58 14.58 15.58

Year

2005 2006 2007 2008 2009 201 0 201 1 2012 201 3 201 4 201 5 201 6 201 7 201 8 201 9 2020

ADFIT pv @

PV of (I) Payment 4.70%

(4,972,848) (4,841,385) (10,276,191) (9,555,423)

4,838,047 4,296,760 19,451,287 16,499,574 20,853,455 16,894,904 22,247,057 17,214,864 23,673,835 17,496,572 251 79,457 17,773,953 26,858,474 1 8,108,076 28,710,726 18,487,938 30,667,402 18,861,429 32,730,381 19,226,578 34,915,673 19,589,560 37,516,270 20,103,757 17,727,232 9,073,019

Schedule 4

.# 310,120,258 199,230,177

ADFIT Benefit 11 0,890,081 @ N te: Discount rate was assumed to be 4.7% to facilitate iterations of the bond issuance 8 and in the final issuance advice letter will equal the average bond issuance cost.

841

Year

Centerpoint Energy Houston Electric Expected Case Amortization Stream

True Up Balance at August - Phase-in Structure

Securitized Interest Principal Payments Payments Payments

(r3- Principal & Interest

(20,987.962) (44,333.250) 107,412.879 288,956,087 246,205,445 250,171.942 253,981,635 270,602,521 343.1 92,551 265,759.363 269,842,045 274.01 2,089 278,292,225 284,317,942 129,589,629

2005 112Year 2006 2007 2008 2009 2010 201 1 2012 2013 2014 2015 2016 2017 2018 2019 IRYear

14,481,954 28,963,908 72.904.462

150,215,565 97,463,655 91,489,981 85.122.871 91,004,584

151,618,660 60,973,883 51,100.150 40,555,545 29,248,615 16,725.009 3.146.299

___l_j

(35,469.916) (73,297,158)

138,740,522 148,741,790 158,681,961 168,858,764 179,597,937 191,573.891 204,785,480 2 1 8,74 1,895 233,456,544 249,043,610 267,592,933 126,443,330

34,50a,417

TOTAL 3,197,Ol 5,141 985.015.141 2.212.000.000

Upfront costs 31,796,73501

Securitization Nominal Bond Rate Excl Sec costs

Amortization % Expected Case

-1.60% -3.31% 1.56% 6.27% 6.72% 7.17% 7.63% 8.12% 8.66% 9.26% 9.89%

10.55% 1 1.26% 12.10% 5.72%

100.00%

a 4.52%

Schedule 5

OC Acct 5,000,000

10,000,000 5,333,333

666,666 666,666 666,666 666,666 666,666 666.666 666,666 666,666 666,666 666.666 666,666

(27,666.659)

.:,

842

CenterPoin1 Energy Houston Elechic Projected Qualiiied Cost

TNE Up Balanca a( August - Phasein Shuclure

UDfrmI Cost

ilem 1 Undemrilen' Fees Rem 2

Item 13 T~ee 's fhs tee 's Couwel Fees and

Rem 3 Legal FseslExp for Undemrilws' Counsel Hem 4 Fee for Commissim's F m i a l Advisa Rem 5 Raliing Agency Fees Rem 6 Fee for Company's Financial Advisor IIem 7 PrWrglEdgarizii Exp~lses Rem 8 SEC R e g i s W i Fee llem 9 Securitizalion Proceeding Expanses Item 10 Miscellanecus AdminisIralive Costs Item H Acmnlanrs F ~ S Item 12 Servicer Sat-up Costs

Item 14 Legal Fees for Commission's C-l

& 11277,281 Legal FmsiExp for Company'snssuah

1,600,000 1 . 0 5 0 . ~

375.000 350.000 280.219 130.000

75.000 1o.ooo

lo.m

W Ne( Present Value of Ongoing Costs al Bond Rate Net Present Value of Ongoing Costs at Worst Case Bond Rate

Remked Ombrs Cost

Ongoing Servieer Fee (CEHE as Servicer) (0 05% of principal a m d ) OrgDing Servieer Fee (Third Party as Servicer) (0.60% of principal amount) Adminishation Fee Accaunlanls' Fee Legal Fms/Expenses rw CompWMssWs Counsel TNstae's/TNstee's Counsel Fees and Expenses Independent Managers' Fee Raling Agency Fees PrinIngEDGARiiation Expenses Miscellaneous

TOTAL (CEHE as Swvicer)

TOTAL (Third Party as Servicer)

Schedule 6

Onaoino Cost

Onqoima Cast NPV 02: @:$ ) m PV of (I)

2005 @ 729.500 710.500 0.5 713.556 694.981 2006 1,459,000 1,421.000 1.5 1.365.467 1.329.903 2007 1.459.000 1.421.WO 25 1.3C6.467 1.272.439 2oM) 1.459.000 . 1,421.000 3.5 1,250,016 1.217.459

2010 1,459,ooO 1.421.M 5.5 1,144,327 1.114.522 2009 1.459.m 1.421.M 4.5 1.196.004 1.164.854

mi1 1.459.W 1.421.000 6.5 1,094.882 1.066.365 2012 1.459.000 1.421.wO 7.5 1.047.573 1,020,289

2014 1.459.000 1.421.M 9.5 9ss.001 934,023 2013 1.459.0(10 1.421.000 8.5 1.w2.309 976.204

2015 1.459.000 1.421.000 10.5 917,563 893.665 2016 1.459,WO 1,421.0M) 11.5 877.917 855.051 2017 1,459.WO 1,421.000 12.5 839.983 818.106 2018 1,459.000 1,421,000 13.5 803.609 782,758

729.500 710.500 14.5 384.481 374,467 14.903.244 14.515,085

OC ACa @ 9.538.780 B13.825.43O 24.440.003 28,340.515

- a A- @ 4.52% & 24,440,003

Expeaed Wont

1W.WO 75.000

4 . m 3.500

50,000 50.WO 2 0 . m 20.000

$1,459,000 $1.421.000

$1 3.625.000 $1 3.169.000

I

'3 2- @"7' 0 1 30

843

CenterPoint Energy Houston Electric Pro-Forma Capital Structure For Regulated Transmission and Distribution Company True Up Balance at August - Phase-in Structure ($ millions) Use of

Collateralized Term Loan

Less: Debt Cost Total Long-term Debt

Common Equity

Other Notes Payable

Schedule 7

1,310 1,310 - 2 2

(148) (148) 2,757 1,310 1,447 60%

1,843 880 963 40%

Note: Until exact timing of bond issuance is known, final Capital Structure will not be known.

844

845

3 '

846

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e

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8

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848

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849