MINNEAPOLIS, Nov 02, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- CenterPoint Energy (NYSE: CNP) today filed with the Minnesota Public Utilities Commission (MPUC) to change the company's natural gas distribution rates. If approved, the new rates will increase the average residential customer's bill by about $3 per month.

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"The costs of distributing natural gas to our customers have been greatly affected by unprecedented increases in natural gas prices," said Phil Hammond, vice president of supply management, regulatory services and government relations. "Just as our customers are seeing the effect of high gas prices in their bills, we too are seeing costs to distribute the gas they use being greatly impacted by these high gas prices. The proposed new rates are necessary because of higher costs that are largely beyond our control," he added.

The filing applies only to the distribution charge on a customer's bill, which makes up about 20 percent of the bill and covers the costs of distributing natural gas. Distribution costs include operating and maintaining CenterPoint Energy's natural gas distribution system, taxes and fees paid to government entities, depreciation, income, and interest. The filing does not apply to the cost of gas, which is what the company pays for natural gas used by customers and makes up about 80 percent of the bill. CenterPoint Energy does not mark-up the cost of gas; instead, it passes it through to customers on a dollar-for-dollar basis.

The main reasons CenterPoint Energy's distribution costs have increased are:

*  Rising natural gas prices over the last year, and the prospect of
        higher prices in the foreseeable future, have dramatically increased
        the company's costs associated with delivering natural gas to
        customers.  These increases include costs to finance gas purchased and
        stored for delivery in winter, as well as other costs such as bad
        debts.
     *  Increasing capital investments to ensure a safe and reliable
        distribution system, including the replacement of approximately
        30,000 service lines in 34 Minnesota communities in the former Midwest
        Gas service area.
     *  Declining use per customer, which affects the company's ability to
        recover distribution costs that, for the most part, do not change with
        the amount of gas used by customers.  Use is declining because
        customers have reacted to higher natural gas prices by conserving
        energy, and because of more energy efficient equipment and building
        construction improvements.

"One of the ways CenterPoint Energy is trying to help lessen the impact of bad debt expenses included in customer bills is by proposing a new pricing mechanism that will adjust our rates to reflect future changes in bad debt expenses," said Hammond. "This mechanism is being used in a handful of other states, but CenterPoint Energy would be the first utility in Minnesota to do so if the MPUC agrees with our approach," he added.

If the filing is approved by the MPUC, the new rates will generate $40.9 million annually or 2.4 percent of CenterPoint Energy's revenues in Minnesota, and will affect individual monthly bills differently depending on natural gas use and customer group. Customers will see the first change on their bills beginning January 1, 2006, when interim, or temporary, rates are expected to take effect. Interim rates stay in place until a decision is made by the MPUC and the company implements final rates. In early 2006, public hearings will be held to provide customers and other interested parties the opportunity to comment on the rate request, followed by formal hearings at the MPUC. A final decision from the MPUC is expected in August 2006, with new rates to be implemented in the fall of 2006. If final rates are lower than interim rates, the company will refund the difference to customers with interest. If they are higher than interim rates, customers will not be required to make up the difference.

For customer questions about the rate filing, contact:

(612) 372-4727 (800) 245-2377 http://www.CenterPointEnergy.com/ratecase

Headquartered in Houston, TX, CenterPoint Energy is a domestic energy delivery company that includes electric transmission and distribution, natural gas distribution and sales, and interstate pipeline and gathering operations. The company serves nearly five million metered customers in six states and has assets of about $17 billion. With more than 9,000 employees, CenterPoint Energy and its predecessor companies have been in business for over 135 years. In Minnesota, CenterPoint Energy is the state's largest natural gas distribution company, serving more than 760,000 residential, commercial and industrial customers in over 240 communities. Home Service Plus(R), the company's non-regulated business in Minnesota, offers products and services in the categories of heating, ventilation, and air conditioning (HVAC) and appliance repair, and HVAC and hearth equipment sales. Visit the Web site at http://www.CenterPointEnergy.com .

SOURCE CenterPoint Energy

Media Pager, Minnesota, +1-612-538-1234, or Rolf Lund, +1-612-321-4879, or Patty
Pederson, +1-612-321-4609, all of CenterPoint Energy

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