Center Point

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    No:

    CITY OF HOUSTON

    PlaintffiV.CENTERPOINT ENERGYHOUSTON ELECTzuC, LLC

    Defendant.

    $ IN THE DISTRICT COURT OF$$$$ HARzuS COLINTY, TEXAS$$$$ JUDICIAL DISTRICT

    PLAINTIFF'S ORIGINAL PETITIONPlaintiff City of Houston files this Original Petition against Defendant CenterPoint

    Energy Houston Electric, LLC, and in support thereof respectfully shows the following:Discovery Control Plan

    1. Discovery in this case is intended to be conducted under Level 3, as set forth inRule 190.4 of the Texas Rules of Civil Procedure.

    Parties2. The City of Houston is a Texas municipality located in Harris County, Texas.3. CenterPoint Energy Houston Electric, LLC ("CenterPoint") is a Texas corporation

    with its principal place of business located at 1111 Louisiana, Houston, Texas 77002, and maybe served at its registered agent, Corporation Service Company, 350 N. St. Paul St., Ste 2900,Dallas, TX7520l-4234.

    Jurisdiction4. This Court has jurisdiction over this action because the amount in controversy is

    in excess of the minimum iurisdictional amount.

    Filed 11 May 17 P3:Chris Daniel - DistricHarris CountyED101J016316856By: Furshilla McGee2011-29666 / Court: 234

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    Venue5. Venue is proper in Harris County, Texas, pursuant to Tpx. Crv. Pnec. & Rvr.

    Cooe $ 15.002(a)(1) because Harris County is the county in which all or a substantial part of theevents or omissions giving rise to the claim occurred.

    6. Venue is proper in Harris County, Texas pursuant to TEX. CIV. PRAC & REM.Code $ 15.002(a)(3) because CenterPoint's principle office is in Harris County, Texas.

    Summary7. Houston brings this suit for breach of contract against CenterPoint because, for

    many years, CenterPoint has consistently delivered less lighting than it has billed Houston, andHouston has consequently paid for more lighting than it actually received. The breach ofcontract arises from CenterPoint's failure to accurately bill for street lighting and failure toproperly maintain the street light system.

    Statement of FactsCenterPoint's Bus ines s

    8. CenterPoint engages in the transmission and distribution of electricity in adesignated 5,000 squa.re mile area of the Texas Gulf Coast that includes the City of Houston.CenterPoint provides services under tariffs approved by the Texas Public Utilities Commission("PUC").

    9. CenterPoint is a Transmission Distribution Supply Provider ("TDSP"). As suchCenterPoint distributes electricity from the point of generation to its retail customers.CenterPoint's retail customers include entities such as developers, builders, and municipalitiessuch as the City of Houston. In addition to items relating to electric power, CenterPoint also

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    promises to "install, own and maintain street lights" in Houston and other areas. The terms ofthe agreement between Houston and CenterPoint are governed by the CenterPoint Tariff forRetail Delivery Service ("the Tariffl') which is filed and approved by the PUC and applicable toall customers within CenterPoint's service area. The Tariff constitutes an enforceable contract.

    Ulectric Power and Lighting are distinct services.10. Underthe terms of the Tariff, CenterPoint sells both electric energy services and

    street lighting to Houston. These are two separate items, quantified separately with uniquecharges.

    I 1. Electricity is measured by kilowatts; CenterPoint bills Houston and Houston paysfor the number of kilowatts of electricity actually consumed by Houston, as measured by electricmeters. Lighting, which is the focus of the case, is unmetered and therefore measured and billeddifferently.

    12. Under the Tarifl in addition to electric services, CenterPoint promises to installand maintain Houston's street light system. Lighting is measured in lumens. In contrast tometered electricity, CenterPoint does not charge Houston for the lighting it actually receives.Instead, CenterPoint charges Houston for the amount of illumination or lumens promised byCenterPoint under the terms of the Tariff. For reasons described more fully below. In terms oflumens, Houston actually receives only a portion of the lighting for which it pays CenterPoint.

    13. There are over 180,000 street lights in Houston. Every month, CenterPointcharges Houston for lighting from street lights. The fixed-rate charge for each is determined bythe number of lumens that particular light is expected to deliver and dependent upon the type ofbulb contained in the street light. Generally, the more lumens a light is expected to deliver, thehigher the monthly charge to Houston. The rate schedule is contained in the Tariff, and the

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    Tariff has been amended several times over the past 20 years. The 2011 Tariff Monthly RateSchedule is attached at Exhibit 1.

    14. Houston has paid CenterPoint the amount invoiced by CenterPoint for streetlighting for many years.

    To comply with its agreemen| CenterPoint must keep an accurate inventoryand adequately maintain the street light system.15. Clearly, given the pricing structure, in order for CenterPoint to fulfill its

    contractual obligations, it must consistently maintain a highly accurate street light inventory andsystematically maintain the street light system to ensure that Houston is receiving the promisednumber of lumens, or amount of illumination, paid for monthly by Houston. Unfortunately, forHouston, CenterPoint routinely fails to keep an accurate inventory of streetlights, and it fails toproperly maintain the street light system, resulting in a failure to deliver the promised amount oflighting and therefore, a breach of contract by CenterPoint which is costly to Houstonians.

    CenterPoint Fails to Keep Accurate Streetlight Inventories.16. CenterPoint's street light inventories are routinely inaccurate. Given that each

    streetlight is charged every month, it is obvious that inaccurate inventories cause erroneouscharges to Houston. By billing Houston for erroneous street light charges, CenterPoint breachesits contract with Houston.

    CenterPoint Fails to Implement Proper Systemic Street Light Maintenqnce.17. In general, at the very minimum, in order to be compliant with its contractual

    obligations to Houston, CenterPoint's street light maintenance system must include the followingroutine tasks:

    (1) CenterPoint must systematically and timely replace street lights;

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    (2) CenterPoint must systematically and timely replace street ballasts:(3) CenterPoint must systematically clean and otherwise maintain street light fixtures

    and lamps; and

    (4) CenterPoint must trim the trees and eliminate other obstacles which preventlighting from reaching the streets.

    18. Lights depreciate with age and produce fewer lumens over time. After fouryears, few lamps generate more than 80% of their original measure of lumens. CenterPoint hasfailed in the past and continues to fail to systematically replace street light bulbs. Accordingly,CenterPoint has in the past and continues to deliver to Houston less lighting than promised byCenterPoint and paid for by Houston.

    19. CenterPoint has failed in the past and continues to fail to timely replace ballasts.A ballast is a device that maintains the electric current through the lamp. Failure to timelyreplace ballasts negatively affects lumen production. CenterPoint does not comply with industrystandards for ballast replacement. Consequently, CenterPoint has in the past and continues todeliver to Houston less lighting than promised by CenterPoint and paid for by Houston.

    20. CenterPoint has failed in the past and continues to fail to implement an adequatesystem for cleaning and maintaining street light fixtures and lamps. Dirt accumulation on lampsand fixtures results in absorption of light and can greatly reduce the light emitted, sometimes to a

    fraction of the expected illumination, even if the lamp itself is producing at t00o/o. CenterPointfails to conform to industry standards on lamp cleaning. As a result, CenterPoint delivers toHouston less lighting than promised by CenterPoint and paid for by Houston.

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    21. CenterPoint has failed in the past and continues to fail to adequately trim trees andeliminate other obstacles which prevent the lighting from reaching the streets. In order for thelighting to reach the streets, CenterPoint must routinely and adequately trim trees surroundingthe lights and remove other lighting obstacles. However, CenterPoint fails to maintain anadequate tree trimming system. Accordingly, CenterPoint has in the past and continues todeliver less lighting than promised by CenterPoint and paid for by Houston.

    22. For all of the reasons stated above, CenterPoint has in the past and continues tobreach its contract to provide lighting services to Houston.

    Cause of Action: Breach of Contract23. Houston incorporates for all pulposes the paragraphs set forth above.24. CenterPoint breached its contract with Houston by charging Houston for more

    lumens of lighting than it actually provided under the present Tariff and the Tariffs effective inthe past.

    25. The breach of contract was material.26. As a result of CenterPoint;s breach of contract. Houston has incurred natural.

    probable and foreseeable damages that are sought in this suit.Damages

    27. Houston seeks all damages flowing from CenterPoint's breach of contract overthe past twenty years, including consequential damages.

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    Attornevst Fees28. Houston re-alleges and incorporates for all purposes the paragraphs set forth

    above.29. Houston has incurred and continues to incur attorneys' fees in pursuing the relief

    requested, including, but not limited to outside counsel fees and expenses. Accordingly,Houston seeks to recover all reasonable attomeys' fees and costs to which it mav show itselflawfully entitled pursuant to Tx. Clv. Pnnc. & RBv. Cone Aw. $ 38.001(8).

    Conditions Precedent30. All conditions precedent have been performed or have occurred.

    Prayer for Relief31. Houston requests whatever relief it may be entitled to in law or equity, including:

    a. Actual damages in an amount to be proven at trial of this matter; andb. Costs, disbursements, and attorneys fees pursuant to applicable law.

    Respectfully submitted,BECK, REDDEN & SECREST, L.L.P.

    iJ.,, (r ti"lW. Curt WebbState Bar No. 21035900Jennifer PratchettState Bar No. 00786517l22l McKinney, Suite 4500Houston, Texas 77010713.95t.3700713.951.3720 (Fax)

    ATTORNEYS FOR PLAINTIF'F'CITY OF HOUSTON