Filed 11 May 17 P3:34

Chris Daniel - District Clerk

2011-29666 / Court: 234 Harris County
ED101J016316856
No: By: Furshilla McGee

CITY OF HOUSTON $ IN THE DISTRICT COURT OF

$
Plaintffi $
$
V. $ HARzuS COLINTY, TEXAS
$
CENTERPOINT ENERGY $
HOUSTON ELECTzuC, LLC $
Defendant. $ JUDICIAL DISTRICT

PLAINTIFF'S ORIGINAL PETITION

Plaintiff 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 in

Rule 190.4 of the Texas Rules of Civil Procedure.

Parties

2. 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 may

be served at its registered agent, Corporation Service Company, 350 N. St. Paul St., Ste 2900,
Dallas, TX7520l-4234.

Jurisdiction

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

in excess of the minimum iurisdictional amount.

 Venue

5. Venue is proper in Harris County, Texas, pursuant to Tpx. Crv. Pnec. & R¡vr.

Cooe $ 15.002(a)(1) because Harris County is the county in which all or a substantial part of the

events 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.

Summary

7. 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, and

Houston has consequently paid for more lighting than it actually received. The breach of

contract arises from CenterPoint's failure to accurately bill for street lighting and failure to

properly maintain the street light system.

Statement of Facts

CenterPoint's Bus ines s

8. CenterPoint engages in the transmission and distribution of electricity in a

designated 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 such

CenterPoint distributes electricity from the point of generation to its retail customers.
CenterPoint's retail customers include entities such as developers, builders, and municipalities

such as the City of Houston. In addition to items relating to electric power, CenterPoint also
promises to "install, own and maintain street lights" in Houston and other areas. The terms of

the agreement between Houston and CenterPoint are governed by the CenterPoint Tariff for

Retail Delivery Service ("the Tariffl') which is filed and approved by the PUC and applicable to

all 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 unique

charges.

I 1. Electricity is measured by kilowatts; CenterPoint bills Houston and Houston pays

for the number of kilowatts of electricity actually consumed by Houston, as measured by electric

meters. Lighting, which is the focus of the case, is unmetered and therefore measured and billed

differently.

12. Under the Tarifl in addition to electric services, CenterPoint promises to install

and maintain Houston's street light system. Lighting is measured in lumens. In contrast to

metered electricity, CenterPoint does not charge Houston for the lighting it actually receives.

Instead, CenterPoint charges Houston for the amount of illumination or lumens promised by

CenterPoint under the terms of the Tariff. For reasons described more fully below. In terms of

lumens, 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, CenterPoint

charges Houston for lighting from street lights. The fixed-rate charge for each is determined by

the number of lumens that particular light is expected to deliver and dependent upon the type of

bulb contained in the street light. Generally, the more lumens a light is expected to deliver, the

higher the monthly charge to Houston. The rate schedule is contained in the Tariff, and the
Tariff has been amended several times over the past 20 years. The 2011 Tariff Monthly Rate

Schedule is attached at Exhibit 1.

14. Houston has paid CenterPoint the amount invoiced by CenterPoint for street

lighting for many years.

To comply with its agreemen| CenterPoint must keep an accurate inventory

and 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 and

systematically maintain the street light system to ensure that Houston is receiving the promised

number of lumens, or amount of illumination, paid for monthly by Houston. Unfortunately, for

Houston, CenterPoint routinely fails to keep an accurate inventory of streetlights, and it fails to

properly maintain the street light system, resulting in a failure to deliver the promised amount of

lighting 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 erroneous
charges to Houston. By billing Houston for erroneous street light charges, CenterPoint breaches

its 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 following

routine tasks:

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

 (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 prevent

lighting from reaching the streets.

18. Lights depreciate with age and produce fewer lumens over time. After four

years, few lamps generate more than 80% of their original measure of lumens. CenterPoint has

failed 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 by

CenterPoint 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 timely

replace ballasts negatively affects lumen production. CenterPoint does not comply with industry

standards for ballast replacement. Consequently, CenterPoint has in the past and continues to

deliver 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 adequate

system for cleaning and maintaining street light fixtures and lamps. Dirt accumulation on lamps

and 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. CenterPoint

fails to conform to industry standards on lamp cleaning. As a result, CenterPoint delivers to

Houston less lighting than promised by CenterPoint and paid for by Houston.
 21. CenterPoint has failed in the past and continues to fail to adequately trim trees and

eliminate other obstacles which prevent the lighting from reaching the streets. In order for the

lighting to reach the streets, CenterPoint must routinely and adequately trim trees surrounding

the lights and remove other lighting obstacles. However, CenterPoint fails to maintain an

adequate tree trimming system. Accordingly, CenterPoint has in the past and continues to

deliver 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 to

breach its contract to provide lighting services to Houston.

Cause of Action: Breach of Contract

23. 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 in

the 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 over

the past twenty years, including consequential damages.

Remainder of the page intentionally left blank.

6
 Attornevst Fees

28. 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 itself
lawfully entitled pursuant to T¡x. Clv. Pnnc. & RBv. Cone A¡w. $ 38.001(8).

Conditions Precedent

30. All conditions precedent have been performed or have occurred.

Prayer for Relief

31. 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; and

b. Costs, disbursements, and attorneys fees pursuant to applicable law.

Respectfully submitted,

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

iJ.,, (rå t¡i"l¿

W. Curt Webb
State Bar No. 21035900
Jennifer Pratchett
State Bar No. 00786517
l22l McKinney, Suite 4500
Houston, Texas 77010
713.95t.3700
713.951.3720 (Fax)

ATTORNEYS FOR PLAINTIF'F'

CITY OF HOUSTON