CENTERPOINT ENERGY TRANSITION BOND CO LLC - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO .

COMMISSION FILE NUMBER 333-91093

CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC

(Exact name of registrant as specified in its charter)

DELAWARE 76-0624152
(State or other jurisdiction of (I.R.S. Employer
incorporation Identification Number)
or organization)

1111 LOUISIANA, SUITE 4667 (713) 207-8272
HOUSTON, TEXAS 77002 (Registrant's telephone number,
(Address and zip code of principal including area code)
executive offices)

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED
DISCLOSURE FORMAT.

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of May 9, 2003, all outstanding membership interests in CenterPoint Energy
Transition Bond Company, LLC were held by CenterPoint Energy Houston Electric,
LLC.

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CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC

TABLE OF CONTENTS

i

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

From time to time we make statements concerning our expectations, beliefs,
plans, objectives, goals, strategies, future events or performance and
underlying assumptions and other statements that are not historical facts. These
statements are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Actual results may differ materially
from those expressed or implied by these statements. In some cases, you can
identify our forward-looking statements by the words "anticipate," "believe,"
"continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may,"
"objective," "plan," "potential," "predict," "projection," "should," "will," or
other similar words.

We have based our forward-looking statements on our management's beliefs
and assumptions based on information available to our management at the time the
statements are made. We caution you that assumptions, beliefs, expectations,
intentions and projections about future events may and often do vary materially
from actual results. Therefore, we cannot assure you that actual results will
not differ materially from those expressed or implied by our forward-looking
statements.

The following list identifies some of the factors that could cause actual
results to differ from those expressed or implied by our forward-looking
statements:

o state and federal legislative and regulatory actions or developments,
including deregulation, re-regulation and restructuring of the electric
utility industry, changes in or application of laws or regulations
applicable to other aspects of our business;

o non-payment of transition charges due to financial distress of CenterPoint
Energy Houston Electric, LLC's (CenterPoint Houston's) customers;

o the accuracy of the servicer's estimates of market demand and prices for
energy;

o the accuracy of the servicer's estimates of industrial, commercial and
residential growth in CenterPoint Houston's service territory;

o changes in market demand and demographic patterns;

o weather variations and other natural phenomena affecting retail electric
customer energy usage;

o the operating performance of CenterPoint Houston's facilities and
third-party suppliers of electric energy in CenterPoint Houston's service
territory;

o the accuracy of the servicer's estimates of the payment patterns of retail
electric customers, including the rate of delinquencies and any collections
curves;

o legal and administrative proceedings and settlements;

o changes in tax laws;

o any lack of effectiveness of our disclosure controls and procedures;

o significant changes in critical accounting policies;

o acts of terrorism or war, including any direct or indirect effect on our
business resulting from terrorist attacks such as occurred on September 11,
2001 or any similar incidents or responses to those incidents;

o the reliability of the systems, procedures and other infrastructure
necessary to operate the retail electric business in CenterPoint Houston's
service territory, including the systems owned and operated by the
independent system operator of the Electric Reliability Council of Texas,
Inc.;

ii

o political, legal, regulatory and economic conditions and developments in
the United States; and

o other factors we discuss in this Form 10-Q and our other SEC filings.

You should not place undue reliance on forward-looking statements. Each
forward-looking statement speaks only as of the date of the particular
statement, and we undertake no obligation to publicly update or revise any
forward-looking statements.

iii

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC

STATEMENTS OF INCOME
AND CHANGES IN MEMBER'S EQUITY
(UNAUDITED)

See Notes to the Company's Interim Financial Statements

1

CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC

BALANCE SHEETS
(UNAUDITED)

See Notes to the Company's Interim Financial Statements

2

CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC

STATEMENTS OF CASH FLOWS
(UNAUDITED)

See Notes to the Company's Interim Financial Statements

3

CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC

NOTES TO UNAUDITED FINANCIAL STATEMENTS

(1) BACKGROUND AND BASIS OF PRESENTATION

Effective August 31, 2002, Reliant Energy, Incorporated (Reliant Energy)
consummated a restructuring transaction in which it, among other things, (1)
conveyed its Texas electric generation assets to an affiliated company, Texas
Genco Holdings, Inc. (Texas Genco), (2) became an indirect, wholly owned
subsidiary of a new utility holding company, CenterPoint Energy, Inc.
(CenterPoint Energy), (3) was converted into a Texas limited liability company
named CenterPoint Energy Houston Electric, LLC (CenterPoint Houston), and (4)
distributed the capital stock of its operating subsidiaries to CenterPoint
Energy. As part of the restructuring, each share of Reliant Energy common stock
was converted into one share of CenterPoint Energy common stock. In connection
with the restructuring, Reliant Energy Transition Bond Company LLC was renamed
CenterPoint Energy Transition Bond Company, LLC (the Company).

The Company's interim financial statements are unaudited, omit certain
financial statement disclosures and should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended December 31, 2002.

The Company is a special purpose Delaware limited liability company whose
sole member is CenterPoint Houston. CenterPoint Houston is a regulated utility
engaged in the transmission and distribution of electric energy in a 5,000
square mile area located along the Texas Gulf Coast, including the City of
Houston.

In June 1999, the State of Texas enacted the Texas Electric Choice Plan
(Texas electric restructuring law). The Texas electric restructuring law
authorizes competition in the retail and generation markets for electricity
beginning in January 2002 and provides for recovery of stranded costs (i.e., the
excess of net regulatory book value of generation assets (as defined by the
Texas electric restructuring law) over the market value of those assets) and
generation-related regulatory assets (as defined by the Texas electric
restructuring law) through irrevocable non-bypassable transition charges
assessed on all retail electric customers within a utility's geographical
certificated service area as it existed on May 1, 1999 (Transition Charges). The
Texas electric restructuring law authorizes the Public Utility Commission of
Texas (Texas Utility Commission) to issue financing orders approving the
issuance of transition bonds to recover generation-related regulatory assets and
stranded costs. The Texas electric restructuring law and the financing order
permit an electric utility to transfer its rights and interests in the financing
order, including the right to collect Transition Charges pursuant to the Texas
electric restructuring law, to a special purpose entity formed by the electric
utility to issue debt securities secured by the right to receive revenues
arising from the Transition Charges. The electric utility's right to receive the
Transition Charges and its other rights and interests under the financing order
constitute Transition Property. The Texas Utility Commission issued a financing
order to CenterPoint Houston on May 31, 2000 (Financing Order) that authorized
CenterPoint Houston to cause the Company to issue transition bonds (Transition
Bonds) in an aggregate principal amount not to exceed $740 million plus up-front
qualified costs not to exceed $10.7 million in the aggregate.

The Company was organized on November 10, 1999 under the laws of the State
of Delaware for the sole purpose of acquiring and holding the Transition
Property to be acquired from CenterPoint Houston. The Company had no operations
until October 24, 2001.

On October 24, 2001, the Company issued $748.9 million of Transition Bonds
and used the net proceeds to purchase the Transition Property from CenterPoint
Houston and pay expenses of issuance. For additional information relating to the
Transition Bonds, see Note 3.

The Company is restricted by its organizational documents from engaging in
any activity not directly related to the specific purposes for which the Company
was created. The Company is a separate and distinct legal entity from
CenterPoint Houston, and the Company's organizational documents require it to
operate in a manner to avoid consolidation with the bankruptcy estate of
CenterPoint Houston in the event CenterPoint Houston becomes subject

4

to such a proceeding. CenterPoint Houston is not the owner of the Transition
Property described herein, and the assets of the Company are not available to
pay creditors of CenterPoint Houston or any of its affiliates.

(2) SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

REGULATION AND REGULATORY ASSETS AND LIABILITIES. The Company's business
meets the criteria of Statement of Financial Accounting Standards (SFAS) No. 71,
"Accounting for the Effects of Certain Types of Regulation" (SFAS No. 71). This
accounting standard recognizes the cost-based ratemaking process which may
result in differences in the application of generally accepted accounting
principles between regulated and non-regulated businesses. The Company's purpose
is to purchase the Transition Property, issue one or more series of Transition
Bonds secured by the Transition Property and perform any activity incidental
thereto. The Transition Charges are designed to provide the necessary revenues
to make such payments. Continued applicability of SFAS No. 71 requires that
rates be designed to recover specific costs of providing regulated services and
products, and that it be reasonable to assume that the Transition Charges are
set at levels that will recover an entity's costs and can be charged to and
collected from customers. The Company believes it satisfies such requirements
and applies the provisions of SFAS No. 71 to its business.

CASH AND CASH EQUIVALENTS/RESTRICTED FUNDS. For purposes of the Balance
Sheet and Statement of Cash Flows, the Company considers investments purchased
with a maturity of three months or less to be the equivalent of cash. The
trustee under the indenture pursuant to which the Transition Bonds were issued
(the Trustee) has established, as provided in the indenture, the following
subaccounts for the Transition Bonds:

o The General Subaccount is comprised of collections of Transition
Charges and interest earned from short term investments. These amounts
accumulate in the General Subaccount until they are transferred from
the General Subaccount on each Transition Bond payment date. The
General Subaccount had a balance of $2.5 million at March 31, 2003.

o The Reserve Subaccount is maintained for the purpose of holding any
Transition Charges and investment earnings (other than investment
earnings on amounts in the Capital Subaccount) not otherwise used on
the payment dates of the Transition Bonds for payment of principal,
interest, fees or expenses or for funding the Capital Subaccount or
the Overcollateralization Subaccount. The Reserve Subaccount had a
balance of $8.4 million at March 31, 2003.

o The Overcollateralization Subaccount has a target funding level of
approximately $3.7 million (0.5% of the initial principal amount of
the Transition Bonds), and funding is scheduled to occur ratably over
the life of the Transition Bonds. The Trustee may draw from this
subaccount if the General Subaccount and Reserve Subaccount are not
sufficient on any payment date to make scheduled payments on the
Transition Bonds and payments of certain fees and expenses. The
Overcollateralization Subaccount had a $0.5 million balance as of
March 31, 2003, with a scheduled level of $0.5 million.

o The Capital Subaccount received a deposit of approximately $3.7
million (0.5% of the initial principal amount of the Transition Bonds)
on the date of issuance of the Transition Bonds. CenterPoint Houston
contributed this amount to the Company. If amounts available in the
General, Reserve and Overcollateralization Subaccounts are not
sufficient on any payment date to make scheduled payments on the
Transition Bonds and payments of certain fees and expenses, the
Trustee will draw on amounts in the Capital Subaccount. As of March
31, 2003, the Capital Subaccount had a balance of $3.7 million.

TRANSITION CHARGE RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS. The
Transition Charge receivable is net of an allowance for doubtful accounts of
$0.2 million and $0.05 million as of December 31, 2002 and March 31, 2003,
respectively.

5

CUSTOMER DEPOSITS. The Trustee holds cash deposits, affiliate guarantees,
surety bonds and letters of credit provided by retail electric providers. Retail
electric providers are required to meet creditworthiness criteria established by
the Texas Utility Commission with respect to transition charges. Each retail
electric provider must (1) have a long-term, unsecured credit rating of not less
than BBB- and Baa3 (or the equivalent) from Standard & Poor's Ratings Services
(S&P) and Moody's Investors Service, Inc. (Moody's), respectively, or (2)
provide (a) a cash deposit of two months' maximum expected transition charge
collections, (b) an affiliate guarantee, surety bond or letter of credit
providing for payment of such amount of transition charge collections in the
event that the retail electric provider defaults in its payment obligations, or
(c) a combination of any of the foregoing. The provider of any affiliate
guarantee, surety bond or letter of credit must have and maintain long-term
unsecured credit ratings of not less than BBB- and Baa3 (or the equivalent) from
S&P and Moody's, respectively. As of March 31, 2003, retail electric providers
had satisfied the creditworthiness criteria through cash deposits, letters of
credit and affiliate guarantees aggregating approximately $1.5 million, $11.8
million and $1.0 million, respectively.

DEBT ISSUANCE COSTS. The costs associated with the issuance of the
Transition Bonds are capitalized and are being amortized over the life of the
Transition Bonds utilizing the effective interest method.

REVENUE. Beginning on October 25, 2001 and pursuant to the Financing Order,
CenterPoint Houston, as servicer of the Transition Charges (Servicer),
implemented the nonbypassable Transition Charge on behalf of the Company. The
Company records revenue for Transition Charges under the accrual method. These
revenues are generally recognized upon delivery of services by CenterPoint
Houston to retail electric providers.

AMORTIZATION. The Transition Property was recorded at acquired cost and is
being amortized over twelve years, the life of the Transition Bonds, based on
estimated revenue from Transition Charges, interest accruals and other expenses.
The Financing Order authorizing the imposition of the Transition Charges and the
issuance of the Transition Bonds limits the terms of the Transition Bonds to no
greater than 15 years. In accordance with SFAS No. 71, amortization is adjusted
for over/under collection of Transition Charges. Amortization of the Transition
Property included regulatory adjustments of $12 million for the three months
ended March 31, 2003 to defer amortization costs until periods in which
Transition Charge revenue is recorded. The Transition Charges are expected to
be reviewed and adjusted at least annually by the Texas Utility Commission to
correct any overcollections or undercollections during the preceding 12 months
and to provide for the expected recovery of amounts sufficient to timely provide
all payment of debt service and other required amounts and charges in connection
with the Transition Bonds.

INCOME TAXES. The Company is organized as a single-member limited liability
company and will not be subject to United States federal income tax as an entity
separate from CenterPoint Energy. In addition, the Company has received a ruling
from the Comptroller of Public Accounts of the State of Texas to the effect that
(i) the Company's receipt of the Transition Property, (ii) the Company's receipt
of the Transition Charges and (iii) the Company's short-term earnings from
investment of the Transition Charges will be excluded from taxable capital and
taxable earned surplus for purposes of the Texas franchise tax. Accordingly,
there is no provision for income taxes or Texas franchise taxes.

(3) LONG-TERM DEBT

Interest payments on the Transition Bonds are due semi-annually beginning
March 15, 2002 and are paid from funds deposited daily with the Trustee by
CenterPoint Houston as Servicer of the Transition Property. Principal payments
on the Transition Bonds are due semi-annually.

The source of repayment for the Transition Bonds is the Transition Charges.
The Servicer collects this non-bypassable charge from retail providers of
electricity in CenterPoint Houston's service territory. The Servicer deposits
Transition Charge collections into a General Subaccount maintained by the
Trustee. The Transition Charges collected from January 1, 2003 through March 31,
2003 were $14.3 million. A principal payment of $6.4 million was made on March
17, 2003.

6

(4) SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS

Under a sale agreement between the Company and CenterPoint Houston dated
October 24, 2001, CenterPoint Houston sold the Transition Property to the
Company. Pursuant to a servicing agreement entered between the Company and
CenterPoint Houston concurrently with the issuance of the Transition Bonds,
CenterPoint Houston is the Servicer of the Transition Property. As the Servicer,
CenterPoint Houston manages and administers the Transition Property of the
Company and collects the Transition Charges on behalf of the Company. The
Company pays a fixed annual servicing fee to CenterPoint Houston for these
services. Pursuant to an administration agreement entered into between the
Company and CenterPoint Houston, CenterPoint Houston also provides
administrative services to the Company. The Company pays CenterPoint Houston a
fixed fee for performing these services, plus all reimbursable expenses. The
Company recorded administrative and servicing fees of $0.1 million during each
of the three month periods ended March 31, 2002 and 2003.

The Company also entered into an intercreditor agreement with CenterPoint
Houston and other parties related to the servicing of the Transition Bonds. In
addition, CenterPoint Houston has agreed to indemnify the Trustee on the
Company's behalf to the extent the indemnification provided for under the
Transition Bond indenture is not recoverable from the Company as a fixed
expense.

In order to obtain the desired ratings on the Transition Bonds, CenterPoint
Houston deposited $3.0 million in a specified reserve account for the benefit of
Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as
Trustee, as cash collateral for an indemnification obligation of CenterPoint
Houston arising in connection with the issuance of the Transition Bonds. All
funds remaining in the specified reserve account less any amounts then due and
owing to Deutsche Bank Trust Company Americas will be released to CenterPoint
Houston upon final payment of the Transition Bonds.

Certain debt issuance costs paid by CenterPoint Houston were reimbursed by
the Company upon issuance of the Transition Bonds.

Subsidiaries of Reliant Resources, Inc. (Reliant Resources), a former
affiliate of the Company, collect the majority of the Transition Charges from
retail electric customers. Reliant Resources has at all times been in compliance
with the creditworthiness criteria for retail electric providers as set forth in
the Financing Order. At March 31, 2003, subsidiaries of Reliant Resources had
letters of credit aggregating approximately $10.9 million on deposit with the
Trustee. As with any retail electric provider, the Servicer is expected to
direct the Trustee to seek recourse against such letters of credit or alternate
form of credit support as a remedy for any payment default that may occur.

7

ITEM 2. MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS OF CENTERPOINT
ENERGY TRANSITION BOND COMPANY, LLC

We meet the conditions specified in General Instruction H(1)(a) and (b) to
Form 10-Q and therefore are providing the following analysis of our results of
operations using the reduced disclosure format for wholly owned subsidiaries of
reporting companies. Accordingly, we have omitted from this report the
information called for by Item 3 (Quantitative and Qualitative Disclosures About
Market Risk) of Part I and the following Part II items of Form 10-Q: Item 2
(Changes in Securities and Use of Proceeds), Item 3 (Defaults Upon Senior
Securities) and Item 4 (Submission of Matters to a Vote of Security Holders).
This analysis should be read in combination with the Interim Financial
Statements included in Item 1 of this Form 10-Q.

We are a Delaware limited liability company established in November 1999
for limited purposes. On October 24, 2001 we issued Transition Bonds and used
the net proceeds to purchase the Transition Property from Reliant Energy. As we
are restricted by our organizational documents from engaging in activities other
than those described in Item 1 (Business) of our Annual Report on Form 10-K for
the year ended December 31, 2002, income statement effects were limited
primarily to income generated from the Transition Charges, interest expense on
the Transition Bonds, amortization of the Transition Property, debt issuance
expenses and the discount on the Transition Bonds, Transition Property servicing
and administration fees and incidental investment interest income.

For the three months ended March 31, 2003, revenue from Transition Charges
was $13.4 million and investment income was $0.1 million. Interest expense of
$9.4 million related to interest on the Transition Bonds and amortization
expense of $0.4 million related to amortization of debt issuance expenses and
the discount on the Transition Bonds. Amortization of the Transition Property
included regulatory adjustments of $12 million for the three months ended March
31, 2003 to defer amortization costs until periods in which Transition Charge
revenue is recorded. We recorded administrative expenses of $0.09 million,
including servicing fees of $0.1 million for the three months ended March 31,
2003.

For the three months ended March 31, 2002, revenue from Transition Charges
was $16.2 million and investment income was $0.03 million. Interest expense of
$9.6 million relates to interest on the Transition Bonds and amortization
expense of $0.4 million relates to amortization of debt issuance expenses and
the discount on the Transition Bonds. Amortization of the Transition Property
includes regulatory adjustments of $9.4 million for the three months ended March
31, 2002. We recorded administrative expenses of $0.2 million, including bad
debt expense of $0.03 million and servicing fees of $0.1 million for the three
months ended March 31, 2002.

We use collections of Transition Charges to make scheduled principal and
interest payments on the Transition Bonds. Transition Charges, together with
interest earned on collected Transition Charges, are expected to offset (1)
interest expense on the Transition Bonds, (2) amortization of the Transition
Property, debt issuance expenses and the discount on the Transition Bonds and
(3) the fees charged by CenterPoint Houston for servicing the Transition
Property and providing administrative services to us. From the October 2001
issuance date of the Transition Bonds to the March 15, 2003 semi-annual debt
service payment date, the aggregate amount of collected Transition Charges and
interest thereon was $82.4 million, and the aggregate amount expected to have
been collected was $74.0 million. As a result of the overcollections, $8.4
million has been deposited into the Reserve Subaccount.

The Transition Charges are expected to be reviewed and adjusted at least
annually by the Public Utility Commission of Texas (Texas Utility Commission) to
correct any overcollections or undercollections during the preceding 12 months
and to provide for the expected recovery of amounts sufficient to timely provide
all payment of debt service and other required amounts and charges in connection
with the Transition Bonds.

As of March 31, 2003, one of the retail electric providers with which we do
business was in default and currently is in bankruptcy. That retail electric
provider's deposit with the trustee is more than sufficient to satisfy its
outstanding Transition Charge balance. Nevertheless, the bankruptcy court has
ruled that the entire deposit, net of the Transition Charge balance, is the
property of CenterPoint Houston. Neither we nor CenterPoint Houston has taken
any action to recover funds from this deposit to satisfy the outstanding
Transition Charge balance.

8

Holders of Transition Bonds may experience payment delays or incur losses
if our assets are not sufficient to pay interest or the scheduled principal of
the Transition Bonds. Funds for payments are dependent upon the Transition
Property and the right to collect the Transition Charges over a period limited
by Texas law to 15 years.

In addition, collections are dependent on the amount of electricity
consumed within CenterPoint Houston's service territory.

ITEM 4. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of our management,
including our principal executive officer and our principal financial officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. Based
on that evaluation, our principal executive officer and the principal financial
officer concluded that our disclosure controls and procedures are effective in
timely alerting them to material information relating to us (including our
consolidated subsidiaries) required to be included in our periodic SEC filings.
Subsequent to the date of their evaluation, there were no significant changes in
our internal controls or in other factors that could significantly affect the
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

9

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

99.1 Section 906 Certification of Gary L. Whitlock

99.2 Section 906 Certification of Marc Kilbride

(b) Reports on Form 8-K.

None.

10

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC

By: /s/ James S. Brian
-----------------------------
James S. Brian
Senior Vice President and
Chief Accounting Officer

Date: May 14, 2003

11

CERTIFICATIONS

I, Gary L. Whitlock, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CenterPoint Energy
Transition Bond Company, LLC;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: May 14, 2003

By: /s/ Gary L. Whitlock
-------------------------------------------
Gary L. Whitlock
President (Principal Executive Officer)

12

CERTIFICATIONS

I, Marc Kilbride, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CenterPoint Energy
Transition Bond Company, LLC;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: May 14, 2003

By: /s/ Marc Kilbride
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Marc Kilbride
Vice President, Treasurer and Principal Financial Officer

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