1126294--2/26/2008--RELIANT_ENERGY

related topics

{operation, natural, condition}

{system, service, information}

{interest, director, officer}

{gas, price, oil}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{cost, operation, labor}

{financial, litigation, operation}

{control, financial, internal}

{capital, credit, financial}

{product, candidate, development}

We depend on sources, facilities and systems that we do not own or control for our fuel and fuel supply and to deliver electricity to and bill our customers. Any disruption in these sources, facilities or systems could have an adverse effect on our business. The operation of generation facilities involves significant risks that could interrupt operations and increase our costs. Our business operations expose us to the risk of loss if third parties fail to perform their contractual obligations. Our costs of compliance with environmental laws are significant and can affect our future financial results. Failure to obtain or maintain any required permits or approvals could prevent or limit us from operating our business. We could be liable for a share of the payment defaults of other market participants. Significant events beyond our control, such as hurricanes and other weather-related problems or acts of terrorism, could have a material adverse effect on our business. Risks Relating to Our Retail Business Merrill Lynch provides credit support for our retail business. We depend on third parties to provide electricity to supply our retail customers. Rising power supply costs could adversely affect the financial performance of our retail electric operations. We may lose further market share in the Houston retail electricity market, which is a significant contributor of income to our consolidated results. Violations of market power standards may negatively impact the wholesale cost of power. We depend on the ISOs to communicate operating and system information in a timely and accurate manner. Information that is not accurate or timely can have an impact on our future reported financial results. Risks Related to Our Company Our borrowing levels, debt service obligations and restrictive covenants may adversely affect our business. We may be vulnerable to reductions in our cash flow. Our hedging and other risk management activities may not work as planned. Changes in the wholesale energy market or changes in our evaluation of generation assets could result in impairments. Lawsuits, regulatory proceedings and tax proceedings could adversely affect our future financial results. We have entered into outsourcing arrangements with third party service providers. In addition, our operations are highly dependent on computer and other operating systems, including telecommunications systems. Any interruptions in these arrangements or systems could significantly disrupt our business operations.

Full 10-K form ▸

1126294--2/26/2008--RELIANT_ENERGY_INC