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                                                                   Exhibit 10.3

                            ADMINISTRATION AGREEMENT

         ADMINISTRATION AGREEMENT, dated as of October 24, 2001 (this
"Administration Agreement"), is by and between RELIANT ENERGY TRANSITION BOND
COMPANY LLC, a Delaware limited liability company, as Issuer (the "Issuer"), and
RELIANT ENERGY, INCORPORATED, a Texas corporation, as Administrator (in such
capacity, the "Administrator"). Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in Appendix A to the
Indenture more fully described below.

                              W I T N E S S E T H:

         WHEREAS, the Issuer is issuing Transition Bonds pursuant to the
Indenture, dated as of October 24, 2001 and a First Supplemental Indenture
thereto, dated as of even date herewith (the "First Supplement") (as amended,
supplemented or otherwise modified and in effect from time to time, the
"Indenture"), between the Issuer and Bankers Trust Company, as the Trustee and
as Securities Intermediary;

         WHEREAS, the Issuer has entered into certain agreements in connection
with the issuance of the Transition Bonds, including (i) the Indenture and the
First Supplement, (ii) the Transition Property Servicing Agreement, dated as of
October 24, 2001 (the "Servicing Agreement"), between the Issuer and Reliant
Energy, Incorporated, as Servicer, (iii) the Transition Property Sale Agreement,
dated as of October 24, 2001 (the "Sale Agreement"), between the Issuer and
Reliant Energy, Incorporated, as Seller, and (iv) the Letter of Representations,
dated as of October 24, 2001 (the "Depository Agreement"), among the Issuer, the
Trustee and The Depository Trust Company relating to the Transition Bonds (the
Indenture, the First Supplement, the Servicing Agreement, the Sale Agreement and
the Depository Agreement being referred to hereinafter collectively as the
"Related Agreements");

         WHEREAS, pursuant to the Related Agreements, the Issuer is required to
perform certain duties in connection with the Related Agreements, the Transition
Bonds and the Trust Estate pledged to the Trustee pursuant to the Indenture;

         WHEREAS, the Issuer has no employees, other than its officers, and does
not intend to hire any employees, and consequently desires to have the
Administrator perform certain of the duties of the Issuer referred to in the
preceding clause and to provide such additional services consistent with the
terms of this Agreement and the Related Agreements as the Issuer may from time
to time request; and

         WHEREAS, the Administrator has the capacity to provide the services and
the facilities required thereby and is willing to perform such services and
provide such facilities for the Issuer on the terms set forth herein;

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         NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

               1.   Duties of the Administrator: Management Services. The
                    ------------------------------------------------
         Administrator hereby agrees to provide the following corporate
         management services to the Issuer:

               (i)  furnish the Issuer with ordinary clerical and bookkeeping
         services necessary and appropriate for the Issuer, including, without
         limitation, the following services:

                    (A) maintain at the Premises (as defined below) general
               accounting records of the Issuer (the "Account Records"), subject
               to year-end audit, in accordance with generally accepted
               accounting principles, separate and apart from its own accounting
               records, prepare or cause to be prepared such quarterly and
               annual financial statements as may be necessary or appropriate
               and arrange for year-end audits of the Issuer's financial
               statements by the Issuer's independent accountants;

                    (B) prepare and, after execution by the Issuer, file with
               the Securities and Exchange Commission (the "Commission") and any
               applicable state agencies documents required to be filed with the
               Commission and any applicable state agencies, including, without
               limitation, periodic reports required to be filed under the
               Securities Exchange Act of 1934, as amended;

                    (C) prepare for execution by the Issuer and cause to be
               filed such income, franchise or other tax returns of the Issuer
               as shall be required to be filed by applicable law (the "Tax
               Returns") and cause to be paid on behalf of the Issuer from the
               Issuer's funds any taxes required to be paid by the Issuer under
               applicable law;

                    (D) prepare or cause to be prepared for execution by the
               Issuer's Managers minutes of the meetings of the Issuer's
               Managers and such other documents deemed appropriate by the
               Issuer to maintain the separate limited liability company
               existence and good standing of the Issuer (the "Company Minutes")
               or otherwise required under the Related Agreements (together with
               the Account Records, the Tax Returns, the Company Minutes, the
               Issuer LLC Agreement, and the Issuer Certificate of Formation,
               the "Issuer Documents"); and any other documents deliverable by
               the Issuer thereunder or in connection therewith; and

                    (E) hold, maintain and preserve at the Premises (or such
               other place as shall be required by any of the Related
               Agreements) executed copies (to the extent applicable) of the
               Issuer Documents and other documents executed by the Issuer
               thereunder or in connection therewith;

               (ii) take such actions on behalf of the Issuer, as are necessary
         or desirable for the Issuer to keep in full effect its existence,
         rights and franchises as a limited liability

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          company under the laws of the state of Delaware and obtain and
          preserve its qualification to do business in each jurisdiction in
          which it becomes necessary to be so qualified;

               (iii)  provide for the issuance and delivery of the Transition
          Bonds;

               (iv)   provide for the performance by the Issuer of its
          obligations under each of the Related Agreements, and prepare, or
          cause to be prepared, all documents, reports, filings, instruments,
          notices, certificates and opinions that it shall be the duty of the
          Issuer to prepare, file or deliver pursuant to the Related Agreements;

               (v)    enforce each of the rights of the Issuer under the Related
          Agreements, at the direction of the Trustee;

               (vi)   provide for the defense, at the direction of the Issuer's
          Managers, of any action, suit or proceeding brought against the Issuer
          or affecting the Issuer or any of its assets;

               (vii)  provide office space (the "Premises") for the Issuer and
          such reasonable ancillary services as are necessary to carry out the
          obligations of the Administrator hereunder, including telecopying,
          duplicating and word processing services;

               (viii) undertake such other administrative services as may be
          appropriate, necessary or requested by the Issuer; and

               (ix)   provide such other services as are incidental to the
          foregoing or as the Issuer and the Administrator may agree.

          In providing the services under this Section 1 and as otherwise
provided under this Administration Agreement, the Administrator will not
knowingly take any actions on behalf of the Issuer which (i) the Issuer is
prohibited from taking under the Related Agreements, or (ii) would cause the
Issuer to be in violation of any federal, state or local law or the Issuer LLC
Agreement.

          2. Compensation. As compensation for the performance of the
             ------------
Administrator's obligations under this Agreement (including the compensation of
Persons serving as Managers, other than the Independent Managers, and officers
of the Issuer), the Administrator shall be entitled to $50,000 every six months,
payable in arrears on each Payment Date, plus all reimbursable expenses.

          3. Third Party Services. Any third-party professional services
             --------------------
required for the performance of the above-referenced services by the
Administrator (including independent auditors' fees and counsel fees) may, if
the Issuer deems it necessary or desirable, be arranged by the Issuer. Costs and
expenses associated with the contracting for such third-party professional
services shall be paid directly by the Issuer, unless otherwise agreed by the
Administrator and the Issuer.

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     4.  Additional Information to be Furnished to the Issuer. The Administrator
         ----------------------------------------------------
shall furnish to the Issuer from time to time such additional information
regarding the Trust Estate as the Issuer shall reasonably request.

     5.  Independence of the Administrator. For all purposes of this Agreement,
         ---------------------------------
the Administrator shall be an independent contractor and shall not be subject to
the supervision of the Issuer with respect to the manner in which it
accomplishes the performance of its obligations hereunder. Unless expressly
authorized by the Issuer, the Administrator shall have no authority, and shall
not hold itself out as having the authority, to act for or represent the Issuer
in any way and shall not otherwise be deemed an agent of the Issuer.

     6.  No Joint Venture. Nothing contained in this Agreement (a) shall
         ----------------
constitute the Administrator and the Issuer as partners or co-members of any
partnership, joint venture, association, syndicate, unincorporated business or
other separate entity, (b) shall be construed to impose any liability as such on
either of them or (c) shall be deemed to confer on either of them any express,
implied or apparent authority to incur any obligation or liability on behalf of
the other.

     7.  Other Activities of Administrator. Nothing herein shall prevent the
         ---------------------------------
Administrator or any of its shareholders, members, directors, managers,
officers, employees, subsidiaries or affiliates from engaging in other
businesses or, in its sole discretion, from acting in a similar capacity as an
Administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer.

     8.  Term of Agreement; Resignation and Removal of Administrator. (a) This
         -----------------------------------------------------------
Agreement shall continue in force until the payment in full of the Transition
Bonds and any other amount which may become due and payable under the Indenture,
upon which event this Agreement shall automatically terminate.

     (b) Subject to Sections 8(e) and 8(f), the Administrator may resign its
duties hereunder by providing the Issuer with at least sixty (60) days' prior
written notice.

     (c) Subject to Sections 8(e) and 8(f), the Issuer may remove the
Administrator without cause by providing the Administrator with at least sixty
(60) days' prior written notice.

     (d) Subject to Sections 8(e) and 8(f), at the sole option of the Issuer,
the Administrator may be removed immediately upon written notice of termination
from the Issuer to the Administrator if any of the following events shall occur:

         (i)  The Administrator shall default in the performance of any of its
     duties under this Agreement and, after notice of such default, shall fail
     to cure such default within ten (10) days (or, if such default cannot be
     cured in such time, shall (A) fail to give within ten (10) days such
     assurance of cure as shall be reasonably satisfactory to the Issuer and (B)
     fail to cure such default within 30 days thereafter);

         (ii) a court of competent jurisdiction shall enter a decree or order
     for relief, and such decree or order shall not have been vacated within
     sixty (60) days, in respect of the Administrator in any involuntary case
     under any applicable bankruptcy, insolvency or

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     other similar law now or hereafter in effect, or such court shall appoint a
     receiver, liquidator, assignee, custodian, Trustee, sequestrator or similar
     official for the Administrator or any substantial part of its property or
     order the winding-up or liquidation of its affairs; or

          (iii) the Administrator shall commence a voluntary case under any
     applicable bankruptcy, insolvency or other similar law now or hereafter in
     effect, shall consent to the entry of an order for relief in an involuntary
     case under any such law, shall consent to the appointment of a receiver,
     liquidator, assignee, Trustee, custodian, sequestrator or similar official
     for the Administrator or any substantial part of its property, shall
     consent to the taking of possession by any such official of any substantial
     part of its property, shall make any general assignment for the benefit of
     creditors or shall fail generally to pay its debts as they become due.

The Administrator agrees that if any of the events specified in clauses (ii) or
(iii) of this Section 8(d) shall occur, it shall give written notice thereof to
the Issuer and the Trustee as soon as possible but in any event within seven (7)
days after the happening of such event.

     (e)  No resignation or removal of the Administrator pursuant to this
Section shall be effective until a successor Administrator has been appointed by
the Issuer, and such successor Administrator has agreed in writing to be bound
by the terms of this Agreement in the same manner as the Administrator is bound
hereunder.

     (f)  The appointment of any successor Administrator shall be effective only
after satisfaction of the Rating Agency Condition with respect to the proposed
appointment.

     9.   Action upon Termination, Resignation or Removal. Promptly upon the
          -----------------------------------------------
effective date of termination of this Agreement pursuant to Section 8(a), the
resignation of the Administrator pursuant to Section 8(b) or the removal of the
Administrator pursuant to Section 8(c) or 8(d), the Administrator shall be
entitled to be paid a pro-rated portion of the semi-annual fee described in
Section 2 hereof through the date of termination and all reimbursable expenses
accruing to it through the date of such termination, resignation or removal. The
Administrator shall forthwith upon such termination pursuant to Section 8(a)
deliver to the Issuer all property and documents of or relating to the Trust
Estate then in the custody of the Administrator. In the event of the resignation
of the Administrator pursuant to Section 8(b) or the removal of the
Administrator pursuant to Section 8(c) or 8(d), the Administrator shall
cooperate with the Issuer and take all reasonable steps requested to assist the
Issuer in making an orderly transfer of the duties of the Administrator.

     10.  Administrator's Liability. Except as otherwise provided herein, the
          -------------------------
Administrator assumes no liability other than to render or stand ready to render
the services called for herein, and neither the Administrator nor any of its
shareholders, members, directors, managers, officers, employees, subsidiaries or
affiliates shall be responsible for any action of the Issuer or any of the
members, managers, officers, employees, subsidiaries or affiliates of the Issuer
(other than the Administrator itself). The Administrator shall not be liable for
nor shall it have any obligation with regard to any of the liabilities, whether
direct or indirect, absolute or contingent of the

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Issuer or any of the members, managers, officers, employees, subsidiaries or
affiliates of the Issuer (other than the Administrator itself).

     11.  Indemnity.
          ---------

          (a)  Subject to the priority of payments set forth in the Indenture,
the Issuer shall indemnify the Administrator, its shareholders, members,
directors, managers, officers, employees and Affiliates against all losses,
claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation therefor whether
or not the Administrator is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement and the services called for herein;
provided, however, that such indemnity shall not apply to any such loss, claim,
damage, penalty, judgment, liability or expense resulting from the
Administrator's negligence or willful misconduct in the performance of its
obligations hereunder.

          (b)  the Administrator shall indemnify the Issuer, its members,
Managers, officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Issuer is a party
thereto) which any of them may incur as a result of the Administrator's
negligence or willful misconduct in the performance of its obligations
hereunder.

     12.  Notices. Any notice, report or other communication given hereunder
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shall be in writing and addressed as follows:

          (a)  if to the Issuer, to:

               Reliant Energy Transition Bond Company LLC
               1111 Louisiana Street, Suite 4667
               Houston, Texas 77002
               Attention: Manager

          (b)  if to the Administrator, to:

               Reliant Energy, Incorporated
               1111 Louisiana Street
               Houston, Texas 77002
               Attention: Treasurer

or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.

     13.  Amendments. This Agreement may be amended from time to time by a
          ----------
written amendment duly executed and delivered by each of the Issuer and the
Administrator, provided that (i) the Rating Agency Condition has been satisfied
in connection therewith and (ii) the Trustee and the PUCT shall have consented
thereto or shall be conclusively deemed to have

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consented thereto, as the case may be. With respect to the PUCT's consent to any
amendment to this Agreement,

          (a)  the Administrator may request the consent of the PUCT by
delivering to the PUCT's executive director and general counsel a written
request for such consent, which request shall contain:

               (i)   a reference to Docket No. 21655;

               (ii)  an Officer's Certificate stating that the proposed
     amendment has been approved by all parties to this Agreement; and

               (iii) a statement identifying the person to whom the PUCT or its
     staff is to address its consent to the proposed amendment or request
     additional time;

          (b)  The PUCT shall, within fifteen days of receiving the request for
consent complying with Section 13(a) above, either

               (i)   provide notice of its consent or lack of consent to the
     person specified in Section 13(a)(iii) above, or

               (ii)  be conclusively deemed to have consented to the proposed
     amendment,

unless, within fifteen days of receiving the request for consent complying with
Section 13(a) above, the PUCT or its staff delivers to the office of the person
specified in Section 13(a)(iii) above a written statement requesting an
additional amount of time not to exceed thirty days in which to consider whether
to consent to the proposed amendment. If the PUCT or its staff requests an
extension of time in the manner set forth in the preceding sentence, then the
PUCT shall either provide notice of its consent or lack of consent to the person
specified in Section 13(a)(iii) above no later than the last day of such
extension of time or be conclusively deemed to have consented to the proposed
amendment on the last day of such extension of time.

     14.  Successors and Assigns. This Agreement may not be assigned by the
          ----------------------
Administrator unless such assignment is previously consented to in writing by
the Issuer and the Trustee and subject to the satisfaction of the Rating Agency
Condition in connection therewith. Any assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee hereunder in
the same manner as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator without the
consent of the Issuer or the Trustee to a corporation or other organization that
is a successor (by merger, consolidation or purchase of assets) to the
Administrator; provided that such successor organization executes and delivers
to the Issuer an Agreement in which such corporation or other organization
agrees to be bound hereunder by the terms of said assignment in the same manner
as the Administrator is bound hereunder. Subject to the foregoing, this
Agreement shall bind any successors or assigns of the parties hereto.

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     15.  Governing Law. This Agreement shall be construed in accordance with
          -------------
the laws of the State of Texas, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.

     16.  Headings. The Section headings hereof have been inserted for
          -------
convenience of reference only and shall not be construed to affect the meaning,
construction or affect of this Agreement.

     17.  Counterparts. This Agreement may be executed in counterparts, each of
          ------------
which when so executed shall be an original, but all of which together shall
constitute but one and the same Agreement.

     18.  Severability. Any provision of this Agreement that is prohibited or
          ------------
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

     19.  Nonpetition Covenant. Notwithstanding any prior termination of this
          --------------------
Agreement, the Administrator covenants that it shall not, prior to the date
which is one year and one day after payment in full of the Transition Bonds,
acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

                                        RELIANT ENERGY TRANSITION BOND
                                        COMPANY LLC, as Issuer


                                        By:  ___________________________________
                                             Name:
                                             Title:

                                        RELIANT ENERGY, INCORPORATED, as
                                        Administrator


                                        By:  ___________________________________
                                             Name:
                                             Title:

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