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                                                                    Exhibit 10.3

                            ADMINISTRATION AGREEMENT

      ADMINISTRATION AGREEMENT, dated as of December 16, 2005 (this
"Administration Agreement"), is by and between CENTERPOINT ENERGY TRANSITION
BOND COMPANY II, LLC, a Delaware limited liability company, as Issuer (the
"Issuer"), and CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a Texas limited
liability company ("CenterPoint Houston"), 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 the date hereof and a First Supplemental Indenture thereto, also
dated as of the date hereof (the "First Supplement") (as amended, supplemented
or otherwise modified and in effect from time to time, the "Indenture"), between
the Issuer and Wilmington Trust Company, as the Trustee, and Deutsche Bank Trust
Company Americas, 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 the
date hereof (the "Servicing Agreement"), between the Issuer and CenterPoint
Energy Houston Electric, LLC, as Servicer, (iii) the Transition Property Sale
Agreement, dated as of the date hereof (the "Sale Agreement"), between the
Issuer and CenterPoint Energy Houston Electric, LLC, as Seller, and (iv) the
Letter of Representations, dated as of December 13, 2005 (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, as such
agreements may be amended and supplemented from time to time, being referred to
hereinafter collectively as the "Initial Related Agreements");

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

      WHEREAS, the Issuer may from time to time enter into and be required to
perform certain duties under additional agreements similar to the Initial
Related Agreements in connection with the issuance of one or more additional
series of Transition Bonds (together with the Initial Related Agreements, the
"Related Agreements");

      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 clauses and to provide such additional services consistent with the
terms of this Administration 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 and to cause third parties to provide professional
      services required for or contemplated by such services in accordance with
      the provisions of this Administration Agreement:

            (i) furnish the Issuer with ordinary clerical, bookkeeping and other
      corporate administrative 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;

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            (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 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 one or more series of
      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) obtaining, maintaining or facilitating one or more letters of
      credit or obtaining, maintaining or facilitating other credit support for
      the obligations of the Issuer contemplated by any Related Agreement;

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

            (x) 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 Administration Agreement (including the
compensation of Persons serving as Managers, other than the independent
managers, and officers of the Issuer, but, for the avoidance of doubt, excluding
the performance by CenterPoint Houston of its obligations in its capacity as
Servicer), the Administrator shall be entitled to $100,000 annually (the
"Administration Fee"), payable by the Issuer in arrears proportionately on each
Payment Date. In addition, the Administrator shall be entitled to be reimbursed
by the Issuer for all costs and expenses of services performed by unaffiliated
third parties and actually incurred by the

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Administrator in connection with the performance of its obligations under this
Administration Agreement in accordance with Section 3 (but, for the avoidance of
doubt, excluding any such costs and expenses incurred by CenterPoint Houston in
its capacity as Servicer), to the extent that such costs and expenses are
supported by invoices or other customary documentation and reasonably allocated
to the Issuer ("Reimbursable Expenses"). The Administration Fee shall be
modified, and this Section 2 shall be deemed to have been amended, without
further act or deed by any Person to reflect any such modification or amendment,
to the extent provided in any financing order issued by the PUCT providing for
the issuance of an additional series of Transition Bonds.

      3. Third Party Services. Any services or fees required for or contemplated
by the performance of the above-referenced services by the Administrator to be
provided by unaffiliated third parties (including independent auditors' fees and
counsel fees) may, if provided for or otherwise contemplated by any related
financing order issued by the PUCT and if the Issuer deems it necessary or
desirable, be arranged by the Issuer or by the Administrator at the direction
(which may be general or specific) of the Issuer. Costs and expenses associated
with the contracting for such third-party services may be paid directly by the
Issuer or paid by the Administrator and reimbursed by the Issuer in accordance
with Section 2, or otherwise as the Administrator and the Issuer may mutually
arrange.

      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
Administration 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 Administration 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 members, 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
Administration Agreement shall continue in force until the payment in full of
the Transition

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Bonds and any other amount which may become due and payable under the Indenture,
upon which event this Administration 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 Administration 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 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 practicable 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 Administration 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.

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      9. Action upon Termination, Resignation or Removal. Promptly upon the
effective date of termination of this Administration 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 annual fee
described in Section 2 hereof through the date of termination and all
Reimbursable Expenses incurred by 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
members, 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 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 MEMBERS, 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 ADMINISTRATION 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
shall be in writing and addressed as follows:

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            (a)   if to the Issuer, to:

                  CenterPoint Energy Transition Bond Company II, LLC
                  1111 Louisiana Street, Suite 4655B
                  Houston, Texas 77002
                  Attention:  Manager

            (b)   if to the Administrator, to:

                  CenterPoint Energy Houston Electric, LLC
                  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 Administration 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, (ii) the Trustee shall have consented and
(iii) in the case of any amendment that increases ongoing qualified costs as
defined in the applicable financing order of the PUCT relating to a series of
Transition Bonds, the PUCT shall have consented thereto or shall be conclusively
deemed to have consented thereto. With respect to the PUCT's consent to any
amendment to this Administration 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. 30485 or to the Docket No. of
      any proceeding related to the issuance of an additional series of
      Transition Bonds and a statement as to the possible effect of the
      amendment on ongoing qualified costs;

                  (ii) an Officer's Certificate stating that the proposed
      amendment has been approved by all parties to this Administration
      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 30 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

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

unless, within 30 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 30 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 as of the last day of such extension of time. Following delivery of a
notice to the PUCT by the Administrator under Section 13(a) above, the
Administrator and Issuer may at any time withdraw from the PUCT further
consideration of any notification of a proposed amendment.

            (c) Any amendment requiring the consent of the PUCT as provided in
this Section 13 shall become effective on the later of (i) the date proposed by
the parties to such amendment and (ii) the first day after the expiration of the
30 day period provided for in Section 13(b), or, if such period has been
extended pursuant thereto, the first day after the expiration of such period as
so extended.

      14. Successors and Assigns. This Administration 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 Administration 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 Administration Agreement shall bind any
successors or assigns of the parties hereto.

      15. Governing Law. This Administration 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 effect of this Administration Agreement.

      17. Counterparts. This Administration 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 Administration Agreement.

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      18. Severability. Any provision of this Administration 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
Administration 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 Administration Agreement
to be duly executed and delivered as of the day and year first above written.

                                            CENTERPOINT ENERGY TRANSITION BOND
                                            COMPANY II, LLC,
                                                  as Issuer

                                            By: /s/ Marc Kilbride
                                                --------------------------------
                                                Marc Kilbride
                                                Manager

                                            CENTERPOINT ENERGY HOUSTON ELECTRIC,
                                            LLC,
                                                  as Administrator,

                                            By: /s/ Marc Kilbride
                                                --------------------------------
                                                Marc Kilbride
                                                Vice President and Treasurer

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