Document:

<PAGE>

                                                                   Exhibit 10.31

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

         This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), dated as
of April 1, 2003, is entered into by and among Hopkins County Coal, LLC, a
Delaware limited liability company ("Assignor"), and Warrior Coal, LLC, a
Delaware limited liability company ("Assignee"), and SynFuel Solutions Operating
LLC, a Delaware limited liability company ("SSO"). Assignor, Assignee and SSO
may be referred to herein individually as a "Party", and collectively as the
"Parties."

Recitals:

         A.       Assignor and SSO are parties to that certain Coal Feedstock
Supply Agreement dated October 26, 2001, as previously and further amended (the
"Coal Feedstock Supply Agreement"), and all of the Coal Purchase Orders entered
into pursuant to the Coal Feedstock Supply Agreement (collectively with the Coal
Feedstock Supply Agreement, the "Contracts"), pursuant to which Assignor agreed
to sell to SSO, and SSO agreed to purchase from Assignor, certain quantities of
Coal.

         B.       Assignor desires to assign to Assignee, and Assignee desires
to accept and assume from Assignor, all rights and obligations of Assignor
arising under the Contracts from and after the Effective Date.

         C.       Capitalized terms not otherwise defined in this Agreement are
used herein as such terms are defined in the Coal Feedstock Supply Agreement.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:

         1.       Assignment. Assignor hereby assigns to Assignee, its
successors and assigns, all of Assignor's rights, titles and interests under the
Contracts and all obligations of Assignor arising therefrom and relating to
periods from and after the Effective Date.

         2.       Acceptance and Assumption. Assignee hereby accepts the
assignment of all of Assignor's rights, titles and interests under the
Contracts, agrees to be bound by all of the terms, covenants and conditions
thereof, and hereby assumes all of Assignor's obligations arising under the
Contracts and relating to periods from and after the Effective Date.

         3.       Effectiveness. This Agreement, and the assignment provided for
herein, will have effect from and after, and not before, the date on which SSO
notifies Assignor and Assignee in writing that the conditions precedent to the
commencement of the relocation of the Coal Synfuel Plant to the Warrior Site
that are set forth in paragraph 3 of the Letter Agreement dated February 1, 2003
among Assignor, Assignee and SSO have been satisfied or waived by SSO (the
"Effective Date").

         4.       Consent. SSO hereby consents to the foregoing assignment.

<PAGE>

         5.       Warranties.

         (a)      Each Party hereby represents and warrants to the others that
the execution, delivery and performance hereof by it are within its corporate or
other organizational powers, and have been duly authorized by all necessary
corporate or other organizational action and that this Agreement constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms (except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles).

         (b)      Each Party hereby represents and warrants to the others that
neither the execution, delivery and performance of this Agreement, nor the sale,
transfer, and assignment of the rights, titles and interests under the Contracts
and all obligations of Assignor arising from the Contracts pursuant to this
Agreement, will require any consent, approval, authorization or permit of, or
filing with or notification to, any person or governmental or regulatory
authority.

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         IN WITNESS WHEREOF, each party has caused this Agreement to be executed
by its duly authorized representative as of the date first set forth above:

                        ASSIGNOR:

                        HOPKINS COUNTY COAL, LLC

                        By: /s/ Gary J. Rathburn
                             -------------------------------------------------
                        Name: Gary J. Rathburn
                        Title: Senior Vice President - Marketing

                        ASSIGNEE:

                        WARRIOR COAL, LLC

                        By: /s/ Gary J. Rathburn
                            -------------------------------------------------
                        Name: Gary J. Rathburn
                        Title: Senior Vice President - Marketing

                        SYNFUEL SOLUTIONS OPERATING LLC

                         By: SynFuel Solutions LLC,
                             its Managing Member

                             By: SynFuel Solutions Holdings LLC,
                                 its Managing Member

                                 By: /s/ Joseph E. Slamm, III
                                     ----------------------------------------
                                 Name: Joseph E. Slamm, III
                                 Title: Vice President

              Signature Page to Assignment and Assumption Agreement<PAGE>

                                                                EXHIBIT 4(e)(10)

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                              OFFICER'S CERTIFICATE

                                October 10, 2002

I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the Manager of the
Company dated October 10, 2002, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture, unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:

1.       The terms and conditions of the Securities of the series described in
this Officer's Certificate are as follows (the numbered subdivisions set forth
in this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):

         (1)      The Securities of the first series to be issued under the
         Indenture shall be designated "General Mortgage Bonds, Series A, due
         October 9, 2003" (the "Series A Bonds").

         (2)      The Series A Bonds shall be authenticated and delivered in the
         aggregate principal amount of $850,000,000.

         (3)      Not applicable.

         (4)      The principal of all Series A Bonds shall be payable by the
         Company in whole or in installments on such date or dates as the
         Company has any obligations under the Credit Agreement, dated as of
         October 10, 2002 (the "Credit Agreement"), among Citibank, N.A., as
         syndication agent, JPMorgan Chase Bank, as administrative agent (the
         "Administrative Agent") and the Banks from time to time parties
         thereto, to repay any Loans (as defined in the Credit Agreement) to the
         Banks (whether upon scheduled maturity, required prepayment,
         acceleration, demand or otherwise), but not later than October 9, 2003.
         The amount of principal of the Series A Bonds payable by the Company on
         any such date shall equal the aggregate principal amount of the Loans
         due and payable on such date pursuant to the Credit Agreement (but, in
         no event, shall exceed the aggregate principal amount of the Series A
         Bonds). The obligation of the Company to make any payment of the
         principal on the Series A Bonds shall be fully or partially, as the
         case may be, deemed to have been paid or otherwise satisfied and
         discharged to the extent that the Company has paid the principal then
         due and payable on the Loans made pursuant to the Credit Agreement.

         (5)      The Series A Bonds shall bear interest from the time
         hereinafter provided at such rate per annum as shall cause the amount
         of interest payable on each Interest Payment

<PAGE>

         Date (as hereinafter defined) on the Series A Bonds to equal the amount
         of interest payable on such Interest Payment Date under the Credit
         Agreement. Such interest on the Series A Bonds shall be payable on the
         same dates as interest is payable from time to time pursuant to the
         Credit Agreement (each such date herein called an "Interest Payment
         Date"), until the maturity of the Series A Bonds, or, in the case of
         any default by the Company in the payment of the principal due on the
         Series A Bonds, until the Company's obligation with respect to the
         payment of such principal shall be discharged as provided in the
         Indenture. The amount of interest payable from time to time under the
         Credit Agreement, the basis on which such interest is computed and the
         dates on which such interest is payable are set forth in the Credit
         Agreement. Each Series A Bond shall bear interest (a) from the date of
         initial authentication of this Bond to but excluding the Interest
         Payment Date next succeeding, and (b) from each Interest Payment Date
         to but excluding the Interest Payment Date next succeeding. The
         obligation of the Company to make any payment of interest on the Series
         A Bonds shall be fully or partially, as the case may be, deemed to have
         been paid or otherwise satisfied and discharged to the extent that the
         Company has paid the interest on the Loans then due and payable
         pursuant to the Credit Agreement.

         (6)      The Corporate Trust Office of JPMorgan Chase Bank in Houston,
         Texas shall be the place at which (i) the principal of and interest on
         the Series A Bonds shall be payable, (ii) registration of transfer of
         the Series A Bonds may be effected, (iii) exchanges of the Series A
         Bonds may be effected and (iv) notices and demands to or upon the
         Company in respect of the Series A Bonds and the Indenture may be
         served; and JPMorgan Chase Bank shall be the Security Registrar for the
         Series A Bonds; provided, however, that the Company reserves the right
         to change, by one or more Officer's Certificates, any such place or the
         Security Registrar; and provided, further, that the Company reserves
         the right to designate, by one or more Officer's Certificates, its
         principal office in Houston, Texas as any such place or itself as the
         Security Registrar; provided, however, that there shall be only a
         single Security Registrar for the Series A Bonds. The principal of the
         Series A Bonds shall be payable without the presentment or surrender
         thereof.

         (7)      Not applicable.

         (8)      Not applicable.

         (9)      The Series A Bonds are issuable only in denominations of
         $850,000,000.

         (10)     Not applicable.

         (11)     Not applicable.

         (12)     Not applicable.

         (13)     See subsection (4) above.

         (14)     Not applicable.

         (15)     Not applicable.

<PAGE>

         (16)     Not applicable.

         (17)     The Series A Bonds shall be evidenced by a single registered
         Series A Bond in the principal amount and denomination of Eight Hundred
         Fifty Million Dollars ($850,000,000). The Series A Bonds shall be dated
         October 10, 2002, shall mature no later than October 9, 2003, unless
         sooner paid, and shall bear interest at the rate specified in
         subsection (5) above. The Series A Bonds may be executed by the Company
         and delivered to the Trustee for authentication and delivery. The
         principal of and interest on the Series A Bonds shall be payable at the
         Corporate Trust Office of the Trustee in Houston, Texas.

         The single Series A Bond shall be identified by the number A-1 and
         shall upon issuance be delivered by the Company to, and registered in
         the name of, the Administrative Agent, on behalf of itself and the
         Banks, and shall be transferable only as required to effect an
         assignment thereof to a successor or an assign of the Administrative
         Agent under the Credit Agreement and provided that all obligations of
         the Administrative Agent under the Pledge Agreement (as defined below)
         shall also be transferred to, and assumed by, any such successor or
         assign. The Series A Bonds are to be issued to the Administrative Agent
         as security for the payment by the Company of its Obligations (as
         defined in the Pledge Agreement). The single Series A Bond shall be
         held by the Administrative Agent subject to the terms of the Pledge
         Agreement, dated as of October 10, 2002, between the Company and the
         Administrative Agent (the "Pledge Agreement").

         Series A Bonds issued upon transfer shall be numbered consecutively
         from A-2 upwards and issued in the same $850,000,000 denomination but,
         to the extent that the Loans are repaid, the registered holder thereof
         shall duly note on the Series A Bonds like reduction in the amount of
         principal in the Schedule of Prepayments to such Series A Bond and upon
         any transfer of said Series A Bond, such Schedule of Prepayments shall
         transfer to the subsequently issued Series A Bond. See also subsection
         (19) below.

         (18)     Not applicable.

         (19)     The holder of the Series A Bond by acceptance of the Series A
         Bond agrees to restrictions on transfer and to waivers of certain
         rights of exchange as set forth herein. The Series A Bonds have not
         been registered under the Securities Act of 1933 and may not be
         offered, sold or otherwise transferred in the absence of such
         registration or an applicable exemption therefrom. No service charge
         shall be made for the registration of transfer or exchange of the
         series A Bonds, or any Tranche thereof; provided, however, that the
         Company may require payment of a sum sufficient to cover any tax or
         other governmental charge payable in connection with the exchange or
         transfer.

         (20)     For purposes of the Series A Bonds, "Business Day" shall mean
         a day other than a Saturday, Sunday or other day on which commercial
         banks in New York City are authorized or required by law to close.

         (21)     Not Applicable.

<PAGE>

         (22)     The Trustee may conclusively presume that the obligation of
         the Company to pay the principal of and interest on the Series A Bond
         shall have been fully satisfied and discharged unless and until it
         shall have received a written notice from the Administrative Agent,
         signed by an authorized officer of the Administrative Agent and
         attested by the Secretary or an Assistant Secretary of the
         Administrative Agent within 90 days after the applicable Interest
         Payment Date, stating that the payment of principal of or interest on
         the Series A Bond has not been fully paid when due and specifying the
         amount of funds required to make such payment.

         The Series A Bonds shall have such other terms and provisions as are
         provided in the form thereof attached hereto as Exhibit A, and shall be
         issued in substantially such form.

2.       The undersigned has read all of the covenants and conditions contained
in the Indenture, and the definitions in the Indenture relating thereto,
relating to the issuance of the Series A Bonds and in respect of compliance with
which this certificate is made.

3.       The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.

4.       In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.

         In the opinion of the undersigned, such conditions and covenants have
been complied with.

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this Officer's
Certificate on this 10th day of October, 2002.

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

Acknowledged and Received on
October 10, 2002

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Ronda L. Parmen
    ----------------------------------------
Name: Ronda L. Parmen
Title: Vice President and Trust Officer

<PAGE>

                                                                       EXHIBIT A

                             FORM OF SERIES A BOND

<PAGE>

NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON
TRANSFER AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE
BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE
WITH APPLICABLE SECURITIES LAWS.

THIS BOND IS NOT TRANSFERABLE EXCEPT COLLATERAL TO A SUCCESSOR OR ASSIGN OF THE
ADMINISTRATIVE AGENT UNDER THE COLLATERAL AGREEMENT REFERRED TO HEREIN AMONG THE
COMPANY AND THE SEVERAL PARTIES THERETO.

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
              General Mortgage Bonds, Series A, due October 9, 2003

<Table>
<S>                                 <C>                       <C>                                <C>       <C>
Original Interest Accrual Date:     October 10, 2002          Redeemable by Company:             Yes [ ]   No [X]
Stated Maturity:                    October 9, 2003           Redemption Date:  N/A
Interest Rate:                      See below                 Redemption Price: N/A
Interest Payment Dates:             See below
Regular Record Dates:               N/A
</Table>

               This Security is not an Original Discount Security
              within the meaning of the within-mentioned Indenture.

                                   ----------

Principal Amount
$850,000,000                                                         No. A-1

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a limited liability company duly
organized and existing under the laws of the State of Texas (herein called the
"Company," which term includes any successor under the Indenture referred to
below), for value received, hereby promises to pay to JPMorgan Chase Bank, as
Administrative Agent (the "Administrative Agent"), or its registered assigns, on
behalf of itself and the Banks (as defined below), the principal sum of EIGHT
HUNDRED FIFTY MILLION DOLLARS, or such lesser principal amount as shall be equal
to the aggregate principal amount of Loans (as defined in the Credit Agreement
defined below) outstanding from time to time under the Credit Agreement (as
defined below), in whole or in installments on such date or dates as the Company
has any obligations under the Credit Agreement to repay any Loans to the Banks
(whether upon scheduled maturity, required prepayment, acceleration, demand or
otherwise), but not later than the Stated Maturity specified above. The amount
of principal of this Bond payable by the Company on any such date shall equal
the aggregate principal amount of the Loans due and payable on such date
pursuant to the Credit Agreement (but, in no event, shall exceed the principal
amount of this Bond). The obligation of the Company to make any payment of the
principal on this Bond shall be fully or partially, as the case may be, deemed
to have been paid or otherwise satisfied and discharged to the extent that the
Company has paid the principal then due and payable on the Loans made pursuant
to the Credit Agreement.

Interest shall be payable on this Bond on each Interest Payment Date (as
hereinafter defined) at such rate per annum as shall cause the amount of
interest payable on such Interest Payment Date on this Bond to equal the amount
of interest payable on such Interest Payment Date under the Credit Agreement.
Such interest shall be payable on the same dates as interest is payable from
time to time in respect of the Loans pursuant to the Credit Agreement (each such
date herein called an "Interest Payment Date"), until the maturity of this Bond,
or, if the Company shall default in the payment of the principal due on this
Bond, until the Company's obligation with respect to the payment of such
principal shall be discharged as provided in the Indenture. The amount of
interest payable from time to time under the Credit Agreement, the basis on
which such interest is computed and the dates on which such interest is payable

<PAGE>

are set forth in the Credit Agreement. This Bond shall bear interest (a) from
the date of initial authentication of this Bond to but excluding the Interest
Payment Date next succeeding, and (b) from each Interest Payment Date to but
excluding the Interest Payment Date next succeeding. The obligation of the
Company to make any payment of interest on this Bond shall be fully or
partially, as the case may be, deemed to have been paid or otherwise satisfied
and discharged to the extent that the Company has paid the interest on the Loans
then due and payable pursuant to the Credit Agreement.

This Bond is issued to the Administrative Agent by the Company pursuant to the
Company's obligations under the Credit Agreement, dated as of October 10, 2002
(as amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement"), among the Company, Citibank, N.A., as Syndication Agent,
JPMorgan Chase Bank, as Administrative Agent, and the banks and other financial
institutions from time to time parties thereto (the "Banks"). This Bond shall be
held by the Administrative Agent subject to the terms of the Pledge Agreement,
dated as of October 10, 2002, between the Company, the Administrative Agent and
the Administrative Agent in such capacity under the Credit Agreement. Any
capitalized terms used herein and not defined herein shall have the meanings
specified in the Indenture (as defined below), unless otherwise noted.

The Administrative Agent shall surrender this Bond to the Trustee when all of
the principal of and interest on the Loans made pursuant to the Credit Agreement
shall have been duly paid and the Credit Agreement shall have been terminated.

Payments of the principal of and interest on this Bond shall be made at the
Corporate Trust Office of JPMorgan Chase Bank, as Trustee, located at 600 Travis
Street, Suite 1150, Houston, Texas 77002, or at such other office or agency as
may be designated for such purpose by the Company from time to time. Payment of
the principal of and interest on this Bond, as aforesaid, shall be made in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts.

This Bond is one of a duly authorized issue of securities of the Company (herein
called the "Securities"), issued and issuable in one or more series under and
equally secured by a General Mortgage Indenture, dated as of October 10, 2002
(such Indenture as originally executed and delivered and as supplemented or
amended from time to time thereafter, together with any constituent instruments
establishing the terms of particular Securities, being herein called the
"Indenture"), between the Company and JPMorgan Chase Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the property mortgaged, pledged and held in
trust, the nature and extent of the security and the respective rights,
limitations of rights, duties and immunities of the Company, the Trustee and the
Holders of the Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered and secured. The
acceptance of this Bond shall be deemed to constitute the consent and agreement
by the Holder hereof to all of the terms and provisions of the Indenture. This
Bond is one of the series designated above.

The Bonds of this series will not be entitled to the benefit of any sinking fund
or voluntary redemption provisions.

If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of this Bond may be declared due and payable in the
manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; PROVIDED, HOWEVER, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and

<PAGE>

PROVIDED, FURTHER, that the Indenture permits the Trustee to enter into one or
more supplemental indentures for limited purposes without the consent of any
Holders of Securities. The Indenture also contains provisions permitting the
Holders of a majority in principal amount of the Securities then Outstanding, on
behalf of the Holders of all Securities, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Bond shall be conclusive and binding upon such Holder and upon all future
Holders of this Bond and of any Security issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond.

As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond is registrable in the Security Register, upon
surrender of this Bond for registration of transfer at the Corporate Trust
Office of JPMorgan Chase Bank in Houston, Texas or such other office or agency
as may be designated by the Company from time to time, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series of authorized denominations and of like tenor and aggregate principal
amount, will be issued to the designated transferee or transferees.

This Bond has been issued by the Company to the Administrative Agent for the
benefit of the holders of the Loans to (i) provide security for the payment of
the Company's obligations on the Loans under the Credit Agreement and (ii)
provide to the holders of such Loans the benefits of the security provided for
this Bond pursuant to the Indenture.

The Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the person in whose name this Bond shall be registered upon the
Security Register for the Bonds of this series as the absolute owner of such
Bond for the purpose of receiving payment of or on account of the principal of
and interest on this Bond and for all other purposes, whether or not this Bond
be overdue, and neither the Company nor the Trustee shall be affected by any
notice to the contrary; and all such payments so made to such registered owner
or upon his order shall be valid and effectual to satisfy and discharge the
liability upon this Bond to the extent of the sum or sums paid.

The Trustee may conclusively presume that the obligation of the Company to pay
the principal of and interest on this Bond shall have been fully satisfied and
discharged unless and until it shall have received a written notice from the
Administrative Agent, signed by an authorized officer of the Administrative
Agent and attested by the Secretary or an Assistant Secretary of the
Administrative Agent within 90 days after the applicable Interest Payment Date,
stating that the payment of principal of or interest on this Bond has not been
fully paid when due and specifying the amount of funds required to make such
payment.

Before any transfer of this Bond by the registered holder or his or its legal
representative will be recognized or given effect by the Company or the Trustee,
the registered holder shall note the amounts of all reductions in the principal
of the Loans under the Credit Agreement, and shall notify the Company and the
Trustee of the name and address of the transferee and shall afford the Company
and the Trustee the opportunity of verifying the notation as to such reductions.
By acceptance hereof the holder of this Bond and each transferee shall be deemed
to have agreed to indemnify and hold harmless the Company and the Trustee
against all losses, claims, damages or liability arising out of any failure on
part of the holder or of any such transferee to comply with the requirements of
the preceding sentence.

No recourse under or upon any obligation, covenant or agreement contained in the
Indenture or in any indenture supplemental thereto, or in any Bond or coupon
thereby secured, or because of any indebtedness thereby secured, shall be had
against any incorporator, member, manager, stockholder, officer, director or
employee, as such, past, present or future, of the Company or any predecessor or
successor corporation or company, either directly or through the Company or any
predecessor or successor corporation or company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that the
Indenture, any indenture supplemental thereto and the obligations thereby
secured, are solely corporate obligations of the Company, and that no personal
liability whatsoever shall attach to, or be incurred by, such incorporators,
members, managers, stockholders, officers, directors or employees, as such, of
the Company or of any predecessor or successor corporation or company, or any of
them, because of the creation of the indebtedness thereby authorized, or under
or by reason of any of the obligations, covenants or agreements contained in the
Indenture or in any indenture supplemental thereto or in any of the Bonds or
coupons thereby secured, or implied therefrom.

This Bond shall be governed by and construed in accordance with the law of the
State of New York except as provided in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Bond shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

           [The remainder of this page is intentionally left blank.]

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                   CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                                   By:
                                       --------------------------------------
                                        Name:
                                        Title:

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Date of Authentication: October 10, 2002

                                    JPMORGAN CHASE BANK, as Trustee

                                    By:
                                       --------------------------------------
                                       Authorized Signatory

<PAGE>

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                              OFFICER'S CERTIFICATE

                                October 10, 2002

I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the Manager of the
Company dated October 10, 2002, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:

1.       The terms and conditions of the Securities of the series described in
this Officer's Certificate are as follows (the numbered subdivisions set forth
in this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):

         (1)      The Securities of the second series to be issued under the
         Indenture shall be designated "General Mortgage Bonds, Series B, due
         November 1, 2018" (the "Series B Bonds").

         (2)      The Series B Bonds shall be initially authenticated and
         delivered in the aggregate principal amount of $50,000,000.

         (3)      Not applicable.

         (4)      The Series B Bonds shall mature and the principal thereof
         shall be due and payable together with all accrued and unpaid interest
         thereon on November 1, 2018. The obligation of the Company to make any
         payment of principal on this Bond shall be fully or partially, as the
         case may be, deemed to have been paid or otherwise satisfied and
         discharged to the extent CenterPoint Energy, Inc. ("CenterPoint") has
         paid to the Trust Indenture Trustee the Installment Payment (as defined
         below) in respect of the principal then due and payable on the Bonds
         (as such term is defined in the Trust Indenture, and hereinafter
         referred to as the "Series 1997 BR Bonds").

         (5)      The Series B Bonds shall bear interest from the time
         hereinafter provided at such rate per annum as shall cause the amount
         of interest payable on each Interest Payment Date (as hereinafter
         defined) on the Series B Bonds to equal the amount of regularly
         scheduled interest payable on such Interest Payment Date

                                       1

<PAGE>

         under the Trust Indenture dated as of January 1, 1997 (as amended and
         supplemented, the "Trust Indenture") between Brazos River Authority
         (the "Issuer") and Bank One Trust Company, National Association
         (successor to The First National Bank of Chicago), as trustee (the
         "Trust Indenture Trustee") in respect of the Series 1997 BR Bonds. Such
         interest on the Series B Bonds shall be payable on the same dates as
         interest is payable from time to time in respect of the Series 1997 BR
         Bonds pursuant to the Trust Indenture (each such date herein called an
         "Interest Payment Date"), until the maturity of the Series B Bonds, or,
         in the case of any default by the Company in the payment of the
         principal due on the Series B Bonds, until the Company's obligation
         with respect to the payment of such principal shall be discharged as
         provided in the Indenture. The amount of interest payable from time to
         time in respect of the Series 1997 BR Bonds under the Trust Indenture,
         the basis on which such interest is computed and the dates on which
         such interest is payable are set forth in the Trust Indenture. Each
         Series B Bond shall bear interest from the later of the date of initial
         authentication of such Series B Bond or the most recent Interest
         Payment Date to which interest has been paid. The obligation of the
         Company to make any payment of interest on the Series B Bonds shall be
         fully or partially, as the case may be, deemed to have been paid or
         otherwise satisfied and discharged to the extent that CenterPoint has
         paid to the Trust Indenture Trustee the Installment Payment in respect
         of the interest then due and payable on the Series 1997 BR Bonds.

         (6)      The Corporate Trust Office of JPMorgan Chase Bank in Houston,
         Texas, shall be the place at which (i) the principal of, premium and
         interest on, the Series B Bonds shall be payable, (ii) registration of
         transfer of the Series B Bonds may be effected, (iii) exchanges of the
         Series B Bonds may be effected and (iv) notices and demands to or upon
         the Company in respect of the Series B Bonds and the Indenture may be
         served; and JPMorgan Chase Bank shall be the Security Registrar for the
         Series B Bonds; provided, however, that the Company reserves the right
         to change, by one or more Officer's Certificates, any such place or the
         Security Registrar; and provided, further, that the Company reserves
         the right to designate, by one or more Officer's Certificates, its
         principal office in Houston, Texas as any such place or itself as the
         Security Registrar; provided, however, that there shall be only a
         single Security Registrar for the Series B Bonds.

         (7)      Not applicable.

                                       2

<PAGE>

         (8)      Not applicable.

         (9)      The Series B Bonds are issuable only in denominations of
         $50,000,000.

         (10)     Not applicable.

         (11)     Not applicable.

         (12)     Not applicable.

         (13)     Not applicable.

         (14)     Not applicable.

         (15)     Not applicable

         (16)     Not applicable.

         (17) The Series B Bonds shall be evidenced by a single registered
         Series B Bond in the principal amount and denomination of Fifty Million
         Dollars ($50,000,000). The Series B Bonds shall be dated October 10,
         2002, shall mature no later than November 1, 2018, unless sooner paid,
         and shall bear interest at the rate specified in subsection (5) above.
         The Series B Bonds may be executed by the Company and delivered to the
         Trustee for authentication and delivery. The principal of and interest
         on the Bonds shall be payable at the Corporate Trust Office of the
         Trustee in Houston, Texas.

         The single Series B Bond shall be identified by the number B-1 and
         shall upon issuance be delivered by the Company to, and registered in
         the name of, the Trust Indenture Trustee, and shall be transferable
         only as required to effect an assignment thereof to a successor or an
         assign of the Trust Indenture Trustee under the Trust Indenture, and
         provided that all obligations of the Trust Indenture Trustee under the
         Collateral Agreement (as defined herein) shall also be transferred to,
         and assumed by, any such successor or assign. The Series B Bonds are to
         be issued to the Trust Indenture Trustee as security for the payment by
         CenterPoint of the Installment Payments, as defined in, and pursuant to
         the Installment Payment and Bond Amortization Agreement, dated as of
         January 1, 1997, by and between the Issuer and CenterPoint (as
         successor). The single Series B Bond shall be held by the Trust
         Indenture Trustee subject to the terms of the Series B Bonds Collateral
         Agreement (Series B Bonds), dated as of October 10, 2002, between the
         Company and the Trust Indenture Trustee (the "Collateral Agreement").

         Series B Bonds issued upon transfer shall be numbered consecutively
         from B-2 upwards and issued in the same $50,000,000 denomination. See
         also subsection (19) below.

         (18)     Not applicable.

         (19)     The holder of the Series B Bond by acceptance of the Series B
         Bond agrees to restrictions on transfer and to waivers of certain
         rights of exchange as set forth herein. The Series B Bonds have not
         been registered under the Securities Act of 1933 and may

                                       3

<PAGE>

         not be offered, sold or otherwise transferred in the absence of such
         registration or an applicable exemption therefrom. No service charge
         shall be made for the registration of transfer or exchange of the
         Series B Bonds, or any Tranche thereof; provided, however, that the
         Company may require payment of a sum sufficient to cover any tax or
         other governmental charge payable in connection with the exchange or
         transfer.

         (20)     For purposes of the Series B Bonds, "Business Day" means any
         day other than (i) a Saturday or Sunday, (ii) a day on which commercial
         banks in New York, New York, Houston, Texas, or the city in which the
         principal corporate trust office of the Indenture Trustee is located,
         are authorized by law to close or (iii) a day on which the New York
         Stock Exchange is closed.

         (21)     Not applicable.

         (22)     The Trustee may conclusively presume that the obligation of
         the Company to pay the principal of and interest on the Series B Bond
         shall have been fully satisfied and discharged unless and until it
         shall have received a written notice from the Indenture Trustee, signed
         by an authorized officer of the Indenture Trustee and attested by the
         Secretary or an Assistant Secretary of the Indenture Trustee within 90
         days after the applicable Interest Payment Date, stating that the
         payment of principal of or interest on the Series B Bond has not been
         fully paid when due and specifying the amount of funds required to make
         such payment.

         The Series B Bonds shall have such other terms and provisions as are
         provided in the form thereof attached hereto as Exhibit A, and shall be
         issued in substantially such form.

2.       The undersigned has read all of the covenants and conditions contained
in the Indenture, and the definitions in the Indenture relating thereto,
relating to the issuance of the Series B Bonds and in respect of compliance with
which this certificate is made.

3.       The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.

4.       In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.

         In the opinion of the undersigned, such conditions and covenants have
been complied with.

                                       4

<PAGE>

IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate on
this 10th day of October, 2002.

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

Acknowledged and Received on
October 10, 2002

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Ronda L. Parmen
    -----------------------------------------
Name: Ronda L. Parmen
Title: Vice President and Trust Officer

                                       5

<PAGE>

                                                                       EXHIBIT A

                              FORM OF SERIES B BOND

                                        6

<PAGE>

NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON
TRANSFER AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE
BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE
WITH APPLICABLE SECURITIES LAWS.

THIS BOND IS NOT TRANSFERABLE EXCEPT, AS FURTHER PROVIDED HEREIN, TO A SUCCESSOR
OR ASSIGN OF THE TRUST INDENTURE TRUSTEE UNDER THE TRUST INDENTURE REFERRED TO
HEREIN AMONG THE ISSUER AND THE TRUST INDENTURE TRUSTEE.

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
             General Mortgage Bonds, Series B, due November 1, 2018

<TABLE>
<S>                               <C>                <C>                       <C>
Original Interest Accrual Date:   October 10, 2002   Redeemable by Company:    Yes _  No X
Stated Maturity:                  November 1, 2018   Redemption Date:  N/A
Interest Rate:                    See below          Redemption Price: N/A
Interest Payment Dates:           See below
Regular Record Dates:             N/A
</TABLE>

               This Security is not an Original Discount Security
              within the meaning of the within-mentioned Indenture.

                          -----------------------------

Principal Amount
$50,000,000                                                      No. B-1

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a corporation duly organized and
existing under the laws of the State of Texas (herein called the "Company,"
which term includes any successor under the Indenture referred to below), for
value received, hereby promises to pay to Bank One Trust Company, National
Association as Trustee under the Trust Indenture (as herein defined) or its
registered assigns (the "Indenture Trustee"), the principal sum of FIFTY MILLION
DOLLARS, in whole or in installments on such date or dates as the Issuer (as
defined herein) has any obligations under the Trust Indenture (as amended and
supplemented, the "Trust Indenture"), dated as of January 1, 1997, between
Brazos River Authority (the "Issuer") and the Indenture Trustee (as successor)
to repay any principal in respect of the Bonds (as such term is defined in the
Trust Indenture, and hereinafter referred to as the "Series 1997 BR Bonds"),
excluding any payment of principal in advance of the final scheduled maturity
date thereof, but not later than the Stated Maturity specified above. The
obligation of the Company to make any payment of principal on this Bond, whether
at maturity or otherwise, shall be fully or partially, as the case may be,
deemed to have been paid or otherwise satisfied and discharged to the extent
CenterPoint Energy, Inc. ("CenterPoint") has paid to the Indenture Trustee the
Installment Payment (as defined below) in respect of the principal then due and
payable on the Series 1997 BR Bonds.

Interest shall be payable on this Bond on each Interest Payment Date (as
hereinafter defined) at such rate per annum as shall cause the amount of
interest payable on such Interest Payment Date on this Bond to equal the amount
of regularly scheduled interest payable on such Interest Payment Date in respect
of the Series 1997 BR Bonds under the Trust Indenture. Such interest shall be
payable on the same dates as interest is payable from time to time in respect of
the Series 1997 BR Bonds pursuant to the Trust Indenture (each such date herein
called an "Interest Payment Date"), until the maturity of this Bond, or, if the
Company shall default in the payment of the principal due on this Bond, until
the Company's obligation with respect to the payment of such principal shall be
discharged as provided in the Indenture. The amount of interest payable from
time to time in respect of the Series 1997 BR Bonds under the Trust Indenture,
the basis on which such interest is computed and the dates on which such
interest is

<PAGE>

payable are set forth in the Trust Indenture. This Bond shall bear interest (a)
from the Interest Payment Date next preceding the date of this Bond to which
interest has been paid, or (b) if the date of this Bond is an Interest Payment
Date to which interest has been paid, then from such date, or (c) if no interest
has been paid on this Bond, then from the date of initial authentication of this
Bond. The obligation of the Company to make any payment of interest on this Bond
shall be fully or partially, as the case may be, deemed to have been paid or
otherwise satisfied and discharged to the extent that CenterPoint has paid to
the Indenture Trustee the Installment Payment in respect of the interest then
due and payable on the Series 1997 BR Bonds.

This Bond is issued to the Trust Indenture Trustee as security for the payment
by CenterPoint of the Installment Payments, as defined in, and pursuant to the
Installment Payment and Bond Amortization Agreement, dated as of January 1,
1997, between the Brazos River Authority and CenterPoint (as successor). This
Bond shall be held by the Trust Indenture Trustee subject to the terms of the
Collateral Agreement (Series B Bonds), dated as of October 10, 2002, between the
Company and the Indenture Trustee. Any capitalized terms used herein and not
defined herein shall have the meanings specified in the Indenture (as defined
below), unless otherwise noted.

The Indenture Trustee shall surrender this Bond to the Trustee when all of the
principal of and interest on the Series 1997 BR Bonds shall have been duly paid,
and the Trust Indenture shall have been terminated.

Payments of the principal of and interest on this Bond shall be made at the
Corporate Trust Office of JPMorgan Chase Bank, as Trustee, located at 600 Travis
Street, Suite 1150, Houston, Texas 77002, or at such other office or agency as
may be designated for such purpose by the Company from time to time. Payment of
the principal of and interest on this Bond, as aforesaid, shall be made in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts.

This Bond is one of a duly authorized issue of securities of the Company (herein
called the "Securities"), issued and issuable in one or more series under and
equally secured by a General Mortgage Indenture, dated as of October 10, 2002
(such Indenture as originally executed and delivered and as supplemented or
amended from time to time thereafter, together with any constituent instruments
establishing the terms of particular Securities, being herein called the
"Indenture"), between the Company and JPMorgan Chase Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the property mortgaged, pledged and held in
trust, the nature and extent of the security and the respective rights,
limitations of rights, duties and immunities of the Company, the Trustee and the
Holders of the Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered and secured. The
acceptance of this Bond shall be deemed to constitute the consent and agreement
by the Holder hereof to all of the terms and provisions of the Indenture. This
Bond is one of the series designated above.

The Bonds of this series will not be entitled to the benefit of any sinking fund
or voluntary redemption provisions.

If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of this Bond may be declared due and payable in the
manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; PROVIDED, HOWEVER, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that the Indenture permits the
Trustee to enter into one or more supplemental indentures for limited purposes
without the consent of any Holders of Securities. The Indenture also contains
provisions

<PAGE>

permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Bond shall be conclusive and binding upon such Holder and upon
all future Holders of this Bond and of any Security issued upon the registration
of transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond.

As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond is registrable in the Security Register, upon
surrender of this Bond for registration of transfer at the Corporate Trust
Office of JPMorgan Chase Bank in Houston, Texas or such other office or agency
as may be designated by the Company from time to time, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series of authorized denominations and of like tenor and aggregate principal
amount, will be issued to the designated transferee or transferees.

The Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the person in whose name this Bond shall be registered upon the
Security Register for the Bonds of this series as the absolute owner of such
Bond for the purpose of receiving payment of or on account of the principal of
and interest on this Bond and for all other purposes, whether or not this Bond
be overdue, and neither the Company nor the Trustee shall be affected by any
notice to the contrary; and all such payments so made to such registered owner
or upon his order shall be valid and effectual to satisfy and discharge the
liability upon this Bond to the extent of the sum or sums paid.

The Trustee may conclusively presume that the obligation of the Company to pay
the principal of and interest on this Bond shall have been fully satisfied and
discharged unless and until it shall have received a written notice from the
Trust Indenture Trustee, signed by an authorized officer of the Trust Indenture
Trustee and attested by the Secretary or an Assistant Secretary of the Trust
Indenture Trustee within 90 days after the applicable Interest Payment Date,
stating that the payment of principal of or interest on this Bond has not been
fully paid when due and specifying the amount of funds required to make such
payment.

Before any transfer of this Bond by the registered holder or his or its legal
representative will be recognized or given effect by the Company or the Trustee,
the registered holder shall notify the Company and the Trustee of the name and
address of the transferee. By acceptance hereof the holder of this Bond and each
transferee shall be deemed to have agreed to indemnify and hold harmless the
Company and the Trustee against all losses, claims, damages or liability arising
out of any failure on part of the holder or of any such transferee to comply
with the requirements of the preceding sentence.

No recourse under or upon any obligation, covenant or agreement contained in the
Indenture or in any indenture supplemental thereto, or in any Bond or coupon
thereby secured, or because of any indebtedness thereby secured, shall be had
against any incorporator, member, manager, stockholder, officer, director or
employee, as such, past, present or future, of the Company or any predecessor or
successor corporation or company, either directly or through the Company or any
predecessor or successor corporation or company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that the
Indenture, any indenture supplemental thereto and the obligations thereby
secured, are solely corporate obligations of the Company, and that no personal
liability whatsoever shall attach to, or be incurred by, such incorporators,
members, managers, stockholders, officers, directors or employees, as such, of
the Company or of any predecessor or successor corporation or company, or any of
them, because of the creation of the indebtedness thereby authorized, or under
or by reason of any of the obligations, covenants or agreements contained in the
Indenture or in any indenture supplemental thereto or in any of the Bonds or
coupons thereby secured, or implied therefrom.

This Bond shall be governed by and construed in accordance with the law of the
State of New York except as provided in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Bond shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any

<PAGE>

purpose.

            [The remainder of this page is intentionally left blank.]

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                 CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                                 By: _____________________________________
                                     Name:
                                     Title:

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Date of Authentication: ______, 2002

                                 JPMORGAN CHASE BANK, as Trustee

                                 By: _____________________________________
                                     Authorized Signatory
<PAGE>

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                              OFFICER'S CERTIFICATE

                                October 10, 2002

I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the Manager of the
Company dated October 10, 2002, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:

1.       The terms and conditions of the Securities of the series described in
this Officer's Certificate are as follows (the numbered subdivisions set forth
in this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):

         (1)      The Securities of the third series to be issued under the
         Indenture shall be designated "General Mortgage Bonds, Series C, due
         November 1, 2028" (the "Series C Bonds").

         (2)      The Series C Bonds shall be initially authenticated and
         delivered in the aggregate principal amount of $68,000,000.

         (3)      Not applicable.

         (4)      The Series C Bonds shall mature and the principal thereof
         shall be due and payable together with all accrued and unpaid interest
         thereon on November 1, 2028. The obligation of the Company to make any
         payment of principal on this Bond shall be fully or partially, as the
         case may be, deemed to have been paid or otherwise satisfied and
         discharged to the extent CenterPoint Energy, Inc. ("CenterPoint") has
         paid to the Trust Indenture Trustee the Installment Payment (as defined
         below) in respect of the principal then due and payable on the Bonds
         (as such term is defined in the Trust Indenture, and hereinafter
         referred to as the "Series 1997 MC Bonds").

         (5)      The Series C Bonds shall bear interest from the time
         hereinafter provided at such rate per annum as shall cause the amount
         of interest payable on each Interest Payment Date (as hereinafter
         defined) on the Series C Bonds to equal the amount of regularly
         scheduled interest payable on such Interest Payment Date under the
         Trust Indenture dated as of January 1, 1997 (as amended and
         supplemented, the "Trust Indenture") between Matagorda County
         Navigation District Number One (the "Issuer") and Bank One Trust
         Company, National Association (successor to The First National Bank of
         Chicago), as trustee (the "Trust Indenture Trustee") in respect of the
         Series 1997 MC Bonds. Such

                                       1

<PAGE>

         interest on the Series C Bonds shall be payable on the same dates as
         interest is payable from time to time in respect of the Series 1997 PC
         Bonds pursuant to the Trust Indenture (each such date herein called an
         "Interest Payment Date"), until the maturity of the Series C Bonds, or,
         in the case of any default by the Company in the payment of the
         principal due on the Series C Bonds, until the Company's obligation
         with respect to the payment of such principal shall be discharged as
         provided in the Indenture. The amount of interest payable from time to
         time in respect of the Series 1997 MC Bonds under the Trust Indenture,
         the basis on which such interest is computed and the dates on which
         such interest is payable are set forth in the Trust Indenture. Each
         Series C Bond shall bear interest from the later of the date of initial
         authentication of such Series C Bond or the most recent Interest
         Payment Date to which interest has been paid. The obligation of the
         Company to make any payment of interest on the Series C Bonds shall be
         fully or partially, as the case may be, deemed to have been paid or
         otherwise satisfied and discharged to the extent that CenterPoint has
         paid to the Trustee the Installment Payment in respect of the interest
         then due and payable on the Series 1997 MC Bonds.

         (6)      The Corporate Trust Office of JPMorgan Chase Bank in Houston,
         Texas shall be the place at which (i) the principal of, premium and
         interest on, the Series C Bonds shall be payable, (ii) registration of
         transfer of the Series C Bonds may be effected, (iii) exchanges of the
         Series C Bonds may be effected and (iv) notices and demands to or upon
         the Company in respect of the Series C Bonds and the Indenture may be
         served; and JPMorgan Chase Bank shall be the Security Registrar for the
         Series C Bonds; provided, however, that the Company reserves the right
         to change, by one or more Officer's Certificates, any such place or the
         Security Registrar; and provided, further, that the Company reserves
         the right to designate, by one or more Officer's Certificates, its
         principal office in Houston, Texas as any such place or itself as the
         Security Registrar; provided, however, that there shall be only a
         single Security Registrar for the Series C Bonds.

         (7)      Not applicable.

         (8)      Not applicable.

         (9)      The Series C Bonds are issuable only in denominations of
         $68,000,000.

         (10)     Not applicable.

         (11)     Not applicable.

         (12)     Not applicable.

         (13)     Not applicable.

         (14)     Not applicable.

         (15)     Not applicable.

         (16)     Not applicable.

                                       2

<PAGE>

         (17)     The Series C Bonds shall be evidenced by a single registered
         Series C Bond in the principal amount and denomination of Sixty-Eight
         Million Dollars ($68,000,000). The Series C Bonds shall be dated
         October 10, 2002, shall mature no later than November 1, 2028, unless
         sooner paid, and shall bear interest at the rate specified in
         subsection (5) above. The Series C Bonds may be executed by the Company
         and delivered to the Trustee for authentication and delivery. The
         principal of and interest on the Bonds shall be payable at the
         Corporate Trust Office of the Trustee in Houston, Texas.

         The single Series C Bond shall be identified by the number C-1 and
         shall upon issuance be delivered by the Company to, and registered in
         the name of, the Trust Indenture Trustee, and shall be transferable
         only as required to effect an assignment thereof to a successor or an
         assign of the Trust Indenture Trustee under the Trust Indenture, and
         provided that all obligations of the Trust Indenture Trustee under the
         Collateral Agreement (as defined herein) shall also be transferred to,
         and assumed by, any such successor or assign. The Series C Bonds are to
         be issued to the Trust Indenture Trustee as security for the payment by
         CenterPoint of the Installment Payments, as defined in, and pursuant to
         the Installment Payment and Bond Amortization Agreement, dated as of
         January 1, 1997, by and between the Issuer and CenterPoint (as
         successor). The single Series C Bond shall be held by the Trust
         Indenture Trustee subject to the terms of the Series C Bonds Collateral
         Agreement (Series B Bonds), dated as of October 10, 2002, between the
         Company and the Trust Indenture Trustee (the "Collateral Agreement").

         Series C Bonds issued upon transfer shall be numbered consecutively
         from C-2 upwards and issued in the same $68,000,000 denomination. See
         also subsection (19) below.

         (18)     Not applicable.

         (19)     The holder of the Series C Bond by acceptance of the Series C
         Bond agrees to restrictions on transfer and to waivers of certain
         rights of exchange as set forth herein. The Series C Bonds have not
         been registered under the Securities Act of 1933 and may not be
         offered, sold or otherwise transferred in the absence of such
         registration or an applicable exemption therefrom. No service charge
         shall be made for the registration of transfer or exchange of the
         Series C Bonds, or any Tranche thereof; provided, however, that the
         Company may require payment of a sum sufficient to cover any tax or
         other governmental charge payable in connection with the exchange or
         transfer.

         (20)     For purposes of the Series C Bonds, "Business Day" means any
         day other than (i) a Saturday or Sunday, (ii) a day on which commercial
         banks in New York, New York, Houston, Texas, or the city in which the
         principal corporate trust office of the Indenture Trustee is located,
         are authorized by law to close or (iii) a day on which the New York
         Stock Exchange is closed.

         (21)     Not applicable.

         (22)     The Trustee may conclusively presume that the obligation of
         the Company to pay the principal of and interest on the Series C Bond
         shall have been fully satisfied and discharged unless and until it
         shall have received a written notice from the Indenture

                                       3

<PAGE>

         Trustee, signed by an authorized officer of the Indenture Trustee and
         attested by the Secretary or an Assistant Secretary of the Indenture
         Trustee within 90 days after the applicable Interest Payment Date,
         stating that the payment of principal of or interest on the Series C
         Bond has not been fully paid when due and specifying the amount of
         funds required to make such payment.

         The Series C Bonds shall have such other terms and provisions as are
         provided in the form thereof attached hereto as Exhibit A, and shall be
         issued in substantially such form.

2.       The undersigned has read all of the covenants and conditions contained
in the Indenture, and the definitions in the Indenture relating thereto,
relating to the issuance of the Series C Bonds and in respect of compliance with
which this certificate is made.

3.       The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.

4.       In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.

         In the opinion of the undersigned, such conditions and covenants have
been complied with.

                                       4

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate on this 10th day of October, 2002.

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

Acknowledged and Received on
October 10, 2002

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Ronda L. Parmen
    ----------------------------------------------
Name: Ronda L. Parmen
Title: Vice President and Trust Officer

                                       5

<PAGE>

                                                                       EXHIBIT A

                              FORM OF SERIES C BOND

                                        6

<PAGE>

NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON
TRANSFER AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE
BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE
WITH APPLICABLE SECURITIES LAWS.

THIS BOND IS NOT TRANSFERABLE EXCEPT, AS FURTHER PROVIDED HEREIN, TO A SUCCESSOR
OR ASSIGN OF THE TRUST INDENTURE TRUSTEE UNDER THE TRUST INDENTURE REFERRED TO
HEREIN AMONG THE ISSUER AND THE TRUST INDENTURE TRUSTEE.

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
             General Mortgage Bonds, Series C, due November 1, 2028

<TABLE>
<S>                                 <C>                       <C>                                <C>
Original Interest Accrual Date:     October 10, 2002          Redeemable by Company:             Yes _  No X
Stated Maturity:                    November 1, 2028          Redemption Date:  N/A
Interest Rate:                      See below                 Redemption Price: N/A
Interest Payment Dates:             See below
Regular Record Dates:               N/A
</TABLE>

               This Security is not an Original Discount Security
              within the meaning of the within-mentioned Indenture.

                          -----------------------------

Principal Amount
$68,000,000                                                        No. C-1

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a corporation duly organized and
existing under the laws of the State of Texas (herein called the "Company,"
which term includes any successor under the Indenture referred to below), for
value received, hereby promises to pay to Bank One Trust Company, National
Association as Trustee under the Trust Indenture (as herein defined) or its
registered assigns (the "Indenture Trustee"), the principal sum of SIXTY EIGHT
MILLION DOLLARS, in whole or in installments on such date or dates as the Issuer
(as defined herein) has any obligations under the Trust Indenture (as amended
and supplemented, the "Trust Indenture"), dated as of January 1, 1997, between
Matagorda County Navigation District Number One (the "Issuer") and the Indenture
Trustee (as successor) to repay any principal in respect of the Bonds (as such
term is defined in the Trust Indenture, and hereinafter referred to as the
"Series 1997 MC Bonds"), excluding any payment of principal in advance of the
final scheduled maturity date thereof, but not later than the Stated Maturity
specified above. The obligation of the Company to make any payment of principal
on this Bond, whether at maturity or otherwise, shall be fully or partially, as
the case may be, deemed to have been paid or otherwise satisfied and discharged
to the extent CenterPoint Energy, Inc. ("CenterPoint") has paid to the Indenture
Trustee the Installment Payment (as defined below) in respect of the principal
then due and payable on the Series 1997 MC Bonds.

Interest shall be payable on this Bond on each Interest Payment Date (as
hereinafter defined) at such rate per annum as shall cause the amount of
interest payable on such Interest Payment Date on this Bond to equal the amount
of regularly scheduled interest payable on such Interest Payment Date in respect
of the Series 1997 MC Bonds under the Trust Indenture. Such interest shall be
payable on the same dates as interest is payable from time to time in respect of
the Series 1997 MC Bonds pursuant to the Trust Indenture (each such date herein
called an "Interest Payment Date"), until the maturity of this Bond, or, if the
Company shall default in the payment of the principal due on this Bond, until
the Company's obligation with respect to the payment of such principal shall be
discharged as

                                        1

<PAGE>

provided in the Indenture. The amount of interest payable from time to time in
respect of the Series 1997 MC Bonds under the Trust Indenture, the basis on
which such interest is computed and the dates on which such interest is payable
are set forth in the Trust Indenture. This Bond shall bear interest (a) from the
Interest Payment Date next preceding the date of this Bond to which interest has
been paid, or (b) if the date of this Bond is an Interest Payment Date to which
interest has been paid, then from such date, or (c) if no interest has been paid
on this Bond, then from the date of initial authentication of this Bond. The
obligation of the Company to make any payment of interest on this Bond shall be
fully or partially, as the case may be, deemed to have been paid or otherwise
satisfied and discharged to the extent that CenterPoint has paid to the
Indenture Trustee the Installment Payment in respect of the interest then due
and payable on the Series 1997 MC Bonds.

This Bond is issued to the Trust Indenture Trustee as security for the payment
by CenterPoint of the Installment Payments, as defined in, and pursuant to the
Installment Payment and Bond Amortization Agreement, dated as of January 1,
1997, between Matagorda County Navigation District Number One and CenterPoint
(as successor). This Bond shall be held by the Indenture Trustee subject to the
terms of the Collateral Agreement (Series C Bonds), dated as of October 10,
2002, between the Company and the Trust Indenture Trustee. Any capitalized terms
used herein and not defined herein shall have the meanings specified in the
Indenture (as defined below), unless otherwise noted.

The Indenture Trustee shall surrender this Bond to the Trustee when all of the
principal of and interest on the Series 1997 MC Bonds shall have been duly paid,
and the Trust Indenture shall have been terminated.

Payments of the principal of and interest on this Bond shall be made at the
Corporate Trust Office of JPMorgan Chase Bank, as Trustee, located at 600 Travis
Street, Suite 1150, Houston, Texas 77002, or at such other office or agency as
may be designated for such purpose by the Company from time to time. Payment of
the principal of and interest on this Bond, as aforesaid, shall be made in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts.

This Bond is one of a duly authorized issue of securities of the Company (herein
called the "Securities"), issued and issuable in one or more series under and
equally secured by a General Mortgage Indenture, dated as of October 10, 2002
(such Indenture as originally executed and delivered and as supplemented or
amended from time to time thereafter, together with any constituent instruments
establishing the terms of particular Securities, being herein called the
"Indenture"), between the Company and JPMorgan Chase Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the property mortgaged, pledged and held in
trust, the nature and extent of the security and the respective rights,
limitations of rights, duties and immunities of the Company, the Trustee and the
Holders of the Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered and secured. The
acceptance of this Bond shall be deemed to constitute the consent and agreement
by the Holder hereof to all of the terms and provisions of the Indenture. This
Bond is one of the series designated above.

The Bonds of this series will not be entitled to the benefit of any sinking fund
or voluntary redemption provisions.

If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of this Bond may be declared due and payable in the
manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; PROVIDED, HOWEVER, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and

                                       2

<PAGE>

PROVIDED, FURTHER, that the Indenture permits the Trustee to enter into one or
more supplemental indentures for limited purposes without the consent of any
Holders of Securities. The Indenture also contains provisions permitting the
Holders of a majority in principal amount of the Securities then Outstanding, on
behalf of the Holders of all Securities, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Bond shall be conclusive and binding upon such Holder and upon all future
Holders of this Bond and of any Security issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond.

As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond is registrable in the Security Register, upon
surrender of this Bond for registration of transfer at the Corporate Trust
Office of JPMorgan Chase Bank in Houston, Texas or such other office or agency
as may be designated by the Company from time to time, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series of authorized denominations and of like tenor and aggregate principal
amount, will be issued to the designated transferee or transferees.

The Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the person in whose name this Bond shall be registered upon the
Security Register for the Bonds of this series as the absolute owner of such
Bond for the purpose of receiving payment of or on account of the principal of
and interest on this Bond and for all other purposes, whether or not this Bond
be overdue, and neither the Company nor the Trustee shall be affected by any
notice to the contrary; and all such payments so made to such registered owner
or upon his order shall be valid and effectual to satisfy and discharge the
liability upon this Bond to the extent of the sum or sums paid.

The Trustee may conclusively presume that the obligation of the Company to pay
the principal of and interest on this Bond shall have been fully satisfied and
discharged unless and until it shall have received a written notice from the
Trust Indenture Trustee, signed by an authorized officer of the Trust Indenture
Trustee and attested by the Secretary or an Assistant Secretary of the Trust
Indenture Trustee within 90 days after the applicable Interest Payment Date,
stating that the payment of principal of or interest on this Bond has not been
fully paid when due and specifying the amount of funds required to make such
payment.

Before any transfer of this Bond by the registered holder or his or its legal
representative will be recognized or given effect by the Company or the Trustee,
the registered holder shall notify the Company and the Trustee of the name and
address of the transferee. By acceptance hereof the holder of this Bond and each
transferee shall be deemed to have agreed to indemnify and hold harmless the
Company and the Trustee against all losses, claims, damages or liability arising
out of any failure on part of the holder or of any such transferee to comply
with the requirements of the preceding sentence.

No recourse under or upon any obligation, covenant or agreement contained in the
Indenture or in any indenture supplemental thereto, or in any Bond or coupon
thereby secured, or because of any indebtedness thereby secured, shall be had
against any incorporator, member, manager, stockholder, officer, director or
employee, as such, past, present or future, of the Company or any predecessor or
successor corporation or company, either directly or through the Company or any
predecessor or successor corporation or company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that the
Indenture, any indenture supplemental thereto and the obligations thereby
secured, are solely corporate obligations of the Company, and that no personal
liability whatsoever shall attach to, or be incurred by, such incorporators,
members, managers, stockholders, officers, directors or employees, as such, of
the Company or of any predecessor or successor corporation or company, or any of
them, because of the creation of the indebtedness thereby authorized, or under
or by reason of any of the obligations, covenants or agreements contained in the
Indenture or in any indenture supplemental thereto or in any of the Bonds or
coupons thereby secured, or implied therefrom.

This Bond shall be governed by and construed in accordance with the law of the
State of New York except as provided in the Indenture.

                                       3

<PAGE>

Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Bond shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

            [The remainder of this page is intentionally left blank.]

                                       4

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                     CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                                     By: _____________________________________
                                         Name:
                                         Title:

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Date of Authentication: ______, 2002

                                     JPMORGAN CHASE BANK, as Trustee

                                     By: _____________________________________
                                         Authorized Signatory

                                       5
<PAGE>

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                              OFFICER'S CERTIFICATE

                                October 10, 2002

I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the Manager of the
Company dated October 10, 2002, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:

1.       The terms and conditions of the Securities of the series described in
this Officer's Certificate are as follows (the numbered subdivisions set forth
in this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):

         (1)      The Securities of the fourth series to be issued under the
         Indenture shall be designated "General Mortgage Bonds, Series D, due
         May 1, 2019" (the "Series D Bonds").

         (2)      The Series D Bonds shall be initially authenticated and
         delivered in the aggregate principal amount of $100,000,000.

         (3)      Not applicable.

         (4)      The Series D Bonds shall mature and the principal thereof
         shall be due and payable together with all accrued and unpaid interest
         thereon on May 1, 2019. The obligation of the Company to make any
         payment of principal on this Bond shall be fully or partially, as the
         case may be, deemed to have been paid or otherwise satisfied and
         discharged to the extent CenterPoint Energy, Inc. ("CenterPoint") has
         paid to the Trust Indenture Trustee the Installment Payment (as defined
         below) in respect of the principal then due and payable on the Bonds
         (as such term is defined in the Trust Indenture, and hereinafter
         referred to as the "Series 1998A BR Bonds").

         (5)      The Series D Bonds shall bear interest from the time
         hereinafter provided at such rate per annum as shall cause the amount
         of interest payable on each Interest Payment Date (as hereinafter
         defined) on the Series D Bonds to equal the amount of regularly
         scheduled interest payable on such Interest Payment Date under the
         Trust Indenture dated as of February 1, 1998 (as amended and
         supplemented, the "Trust Indenture") between Brazos River Authority
         (the "Issuer") and JPMorgan Chase Bank (successor to Chase Bank of
         Texas, National Association, as trustee (the "Trust Indenture Trustee")
         in respect of the Series 1998A BR Bonds. Such interest on the Series D
         Bonds shall be payable on

                                       1

<PAGE>

         the same dates as interest is payable from time to time in respect of
         the Series 1998A BR Bonds pursuant to the Trust Indenture (each such
         date herein called an "Interest Payment Date"), until the maturity of
         the Series D Bonds, or, in the case of any default by the Company in
         the payment of the principal due on the Series D Bonds, until the
         Company's obligation with respect to the payment of such principal
         shall be discharged as provided in the Indenture. The amount of
         interest payable from time to time in respect of the Series 1998A BR
         Bonds under the Trust Indenture, the basis on which such interest is
         computed and the dates on which such interest is payable are set forth
         in the Trust Indenture. Each Series D Bond shall bear interest from the
         later of the date of initial authentication of such Series D Bond or
         the most recent Interest Payment Date to which interest has been paid.
         The obligation of the Company to make any payment of interest on the
         Series D Bonds shall be fully or partially, as the case may be, deemed
         to have been paid or otherwise satisfied and discharged to the extent
         that CenterPoint has paid to the Trust Indenture Trustee the
         Installment Payment in respect of the interest then due and payable on
         the Series 1998A BR Bonds.

         (6)      The Corporate Trust Office of JPMorgan Chase Bank in Houston,
         Texas shall be the place at which (i) the principal of, premium and
         interest on, the Series D Bonds shall be payable, (ii) registration of
         transfer of the Series D Bonds may be effected, (iii) exchanges of the
         Series D Bonds may be effected and (iv) notices and demands to or upon
         the Company in respect of the Series D Bonds and the Indenture may be
         served; and JPMorgan Chase Bank shall be the Security Registrar for the
         Series D Bonds; provided, however, that the Company reserves the right
         to change, by one or more Officer's Certificates, any such place or the
         Security Registrar; and provided, further, that the Company reserves
         the right to designate, by one or more Officer's Certificates, its
         principal office in Houston, Texas as any such place or itself as the
         Security Registrar; provided, however, that there shall be only a
         single Security Registrar for the Series D Bonds.

         (7)      Not applicable.

         (8)      Not applicable.

         (9)      The Series D Bonds are issuable only in denominations of
         $100,000,000.

         (10)     Not applicable.

         (11)     Not applicable.

         (12)     Not applicable.

         (13)     Not applicable.

         (14)     Not applicable.

         (15)     Not applicable.

         (16)     Not applicable.

                                       2

<PAGE>

         (17)     The Series D Bonds shall be evidenced by a single registered
         Series D Bond in the principal amount and denomination of One Hundred
         Million Dollars ($100,000,000). The Series D Bonds shall be dated
         October 10, 2002, shall mature no later than May 1, 2019, unless sooner
         paid, and shall bear interest at the rate specified in subsection (5)
         above. The Series D Bonds may be executed by the Company and delivered
         to the Trustee for authentication and delivery. The principal of and
         interest on the Bonds shall be payable at the Corporate Trust Office of
         the Trustee in Houston, Texas.

         The single Series D Bond shall be identified by the number D-1 and
         shall upon issuance be delivered by the Company to, and registered in
         the name of, the Trust Indenture Trustee, and shall be transferable
         only as required to effect an assignment thereof to a successor or an
         assign of the Trust Indenture Trustee under the Trust Indenture, and
         provided that all obligations of the Trust Indenture Trustee under the
         Collateral Agreement (as defined herein) shall also be transferred to,
         and assumed by, any such successor or assign. The Series D Bonds are to
         be issued to the Trust Indenture Trustee as security for the payment by
         CenterPoint of the Installment Payments, as defined in, and pursuant to
         the Installment Payment and Bond Amortization Agreement, dated as of
         February 1, 1998, by and between the Issuer and CenterPoint (as
         successor). The single Series D Bond shall be held by the Trust
         Indenture Trustee subject to the terms of the Series D Bonds Collateral
         Agreement (Series D Bonds), dated as of October 10, 2002, between the
         Company and the Trust Indenture Trustee (the "Collateral Agreement").

         Series D Bonds issued upon transfer shall be numbered consecutively
         from D-2 upwards and issued in the same $100,000,000 denomination. See
         also subsection (19) below.

         (18)     Not applicable.

         (19)     The holder of the Series D Bond by acceptance of the Series D
         Bond agrees to restrictions on transfer and to waivers of certain
         rights of exchange as set forth herein. The Series D Bonds have not
         been registered under the Securities Act of 1933 and may not be
         offered, sold or otherwise transferred in the absence of such
         registration or an applicable exemption therefrom. No service charge
         shall be made for the registration of transfer or exchange of the
         Series D Bonds, or any Tranche thereof; provided, however, that the
         Company may require payment of a sum sufficient to cover any tax or
         other governmental charge payable in connection with the exchange or
         transfer.

         (20)     For purposes of the Series D Bonds, "Business Day" means any
         day other than (i) a Saturday or Sunday, (ii) a day on which commercial
         banks in New York, New York, Houston, Texas, or the city in which the
         principal corporate trust office of the Indenture Trustee is located,
         are authorized by law to close or (iii) a day on which the New York
         Stock Exchange is closed.

         (21)     Not applicable.

         (22)     The Trustee may conclusively presume that the obligation of
         the Company to pay the principal of and interest on the Series D Bond
         shall have been fully satisfied and discharged unless and until it
         shall have received a written notice from the Indenture

                                       3

<PAGE>

         Trustee, signed by an authorized officer of the Indenture Trustee and
         attested by the Secretary or an Assistant Secretary of the Indenture
         Trustee within 90 days after the applicable Interest Payment Date,
         stating that the payment of principal of or interest on the Series D
         Bond has not been fully paid when due and specifying the amount of
         funds required to make such payment.

         The Series D Bonds shall have such other terms and provisions as are
         provided in the form thereof attached hereto as Exhibit A, and shall be
         issued in substantially such form.

2.       The undersigned has read all of the covenants and conditions contained
in the Indenture, and the definitions in the Indenture relating thereto,
relating to the issuance of the Series D Bonds and in respect of compliance with
which this certificate is made.

3.       The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.

4.       In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.

         In the opinion of the undersigned, such conditions and covenants have
been complied with.

                                       4

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate on this 10th day of October, 2002.

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

Acknowledged and Received on
October 10, 2002

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Ronda L. Parmen
    ----------------------------------------
Name: Ronda L. Parmen
Title: Vice President and Trust Officer

                                       5

<PAGE>

                             FORM OF SERIES D BONDS
<PAGE>

NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON
TRANSFER AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE
BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE
WITH APPLICABLE SECURITIES LAWS.

THIS BOND IS NOT TRANSFERABLE EXCEPT, AS FURTHER PROVIDED HEREIN, TO A SUCCESSOR
OR ASSIGN OF THE TRUST INDENTURE TRUSTEE UNDER THE TRUST INDENTURE REFERRED TO
HEREIN AMONG THE ISSUER AND THE TRUST INDENTURE TRUSTEE.

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
                General Mortgage Bonds, Series D, due May 1, 2019

<TABLE>
<S>                                 <C>                       <C>                                <C>
Original Interest Accrual Date:     October 10, 2002          Redeemable by Company:             Yes _   No X
Stated Maturity:                    May 1, 2019               Redemption Date:  N/A
Interest Rate:                      See below                 Redemption Price: N/A
Interest Payment Dates:             See below
Regular Record Dates:               N/A
</TABLE>

               This Security is not an Original Discount Security
              within the meaning of the within-mentioned Indenture.

                          -----------------------------

Principal Amount
$100,000,000                                                      No. D-1

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a corporation duly organized and
existing under the laws of the State of Texas (herein called the "Company,"
which term includes any successor under the Indenture referred to below), for
value received, hereby promises to pay to JPMorgan Chase Bank as Trustee under
the Trust Indenture (as herein defined) or its registered assigns (the
"Indenture Trustee"), the principal sum of ONE HUNDRED MILLION DOLLARS, in whole
or in installments on such date or dates as the Issuer (as defined herein) has
any obligations under the Trust Indenture (as amended and supplemented, the
"Trust Indenture"), dated as of February 1, 1998, between Brazos River Authority
(the "Issuer") and the Indenture Trustee (as successor) to repay any principal
in respect of the 1998A Bonds (as such term is defined in the Trust Indenture,
and hereinafter referred to as the "Series 1998A BR Bonds"), excluding any
payment of principal in advance of the final scheduled maturity date thereof,
but not later than the Stated Maturity specified above. The obligation of the
Company to make any payment of principal on this Bond, whether at maturity or
otherwise, shall be fully or partially, as the case may be, deemed to have been
paid or otherwise satisfied and discharged to the extent CenterPoint Energy,
Inc. ("CenterPoint") has paid to the Indenture Trustee the Installment Payment
(as defined below) in respect of the principal then due and payable on the
Series 1998A BR Bonds.

Interest shall be payable on this Bond on each Interest Payment Date (as
hereinafter defined) at such rate per annum as shall cause the amount of
interest payable on such Interest Payment Date on this Bond to equal the amount
of regularly scheduled interest payable on such Interest Payment Date in respect
of the Series 1998A BR Bonds under the Trust Indenture. Such interest shall be
payable on the same dates as interest is payable from time to time in respect of
the Series 1998A BR Bonds pursuant to the Trust Indenture (each such date herein
called an "Interest Payment Date"), until the maturity of this Bond, or, if the
Company shall default in the payment of the principal due on this Bond, until
the Company's obligation with respect to the payment of such principal shall be
discharged as provided in the Indenture. The amount of interest payable from
time to time in respect of the Series 1998A BR Bonds under the Trust Indenture,
the basis on which such interest is computed and the dates on which such
interest

                                       1

<PAGE>

is payable are set forth in the Trust Indenture. This Bond shall bear interest
(a) from the Interest Payment Date next preceding the date of this Bond to which
interest has been paid, or (b) if the date of this Bond is an Interest Payment
Date to which interest has been paid, then from such date, or (c) if no interest
has been paid on this Bond, then from the date of initial authentication of this
Bond. The obligation of the Company to make any payment of interest on this Bond
shall be fully or partially, as the case may be, deemed to have been paid or
otherwise satisfied and discharged to the extent that CenterPoint has paid to
the Trust Indenture Trustee the Installment Payment in respect of the interest
then due and payable on the Series 1998A BR Bonds.

This Bond is issued to the Trust Indenture Trustee as security for the payment
by CenterPoint of the Installment Payments, as defined in, and pursuant to the
Installment Payment and Bond Amortization Agreement, dated as of February 1,
1998, between the Brazos River Authority and CenterPoint (as successor). This
Bond shall be held by the Trust Indenture Trustee subject to the terms of the
Collateral Agreement, (Series D Bonds) dated as of October 10, 2002, between the
Company and the Indenture Trustee. Any capitalized terms used herein and not
defined herein shall have the meanings specified in the Indenture (as defined
below), unless otherwise noted.

The Indenture Trustee shall surrender this Bond to the Trustee when all of the
principal of and interest on the Series 1998A BR Bonds shall have been duly
paid, and the Trust Indenture shall have been terminated.

Payments of the principal of and interest on this Bond shall be made at the
Corporate Trust Office of JPMorgan Chase Bank, as Trustee, located at 600 Travis
Street, Suite 1150, Houston, Texas 77002, or at such other office or agency as
may be designated for such purpose by the Company from time to time. Payment of
the principal of and interest on this Bond, as aforesaid, shall be made in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts.

This Bond is one of a duly authorized issue of securities of the Company (herein
called the "Securities"), issued and issuable in one or more series under and
equally secured by a General Mortgage Indenture, dated as of October 10, 2002
(such Indenture as originally executed and delivered and as supplemented or
amended from time to time thereafter, together with any constituent instruments
establishing the terms of particular Securities, being herein called the
"Indenture"), between the Company and JPMorgan Chase Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the property mortgaged, pledged and held in
trust, the nature and extent of the security and the respective rights,
limitations of rights, duties and immunities of the Company, the Trustee and the
Holders of the Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered and secured. The
acceptance of this Bond shall be deemed to constitute the consent and agreement
by the Holder hereof to all of the terms and provisions of the Indenture. This
Bond is one of the series designated above.

The Bonds of this series will not be entitled to the benefit of any sinking fund
or voluntary redemption provisions.

If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of this Bond may be declared due and payable in the
manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; PROVIDED, HOWEVER, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that the Indenture permits the
Trustee to enter into one or more supplemental indentures for limited purposes
without the consent of any Holders of Securities. The Indenture also contains
provisions

                                       2

<PAGE>

permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Bond shall be conclusive and binding upon such Holder and upon
all future Holders of this Bond and of any Security issued upon the registration
of transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond.

As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond is registrable in the Security Register, upon
surrender of this Bond for registration of transfer at the Corporate Trust
Office of JPMorgan Chase Bank in Houston, Texas or such other office or agency
as may be designated by the Company from time to time, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series of authorized denominations and of like tenor and aggregate principal
amount, will be issued to the designated transferee or transferees.

The Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the person in whose name this Bond shall be registered upon the
Security Register for the Bonds of this series as the absolute owner of such
Bond for the purpose of receiving payment of or on account of the principal of
and interest on this Bond and for all other purposes, whether or not this Bond
be overdue, and neither the Company nor the Trustee shall be affected by any
notice to the contrary; and all such payments so made to such registered owner
or upon his order shall be valid and effectual to satisfy and discharge the
liability upon this Bond to the extent of the sum or sums paid.

The Trustee may conclusively presume that the obligation of the Company to pay
the principal of and interest on this Bond shall have been fully satisfied and
discharged unless and until it shall have received a written notice from the
Trust Indenture Trustee, signed by an authorized officer of the Trust Indenture
Trustee and attested by the Secretary or an Assistant Secretary of the Trust
Indenture Trustee within 90 days after the applicable Interest Payment Date,
stating that the payment of principal of or interest on this Bond has not been
fully paid when due and specifying the amount of funds required to make such
payment.

Before any transfer of this Bond by the registered holder or his or its legal
representative will be recognized or given effect by the Company or the Trustee,
the registered holder shall notify the Company and the Trustee of the name and
address of the transferee. By acceptance hereof the holder of this Bond and each
transferee shall be deemed to have agreed to indemnify and hold harmless the
Company and the Trustee against all losses, claims, damages or liability arising
out of any failure on part of the holder or of any such transferee to comply
with the requirements of the preceding sentence.

No recourse under or upon any obligation, covenant or agreement contained in the
Indenture or in any indenture supplemental thereto, or in any Bond or coupon
thereby secured, or because of any indebtedness thereby secured, shall be had
against any incorporator, member, manager, stockholder, officer, director or
employee, as such, past, present or future, of the Company or any predecessor or
successor corporation or company, either directly or through the Company or any
predecessor or successor corporation or company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that the
Indenture, any indenture supplemental thereto and the obligations thereby
secured, are solely corporate obligations of the Company, and that no personal
liability whatsoever shall attach to, or be incurred by, such incorporators,
members, managers, stockholders, officers, directors or employees, as such, of
the Company or of any predecessor or successor corporation or company, or any of
them, because of the creation of the indebtedness thereby authorized, or under
or by reason of any of the obligations, covenants or agreements contained in the
Indenture or in any indenture supplemental thereto or in any of the Bonds or
coupons thereby secured, or implied therefrom.

This Bond shall be governed by and construed in accordance with the law of the
State of New York except as provided in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Bond shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any

                                       3

<PAGE>

purpose.

            [The remainder of this page is intentionally left blank.]

                                       4

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                                    By: _____________________________________
                                        Name:
                                        Title:

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Date of Authentication: ______, 2002

                                    JPMORGAN CHASE BANK, as Trustee

                                    By: _____________________________________
                                        Authorized Signatory

                                       5
<PAGE>

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                              OFFICER'S CERTIFICATE

                                October 10, 2002

I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the Manager of the
Company dated October 10, 2002, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:

1.       The terms and conditions of the Securities of the series described in
this Officer's Certificate are as follows (the numbered subdivisions set forth
in this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):

         (1)      The Securities of the fifth series to be issued under the
         Indenture shall be designated "General Mortgage Bonds, Series E, due
         November 1, 2020" (the "Series E Bonds").

         (2)      The Series E Bonds shall be initially authenticated and
         delivered in the aggregate principal amount of $90,000,000.

         (3)      Not applicable.

         (4)      The Series E Bonds shall mature and the principal thereof
         shall be due and payable together with all accrued and unpaid interest
         thereon on November 1, 2020. The obligation of the Company to make any
         payment of principal on this Bond shall be fully or partially, as the
         case may be, deemed to have been paid or otherwise satisfied and
         discharged to the extent CenterPoint Energy, Inc. ("CenterPoint") has
         paid to the Trust Indenture Trustee the Installment Payment (as defined
         below) in respect of the principal then due and payable on the Bonds
         (as such term is defined in the Trust Indenture, and hereinafter
         referred to as the "Series 1998B BR Bonds").

         (5)      The Series E Bonds shall bear interest from the time
         hereinafter provided at such rate per annum as shall cause the amount
         of interest payable on each Interest Payment Date (as hereinafter
         defined) on the Series E Bonds to equal the amount of regularly
         scheduled interest payable on such Interest Payment Date under the
         Trust Indenture dated as of February 1, 1998 (as amended and
         supplemented, the "Trust Indenture") between Brazos River Authority
         (the "Issuer") and JPMorgan Chase Bank (successor to Chase Bank of
         Texas, National Association), as trustee (the "Trust Indenture
         Trustee") in respect of the Series 1998A BR Bonds. Such interest on the
         Series E Bonds shall be

<PAGE>

         payable on the same dates as interest is payable from time to time in
         respect of the Series 1998B BR Bonds pursuant to the Trust Indenture
         (each such date herein called an "Interest Payment Date"), until the
         maturity of the Series E Bonds, or, in the case of any default by the
         Company in the payment of the principal due on the Series E Bonds,
         until the Company's obligation with respect to the payment of such
         principal shall be discharged as provided in the Indenture. The amount
         of interest payable from time to time in respect of the Series 1998B BR
         Bonds under the Trust Indenture, the basis on which such interest is
         computed and the dates on which such interest is payable are set forth
         in the Trust Indenture. Each Series E Bond shall bear interest from the
         later of the date of initial authentication of such Series E Bond or
         the most recent Interest Payment Date to which interest has been paid.
         The obligation of the Company to make any payment of interest on the
         Series E Bonds shall be fully or partially, as the case may be, deemed
         to have been paid or otherwise satisfied and discharged to the extent
         that CenterPoint has paid to the Trust Indenture Trustee the
         Installment Payment in respect of the interest then due and payable on
         the Series 1998B BR Bonds.

         (6)      The Corporate Trust Office of JPMorgan Chase Bank in Houston,
         Texas shall be the place at which (i) the principal of, premium and
         interest on, the Series E Bonds shall be payable, (ii) registration of
         transfer of the Series E Bonds may be effected, (iii) exchanges of the
         Series E Bonds may be effected and (iv) notices and demands to or upon
         the Company in respect of the Series E Bonds and the Indenture may be
         served; and JPMorgan Chase Bank shall be the Security Registrar for the
         Series E Bonds; provided, however, that the Company reserves the right
         to change, by one or more Officer's Certificates, any such place or the
         Security Registrar; and provided, further, that the Company reserves
         the right to designate, by one or more Officer's Certificates, its
         principal office in Houston, Texas as any such place or itself as the
         Security Registrar; provided, however, that there shall be only a
         single Security Registrar for the Series E Bonds.

         (7)      Not applicable.

         (8)      Not applicable.

         (9)      The Series E Bonds are issuable only in denominations of
         $90,000,000.

         (10)     Not applicable.

         (11)     Not applicable.

         (12)     Not applicable.

         (13)     Not applicable.

         (14)     Not applicable.

         (15)     Not applicable.

         (16)     Not applicable.

                                       2

<PAGE>

         (17)     The Series E Bonds shall be evidenced by a single registered
         Series E Bond in the principal amount and denomination of Ninety
         Million Dollars ($90,000,000). The Series E Bonds shall be dated
         October 10, 2002, shall mature no later than November 1, 2020, unless
         sooner paid, and shall bear interest at the rate specified in
         subsection (5) above. The Series E Bonds may be executed by the Company
         and delivered to the Trustee for authentication and delivery. The
         principal of and interest on the Bonds shall be payable at the
         Corporate Trust Office of the Trustee in Houston, Texas.

         The single Series E Bond shall be identified by the number E-1 and
         shall upon issuance be delivered by the Company to, and registered in
         the name of, the Trust Indenture Trustee, and shall be transferable
         only as required to effect an assignment thereof to a successor or an
         assign of the Trust Indenture Trustee under the Trust Indenture, and
         provided that all obligations of the Trust Indenture Trustee under the
         Collateral Agreement (as defined herein) shall also be transferred to,
         and assumed by, any such successor or assign. The Series E Bonds are to
         be issued to the Trust Indenture Trustee as security for the payment by
         CenterPoint of the Installment Payments, as defined in, and pursuant to
         the Installment Payment and Bond Amortization Agreement, dated as of
         February 1, 1998, by and between the Issuer and CenterPoint (as
         successor). The single Series E Bond shall be held by the Trust
         Indenture Trustee subject to the terms of the Series E Bonds Collateral
         Agreement (Series E Bonds), dated as of October 10, 2002, between the
         Company and the Trust Indenture Trustee (the "Collateral Agreement").

         Series E Bonds issued upon transfer shall be numbered consecutively
         from E-2 upwards and issued in the same $90,000,000 denomination. See
         also subsection (19) below.

         (18)     Not applicable.

         (19)     The holder of the Series E Bond by acceptance of the Series E
         Bond agrees to restrictions on transfer and to waivers of certain
         rights of exchange as set forth herein. The Series E Bonds have not
         been registered under the Securities Act of 1933 and may not be
         offered, sold or otherwise transferred in the absence of such
         registration or an applicable exemption therefrom. No service charge
         shall be made for the registration of transfer or exchange of the
         Series E Bonds, or any Tranche thereof; provided, however, that the
         Company may require payment of a sum sufficient to cover any tax or
         other governmental charge payable in connection with the exchange or
         transfer.

         (20)     For purposes of the Series E Bonds, "Business Day" means any
         day other than (i) a Saturday or Sunday, (ii) a day on which commercial
         banks in New York, New York, Houston, Texas, or the city in which the
         principal corporate trust office of the Indenture Trustee is located,
         are authorized by law to close or (iii) a day on which the New York
         Stock Exchange is closed.

         (21)     Not applicable.

         (22)     The Trustee may conclusively presume that the obligation of
         the Company to pay the principal of and interest on the Series E Bond
         shall have been fully satisfied and discharged unless and until it
         shall have received a written notice from the Indenture

                                       3

<PAGE>

         Trustee, signed by an authorized officer of the Indenture Trustee and
         attested by the Secretary or an Assistant Secretary of the Indenture
         Trustee within 90 days after the applicable Interest Payment Date,
         stating that the payment of principal of or interest on the Series E
         Bond has not been fully paid when due and specifying the amount of
         funds required to make such payment.

         The Series E Bonds shall have such other terms and provisions as are
provided in the form thereof attached hereto as Exhibit A, and shall be issued
in substantially such form.

2.       The undersigned has read all of the covenants and conditions contained
in the Indenture, and the definitions in the Indenture relating thereto,
relating to the issuance of the Series E Bonds and in respect of compliance with
which this certificate is made.

3.       The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.

4.       In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.

         In the opinion of the undersigned, such conditions and covenants have
been complied with.

                                       4

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate on this 10th day of October, 2002.

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

Acknowledged and Received on
October 10, 2002

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Ronda L. Parmen
    ----------------------------------------
Name: Ronda L. Parmen
Title: Vice President and Trust Officer

                                       5

<PAGE>

                             FORM OF SERIES E BONDS
<PAGE>

NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON
TRANSFER AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE
BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE
WITH APPLICABLE SECURITIES LAWS.

THIS BOND IS NOT TRANSFERABLE EXCEPT, AS FURTHER PROVIDED HEREIN, TO A SUCCESSOR
OR ASSIGN OF THE TRUST INDENTURE TRUSTEE UNDER THE TRUST INDENTURE REFERRED TO
HEREIN AMONG THE ISSUER AND THE TRUST INDENTURE TRUSTEE.

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
             General Mortgage Bonds, Series E, due November 1, 2020

<TABLE>
<S>                                 <C>                       <C>                                <C>
Original Interest Accrual Date:     October 10, 2002          Redeemable by Company:             Yes _   No X
Stated Maturity:                    November 1, 2020          Redemption Date:  N/A
Interest Rate:                      See below                 Redemption Price: N/A
Interest Payment Dates:             See below
Regular Record Dates:               N/A
</TABLE>

               This Security is not an Original Discount Security
              within the meaning of the within-mentioned Indenture.

                          -----------------------------

Principal Amount
$90,000,000                                                          No. E-1

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a corporation duly organized and
existing under the laws of the State of Texas (herein called the "Company,"
which term includes any successor under the Indenture referred to below), for
value received, hereby promises to pay to JPMorgan Chase Bank as Trustee under
the Trust Indenture (as herein defined) or its registered assigns (the
"Indenture Trustee"), the principal sum of NINETY MILLION DOLLARS, in whole or
in installments on such date or dates as the Issuer (as defined herein) has any
obligations under the Trust Indenture (as amended and supplemented, the "Trust
Indenture"), dated as of February 1, 1998, between Brazos River Authority (the
"Issuer") and the Indenture Trustee (as successor) to reply any principal in
respect of the 1998B Bonds (as such term is defined in the Trust Indenture, and
hereinafter referred to as the "Series 1998B BR Bonds"), excluding any payment
of principal in advance of the final scheduled maturity date thereof, but not
later than the Stated Maturity specified above. The obligation of the Company to
make any payment of principal on this Bond, whether at maturity or otherwise,
shall be fully or partially, as the case may be, deemed to have been paid or
otherwise satisfied and discharged to the extent CenterPoint Energy, Inc.
("CenterPoint") has paid to the Indenture Trustee the Installment Payment (as
defined below) in respect of the principal then due and payable on the Series
1998B BR Bonds.

Interest shall be payable on this Bond on each Interest Payment Date (as
hereinafter defined) at such rate per annum as shall cause the amount of
interest payable on such Interest Payment Date on this Bond to equal the amount
of regularly scheduled interest payable on such Interest Payment Date in respect
of the Series 1998B BR Bonds under the Trust Indenture. Such interest shall be
payable on the same dates as interest is payable from time to time in respect of
the Series 1998B BR Bonds pursuant to the Trust Indenture (each such date herein
called an "Interest Payment Date"), until the maturity of this Bond, or, if the
Company shall default in the payment of the principal due on this Bond, until
the Company's obligation with respect to the payment of such principal shall be
discharged as provided in the Indenture. The amount of interest payable from
time to time in respect of the Series 1998B BR Bonds under the Trust Indenture,
the basis on which such interest is computed and the dates on which such
interest

                                       1

<PAGE>

is payable are set forth in the Trust Indenture. This Bond shall bear interest
(a) from the Interest Payment Date next preceding the date of this Bond to which
interest has been paid, or (b) if the date of this Bond is an Interest Payment
Date to which interest has been paid, then from such date, or (c) if no interest
has been paid on this Bond, then from the date of initial authentication of this
Bond. The obligation of the Company to make any payment of interest on this Bond
shall be fully or partially, as the case may be, deemed to have been paid or
otherwise satisfied and discharged to the extent that CenterPoint has paid to
the Indenture Trustee the Installment Payment in respect of the interest then
due and payable on the Series 1998B BR Bonds.

This Bond is issued to the Trust Indenture Trustee as security for the payment
by CenterPoint of the Installment Payments, as defined in, and pursuant to the
Installment Payment and Bond Amortization Agreement, dated as of February 1,
1998, between the Brazos River Authority and CenterPoint (as successor). This
Bond shall be held by the Trust Indenture Trustee subject to the terms of the
Collateral Agreement (Series E Bonds), dated as of October 10, 2002, between the
Company and the Indenture Trustee. Any capitalized terms used herein and not
defined herein shall have the meanings specified in the Indenture (as defined
below), unless otherwise noted.

The Indenture Trustee shall surrender this Bond to the Trustee when all of the
principal of and interest on the Series 1998B BR Bonds shall have been duly
paid, and the Trust Indenture shall have been terminated.

Payments of the principal of and interest on this Bond shall be made at the
Corporate Trust Office of JPMorgan Chase Bank, as Trustee, located at 600 Travis
Street, Suite 1150, Houston, Texas 77002, or at such other office or agency as
may be designated for such purpose by the Company from time to time. Payment of
the principal of and interest on this Bond, as aforesaid, shall be made in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts.

This Bond is one of a duly authorized issue of securities of the Company (herein
called the "Securities"), issued and issuable in one or more series under and
equally secured by a General Mortgage Indenture, dated as of October 10, 2002
(such Indenture as originally executed and delivered and as supplemented or
amended from time to time thereafter, together with any constituent instruments
establishing the terms of particular Securities, being herein called the
"Indenture"), between the Company and JPMorgan Chase Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the property mortgaged, pledged and held in
trust, the nature and extent of the security and the respective rights,
limitations of rights, duties and immunities of the Company, the Trustee and the
Holders of the Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered and secured. The
acceptance of this Bond shall be deemed to constitute the consent and agreement
by the Holder hereof to all of the terms and provisions of the Indenture. This
Bond is one of the series designated above.

The Bonds of this series will not be entitled to the benefit of any sinking fund
or voluntary redemption provisions.

If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of this Bond may be declared due and payable in the
manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; PROVIDED, HOWEVER, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that the Indenture permits the
Trustee to enter into one or more supplemental indentures for limited purposes
without the consent of any Holders of Securities. The Indenture also contains
provisions

                                       2

<PAGE>

permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Bond shall be conclusive and binding upon such Holder and upon
all future Holders of this Bond and of any Security issued upon the registration
of transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond.

As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond is registrable in the Security Register, upon
surrender of this Bond for registration of transfer at the Corporate Trust
Office of JPMorgan Chase Bank in Houston, Texas or such other office or agency
as may be designated by the Company from time to time, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series of authorized denominations and of like tenor and aggregate principal
amount, will be issued to the designated transferee or transferees.

The Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the person in whose name this Bond shall be registered upon the
Security Register for the Bonds of this series as the absolute owner of such
Bond for the purpose of receiving payment of or on account of the principal of
and interest on this Bond and for all other purposes, whether or not this Bond
be overdue, and neither the Company nor the Trustee shall be affected by any
notice to the contrary; and all such payments so made to such registered owner
or upon his order shall be valid and effectual to satisfy and discharge the
liability upon this Bond to the extent of the sum or sums paid.

The Trustee may conclusively presume that the obligation of the Company to pay
the principal of and interest on this Bond shall have been fully satisfied and
discharged unless and until it shall have received a written notice from the
Trust Indenture Trustee, signed by an authorized officer of the Trust Indenture
Trustee and attested by the Secretary or an Assistant Secretary of the Trust
Indenture Trustee within 90 days after the applicable Interest Payment Date,
stating that the payment of principal of or interest on this Bond has not been
fully paid when due and specifying the amount of funds required to make such
payment.

Before any transfer of this Bond by the registered holder or his or its legal
representative will be recognized or given effect by the Company or the Trustee,
the registered holder shall notify the Company and the Trustee of the name and
address of the transferee. By acceptance hereof the holder of this Bond and each
transferee shall be deemed to have agreed to indemnify and hold harmless the
Company and the Trustee against all losses, claims, damages or liability arising
out of any failure on part of the holder or of any such transferee to comply
with the requirements of the preceding sentence.

No recourse under or upon any obligation, covenant or agreement contained in the
Indenture or in any indenture supplemental thereto, or in any Bond or coupon
thereby secured, or because of any indebtedness thereby secured, shall be had
against any incorporator, member, manager, stockholder, officer, director or
employee, as such, past, present or future, of the Company or any predecessor or
successor corporation or company, either directly or through the Company or any
predecessor or successor corporation or company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that the
Indenture, any indenture supplemental thereto and the obligations thereby
secured, are solely corporate obligations of the Company, and that no personal
liability whatsoever shall attach to, or be incurred by, such incorporators,
members, managers, stockholders, officers, directors or employees, as such, of
the Company or of any predecessor or successor corporation or company, or any of
them, because of the creation of the indebtedness thereby authorized, or under
or by reason of any of the obligations, covenants or agreements contained in the
Indenture or in any indenture supplemental thereto or in any of the Bonds or
coupons thereby secured, or implied therefrom.

This Bond shall be governed by and construed in accordance with the law of the
State of New York except as provided in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Bond shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any

                                       3

<PAGE>

purpose.

            [The remainder of this page is intentionally left blank.]

                                       4

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                   CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                                   By: _____________________________________
                                       Name:
                                       Title:

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Date of Authentication: ______, 2002

                                   JPMORGAN CHASE BANK, as Trustee

                                   By: _____________________________________
                                       Authorized Signatory

                                       5
<PAGE>

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                              OFFICER'S CERTIFICATE

                                October 10, 2002

I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the Manager of the
Company dated October 10, 2002, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:

1.       The terms and conditions of the Securities of the series described in
this Officer's Certificate are as follows (the numbered subdivisions set forth
in this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):

         (1)      The Securities of the sixth series to be issued under the
         Indenture shall be designated "General Mortgage Bonds, Series F, due
         May 1, 2019" (the "Series F Bonds").

         (2)      The Series F Bonds shall be initially authenticated and
         delivered in the aggregate principal amount of $100,000,000.

         (3)      Not applicable.

         (4)      The Series F Bonds shall mature and the principal thereof
         shall be due and payable together with all accrued and unpaid interest
         thereon on May 1, 2019. The obligation of the Company to make any
         payment of principal on this Bond shall be fully or partially, as the
         case may be, deemed to have been paid or otherwise satisfied and
         discharged to the extent CenterPoint Energy, Inc. ("CenterPoint") has
         paid to the Trust Indenture Trustee the Installment Payment (as defined
         below) in respect of the principal then due and payable on the Bonds
         (as such term is defined in the Trust Indenture, and hereinafter
         referred to as the "Series 1998C BR Bonds").

         (5)      The Series F Bonds shall bear interest from the time
         hereinafter provided at such rate per annum as shall cause the amount
         of interest payable on each Interest Payment Date (as hereinafter
         defined) on the Series F Bonds to equal the amount of regularly
         scheduled interest payable on such Interest Payment Date under the
         Trust Indenture dated as of February 1, 1998 (as amended and
         supplemented, the "Trust Indenture") between Brazos

                                       1

<PAGE>

         River Authority (the "Issuer") and JPMorgan Chase Bank (successor to
         Chase Bank of Texas, National Association), as trustee (the "Trust
         Indenture Trustee") in respect of the Series 1998C BR Bonds. Such
         interest on the Series F Bonds shall be payable on the same dates as
         interest is payable from time to time in respect of the Series 1998C BR
         Bonds pursuant to the Trust Indenture (each such date herein called an
         "Interest Payment Date"), until the maturity of the Series F Bonds, or,
         in the case of any default by the Company in the payment of the
         principal due on the Series F Bonds, until the Company's obligation
         with respect to the payment of such principal shall be discharged as
         provided in the Indenture. The amount of interest payable from time to
         time in respect of the Series 1998C BR Bonds under the Trust Indenture,
         the basis on which such interest is computed and the dates on which
         such interest is payable are set forth in the Trust Indenture. Each
         Series F Bond shall bear interest from the later of the date of initial
         authentication of such Series F Bond or the most recent Interest
         Payment Date to which interest has been paid. The obligation of the
         Company to make any payment of interest on the Series F Bonds shall be
         fully or partially, as the case may be, deemed to have been paid or
         otherwise satisfied and discharged to the extent that CenterPoint has
         paid to the Trust Indenture Trustee the Installment Payment in respect
         of the interest then due and payable on the Series 1998C BR Bonds.

         (6)      The Corporate Trust Office of JPMorgan Chase Bank in Houston,
         Texas shall be the place at which (i) the principal of, premium and
         interest on, the Series F Bonds shall be payable, (ii) registration of
         transfer of the Series F Bonds may be effected, (iii) exchanges of the
         Series F Bonds may be effected and (iv) notices and demands to or upon
         the Company in respect of the Series F Bonds and the Indenture may be
         served; and JPMorgan Chase Bank shall be the Security Registrar for the
         Series F Bonds; provided, however, that the Company reserves the right
         to change, by one or more Officer's Certificates, any such place or the
         Security Registrar; and provided, further, that the Company reserves
         the right to designate, by one or more Officer's Certificates, its
         principal office in Houston, Texas as any such place or itself as the
         Security Registrar; provided, however, that there shall be only a
         single Security Registrar for the Series F Bonds.

         (7)      Not applicable.

         (8)      Not applicable.

         (9)      The Series F Bonds are issuable only in denominations of
         $100,000,000.

                                       2

<PAGE>

         (10)     Not applicable.

         (11)     Not applicable.

         (12)     Not applicable.

         (13)     Not applicable.

         (14)     Not applicable.

         (15)     Not applicable.

         (16)     Not applicable.

         (17)     The Series F Bonds shall be evidenced by a single registered
         Series F Bond in the principal amount and denomination of One Hundred
         Million Dollars ($100,000,000). The Series F Bonds shall be dated
         October 10, 2002, shall mature no later than May 1, 2019, unless sooner
         paid, and shall bear interest at the rate specified in subsection (5)
         above. The Series F Bonds may be executed by the Company and delivered
         to the Trustee for authentication and delivery. The principal of and
         interest on the Bonds shall be payable at the Corporate Trust Office of
         the Trustee in Houston, Texas.

         The single Series F Bond shall be identified by the number F-1 and
         shall upon issuance be delivered by the Company to, and registered in
         the name of, the Trust Indenture Trustee, and shall be transferable
         only as required to effect an assignment thereof to a successor or an
         assign of the Trust Indenture Trustee under the Trust Indenture, and
         provided that all obligations of the Trust Indenture Trustee under the
         Collateral Agreement (as defined herein) shall also be transferred to,
         and assumed by any such successor or assign. The Series F Bonds are to
         be issued to the Trust Indenture Trustee as security for the payment by
         CenterPoint of the Installment Payments, as defined in, and pursuant to
         the Installment Payment and Bond Amortization Agreement, dated as of
         February 1, 1998, by and between the Issuer and CenterPoint (as
         successor). The single Series F Bond shall be held by the Trust
         Indenture Trustee subject to the terms of the Series F Bonds Collateral
         Agreement (Series F Bonds) , dated as of October 10, 2002, between the
         Company and the Trust Indenture Trustee (the "Collateral Agreement").

         Series F Bonds issued upon transfer shall be numbered consecutively
         from F-2 upwards and issued in the same $100,000,000 denomination. See
         also subsection (19) below.

         (18)     Not applicable.

         (19)     The holder of the Series F Bond by acceptance of the Series F
         Bond agrees to restrictions on transfer and to waivers of certain
         rights of exchange as set forth herein. The Series F Bonds have not
         been registered under the Securities Act of 1933 and may not be
         offered, sold or otherwise transferred in the absence of such
         registration or an applicable exemption therefrom. No service charge
         shall be made for the registration of transfer or exchange of the
         Series F Bonds, or any Tranche thereof; provided, however,

                                       3

<PAGE>

         that the Company may require payment of a sum sufficient to cover any
         tax or other governmental charge payable in connection with the
         exchange or transfer.

         (20)     For purposes of the Series F Bonds, "Business Day" means any
         day other than (i) a Saturday or Sunday, (ii) a day on which commercial
         banks in New York, New York, Houston, Texas, or the city in which the
         principal corporate trust office of the Indenture Trustee is located,
         are authorized by law to close or (iii) a day on which the New York
         Stock Exchange is closed.

         (21)     Not applicable.

         (22)     The Trustee may conclusively presume that the obligation of
         the Company to pay the principal of and interest on the Series F Bond
         shall have been fully satisfied and discharged unless and until it
         shall have received a written notice from the Indenture Trustee, signed
         by an authorized officer of the Indenture Trustee and attested by the
         Secretary or an Assistant Secretary of the Indenture Trustee within 90
         days after the applicable Interest Payment Date, stating that the
         payment of principal of or interest on the Series F Bond has not been
         fully paid when due and specifying the amount of funds required to make
         such payment.

         The Series F Bonds shall have such other terms and provisions as are
         provided in the form thereof attached hereto as Exhibit A, and shall be
         issued in substantially such form.

2.       The undersigned has read all of the covenants and conditions contained
in the Indenture, and the definitions in the Indenture relating thereto,
relating to the issuance of the Series F Bonds and in respect of compliance with
which this certificate is made.

3.       The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.

4.       In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.

         In the opinion of the undersigned, such conditions and covenants have
been complied with.

                                       4

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate on this 10th day of October, 2002.

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

Acknowledged and Received on
October 10, 2002

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Ronda L. Parmen
    ----------------------------------------
Name: Ronda L. Parmen
Title: Vice President and Trust Officer

                                       5

<PAGE>

                                                                       EXHIBIT A

                              FORM OF SERIES F BOND

                                        6

<PAGE>

NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON
TRANSFER AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE
BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE
WITH APPLICABLE SECURITIES LAWS.

THIS BOND IS NOT TRANSFERABLE EXCEPT, AS FURTHER PROVIDED HEREIN, TO A SUCCESSOR
OR ASSIGN OF THE TRUST INDENTURE TRUSTEE UNDER THE TRUST INDENTURE REFERRED TO
HEREIN AMONG THE ISSUER AND THE TRUST INDENTURE TRUSTEE.

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
                General Mortgage Bonds, Series F, due May 1, 2019

<TABLE>
<S>                                 <C>                       <C>                                <C>
Original Interest Accrual Date:     October 10, 2002          Redeemable by Company:             Yes _   No X
Stated Maturity:                    May 1, 2019               Redemption Date:  N/A
Interest Rate:                      See below                 Redemption Price: N/A
Interest Payment Dates:             See below
Regular Record Dates:               N/A
</TABLE>

               This Security is not an Original Discount Security
             within the meaning of the within-mentioned Indenture.

                         -----------------------------

Principal Amount
$100,000,000                                                       No. F-1

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a corporation duly organized and
existing under the laws of the State of Texas (herein called the "Company,"
which term includes any successor under the Indenture referred to below), for
value received, hereby promises to pay to JPMorgan Chase Bank as Trustee under
the Trust Indenture (as herein defined) or its registered assigns (the
"Indenture Trustee"), the principal sum of ONE HUNDRED MILLION DOLLARS, in whole
or in installments on such date or dates as the Issuer (as defined herein) has
any obligations under the Trust Indenture (as amended and supplemented, the
"Trust Indenture"), dated as of February 1, 1998, between Brazos River Authority
(the "Issuer") and the Indenture Trustee (as successor) to repay any principal
in respect of the 1998C Bonds (as such term is defined in the Trust Indenture,
and hereinafter referred to as the "Series 1998C BR Bonds"), excluding any
payment of principal in advance of the final scheduled maturity date thereof,
but not later than the Stated Maturity specified above. The obligation of the
Company to make any payment of principal on this Bond, whether at maturity or
otherwise, shall be fully or partially, as the case may be, deemed to have been
paid or otherwise satisfied and discharged to the extent CenterPoint Energy,
Inc. ("CenterPoint") has paid to the Indenture Trustee the Installment Payment
(as defined below) in respect of the principal then due and payable on the
Series 1998C BR Bonds.

Interest shall be payable on this Bond on each Interest Payment Date (as
hereinafter defined) at such rate per annum as shall cause the amount of
interest payable on such Interest Payment Date on this Bond to equal the amount
of regularly scheduled interest payable on such Interest Payment Date in respect
of the Series 1998C BR Bonds under the Trust Indenture. Such interest shall be
payable on the same dates as interest is payable from time to time in respect of
the Series 1998C BR Bonds pursuant to the Trust Indenture (each such date herein
called an "Interest Payment Date"), until the maturity of this Bond, or, if the
Company shall default in the payment of the principal due on this Bond, until
the Company's obligation with respect to the payment of such principal shall be
discharged as provided in the Indenture. The amount of interest payable from
time to time in respect of the Series 1998C BR Bonds under the Trust Indenture,
the basis on which such interest is computed and the dates on which such
interest

                                       1

<PAGE>

is payable are set forth in the Trust Indenture. This Bond shall bear interest
(a) from the Interest Payment Date next preceding the date of this Bond to which
interest has been paid, or (b) if the date of this Bond is an Interest Payment
Date to which interest has been paid, then from such date, or (c) if no interest
has been paid on this Bond, then from the date of initial authentication of this
Bond. The obligation of the Company to make any payment of interest on this Bond
shall be fully or partially, as the case may be, deemed to have been paid or
otherwise satisfied and discharged to the extent that CenterPoint has paid to
the Indenture Trustee the Installment Payment in respect of the interest then
due and payable on the Series 1998C BR Bonds.

This Bond is issued to the Trust Indenture Trustee as security for the payment
by CenterPoint of the Installment Payments, as defined in, and pursuant to the
Installment Payment and Bond Amortization Agreement, dated as of February 1,
1998, between the Brazos River Authority and CenterPoint (as successor). This
Bond shall be held by the Trust Indenture Trustee subject to the terms of the
Collateral Agreement (Series F Bonds), dated as of October 10, 2002, between the
Company and the Indenture Trustee. Any capitalized terms used herein and not
defined herein shall have the meanings specified in the Indenture (as defined
below), unless otherwise noted.

The Indenture Trustee shall surrender this Bond to the Trustee when all of the
principal of and interest on the Series 1998C BR Bonds shall have been duly
paid, and the Trust Indenture shall have been terminated.

Payments of the principal of and interest on this Bond shall be made at the
Corporate Trust Office of JPMorgan Chase Bank, as Trustee, located at 600 Travis
Street, Suite 1150, Houston, Texas 77002, or at such other office or agency as
may be designated for such purpose by the Company from time to time. Payment of
the principal of and interest on this Bond, as aforesaid, shall be made in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts.

This Bond is one of a duly authorized issue of securities of the Company (herein
called the "Securities"), issued and issuable in one or more series under and
equally secured by a General Mortgage Indenture, dated as of October 10, 2002
(such Indenture as originally executed and delivered and as supplemented or
amended from time to time thereafter, together with any constituent instruments
establishing the terms of particular Securities, being herein called the
"Indenture"), between the Company and JPMorgan Chase Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the property mortgaged, pledged and held in
trust, the nature and extent of the security and the respective rights,
limitations of rights, duties and immunities of the Company, the Trustee and the
Holders of the Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered and secured. The
acceptance of this Bond shall be deemed to constitute the consent and agreement
by the Holder hereof to all of the terms and provisions of the Indenture. This
Bond is one of the series designated above.

The Bonds of this series will not be entitled to the benefit of any sinking fund
or voluntary redemption provisions.

If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of this Bond may be declared due and payable in the
manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; PROVIDED, HOWEVER, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that the Indenture permits the
Trustee to enter into one or more supplemental indentures for limited purposes
without the consent of any Holders of Securities. The Indenture also contains
provisions

                                       2

<PAGE>

permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Bond shall be conclusive and binding upon such Holder and upon
all future Holders of this Bond and of any Security issued upon the registration
of transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond.

As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond is registrable in the Security Register, upon
surrender of this Bond for registration of transfer at the Corporate Trust
Office of JPMorgan Chase Bank in Houston, Texas or such other office or agency
as may be designated by the Company from time to time, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series of authorized denominations and of like tenor and aggregate principal
amount, will be issued to the designated transferee or transferees.

The Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the person in whose name this Bond shall be registered upon the
Security Register for the Bonds of this series as the absolute owner of such
Bond for the purpose of receiving payment of or on account of the principal of
and interest on this Bond and for all other purposes, whether or not this Bond
be overdue, and neither the Company nor the Trustee shall be affected by any
notice to the contrary; and all such payments so made to such registered owner
or upon his order shall be valid and effectual to satisfy and discharge the
liability upon this Bond to the extent of the sum or sums paid.

The Trustee may conclusively presume that the obligation of the Company to pay
the principal of and interest on this Bond shall have been fully satisfied and
discharged unless and until it shall have received a written notice from the
Trust Indenture Trustee, signed by an authorized officer of the Trust Indenture
Trustee and attested by the Secretary or an Assistant Secretary of the Trust
Indenture Trustee within 90 days after the applicable Interest Payment Date,
stating that the payment of principal of or interest on this Bond has not been
fully paid when due and specifying the amount of funds required to make such
payment.

Before any transfer of this Bond by the registered holder or his or its legal
representative will be recognized or given effect by the Company or the Trustee,
the registered holder shall notify the Company and the Trustee of the name and
address of the transferee. By acceptance hereof the holder of this Bond and each
transferee shall be deemed to have agreed to indemnify and hold harmless the
Company and the Trustee against all losses, claims, damages or liability arising
out of any failure on part of the holder or of any such transferee to comply
with the requirements of the preceding sentence.

No recourse under or upon any obligation, covenant or agreement contained in the
Indenture or in any indenture supplemental thereto, or in any Bond or coupon
thereby secured, or because of any indebtedness thereby secured, shall be had
against any incorporator, member, manager, stockholder, officer, director or
employee, as such, past, present or future, of the Company or any predecessor or
successor corporation or company, either directly or through the Company or any
predecessor or successor corporation or company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that the
Indenture, any indenture supplemental thereto and the obligations thereby
secured, are solely corporate obligations of the Company, and that no personal
liability whatsoever shall attach to, or be incurred by, such incorporators,
members, managers, stockholders, officers, directors or employees, as such, of
the Company or of any predecessor or successor corporation or company, or any of
them, because of the creation of the indebtedness thereby authorized, or under
or by reason of any of the obligations, covenants or agreements contained in the
Indenture or in any indenture supplemental thereto or in any of the Bonds or
coupons thereby secured, or implied therefrom.

This Bond shall be governed by and construed in accordance with the law of the
State of New York except as provided in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Bond shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any

                                       3

<PAGE>

purpose.

            [The remainder of this page is intentionally left blank.]

                                       4

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                   CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                                   By: _____________________________________
                                       Name:
                                       Title:

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Date of Authentication: ______, 2002

                                   JPMORGAN CHASE BANK, as Trustee

                                   By: _____________________________________
                                       Authorized Signatory

                                       5
<PAGE>

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                              OFFICER'S CERTIFICATE

                                October 10, 2002

I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the Manager of the
Company dated October 10, 2002, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:

1.       The terms and conditions of the Securities of the series described in
this Officer's Certificate are as follows (the numbered subdivisions set forth
in this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):

         (1)      The Securities of the seventh series to be issued under the
         Indenture shall be designated "General Mortgage Bonds, Series G, due
         January 1, 2011" (the "Series G Bonds").

         (2)      The Series G Bonds shall be initially authenticated and
         delivered in the aggregate principal amount of $19,200,000.

         (3)      Not applicable.

         (4)      The Series G Bonds shall mature and the principal thereof
         shall be due and payable together with all accrued and unpaid interest
         thereon on January 1, 2011. The obligation of the Company to make any
         payment of principal on this Bond shall be fully or partially, as the
         case may be, deemed to have been paid or otherwise satisfied and
         discharged to the extent CenterPoint Energy, Inc. ("CenterPoint") has
         paid to the Trust Indenture Trustee the Installment Payment (as defined
         below) in respect of the principal then due and payable on the Bonds
         (as such term is defined in the Trust Indenture, and hereinafter
         referred to as the "Series 1999 GC Bonds").

         (5)      The Series G Bonds shall bear interest from the time
         hereinafter provided at such rate per annum as shall cause the amount
         of interest payable on each Interest Payment Date (as hereinafter
         defined) on the Series G Bonds to equal the amount of regularly
         scheduled interest payable on such Interest Payment Dates under the
         Trust Indenture dated as of April 1, 1999 (as amended and supplemented,
         the "Trust Indenture") between Gulf Coast Waste

<PAGE>

         Disposal Authority (the "Issuer") and JPMorgan Chase Bank (successor to
         Chase Bank of Texas, National Association), as trustee (the "Trust
         Indenture Trustee") in respect of the Series 1999 GC Bonds". Such
         interest on the Series G Bonds shall be payable on the same dates as
         interest is payable from time to time in respect of the Series 1999 GC
         Bonds pursuant to the Trust Indenture (each such date herein called an
         "Interest Payment Date"), until the maturity of the Series G Bonds, or,
         in the case of any default by the Company in the payment of the
         principal due on the Series G Bonds, until the Company's obligation
         with respect to the payment of such principal shall be discharged as
         provided in the Indenture. The amount of interest payable from time to
         time in respect of the Series 1999 GC Bonds under the Trust Indenture,
         the basis on which such interest is computed and the dates on which
         such interest is payable are set forth in the Trust Indenture. Each
         Series G Bond shall bear interest from the later of the date of initial
         authentication of such Series G Bond or the most recent Interest
         Payment Date to which interest has been paid. The obligation of the
         Company to make any payment of interest on the Series G Bonds shall be
         fully or partially, as the case may be, deemed to have been paid or
         otherwise satisfied and discharged to the extent that CenterPoint has
         paid to the Trust Indenture Trustee the Installment Payment in respect
         of the interest then due and payable on the Series 1999 GC Bonds.

         (6)      The Corporate Trust Office of JPMorgan Chase Bank in Houston,
         Texas shall be the place at which (i) the principal of, premium and
         interest on, the Series G Bonds shall be payable, (ii) registration of
         transfer of the Series G Bonds may be effected, (iii) exchanges of the
         Series G Bonds may be effected and (iv) notices and demands to or upon
         the Company in respect of the Series G Bonds and the Indenture may be
         served; and JPMorgan Chase Bank shall be the Security Registrar for the
         Series G Bonds; provided, however, that the Company reserves the right
         to change, by one or more Officer's Certificates, any such place or the
         Security Registrar; and provided, further, that the Company reserves
         the right to designate, by one or more Officer's Certificates, its
         principal office in Houston, Texas as any such place or itself as the
         Security Registrar; provided, however, that there shall be only a
         single Security Registrar for the Series G Bonds.

         (7)      Not applicable.

         (8)      Not applicable.

         (9)      The Series G Bonds are issuable only in denominations of
         $19,200,000.

<PAGE>

         (10)     Not applicable.

         (11)     Not applicable.

         (12)     Not applicable.

         (13)     Not applicable.

         (14)     Not applicable.

         (15)     Not applicable.

         (16)     Not applicable.

         (17)     The Series G Bonds shall be evidenced by a single registered
         Series G Bond in the principal amount and denomination of Nineteen
         Million Two Hundred Thousand Dollars ($19,200,000). The Series G Bonds
         shall be dated October 10, 2002, shall mature no later than January 1,
         2011, unless sooner paid, and shall bear interest at the rate specified
         in subsection (5) above. The Series G Bonds may be executed by the
         Company and delivered to the Trustee for authentication and delivery.
         The principal of and interest on the Bonds shall be payable at the
         Corporate Trust Office of the Trustee in Houston, Texas.

         The single Series G Bond shall be identified by the number G-1 and
         shall upon issuance be delivered by the Company to, and registered in
         the name of, the Trust Indenture Trustee, and shall be transferable
         only as required to effect an assignment thereof to a successor or an
         assign of the Trust Indenture Trustee under the Trust Indenture, and
         provided that all obligations of the Trust Indenture Trustee under the
         Collateral Agreement (as defined herein) shall also be transferred to,
         and assumed by, any such successor or assign. The Series G Bonds are to
         be issued to the Trust Indenture Trustee as security for the payment by
         CenterPoint of the Installment Payments, as defined in, and pursuant to
         the Installment Payment and Bond Amortization Agreement, dated as of
         April 1, 1999, by and between the Issuer and CenterPoint (as
         successor). The single Series G Bond shall be held by the Trust
         Indenture Trustee subject to the terms of the Series G Bonds Collateral
         Agreement (Series G Bonds), dated as of October 10, 2002, between the
         Company and the Trust Indenture Trustee (the "Collateral Agreement").

         Series G Bonds issued upon transfer shall be numbered consecutively
         from G-2 upwards and issued in the same $19,200,000 denomination. See
         also subsection (19) below.

         (18)     Not applicable.

         (19)     The holder of the Series G Bond by acceptance of the Series G
         Bond agrees to restrictions on transfer and to waivers of certain
         rights of exchange as set forth herein. The Series G Bonds have not
         been registered under the Securities Act of 1933 and may not be
         offered, sold or otherwise transferred in the absence of such
         registration or an applicable exemption therefrom. No service charge
         shall be made for the registration of transfer or exchange of the
         Series G Bonds, or any Tranche thereof; provided, however,

<PAGE>

         that the Company may require payment of a sum sufficient to cover any
         tax or other governmental charge payable in connection with the
         exchange or transfer.

         (20)     For purposes of the Series G Bonds, "Business Day" means any
         day other than (i) a Saturday or Sunday, (ii) a day on which commercial
         banks in New York, New York, Houston, Texas, or the city in which the
         principal corporate trust office of the Indenture Trustee is located,
         are authorized by law to close or (iii) a day on which the New York
         Stock Exchange is closed.

         (21)     Not applicable.

         (22)     The Trustee may conclusively presume that the obligation of
         the Company to pay the principal of and interest on the Series G Bond
         shall have been fully satisfied and discharged unless and until it
         shall have received a written notice from the Indenture Trustee, signed
         by an authorized officer of the Indenture Trustee and attested by the
         Secretary or an Assistant Secretary of the Indenture Trustee within 90
         days after the applicable Interest Payment Date, stating that the
         payment of principal of or interest on the Series G Bond has not been
         fully paid when due and specifying the amount of funds required to make
         such payment.

         The Series G Bonds shall have such other terms and provisions as are
provided in the form thereof attached hereto as Exhibit A, and shall be issued
in substantially such form.

2.       The undersigned has read all of the covenants and conditions contained
in the Indenture, and the definitions in the Indenture relating thereto,
relating to the issuance of the Series G Bonds and in respect of compliance with
which this certificate is made.

3.       The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.

4.       In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.

         In the opinion of the undersigned, such conditions and covenants have
been complied with.

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate on this 10th day of October, 2002.

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

Acknowledged and Received on
October 10, 2002

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Ronda L. Parmen
    -----------------------------------------
Name: Ronda L. Parmen
Title: Vice President and Trust Officer

<PAGE>

                                                                       EXHIBIT A

                              FORM OF SERIES G BOND

<PAGE>

NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON
TRANSFER AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE
BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE
WITH APPLICABLE SECURITIES LAWS.

THIS BOND IS NOT TRANSFERABLE EXCEPT, AS FURTHER PROVIDED HEREIN, TO A SUCCESSOR
OR ASSIGN OF THE TRUST INDENTURE TRUSTEE UNDER THE TRUST INDENTURE REFERRED TO
HEREIN AMONG THE ISSUER AND THE TRUST INDENTURE TRUSTEE.

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
              General Mortgage Bonds, Series G, due January 1, 2011

<TABLE>
<S>                                 <C>                       <C>                                <C>
Original Interest Accrual Date:     October 10, 2002          Redeemable by Company:             Yes _   No X
Stated Maturity:                    January 1, 2011           Redemption Date:  N/A
Interest Rate:                      See below                 Redemption Price: N/A
Interest Payment Dates:             See below
Regular Record Dates:               N/A
</TABLE>

               This Security is not an Original Discount Security
             within the meaning of the within-mentioned Indenture.

                         -----------------------------

Principal Amount
$19,200,000                                                        No. G-1

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a corporation duly organized and
existing under the laws of the State of Texas (herein called the "Company,"
which term includes any successor under the Indenture referred to below), for
value received, hereby promises to pay to JPMorgan Chase Bank as Trustee under
the Trust Indenture (as herein defined) or its registered assigns (the
"Indenture Trustee"), the principal sum of NINETEEN MILLION TWO HUNDRED THOUSAND
DOLLARS, in whole or in installments on such date or dates as the Issuer (as
defined herein) has any obligations under the Trust Indenture (as amended and
supplemented, the "Trust Indenture"), dated as of April 1, 1999, between Gulf
Coast Waste Disposal Authority (the "Issuer") and the Indenture Trustee (as
successor) to repay any principal in respect of the Bonds (as such term is
defined in the Trust Indenture, and hereinafter referred to as the "Series 1999
GC Bonds"), excluding any payment of principal in advance of the final scheduled
maturity date thereof, but not later than the Stated Maturity specified above.
The obligation of the Company to make any payment of principal on this Bond,
whether at maturity or otherwise, shall be fully or partially, as the case may
be, deemed to have been paid or otherwise satisfied and discharged to the extent
CenterPoint Energy, Inc. ("CenterPoint") has paid to the Indenture Trustee the
Installment Payment (as defined below) in respect of the principal then due and
payable on the Series 1999 GC Bonds.

Interest shall be payable on this Bond on each Interest Payment Date (as
hereinafter defined) at such rate per annum as shall cause the amount of
interest payable on such Interest Payment Date on this Bond to equal the amount
of regularly scheduled interest payable on such Interest Payment Date in respect
of the Series 1999 GC Bonds under the Trust Indenture. Such interest shall be
payable on the same dates as interest is payable from time to time in respect of
the Series 1999 GC Bonds pursuant to the Trust Indenture (each such date herein
called an "Interest Payment Date"), until the maturity of this Bond, or, if the
Company shall default in the payment of the principal due on this Bond, until
the Company's obligation with respect to the payment of such principal shall be
discharged as provided in the Indenture. The amount of interest payable from
time to time in respect of the Series 1999 GC Bonds under the Trust Indenture,
the basis on which such interest is computed and the dates on which such
interest is

                                       1

<PAGE>

payable are set forth in the Trust Indenture. This Bond shall bear interest (a)
from the Interest Payment Date next preceding the date of this Bond to which
interest has been paid, or (b) if the date of this Bond is an Interest Payment
Date to which interest has been paid, then from such date, or (c) if no interest
has been paid on this Bond, then from the date of initial authentication of this
Bond. The obligation of the Company to make any payment of interest on this Bond
shall be fully or partially, as the case may be, deemed to have been paid or
otherwise satisfied and discharged to the extent that CenterPoint has paid to
the Indenture Trustee the Installment Payment in respect of the interest then
due and payable on the Series 1999 GC Bonds.

This Bond is issued to the Trust Indenture Trustee as security for the payment
by CenterPoint of the Installment Payments, as defined in, and pursuant to the
Installment Payment and Bond Amortization Agreement, dated as of April 1, 1999,
between Gulf Coast Waste Disposal Authority and CenterPoint (as successor). This
Bond shall be held by the Trust Indenture Trustee subject to the terms of the
Collateral Agreement (Series G Bonds), dated as of October 10, 2002, between the
Company and the Indenture Trustee. Any capitalized terms used herein and not
defined herein shall have the meanings specified in the Indenture (as defined
below), unless otherwise noted.

The Indenture Trustee shall surrender this Bond to the Trustee when all of the
principal of and interest on the Series 1999 GC Bonds shall have been duly paid,
and the Trust Indenture shall have been terminated.

Payments of the principal of and interest on this Bond shall be made at the
Corporate Trust Office of JPMorgan Chase Bank, as Trustee, located at 600 Travis
Street, Suite 1150, Houston, Texas 77002, or at such other office or agency as
may be designated for such purpose by the Company from time to time. Payment of
the principal of and interest on this Bond, as aforesaid, shall be made in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts.

This Bond is one of a duly authorized issue of securities of the Company (herein
called the "Securities"), issued and issuable in one or more series under and
equally secured by a General Mortgage Indenture, dated as of October 10, 2002
(such Indenture as originally executed and delivered and as supplemented or
amended from time to time thereafter, together with any constituent instruments
establishing the terms of particular Securities, being herein called the
"Indenture"), between the Company and JPMorgan Chase Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the property mortgaged, pledged and held in
trust, the nature and extent of the security and the respective rights,
limitations of rights, duties and immunities of the Company, the Trustee and the
Holders of the Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered and secured. The
acceptance of this Bond shall be deemed to constitute the consent and agreement
by the Holder hereof to all of the terms and provisions of the Indenture. This
Bond is one of the series designated above.

The Bonds of this series will not be entitled to the benefit of any sinking fund
or voluntary redemption provisions.

If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of this Bond may be declared due and payable in the
manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; PROVIDED, HOWEVER, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that the Indenture permits the
Trustee to enter into one or more supplemental indentures for limited purposes
without the consent of any Holders of Securities. The Indenture also contains
provisions

                                       2

<PAGE>

permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Bond shall be conclusive and binding upon such Holder and upon
all future Holders of this Bond and of any Security issued upon the registration
of transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond.

As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond is registrable in the Security Register, upon
surrender of this Bond for registration of transfer at the Corporate Trust
Office of JPMorgan Chase Bank in Houston, Texas or such other office or agency
as may be designated by the Company from time to time, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series of authorized denominations and of like tenor and aggregate principal
amount, will be issued to the designated transferee or transferees.

The Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the person in whose name this Bond shall be registered upon the
Security Register for the Bonds of this series as the absolute owner of such
Bond for the purpose of receiving payment of or on account of the principal of
and interest on this Bond and for all other purposes, whether or not this Bond
be overdue, and neither the Company nor the Trustee shall be affected by any
notice to the contrary; and all such payments so made to such registered owner
or upon his order shall be valid and effectual to satisfy and discharge the
liability upon this Bond to the extent of the sum or sums paid.

The Trustee may conclusively presume that the obligation of the Company to pay
the principal of and interest on this Bond shall have been fully satisfied and
discharged unless and until it shall have received a written notice from the
Trust Indenture Trustee, signed by an authorized officer of the Trust Indenture
Trustee and attested by the Secretary or an Assistant Secretary of the Trust
Indenture Trustee within 90 days after the applicable Interest Payment Date,
stating that the payment of principal of or interest on this Bond has not been
fully paid when due and specifying the amount of funds required to make such
payment.

Before any transfer of this Bond by the registered holder or his or its legal
representative will be recognized or given effect by the Company or the Trustee,
the registered holder shall notify the Company and the Trustee of the name and
address of the transferee. By acceptance hereof the holder of this Bond and each
transferee shall be deemed to have agreed to indemnify and hold harmless the
Company and the Trustee against all losses, claims, damages or liability arising
out of any failure on part of the holder or of any such transferee to comply
with the requirements of the preceding sentence.

No recourse under or upon any obligation, covenant or agreement contained in the
Indenture or in any indenture supplemental thereto, or in any Bond or coupon
thereby secured, or because of any indebtedness thereby secured, shall be had
against any incorporator, member, manager, stockholder, officer, director or
employee, as such, past, present or future, of the Company or any predecessor or
successor corporation or company, either directly or through the Company or any
predecessor or successor corporation or company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that the
Indenture, any indenture supplemental thereto and the obligations thereby
secured, are solely corporate obligations of the Company, and that no personal
liability whatsoever shall attach to, or be incurred by, such incorporators,
members, managers, stockholders, officers, directors or employees, as such, of
the Company or of any predecessor or successor corporation or company, or any of
them, because of the creation of the indebtedness thereby authorized, or under
or by reason of any of the obligations, covenants or agreements contained in the
Indenture or in any indenture supplemental thereto or in any of the Bonds or
coupons thereby secured, or implied therefrom.

This Bond shall be governed by and construed in accordance with the law of the
State of New York except as provided in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Bond shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any

                                       3

<PAGE>

purpose.

            [The remainder of this page is intentionally left blank.]

                                       4

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                 CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                                 By: _____________________________________
                                     Name:
                                     Title:

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Date of Authentication: ______, 2002

                                 JPMORGAN CHASE BANK, as Trustee

                                 By: _____________________________________
                                     Authorized Signatory

                                       5
<PAGE>

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                              OFFICER'S CERTIFICATE

                                October 10, 2002

I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the Manager of the
Company dated October 10, 2002, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:

1.       The terms and conditions of the Securities of the series described in
this Officer's Certificate are as follows (the numbered subdivisions set forth
in this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):

         (1)      The Securities of the eighth series to be issued under the
         Indenture shall be designated "General Mortgage Bonds, Series H, due
         June 1, 2026" (the "Series H Bonds").

         (2)      The Series H Bonds shall be initially authenticated and
         delivered in the aggregate principal amount of $100,000,000.

         (3)      Not applicable.

         (4)      The Series H Bonds shall mature and the principal thereof
         shall be due and payable together with all accrued and unpaid interest
         thereon on June 1, 2026. The obligation of the Company to make any
         payment of principal on this Bond shall be fully or partially, as the
         case may be, deemed to have been paid or otherwise satisfied and
         discharged to the extent CenterPoint Energy, Inc. ("CenterPoint") has
         paid to the Trust Indenture Trustee the Installment Payment (as defined
         below) in respect of the principal then due and payable on the Bonds
         (as such term is defined in the Trust Indenture, and hereinafter
         referred to as the "Series 1999A MC Bonds").

         (5)      The Series H Bonds shall bear interest from the time
         hereinafter provided at such rate per annum as shall cause the amount
         of interest payable on each Interest Payment Date (as hereinafter
         defined) on the Series H Bonds to equal the amount of regularly
         scheduled interest payable on such Interest Payment Date under the
         Trust Indenture dated as of April 1, 1999 (as amended and supplemented,
         the "Trust Indenture") between Matagorda

                                       1

<PAGE>

         County Navigation District Number One (the "Issuer") and JPMorgan Chase
         Bank (successor to Chase Bank of Texas, National Association, as
         trustee (the "Trust Indenture Trustee") in respect of the Series 1999A
         MC Bonds. Such interest on the Series H Bonds shall be payable on the
         same dates as interest is payable from time to time in respect of the
         Series 1999A MC Bonds pursuant to the Trust Indenture (each such date
         herein called an "Interest Payment Date"), until the maturity of the
         Series H Bonds, or, in the case of any default by the Company in the
         payment of the principal due on the Series H Bonds, until the Company's
         obligation with respect to the payment of such principal shall be
         discharged as provided in the Indenture. The amount of interest payable
         from time to time in respect of the Series 1999A MC Bonds under the
         Trust Indenture, the basis on which such interest is computed and the
         dates on which such interest is payable are set forth in the Trust
         Indenture. Each Series H Bond shall bear interest from the later of the
         date of initial authentication of such Series H Bond or the most recent
         Interest Payment Date to which interest has been paid. The obligation
         of the Company to make any payment of interest on the Series H Bonds
         shall be fully or partially, as the case may be, deemed to have been
         paid or otherwise satisfied and discharged to the extent that
         CenterPoint has paid to the Trust Indenture Trustee the Installment
         Payment in respect of the interest then due and payable on the Series
         1999A MC Bonds.

         (6)      The Corporate Trust Office of JPMorgan Chase Bank in Houston,
         Texas shall be the place at which (i) the principal of, premium and
         interest on, the Series H Bonds shall be payable, (ii) registration of
         transfer of the Series H Bonds may be effected, (iii) exchanges of the
         Series H Bonds may be effected and (iv) notices and demands to or upon
         the Company in respect of the Series H Bonds and the Indenture may be
         served; and JPMorgan Chase Bank shall be the Security Registrar for the
         Series H Bonds; provided, however, that the Company reserves the right
         to change, by one or more Officer's Certificates, any such place or the
         Security Registrar; and provided, further, that the Company reserves
         the right to designate, by one or more Officer's Certificates, its
         principal office in Houston, Texas as any such place or itself as the
         Security Registrar; provided, however, that there shall be only a
         single Security Registrar for the Series H Bonds.

         (7)      Not applicable.

         (8)      Not applicable.

                                       2

<PAGE>

         (9)      The Series H Bonds are issuable only in denominations of
         $100,000,000.

         (10)     Not applicable.

         (11)     Not applicable.

         (12)     Not applicable.

         (13)     Not applicable.

         (14)     Not applicable.

         (15)     Not applicable.

         (16)     Not applicable.

         (17)     The Series H Bonds shall be evidenced by a single registered
         Series H Bond in the principal amount and denomination of One Hundred
         Million Dollars ($100,000,000). The Series H Bonds shall be dated
         October 10, 2002, shall mature no later than June 1, 2026, unless
         sooner paid, and shall bear interest at the rate specified in
         subsection (5) above. The Series H Bonds may be executed by the Company
         and delivered to the Trustee for authentication and delivery. The
         principal of and interest on the Bonds shall be payable at the
         Corporate Trust Office of the Trustee in Houston, Texas.

         The single Series H Bond shall be identified by the number H-1 and
         shall upon issuance be delivered by the Company to, and registered in
         the name of, the Trust Indenture Trustee, and shall be transferable
         only as required to effect an assignment thereof to a successor or an
         assign of the Trust Indenture Trustee under the Trust Indenture, and
         provided that all obligations of the Trust Indenture Trustee under the
         Collateral Agreement (as defined herein) shall also be transferred to,
         and assumed by, any such successor or assign. The Series H Bonds are to
         be issued to the Trust Indenture Trustee as security for the payment by
         CenterPoint of the Installment Payments, as defined in, and pursuant to
         the Installment Payment and Bond Amortization Agreement, dated as of
         April 1, 1999, by and between the Issuer and CenterPoint (as
         successor). The single Series H Bond shall be held by the Trust
         Indenture Trustee subject to the terms of the Series H Bonds Collateral
         Agreement (Series H Bonds), dated as of October 10, 2002, between the
         Company and the Trust Indenture Trustee (the "Collateral Agreement").

         Series H Bonds issued upon transfer shall be numbered consecutively
         from H-2 upwards and issued in the same $100,000,000 denomination. See
         also subsection (19) below.

         (18)     Not applicable.

         (19)     The holder of the Series H Bond by acceptance of the Series H
         Bond agrees to restrictions on transfer and to waivers of certain
         rights of exchange as set forth herein. The Series H Bonds have not
         been registered under the Securities Act of 1933 and may not be
         offered, sold or otherwise transferred in the absence of such
         registration or an applicable exemption therefrom. No service charge
         shall be made for the registration of

                                       3

<PAGE>

         transfer or exchange of the Series H Bonds, or any Tranche thereof;
         provided, however, that the Company may require payment of a sum
         sufficient to cover any tax or other governmental charge payable in
         connection with the exchange or transfer.

         (20)     For purposes of the Series H Bonds, "Business Day" means any
         day other than (i) a Saturday or Sunday, (ii) a day on which commercial
         banks in New York, New York, Houston, Texas, or the city in which the
         principal corporate trust office of the Indenture Trustee is located,
         are authorized by law to close or (iii) a day on which the New York
         Stock Exchange is closed.

         (21)     Not applicable.

         (22)     The Trustee may conclusively presume that the obligation of
         the Company to pay the principal of and interest on the Series H Bond
         shall have been fully satisfied and discharged unless and until it
         shall have received a written notice from the Indenture Trustee, signed
         by an authorized officer of the Indenture Trustee and attested by the
         Secretary or an Assistant Secretary of the Indenture Trustee within 90
         days after the applicable Interest Payment Date, stating that the
         payment of principal of or interest on the Series H Bond has not been
         fully paid when due and specifying the amount of funds required to make
         such payment.

         The Series H Bonds shall have such other terms and provisions as are
         provided in the form thereof attached hereto as Exhibit A, and shall be
         issued in substantially such form.

2.       The undersigned has read all of the covenants and conditions contained
in the Indenture, and the definitions in the Indenture relating thereto,
relating to the issuance of the Series H Bonds and in respect of compliance with
which this certificate is made.

3.       The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.

4.       In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.

         In the opinion of the undersigned, such conditions and covenants have
been complied with.

                                       4

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate on this 10th day of October, 2002.

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

Acknowledged and Received on
October 10, 2002

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Ronda L. Parmen
    -----------------------------------------
Name: Ronda L. Parmen
Title: Vice President and Trust Officer

                                       5

<PAGE>

                                                                       EXHIBIT A

                              FORM OF SERIES H BOND

                                       6
<PAGE>

NOTE: THE HOLDER OF THIS BOND BY ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON
TRANSFER AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE
BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE
WITH APPLICABLE SECURITIES LAWS.

THIS BOND IS NOT TRANSFERABLE EXCEPT, AS FURTHER PROVIDED HEREIN, TO A SUCCESSOR
OR ASSIGN OF THE TRUST INDENTURE TRUSTEE UNDER THE TRUST INDENTURE REFERRED TO
HEREIN AMONG THE ISSUER AND THE TRUST INDENTURE TRUSTEE.

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
               General Mortgage Bonds, Series H, due June 1, 2026

<TABLE>
<S>                                 <C>                       <C>                                <C>
Original Interest Accrual Date:     October 10, 2002          Redeemable by Company:             Yes _   No X
Stated Maturity:                    June 1, 2026              Redemption Date:  N/A
Interest Rate:                      See below                 Redemption Price: N/A
Interest Payment Dates:             See below
Regular Record Dates:               N/A
</TABLE>

               This Security is not an Original Discount Security
              within the meaning of the within-mentioned Indenture.

                          -----------------------------

Principal Amount
$100,000,000                                                        No. H-1

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a corporation duly organized and
existing under the laws of the State of Texas (herein called the "Company,"
which term includes any successor under the Indenture referred to below), for
value received, hereby promises to pay to JPMorgan Chase Bank as Trustee under
the Trust Indenture (as herein defined) or its registered assigns (the
"Indenture Trustee"), the principal sum of ONE HUNDRED MILLION DOLLARS, in whole
or in installments on such date or dates as the Issuer (as defined herein) has
any obligations under the Trust Indenture (as amended and supplemented, the
"Trust Indenture"), dated as of April 1, 1999, between Matagorda County
Navigation District Number One (the "Issuer") and the Indenture Trustee (as
successor) to repay any principal in respect of the Bonds (as such term is
defined in the Trust Indenture, and hereinafter referred to as the "Series 1999A
MC Bonds"), excluding any payment of principal in advance of the final scheduled
maturity date thereof, but not later than the Stated Maturity specified above.
The obligation of the Company to make any payment of principal on this Bond,
whether at maturity or otherwise, shall be fully or partially, as the case may
be, deemed to have been paid or otherwise satisfied and discharged to the extent
CenterPoint Energy, Inc. ("CenterPoint") has paid to the Indenture Trustee the
Installment Payment (as defined below) in respect of the principal then due and
payable on the Series 1999A MC Bonds.

Interest shall be payable on this Bond on each Interest Payment Date (as
hereinafter defined) at such rate per annum as shall cause the amount of
interest payable on such Interest Payment Date on this Bond to equal the amount
of regularly scheduled interest payable on such Interest Payment Date in respect
of the Series 1999A MC Bonds under the Trust Indenture. Such interest shall be
payable on the same dates as interest is payable from time to time in respect of
the Series 1999A MC Bonds pursuant to the Trust Indenture (each such date herein
called an "Interest Payment Date"), until the maturity of this Bond, or, if the
Company shall default in the payment of the principal due on this Bond, until
the Company's obligation with respect to the payment of such principal shall be
discharged as provided in the Indenture. The amount of interest payable from
time to time in respect of the Series 1999A MC Bonds under the Trust Indenture,
the basis on which such interest is computed and the dates on which such
interest

                                       1

<PAGE>

is payable are set forth in the Trust Indenture. This Bond shall bear interest
(a) from the Interest Payment Date next preceding the date of this Bond to which
interest has been paid, or (b) if the date of this Bond is an Interest Payment
Date to which interest has been paid, then from such date, or (c) if no interest
has been paid on this Bond, then from the date of initial authentication of this
Bond. The obligation of the Company to make any payment of interest on this Bond
shall be fully or partially, as the case may be, deemed to have been paid or
otherwise satisfied and discharged to the extent that CenterPoint has paid to
the Indenture Trustee the Installment Payment in respect of the interest then
due and payable on the Series 1999A MC Bonds.

This Bond is issued to the Trust Indenture Trustee as security for the payment
by CenterPoint of the Installment Payments, as defined in, and pursuant to the
Installment Payment and Bond Amortization Agreement, dated as of April 1, 1999,
between Matagorda County Navigation District Number One and CenterPoint (as
successor). This Bond shall be held by the Trust Indenture Trustee subject to
the terms of the Collateral Agreement (Series H Bonds), of October 10, 2002,
between the Company and the Indenture Trustee. Any capitalized terms used herein
and not defined herein shall have the meanings specified in the Indenture (as
defined below), unless otherwise noted.

The Indenture Trustee shall surrender this Bond to the Trustee when all of the
principal of and interest on the Series 1999A MC Bonds shall have been duly
paid, and the Trust Indenture shall have been terminated.

Payments of the principal of and interest on this Bond shall be made at the
Corporate Trust Office of JPMorgan Chase Bank, as Trustee, located at 600 Travis
Street, Suite 1150, Houston, Texas 77002, or at such other office or agency as
may be designated for such purpose by the Company from time to time. Payment of
the principal of and interest on this Bond, as aforesaid, shall be made in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts.

This Bond is one of a duly authorized issue of securities of the Company (herein
called the "Securities"), issued and issuable in one or more series under and
equally secured by a General Mortgage Indenture, dated as of October 10, 2002
(such Indenture as originally executed and delivered and as supplemented or
amended from time to time thereafter, together with any constituent instruments
establishing the terms of particular Securities, being herein called the
"Indenture"), between the Company and JPMorgan Chase Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the property mortgaged, pledged and held in
trust, the nature and extent of the security and the respective rights,
limitations of rights, duties and immunities of the Company, the Trustee and the
Holders of the Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered and secured. The
acceptance of this Bond shall be deemed to constitute the consent and agreement
by the Holder hereof to all of the terms and provisions of the Indenture. This
Bond is one of the series designated above.

The Bonds of this series will not be entitled to the benefit of any sinking fund
or voluntary redemption provisions.

If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of this Bond may be declared due and payable in the
manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; PROVIDED, HOWEVER, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and PROVIDED, FURTHER, that the Indenture permits the
Trustee to enter into one or more supplemental indentures for limited purposes
without the consent of any Holders of Securities. The Indenture also contains
provisions

                                       2

<PAGE>

permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Bond shall be conclusive and binding upon such Holder and upon
all future Holders of this Bond and of any Security issued upon the registration
of transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond.

As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond is registrable in the Security Register, upon
surrender of this Bond for registration of transfer at the Corporate Trust
Office of JPMorgan Chase Bank in Houston, Texas or such other office or agency
as may be designated by the Company from time to time, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series of authorized denominations and of like tenor and aggregate principal
amount, will be issued to the designated transferee or transferees.

The Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the person in whose name this Bond shall be registered upon the
Security Register for the Bonds of this series as the absolute owner of such
Bond for the purpose of receiving payment of or on account of the principal of
and interest on this Bond and for all other purposes, whether or not this Bond
be overdue, and neither the Company nor the Trustee shall be affected by any
notice to the contrary; and all such payments so made to such registered owner
or upon his order shall be valid and effectual to satisfy and discharge the
liability upon this Bond to the extent of the sum or sums paid.

The Trustee may conclusively presume that the obligation of the Company to pay
the principal of and interest on this Bond shall have been fully satisfied and
discharged unless and until it shall have received a written notice from the
Trust Indenture Trustee, signed by an authorized officer of the Trust Indenture
Trustee and attested by the Secretary or an Assistant Secretary of the Trust
Indenture Trustee within 90 days after the applicable Interest Payment Date,
stating that the payment of principal of or interest on this Bond has not been
fully paid when due and specifying the amount of funds required to make such
payment.

Before any transfer of this Bond by the registered holder or his or its legal
representative will be recognized or given effect by the Company or the Trustee,
the registered holder shall notify the Company and the Trustee of the name and
address of the transferee. By acceptance hereof the holder of this Bond and each
transferee shall be deemed to have agreed to indemnify and hold harmless the
Company and the Trustee against all losses, claims, damages or liability arising
out of any failure on part of the holder or of any such transferee to comply
with the requirements of the preceding sentence.

No recourse under or upon any obligation, covenant or agreement contained in the
Indenture or in any indenture supplemental thereto, or in any Bond or coupon
thereby secured, or because of any indebtedness thereby secured, shall be had
against any incorporator, member, manager, stockholder, officer, director or
employee, as such, past, present or future, of the Company or any predecessor or
successor corporation or company, either directly or through the Company or any
predecessor or successor corporation or company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that the
Indenture, any indenture supplemental thereto and the obligations thereby
secured, are solely corporate obligations of the Company, and that no personal
liability whatsoever shall attach to, or be incurred by, such incorporators,
members, managers, stockholders, officers, directors or employees, as such, of
the Company or of any predecessor or successor corporation or company, or any of
them, because of the creation of the indebtedness thereby authorized, or under
or by reason of any of the obligations, covenants or agreements contained in the
Indenture or in any indenture supplemental thereto or in any of the Bonds or
coupons thereby secured, or implied therefrom.

This Bond shall be governed by and construed in accordance with the law of the
State of New York except as provided in the Indenture.

Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Bond shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any

                                       3

<PAGE>

purpose.

            [The remainder of this page is intentionally left blank.]

                                       4

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                                    By: _____________________________________
                                        Name:
                                        Title:

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Date of Authentication: ______, 2002

                                    JPMORGAN CHASE BANK, as Trustee

                                    By: _____________________________________
                                        Authorized Signatory

                                       5

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