Message-ID: <11314202.1075855595174.JavaMail.evans@thyme> Date: Tue, 5 Dec 2000 14:07:00 -0800 (PST) From: mike.grigsby@enron.com To: patti.sullivan@enron.com, randall.gay@enron.com Subject: Socal ATM nominations Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Mike Grigsby X-To: Patti Sullivan, Randall L Gay X-cc: X-bcc: X-Folder: \Michael_Grigsby_Jun2001\Notes Folders\All documents X-Origin: Grigsby-M X-FileName: mgrigsb.nsf Good morning. With the energy crisis in California at this time, we will need to be extra careful with nominations at Socal and throughout the west to ensure that we continue to provide the excellent nomination service that we have been providing to our customers. You guys are doing an excellent job and we understand that you are under quite a bit of pressure with limited staff. Our contracts state that we must notify every customer of pipeline allocations 12 hours in advance. We all know that this can be almost impossible on EPNG, but because of the current price levels at Socal and the basins, Enron needs to call each customer and notify them of their cuts with an explanation of the pipeline cuts each day to avoid any potential penalties. We also need to document when the call was made. In regards to the ATM nominations on Socal (ones that we can't monitor), Enron will be requesting full pipeline summaries of the nominations from our counterparties. Please try to think of any nomination gaming that may take place at these historical levels. We need to remember that our counterparties may not act as they have in the past due to the market price implications on their P&L. We should not rely on prior business conduct in regards to "standard epng allocations" when dealing with our customers. I would expect that the market is going to overreact to any cuts that may be above the "pipeline average". Let's discuss how we are going to monitor the flows of nominations out of our control. How do we prevent collusion with respect to the socal nominations that we can't see? Are there package numbers on each baseload contract to ensure that they don't simply reshuffle gas according to price? Let me know which companies are not providing Enron with timely allocation reports at Socal and I will call their senior trader to discuss getting this operational information sooner. Sincerely, Mike