Subject: Re: Pueblo: CONFIDENTIAL
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Fri, 17 Mar 2000 00:30:00 -0800 (PST)

Thanks.  I'll call Tino back and tell him not to fret about what he heard 
from Maddox --I know Tino and Dennis knew about the Cobisa project and I 
think he believed Maddox was working on yet another project.  I can get Tino 
comfortable without breaching our confid. agreement with Maddox by just 
telling Tino that we understand there is just one project down South of our 
target location, not two.  Also, I'll let Tino know that early April looks 
like the best time to get together to talk numbers and we'll call to set it 
up when we are ready.  DF    

Lorraine Lindberg
03/16/2000 04:42 PM
To: Drew Fossum/ET&S/Enron@ENRON
cc: Steven Harris/ET&S/Enron@Enron, Kevin Hyatt/ET&S/Enron@Enron 

Subject: Re: Pueblo: CONFIDENTIAL  

Drew - Good timing.  Here's what I know:

1) Jack Maddox and I have spoken sporadically in the past about very nebulous 
projects in areas near TW.  (We even have a signed Confidentiality Agreement 
with him!)  After I read your memo, I called him to see what's going on.  

He is working on a 220 MW gas-fired plant near Belen, NM.  Houston-based 
Cobisa Corp. will ask the city of Belen to issue industrial revenue bonds to 
help it build this plant.  Power generated by the plant will be sold to 
customers through service agreements with electricity moving along existing 
PNM lines.  Plans call for construction to begin by Spring 2001 with 
operations to begin by 2003.  Kevin and I have a meeting scheduled with him 
next Friday, March 31 in Albuquereque.  We'll keep you posted.

2)  I received the economic analysis today which factors in some of Dennis 
Langley's wish list.  The "as good as it gets" rate, assuming the project is 
sized at 150,000 MMBtu and fully subscribed over the project life of 10 
years, is $.1631.  This does not include a) any ROW cost, b) a 50/50 split of 
any incremental revenue TW receives on its existing line as a result of 
additional capacity sold to serve new markets, or c) 25% of ownership in the 
assets and 25% of the cash flow stream after payout.  

 I need to continue working the economics with James Centilli.  In the 
meantime, our consultant, Mark Baldwin will hopefully provide us with 
critical market information near the end of March. This is also around the 
time when Tino should have his report on detailed the cost estimate of 
construction and environmental issues.  Maybe we should rally first part of 
April to see where we are.

Lorraine

   

	From:  Drew Fossum                           03/16/2000 01:55 PM

To: Steven Harris/ET&S/Enron@Enron, Kevin Hyatt/ET&S/Enron@Enron, Lorraine 
Lindberg/ET&S/Enron@ENRON
cc:  

Subject: Pueblo: CONFIDENTIAL

Here's the latest Tino-gram:
1.  Tino's environ. consultants have not discovered any stop signs.  

2.  The Isleta is interested in granting Dennis ROW/lease for the power plant 
as well as the pipeline.  The power plant could be located on Isleta land 
adjacent to the South boundary of the Scandia reservation.  Thus, the power 
plant could be connected to DOE's existing powerline infrastructure without 
ever leaving the Isleta and DOE land.  PNM would not be necessary to move 
power to DOE.  Unclear to me whether this approach would give the power plant 
optimal access to the power grid for sales of surplus power.  (maybe  this 
could be done through DOE to an interconnect with PNM on the Scandia 
reservation?)

3.  Dennis is using Jim Slattery, an ex law partner of mine in DC (and ex 
Dem. U.S. Congressman from Kansas), as his primary contact with  Bill 
Richardson at DOE.  My recollection is that Jim does have a good relationship 
with Richardson, so this seems very likely to be effective.  Tino reports 
that "DOE is OK with the deal" and the next step is negotiating the power 
contract itself.  Tino said that DOE is aware that the capital for the 
project will not come from the tribe so the tribe's interest will be fairly 
thin.   It is unclear exactly how much indian ownership Dennis and Slattery 
promised DOE.

4.  Tino has run into a power plant consultant named Jack Maddox who says 
he's working on a 230MW plant to be located west of Belen.  Tino thinks he's 
working for the Laguna tribe, but wanted us to find out who is planning a big 
power plant out there.  Is this ours?  PNM's?  El Paso?  

Finally, the next key step is obviously the economics.  Based on what Tino 
told me, I'm convinced that Dennis and Tino don't have a real good sense of 
how much $$$ might be in this deal.  They are groping a bit and our initial 
analysis of the numbers will likely carry a lot of weight.  How are those 
efforts coming?  

Thanks.  DF    
4.