Subject: Re: USGT East - East Capacity deal
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Mon, 27 Mar 2000 04:40:00 -0800 (PST)

Great--thanks for the info.  DF

Jeffery Fawcett
03/27/2000 11:54 AM
To: Drew Fossum/ET&S/Enron@ENRON
cc: Steven Harris/ET&S/Enron@ENRON, Kevin Hyatt/ET&S/Enron@Enron 

Subject: USGT East - East Capacity deal  

Except for a small amount of capacity we're managing on a short-term basis 
[owing to the Topock lateral problem with PG&E], our West flow capacity is 
sold-out.  Therefore, there is really no means to compare the USGT alt. flow 
rights with an opportunity cost for unsubscribed firm capacity.  Moreover, 
the receipt points under the USGT deal are not on the San Juan Lateral, so 
any alt. West flow transportation will be marked against a Permian - Cal. 
Border price spread.  However, your instincts are probably correct regarding 
the practical use of the capacity -- if there is a market shift resulting is 
a significant widening of the East - West spread, then we'd likely see FTS-1 
shippers with primary rights more fully utilizing their firm capacity, 
thereby frustrating any USGT attempt to access Cal. Border capacity.

   

	From:  Drew Fossum                           03/27/2000 12:23 PM

To: Christine Stokes/ET&S/Enron@ENRON
cc: Bill Cordes/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@ENRON, Mary 
Darveaux/ET&S/Enron@ENRON, Glen Hass/ET&S/Enron@ENRON, Steven 
Harris/ET&S/Enron@ENRON, Susan Scott/ET&S/Enron@ENRON, Jeffery 
Fawcett/ET&S/Enron@ENRON, Kevin Hyatt/ET&S/Enron@Enron 

Subject: Re:  

 Steve, Kevin, and Jeff: If what I heard this morning is correct and the San 
Juan-Cal. basis is up to about 25 cents, I trust that we will be selling our 
Cal Border capacity with primary point rights at rates significantly higher 
than the $.04 available to USGT/Aquila under this deal.  In other words, it 
is very unlikely that USGT will be able to move significant volumes to 
California under the $.04 part of this deal, right?  With that understanding, 
I'm OK on the deal.  Thanks. DF 

Christine Stokes
03/24/2000 03:28 PM
To: Bill Cordes/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@ENRON, Drew 
Fossum/ET&S/Enron@ENRON, Mary Darveaux/ET&S/Enron@ENRON, Glen 
Hass/ET&S/Enron@ENRON, Steven Harris/ET&S/Enron@ENRON, Susan 
Scott/ET&S/Enron@ENRON, Jeffery Fawcett/ET&S/Enron@ENRON
cc: Kevin Hyatt/ET&S/Enron@Enron 

Subject: 

TRANSWESTERN PIPELINE CONTRACT APPROVAL REQUEST

Please review the attached non-standard discount letter for USGT.  
Transwestern and USGT have agreed to enter into a contract for 400,000 Dth/d 
of primary EOT-EOT capacity for the term April 1, 2000 through October 31, 
2001.   The primary EOT-EOT path will be a 2-part rate structure:  $.0075 
reservation and $.0093 commodity rate. USGT will also have the ability to 
flow to California on an alternate basis at a $.04 total rate.    

Transwestern and USGT have agreed to enter into a Revenue Sharing Mechanism 
whereby after USGT recovers their contract demand charges plus an additional 
$2.5 Million in Commodity Sales Margin revenue,  then TW and USGT will share 
50%/50% in any additional Commodity Sales Margin revenue which USGT may 
receive.

USGT will not retain their ROFR rights for their contract.

(Please note that references to "Appendix A"  in the discount letter refer to 
the FTS-1 Appendix A primary receipt and delivery point allocation of the 
400,000 Dth/d primary capacity.)

Please indicate approval via REPLY WITH HISTORY.
All Officer approvals will be faxed to Bill Cordes for final President Level 
Approval.