Subject: Re: TW Options filing
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Tue, 31 Oct 2000 01:36:00 -0800 (PST)

To synthesize what I'm hearing from you and MKM (and Mr. Ni),  our story is 
that we will post for sale an option with a specific MDQ, type (i.e., 
European option or American or whatever), flow period, and points.  For 
example, we'd post  a European call on 10,000/d of Nov. 01--March 02 Permian 
to Topock firm capacity with an exercise date of Jan 1, 2001.  the customer 
would bid an option price and a transport rate.  We'd look at both components 
under a publicly posted evaluation method to decide who wins.  I.e., we may 
post a method saying the winner is the one who pays the highest option fee so 
long as the transport rate bid is above "x".   Seems pretty straightforward, 
and we ought to be able to clarify this adequately in our answer to 
protests.  DF  

Shelley Corman
10/31/2000 08:31 AM
To: Mary Kay Miller/ET&S/Enron@ENRON
cc: Susan Scott/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Jeffery 
Fawcett/ET&S/Enron@ENRON, Glen Hass/ET&S/Enron@ENRON, Mary 
Darveaux/ET&S/Enron@ENRON 

Subject: Re: TW Options filing  

In our pre-filing discussion, we explained the awarding of call options as 
follows:

Because call options are only sold after we have tried to sell the underlying 
capacity and there were no takers at max. rate or an acceptable price, there 
is really only 1 variable -- the total rate (consisting of the option 
component and the strike price).

The call option is posted for a specific quantity, start date, etc.  There 
are no other variables.  It's just price.

From our discussions with Mike Coleman and crew on this topic -- I think is 
it absolutely key that we keep the award variables to a minimum.  My take is 
that the transmittal letter referring to highest price is the right way to 
go.  The concept in the tariff about posting the evaluation criteria 
(implying that there are more variables) could kill the deal.