Subject: Lafayette Utilities System "LUS"
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Tue, 30 Jan 2001 08:51:00 -0800 (PST)

Ed,

I had a chance to read the contract LUS and follow-up with a phone call to 
Ron Gary to clarify.  Please note the following information:

LUS entered into a letter agreement after the contract was put in place for 
gas supply greater than Base quantities.  That price is GDA Hub + $.04.  The 
letter agreement allows LIG to 
The contract has a 75% take requirement for Base quantities but has no 
penalty if LUS does not take.  LUS uses this optionality to buy less 
expensive power in the marketplace.  There has been times that LUS takes less 
than the Base quantity.  He would be open to a GDA keep whole for this but 
would like to have 24 months of history so he can compare.  Tricia is working 
on this.  
For the Natchiotoches plant, Seller has an out if TransLa interrupts.  LUS is 
given a credit of 45,000/year for fuel retention on TransLa.  We need to 
gross up our price to account for this.
There is a GDA keep whole for any vol's that are triggered.  The trigger 
price is NYMEX plus $.04 and this basis is fixed.
LUS has not nominated Surplus volumes in two years.
Our bid will be reduced by $30,000 for the year by LUS to compare us to LIG's 
bid for gas odorization.  This will not be a cost to Enron but will be used 
in their evaluation process.
We need to state how we will make deliveries firm or why our volumes will 
flow if we do not sign up for firm capacity form the pipeline.

There is additional stuff in the contract that we need to discuss.  I'm 
working on the proposal and Hodge is working on getting a discounted firm 
rate on Texas Gas and Columbia.  Ultimately, this is what will determine if 
we win this deal or not.  Lets discuss when you get a chance.

Thanks.