Message-ID: <6186238.1075840850171.JavaMail.evans@thyme> Date: Fri, 30 Mar 2001 16:03:00 -0800 (PST) From: ed.mcmichael@enron.com To: louise.kitchen@enron.com Subject: NUI Corp Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Ed McMichael X-To: Louise Kitchen X-cc: X-bcc: X-Folder: \ExMerge - Kitchen, Louise\'Americas\Gas X-Origin: KITCHEN-L X-FileName: louise kitchen 2-7-02.pst Thanks for the reply on the other memo. I thought you might want to see this information as well - - it's regarding the likelihood of under-collection on the part of NUI. If you have any questions, please ask. Ed ---------------------- Forwarded by Ed McMichael/HOU/ECT on 03/30/2001 01:01 PM --------------------------- Ed McMichael 03/30/2001 10:30 AM To: Tanya Rohauer/Enron@EnronXGate, Rudwell Johnson/Enron@EnronXGate, Bradford Larson/Enron@EnronXGate, David Gorte/Enron@EnronXGate, William S Bradford/Enron@EnronXGate cc: Mark Breese/HOU/ECT@ECT, Steve Montovano/NA/Enron@Enron, Frank W Vickers/NA/Enron@Enron, John Craig Taylor/HOU/ECT@ECT Subject: NUI Corp The attached information is from Steve Montovano, Enron Corp. VP Governmental./Regulatory Affairs. This information applies to all gas utilities in New Jersey, including Elizabethtown Gas Company, the largest gas utility in the NUI Corp. group of companies. I hope this information will help expedite your evaluation process. Thanks for your help with this deal. If you have any questions, please ask. Regards, Ed ---------------------- Forwarded by Ed McMichael/HOU/ECT on 03/30/2001 10:18 AM --------------------------- Steve Montovano@ENRON 03/30/2001 09:47 AM To: Ed McMichael/HOU/ECT@ECT, Mark Breese/HOU/ECT@ECT cc: Frank W Vickers/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron Subject: NUI Corp CONFIDENTIAL INFORMATION Ed/Mark - In follow-up to our telephone conversation this am regarding NUI's ability to pay for gas purchases that they will make this summer and pay for next winter I offer you the following information regarding NUI's most recent Levelized Gas Cost Adjustment (LGAC) proceeding just concluded at the Board of Public Utilities (BPU): The NJ BPU ordered on March 15, 2001 the following: The LGAC is NUI's regulatory mechanism in which they recover all of their natural gas costs; NUI will increase its current gas costs from roughly $6.70 Dth to $7.20 between April 01 and July 01; They will be allowed to continue to defer any underrecovered gas costs until 10/31/01, at which time they will file a "Compliance" filing with the BPU no later than 11/15/01; The Compliance filing will set out a three year amortization schedule to recover the underrecovered gas cost balance as of 10/31/01 and will include interest at 5.5%; NUI will also at that time (11/01) file a new new Levelized Gas Cost Adjustment (LGAC), if the $7.20 is not sufficient to avoid future gas cost underrecoveries; Although that additional increase, if needed, is not officially granted at this time it does not concern your deal because your deal is inside the test period which was approved. Secondly, the precedence has been set for recovery with interest, with this current order; The 1999 NJ Deregulation Act helped NUI get the carrying costs on the underrecovered balance in that it called for "full and timely" recovery of gas costs for all NJ LDC's; Unfortunately, the BPU has not yet issued the Order, so I cannot send it to you, however that is typical of this Board and may not be issued for some time, at which point I will forward it to you; It is important to note for precedence arguments that this Order is a BPU Order of a contested case, not a settlement and applies to ALL NJ LDC's; Should you wish to discuss this matter further please call me. Note that I will be out of the office for two weeks beginning Monday and can reached through Chauncey. Steve