Message-ID: <22613838.1075846736468.JavaMail.evans@thyme> Date: Wed, 31 May 2000 17:21:00 -0700 (PDT) From: susan.scott@enron.com To: mary.miller@enron.com Subject: Re: Transwestern CAF Request Cc: christine.stokes@enron.com, glen.hass@enron.com, mary.darveaux@enron.com, kevin.hyatt@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: christine.stokes@enron.com, glen.hass@enron.com, mary.darveaux@enron.com, kevin.hyatt@enron.com X-From: Susan Scott X-To: Mary Kay Miller X-cc: Christine Stokes, Glen Hass, Mary Darveaux, Kevin Hyatt X-bcc: X-Folder: \Susan_Scott_Dec2000_June2001_1\Notes Folders\'sent mail X-Origin: SCOTT-S X-FileName: sscott3.nsf Since the contract quantity goes to zero in Nov.-Mar., they pay no reservation charge in those months, so effectively the rate is zero for those months. I suppose we could draft it either way and logistically it would work. We used a similar structure in a deal we did earlier this year, if I recall correctly. Also -- I agree that we would need to file this as a material deviation if SWG agrees to include the capacity release provision. In case FERC does not like the provision for some reason, do we want to provide that disapproval by FERC will invalidate the whole contract (see language in the recent USGT contract), or do we want it to invalidate just that provision and let the rest of the deal stand? It would depend on how much value the parties are attaching to that provision and whether we would want a chance to renegotiate...and I am assuming we would. Christine, let me know which is preferable and I'll send you some language in the a.m. From: Mary Kay Miller 05/31/2000 03:15 PM To: Christine Stokes/ET&S/Enron@ENRON cc: Glen Hass/ET&S/Enron@ENRON, Mary Darveaux/ET&S/Enron@ENRON, Susan Scott/ET&S/Enron@ENRON, Kevin Hyatt/ET&S/Enron@Enron Subject: Re: Transwestern CAF Request It seems to me that if the capacity is only for the months of Nov-Mar, the reference to the discounted rate in section 2 should state that it is for the period Nov-Mar through 2010. Also, the language in paragraph 6 should eliminate the reference to the tariff, since we don't have it, just start with the phrase "Shipper agrees that if it utilizes ----- See previous comment as well. Need to make sure we want to commit to a 10 year discount, as policy may change and Tw would be required to absord the difference. MK Christine Stokes 05/31/2000 08:35 AM To: Lorraine Lindberg, Steven Harris/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@ENRON, Glen Hass/ET&S/Enron@ENRON, Mary Darveaux/ET&S/Enron@ENRON, Bill Cordes/ET&S/Enron@ENRON, Susan Scott/ET&S/Enron@ENRON cc: Kevin Hyatt/ET&S/Enron@Enron Subject: Transwestern CAF Request TRANSWESTERN PIPELINE CONTRACT APPROVAL REQUEST Please review the attached non-standard discount letter to Southwest Gas Corporation (SWG). SWG shall enter into a 10 year agreement for 14,000 Dth/d of seasonal (November through March) capacity effective November 1, 2000. The transport rate of $.15/Dth/d shall increase annually by $.005/Dth/d. The primary path shall be from Tranwestern's East of Thoreau (EOT) Area to the SWG Interconnect located in the East of California Area. Alternate receipt point rights shall be from Tranwestern's EOT Area and from the Bloomfield Compressor. SWG ROFR rights shall be wiaved. In additionTranswestern shall propose to retain revenues generated by capacity release at rates higher than the effective contract's discount rate. (Please note that the FTS-1 Appendix A - not shown here with the discount letter- specifically indicates 0 MMcf/d capacity for the April through October period. Therefore, even though the $.1500/MMBtu rate in Paragraph 3 of the discount letter does not indicate the rate is a "seasonal rate", the effective billing to SWG shall be seasonal.) Please indicate your approval via REPLY WITH HISTORY. All Officer approvals shall be faxed to Bill Cordes for final Officer approval.