Message-ID: <23921755.1075846739084.JavaMail.evans@thyme> Date: Mon, 6 Mar 2000 08:41:00 -0800 (PST) From: susan.scott@enron.com To: maria.pavlou@enron.com Subject: Re: Gas Sales on TW? Cc: drew.fossum@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: drew.fossum@enron.com X-From: Susan Scott X-To: Maria Pavlou X-cc: Drew Fossum X-bcc: X-Folder: \Susan_Scott_Dec2000_June2001_1\Notes Folders\'sent mail X-Origin: SCOTT-S X-FileName: sscott3.nsf Thanks, Maria, this is very helpful. I'm planning on drafting something this week for everyone's review. Don't know if any other pipelines have tried to do anything similar but I'll find out. Maria Pavlou 03/06/2000 04:39 PM To: Drew Fossum/ET&S/Enron@ENRON cc: Susan Scott/ET&S/Enron@ENRON Subject: Re: Gas Sales on TW? FYI a little more background: The Amgas relationship began as a result of TW's efforts to unbundle under Order No. 636, whereby we assigned gas purchase contracts to Amgas. In addition, we had them administer certain remaining gas purchase contracts as well as our de minimus sales function. All Amgas does today is administer our sales function. We never eliminated our sales function; we just transferred the administration of it to Amgas. The marketing affiliate rule requires that a pipeline's sales division be treated as a functional equivalent of a marketing affiliate. Our standards of conduct provide that the Vice President of Finance and Accounting is advised of pertinent sales activities by Amgas but does not participate in any of the day-to-day operations of Transwestern's merchant function. As a result, the VP is not a shared operating employee under Standard G. FTS-2 transportation service is the unbundled no-notice transportation service the (former and current) sales customers received under Order No. 636. I think we should be able to file revised standards saying that the merchant function is even smaller than it was when we unbundled [true?] which is not enough work for an agent to perform and that we've brought it back in house and explain why the person with the sales function responsibility is not a shared operating employee under G. Maria From: Drew Fossum 03/06/2000 11:02 AM To: Susan Scott/ET&S/Enron@ENRON, Maria Pavlou/ET&S/Enron@ENRON cc: Subject: Re: Gas Sales on TW? This sounds like a good candidate for a waiver application to FERC. If we can save the $60,000/yr, it would be worth asking FERC for authority to simply use an ET&S market services person to administer the farm tap sales from time to time, without any functional separation or other junk. We could even list the specific sales contracts we have so FERC would be comfortable that we are not going to expand the business. The NN situation was different (I think) because NN had formally notified FERC that it was discontinuing use of its sales rate schedule. Would TW use the FTS-2 rate schedule? We have never formally discontinued the TW sales function, right? What do you guys think about the likelihood that FERC would approve such a waiver? Has it ever approved similar small-volume waivers? DF From: Susan Scott 03/02/2000 04:32 PM To: Drew Fossum@ENRON, Mary Kay Miller/ET&S/Enron@ENRON, Dari Dornan@Enron cc: Subject: Gas Sales on TW? I've been asked to look into whether TW may administer its farm tap sales contracts directly or whether we need to continue to use AmGas. TW no longer has any gas purchase contracts, just a handful of sales contracts to persons who granted rights of way to TW. Many of these parties don't even buy gas on a regular basis, but they still have the contractual right to do so. We pay AmGas around $60,000/year to administer the contracts. The AmGas contract is terminable on 30 days notice. I know that last year NNG re-established its pipeline sales division to make occasional gas sales and for other economic reasons (i.e. the base gas deal). Do you think it would be worthwhile for TW to do the same? Looks like NNG had an easy time getting its filing approved, but would like to hear from you what all was involved behind the scenes -- in other words, was it as easy as it looked? Another idea that Maria suggested would be to apply to the Commission to waive the Section 284.286 requirements in this instance since the remaining sales contracts are so few and insignificant. Your comments would be most appreciated!