Message-ID: <25180714.1075846670184.JavaMail.evans@thyme>
Date: Thu, 10 Aug 2000 10:52:00 -0700 (PDT)
From: susan.scott@enron.com
To: lindy.donoho@enron.com, jeffery.fawcett@enron.com, steven.harris@enron.com, 
	kevin.hyatt@enron.com, lorraine.lindberg@enron.com, 
	tk.lohman@enron.com, michelle.lokay@enron.com
Subject: Transport Options Program
Mime-Version: 1.0
Content-Type: text/plain; charset=us-ascii
Content-Transfer-Encoding: 7bit
X-From: Susan Scott
X-To: Lindy Donoho, Jeffery Fawcett, Steven Harris, Kevin Hyatt, Lorraine Lindberg, TK Lohman, Michelle Lokay
X-cc: 
X-bcc: 
X-Folder: \Susan_Scott_Dec2000_June2001_1\Notes Folders\All documents
X-Origin: SCOTT-S
X-FileName: sscott3.nsf

Attached is the latest draft of the Transport Option Program filing.

There are a couple of important changes from the last draft.

One is that we're no longer stating that the option fee is going to be 
"market-based."  At FERC, the term "market-based" has connotations of having 
to prove to FERC that a non-cost-based rate is appropriate because we lack 
market power.  While we probably do lack market power, the consensus of the 
legal/regulatory team was to try to portray the option fee as a built-in 
feature of the transport rate, which is simply being disaggregated into a 
separate option fee.  If this theory is not clear to you after you read the 
filing letter, let's discuss how it should be improved.

The other significant change (also based on my meeting with legal/regulatory) 
is that I've structured the tariff language and the agreement so that every 
shipper, regardless of whether they currently use transport on TW, will have 
to have a firm transportation agreement when they buy an option.  In other 
words, a shipper that does not currently have a service agreement will simply 
execute an agreement with a MAXDTQ of zero.  This structure has two 
advantages:  1) it's consistent with our option-fee-as-part-of-transport-rate 
theory, and 2) it will help support that theory in our next rate case.

I'd like to meet next week, either Wednesday afternoon or Thursday, to 
discuss the following topics:

1)  Your comments and questions on this draft,
2)  Some examples of options, to make sure the tariff provisions and contract 
work from a logistical standpoint,
3)  The bidding process, and how bids for options will be evaluated, and
4)  Comments received from shippers thus far.

I'll be working on 41 tomorrow; let's talk about what would be a good meeting 
time.
I will be out Mon. and Tues.