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From:john.shafer@enron.com
To:larry.campbell@enron.com, keith.petersen@enron.com
Subject:FW: Removing impediments to electric generation in western states -
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Date:Mon, 21 May 2001 05:43:00 -0700 (PDT)

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Interesting development - Huh? John

-----Original Message-----
From: "Terry D. Boss" <tboss@INGAA.org<@ENRON
Sent: Monday, May 21, 2001 10:34 AM
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Subject: Removing impediments to electric generation in western states - w
hat's in it for the pipelines


Attached is a Word version of the FERC EL01-47 order, Removing Impediments
to Electic Generation in the Western US. The order was issued May 16.
The order:

(1) Temporarily waives blanket certificate regulations toincrease
the dollar limitations for natural gasfacilities under automatic
authorization to $10 million
and for prior notice authorizations to $30 million for all pipelines
that deliver gas in the WSCC http://www.wscc.com/;

(2) Temporarily waives blanket certificate regulations to allow
construction of mainline facilities, including temporary compression and
facilities that alter mainline capacity;

(3)Allows pipelines to roll-in costs costs of facilities constructed
under waived blanket certificate regulations until April 30, 2002..

The FERC did NOT find it appropriate to provide a greater rate of return for
pipelines into the western US. The FERC stated that the demand in the
Western US market is an adequate rate incentive for the short term. In
addition, there are other rate incentives, according to FERC, albeit more of
a long-term nature, in esistence and at the disposal of the pipelines that
deliver gas in the WSCC. Pipelines have the right to propose market-based
or negotiated rates. Pipelines can propose incentive rates. In addition,
pipelines can design incremental rates for projects which propose rates of
return and depreciaiton rates that differ from those used on a system wide
basis.

The areas of interest to the pipeline industry are highlighted on pp. 29-38
of the attached order.
Confidential: INGAA Member Use only
Terry D. Boss
VP Environment Safety and Operations
INGAA
tboss@ingaa.org
Joan Dreskin
- EL01-47_00F_TXT.doc