Enron Mail

From:ray.alvarez@enron.com
To:steve.walton@enron.com, susan.mara@enron.com, alan.comnes@enron.com,leslie.lawner@enron.com, rebecca.cantrell@enron.com, donna.fulton@enron.com, jeff.dasovich@enron.com, christi.nicolay@enron.com, james.steffes@enron.com, jalexander@gibbs-bruns.com,
Subject:Transwestern negotiated rate order, discussed at yesterday's
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Date:Thu, 26 Jul 2001 11:05:00 -0700 (PDT)

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FYI. This is receiving close scrutiny by the Commission. RA

---------------------- Forwarded by Ray Alvarez/NA/Enron on 07/26/2001 05:5=
9=20
PM ---------------------------


Nancy Bagot
07/26/2001 05:54 PM
To: Ray Alvarez/NA/Enron@ENRON
cc: =20

Subject: TW neg. rate order summary

(1) Transwestern Negotiated Rates proceeding, RP97-288 et al.: The order=
=20
calls for an expedited hearing to explore four primary issues (listed=20
below). The draft order passed at the meeting by a vote of 5 =01) 0, and=
=20
language on revisions to TW's tariff and posting policy were added to the=
=20
final order to assuage concerns expressed in the discussion of the case at=
=20
the meeting. =20

The case was called for public discussion by Commissioner Breathitt, who=20
wanted to highlight that the additional =01&limited scope=018 fast track he=
aring =20
is the =01&right way to go=018 to understand why negotiated rates that were=
seventy=20
times the maximum recourse rate are just and reasonable. Breathitt=01,s=20
additional question in this case is why shippers would agree to such rates=
=20
when lower rates were available.

In the final order, Breathitt=01,s concerns about the posting of the operat=
ional=20
capacity as such were reflected in language ordering TW to revise its tarif=
f=20
and web postings to provide clear identification of operational capacity an=
d=20
to post and contract such capacity on each day of its availability (i.e., o=
n=20
a day-to-day basis) unless it can demonstrate that operational capacity wil=
l=20
be available for some longer period of time.

At Wednesday=01,s meeting, Wood noted that =01&we bumped into something her=
e,=018=20
though he did not mention possibilities but instead agreed that a procedura=
l=20
schedule to =01&vet the issues in the light of day=018 was the best route. =
The=20
four issues set for hearing are: =20
? whether the transportation capacity was advertised and awarded in an=20
accurate and fair manner consistent with Transwestern=01,s tariff;=20
? whether the transportation rates=01(were the product of an exercise of=
=20
market power (i.e., did TW withhold capacity that otherwise could have=
=20
been made available under recourse service in order to make the capacity=
=20
available under negotiated rate charges at substantially higher rates);=
=20
? why the shippers agreed to these rates when significantly lower recours=
e=20
rates should have been available under our negotiated rate program; and=
=20
? why the awarded capacity appears to be available without interruption=
=20
while firm transportation service under Transwestern=01,s recourse rate=
was=20
not.