Re: P G & E Credit Assurance

Miles--sorry about the hurry up. Please give me a call on this at
402-398-7449. Note the issue raised by the email from Rick Dietz. Thanks. DF
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 01/26/2001
03:54 PM ---------------------------

Drew Fossum
01/26/2001 03:50 PM
To: Rick Dietz/ET&S/Enron@ENRON
cc: Rod Hayslett/FGT/Enron@ENRON, Julia White/ET&S/Enron@ENRON, Paul
Cherry/GPGFIN/Enron@ENRON, Jerry Peters/NPNG/Enron@ENRON, Maria
Pavlou/Enron@EnronXGate, Steven Harris/ET&S/Enron@ENRON, Lee
Huber/ET&S/Enron@ENRON

Subject: Re: P G & E Credit Assurance

Attached is the revised version incorporating Julia and Rick's comments.
Note that to avoid confusion I've labeled the new invoice as the "Prepayment
Invoice" to distinguish it from the "Normal Invoice" we send out later and
which we'll use as the true up mechanism. I've designated the agreement to
be sent out by fax and FedEx, with two signed originals to be included to
speed execution by PG&E. I think Rod is the logical candidate to sign it but
have left name and title off for now--whoever signs it please add this.
Please call if there are any questions and please send me a copy of the final
signed version. DF

Rick Dietz
01/26/2001 02:39 PM
To: Drew Fossum/ET&S/Enron@ENRON
cc: Martha Benner/ET&S/Enron, Rod Hayslett/FGT/Enron@ENRON, Julia
White/ET&S/Enron@ENRON, Paul Cherry/GPGFIN/Enron@ENRON, Jerry
Peters/NPNG/Enron@ENRON, Maria Pavlou/ET&S/Enron, Steven
Harris/ET&S/Enron@ENRON, Lee Huber/ET&S/Enron@ENRON

Subject: Re: P G & E Credit Assurance

Rod, Paul and I spoke and have only two changes. The second one is a more
significant change to the true up mechanism language in paragraph #4. Julia
is in agreement with the changes.

Paragraph 2: after "by wire transfer", add "according to the underlying
agreements."

Paragraph 4: We felt this sounded a little complicated and may appear to be a
deposit. We would recommend changing the paragraph to read: "Transwestern's
invoice applicable to February, 2001 business, which is to be delivered to
PG&E on or before the 1st of March, 2001, will include a true up of PG&E's
prepayment for February, 2001. All subsequent invoices will similarly
include a true up of PG&E's prepayment for that production month."

If you have any questions, please give any of us a call.

Rick

Drew Fossum
01/26/2001 01:21 PM
To: Rod Hayslett/FGT/Enron@ENRON
cc: Paul Cherry/GPGFIN/Enron@ENRON, Jerry Peters/NPNG/Enron@ENRON, Julia
White/ET&S/Enron@ENRON, Rick Dietz/ET&S/Enron@ENRON, Maria
Pavlou/Enron@EnronXGate, Steven Harris/ET&S/Enron@ENRON, Lee
Huber/ET&S/Enron@ENRON, Steven Harris/ET&S/Enron@ENRON

Subject: Re: P G & E Credit Assurance

I think I beat your deadline for internal distribution, but we need a bit
more time to make sure this approach will work. In particular, Julia and
Rick need to take a quick look at the true up mechanism and I need to go
back through it one more time to make sure I haven't forgotten something and
to clean it up. I look forward to your comments. DF

Rod Hayslett

01/26/2001 12:57 PM
To: Paul Cherry/GPGFIN/Enron@ENRON
cc: Jerry Peters/NPNG/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON

Subject: Re: P G & E Credit Assurance

I would agree with Paul, unless Drew thinks we can get the agreement out of
here in the next 30-40 minutes.

From: Paul Cherry 01/26/2001 12:46 PM

To: Jerry Peters/NPNG/Enron@ENRON, Rod Hayslett/FGT/Enron@ENRON, Drew
Fossum/ET&S/Enron@ENRON
cc:

Subject: P G & E Credit Assurance

In order to comply with the request we have made to P G & E of a 12:00
P.M. CST deadline, Chris Chung of P G & E has advised that our proposal has
to be submitted to him by Noon today in order to effect a wire transfer by
the Monday deadline. Drew is close in the completion of generating the
Agreement, however, with the internal review and approval process, it is
doubtful we can achieve the timetable needed by P G & E. It would be my
recommendation that we extend the deadline from Monday, January 29 at Noon to
Tuesday, January 30 at Noon. This would permit our internal review with the
expectation of sending P G & E our Agreement by Monday morning and allowing
time for their review. I have spoken to Drew and he is comfortable with this
approach. Additionally, in my conversation with Chung, I indicated that our
approach and proposal would be for P G & E to wire transfer the necessary
funds prior to our providing transportation for February and then payment
would be expected to be made for the January transportation on the
appropriate due date in February. (Approximately the tenth )

Please advise your comments at your earliest conveniece.

Thanks and Regards.