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Enron Mail |
Ugh. We are in for a battle. Some of this may be OK, but I detect an
underlying philosophy that pipelines should simply not be allowed into markets that unregulated players (using the gray market or financial products) currently have monopoly control over. DF From: Susan Scott 08/09/2000 01:10 PM To: Shelley Corman/ET&S/Enron@ENRON, Drew Fossum@ENRON, Mary Kay Miller/ET&S/Enron@ENRON cc: Subject: Prelimiinary Comments on Transport Option Program Thought you'd be interested in the attached. ---------------------- Forwarded by Susan Scott/ET&S/Enron on 08/09/2000 01:10 PM --------------------------- Lorraine Lindberg 08/09/2000 12:49 PM To: Jeffery Fawcett/ET&S/Enron@ENRON, Michelle Lokay/ET&S/Enron@Enron, Susan Scott/ET&S/Enron@ENRON, Kevin Hyatt cc: Subject: Prelimiinary Comments on Transport Option Program ---------------------- Forwarded by Lorraine Lindberg/ET&S/Enron on 08/09/2000 12:48 PM --------------------------- "Frost, Pete" <Pete.Frost@usa.conoco.com< on 08/09/2000 12:47:17 PM To: "'lorraine.lindberg@enron.com'" <lorraine.lindberg@enron.com< cc: "'Tarpey, Steve P'" <tarpeysp@bp.com<, "'Pete Cervin'" <pcervin@br-inc.com<, "Wheatley, Jerry L." <Jerry.L.Wheatley@usa.conoco.com<, "Jones, Teddy G." <Teddy.G.Jones@usa.conoco.com< Subject: Prelimiinary Comments on Transport Option Program Lorraine, Below are some very preliminary regulatory issues that I have identified regarding Transwestern's Transport Option Program. These concerns may not constitute all of our concerns; I'm sure there will be more as we continue to review this proposal with our commercial people. Also, they have not been reviewed with management, and may, or may not, represent the ultimate positions that Conoco (or the Indicated Shipper Trial Group) takes in any proceeding before the FERC. Thanks again for inviting us to lunch yesterday. Both Teddy and I found it to be very helpful and informative. We look forward to a more detailed description of your proposal, and the ability to discuss it with Transwestern in a future customer meeting. Please forward this e-mail on to Jeff; I don't have his direct e-mail address. Tentative Regulatory Issues regarding Transwestern's Transport Option Program ("TOP"). 1. Market Based Rates. To the extent that TW intends to offer the TOP service without a corresponding cost based recourse service, under current FERC policy, TW would need to make a filing that demonstrates a lack of market power. 2. Comparable Service: To the extent that TW implements a TOP service, it would be highly advisable to provide that other FT holders be able to offer a similar call & put capability in the capacity release market. As I remember TW's tariffs, this would likely require specific changes to the capacity release sections in order to allow prospective capacity releases with a call or put pricing option. 3. Hoarding: The TOP service should not be a means for any party (particularly an affiliate) to manipulate the transportation market and/or to exert market power by withholding capacity. 4. Reliability: The TOP service should require sufficient protections to ensure continued, undiminished service to all of TW's existing and future FT customers. 5. Standardized Product: The terms and conditions for the TOP service should be standardized in order that each TOP service offer is not considered a "non-conforming" contract under FERC policy. The call and put options, and any administrative or operating limitations, should be specifically defined. 6. Non-preferential Service: TW must ensure that the TOP service is offered and administered in a manner that is fair and equitable, and in a manner that does not convey a preferential right to any party (particularly an affiliate). 7. Revenue: Regardless of whether the TOP is a cost or market based rate, there will be a question as to where the revenue goes. 8. Pilot Program. Given the precedential nature of this proposal, perhaps the industry would be more comfortable with the TOP if it were filed as an experimental program on TW, with a finite life. This would allow parties to gain experience prior to having all of the Enron pipelines (and others) file for similar authority. Thanks again. Pete Frost Manager of Regulatory Affairs Conoco Gas and Power Marketing pete.frost@usa.conoco.com <mailto:pete.frost@usa.conoco.com<
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