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Enron Mail |
Great--thanks for the info. DF
Jeffery Fawcett 03/27/2000 11:54 AM To: Drew Fossum/ET&S/Enron@ENRON cc: Steven Harris/ET&S/Enron@ENRON, Kevin Hyatt/ET&S/Enron@Enron Subject: USGT East - East Capacity deal Except for a small amount of capacity we're managing on a short-term basis [owing to the Topock lateral problem with PG&E], our West flow capacity is sold-out. Therefore, there is really no means to compare the USGT alt. flow rights with an opportunity cost for unsubscribed firm capacity. Moreover, the receipt points under the USGT deal are not on the San Juan Lateral, so any alt. West flow transportation will be marked against a Permian - Cal. Border price spread. However, your instincts are probably correct regarding the practical use of the capacity -- if there is a market shift resulting is a significant widening of the East - West spread, then we'd likely see FTS-1 shippers with primary rights more fully utilizing their firm capacity, thereby frustrating any USGT attempt to access Cal. Border capacity. From: Drew Fossum 03/27/2000 12:23 PM To: Christine Stokes/ET&S/Enron@ENRON cc: Bill Cordes/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@ENRON, Mary Darveaux/ET&S/Enron@ENRON, Glen Hass/ET&S/Enron@ENRON, Steven Harris/ET&S/Enron@ENRON, Susan Scott/ET&S/Enron@ENRON, Jeffery Fawcett/ET&S/Enron@ENRON, Kevin Hyatt/ET&S/Enron@Enron Subject: Re: Steve, Kevin, and Jeff: If what I heard this morning is correct and the San Juan-Cal. basis is up to about 25 cents, I trust that we will be selling our Cal Border capacity with primary point rights at rates significantly higher than the $.04 available to USGT/Aquila under this deal. In other words, it is very unlikely that USGT will be able to move significant volumes to California under the $.04 part of this deal, right? With that understanding, I'm OK on the deal. Thanks. DF Christine Stokes 03/24/2000 03:28 PM To: Bill Cordes/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Mary Darveaux/ET&S/Enron@ENRON, Glen Hass/ET&S/Enron@ENRON, Steven Harris/ET&S/Enron@ENRON, Susan Scott/ET&S/Enron@ENRON, Jeffery Fawcett/ET&S/Enron@ENRON cc: Kevin Hyatt/ET&S/Enron@Enron Subject: TRANSWESTERN PIPELINE CONTRACT APPROVAL REQUEST Please review the attached non-standard discount letter for USGT. Transwestern and USGT have agreed to enter into a contract for 400,000 Dth/d of primary EOT-EOT capacity for the term April 1, 2000 through October 31, 2001. The primary EOT-EOT path will be a 2-part rate structure: $.0075 reservation and $.0093 commodity rate. USGT will also have the ability to flow to California on an alternate basis at a $.04 total rate. Transwestern and USGT have agreed to enter into a Revenue Sharing Mechanism whereby after USGT recovers their contract demand charges plus an additional $2.5 Million in Commodity Sales Margin revenue, then TW and USGT will share 50%/50% in any additional Commodity Sales Margin revenue which USGT may receive. USGT will not retain their ROFR rights for their contract. (Please note that references to "Appendix A" in the discount letter refer to the FTS-1 Appendix A primary receipt and delivery point allocation of the 400,000 Dth/d primary capacity.) Please indicate approval via REPLY WITH HISTORY. All Officer approvals will be faxed to Bill Cordes for final President Level Approval.
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