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Enron Mail |
FYI... This was received yesterday from the CPUC. As you can see, settleme=
nt prospects do not look good. Ann is trying to get a meeting set up to di= scuss our next step regarding settlement (tentatively 1:30). Greg -----Original Message----- From: Passamonti, Ida [mailto:imp@cpuc.ca.gov] Sent: Wednesday, October 17, 2001 3:41 PM To: Porter, Gregory J. Subject: RE: E TW settlement offer Sensitivity: Confidential Yes - the copies of the letter orders and one decision of the footnote arr= ived yesterday and we have looked at them.=20 First, I think it is in this proceeding that the FERC advisory staff raised= the issue whether the contracts revealed contravention of FERC policy. Se= e the original order to show cause. The issues addressed in the hearing we= re a means or an attempt to get more facts that relate to the original ques= tions flagged by the FERC advisory staff regarding the FERC's policy on use= of negotiated rates. We also know that when Indicated Shippers attempted = to challenge the policy statement when it first issued, the court said that= such a challenge was not appropriate and only the implementation cases reg= arding the policy would give rise to issues the court could consider. The = CPUC is therefore in the right forum and in the right proceeding to claim t= hat TW used market-based rates without authority to use market-based rates.= TW's tariff must be modified to provide for the exclusion of market-based = rates. Of course we understand that the FERC had pinned its hopes on neg= otiated rates working equitably and legally by emphasizing all shippers mus= t be treated in nondiscriminatory manner and all shippers who bid the recou= rse rate must be granted the capacity bid on at the recourse rate. We saw = in this proceeding, however, that shippers were not treated equally and in = nondiscriminatory manner (see e.g. our discussion in CPUC's reply brief of = TW's total disregard for accuracy and equitable treatment regarding announc= ement of delivery points ). We also note that in your proposed tariff modification - last page of tarif= f changes attachment to your outline of settlement - you do not provide for= evaluation of bids in a manner that would indeed assure shippers who bid f= or the capacity they want at the recourse rate would get that capacity at t= he recourse rate. If there are a number of bidders at the recourse rate and= some bidders at a negotiated rate that is not fixed at a rate below the re= course rate, then the available capacity should first be prorated among the= recourse rate bidders, and the remainder allocated to negotiated rate bidd= ers. Unless this is done, TW cannot say that shippers who bid the recourse= rate are awarded the bid. If you include negotiated rates (not fixed below= recourse rate)in prorating the capacity allocation, then you are not imple= menting the FERC's essential rationale that shippers must have the right to= bid for the capacity they want at the recourse rate if the pipeline is to = be allowed use of negotiated rates. By prorating among negotiated rate ship= pers, you are forcing shippers who only want to bid the recourse rate to en= ter into a negotiated rate to get the total capacity they need. That underm= ines the FERC's only rationale for authorizing negotiated rates. We think,therefore, that the next step would be for TW to draft a revision = of the initial TW settlement offer expressing whatever changes TW is propos= ing in response to Indicated Shippers comments and CPUC s comments. I will send in separate e-mail an outline of CPUC concerns re= garding TW's original settlement offer. This outline summarizes the issues = TW may want to consider if it revises that offer. -----Original Message-----=20 From: Porter, Gregory J.=20 To: Passamonti, Ida=20 Sent: 10/17/01 5:45 AM=20 Subject: RE: E TW settlement offer=20 Sensitivity: Confidential=20 Privileged and Confidential=20 =20 Ida,=20 =20 A response to your questions regarding the citations was provided=20 yesterday under separate cover.=20 =20 In regards to TW's settlement proposal, we need to know whether the CPUC=20 can settle this case and if so on what terms. To date, you and I have=20 discusseds everal policy matters. It is not practical to think all of=20 them will be addressed in this proceeding, let alone in a settlement.=20 Therefore, it would be most helpful if the CPUC would specifically let=20 us know what it needs to settle. =20 =20 We have discussed so many issues that I am quite honestly having=20 difficulty identifying the CPUC's objective in this proceeding as=20 opposed to general policy concerns that could be raised by the CPUC in=20 other, more broad based, proceedings. For instance, it is my=20 perception, based on our last conversation, that CPUC will oppose any=20 settlement that does not prohibit TW from negotiating agreements with=20 shippers that include a rate component based off of published indexes.=20 If this is correct, is the CPUC's concern the resulting rate (i.e., that=20 the rate may exceed max rates) or is it the fundamental structure (i.e.,=20 index rates are inappropriate)? TW will not give up the flexibility to=20 enter into deals based off of published indexes. Such deals reflect how=20 the gas market works and are desired by customers. Is it possible for=20 the CPUC to agree on specific tariff changes of the nature proposed by=20 TW and pursue broaderp olicy concerns in another proceeding?=20 =20 TW would like a specific response to the settlement proposal it provided=20 on ora bout October 8, 2001. Obviously, the more specific the better.=20 However, our immediate question is whether the CPUC believes it is=20 possible to reach a settlement based on the process oriented tariff=20 changes proposed by TW or, if not, what else needs to be considered. =20 =20 Please give me a call when you get in today to discuss. Thanks. Greg=20 J. Gregory Porter=20 Assistant General Counsel=20 Enron Transportation Services=20 (402) 398-7406 (voice)=20 (402) 398-7426 (fax)=20 greg.porter@enron.com=20 =20 [Porter, Gregory J.] ----Original Message-----=20 From: Passamonti, Ida [ <mailto:imp@cpuc.ca.gov<]=20 Sent: Tuesday, October 16, 2001 3:25 PM=20 To: Porter, Gregory J.=20 Subject: E TW settlement offer=20 Importance: High=20 Sensitivity: Confidential=20 We are still reviewing your letters of October 12, 2001 and the=20 settlement TW has thus far proposed. One practical problem you may be=20 able to help us with. In the first of your letters, you referenced FERC=20 approval of "index-to-index" type mechanisms in other proceedings as=20 noted TW's Reply Brief at footnote 10 (page 48 not page 49). The=20 footnote of TW's brief, however, contains inaccurate and incomplete=20 citations. Please provide the correct citation for the reference to=20 TransColorado decision, the docket number for the Great Lakes Letter=20 order so we can try to retrieve it from FERC's electronic data base -or=20 please provide a copy of the letter order; and a correction of the date=20 of the letter order re Columbia in Docket RP96-389-026 since a July 7=20 letter order cannot be found. Also, please let me know Greg how TW wants=20 to proceed. Should we communicate by telephone the CPUC's responses to=20 the TW settlement offer and letters, and determine whether TW is=20 prepared to revise the offer pursuant to our responses and those of=20 Indicated SHippers? Are weto have a teleconference call including=20 Kathy and Tom or just with Kathy to see where we are on the possibility=20 of reaching a settlement? Would TW like an outline of the CPUC's=20 responses, thus far, including outline of questions or concerns still=20 not answered by TW in their settlement offer? How should the outline be=20 sent?=20 **********************************************************************=20 This e-mail is the property of Enron Corp. and/or its relevant affiliate=20 and may contain confidential and privileged material for the sole use of=20 the intended recipient (s). Any review, use, distribution or disclosure=20 by others is strictly prohibited. If you are not the intended recipient=20 (or authorized to receive for the recipient), please contact the sender=20 or reply to Enron Corp. at enron.messaging.administration@enron.com and=20 delete all copies of the message. This e-mail (and any attachments=20 hereto) are not intended to be an offer (or an acceptance) and do not=20 create or evidence a binding and enforceable contract between Enron=20 Corp. (or any of its affiliates) and the intended recipient or any other=20 party, and may not be relied on by anyone as the basis of a contract by=20 estoppel or otherwise. Thank you.=20 **********************************************************************
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