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Enron Mail |
Ed,
I had a chance to read the contract LUS and follow-up with a phone call to Ron Gary to clarify. Please note the following information: LUS entered into a letter agreement after the contract was put in place for gas supply greater than Base quantities. That price is GDA Hub + $.04. The letter agreement allows LIG to The contract has a 75% take requirement for Base quantities but has no penalty if LUS does not take. LUS uses this optionality to buy less expensive power in the marketplace. There has been times that LUS takes less than the Base quantity. He would be open to a GDA keep whole for this but would like to have 24 months of history so he can compare. Tricia is working on this. For the Natchiotoches plant, Seller has an out if TransLa interrupts. LUS is given a credit of 45,000/year for fuel retention on TransLa. We need to gross up our price to account for this. There is a GDA keep whole for any vol's that are triggered. The trigger price is NYMEX plus $.04 and this basis is fixed. LUS has not nominated Surplus volumes in two years. Our bid will be reduced by $30,000 for the year by LUS to compare us to LIG's bid for gas odorization. This will not be a cost to Enron but will be used in their evaluation process. We need to state how we will make deliveries firm or why our volumes will flow if we do not sign up for firm capacity form the pipeline. There is additional stuff in the contract that we need to discuss. I'm working on the proposal and Hodge is working on getting a discounted firm rate on Texas Gas and Columbia. Ultimately, this is what will determine if we win this deal or not. Lets discuss when you get a chance. Thanks.
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