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Enron Mail |
This is the final OBA letter that we should be using to terminate the volum=
etric OBAs. Lee will be down sometime tomorrow afternoon to review all our= letters. -----Original Message----- From: =09Pryor, Tony =20 Sent:=09Tuesday, September 25, 2001 5:24 PM To:=09Lindberg, Lorraine Subject:=09FW: TW OBAs Calling for Volumetric Settlement Importance:=09High -----Original Message----- From: =09Pryor, Tony =20 Sent:=09Saturday, September 22, 2001 9:16 AM To:=09Huber, Lee Cc:=09Watson, Kimberly Subject:=09TW OBAs Calling for Volumetric Settlement Lee, as I mentioned on Friday, the purpose of the attached letter is to ter= minate the volumetric OBAs and revert to the tariff OBA to avail ourselves = of the "hammer" in Section 4(b) of the tariff form (Sheet 147) which permit= s us to credit the operators' scheduled volumes to the imbalance, ie, confi= scate their gas. I'm told that the subject OBAs were individually negotiat= ed and deviate from the tariff in one way or another. They also said that = these OBAs allow cashout, but don't require it, and that's the problem: Th= e operators are not voluntarily paying back the gas because in many locatio= ns (ie, San Juan), the pipeline is full and they don't want to short their = markets. Because I haven't seen any of the agreements that we propose to t= erminate (the TW people have just finished briefing them), I told the group= that an attorney needs to look at each one to make sure that we cannot, in= fact, force cashout. In most of them, I'm told, cashout is at the option = of the party owing the imbalance. =20 As I also mentioned, this letter is a template; a starting point. It must = be tailored to each OBA being terminated. For example, the Section numbers = are not filled in, and must be supplied. You will note in the second paragr= aph of the letter that we say, essentially, that in capacity-constrained ar= ea, if volumetric settlement is to occur, it will need to be accomplished t= hrough crediting their scheduled volumes to the imbalance. From my convers= ations with TW, my understanding is that most of the volumetric OBAs do not= have a provision expressly permitting us to do that. Indeed, as I mention= ed above, that's my understanding of why we're terminating the volumetric O= BAs. Even if there is no provision in the subject OBAs for crediting sched= uled volumes, my opinion is that we can offer that as an option, because th= at is still a way of balancing "in kind", but omit the reference to the agr= eement (as I have noted with brackets). If they don't want to do that, cas= hout is the only other option; that's our way of forcing cashout. =20 Thanks for your help, and if you need help, you might ask Maria or Dari. H= owever, I don't envision that it will take much time to do any one letter..= ...............Tony
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