
Date: Wed, 26 Jan 2000 10:41:00 -0800 (PST)
From: katherine.kelly@enron.com
To: robert.superty@enron.com
Subject: Re: Accounting stuff. Let me know what you find out. Thanks.
Cc: chris.germany@enron.com
Bcc: chris.germany@enron.com

Actually, prior to the CES acquisition we had between 200 and 500 little
wells of metered production in the Appalachian area of our own.  These wells
produce anywhere from 10 dt's to 10,000 dt's per day.  Most are very minimal,
probably 500 dt's or less.  This production is produced on several gathering
lines off of CNG and Columbia Gas.  A couple of years ago Columbia Gas
started getting out of the gathering business and sold part of the wells to
Gatherco, then they spun off part to CNR, and the remainder are still held by
Columbia Gas.  Around the 10th of the month we get estimates from Gatherco
and CNR as to what it appears that the individual wells are producing and
then we nominate the gas, which takes up to several hours of updating time.
The Columbia Gas meters we do not have to individually nominate to the pipe.
We receive an estimate from the pipe for the total volume and they give us
credit for it in our pool.  Sounds simple.  The problem comes three months
down the road when we get the actuals from Columbia Gas as to what flowed at
these meters and accounting has to go in and make payments to all these
little producers.

Prior to unify, it didn't really effect us.  Client Services would just zero
out the one lump estimate that we had made and then they would go in and add
each producer, the wells that flowed, the volume and make the final payment
to each.  It was a very time consuming process and they had one person who
was solely devoted to doing nothing but this.  Because unify was developed to
put as much work up front in the process, client services no longer has the
'back door' to get the payment out the door.  This means that each well that
we have on Columbia Gas must now have an individual ticket in sitara  with a
volume of 0 (currently our responsibility to set up) and must have at least
one path with a volume of 1 for each month in unify.  Several months ago
after converting to unify, Robert, Molly Lafuze, Kathy Moore, and Victor put
in a massive effort over the course of about three weeks to get all of our
own meters taken care of while still maintaining their respective jobs.
Generally, it's the same meters that flow and when we set them up, we do it
over a long period of time so the path just rolls from one month to next and
as long as we keep up our tracking and balancing, we're just in maintenance
mode.  However, sometimes new wells come up, at which point the process is to
1) have the global group set up the meters and the counterparties, 2) set up
a deal in sitara, 3) put a path in unify with a volume of 1, 4) create noms,
and 5) track and balance.  Since we don't even get actuals to 3 months after
flow, we usually have at least 3 to 4 months of catch up to do.  And of
course, as you are aware, our systems have been running a little slow lately.

With the acquisition of CES we have taken on even more of the gas.  I've
heard on a couple of occasions just how many wells this is, but I'm sorry,
the number seems to have escaped me.  I know it is at least several hundred
and that it is quit a bit more than we had previously.

This whole subject is one that has been passed around by several people
including myself, Chris Germany, John Singer, Jim Javins, and Scott Neal on
more than one occasion.  One thought that John Singer and Jim Javins had was
to have someone named Hiedi in Jim's office get access to our systems and
input the gas herself.  Seems like a nice suggestion, except that she is EES
and I don't think that we want her in our sytems.  By the way, John Singer
and Jim Javins are the ones buying this wellhead gas.  They picked Hiedi
because she works in the same office as Jim and they feel that she could give
these little guys the hand holding treatment that they sometimes demand.
Yes, it's hard to believe but it's the ones getting the $50 checks that
complain the most.  They thought that Hiedi could also be responsible for
making the payments.

Anyway, that suggestion wasn't really panning out, so another suggestion has
arisen as to setting up a whole new Enron entity that would handle the
metered supply and we would be buying the gas from this entity.  First, we
would have to take into consideration whether it would restrict our
flexibility on Columbia Gas.   I'm not totally sure how to go about getting
something like this off the ground, but it does have merit.  Another thought
was to hire someone here that's sole responsibility would be the metered
supply.  They would hopefully become a specialist in the area and would work
closely with Gloria in client services, Jim Javins and John Singer.  The
thought was to have them report either to me or to Scott Neal.  Chris and I
tend to disagree in this area.  he thinks there is plenty of work for a full
time person.  My opinion is that there is definitely a need for a special
project over the course of some time, but that once the initial push to get
the meters in is done that it is more of a part-time responsibility.  The big
problem with that though is right now, the guys downstairs don't even have
time to get these special type of requests done and it might be faster for
Gloria to do them herself, if she has proper training and access to our
systems.  However, regardless of which group gets the responsibility, there
is going to be a need for a very large effort within the next month or so
when January actuals come in and we should be prepared.

Any way, please give it some thought and let me know if you have any
suggestions.  I'd also like to here what your views might be.

Thanks!




