Why would this be any different from TW operatiing the Blanco line for NW? We 
would need to put together a joint budget between Operations and Market 
Services exactly as we do for NW? 

Julia




Jeffery Fawcett
11/27/2000 04:00 PM
To: Randy Rice/OTS/Enron@ENRON, Rich Jolly/ET&S/Enron@ENRON
cc: Susan Scott/ET&S/Enron@ENRON, Steven Harris/ET&S/Enron@ENRON, Kevin 
Hyatt/ET&S/Enron@Enron, Mary Kay Miller/ET&S/Enron@ENRON, Drew 
Fossum/ET&S/Enron@ENRON, Julia White/ET&S/Enron@ENRON 

Subject: Citizens request for proposal

Citizens Utilities is in the process of selling off all of its 
non-telecommunications businesses throughout North America.  One of their 
principal assets, Louisiana Gas Service (LGS) is one of those companies 
recently sold by Citizens.  LGS provided gas control and operations services 
to other non-LGS companies, including the Citizens Utilities LDC assets in 
Arizona.  With the consummation of the sale of LGS, Citizens has told me 
confidentially that they have no reasonable way of operating the 
interconnect, metering and 1.5 mile lateral pipeline facilities that 
interconnects TW and EPNG to the recently constructed Griffith Energy Power 
Plant.   Therefore, Citizens is looking to possibly have a 3rd party provide 
contract operations services under an operating agreement.  TW has been asked 
in writing by Citizens to consider making a proposal to operate these 
facilities. 

Does TW have an interest in providing contract operations services for 
Citizens?  In a related legal/regulatory question, does TW have the authority 
to conduct contract services on behalf of others, or would we have to perform 
these services as a separate legal entity?  If we do, does this present an 
affiliate problem for us if we "share" operating employees?  If these 
threshold questions can be accommodated, and TW is not only able to provide 
contract operations services for Citizens, but has a commercial desire to do 
so, what would we charge Citizens for this service?  Although it would appear 
at first blush to be a relatively simple matter to operate these facilities, 
remember that Citizens will be receiving gas (potentially) from both TW and 
EPNG simultaneously, presenting not only a challenge to balance pressure 
between the pipes, but to account for and reconcile deliveries and receipts 
from both pipes as well as the plant site. 

Although I'm the principal commercial representative for Citizens as regards 
transportation matters, I'm certainly willing to step out of the middle of 
this negotiation if Operations desires to handle it themselves.  I will be 
happy to provide you a copy of the brief 1/2 page letter Citizens sent to me 
on the 17th soliciting TW's interest.   Given the relatively short lead time 
until LGS operations is sold, Citizens has requested expedited 
consideration.  Please let me know how you want to proceed.  Call if you have 
any questions.