When the Commission granted Texas Eastern authority to hold capacity on 
another pipeline in Texas Eastern Transmission Corporation, 74 FERC P 61,074 
(1996), it stated that when a pipeline holds capacity on an upstream 
pipeline, the downstream pipeline's customers may hold title to the gas 
transported on the upstream pipeline.  The Commission recognized this as one 
of the limited exceptions to the shipper must have title rule.  Specifically, 
the Commission stated:  

The downstream pipeline will not hold title to gas shipped on capacity it has 
acquired on an upstream 
pipeline. Rather, shippers on the downstream pipeline will hold title to the 
gas on the upstream 
pipeline. We will allow a pipeline to hold the upstream capacity; we will 
not, however, allow the pipeline 
to hold title to the gas being shipped.  Thus, the downstream pipeline will 
be the shipper on the upstream 
pipeline, but will not hold title when the gas is being shipped. This results 
in a limited exception to the rule 
that a shipper must hold title to gas being shipped. 

I believe that if we can address the Commission's other concerns about this 
filing, they will grant a similar waiver for this transaction.  You can feel 
free to pass this along to your contact at PNM.