---------------------- Forwarded by Edith Cross/HOU/ECT on 02/27/2001 09:15 
AM ---------------------------
   
	Enron North America Corp.
	
	From:  Edith Cross                           02/22/2001 10:12 AM
	

To: Mark Breese/HOU/ECT@ECT
cc:  
Subject: Gas Transport Issues for OPC

Here you go...
---------------------- Forwarded by Edith Cross/HOU/ECT on 02/22/2001 10:11 
AM ---------------------------
   
	Enron North America Corp.
	
	From:  Edith Cross                           01/26/2001 03:12 PM
	

To: Ozzie Pagan/HOU/ECT@ECT, Heather Kroll/HOU/ECT@ECT
cc:  
Subject: Gas Transport Issues for OPC

I wanted to quickly write up the conversations I have had today and yesterday 
with John Hodge (Gas Upstream Origination - I think this is the name of the 
group) related to gas transport issues for Georgia.  As I said yesterday, 
Transco Zone 4 is at the Mississippi/Alabama border, and is not a delivered 
price to Georgia.  The only Inside FERC SONAT index is in Louisiana.  Each of 
these points are supply basins, and not delivered Indices.  Hence the need to 
pay transport costs to the delivery area.  Below I have detailed the issues 
on each of these pipes.

Transco Zone 4

Currently, Enron is working on a project with Transco to expand the pipeline 
in Zone 4 (Project Momentum).  This project is related to development sites 
at Athens and Hartwell.  John said he thought that Athens and Hartwell were 
each a 500 MW combined cycle facility.  The negotiated rate for capacity on 
this expansion is ABOVE max rate for Transco Zone 4.  The current max rate 
for intra-zone transport is $0.21 for demand and variable costs 
(approximately $0.03 is variable).  The negotiated rates for this expansion 
is $0.24 for Athens and $0.27 for Hartwell.  Rememeber that the demand prices 
must be paid year round for the maximum capacity needed, regardless of the 
actual usage.  These prices do not include the cost of fuel.  If we were to 
purchase transport from Onshore Louisiana to each of these delivery points, 
you can expect to add another $0.05 to the above prices.  Transco has 
informed us that if we do not continue with this project, there are plenty of 
people waiting to buy capacity on this expansion, and that they are already 
planning another expansion after this.  

Sonat Zone 3

Skygen (Calpine) is working with SONAT to expand their capacity (approx. 
120,000/mmbtu/day) for a development in Augusta.  SONAT has said that they 
should be able to expand this at current max rate prices.  The current max 
rate is $0.55, which is $0.16 variable, and $0.39 demand.  This expansion is 
from an offshore pipe through Destin pipeline to connect with SONAT.  
Recently, SONAT has sold their capacity at prices lower than max rate in 
order compete with Transco.  

Elba Island

Theoretically, SONAT should offer Intrazonal transport from Elba Island at a 
discount to max rate.  However, I think SONAT (El Paso) is still trying to 
figure out what to do since we now have access to this facility. Currently, 
SONAT does not want discount the transport cost.  We are waiting to see what 
price SONAT charges El Paso to transport their gas from Elba Island.  So far, 
they haven't reached an agreement (that we know of), but we are hoping that 
SONAT will offer this at a discount to El Paso, and then we will 'force' them 
to give us the same rate.  John thinks that they will charge max rate for the 
transport, but embed some sort of discount into the gas price to try to get 
around offering Enron a discounted rate.

I hope this helps!

Edith