----- Forwarded by Jeff Dasovich/NA/Enron on 09/28/2000 03:47 PM -----

	Miyung Buster@ENRON_DEVELOPMENT
	09/28/2000 02:50 PM
		 
		 To: Joe Hartsoe@ENRON, Sandra McCubbin@EES, Susan Mara@EES, Paul 
Kaufman@ECT, Karen Denne@ENRON, Jeff Dasovich@EES, Jeannie Mandelker@ECT, 
Mark Schroeder@ECT, Peter Styles@ECT, Mona L Petrochko@EES, Peggy 
Mahoney@EES, Nicholas O'Day/AP/Enron@Enron, Mike 
Dahlke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rob Bradley@ENRON, Shelley 
Corman@ENRON, Jennifer Rudolph/HOU/EES@EES
		 cc: 
		 Subject: Natural Gas Price Increase



	Robert Neustaedter@ENRON_DEVELOPMENT
	09/19/2000 11:44 AM
		 
		 To: Steven J Kean/NA/Enron@Enron, Richard Shapiro@EES, James D Steffes@EES, 
Mark Palmer/Corp/Enron@ENRON
		 cc: Harry Kingerski@EES
		 Subject: Natural Gas Price Increase

As discussed in last Friday's meeting on strategies related to higher energy 
prices, Harry asked me to develop the attached projection of delivered gas 
prices for this winter.

The projection is based upon EIA's monthly analysis of delivered gas prices 
for residential, commercial and industrial customers for selected states 
(Connecticut, Virginia, Illinois and Texas) for the 1999-2000 winter heating 
season (Nov-Mar).  Assuming pipeline and LDC mark-ups remain constant, the 
delivered prices were adjusted for the NYMEX Henry Hub projection of wellhead 
prices for the 2000-2001 winter period.  A national projection is also 
included.

Because the commodity portion of the gas bill for residential customers is a 
smaller percent of the total bill compared to commercial and industrial 
customers, the increase for residential customers will be less pronounced 
than for commercial or industrial customers.  In addition, LDC purchased gas 
cost mechanisms will moderate the effect of the price increase to some extent 
because monthly price increases are averaged out over an extended period (12 
months in some cases).  Furthermore, some state public utility commissions 
(e.g. Connecticut) are conducting meetings with LDCs to discuss looking for 
ways to lessen the impact of the projected increases. That being said, Nipsco 
recently announced residential prices are expected to increase 50-60% this 
winter over last winter (in line with the projection for Illinois).

If you are interested in a similar projection for other states, or have 
comments with respect to the above let me know.