John,  I have a flight this afternoon to San Antonio.  I will take this note 
with me and review.  I will call you either late this evening or tommorrow 
morning to discuss.






John Hodge@ENRON
01/12/2000 10:14 AM
To: Gerald Nemec/HOU/ECT@ECT
cc: Stephanie Miller/ET&S/Enron@ENRON, Julie A Gomez/HOU/ECT@ECT 
Subject: Millennium Pipeline Precedent Agreement

As part of Enron's acquisition of the wholesale unit of Columbia Energy 
Services, Enron North America has a Precedent Agreement with the Millennium 
Pipeline project.  The Precedent Agreement contains termination clauses that 
are date certain for January 14, 2000.  These clauses have been extended 
numerous times in the past.  The PA also contains a clause that gives Enron 
the right to terminate the agreement if FERC's Order regarding Millennium's 
Certificate Application is not satisfactory and acceptable to Enron.  The 
FERC has not acted upon Millennium's Certificate Application.  The PA also 
includes an "exclusivity" clause (Section 3.4) that we would like clarified 
in conjunction with extending the dates in the agreement.  Millennium would 
like to clarify the "exclusivity" clause in an interpretive letter, rather 
than eliminate the language from the PA.  Millennium claims that if they 
eliminate the language for Enron, they would have to do the same for other 
shippers.  Therefore, we would like to remove the ambiguity of the 
"exclusivity" clause and clarify Enron's rights through the interpretive 
letter.  If we cannot agree on the interpretive letter language, then we can 
still exercise the right to terminate the PA by deeming the FERC Order 
unacceptable.  The following is the language of the "exclusivity" clause, a 
rough cut that I have made for language in the interpretive letter and the 
clause pertaining to the FERC Order.  Could you please give me your thoughts 
on the interpretive letter.  We can then send the letter to the pipeline for 
signature by both Enron North America and Millennium.

Exclusivity Clause

Section 3.4  This Agreement shall constitute the exclusive agreement by which 
Shipper shall seek to obtain a firm natural gas transportation service with 
respect to Shipper's MDQ, except for agreements pursuant to which Shipper 
contracts for the transportation of its MDQ to and from the Millennium 
Project.

Interpretive Letter

Notwithstanding anything contained in Section 3.4 of the Millennium Pipeline 
Project Precedent Agreement between the sponsors of the Millennium Pipeline 
Project and Enron North America ("Shipper"), as successor to Columbia Energy 
Services, Shipper is not precluded from obtaining firm or interruptible 
natural gas transportation services on any interstate pipeline offering 
services similar to the Millennium Pipeline.

FERC Order Clause

Section 5.1  If the FERC's order regarding Millennium's Certificate 
Application is not satisfactory and acceptable to Shipper in its sole 
discretion, then Shipper may terminate this Agreement by giving Millennium 
notice thereof within fifteen (15) days after the date of issuance of the 
FERC's order.  In the event that Millennium fails to receive approval of this 
Agreement from its Management Committee, to the extent required, Millennium 
may terminate this Agreement by giving Shipper fifteen (15) days prior notice.