Laura,

I'll be in your offices 1st thing Thursday morning.  Is that a good time for 
you?

Kay





Laura Luce
09/12/2000 12:26 PM
To: Kay Mann/Corp/Enron@Enron, Gregg Penman/Corp/Enron@Enron
cc: Sheila Tweed/HOU/ECT@ECT 

Subject: Re: Transfer price agreement  

Kay,

The below looks like a good summary of what we discussed on 8/30.  The 
pipeline is actually spelled Mahomet, but otherwise this is the right track. 

Let's set up a conference call (with Gregg) at your earliest convenience.  I 
need to ensure that a document is turned to Peoples as soon as possible and I 
had hoped we would be further along at this point.  I know we are all trying 
to juggle schedules, however;  I need to determine if we have a resource 
issue that requires additional assistance in support of our Chicago business.

Thanx,
Laura


   
	
	
	From:  Kay Mann                           09/11/2000 05:27 PM
	

To: Laura Luce/Corp/Enron@Enron, Gregg Penman/Corp/Enron@Enron
cc:  
Subject: Transfer price agreement

I'm working on the agreement, but since it is taking longer than I had hoped, 
I wanted to send you my understanding of the basic premise for your input.  
I'll continue to refine/integrate this into a real document while you review 
the important stuff:



Hub Services. 

&Hub Services8 include (a) transactions entered into by MEH or the PGL HUB 
which are subject to Peoples' Hub FERC operating statement, and (b) all 
physical transactions which require the use of the Manlove or Mohammad fields 
(also known as &exchange8 or &enhanced hub8 services). 

The profit [what is profit? Obviously before tax, but otherwise a GAAP 
standard?] from Hub Services shall be split as follows:

? For transactions entered into between February 15, 2000 through September 
30, 2000, the profit shall be equally shared.

? For transactions entered into from October 1, 2000 to September 30, 2001 
(and successive years until September 30, 2004), Peoples will receive the 
first $4 million in profit (cumulative, not annual), and will Enron receive 
the next $1million in profit.  For any profit exceeding $5 million, Peoples 
and Enron will share any on a 50/50 basis.

This arrangement excludes all agency fees paid to MEH.  These fees will be 
shared 50/50 from the inception. 

All internal costs incurred in the normal course of business will be borne by 
the party incurring same. All third party costs will be shared equally, and 
require MEH board approval.

PERC Peaking Agreement

PERC has contracts with PGL and with NICOR contracts relating to the 
ethane/propane peaking facility. The two existing contracts pay a total of 
$2million (approximate or exact) in demand charges annually. Any profit 
exceeding $2 million in a year will be shared by Peoples and Enron on a 50/50 
basis.

If either of these contracts is extended in any form other than the current 
form, then Peoples and Enron share the demand charge and the profit on a 
50/50 basis.

Other Transactions 

Peoples and Enron will split the profit from any transactions other than 
those described above on a 50/50 basis. 



Kay