A couple of more things on Red Rock.  First, Shelley asked whether ENA participated in the open season.  If not, and if they are interested, or if Mavrix or any one else who didn't participate in the open season is interested, we ought to put something on the EBB that says "TW is now accepting binding proposals for the capacity described in its ____, __ 2000 open season and any shippers that didn't participate in that open season but who are interested in capacity should contact a TW marketing rep."  Or something like that.   Is there any problem with that?  Second, the Jeffs (Fawcett and Dasovich) and perhaps others will be talking to Danny shortly about a possible next phase expansion into California.  Someone please take point on passing info from that meeting on to Shelley and MKM and me.  Shelley may want to have Stan tell Madden that we are looking at an additonal large expansion beyond the one we are about to file.  The PR mileage might be useful but Shelley will need to know as much as we can disclose outside about what we are up to.  If we get serious about looking at something that goes beyond the Cal border we may want to hold that internally for a while and not tell Madden.  On the other hand, I don't have any problem with Stan telling Madden that we have general concerns about whether pipe expansions within California will keep pace with interstate expansions to the border.  Jeff D's analogy of the "four lane superhighway turning into a dirt road" is too good not to use with Madden!  df      




Susan Scott
02/15/2001 05:33 PM
To:	Mary Kay Miller/ET&S/Enron@ENRON, Keith Petersen/ET&S/Enron, Drew Fossum@ENRON, sstojic@gbmdc.com, fkelly@gbmdc.com
cc:	Maria Pavlou/ET&S/Enron, Lee Huber/ET&S/Enron@ENRON 

Subject:	sale of Red Rock expansion capacity

After consulting with the commercial people and Bros. Fossum, Stojic and Kelly, I propose this simple plan for marketing the Red Rock expansion capacity.   Please let me know as soon as possible what you think of this.  

Steps:  

Marketers to contact shippers by phone and tell their contacts the following:

		- bids will be accepted until 5:00, March 2
		- we have a minimum NPV of $___ that must be met in order for the project to be economic; bid accordingly
		- Bids will be evaluated based on highest rate.
		- Minimum term is 5 years.
		- If there are tie bids that all qualify as highest rate and quantities bid upon exceed quantity available, the tie bids will be allocated pro rata.
		- Shippers should indicate whether they would be willing to have their bid capacity prorated in case an allocation is necessary.
		- Bids should include:  1) service request and 2) offer letter stating material terms (rate, term, points, quantity).  Offer is binding.  It can include a regulatory "out," but cannot be "subject to management approval."

The only shippers that will be contacted are those that responded to the Nov. open season in a timely fashion.  (Drew, I found out this includes Calpine).

Explanation:

	The commercial group decided (pending Steve Harris's approval) that they prefer the "highest rate with a minimum stated term" over highest net present value because it is consistent with Stan's stated preference for "front loading" the contracts.  In other words, a shipper that bids $0.60 for 5 years beats a shipper that bids $0.35 for 15 years because it has bid the highest rate.   

Questions? Comments?  Please reply soon.
Our marketers want to contact shippers tomorrow.  Competing pipelines are already out soliciting bids for their expansions...