---------------------- Forwarded by Katherine L Kelly/HOU/ECT on 04/19/2000 
03:25 PM ---------------------------
   
	Enron North America Corp.
	
	From:  Rebecca W Cantrell                           04/19/2000 02:44 PM
	

To: Chris Meyer/HOU/ECT@ECT, Ruth Concannon/HOU/ECT@ECT, Theresa 
Branney/HOU/ECT@ECT, George Smith/HOU/ECT@ECT, Hunter S Shively/HOU/ECT@ECT, 
Ray Hamman/HOU/EES@EES, Carrie Hollomon/HOU/ECT@ect, Robert 
Superty/HOU/ECT@ECT, Laura Luce/HOU/ECT@ECT, Cary M Carrabine/HOU/ECT@ECT, 
Colleen Sullivan/HOU/ECT@ECT, John Hodge/Corp/Enron@ENRON, Judy 
Townsend/HOU/ECT@ECT, Katherine L Kelly/HOU/ECT@ECT, Scott Neal/HOU/ECT@ECT, 
Paul Tate/HOU/EES@EES, Stephanie Miller/Corp/Enron@ENRON
cc:  
Subject: ANR Wins on Transco Interconnect Complaint!

Well, they will probably file a court appeal, but it doesn't look good.


NGI's Daily Gas Price Index 
 published : April 19, 2000

               ANR Gets Green Light for Transco Interconnect

      ANR Pipeline last week won a two-year battle at FERC to build a direct 
interconnect to Transcontinental
      Gas Pipe Line's mainline facilities at Evangeline Parish, LA --- near 
the site of an active natural gas sales
      market. 

      On rehearing, the Commission upheld a July 1998 order granting a 
complaint in which ANR accused
      Transco of discriminating against it by denying a request to construct 
minor interconnection facilities that
      would provide its shippers with direct access to gas sales markets on 
Transco's system at Evangeline. 

      Specifically, the Coastal Corp. pipeline has fought to obtain a direct 
connection to Station 50, which is one
      of several compressor stations on Transco's mainline serving as pooling 
points. There, producers and
      marketers sell gas to LDCs and other buyers who hold firm capacity on 
Transco for shipment to
      downstream markets. The gas sale market at Station 50 is said to be a 
"premium one." 

      In order to get their gas to Station 50 now, ANR shippers must deliver 
gas via ANR's existing
      interconnection on Transco's Central Louisiana Lateral at Eunice, LA, 
and then purchase interruptible
      transportation (IT) service on Transco for a distance of about 7.4 
miles. So, in effect, ANR shippers
      currently must pay "stacked rates" for service on ANR's existing 
interconnect and for service on Transco's
      IT feeder to reach Station 50. 

      But the Commission last week found that ANR's request for a direct 
interconnection at Evangeline was
      reasonable under three different analyses. "First, the evidence shows 
that Transco has provided no
      reasonable justification for denying ANR's request, given Transco's 
history of granting such requests made
      by similarly situated parties," the order said [CP98-74]. Six pipelines 
other than ANR currently have direct
      interconnections on Transco's mainline in the Gulf region that were 
established prior to Transco's
      restructuring under Order 636, and none of the shippers pay an IT rate 
in order to get gas to Transco's
      mainline markets, according to the order. 

      Secondly, evidence suggests the denial of an interconnection for ANR 
has led to "specific competitive harm
      to the operations of sales markets on Transco's mainline," the 
Commission said. That's because buyers at
      Station 50 have been barred access to the competitively priced gas 
supplies that ANR's shippers seek to
      offer, FERC noted. Lastly, it said the establishment of the Evangeline 
interconnect for ANR was required
      under the new five-step interconnection policy for gas pipelines, which 
FERC unveiled last week. 

      In upholding the July 1998 decision, the Commission overturned an 
administrative law judge's (ALJ) initial
      findings that competition hadn't been adversely harmed at Station 50, 
and that FERC's prior approval of the
      IT feeder system provided "appropriate support" for Transco to deny ANR 
the Evangeline interconnect. 

      "We are persuaded by the record in this case that ANR cannot offer a 
pipeline transportation service
      reasonably competitive with those provided by Transco and other 
interstate pipelines, without the
      Evangeline interconnect, a minor facility consisting of valve access to 
Transco's mainline," the order
      concluded. 

      The Commission also rejected Transco's claim that it partly denied 
ANR's request for the Evangeline
      interconnect because it would have led to a revenue loss on its IT 
Feeder system. As the FERC staff noted,
      "six other interstate pipelines currently use mainline interconnects 
[on Transco].....but no evidence indicates
      the extent of even arguably identifiable business loss from these 
pipeline competitors," the order noted. If
      anything, "Transco has accorded itself an anti-competitive 
preference.....to assure that its own IT service is
      used in lieu of the potential alternative proposed by ANR."