Wow.  Pretty interesting info.  I'm trying to think of a "plan B" approach, 
but without ENA (and their turbines) I'm haviang a hard time coming up with 
one.  Steve, I'll talk to you in Tucson on this.  Thanks.  DF




Steven Harris
04/25/2000 09:19 AM
To: Kevin Hyatt/ET&S/Enron@Enron, Lorraine Lindberg/ET&S/Enron@ENRON, Drew 
Fossum/ET&S/Enron@ENRON
cc:  

Subject: Pueblo

 I spoke to Frank Vickers who is responsible for ENA's power generation 
projects for the Western half of the United States. We discussed the 
opportunities for a generation project in the Albuquerque region and he 
offered the following observations.

 First, he indicated ENA has evaluated numerous projects in that area 
including participation in the Cobisa project. They always come to the same 
conclusion which is that the project economics become non-workable due power 
grid constraints and the inability to negotiate a long-term wheeling 
arrangement with PNM. He felt like the only reason Cobisa could go forward 
was due to PNM being the purchaser of power from the project. 

 We talked about lower the delivered cost of gas to the facility through a 
"zero return" pipeline but in the end what the generation facility would have 
to compete with is power from and around Palo Verde. He is very familiar with 
the ENA model (in fact he could calculate various electric costs immediately 
just based on some parameters I mentioned to him over the phone). In the end, 
he felt like ENA would not want to participate because the risk of having to 
sell the excess power at a competitive rate was just too great given the cost 
to get it to a market.

 We will continue to give the Pueblo project a final look by talking to 
Plains and Four Corners but without the baseload generation the pipeline 
prospects look pretty dismal.