---------------------- Forwarded by Rod Hayslett/FGT/Enron on 02/21/2001 07:00 AM ---------------------------


Shelley Corman
11/15/2000 08:58 AM
To:	Steven J Kean/NA/Enron@Enron, Vicki Sharp/HOU/EES@EES, Drew Fossum/ET&S/Enron@ENRON, Maria Pavlou/ET&S/Enron@ENRON, Michael Moran/ET&S/Enron@ENRON
cc:	 (bcc: Rod Hayslett/FGT/Enron)

Subject:	Mkt Affiliate Implications: Reorganization of Houston and Omaha Facilities Management Responsibilities   



Enron Energy Services is presently a marketing affiliate of several of the Enron pipelines because EES: (1) buys/sells gas; and (2) holds transport contracts on our pipelines.  

Under the FERC's standards of conduct, the pipelines cannot: (1) share transportation information or shipper information with EES; (2) must function independently and keep separate books and records.  Generally, I don't see the FERC having any problem with mechanical, electrical, air-conditioning types of services.  However; there are 2 specific concerns that arise with respect to the described arrangement under the FERC's marketing affiliate standards of conduct:

1. Records -- FERC has ruled that giving a marketing affiliate "access" to transportation and shipper records (including something as simple as file room access) is deemed to be impermissibly sharing the information with a marketing affiliate in violation of the standards. Thus, it seems to me that EES will explicitly not be able to perform any records management function for NNG, TW or NBPL.

2. Billing -  FERC scrutinizes intercompany charges carefully.  In a recent Kinder-Morgan consent order, the FERC used payroll and intercompany charge records to make the case that the pipeline and marketing affiliate did not operate separately.  It would be helpful if any EES facility management charges/allocations come from Enron Facility Services (not EES) --  leaving us room to argue that the facility management subsidiary involves separate functions and staff than the EES subsidiary that is a marketing affiliate.




   
	  From:  Steve Kean & Bill Donovan                           11/14/2000 06:36 PM	
		


Sent by:	Enron Announcements
To:	All Enron Houston
cc:	 

Subject:	Reorganization of Houston and Omaha Facilities Management Responsibilities


Responsibility  for daily operations of building support services in the Enron Building, Houston leased offices, and Two Pacific Place (Omaha) will be transitioning from Corporate to Enron Energy Services (EES) by year-end.  The areas affected include facility operations and maintenance of mechanical, electrical, and air-conditioning systems; mail delivery;  housekeeping;  food, copier, and records services.

This transition of services, as presently managed by Enron Property and Services Corp. (EPSC), is designed to optimize value to Enron's Business Units by leveraging facility management businesses now offered by EES to their commercial customers.  EPSC staff having administrative responsibility for these services will report to Enron Facility Services, a subsidiary of EES's Global Energy Services group led by Daniel Leff, President and CEO.

EPSC is responsible for Enron's internal real estate and office development needs, including leasing, space allocations and facility planning, project and construction management, furniture systems, and office relocation.  EPSC, in its development role, remains a part of Enron Corporate Administration Services (ECAS) along with Corporate Security and the Aviation Department, reporting to Bill Donovan, Vice President, Corporate Administrative Services.

This alignment of responsibilities offers the opportunity for EPSC to focus resources on effective utilization of our existing office space assets and managing the development of Houston's new Enron Center Campus project.





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