From today's Gas Daily, in case you haven't seen it yet.......

 El Paso Merchant Energy will be passing up on its right of first refusal for 
up to 1.22 billion
cfd of capacity on El Paso Natural Gas, sources said yesterday. El Paso would 
not comment
on the report but said the company would issue a statement soon.
 The capacity, from the San Juan Basin to California, was open for bids until 
Feb. 12, and
El Paso Merchant Energy held a right of first refusal at six receipt points 
until May 31. El Paso
Merchant paid $38.5 million for the capacity, which was previously held by 
Dynegy Energy
Marketing.
 The capacity has been the source of controversy in the wake of California,s 
ongoing energy
crisis, with companies concerned that an affiliated company held the pipeline 
capacity.
The California Public Utilities Commission alleged in a FERC complaint that 
the agreement
between the companies was "rigged" (GD 1/11).
 "There has been a lot of pressure," said Gordon Howald, an analyst with 
Credit Lyonnais
Securities. "Everyone is blaming them for what,s going on in California, 
though I believe
FERC did clear them."
 Howald said that giving up that capacity and allowing the "market to decide 
the value"
would help El Paso on two fronts.
 "It probably makes sense considering the pressure they,ve been under from 
regulators,"
Howald said. And "their pipeline operations could essentially garner some 
higher profitability
if they are able to increase the value of that capacity in an open season." 
RW