I don't think she finished her thought.  I'll check with Allyson on this.

Kay
---------------------- Forwarded by Kay Mann/Corp/Enron on 08/09/2000 05:44 
PM ---------------------------


"Duncan, Allyson" <aduncan@kilstock.com> on 08/07/2000 02:27:23 PM
To: "'Mann Kay'" <Kay.Mann@enron.com>
cc: "Fine, Jonathan" <JFine@kilstock.com> 

Subject: NCNG Delivery Points

There would seem to me to be two questions--the threshold one is whether the
site is within Rocky Mount's service territory.  If it is, then what
obligation does NCNG have with respect to the construction of a delivery
point.  I haven't reviewed the annexation statutes yet, but based on my
initial reading of the Service Area Territory Agreement between Rocky Mount
and NCNG, once annexed the site would come within Rocky Mount's purview to
serve, and, although a "mutually agreeable" delivery point would have to be
negotiated, NCNG would at least have to negotiate that in good faith.  

The January 13, 1992 Service Area Territory Agreement gives Rocky Mount the
right to distribute natural gas within the city's incorporated limits as
well as a specified area outside the incorporated limits.   The contract
goes on to provide that should any part of that perimeter be annexed into
the city, "the respective rights of the parties as to service in any such
portion shall be determined by applicable case law and the General Statutes
of North Carolina. . ."  The contract further provides that absent an order
of the NCUC to the contrary, NCNG agrees that Rocky Mount has the right to
serve all end users within the "aforementioned" area--presumably referring
to the annexed area, although the agreement is not a model of clarity.

So, at least based on this language, Rocky Mount's right to serve arguably
tracks its incorporated limits, whatever they might be.  (Jonathan and I are
looking at annexation law to see what else might be lurking out there).  

The 1992 Service agreement provides, In Article IV, provides that points of
devliery for all natural gas purchased or transported under the agreement
with NCNG shall be "at the following locations and other stations added at
mutually agreeable locations in the future. . ." In the Third Amendment to
the Natural Gas Service Agreement, dated March 10, 1997, new language and
delivery points are negotiated upon, but the principle is still included
that  other stations may be added at "mutually agreeable locations in the
future."  The question which then arises is what Rocky Mount would have to
give in exchange.  In the 1997 agreement, Rocky Mount agreed to an extention
of terms of the of ten years, until December 6,