Melissa,
 The maximum rate which HPL is authorized to impose for 311 transportation 
service may be established by either a rate proceeding before the FERC which 
would have to be renewed every 3 years or by using the margin component of a 
city gate rate which has been approved by the state regulatory agency.  In 
HPL's case, HPL has filed with the FERC that its rates will be the margin 
component of the City Gate Rate approved in Docket No. 592 before the Texas 
Railroad Commission.  This allows HPL to use this margin determined as 
provided in the February 8, 1974 contract between Entex and HPL as its 
maximum rate for 311 service.  That is one of the reasons that HPL continues 
to sell certain volumes of gas to Entex under that contract.   You can 
probably contact Steve VanHooser for any documentation that he may have 
concerning the applicable FERC filings if Tom Shelton does not already have 
such information.

 Please reforward your message to me after the 18th so that I can contact 
Aquila concerning where we next proceed concerning HPL's contract.



	mrgraves@aep.com
	06/08/2001 09:49 AM
		 
		 To: dan.j.hyvl@enron.com
		 cc: 
		 Subject: Aquila Contract and 311 Grandfathered Transportation


Dan,

Per our phone conversation, please contact Kathy Dirks with Aquila Energy
Marketing, Corporation regarding the final negotiations of their master
contract.  Per Kathy, this HPL contract has been in negotiations for almost
a year, and they are very close to finalizing.  Her phone number is:
816-527-1560.

Also, at yesterday's meeting regarding the various AEP Entities, you
mentioned that HPL has 311 Transportation with a Grandfathered Rate.  Do
you have any documentation regarding this arrangement, or can you refer me
to the person that could provide this?

Thank you,
Melissa Graves