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David: Here are my comments re the Agency Agreement draft sent last week:
(1) Section 1.27. I would suggest replacing "in Peoples' sole discretion"
with "in accordance with Sections 6.1 and 6.2". This is more consistent
with the intent re changes to the Operating Statement. (2) Section 2.4.
Each one of the new provisions re nominations, (a) 1,2, and 3, ends with a
similar sentence: "Peoples will confirm these requests as soon as
practicable prior to such nimination deadline and shall enter any
nominations necessary by such nomination deadline." Should this be more
specific, perhaps something like : "Peoples will confirm acceptance of
these requests as soon as practicable prior to the nomination deadlione and
shall schedule such nominations prior to the dealdine."? (The wording for
no. 3 is similar to 1 and 2.)   (3) Section 2.9 (ii) From a regulatory
perspective, I prefer the bracketed language. As I noted regarding the last
draft, a regulator would be concerned with an agreement commiting only to
"commercially reasonable efforts" re compliance with the GTC, or a Law or
Judgment. (4) Section 2.10. There is a typo in the second line from the
bottom of 8, it's "remains" unpaid, not "remain". (note that this concept
of a Peoples credit policy is consistent with Peoples' rights re denial of
serivice under Section 8.2 of the GTC, which allows Peoples to refuse
service based on a credit analysis.) (5) Section 5.1. At the time of the
last draft, we discussed an additional representation for Peoples that "it
has provided MEH with a copy of the G&TC in effect as of the Effective
Date". This could inserted in 5.1 as (d), with a relettering of current d
and e. (6) Section 7.2 I don't think the second to last sentence will work.
This says that, if Peoples rejects an offered Extended Hub Transactions or
doesn't timely accept, it can't enter into a similar transaction with the
party involved for 6 months. The problem with this is that Peoples must
provided Hub Service under the GTC, except when a ground for refusal stated
in Section 8.2 of the GTC applies. The circumstances described in 7.2 are
not a legitimate ground for refusal. I beleive, however, that we get to the
same place if 7.2 were modified to require that Peoples pay MEH its
percentage of Cumulative Net Revenues in the event that a transaction
similar to one previously rejected for the same party is accepted within 6
mos. after termination of the Agency Agreement.  (7) Section 8.3.  Item
(vi) of the list of functions could be expanded to state: "assisting in the
pareparation and filing of requests for Governmental Approval in accordance
with Section 10.1 and/or the preparation of FERC reports that are required
in the ordinary course of business and not specifically requested by FERC."
I wan't sure of the intent re the last phrase of this. Does this mean that
if a Report is specifically requested by FERC, MEH would be paid separetly
for work on the Report? I would have thought that routine review of
regulatory filings and work on reports might all fall into the category
covered by the $50,000 payment, regardless of whether a particular report
is requested. Please let me know if you have questions. Thanks