---------------------- Forwarded by Phillip K Allen/HOU/ECT on 04/28/2000 
09:02 AM ---------------------------


Laird Dyer
04/27/2000 01:17 PM
To: Phillip K Allen/HOU/ECT@ECT
cc: Christopher F Calger/PDX/ECT@ECT, Michael McDonald/SF/ECT@ECT 
Subject: Re: SW Gas  

Mike McDonald and I met with SW Gas this morning.  They were polite regarding 
asset management and procurement function outsourcing and are willing to 
listen to a proposal.  However, they are very interested in weather hedges to 
protect throughput related earnings.  We are pursuing a confidentiality 
agreement with them to facilitate the sharing of information that will enable 
us to develop proposals.  Our pitch was based upon enhancing shareholder 
value by outsourcing a non-profit and costly function (procurement) and by 
reducing the volatility of their earnings by managing throughput via a 
weather product.

As to your other question.  We have yet to identify or pursue other 
candidates; however, Mike McDonald and I are developing a coverage strategy 
to ensure that we meet with all potential entities and investigate our 
opportunities.  We met with 8 entities this week (7 Municipals and SWG) as we 
implement our strategy in California.

Are there any entities that you think would be interested in an asset 
management deal that we should approach?  Otherwise, we intend to 
systematically identify and work through all the candidates. 

Laird