Per Rod's request this morning, I have added the amortization of the Revenue Management Phase I Project to Marketing's O&M Expense (on a separate line) for the presentation to Stan next week.  The entire project costs (included in the Capital Budget) will be deferred and amortized as O&M expense over 5 years.  See notes below.

Please see revised Plan O&M schedules attached.  Please call me if you have questions.

  

Thanks,  Elaine

---------------------- Forwarded by Elaine Concklin/ET&S/Enron on 09/01/2000 12:16 PM ---------------------------

 	Elaine Concklin 08/29/2000 06:46 PM 	

To:	Bob Chandler/ET&S/Enron@ENRON, Sophie Patel/ET&S/Enron@ENRON, Vera Apodaca/ET&S/Enron@ENRON, James Centilli/ET&S/Enron@ENRON, Kimberly Watson/ET&S/Enron@ENRON, Dana Jones/ET&S/Enron@ENRON, Steve Gilbert/ET&S/Enron@ENRON, Dave Neubauer/ET&S/Enron@ENRON
cc:	Allison Millan/ET&S/Enron@ENRON, Gary Zahn/ET&S/Enron@ENRON, Tracy Geaccone/GPGFIN/Enron@ENRON, Danny McCarty/ET&S/Enron@Enron 

Subject:	Re: Revenue Management Project   

We will need to add/assign this cost to NNG and TW Marketing cost centers under Dave Neubauer and Steve Harris (probably Kim's??).  It needs to be included in the Gross O&M and in Project Specific Capital if it is not already (THE CASH PORTION - no effect on net O&M).  Then we will assign the amortization expense to the same cost center when we complete the functional earnings statements for Dan's Commercial Group.  THIS WILL AFFECT GROSS/NET O&M EXPENSE.

 


   
	  From:  Bob Chandler                           08/29/2000 11:42 AM	
		


To:	Elaine Concklin/ET&S/Enron@ENRON
cc:	Allison Millan/ET&S/Enron@ENRON, Gary Zahn/ET&S/Enron@ENRON 

Subject:	Re: Revenue Management Project

It looks like we have a winner.  This will need to be in McCarty' O&M budget.  Who should we advise?  Tracy?
---------------------- Forwarded by Bob Chandler/ET&S/Enron on 08/29/2000 11:40 AM ---------------------------

Rod Hayslett

08/29/2000 11:31 AM
To:	Bob Chandler/ET&S/Enron@ENRON
cc:	Elaine Concklin/ET&S/Enron@ENRON, Gary Zahn/ET&S/Enron@ENRON, Kimberly Watson/ET&S/Enron@ENRON, James Centilli/ET&S/Enron@ENRON 

Subject:	Re: Revenue Management Project   

I like #3



   
	  From:  Bob Chandler                           08/29/2000 08:28 AM	
		


To:	Rod Hayslett/FGT/Enron@Enron
cc:	Elaine Concklin/ET&S/Enron@ENRON, Gary Zahn/ET&S/Enron@ENRON, Kimberly Watson/ET&S/Enron@ENRON, James Centilli/ET&S/Enron@ENRON 

Subject:	Revenue Management Project

We need to finalize our tactics for amortizing this software development project for inclusion in the 2001-2003 Plan.  

Some options:

1.   Capitalize as software development cost and amortize at FERC approved rate of 4.4% to DD&A. (The implied amortization period is substantially longer than the expected useful life of the software).

2.  Capitalize as software development cost and amortize using Corporate Standard rate of 20% to DD&A.  (Would not want to have this rate applied to all of our other unamortized software development costs).

3.  Hold balance in deferred debits (as deferred O&M) and amortize to Marketing O&M expense over the 5 year useful life of the project (per project economics).  This approach is similar to the way we handled the deferred costs (mainly AA charges) associated with the Operation Information project about 4 1/2 years ago.

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