Look!  Foti's computer also confuses the Evil and Good Steves!  DF 
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 04/10/2000 
12:16 PM ---------------------------


Steven Harris
04/10/2000 10:42 AM
To: Drew Fossum/ET&S/Enron@ENRON
cc:  

Subject: ECS and the $500k reduction

FYI
---------------------- Forwarded by Steven Harris/ET&S/Enron on 04/10/2000 
10:41 AM ---------------------------


Steve Harris@ECT
04/04/2000 05:50 PM
To: Steven Harris/ET&S/Enron@ENRON
cc: David Foti/ET&S/Enron@ENRON 

Subject: ECS and the $500k reduction

I believe this is for you.

Regards,
Steve
---------------------- Forwarded by Steve Harris/HOU/ECT on 04/04/2000 05:49 
PM ---------------------------


David Foti@ENRON
04/04/2000 05:45 PM
To: Rod Hayslett/FGT/Enron@ENRON, Steve Harris/HOU/ECT@ECT, James 
Centilli/ET&S/Enron@ENRON
cc:  
Subject: ECS and the $500k reduction

Rod, Steve, & James:

In rough terms, this is what I understand ECS' logic to be -

The $3.35 per KW for transmission demand charge was assumed not to be 
avoidable and have a 5000 KW minimum when ET&S and ECS agreed on the $2.8MM 
one time payment.
ECS says that they have negotiated to make the transmission demand charge 
avoidable with no minimum.
$3.35 * 10,000HP / 1.341 = $25k
$25k discounted 10 years = $1.9MM
25% of 1.9MM = approx. $500k
Original one time payment = $2.8MM less $0.5MM = $2.3MM (the new payment ECS 
wants to give ET&S)

ECS contends that Fastuca agreed to a 25% sharing of benefits received from 
the avoidable demand.  My recollection is that the 25% was used as a 
benchmark to estimate ECS' fee but was never established as a firm rule.

ECS is supposed to provide us with their own written explanation for the 
$500k reduction.  They are also supposed to send us the "re-negotiated" rate 
schedule 21 that shows the transmission demand charge becoming avoidable.

In any event, whether it is reasonable or not that ECS is due the $500k, it 
is reasonable to expect that ET&S would have been notified of this change in 
a more timely manner.


Dave Foti
x.31978