Maybe this will be of interest.

- Rob


----- Forwarded by Steven J Kean/NA/Enron on 02/15/2001 09:38 AM -----


	Phillip K Allen@ECT 12/22/2000 03:06 PM 	   To: Steven J Kean/NA/Enron@Enron  cc:   Subject: 	


Steve,


I am sending you a variety of charts with prices and operational detail.  If you need to call with questions my home number is 713-463-8626.


 






As far as recommendations, here is a short list:

	1.  Examine LDC's incentive rate program.  Current methodology rewards sales above monthly index without enough consideration of future 
	     replacement cost.  The result is that the LDC's sell gas that should be injected into storage when daily prices run above the monthly index.
                    This creates a shortage in later months.

	2.  California has the storage capacity and pipeline capacity to meet demand.  Investigate why it wasn't maximized operationally.  
                      Specific questions should include:  

		1.  Why in March '00-May '00  weren't total system receipts higher in order to fill storage?

		2.  Why are there so many examples of OFO's on weekends that push away too much gas from Socal's system.  
		     I believe Socal gas does an extremely poor job of forecasting their own demand.  They repeatedly estimated they would receive 		    more gas than their injection capablity, but injected far less.

	3.  Similar to the power market,  there is too much benchmarking to short term prices.  Not enough forward hedging is done by the major 
              	     LDCs.  By design the customers are short at a floating rate.  This market has been long historically.  It has been a buyers market and the 
	    consumer has benefitted.  


Call me if you need any more input.


Phillip