---------------------- Forwarded by Susan Scott/ET&S/Enron on 07/07/2000 
09:00 AM ---------------------------


Christine Stokes
07/06/2000 01:04 PM
To: Steven Harris/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@ENRON, Glen 
Hass/ET&S/Enron@ENRON, Mary Darveaux/ET&S/Enron@ENRON, Susan 
Scott/ET&S/Enron@ENRON, Lorraine Lindberg, Bill Cordes/ET&S/Enron@ENRON
cc: Kevin Hyatt/ET&S/Enron@Enron 

Subject: Southwest Gas Discount Amendment Changes

Recent negotiations with Southwest Gas Corporation have resulting in the 
deletion of two provisions  contained in the original Southwest Gas 
Corporation discount letter with was routed for Officer Approval.  Several  
minor "sentence structure" changes requested by Southwest Gas have also been 
included.  

Please review the revised Discount Letter and forward any comments 
immediately to either Lorraine Lindberg (x35403) or Susan Scott (x30596).  
The following summarizes the changes to the original discount letter:

1.  Deletion of paragraph which waives ROFR rights.    This paragraph is not 
necessary due to FERC Order 637 rule which states that the shipper's tariff 
right to ROFR for contracts of one year or longer does not apply to 
discounted transportation contracts, only max rate contracts.

2.  Deletion of Paragraph which states Transwestern will retain any capacity 
release revenues which Shipper may acquire from releasing capacity at rates 
above the Discount Rate provided by Transwestern to Shipper.


Please note that the revised discount letter does retain the original intent 
of providing Southwest Gas a 10 year discount rate for seasonal (November 
through March period) capacity from Transwestern's East of Thoreau (EOT) Area 
to the Southwest Gas Interconnect located in the East of California Area.  
The $.10/Dth/d transportation rate shall increase annually by $.005/Dth/d for 
the term of the agreement.  Alternate receipt points rights are in the EOT 
Area as with as within the primary path of the contract.  Southwest Gas may 
also utilize the Bloomfield Compressor on an alternate basis.