Sun Devil Pipeline Project

Marketing
-- Meetings scheduled for week of 1/7 with power generators Salt River Project and AZ Public Service in Phoenix.  Issues for discussion include accessible rights-of-way and opportunities to use the project as an alternative to underground storage.

--  Panda Energy:  expect a response to our market proposal during the week of 1/14.

Engineering - is exploring options to reduce compressor costs and overall project costs.  Their goal is $100 million in reductions.  Will regroup 1/18 to review  potential reduction areas weighed against operational flexibility and volume.

Storage - we are exploring ways to offer a limited firm Park N Ride service on the new project; this would help compete against the proposed salt dome storage and may garner a larger market share for Sun Devil.

FERC and El Paso Full Requirements Contracts - Arizona Governor Hull wrote a letter to FERC Chair Pat Wood emphasizing he not forget about the East of California shippers on El Paso.  SRP submitted a straw man settlement to FERC for their consideration.  The topic is expected to be on the agenda for FERC's meeting on 1/16.