Yes, the utilities can pass through the gas costs. They face an "incentive 
ratemaking mechanism" that includes a "market benchmarket" that they must 
meet or beat.  The benchmark's a composite of spot indeces.  So as long as 
they buy spot, they can meet the benchmark and pass everything through.  
(Ill-conceived procurement incentive, particularly in these days when prices 
are going north, but at least there's no price cap creating gas 
undercollections like there is on the electric side.)  If you need anything 
else, just holler.

Jeff



	James D Steffes
	01/11/2001 06:25 PM
		 
		 To: Jeff Dasovich/NA/Enron@Enron, Andre 
Cangucu/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: 
		 Subject: HOW DOES THE COST RECOVERY FOR THE GAS UTILITY WORK?

Jeff --

Wanted to confirm that the Gas Utility has a PGA that allows for pass through 
of its gas purchase expense?  Is that right?

Jim