** Proprietary **

Michelle:  Thanks for sending this to me so quickly.  I do have a couple more questions for you.

1.  What is the discount rate you will be using to calculate the NPV in your open season?

2.  Can an affiliate of a company also place a bid for up to the volume available to Needles?

3.  How does the right of first refusal work?

For example, when we spoke earlier I think you used an example of a $3.00 bid for 1 year getting equal value as a $.30 bid for 10 years (adjusted for NPV, of course) and the winning party got a ROFR. (Let's say the 1 year bid won).  At the end of the year, is the ROFR calculated on the $3.00 value the shipper holds the transport at or is it based on current market conditions.  Let's say the market value has collapsed and the market views this capacity as worth only $.28/Dth and the current shipper is willing to match that rate does that mean he can retain the capacity?  Then for what term, whatever the market bids that piece for or will there be a set time the (in years) that the  holder of the capacity will have to match regardless of what the bidder bids?

I hope this example makes sense.  If not, please give me a call to discuss at (303) 252-6224.


Thanks for your help.

Terri Dickerson

>>> "Lokay, Michelle" <Michelle.Lokay@ENRON.com> 04/17/01 12:09PM >>>

Transwestern Pipeline Company Red Rock Expansion


            From October 30, 2000 to November 17, 2000, Transwestern
posted a notice of open season.  As a result of the response to the open
season, Transwestern has filed for FERC authority to expand its mainline
by 150,000 MMBtu by a proposed in service date of June 2002.  The
project is known as the Red Rock Expansion.

            Transwestern is continuing to solicit bids from open season
respondents as well as all other interested parties.  Interested parties
should submit bids conforming to the criteria listed below.  The
deadline for bidding is Friday, April 20, 2001 at 5:00 p.m. CDT.

            If you have questions or need further information, please
contact Lorraine Lindberg at (713) 853-5403 or your marketing
representative.

Volume:            150,000 Dth/day

            Points of Delivery/Receipt:

Primary Receipt Points:            East of Thoreau

Primary Delivery Points:

Topock Lateral Capacity:            92,000 MMBtu
   - Available Point Capacity:            PGE/Topock, POI # 56698
(126,000 MMBtu)

Mojave Topock, POI # 56696, (280,000 MMBtu)

Calpine/Southpoint, POI #78113 (76,000 MMBtu)

Other Delivery Points:  Southwest Gas, POI #78003 (86,000 MMBtu)

Citizens/Griffith, POI #78069 (120,000 MMBtu)
                        Subject to availability of
                        additional delivery point
                        capacity:
SoCal Needles, POI # 10487 (50,000 MMBtu)



Awarding Capacity

1.  Written offers must include material terms (rate, term, points,
quantity).  Shipper should indicate whether it will accept partial
volume in the event allocation is necessary.

2.  Shippers' binding bids must be accompanied by a valid Request for
Gas Transportation Service form.

3.  Shippers submitting bids containing terms or conditions unacceptable
to Transwestern shall not be accepted.

4.  If the total volume of all bids received by Transwestern exceeds the
capacity of the proposed expansion, Transwestern will award the capacity
based on the highest net present value bid (calculated consistent with
the net present value provisions of Transwestern's tariff).

5.  In the event of a tie, the capacity shall be awarded on a pro rata
basis.

6.  Transwestern reserves the right to reject any bid less than the
maximum tariff rate, or any bid that would cause the Red Rock Expansion
to be uneconomic.