I'd like you to be involved in this from the legal side.  Shelley, please 
keep Lee in the loop on this matter.  
Gracias.  DF
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 05/08/2000 
12:55 PM ---------------------------


Shelley Corman
05/07/2000 10:08 PM
To: Mary Kay Miller/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Dari 
Dornan/ET&S/Enron@ENRON
cc: Michele Winckowski/ET&S/Enron@ENRON, Keith Petersen/ET&S/Enron@ENRON, 
James Harvey/ET&S/Enron@ENRON 

Subject: Notes from Meeting on OCSLA Reporting

Michele Winckowski, Keith Petersen, James Harvey & I met last week to discuss 
compliance with Order 639, the new OCS reporting requirements.  NNG has 5 
NGA-exempt facilities that are subject to the new reporting rules and will 
therefore be subject to Section 330.2.  While these facilities are NGA-exempt 
gathering, they continue to be included in NNG's transmission rates for rate 
purposes and remain eligible points for TI agreements and alternate firm.  
While these points are currently listed as available points and on the 
all-points exhibits of TI agreements, these points are not currently being 
used.  Michele and Keith have voiced concerns about having to perform 
separate OCS reports for these facilities.

Section 330.2(a) requires a report that includes maps and a list of 
affiliates.   Section 330.2(b) requires a description of transactions - 
contract number, receipt/delivery point, rates etc.  

We discussed two possible compliance strategies.  First, NNG could seek a 
waiver, asking that since the facilities remain in transmission rates and 
valid points on jurisdictional contracts, NNG asks that it be allowed to 
include these points in its NGA reports.   Alternatively, NNG could file the 
maps and list of affiliates, but with regard to transactions, simply file a 
statement that these points, while listed as valid on all TI and FT 
agreements have not been used in some time.  

I have read and re-read Order 639 to understand the date an initial report 
would be due.   The rule sets out some of the most confusing effective date 
language that I have ever read. Generally, reports are due on the 1st of each 
quarter regarding the status of transactions on the first day of the previous 
quarter.  On Page 47, the Commission purports to give more time for the 
initial submissions.  Initial reports will be "based on conditions on the 
first day of the full calendar quarter that begins after the effective date 
of thise rule, with initial reports due on the first business day after close 
of the quarter."  What I make of this is that NNG's first report would be due 
October 1, 2000 (based on the quarter commencing July 1).

We may want to considering seeking a waiver on or before July 1 (i.e. before 
the reporting period commences).