Tino called today to report on their meetings with DOE last week.  Tino, 
Dennis Langley, and their outside lawyer Jim Slattery met with Bill 
Richardson and DOE staff to discuss the "sole source" procurement approach to 
DOE's obtaining an alternative power supplier for Kirtland AFB and Sandia.  
Tino reports that Richardson signed off on the sole source approach, subject 
only to DOE review of the final contract to assure its consistency with the 
public interest.  Tino believes that the combination of significant Native 
American involvement in the overall deal structure along with a power price 
that is lower than DOE's current PNM rates will satisfy the "public interest" 
standard.  

 Slattery is set to begin discussions with DOE next week on the overall 
structure of Dennis' proposal.  I am surprised that Dennis would go this far 
before hearing from us on the economics, but Tino made it sound like the 
initial discussions would be fairly general--i.e., to explain to DOE that the 
plan is to build a new pipeline and a new power plant and to do the whole 
thing in partnership with the Isleta Tribe, but without talking about 
specific economic issues.  Sounds to me like Dennis has Richardson on board 
but is nevertheless planning to pitch to the lower level DOE staff people 
what a great deal this is for the Tribes and therefore the government.  

 Tino, not surprisingly, is eager to see numbers and sit down to discuss 
them.  He suggested a meeting the first week of May in either Houston or KC.  
I asked Tino whether he could get firmer numbers from DOE than we currently 
have on (1) total electric and gas load (current and projected) for the AFB 
and Sandia and (2) actual price DOE currently pays for gas and power.  He 
didn't think he could get better information before the first week in May.   

 On another related topic, through Shelley Corman's group  I got acquainted 
with a guy named Tim Beldon who runs the ENA transmission capacity book for 
the Western U.S., out of Portland.  I talked with him for a few minutes about 
power flows and pricing in the N.M-Arizona area and he seemed pretty 
knowledgable.  He has a transmission engineer on his team who is an expert in 
verifying utility claims of transmission constraints.  Apparently, ENA buys 
and sells a lot of power in the four corners area and is pretty familiar with 
the transmission availabilty and power pricing situation up there.  I didn't 
discuss with Tim the specifics of the project we are looking at, but did tell 
him that Kevin and Steve were looking at a potential power plant load and 
trying to figure out how serious it is.  Kevin, if you guys think Beldon 
could provide useful info on the cost and availability of firm and non-firm 
transmission for the surplus power out of Albequerque up to four corners, 
please give him a call.  It is OK to disclose to Beldon what we are working 
on, but please inform him that we are subject to a confidentiality agreement 
and that further disclosure is improper.  

Please let me know whether a meeting with these guys the first week of May is 
doable.  Thanks.  DF