Kim:  Read this over and give me a call.  
---------------------- Forwarded by Chris H Foster/HOU/ECT on 03/30/2001 06:05 AM ---------------------------
   
	Enron Capital & Trade Resources Corp.  From:  CoganJA@aol.com                           03/29/2001 11:49 PM	
		


To:	sbreen@czn.com, cfoster@enron.com
cc:	 
Subject:	PPL Proposal


Gentlemen,

I tried to reach both of you late in the evening, but was unsuccessful.  I
will be traveling starting at 7 am Las Vegas time back to NO.  I have a brief
layover in Phoenix and will try to contact you.

Initial reaction to our proposal during the day was that it looked pretty
good.  This I got from Terry Crupi.  At that time Terry had not seen the
proposal, but was relaying what he had gotten from Barbara Veety back in
Allentown. In the early evening I met with John Baileys, Terry Crupi, and Joe
Cammarano of PPL.  At that meeting they expressed concern for the reservation
charge and floor, especially since the Citizens' TW contract has no
alternative market.  I asked if a cap would help ease their concerns and they
said that they did not think so.  They are really struggling with the
reservation charge as we have currently proposed it.  They agree that we
should at a minimum recover all of our fixed pipeline fees in a reservation
charge.  We did not have a chance to get into discussions about other
potential cost that would be appropriately placed in the reservation charge.

They would prefer a pure index based deal and could agree to a load factor of
about 80%, but indicated that they could live with some monthly reservation
fee based upon the monthly index, but we did not get into much detail on
exactly how that would work.

Perhaps the biggest issue that came out of this meeting is that they do not
believe that the SoCal Border is the appropriate index.  They believe that
the PG&E City Gate is more reflective of what the market price is.  They
claim that the SoCal point reflects the El Paso cuts.

In a passing comment John Baileys indicated that they have gotten a number of
 proposals that are attractive on both El Paso and TW.

John Baileys wants to do something with Citizens and is interested in a term
that would go for a least 2 years.  I ask if going through September 03 had
appeal and he responded affirmatively.  He also said that a provision that
allowed for available capacity to move up or down would be acceptable.

PPL wants to keep this process on a fast track, as do we.

The next steps:

1) PPL will provide a counter proposal on Monday.

2) Chris, what insight can you provide on the index issue.  I do not have
much history on that point, but on Friday of last week PGE City Gate was
$9.08 while SoCal Border was $10.90.  What are the historical prices for PGE?
 What are the drivers for the price differences between PGE and SoCal?  Is
the PGE index mature?  I have not followed it.  Is it a more appropriate
index for TW?

Hopefully we can catch up in the morning from Phoenix.

John