Greetings:
Joe, I just ran into some El Paso guys that I know (I'm in L.A.) and asked 
them about the Lukens study.  They said that they weren't sure that it had 
been released yet.  They intend to submit it with their testimony in the FERC 
case.

Best,
Jeff



	James D Steffes
	05/02/2001 11:15 AM
		 
		 To: Phillip K Allen/HOU/ECT@ECT, Tim Belden/HOU/ECT@ECT, Ray 
Alvarez/NA/Enron@ENRON, Alan Comnes/PDX/ECT@ECT, Leslie 
Lawner/NA/Enron@Enron, Rebecca W Cantrell/HOU/ECT@ECT, Robert 
Neustaedter/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Christi L 
Nicolay/HOU/ECT@ECT, Jeff Dasovich/NA/Enron@Enron
		 cc: Joe Hartsoe/Corp/Enron@ENRON
		 Subject: Natural Gas Basis Differential - Why so Big?


	


Joe Hartsoe received a call from Commission staff at FERC to try and 
understand why basis differentials into California were so big and why the 
large basis continues.  Clearly with the new Electricity Order, natural gas 
is one of the primary factors on electricity prices in California.

Our key fear, however small, is that FERC (or someone else) recognizes the 
huge implication of natural gas prices and seeks to cap natural gas sales for 
resale of P/L affiliates (such as ENA).  There is some fear that the real 
monopoly is the holder of LT firm capacity, not the gas production firms.

We need to develop a good story as to why the basis gas continues and 
messaging it quietly into the right FERC staff to keep the pressure of 
additional Investigations from happening.  Joe is trying to get his hands on 
the Lukens study presented to the California study Committee on natural gas 
abuse to help guide our analysis.  

Jim