From:  John Goodpasture                           11/03/2000 08:15 AM	
		


To:	Bill Cordes/NPNG/Enron@ENRON, Danny McCarty/LON/ECT@ECT, Michael Moran/ET&S/Enron@ENRON, Rod Hayslett/FGT/Enron@ENRON, Shelley Corman/ET&S/Enron@ENRON, Robert Hill/NPNG/Enron@ENRON, Dave Neubauer/ET&S/Enron@ENRON, Mike McGowan/ET&S/Enron@ENRON
cc:	 

Subject:	Re: Dale Nesbitt meeting   

In case you were not quite certain of who Dale Nesbitt is, here is the skinny.  Sorry for my oversight.  

Dale Nesbitt is the founder and President of Altos Management Partners.  Altos is a consulting and systems development firm that has visited Enron's offices on a couple of occasions to show us a computer model of the North American Natural Gas grid.  This was in conjunction with the Revenue Management project that Kim Watson headed up, but my group was also very interested in developing a more sophisticated (hopefully) analysis of pipeline flows, basis differentials, regional supply/demand, etc. for development of our short/long term strategies.  

This model would accept a wide array of input data such as gas price curves, oil price curves, production potential of the major basins, regional market demand, pipeline tariffs, pipeline capacity limits, etc.  In theory, we could then have a more reasoned view of which pipelines would be either "winners" or "losers", which expansions would most likely be built, and what basis would exist at all pertinent trading points.  I understand that Enron already has a similar model for the electric generating/transmission grid in North America, and it has proven quite valuable.

In addition to the Altos model, we also looked at a model that had been developed by ICF Consulting.  Both companies made very impressive presentations and had obviously spent a great deal of time developing their work.  Vince Kaminski's research group has been involved in the evaluation of these two working models.  For comparison, Vince has also considered whether Enron should develop our own proprietary model in-house.  

Vince now believes that the most cost effective way to get to final working model that we have confidence in, is to start with the Altos model and work with them to add/modify certain features.  The meeting with Dale Nesbitt is to explore this possibility.  I think it would be good to have another ETS representative (other than me) and possibly someone from NBP present at the meeting.  Both Margaret Carson and Vince Kaminski will attend.    

JNG






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