I think that is exactly right.  I suspect that the marketing guys could work 
up a simple formula for determining our course of action depending on the 
size of the revenue opportunity vs. the power cost/penalty.  Thanks. df


From: Randy Rice on 12/15/2000 07:53 AM
Sent by: Randy Rice
To: Drew Fossum/ET&S/Enron
cc: Charlie Graham/ET&S/Enron@ENRON, Dan Fancler/ET&S/Enron@ENRON, James 
Centilli/ET&S/Enron@ENRON, Rod Hayslett/FGT/Enron@ENRON, Steven 
Harris/ET&S/Enron@ENRON, Susan Scott/ET&S/Enron@ENRON 

Subject: Re: Gallup Rebate  

Drew, I plan to discuss this with Rich Jolly, and will call you with our 
thoughts. I would suggest our plan be such that we do not just aoutomatically 
shut down during these periods but work with marketing to create a cost vs. 
benefit profile of when/if it may make sense to operate even when in a peak 
state?
R2



	Drew Fossum
	12/14/2000 05:31 PM
		
		 To: James Centilli/ET&S/Enron@ENRON, Randy Rice/OTS/Enron@ENRON
		 cc: Susan Scott/ET&S/Enron@ENRON, Steven Harris/ET&S/Enron@ENRON, Rod 
Hayslett/FGT/Enron@ENRON, Dan Fancler/ET&S/Enron@ENRON, Charlie 
Graham/ET&S/Enron@ENRON
		 Subject: Re: Gallup Rebate

Randy, this is the issue I left you the voice mail on.  Article 6 of the 
Gallup Compression Services Agreement (which I am sending to you separately) 
with ECS obligates ECS to "work in good faith with CDEC" to establish an 
automated system that would automatically have alerted us to peak loading 
conditions on CDEC's system.  We had a pretty good idea when we signed the 
contract that ECS would not be able to complete that by the contract start 
date, so we negotiated a fall back plan under which ECS is obligated to 
"assist [Transwestern] in developing a manual system to accomplish the same 
result and will hold harmless and keep [Transwestern] whole for all cost and 
expenses" associated with the manual system.  We will fight with them about 
who owes the $200k that James mentions below based on their failure to 
"assist" us in managing the cost.  In the mean time, we need to make sure 
that we are doing everything we can to get a handle on the situation to 
mitigate future costs.  Do we have someone who is watching this out there?  
We are running so full tilt on TW that we may not have as much flexibiltiy to 
manage this situation as we expected, but let me know what we can do.  James 
had heard that one hold up was the absence of a confidentiality agreement--I 
guess between ECS and Transwestern--that would permit ECS to communicate to 
us the details on how to access teh key info. from CDEC.  That sounds like a 
BS excuse from ECS, but it that's what they are saying, let me know and we 
can figure out a solution.  Thanks.  DF 



James Centilli
12/14/2000 02:49 PM
To: Susan Scott/ET&S/Enron@ENRON
cc: Steven Harris/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Rod 
Hayslett/FGT/Enron@ENRON, Dan Fancler/ET&S/Enron@ENRON, Randy 
Rice/OTS/Enron@ENRON 

Subject: Gallup Rebate

Would you please contact Gerald Nemec and review the Gallup Compression 
Service Contract in respect to the Load Control Management.  My understanding 
was that ECS was to provide a means to access CDEC's online profile in order 
for us to make a decision to avoid running the compressor during CDEC's peak 
load periods.  We have not received access to this information which has 
resulted so far in additional electric cost of $200,987.33 for the period of 
July through September.  Additional cost will be incurred for the remainder 
of this year, that I have not been able to review yet.  This cost is 
averaging $79,000 per month if we continue to run the compressor as we have 
in August and September.