Good morning.  With the energy crisis in California at this time, we will 
need to be extra careful with nominations at Socal and throughout the west to 
ensure that we continue to provide the excellent nomination service that we 
have been providing to our customers.  You guys are doing an excellent job 
and we understand that you are under quite a bit of pressure with limited 
staff.  Our contracts state that we must notify every customer of  pipeline 
allocations 12 hours in advance.  We all know that this can be almost 
impossible on EPNG, but because of the current price levels at Socal and the 
basins, Enron needs to call each customer and notify them of their cuts with 
an explanation of the pipeline cuts each day to avoid any potential 
penalties.  We also need to document when the call was made.  In regards to 
the ATM nominations on Socal (ones that we can't monitor), Enron will be 
requesting full pipeline summaries of the nominations from our 
counterparties.  Please try to think of any nomination gaming that may take 
place at these historical levels.  We need to remember that our 
counterparties may not act as they have in the past due to the market price 
implications on their P&L.  We should not rely on prior business conduct in 
regards to "standard epng allocations" when dealing with our customers.  I 
would expect that the market is going to overreact to any cuts that may be 
above the "pipeline average".

Let's discuss how we are going to monitor the flows of nominations out of our 
control.  How do we prevent collusion with respect to the socal nominations 
that we can't see?  Are there package numbers on each baseload contract to 
ensure that they don't simply reshuffle gas according to price? Let me know 
which companies are not providing Enron with timely allocation reports at 
Socal and I will call their senior trader to discuss getting this operational 
information sooner.

Sincerely,

Mike