With regard to the lease question, the Commission has no problem with capacity leases now.  However, the general rule is that the cost of the lease needs to be set so that the exisiting customers are not harmed.  That raises the question of what the backhaul rate should be.  Of course, the customers and Gulfstream will take conflicting positions on the answer.  We should discuss some of the commercial aspects.  There may be some opportunities.

 -----Original Message-----
From: 	Lokey, Teb  
Sent:	Tuesday, January 08, 2002 4:37 PM
To:	Boatman, Jack; McCoppin, Dorothy; King Jr., Frazier; Holtzman, Staci; Kilmer III, Robert; Hayes, Robert
Subject:	RE: Capacity Lease (Backhaul) - Gulfstream

A backhaul capacity lease was proposed in the multi-party Mobile Bay projects and FERC did not seem to have any philosophical problems with the concept.  I will defer the second question to the real lawyers.

 -----Original Message-----
From: 	Boatman, Jack  
Sent:	Tuesday, January 08, 2002 12:48 PM
To:	McCoppin, Dorothy; King Jr., Frazier; Holtzman, Staci; Lokey, Teb; Kilmer III, Robert; Hayes, Robert
Subject:	Capacity Lease (Backhaul) - Gulfstream

We are currently discussing several potential approaches for a "Phase VII" expansion project.  We have preliminary work underway on several potential scenarios, some of which might involve Gulfstream as an upstream transporter.  

As part of these discussions, Gulfstream has inquired about FGT's interest in providing a capacity lease for backhaul service (approximately 20-30 miles - they did not identify the specific market). 

My questions are:
	(1) Backhaul capacity lease with an interstate pipeline - Do you see any problems/issues?  The lease arrangement would be with Guflstream Pipeline.

	(2) If this backhaul lease capacity is used by Gulfstream to provide deliveries to an electric generator, would the FP&L Favored Nations Clause be triggered?