lets talk in am--did we pay SET to forgo their option on the Gallup 
space????? ON the "gross margin" spreads mentioned in 3, do we hedge the fuel 
componenet or is that the customer's problem?  Pls print this page for me as 
I can't.   DF
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 02/12/2001 
06:00 PM ---------------------------


Jeffery Fawcett
02/12/2001 04:13 PM
To: Steven Harris/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Mary Kay 
Miller/ET&S/Enron@ENRON, Glen Hass/ET&S/Enron@ENRON, Susan 
Scott/ET&S/Enron@ENRON
cc: Perry Frazier/ET&S/Enron@ENRON, Ted Chavez/GPGFIN/Enron@ENRON, Kevin 
Hyatt/ET&S/Enron@Enron, Dennis Lee/ET&S/Enron@ENRON 

Subject: New K, Amendment- Sempra, Amendment- Calpine

Attached for your review and approval are three (3) Agreements:

1.  New contract with Sempra Energy Trading for 35,000 MMBtu/d, SJ Blanco to 
SoCal Needles, 2 years, Jan. '04 thru Dec. '05, at a Negotiate Rate of 
$0.50/MMBtu, plus applicable fuel.  Sempra replaces Dynegy who holds this 
capacity under an Index-Index deal for cal. '03.

2.  Amendment to Sempra Energy Trading, Sempra waives option to increase 
MAXDTQ under existing Gallup contract from Jan. 1, '04 thru Apr. 30, '05 
(contract termination date, no ROFR rights).

3.  Amendment to existing Calpine contract, extends term for two (2) years, 
Jan. '04 thru Dec. '05 on existing Index-Index deal for cal. '03.   Path is 
SJ Blanco to Calpine South Point del. at Cal. border. 

Agreements (nos. 1, 3) are in credit and capacity approval.

Expedited approval of the Calpine contract is requested as it is an Index - 
Index transport that will [likely] be hedged immediately upon ETS mgmnt. 
approval and Calpine execution.  Currently, spread swaps would result in 
$0.85/MMBtu gross margin for '05, and $0.77/MMBtu for '04.