Since the contract quantity goes to zero in Nov.-Mar., they pay no 
reservation charge in those months, so effectively the rate is zero for those 
months.  I suppose we could draft it either way and logistically it would 
work.  We used a similar structure in a deal we did earlier this year, if I 
recall correctly.

Also --  I agree that we would need to file this as a material deviation if 
SWG agrees to include the capacity release provision.  In case FERC does not 
like the provision for some reason, do we want to provide that disapproval by 
FERC will invalidate the whole contract (see language in the recent USGT 
contract), or do we want it to invalidate just that provision and let the 
rest of the deal stand?  It would depend on how much value the parties are 
attaching to that provision and whether we would want a chance to 
renegotiate...and I am assuming we would.  Christine, let me know which is 
preferable and I'll send you some language in the a.m.



   
	
	
	From:  Mary Kay Miller                           05/31/2000 03:15 PM
	

To: Christine Stokes/ET&S/Enron@ENRON
cc: Glen Hass/ET&S/Enron@ENRON, Mary Darveaux/ET&S/Enron@ENRON, Susan 
Scott/ET&S/Enron@ENRON, Kevin Hyatt/ET&S/Enron@Enron 

Subject: Re: Transwestern CAF Request  

It seems to me that if the capacity is only for the months of Nov-Mar, the 
reference to the discounted rate in section 2 should state that it is for the 
period Nov-Mar through 2010.  Also, the language in paragraph 6 should 
eliminate the reference to the tariff, since we don't have it, just start 
with the phrase "Shipper agrees that if it utilizes -----
See previous comment as well.  Need to make sure we want to commit to a 10 
year discount, as policy may change and Tw would be required to absord the 
difference.  MK



Christine Stokes
05/31/2000 08:35 AM
To: Lorraine Lindberg, 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, Mary Darveaux/ET&S/Enron@ENRON, Bill 
Cordes/ET&S/Enron@ENRON, Susan Scott/ET&S/Enron@ENRON
cc: Kevin Hyatt/ET&S/Enron@Enron 

Subject: Transwestern CAF Request

TRANSWESTERN PIPELINE CONTRACT APPROVAL REQUEST


Please review the attached non-standard discount letter to Southwest Gas 
Corporation (SWG).  SWG shall enter into a 10 year agreement  for 14,000 
Dth/d of seasonal (November through March) capacity effective November 1, 
2000.  The transport rate of $.15/Dth/d shall increase annually by 
$.005/Dth/d.  The primary path shall be from Tranwestern's  East of Thoreau 
(EOT) Area  to the SWG Interconnect located in the East of California Area.  
Alternate receipt point rights shall be from Tranwestern's EOT Area and from 
the Bloomfield Compressor.   SWG ROFR rights shall be wiaved. In 
additionTranswestern shall propose  to retain revenues generated by capacity 
release at rates higher than the effective contract's discount rate.

(Please note that the FTS-1 Appendix A - not shown here with the discount 
letter-  specifically indicates 0 MMcf/d capacity for the April through 
October period.  Therefore, even though the $.1500/MMBtu rate in Paragraph 3 
of the discount letter does not indicate the rate is a "seasonal rate", the 
effective billing to SWG shall be seasonal.)

Please indicate your approval via REPLY WITH HISTORY.   All Officer approvals 
shall be faxed to Bill Cordes for final Officer approval.