---------------------- Forwarded by Drew Fossum/ET&S/Enron on 12/29/99 10:58 
AM ---------------------------
   
	
	
	From:  Susan Scott                           12/29/99 09:56 AM
	

To: Drew Fossum@ENRON
cc:  

Subject: Red Cedar update

Since the 311 belt/suspenders approach didn't quite fit, I've had to try to 
convince Mr. Hertzberg that he ought to rely on the NGA Sec. 1 exemption for 
gatherers (Frank Kelly and Frazier concur with us on this, by the way).  He 
is not convinced yet, although he is unable to cite any authority for his 
proposition that being a shipper on TW would subject a gathering company to 
FERC jurisdiction.  I pointed out that Agave, the owner and operator of an 
extensive gathering system that interconnects with TW's system, has for many 
years been a shipper on TW.  Also, Lindy has found that Red Cedar already has 
a long-term transportation contract on another interstate system, 
Transcolorado, so if Hertzberg's theory is right they are going to jail 
anyway!

Red Cedar also seems to be hung up on our requirement that shippers have 
title to the gas they ship.  At this point Lorraine and I believe they might 
just be looking for any excuse to get out of the deal.  If anything 
interesting happens I'll let you know.