FYI  cvb

 -----Original Message-----
From: 	Brassfield, Morris  
Sent:	Friday, February 01, 2002 12:35 PM
To:	Cobb Jr., John; Saunders, James; Sutton, Lisa
Cc:	Arnold, Jeff; Bayles, Timothy; Brasher, Barney; Barnes, Caroline
Subject:	RE: NNG Project Approval Requirements

I agree with your interpretation.

I would recommend that we don't eliminate the "Blanket", but rather arrange a sit down meeting with NNG - Dynegy to explain what each "Blanket" consists of and obtain approval for what we plan to spend within each blanket.   If they place restrictions on the blanket expenditures, then we get those restrictions spelled out and we live within their limits.

We can identify every vehicle that needs replaced in 2002 and the Large Tools.   Computers probably can be justified based on historical turnover, etc.

Morris A. Brassfield
ECN- 4706 B
Senior Director
Operations Support Services
Enron Operations Services Company

Work:  (713) 646-7006
Cell:    (713) 503-1409
Pager: (877) 701-9516

 -----Original Message-----
From: 	Cobb Jr., John  
Sent:	Friday, February 01, 2002 10:41 AM
To:	Saunders, James; Brassfield, Morris; Sutton, Lisa
Cc:	Arnold, Jeff; Bayles, Timothy; Brasher, Barney; Barnes, Caroline
Subject:	NNG Project Approval Requirements

	Please review the following interpretations of the project approval requirements of the NNG-Dynegy TSA
	(Pages 8 & 9 - Capital Budgets) and advise if this is consistent with the overall intent and management's 
	position.  This interpretation represents the views of those on the "cc" list above and must be communicated 
	to the field personnel and others ASAP.
								     Approval Requirement
		Within Budget Category
			All Discretionary Projects			NNG-Dynegy

			Non Discretionary Projects
			     Less than $25,000				ETS as Operator
			     $25,000 or greater				NNG-Dynegy


		Non Budgeted Projects				NNG-Dynegy

	Previously NNG used blanket project approvals for certain purchases based on the approved budget, as listed
	below, which was setup for expenditure at the beginning of the year.  We think this new approval requirement 
	requires the termination of the use of these blankets or at a minimum require NNG-Dynegy expenditure 
	approval for those dollars remaining to be spent.

		Blanket Projects		         Authorized	      1/30/02 Expenditure
	
		Standby Parts			        $ 14,000,000		$ 8,272,710
		Automobiles				1,974,747		        32,726
		Computer Equip.-Operations		   993,250		        62,189
		Tools & Work Equipment		1,018,856		      138,030


	Finally, projects authorized for expenditure and setup prior to 2/01/02 in the SAP system are considered
	approved, unless directed otherwise.