----- Forwarded by Gerald Nemec/HOU/ECT on 05/11/2001 05:17 PM -----

	Kim Ward/ENRON@enronXgate
	05/11/2001 04:49 PM
		 
		 To: Gerald Nemec/HOU/ECT@ECT
		 cc: 
		 Subject: 

Attached is my letter and here are the some additional terms - 

Seller shall provide informal pricing information to Buyer on a regular 
basis.  Buyer and Seller can agree to a mechanism to facilitate this 
process.  Pricing for various risk management products can be provided at the 
request of the customer.
  
 Customer will not be exposed to daily prices, even during OFO periods

 Seller can provide accounting services to handle all payables for 
transportation capacity and therefore provide a consolidated statement for 
gas supply and transportation.

Seller is prepared to work with the Buyer to manage any new acquisitions that 
take place during the course of any agreement.  However, Seller maintains the 
right to reprice the products and services provided under such agreement if 
such acquisition materially affects the scope of the original offer.




They selected a three year deal, however, termination language will need to 
be negotiated. We will wait for Mike Grigsby to get back to determine some of 
that language.  If they terminate with in one or two years, they will be 
required to pay the difference in the demand charge for the period we 
provided this service and the $.08.

Please let me know what else I can do to help facilitate this process.

Thanks,

Kim