To:  AGA Member Company General Counsel

Re:  Legal Update

We'd like to update you on recent developments that may be of interest to
you:

President Bush Releases His Energy Plan: On May 17, President Bush took a
large step towards addressing the nation's growing imbalance between energy
supply and demand by issuing a comprehensive report on national energy
policy. The 150+ page report contains 105 specific recommendations with
respect to all forms of energy, including natural gas, coal, oil, nuclear
and renewable energy sources. It is unknown at this time how Senator
Jeffords (VT) announcing on May 23rd a switch to independent will affect
energy legislation.

A number of proposals directly affect natural gas, including:



*	Increase funding for LIHEAP to $1.7 billion annually
*	Funnel some oil and gas royalty payments to LIHEAP when oil and
natural gas prices exceed a certain level
*	Streamline pipeline permitting processes
*	Improve pipeline safety and reliability
*	Provide tax incentives and streamlined permitting for Combined Heat
and Power
*	Establish an interagency task force under the Council on
Environmental Quality to coordinate federal agencies in expediting permits
and guide federal, state and local coordination for energy projects
*	Direct federal agencies to prepare Energy Impact Statements for
proposed actions
*	Open a portion of ANWR for exploration and production
*	Double funding for DOE's Weatherization Assistance Program
*	Increase coordination with Canada and Mexico with regard to energy
investment and infrastructure permitting

Important items not included in the White House plan are tax incentives for
natural gas exploration and production, natural gas transmission and
distribution infrastructure, natural gas vehicles and a mandate for total
energy efficiency. See attachment for side-by-side analysis. Also see
www.aga.org <http://www.aga.org/>  for additional information.

Alliance for Energy and Economic Growth Increases in Size and Influence:
During the last few weeks, more than 200 local chambers of commerce, major
trade organizations and other energy customer representatives have joined
the Alliance for Energy and Economic Growth. The 400+ member Alliance is
building consensus for a comprehensive U.S. energy strategy that balances
supply and demand without compromising environmental safeguards. Recently
during a Washington, D.C., speech, AGA's Dave Parker described that consumer
education about energy issues will play a vital role in mobilizing public
support behind a balanced approach in Congress. More material is posted on
www.yourenergyfuture.org.

Senate Banking Committee Approves Bill to Repeal PUHCA: On April 24, the
Senate Banking Committee approved by a 19-1 vote a bill (S.206) to repeal
the original 1935 PUHCA. The committee also approved three amendments. The
first would establish a five-member task force to study competition in the
wholesale and retail electricity market. The second would continue FERC's
role in requiring "reasonable" utility rates. It would also continue to
prohibit utility companies from using profits from regulated activities to
fund unregulated activities. The third amendment would direct the General
Accounting Office to study the efforts of state and federal regulators in
preventing anticompetitive practices by holding companies. The bill would
transfer oversight of public utility holding companies from the Securities
and Exchange Commission to FERC. A similar bill, HR 1101, has been
introduced in the House.

Pipeline Safety, the Focus of DOT and AGA Meeting: On May 22, AGA chairman
Nick Rose and AGA's Dave Parker met with Secretary of Transportation Norman
Mineta and discussed a wide range of pipeline safety issues, including the
importance of the enactment of balanced legislation. We will provide more
information on pipeline safety legislation at the Legal Forum

Gramm-Leach-Bliley Act, Pub. L. 106-102: By July 1, 2001 all "financial
institutions" that collect non-public personal information from consumer
customers must examine their information collection and sharing practices
and have a "privacy policy" that notifies those customers of their
distribution of that information. The regulations broadly define "financial
institutions" to include entities that are "significantly engaged," inter
alia, in lending, insuring and guaranteeing. Such activities may include
providing financing or warranty service. Regulated entities must provide
their customers with the policy and, under certain circumstances, the
ability to opt-out or prevent the entities from distributing the
information. The law does not require that all customers receive the privacy
policy - it only applies to those customers that receive the benefit of the
financial activities. Most activity by an LDC does not subject the company
to the Act. However, providing appliance financing or warranty service may
require compliance. The law, regulations and sample privacy policies can be
found at www.ftc.gov/privacy/index <http://www.ftc.gov/privacy/index> .

* * * * *
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***********

Don't miss this year's AGA Legal Forum in Monterey, California on July
16-17, 2001. Some of the above issues and other issues of vital importance
to member company general counsel will be discussed in detail during the
Forum. For registration information, please contact Theresa Thoman at (202)
824-7072 or  <mailto:tthoman@aga.org> tthoman@aga.org .

For more information about anything in this Legal Update, please contact AGA
General Counsel Kevin Belford (at 202/824-7070 or  <mailto:kbelford@aga.org>
kbelford@aga.org), AGA Deputy General Counsel Mike Murray (at 202/824-7071
or  <mailto:jstephens@aga.org> mmurray@aga.org) or Senior Staff Associate
Theresa Thoman (at 202/824-7072 or  <mailto:tthoman@aga.org> tthoman@aga.org
)

If you have trouble viewing this e-mail or the attachment, please contact
Theresa Thoman and she will send you a fax version of this Legal Update
and/or the attachment.


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