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Enron Mail |
Larry, this is a potential issue, at least from an accounting perspective.
The total dollar amount for 1999 Expense in the ET&S Albuquerque Region is $345,000 (excluding Gomez, Bell Lake, & N. Crawar remediation projects which are accounted for separately due to sale agreements). This amount is not allocated for specific projects but includes all environmental O&M costs for the region. As it is, this amount may not be sufficient to cover costs for the ongoing Expense projects, including: Thoreau Lease Payment, Roswell Remediation, WT-1 Dehy Area Remediation, WT-1 Pit Area Remediation, Eunice Monitoring, & Puckett Monitoring. The Albuquerque Region 1999 Capital budget for remediation projects is about $270,000; this includes: Thoreau Remediation, Laguna Groundwater Remediation, Lockridge Remediation, and Atoka-1 Remediation. If the capital projects are rolled into O&M, the O&M budget will be far too insufficient. A related issue is concerning the allocated AFUDC costs. These costs will add about $60,000 to the Thoreau Remediation project cost and about $10,000 to each of the Laguna and Atoka-1 Remediation projects. These costs were not budgeted for because I was under the assumption that new work orders would be issued for 1999, in which case, AFUDC costs would only be allocated based on 1999 spending charged to the new work orders. New work orders were not issued and the 1999 budgeted amount for the Thoreau Remediation of $78,000 can not possibly absorb the anticipated AFUDC costs. I will keep you posted of any further developments. Thanks, George ---------------------- Forwarded by George Robinson/OTS/Enron on 05/03/99 10:11 AM --------------------------- Vera Jones 05/03/99 09:38 AM To: George Robinson/OTS/Enron@Enron cc: Earl Chanley/ET&S/Enron@Enron Subject: AFUDC on Remediation Projects George, This whole deal is still up in the air. When I brought up the subject of AFUDC to Property Accounting, they started questioning whether these particular projects qualify to be "CAPITAL" at all. I discussed the matter with Dan Pribble and he says to leave them as capital as long as I can but Property Accounting is going to want some real substantial justification before long for continuing to carry them in their arena. And, if we end up having to dump a substantial portion of the total costs in all 5 of the current workorders to O&M, that will really kill the O&M budgets of the affected Teams. So, don't do anything different from what you have been doing until we tell you different. Thanks.
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