|
|
Enron Mail |
Got your message. You're a pal. Can't thank you enough. Wish you the best
of luck on the options program. If you can send me a copy of the presentation on the options programs, boy, I'd love to have one. Please give our lovely counsel a big hug for me. And I plan to be out there again real soon. Best, Jeff Jeffery Fawcett@ENRON 08/31/2000 05:32 PM To: Jeff Dasovich/SFO/EES@EES cc: Subject: GIR proceeding-- Potential Financial Impact to TW Jeff, Sorry I've been hard to get a hold of... we held a workshop today to talk about our proposed Transport Options program. I found a copy of what I'd sent to you before. I'll stand behind these numbers today as representing the dollar value of the risk Transwestern faced in the proceeding. What's not clear from my original note is that these cost impacts were annual, and such impacts would continue year to year thereafter until conditions/circumstances changed. I hope this is useful. ---------------------- Forwarded by Jeffery Fawcett/ET&S/Enron on 08/31/2000 05:25 PM --------------------------- Jeffery Fawcett 03/06/2000 04:40 PM To: Jeff Dasovich/SFO/EES@EES cc: Subject: GIR proceeding-- Potential Financial Impact to TW Jeff, You asked me to try to quantify the impact of Transwestern losing access rights to 200 MMcf/d of capacity at SoCal Needles as part of the GIR proceeding. Unfortunately, it's not a precise science inasmuch as it depends on the shippers' reaction and/or retaliation to such circumstances. As a baseline, Transwestern is almost fully subscribed under various term length contracts (and has been since 1998) to the California Border, including the 750 MMcf/d of capacity available at SoCal Needles. In concept, under SFV rates, the majority of revenues would otherwise be realized by TW, notwithstanding the circumstance of TW shippers being denied full access to their primary delivery point. In this "best case," the loss to TW would be the commodity rates (theoretically, a wash, since they presumably represent the true variable cost of TW providing the service), and the revenue benefit associated with the fuel margin, calculated to be $5.8MM. If TW shippers took the position that TW was responsible, and therefore, accountable for their inability to consumate a portion of their transactions into SoCal Gas' system, then TW faces a "more onerous case" in which it loses the demand charge component of their contracts calculated to be $16.5MM. Coupled with the aforementioned fuel margin, the total loss is $22.3MM. In the worst case, in addition to the actual damages or costs to TW's shippers described above, TW shippers may face performance penalties or other contractual damages involving their commodity sales to customers behind SoCal Gas. Therfore, TW shippers may attempt to extract those same penalties and costs from TW. Realistically, I'd say that TW faces a loss somewhere between the best case and the more onerous case, maybe in the $12 - $15MM range. I hope this information is useful for purposes of your analysis. Let me know if I can be of any further assistance.
|