Notes from Meeting on OCSLA Reporting

I'd like you to be involved in this from the legal side. Shelley, please
keep Lee in the loop on this matter.
Gracias. DF
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 05/08/2000
12:55 PM ---------------------------

Shelley Corman
05/07/2000 10:08 PM
To: Mary Kay Miller/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Dari
Dornan/ET&S/Enron@ENRON
cc: Michele Winckowski/ET&S/Enron@ENRON, Keith Petersen/ET&S/Enron@ENRON,
James Harvey/ET&S/Enron@ENRON

Subject: Notes from Meeting on OCSLA Reporting

Michele Winckowski, Keith Petersen, James Harvey & I met last week to discuss
compliance with Order 639, the new OCS reporting requirements. NNG has 5
NGA-exempt facilities that are subject to the new reporting rules and will
therefore be subject to Section 330.2. While these facilities are NGA-exempt
gathering, they continue to be included in NNG's transmission rates for rate
purposes and remain eligible points for TI agreements and alternate firm.
While these points are currently listed as available points and on the
all-points exhibits of TI agreements, these points are not currently being
used. Michele and Keith have voiced concerns about having to perform
separate OCS reports for these facilities.

Section 330.2(a) requires a report that includes maps and a list of
affiliates. Section 330.2(b) requires a description of transactions -
contract number, receipt/delivery point, rates etc.

We discussed two possible compliance strategies. First, NNG could seek a
waiver, asking that since the facilities remain in transmission rates and
valid points on jurisdictional contracts, NNG asks that it be allowed to
include these points in its NGA reports. Alternatively, NNG could file the
maps and list of affiliates, but with regard to transactions, simply file a
statement that these points, while listed as valid on all TI and FT
agreements have not been used in some time.

I have read and re-read Order 639 to understand the date an initial report
would be due. The rule sets out some of the most confusing effective date
language that I have ever read. Generally, reports are due on the 1st of each
quarter regarding the status of transactions on the first day of the previous
quarter. On Page 47, the Commission purports to give more time for the
initial submissions. Initial reports will be "based on conditions on the
first day of the full calendar quarter that begins after the effective date
of thise rule, with initial reports due on the first business day after close
of the quarter." What I make of this is that NNG's first report would be due
October 1, 2000 (based on the quarter commencing July 1).

We may want to considering seeking a waiver on or before July 1 (i.e. before
the reporting period commences).