Proposed Revisions to 2001 Plan O&M

FYI: more O&M gymnastics, but so far no impact on law. DF
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 10/12/2000
12:43 PM ---------------------------

Elaine Concklin
10/11/2000 07:13 PM

To: Danny McCarty/ET&S/Enron@Enron, Dave Neubauer/ET&S/Enron@ENRON, Steven
Harris/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Kent
Miller/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@ENRON, Steve
Gilbert/ET&S/Enron@ENRON, Julia White/ET&S/Enron@ENRON, Steve
Hotte/Corp/Enron@ENRON, Phil Lowry/OTS/Enron@ENRON, Rod
Hayslett/FGT/Enron@ENRON, Louis Soldano/ET&S/Enron@ENRON, Michel
Nelson/ET&S/Enron@ENRON
cc: Tracy Geaccone/GPGFIN/Enron@ENRON, Vera Apodaca/ET&S/Enron@ENRON, Sophie
Patel/ET&S/Enron@ENRON

Subject: Proposed Revisions to 2001 Plan O&M

In order to reduce net O&M by $7.9MM on NNG and $3.8MM on TW, I propose the
following additions to overhead. Per Rod, we will leave Gross O&M where it
is and increase the overhead allocations. These dollars will be added to the
Capital Budget via an increased overhead rate. Once finalized, I will
calculate the new overhead rate and send it to you so we can add these
dollars to the construction projects.

Please review this proposal and let me know by Friday if we need to make
adjustments. There is still a hole of $1.2MM on TW that we need to fill in
order to cover the Environmental Remediation/PCB costs without reducing them.

NORTHERN NATURAL GAS:
Direct:
0.5 - Marketing (brings net flat to 3CE)
2.7 - Operations (brings net flat to 3CE)
2.0 - IT (brings captalized portion of total IT back up to 3CE levels)
5.2 - Total Direct

1.6 - ETS Operations (brings captalized portion back up to 3CE levels @
35%)
0.3 - ETS Executive (5%)
0.5 - ETS IT (brings captalized portion of total IT back up to 3CE levels)
0.3 - Corporate Direct (4%)
2.7 - Total ETS/Corporate

7.9 - Total Decrease in Net O&M / Increase in Overhead

TRANSWESTERN:
Direct:
? - Marketing (already below 3CE)
1.2 - Operations (brings net flat to 3CE)
1.2 - ??? (Operations?? - need to cover increased PG&E PCB of 1.0 & Env.
Rem. of 1.4)
0.8 - IT (brings captalized portion back up to 3CE levels)
3.2 - Total Direct

0.3 - ETS Operations (35%)
0.1 - ETS Executive (5%)
0.1 - ETS IT (20%)
0.1 - Corporate Direct (5%)
0.6 - Total ETS/Corporate

3.8 - Total Decrease in Net O&M / Increase in Overhead

Thanks, Elaine