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Enron Mail |
pls print. thanks df
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 01/25/2001 04:48 PM --------------------------- Susan Scott 01/24/2001 11:12 AM To: Paul Cherry/GPGFIN/Enron@ENRON cc: Steven Harris/ET&S/Enron@ENRON, Drew Fossum@ENRON, Shelley Corman, Lee Huber/ET&S/Enron@ENRON Subject: Re: PG & E Capacity Paul, as we discussed on the phone, here are my conclusions on the terminability of our firm contracts with PG&E. I believe Drew and Shelley concur (and they are welcome to add their comments, of course). If PG&E fails to comply with our request for assurance of creditworthiness, the "Termination" provisions of Section 16.1(b) of our General Terms and Conditions will be triggered. If PG&E fails to perform any obligation under a service agreement, TW may terminate the agreement under the following procedure: 1) TW serves written notice on PG&E that it is in default, and that TW intends to terminate the agreement, 2) PG&E gets 30 days to remedy the default, 3) if PG&E does not remedy the default within 30 days, the agreement shall become null and void, after we obtain the requisite regulatory approvals, which Shelley advises me would include obtaining abandonment authority from FERC. The Bankruptcy Code provides that a utility may not alter, refuse or discontinue service to a debtor solely because of commencement of a bankruptcy action or because a debt owed by the bankruptcy debtor was not paid when due. However, the utility may alter, refuse or discontinue service if neither the trustee nor the debtor, within 20 days after the date of an order for relief, furnished adequate assurance of payment for service after such date. I am not a bankruptcy expert, but my point is simply that our rights may change once a bankruptcy action is filed. Let's hope that our 30 days runs before PG&E goes to Bankruptcy Court. FERC has held that termination of service cannot be inconsistent with federal bankruptcy law: see El Paso Natural Gas Company, 61 FERC P61,302 (1992) (involving El Paso Electric bankruptcy). As far as whether there could be a temporary release of PG&E's capacity, our tariff does not contain any provision under which we could compel any shipper to release its capacity. PG&E certainly has the ability to release its capacity, but it does not sound as if they would want to without some incentive. If there are any other questions give me a call (or Drew or Shelley). From: Paul Cherry 01/24/2001 10:50 AM To: Susan Scott/ET&S/Enron@ENRON cc: Subject: Re: PG & E Capacity Per our conversation. Thanks ---------------------- Forwarded by Paul Cherry/GPGFIN/Enron on 01/24/2001 08:49 AM --------------------------- Steven Harris 01/23/2001 01:19 PM To: Paul Cherry/GPGFIN/Enron@ENRON cc: Subject: Re: PG & E Capacity I am not sure I exactly understand your question. It is possible for us to sell the space if PG&E were to release it. However, I am sure PG&E has no intention of letting it go as they need it for their core supplies. Also, since the market value of the space is greater than what they pay us it would cost them more money in the long run to get rid of it and have to buy/ ship supplies under some other supply arrangement. For an answer to any legal rights they have Susan Scott would be the best one to answer that. Thanks. From: Paul Cherry 01/23/2001 12:48 PM To: Steven Harris/ET&S/Enron@ENRON cc: Subject: PG & E Capacity Steve, The question has been brought up in regard to the capacity that PG&E holds and it's marketability, in the event that PG &E defaults and goes into bankruptcy. Could a preauthorized temporary release of this capacity be considered where performance would continue, while PG & E would retain it's liability under the Firm Contracts? Thanks and Regards.
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