Re: Revised Duke Contract Approval Request

Approved. DF
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 09/15/2000
08:04 AM ---------------------------

Susan Scott
09/14/2000 11:18 AM
To: Christine Stokes/ET&S/Enron@ENRON
cc: Drew Fossum/ET&S/Enron@ENRON

Subject: Re: Revised Duke Contract Approval Request

Approved, subject to Drew's approval.

Christine Stokes
09/14/2000 09:26 AM
To: Bob Burleson/ET&S/Enron@ENRON, Steven Harris/ET&S/Enron@ENRON, Mary Kay
Miller/ET&S/Enron@ENRON, Mary Darveaux/ET&S/Enron@ENRON, Glen
Hass/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON
cc: Susan Scott/ET&S/Enron@ENRON, Kevin Hyatt/ET&S/Enron@Enron

Subject: Revised Duke Contract Approval Request

TRANSWESTERN PIPELINE COMPANY
CONTRACT APPROVAL FORM

Please review the attached revised non-standard discount letter to Duke
Energy Trading & Marketing (DUKE) and the associated letter from Transwestern
to Duke which outlines the conditions of Transwestern's Contribution in Aid
of Construction (CIAC) payment to Duke for certain facility upgrades.

The revised discount letter eliminates the reference to actual fuel
(calculated at 1.5% for the EOT Area) which Duke shall provide to
Transwestern. All fuel which Duke shall provide Transwestern shall be at the
Tariff fuel rate. Bob Burleson has decided not to monetize the difference
between actual fuel and Tariff fuel (difference being only .19%) and revise
the rate given that the current economics of the deal already provide for a
24% rate of return (not including any fuel retainage "value added" factor).

Transwestern shall pay Duke $750,000 for Duke facility upgrades in order to
increase gas receipts into Transwestern from Duke's Artesia plant and Big
Eddy gathering system by an incremental 20,000 Dth/d. Duke shall
subsequently subscribe to a five year transportation contract for 20,000
Dth/d of East of Thoreau (EOT) capacity at a $.05/Dth/d one-part rate
effective November 1, 2000. Duke has been given alternate receipt and
delivery rights in Transwestern's EOT Area. Duke has also been granted the
ability to flow to California on an alternate basis at a total rate of
$.09/Dth/d.

Please indicate approval via REPLY WITH HISTORY. Please contact me at x5702
if any questions arise.