RE: Columbia Gulf order on negotiated rates

I think we ought to discuss the Order with Columbia Gulf. Its possible we =
are ok. The problem FERC seems to have is that under the negotiated contra=
ct it is impossible for anyone but Columbia and the Shipper to know what th=
e rate is at the time of the transaction. Columbia's deal contains a defau=
lt rate (based on index differentials) applicable if the parties are unable=
to agree on a basis price used to determine the "Negotiated Daily Reservat=
ion Charge". To avoid the application of the default rate, the "Negotiate=
d Daily Reservation Charge" requires Columbia and the shipper to negotiate,=
and agree, to a basis number on a daily basis. The parties did not speci=
fy particular index's for the purpose of calculating basis. Thus, under Co=
lumbia's deal only the default rate can be determined at the time of the tr=
ansaction. In contrast, Transwestern's deals appear to be similar to Colum=
bia's default rate; i.e., a rate based upon index's where the index's are a=
greed upon and stated upfront. Thanks. Greg =20

-----Original Message-----
From: =09Miller, Mary Kay =20
Sent:=09Friday, October 26, 2001 3:35 PM
To:=09Harris, Steven; Watson, Kimberly; Lokey, Teb; Neubauer, Dave; Miller,=
Kent; Fossum, Drew; Pavlou, Maria; Kirk, Steve; Porter, Gregory J.; Hartso=
e, Joe; Kilmer III, Robert; Williams, Jo
Subject:=09Columbia Gulf order on negotiated rates

I received a copy of an order issued by the FERc on Columbia negotiated rat=
e transaction, which includes a formula ie indexed rate. They accepted the=
negotiated rate deal but they are requiring them to file in their tariff =
within ONE DAY after the rate has been determined the contract and actual r=
ate. ( Each time the actual rate changes during the term) Just think abou=
t this for the upcoming TW_ USGT deal and NNG"- Reliant deals. Notwithst=
anding the time to actually make the filing, the cost to serve it each day =
if the negotiated rate is different by day and then the service when an ord=
er is issued each day--- I believe this is FERC's way to attempt to elimin=
ate negotiated rate indexed based deals- they are punishing themselves as =
well, as each filing will require a notice etc- so every day they could ne=
ed to issue an order. =20

I feel we need to discuss with Columbia, INGAA and join in filing for rehea=
ring on this administrative nightmare. An alternative would be to require =
you to post on Internet website the day of the transaction the actual rate,=
so similarly situated customers would have access to the actual rate. I'm=
sending you guys a copy of the order.