Meeting with FERC Staff

FYI
----- Forwarded by Bernadette Hawkins/Corp/Enron on 07/20/2001 03:08 PM -----

Joe Hartsoe 07/20/2001 02:47 PM To: Sarah Novosel/Corp/Enron@ENRON cc: Subject: Meeting with FERC Staff

Sorry Left the Subject Off.
----- Forwarded by Joe Hartsoe/Corp/Enron on 07/20/2001 01:45 PM -----

Joe Hartsoe 07/20/2001 01:44 PM To: Sarah Novosel/Corp/Enron@ENRON cc: Subject:

Sarah -- These are my notes from the meeting with Dan Larcamp. Please circulate to those you believe are appropriate. I would prefer a limited distribution. Hope you have a great week-end. Later Joe

Analyst: Pat does not care about the effect he is having on Wall Street. Wall Street should make the attempt to meet with him, but nothing we can say will likely have an effect.

2. Building pipelines: Pat will give pipelines certificates to build, but will be hard-nosed on protecting captive customers/native load from any rate increase (perhaps demanding rate reductions).

3. Rates on pipelines: Section 5 cases are more likely to be started by the Commission in the future (this is one way to ensure periodic rate reviews).

4. Structured Goals: We should look to the Texas Web Page for an example of the list of priorities for the coming year, updated by quarter. This approach will likely be adopted by FERC (and be in place Mid-Fall). Pat will run FERC like a business.

5. Degradation of Service: Two El Paso complaints were filed (filings that aver that El Paso oversold its system). Pat is very concerned about pipelines overselling firm capacity.

6. Marketing Affiliates: It will be a Notice of Proposed Rulemaking.
Discounts will be required to be communicated contemporaneously to all shippers. Notice of Proposed Rulemaking still a work in progress and staff remains divided. Notice of Proposed Rulemaking may not stay on the agenda this meeting, and, if postponed, it will be worse.

a. Non-conforming contracts are considered a problem because pipelines can favor their affiliates and FERC cannot monitor them.
b. Staff is discussing the Dominion standard (applying standards of conduct to the corporate family) and it is being considered and debated for inclusion in the Notice of Proposed Rulemaking.

Lastly, We should expect long Commission meetings because Pat and his fellow Commissioners want to debate issues in public. Please call if you have any questions. 202.466.9150 (w), 703.503.0555 home