See the attached.  The proceeding certainly isn't over, but I think the 
parties have done a great job of submitting a settlement that the Commission 
will eventually approve, provided the parties present sufficient evidence to 
support such a decision.  (Unfortunately, we expect the settlement to be 
protested.)  Direct testimony is due May 5.  To streamline things, the 
parties are going to consolidate efforts and have divided up the testimony by 
topic.  Of course Transwestern got the Hector Road issue.  I plan to put Mr. 
Fawcett on as a witness.  Our issue is not particularly controversial 
anymore, so I do not anticipate rigorous cross-examination; nevertheless, I 
will probably ask your assistance in preparing the witness for the hearing, 
which begins May 30.
---------------------- Forwarded by Susan Scott/ET&S/Enron on 04/17/2000 
03:53 PM ---------------------------


Jeffery Fawcett
04/17/2000 03:42 PM
To: Steven Harris/ET&S/Enron@ENRON, Susan Scott/ET&S/Enron@ENRON, Kevin 
Hyatt/ET&S/Enron@Enron, mbaldwin@igservice.com, Jeff Dasovich/SFO/EES@EES
cc: Julia White/ET&S/Enron@ENRON, Tim Aron/ET&S/Enron@ENRON 

Subject: GIR settlement

As you know, approximately one year ago Transwestern first learned of a dark 
cloud looming on the regulatory horizon in California.  The CPUC in its draft 
Order on the Gas Industry Restructuring proceeding in May, 1999 listed, among 
a variety of "promising options," the institution of Mojave's "Hector Road" 
as a commercial receipt point into the SoCalGas system.  In fact, the CPUC 
held in its "Findings of Fact" with regard to Hector Road that:

 - It is unlikely that the market will accurately reflect the value of 
transmission resources if SoCalGas were to define its marketable transmission 
access in a way that did not include the Hector Road facilities, and

 - The failure to provide at least window-style access through Hector Road 
has resulted in lost opportunities for bringing relatively inexpensive gas 
into Southern California.

The basis for the CPUC finding came from testimony taken during the 
proceeding indicating that the use of Hector Road displaces deliveries to the 
constrained delivery point at Wheeler Ridge.  In other words, whatever could 
be delivered by Mojave at Hector Road frees-up space at Wheeler Ridge, a 
delivery point many in the marketplace considered more desirable.

As first articulated by SoCalGas in its draft settlement proposal in the 
summer of 1999, the Hector Road point would be established as a formal 
receipt point into SoCalGas, with rights equal to Transwestern's delivery 
point at North Needles.  With a meter capacity of 200 MMcf/d, and with the 
market's apparent interest in securing additional capacity at Hector Road, 
Transwestern was facing the real possibility of losing up to 200 MMcf/d of 
access rights into SoCalGas at North Needles.  Using an average transport 
rate of $0.25/Mcf, the resulting loss in transport revenues would be $19MM 
per year.

Through months of [seemingly endless] negotiations, and through an 
educational process begun by Transwestern during one of the early settlement 
meetings back in September 1999, Transwestern went from a party with a 
"bullseye" clearly taped on its back, to a party that other stakeholders were 
depending on for a principled solution to these receipt point issues.  As it 
stands now, the Appendix A to the Settlement Agreement, "Primary and 
Secondary Receipt Point Access Rights" is nearly identical to the principles 
outlined by Transwestern in that September settlement meeting.

I only re-state the obvious here to remind the group what their hard work has 
accomplished.  Not only am I proud to see that the resulting Settlement 
Agreement filed with the CPUC today treats Transwestern and its shippers 
equitably, but I'm proud that the work group we cobbled together for this 
effort functioned like a "well oiled machine."

I thank each of you for your efforts to get to this point.  We know we've 
still got a lot of work to do to gain CPUC approval of this document, but no 
matter what happens, we can be proud of what was accomplished here.



---------------------- Forwarded by Jeffery Fawcett/ET&S/Enron on 04/17/2000 
02:49 PM ---------------------------
   
	
	
	From:  Susan Scott                           04/17/2000 02:42 PM
	

To: "Sullivan, Glen J." <GSullivan@sempra.com>
cc: "'MBD'" <MDay@GMSSR.com>, "'Leslie, John'" <jleslie@LUCE.com>, 
"'Elsesser, Evie'" <eke@aelaw.com>, "'McCrea, Keith'" <kmccrea@sablaw.com>, 
"'Pocta, R. Mark'" <rmp@cpuc.ca.gov>, "'Dasovich, Jeff'" 
<jdasovic@enron.com>, "'Beach, Tom'" <tomb@crossborderenergy.com>, 
"'Burkholder, John'" <burkee@cts.com>, "'Amirault, Paul'" 
<paulamirault@aec.ca>, "'Alexander, Michael'" <alexanms@sce.com>, 
"'Chancellor, Craig'" <craigc@calpine.com>, "'Dingwall, B.'" 
<bdingwall@unitedgas.com>, "'Douglass, Dan@SES'" <douglass@arterhadden.com>, 
"'Fawcett, Jeff'" <jfawcet@enron.com>, "'Porter, Doug'" <porterdk@sce.com>, 
"'Rochman, Michael'" <rochmanm@spurr.org>, "'Counihan, Rick'" 
<rick.counihan@greenmountain.com>, "'Bayless, David'" 
<david.bayless@utility.com>, "'Paul, Joe'" <jmpa@dynegy.com>, "'Jimison, 
John'" <johnj@bcjlaw.com>, "'Foss, Robert'" <rfoss@coral-energy.com>, "McVay, 
Nancy W - TPNWM" <NMcVay@socalgas.com>, "'Karp, Joe'" 
<karpjos@sf.whitecase.com>, "'Johnson, Pamela'" <Johnson_pamela@lacoe.edu>, 
Steven Harris/ET&S/Enron@ENRON 

Subject: GIR settlement

Glen, I'm faxing you Transwestern's signature page and declaration.  An 
electronic version of the declaration is attached.