Gallup Station - Demand Rebate ,
 Hey Drew,
 
Sorry that we did not get to meet last week when you were in town.  I have 
pulled up some information on the project performance and wanted to share 
with the group.  I was very concerned by the comment that the project was on 
a rate to cost TW an additional $1.0 million for the year because the demand 
avoidance program was not in place.  I do want to confirm that Arnold 
Eisenstein at ET&S working on the development of the programming to support 
TW's efforts to minimize demand expenses.  It was my understanding during the 
development of this project, that TW was targeting a 75% avoidance for an 
annual basis.   I offer the following details regarding the actual operation 
of the station in 2000. 

Peak load for 12,000 hp = 9,621 kw x 3 = 28,864.0 kw per Quarter

Actual Utilization
   3rd Quarter 2000      % of Max  4th Quarter 2000  % of Max
 kw - generation   22,684.8      78.6   17,779       61.6
 kw - transmission 25,421.0      88.1   22,992       79.6
 
 Target $'s @ 75% 99,142      75.0            73,480      75.0
 Net Actual Rebate  $'s 75,935        78.6                105,181        61.59
  difference            ($23,206)                  $31,702   

Overall net for 2000 under Rate 21 appears to reflect that TW has saved 
$8,496 above their target rebate of $170,622 (75% avoidance) for the 3rd and 
4th quarters.  In addition, ECS has made payment to TW under Rate 19 that 
resulted in an additional $118,441 paid to TW.   Note that ECS has proposed 
to included the transmission demand in the Rebate process which is not 
specifically addressed the Compression Service Agreement.  


Currently TW has access to the web site that graphically displays the current 
Tri-State generation load as well as several years of month by month 
history.  This access was conveyed to TW as soon as the confidentiality 
agreement between TW, ECS and Tri-State was executed and delivered to ECS.  
At this point, EE&CC (now under ET&S) was notified that the system access was 
available to package the load monitoring programming.  As I mentioned above, 
that effort is underway.  

I will be glad to meet and/or discuss these issues when you are available.  I 
will be travelling most of the next (2) weeks but you can reach me via email 
or my
cell phone (713) 851-7703.   Based on the information that I was able to pull 
together, I just don't see the magnitude of dollars that seems to have TW 
concerned.
I would like to discuss at your earliest convenience.

Thanks,
mk
drew.fossum@enron.com