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In a couple of places, I have questions: 1) In the second opening paragraph, I don't know whether it is possible to attach the Proposal as an exhibit; if not, ignore my change.
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2) Section 4.a.
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-- their provision for an adjustment seemed a little unusual to me but it could work in favor of either party, so I left it in. If you don't like it, let me know.
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3) In Section 5, I just tried to simplify the billing procedure in case of termination.
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Let me know if this does not agree with your intent.
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Please call me with your comments, and let me know how you would like to proceed.
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That is weird.
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I received your first message.
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Dave, Exhibit A of the O&M agreement is a description of the Compressor Motor Facilities.
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Do you have this?
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Exhibit C is insurance coverages; I assume I need to get that from Nemec.
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Martha, please send me by interoffice mail copies of the executed documents Drew has; mine seem to have vaporized.
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Thank you!
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Christine and I seem to have gotten Phillips interested in a right to terminate if TW's minimum tariff rate ever exceeds the contract rate.
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They said they would mull it over, at least.
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But what they really would prefer to have is a provision in which they would get the contract rate no matter what.
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Since this would make it a negotiated rate deal from day 1, I feel like I need to get your buy-in before we agree to it.
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Steve has already told me it is OK with him.
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Please advise.
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Here's the summary we sent you before, with new reference to Hector in redlining.
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Call Jeff (713-853-1521) or me (713-853-0596) if you have questions.
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Mary Kay and Drew, please see Christine's message below.
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This language is very similar to language that NNG has used to address the change-in-rates issue.
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I do not believe it creates a negotiated rates issue.
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Please let me know as soon as possible if you have any concerns.
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It is important that we work something out with Phillips today.
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By the way, I asked Christine if she had asked Phillips to 1) give up their right of first refusal and 2) agree to our new capacity release language (i.e. TW gets the upside if capacity is released at a higher rate) in exchange for us making this compromise.
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She feels that it would be inappropriate to ask them because the language below does not quite give Phillips what they had requested originally (that is, a negotiated rate).
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Dear Citizens' Assistance Division: I live in the Houston Heights on the 800 block of Cortlandt.
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For the 3 years I've lived there, the drainage ditch in front of my house, and several other houses on my street, have been blocked.
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Any time it rains, we have standing water for several days afterwards.
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I know that other streets in the Heights have the same problem.
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I have heard that because of the mild winter we're having, we can expect a bumper crop of mosquitos this summer.
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Standing water therefore poses a health concern for residents of the Heights this summer.
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Does the City have any current plans to fix the drainage problem in the Heights?
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Last year I called and requested that the ditch in front of my house be cleared, but got no response.
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I hope that this was merely an oversight rather than an indication that the City of Houston has no regard for the health and comfort of its citizens.
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Any information you can provide would be appreciated.
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Sincerely, Susan Scott (713) 853-0596 (daytime phone)
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Dear Mr. Henderson: Attached pursuant to Dave Foti's request is the Substation Maintenance Agreement in Word format with Transwestern's proposed changes shown in redlining.
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After you've had a chance to review the agreement, please feel free to contact me with any questions or comments.
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Sincerely, Susan Scott Counsel for Transwestern Pipeline Company
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Drew, what is BNSF?
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Spoke with Steve about the swap question.
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He wants to talk with you about this before circling back to Knippa.
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If you don't hear from him, and want to call him, his # is 281-350-8441.
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Re.
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TW's exposure if we authorize ECS to lock in too early: If TW defaults under the CSA, it must hold ECS harmless with regard to expenses incurred by ECS in the assignment of the electric supply agreement and pay ECS whatever is owed under the agreement.
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No other specific damages are addressed, and the agreement specifically prohibits the recovery of consequential, incidental or indirect losses or damages.
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(Section 9.2 provides for reimbursement for ECS's reasonable costs in providing Compression Services, but only in the event TW uses its FERC out.) The Gas Conversion Agreement provides for termination of the agreement in the event of default by TW under the CSA, and obligates TW to reimburse ECS for ECS's costs and expenses incurred in unwinding the forward sale of natural gas volumes to be delivered to ECS under the agreement.
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Other questions -- let me know.
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If there's still space available, please enroll me in the March 14-15 Derivatives I class.
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Here's my info: Susan Scott GPG Legal Supervisor: Drew Fossum SSN ********* Thanks.
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Here's my request for rehearing so far.
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The marketing folks are helping me with our competitive harm argument and will, I hope, come up with something plausible.
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In the meantime, I would appreciate your comments.
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Approved.
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Lindy -- I'm working on a checklist.
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There were just a couple of issues arising from the discussions with market services, weren't there?
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One having to do with whether we want to change our 68 A to reflect FTS-1 and FTS-3 in same bucket -- I'm leaning towards not changing since the language is already general enough to cover us there.
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The other issue had to do with issuing the OFO if EFBH does not show up in the last cycle.
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I do not believe any changes are necessary there either.
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The tariff language as it's currently written says we "shall" issue an OFO, and we would, but an OFO issued in the last cycle would simply be a formality and the EFBH shipper would have no choice but to pay the penalty.
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If you see any roadblocks on these 2 tariff sheets (27A and 68A), or if there are any other issues we need to address, let me know.
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Also, if you want to sit down and go thru my checklist together sometime tomorrow, or even later this afternoon, I'm available.
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Thanks!
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My several hours of on-line research on this last Sept. turned up nothing on point.
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The only case that even addressed the issue of confidentiality of contracts in a certificate context was one I'll excerpt here: Maritimes requested confidentiality for the precedent agreements it submitted.
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Commission staff denied the blanket request, but indicated that Maritimes could request that specific provisions be kept confidential.
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Maritimes subsequently requested that the contract terms and various cut-off dates [FN29] in the precedent agreements be kept confidential because such information was commercially sensitive.
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On the other hand, Maritimes requested that the terms and conditions of the backstop agreements be kept confidential, but was willing to make the contract terms of 10 and 20 years public.
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Generally, the Commission will deny blanket requests for confidentiality of agreements that are submitted to demonstrate market support for new facilities.
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[FN30] However, in the instance case, the contract terms of the backstop agreements are public and, thus, evidence of longterm subscriptions for Maritimes proposal are in the public record and support our finding that Maritimes has demonstrated a market for its proposed services.
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Therefore, we find no compelling reason to require the length of the terms of the other precedent agreements or the cut-off dates to be made public.
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FN29 Cut off dates refer to points in time when individual contracts could terminate contingent on the occurrence of certain events.
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In Amoco Production Company and Amoco Energy Trading Company V. Natural Gas Pipeline Company of America, 82 FERC P 61,037 (1998), which involved a request for confidentiality of a gas sales agreement, the Commission explained why a gas sales agreement should be given confidential treatment but transportation contracts should not: the Commission has explicitly held that gas transportation rates stand on a different footing from gas sales rates because pipelines and their competitors are subject to similar disclosure requirements.
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In ANR Pipeline Co., the Commission explained that unlike gas sales in a competitive market, transportation of natural gas is still regulated under the assumption that the pipeline exercises market power.
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Even where transportation competition exists, that competition is from other pipelines that are likely to be subject to similar filing and reporting requirements.
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There were several cases denying confidential treatment of rates in the context of Section 4 cases.
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Just to make sure I found everything, I'll do some follow up sometime in the next few days and let you know if I find anything.
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Here is a draft of the compliance filing regarding our operational control agreement with ECS.
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Please let me know your comments by C.O.B.
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tomorrow.
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At this point I'm not planning to file the agreement, just a report as requested by the Commission.
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I'm still working with ECS to finalize the agreement.
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Their attorney is checking with his resident experts to make sure ECS, by expressly giving TW Operational Control, does not somehow cross the line into retail wheeling.
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I do not expect the agreement to change significantly.
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Steve and Frank, I would be very interested in your comments on the attached.
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Here's what I propose to send to the parties on the 14th.
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Take a look, and think about whether it would be wise to do more selling in the first paragraph.
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I propose that we get on the agenda for the March 1 meeting so that we have some time to approach individual parties first.
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With your permission, I will forward this to Mr. Dasovich also.
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The reservation charge reduction applicable to TW's failure to deliver gas under certain circumstances does NOT apply to either force majeure events or periods of unscheduled maintenance less than 10 days in any calendar quarter.
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Unscheduled maintenance is defined as unanticipated or unplanned maintenance on the pipeline system required to be performed to ensure that gas continues to flow in months other than Dec., Jan., Feb., July and Aug. Assuming we could even classify the proposed activity as "maintenance," I'm not sure we could get away with saying it was unanticipated or unplanned, as the Gallup expansion has been in the works for some time.
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I am also not completely comfortable calling this "force majeure" because part of the tariff definition is that the event was not within the control of either party; however, since the definition does include "binding order of any court or governmental authority," we could possibly say this is force majeure if we're reducing the pressure in order to comply with a DOT pipeline safety rule.
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(In that event, our notice on the EBB would be a force majeure notice.) If not, we can argue that since this is not "maintenance," but simply being done to construct the expansion in a safe and prudent manner, the shippers' rights are not triggered under the reservation charge reduction provisions.
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In that case, damages (if any) would have to be pursued under ordinary contract law.
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I realize that this is not a very satisfactory answer; however, the outage is going to be relatively short, and no shipper in recent memory has availed itself of the reservation charge reduction.
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I recommend we give shippers reasonable notice of the pressure reduction so that they can make alternate plans -- this will reduce the likelihood that they will feel revengeful.
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Please call (x30596) or e-mail if you have further questions.
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