Message-ID: <22092947.1075844105698.JavaMail.evans@thyme>
Date: Wed, 29 Nov 2000 02:10:00 -0800 (PST)
From: jeffery.fawcett@enron.com
To: lorna.brennan@enron.com
Subject: Kern River to Do Another Open Season
Cc: steven.harris@enron.com, kevin.hyatt@enron.com, susan.scott@enron.com, 
	tk.lohman@enron.com, christine.stokes@enron.com, 
	michelle.lokay@enron.com, lorraine.lindberg@enron.com, 
	lindy.donoho@enron.com
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Lorna,
Sources close to Kern River confirmed with me just yesterday that the=20
original expansion (124,500 MMBtu/d) is being contracted principally by one=
=20
party, PG&E National Energy Group, for their La Paloma Power Project outsid=
e=20
of Bakersfield, California.  I'm assuming that additional support for a 2nd=
=20
KRGT expansion will come from other developers interested in securing gas=
=20
supply. =20

It's important to remember the economics here --- Kern River's pipeline=20
originates in Wyoming (Rockies gas) and delivers directly into Southern=20
California.  Their gas generally clears the market at the Southern Californ=
ia=20
Border index.  Consequently, there is no stacking of rates as would be the=
=20
case if TW or EPNG attempted to deliver their gas through Mojave to the sam=
e=20
markets.  I've attached the recent press release regarding the La Paloma=20
project for your information...


PG&E CORPORATION UNIT BEGINS CONSTRUCTION OF=20
CALIFORNIA'S LARGEST =01+GREENFIELD=01, MERCHANT POWER PLANT
La Paloma Facility Will Fill a Critical Need for New Electricity Supplies i=
n=20
California

San Francisco =01) Welcoming the opportunity to provide competitive electri=
city=20
to meet the growing electricity needs of California, PG&E Corporation=20
(NYSE:PCG) announced today that its National Energy Group has begun=20
construction on the La Paloma Generating Plant. La Paloma is a 1,048-megawa=
tt
, natural gas-fueled combined-cycle facility. The plant is expected to begi=
n=20
operating in the summer of 2001.  PG&E National Energy Group President & CE=
O=20
Tom Boren said, "The construction of the La Paloma facility is an important=
=20
step in meeting the growing demand for electricity in the state. We welcome=
=20
the opportunity to further the growth of customer choice in California's=20
evolving competitive power market."=20

The California Independent System Operator (ISO), a non-profit public benef=
it=20
corporation responsible for maintaining transmission reliability and ensuri=
ng=20
adequate electricity supplies, hailed La Paloma as a welcome addition. "As=
=20
North America=01,s only regional transmission operator relying on competiti=
ve=20
market forces to maintain the critical balance between electricity supply a=
nd=20
demand for California=01,s 27 million electric customers, the California IS=
O is=20
very pleased that PG&E=01,s National Energy Group has stepped forward with =
the=20
La Paloma facility to fill an essential consumer need," said Cal ISO=20
President & CEO Terry Winter. "This investment shows that the market is=20
responding to the growing demand for electricity."
"As a highly efficient plant from both an energy and environmental=20
standpoint, California consumers will benefit," added PG&E Corp.'s Boren.=
=20
"The La Paloma Generating Plant provides highly competitive costs with a=20
minimum of energy consumption and environmental impacts."

The La Paloma plant site is approximately 40 miles west of Bakersfield,=20
Calif. in western Kern County on an industrial site previously used for oil=
=20
production. When completed, it will be the state=01,s largest facility desi=
gned=20
from the ground up exclusively as a merchant power plant. A merchant plant=
=20
sells its electrical output to wholesale customers in a regional competitiv=
e=20
bulk power market. Those wholesale customers, which include traditional=20
utilities, municipal utility districts, retail energy services companies,=
=20
wholesale power marketers, and electric cooperatives, in turn arrange to ha=
ve=20
the electricity delivered to retail consumers.

The La Paloma development team has selected ABB ALSTOM POWER Inc. as the=20
turnkey contractor for the project. ABB ALSTOM POWER is responsible for the=
=20
design and engineering work, the procurement of equipment and management of=
=20
sub-contractors, and the actual construction of the facility. The La Paloma=
=20
Generating Project received its California Energy Commission approval in=20
October 1999, and the financing package for the project is being completed=
=20
now.

"The rigorous permitting process really laid the ground for an outstanding=
=20
construction program," said Roger Garratt, project development manager for=
=20
PG&E Corporation=01,s generating unit. "We look forward to making a major=
=20
contribution to the Kern County economy in a manner that is completely=20
compatible with the area's sensitive ecosystem." Garratt noted the project'=
s=20
plan to permanently set aside conservation land as part of its environmenta=
l=20
mitigation program.





Market Intelligence - Enron Transportation Services
From: Lorna Brennan on 11/29/2000 09:49 AM
To: Courtney Barker/ET&S/Enron@Enron, John Goodpasture/OTS/Enron@ENRON,=20
Michael Ratner/OTS/Enron@Enron, Sebastian Corbacho/ET&S/Enron@Enron, Yuan=
=20
Tian/ET&S/Enron@ENRON, Mike McGowan/ET&S/Enron@ENRON, Rockey=20
Storie/ET&S/Enron@ENRON, Kent Miller/ET&S/Enron@ENRON, John=20
Dushinske/ET&S/Enron@ENRON, Dave Neubauer/ET&S/Enron@ENRON, Bill=20
Fowler/ET&S/Enron@Enron, Steven Harris/ET&S/Enron@ENRON, Jeffery=20
Fawcett/ET&S/Enron@ENRON, Lorraine Lindberg/ET&S/Enron@ENRON, Kevin=20
Hyatt/ET&S/Enron@Enron, Christine Stokes/ET&S/Enron@ENRON, TK=20
Lohman/ET&S/Enron@ENRON, Michelle Lokay/ET&S/Enron@Enron, Lindy=20
Donoho/ET&S/Enron@ENRON, Lee Huber/ET&S/Enron@ENRON, Susan=20
Scott/ET&S/Enron@ENRON
cc: =20
Subject: Kern River to Do Another Open Season

Open Season Expected for Kern River Capacity=20

After the recent successful completion of an open season on an added 124,50=
00=20
Dth/d of firm transportation capacity into California along its 922-mile=20
interstate pipeline, Williams' subsidiary Kern River Gas Transmission will=
=20
announce another open season this week, perhaps as early as today for=20
additional new capacity on the pipeline carrying Rocky Mountain supplies fr=
om=20
southwest Wyoming, a Salt Lake City-based Kern River spokesperson said=20
Tuesday.=20

Although the spokesperson indicated the current 700 MMcf/d-capacity pipelin=
e=20
is running full these days, Kern River has no plans to re-open its previous=
=20
proposals to build transmission laterals within California, heading north a=
nd=20
south into major industrial areas of the state. The growing supplies, which=
=20
are expected to come into the state to fuel the accelerating demand for new=
=20
natural gas-fired electric generation plants, will be fulfilled by adding=
=20
compression and looping, the spokesperson said.=20

Kern River is planning on bringing "a lot more volumes" into California in=
=20
the years ahead, said the spokesperson, noting that the recent capacity=20
expansion will be made possible by an $80 million project to add three new=
=20
compressor stations, additional compression at an existing Wyoming station,=
=20
restage a compressor in Utah and upgrade two meter stations. The new open=
=20
season is expected to run for two months through the end of January for=20
marketers, merchant generators, large industrial plants and utilities along=
=20
the pipeline route in Utah, Nevada and California, all of which have been=
=20
experiencing tremendous energy load growth. The bulk of the interest is sti=
ll=20
expected to come from California, the spokesperson said.=20



