Subject: "Portfolios".

Body: Heres' the file. Again, we used it, in the end, to justify having the utilities go out, now, and fill 10-15% of their net short position with 5 and 10 years deals. The group agreed, though there's still discussions about the percentage (higher?) and the mix (5 and 10 year deals? ; 3, 5, 10 year deals?) --you get the picture.

Subject: "CAED docs".

Body: Kathleen, There were three original assignment and assumption agreements: One of CAED I (GE) and two for CAED II (one for GE, one for ABB). I only see two in my packet, and only two are referenced in the transmittal letter. HELP!!!!!!!! This is obviously urgent. Kay

Subject: "Derek Bailey".

Body: Jeff, Derek stopped by after he talked to his wife over the phone and it looks like he will probably take the job. He wants to talk to her again tonite, and he will let me know officially tommorrow. So he can let Joe Hunter know -- any

Subject: "Texas Eastern".

Body:
Either I didn't fully understand the December Texas Eastern order or else FERC has just put a new and unhelpful spin on it. The Thursday rehearing order dramatically changes how the "shipper must have title" rule applies to acquisitions of upstream capacity. I thought the Dec. order pretty clearly allowed a pipe to acquire upstream capacity and then resell that capacity under the acquiring pipeline's rate schedules. FERC specifically held that the "shipper must have title" policy won't be applied if the acquiring pipe treats the acquired capacity "as though it were part of its own system". (p. 61,886) The Dec. order even cited TW's acquisition of park n ride capacity from PG&E as an example of the type of transaction that (I thought) could be done without advance Commission approval. Now, FERC explains that it did not intend a "blanket waiver" of the shipper must have title policy. Pipes can still acquire upstream capacity without advance FERC permission, but only if the acquiring pipe is going to use the acquired capacity for operational needs or to resell under the selling pipe's release mechanism. If the acquiring pipe wants to use the acquired capacity to support sales of service under the acquiring pipe's rate schedules, a specific waiver of the "must have title" policy is required (see FN 20 and text). We are right back to where we started. I guess the orders signal that FERC is much more likely to grant waivers of the "must have title" policy than in the past, but I don't think we are good to go to acquire upstream storage, for example, and resell it as FDD or IDD until we get permission first. Shelley--let me know if you hear any expressions of outrage from other