IN: On Thursday last week the Commission eliminated the old "Texas Eastern" rule that required pipelines to obtain prior FERC approval before contracting for transportation and storage capacity on upstream or downstream pipelines. The new rule allows pipelines to acquire and use such capacity without going to FERC first. The rule does reiterate that bundled sales of gas are still prohibited, and further provides that the acquiring pipeline will be financially at risk for the costs of the acquired capacity. Interestingly, the acquiring pipeline apparently has the option of selling the acquired capacity under its own rate schedules or of releasing the capacity pursuant to its capacity release program. The order is silent on whether the price cap applies to short term releases of acquired capacity. While we are still reviewing the order and may provide additional guidance at a later time, I'd emphasize for now that our normal contract approval procedures and authority thresholds should be deemed to apply to capacity contracts. For example, the "Approval Authorization for Cash Expenditures" dated Feb. 3, 2000 provides Dave and Steve with authority up to $250,000 on operating expense obligations. Please contact me if you have any questions on this matter. DF

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OUT: Upstream Capacity

IN: Atttended the NMOGA meeting in Farmington, NM. It appears that the BLM will implement its own noise criteria in areas within New Mexico that are deemed sensitive by the BLM. The proposed noise threshold will be 48.6 DBA(A). There are no Transwestern facilities in the Farmington resource area which will be impacted by this proposed level, however the potential exists for several Transwestern locations in southeast New Mexico to be impacted. A meeting was held with the president of Del Mar, concerning the issues associated with the lead in their lead acetate tape for monitoring sulfur concentrations in the natural gas. A request was made to the company to determine the feasability of recycling the tape and eleviate the management and disposal issues associated with the tape as a hazardous waste. The quarterly SoCal Transwestern PCB conference call was held this week. Transwesten's share (86%) of SoCal's PCB management activities was approx. $79,000. Due to the press release by PG&E concerning the increased occurance of PCB's into their system, SoCal has initiated increased sampling activities on their system and will be proposing to do additional monitoring to track liquids from Transwestern's M/S into the SoCal system. Preliminary sampling results at strategic liquids locations on the SoCal system has revealed hits of PCB's in the range of 7-10 ppm, although, a hit of 77 ppm was discovered. As a result of an isolated hit of PCB's into the new filter separator at the PG&E C/S in excess of regulated levels, a conference call was held the ET&S VP to determine forthcoming activities with PG&E. A meeting has been scheduled at the PG&E C/S next week to reveiw sampling on the PG&E system and discuss the recent hit of PCB's in the F/S and what forthcoming activities will be conducted at the site.

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OUT: Weekly Environmental Activity Report-Roswell Area

IN: Krishna, We shall have meeting with Kim Watson on Thu at 10:00, 49 C2. It will be followed by a Video Conference with Nebraska at 11:30. Vince

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OUT: Kim Watson

IN: At the request of Stephen Abbanat, I am attaching our proposed form of Non-Disclosure Agreement. We would appreciate it if you could please verify whether "CMS Energy-Panhandle Pipe Line Companies" is the correct legal name of your company. If you have any comments or questions, please call Mark Greenberg, Senior Counsel, at (713) 345-8897as I will be on vacation the rest of this week.

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OUT:
NDA - CMS Energy - Panhandle Pipe Line Companies