IN: Please respond to I have done a crappy job of being a witness and a friend. You are correct, and rightly so about the way I have patronized you. It has not been a conscious effort, but I understand your perspective and as I look at me, I am forced to admit you are correct. Christian hypocrites are a dime a dozen, and I am ashamed that I have fallen far short of what He has called me to be. I am very thankful for your business over that last 3 years. I know that my success here has been largely because of your help and business and I and my family thank you for it.

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OUT: An Apology

IN: Attached is the latest draft of the Transport Option Program filing. There are a couple of important changes from the last draft. One is that we're no longer stating that the option fee is going to be "market-based." At FERC, the term "market-based" has connotations of having to prove to FERC that a non-cost-based rate is appropriate because we lack market power. While we probably do lack market power, the consensus of the legal/regulatory team was to try to portray the option fee as a built-in feature of the transport rate, which is simply being disaggregated into a separate option fee. If this theory is not clear to you after you read the filing letter, let's discuss how it should be improved. The other significant change (also based on my meeting with legal/regulatory) is that I've structured the tariff language and the agreement so that every shipper, regardless of whether they currently use transport on TW, will have to have a firm transportation agreement when they buy an option. In other words, a shipper that does not currently have a service agreement will simply execute an agreement with a MAXDTQ of zero. This structure has two advantages: 1) it's consistent with our option-fee-as-part-of-transport-rate theory, and 2) it will help support that theory in our next rate case. I'd like to meet next week, either Wednesday afternoon or Thursday, to discuss the following topics: 1) Your comments and questions on this draft, 2) Some examples of options, to make sure the tariff provisions and contract work from a logistical standpoint, 3) The bidding process, and how bids for options will be evaluated, and 4) Comments received from shippers thus far. I'll be working on 41 tomorrow; let's talk about what would be a good meeting time. I will be out Mon. and Tues.

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OUT: Transport Options Program

IN: This is where we are today on the VNG releases to ENA. All effective dates are 1/1/2001 - 12/31/2003 unless stated differently. MDQ/MSQ (Storage) Pipeline VNG k# ENA k# MDQ Comment CNG 100007 523666 58352 FT CNG 100104 523664 15225 FT CNG 200088 523667 10000 FT - to be used with Cove Point. Released 1/1/2001 - 2/28/200. CNG 700005 571492 40148 FTGSS. Released 1/1/2001 - 3/31/2001. CNG 300008 530912 53648 / 2791000 GSS CNG 300107 530913 15225 / 761250 GSS CGLF 38070 70198 51479 FTS1 CGAS - we may not release any VNG CGAS capacity to ENA. According to CGAS, we may loose some of our flexibility with the contract. Scott is waiting to hear from CGAS. At this point, we will not release the capacity effective for the 1st. Tenn - I do not have the new contract numbers yet. Per Tenn - Scott will send a letter to Tenn requesting that the VNG discounts be transferred to the new ENA contracts. Trco - Trco has a capacity release "glitch" in their EBB and needs to "temporarily flip a switch" while I do the capacity releases. Since I know Trco well, I've decided to wait until after the 1st to do the releases in case their are EDI issues with the "switch flipping". AND we would not know about any problems until the 31st. Also, VNG has 35,930 dth of telescoped Trco capacity. Williams has 15,930 dth of the VNG capacity because of the FS service. I will release 20,000 dth to ENA. This will eliminate the overlapping problems we have with Williams.

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OUT: VNG Capacity Release to ENA

IN: Was any capacity released under this contract in November? There is no deal number in Sitara with a demand fee for this contract for November forward. Deal # 429424 has IM - Market East as the Agent. If we need to pay a transport fee for this contract, then a new deal needs to be set up. Please let me know as soon as possible. Thanks,

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OUT:
VNG - TENN - Contract #47