Spreadsheet: drew_fossum__8929__virtualpwr5
Sheet: Summary

VIRTUAL POWER ASSESSMENT - ET&S CONFIDENTIAL - DO NOT DISTRIBUTE TO OUTSIDED PARTIES
 |  | 2000-10-30 00:00:00
 |  |  |  | DEDICATED FACILITY |  |  |  |  |  | DUAL-USE ENGINE
Line No. |  | ITEM: |  | (Engine dedicated solely to electric generation.  Could be an abandoned turbine unit or a new unit purchased to generate electricity.) |  |  |  |  |  | (Engine's first call is natural gas service - existing or new facility) |  |  |  |  |  |  |  | Line No.
 |  | (a) |  | (b) |  | ( c) |  | (d) |  | (e) |  | (f) |  | (g) |  | (h)
1 |  | OPERATIONS SCENARIOS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1
2 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2
3 |  | Facilities Owner : |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3
4 |  | Compressor |  | Abandoned |  | Abandoned |  | Abandoned |  | NNG owns turbine & compressor; sells shaft HP |  |  |  | EWG or 3rd Party owns all compression assets and generator:                             NNG purchases a compression service |  |  |  | 4
5 |  | Turbine |  | NNG owns turbine; sells shaft HP |  | EWG or 3rd Party |  | EWG or 3rd Party |  |  |  |  |  |  |  |  |  | 5
6 |  | Generator  1/ |  | EWG / 3rd Party |  | EWG or 3rd Party |  | EWG or 3rd Party |  | EWG or 3rd Party |  |  |  |  |  |  |  | 6
7 |  | Facilities Operator |  | NNG |  | NNG |  | NNG |  | NNG |  | NNG |  | NNG |  | NNG |  | 7
8 |  | ACCOUNTING SCENARIOS: |  | Expenses & associated revenues are classified Non-utility |  | Expenses & associated revenues are classified Non-utility |  | Expenses are cross-charged to EWG or ENRE 2/ |  | Assets remain 100% in rate base |  | Assets are split between Utility & Non-Utility based on usage |  | Expenses & associated revenues are classified Non-utility |  | Expenses are cross-charged to EWG or ENRE 2/ |  | 8
9 |  | ISSUES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 9
10 |  | Jurisdiction: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10
 |  | Electricity Generation |  | No federal; check each state |  | No federal; check each state |  | No federal; check each state |  | No federal; check each state |  | No federal; check each state |  | No federal; check each state |  | No federal; check each state
 |  | Electricity Transmission |  | FERC |  | FERC |  | FERC |  | FERC |  | FERC |  | FERC |  | FERC
 |  | Electric Rates |  | None - wholesale market |  | None - wholesale market |  | None - wholesale market |  | None - wholesale market |  | None - wholesale market |  | None - wholesale market |  | None - wholesale market
 |  | Natural Gas Service Impact |  | NA |  | NA |  | NA |  | Possible service issue 3/ |  | Possible service issue 3/ |  | Possible service issue 3/ |  | Possible service issue 3/
 |  | Compression Service |  | NA |  | NA |  | NA |  | NA |  | NA |  | Possible jurisdictionality issue 4/ |  | Possible jurisdictionality issue 4/
16 |  | Agreement: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 16
 |  | Operating |  | Yes, NNG is Operator |  | Yes, NNG is Operator |  | Yes, NNG is Operator |  | NA |  | NA |  | Yes, NNG is Operator |  | Yes, NNG is Operator
 |  | Sale/Purchase |  | Shaft HP Agreement |  | Sale of Turbine |  | Sale of Turbine |  | Sale of Turbine |  | Shaft HP Agreement |  | Asset Sale & Purchase of Compression Service |  | Asset Sale & Purchase of Compression Service
 |  | Transportation Capacity and Fuel per NNG Tariff |  | EWG/3rd Party |  | EWG/3rd Party |  | EWG/3rd Party |  | EWG/3rd Party |  | EWG/3rd Party |  | EWG/3rd Party |  | EWG/3rd Party
20 |  | New Delivery Point: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 20
 |  | Physical |  | Yes |  | Yes |  | Yes |  | Yes |  | Yes |  | Yes |  | Yes
 |  | Measurement (Paper Point) |  | Yes |  | Yes |  | Yes |  | Yes |  | Yes |  | Yes |  | Yes
23 |  | Environmental: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 23
 |  | Existing Air Permit |  | Check Permit |  | Check Permit |  | Check Permit |  | Check Permit |  | Check Permit |  | Check Permit |  | Check Permit
 |  | Existing Noise Permit |  | Check Permit |  | Check Permit |  | Check Permit |  | Check Permit |  | Check Permit |  | Check Permit |  | Check Permit
26 |  | Existing Right-Of-Way: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 26
 |  | Access Transferable |  | Check Easement |  | Check Easement |  | Check Easement |  | Check Easement |  | Check Easement |  | Check Easement |  | Check Easement
 |  | Use Restriction(s) |  | Check Easement |  | Check Easement |  | Check Easement |  | Check Easement |  | Check Easement |  | Check Easement |  | Check Easement
29 |  | NNG PRA (Fuel used in compressor only.  Fuel on transportaion captured in line 19 above.) |  | N/A |  | N/A |  | N/A |  | Include in PRA |  | Fuel for gas used in  compression (only) included in PRA. |  | Fuel charged by 3rd Party would be in PRA |  | Fuel charged by 3rd Party would be in PRA |  | 29
30 |  | NNG Cost of Service |  | Non-utility costs not recovered in COS.  NNG incurs expense. |  | Non-utility costs not recovered in COS.  NNG incurs expense. |  | Since costs are cross-charged, NNG has no recorded expenses.  Expenses are on the books of either EWG or ENRE. |  | Utility costs recovered in COS. |  | Compression related costs recovered in COS.  Generation related (non-utility) costs not recovered.  NNG incurs these expenses. |  | Purchased compression included in COS.  Other (non-utility) costs not recovered in COS.  NNG incurs these expenses. |  | Purchased compression included in COS.  Since other costs are cross-charged, they are on the books of either EWG or ENRE, not NNG. |  | 30
31 |  | NNG Revenue Treatment |  | Non-utility revenue.  NNG keeps profit. |  | Non-utility revenue equals expense.  EWG or ENRE makes the profit. |  | No billings/revenue since costs were cross-charged.  ENRE Make profit. |  | Utility revenue equals expense, thus reducing COS.  EWG or ENRE makes the profit. |  | Non-utility revenue equals expense.  EWG or ENRE makes the profit. |  | Non-utility revenue equals expense.  EWG or ENRE makes the profit. |  | No billings/revenue since costs were cross-charged.  ENRE Make profit. |  | 31
32 |  | [NAME]: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 32
33 |  | EWG  = [NAME].  Under these scenarios, EWG is either a new NNG subsidiary or an Enron affiliate. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 33
34 |  | 3rd Party = Non-affiliated Entity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 34
35 |  | ENRE = ETS Non-regulated Entity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 35
36 |  | FOOTNOTES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 36
 |  | 1/ Based upon advice of Counsel, NNG direct ownership not a viable option under current PUCHA.  The Act requires the owner to be "engaged directly or indirectly… and exclusively in the business of owning or operating one or more eligible facilities and selling electricity at wholesale."
 |  | 2/ In the scenario of the Facilities Owner and Merchant/Generator being an Enron EWG ("EWG"), NNG would cross-charge it for services performed by NNG personnel operating the equipment.
 |  | In the scenario of the Facilities Owner and Merchant/Generator being a third party, there would be an ETS non-regulated entity ("ENRE") as a middleman for NNG to cross-charge for services performed by NNG personnel operating the equipment..
 |  | 3/  Need a definition for "abandonment of service".  That is, how long can natural gas service be delayed if engine being used to generate electricity?
 |  | 4/  Will require a FERC filing to abandon NNG compression.  We will need to satisfactorily address a jurisdictionality issue that FERC may have in regard to the compression service.    That is, how do we guarantee natural gas service.