Once considered the most complex solution, we are now driven by new data to conclude the simpler explanation is the correct one. The data suggests the increase in heating demand over the last decade has not been matched by a proportional increase in heating capacity. Although there has been some slight increase in capacity, it is not enough to meet the additional demand. As the end of the decade approaches, this mismatch between demand and supply will become more and more stark. Based on this analysis, we have concluded that neither an upgrade of the current pipeline systems nor the construction of new transmission lines is a sustainable or desirable option for the future. The situation is particularly acute for Eastern Canadian Gas Transmission, which is a single line from the Alberta/Saskatchewan Border to New York. This line is currently being used at around half of its capacity. Because of the line
,s limited capacity, the delivery point is limited to the AECO area. Based on the foregoing, we have created a detailed project schedule to act as a guide for the entire project. However, given the number of variables in the proposal, it is likely that the project will require more detailed information to proceed further at this time. Efforts to obtain a greater level of understanding must be coordinated between TransCanada, National Energy Board (NEB), Federal Agencies, US & Canadian Governments, and other potential partners and stakeholders. As you will see, the project schedule is complex and requires a significant amount of work for the next three months. We are looking forward to working with you, and if you have any questions or require additional assistance please do not hesitate to contact myself, Rob Waugh, Leslie Lawner, John Novak or Jeff Keeler. Thank You, W. J. (Billy) Wilson, Jr. Director, CA Development ---------------------- Forwarded by William J Haizmann/HOU/EES on 12/07/2000 05:40 PM --------------------------- Enron Energy Services From: Susan Scott @ EES 12/06/2000 01:29 PM Phone No: 713 853-0596 To: Billy Lemmons/Corp/Enron@ENRON, Brad Pettinger/HOU/EES@EES, Dave Schafer/NA/Enron@ENRON, Jeff Dasovich/NA/Enron@Enron, James E Keller/HOU/EES@EES, Wanda Curry/HOU/EES@EES, Evan Hughes/HOU/EES@EES, Doug Sewell/HOU/EES@EES, David K Mack/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David Nutt/Corp/Enron@ENRON, Greg Blair/Corp/Enron@Enron, Harry Kingerski/NA/Enron@Enron cc: Tom Riley/Western Region/The Bentley Company@Exchange, Ken Frankel/HOU/EES@EES, Jeff Golden/HOU/EES@EES, John Shafer/OTS/Enron@Enron, Chuck Webb/HOU/EES@EES, David P Vos/HOU/EES@EES Subject: Preliminary 2001 Integrated Production/Cost Estimate Attached is an estimate of combined production and cost for new and continued projects for 2001. This estimate is based on the decisions that Enron's west business units have made regarding new projects and approximately 60 percent of the corporatewide projects that will be completed next year. This work will be coordinated with the individual project schedules that are under way throughout Enron. Although this schedule was formulated with the assumption that successful completion of all corporate projects will be guaranteed, there is too much uncertainty surrounding the projects and costs to be certain of the actual costs. In addition, the level of any increase in the price of oil, LNG or other commodities this year will also significantly impact the 2001 schedule. Therefore, this schedule is only an estimate of Enron's potential costs. The final schedule and costs will be formulated when the individual project schedule are finalized throughout Enron. Please keep this schedule confidential. Susan Scott Transwestern Pipeline Company P.O. Box 1738 Houston, TX 77251 Susan.Scott@enron.com