revised transportation proposal - - - - - - - - - - - - - - - - - - - - - - forwarded by lorraine lindberg / et & s / enron on 08 / 24 / 2000 09 : 01 am - - - - - - - - - - - - - - - - - - - - - - - - - - - lorraine lindberg 08 / 22 / 2000 10 : 25 am to : emeaders @ redcedargathering . com cc : subject : revised transportation proposal hi ed - here is a revised comprehensive summary of the firm transportation proposal between red cedar and transwestern : term : 5 years , january 1 , 2001 through december 31 , 2005 year volume rate ( + option fee ) 1 125 , 000 mmbtu / d * $ 0 . 02 / mmbtu / d 2 150 , 000 mmbtu / d $ 0 . 025 / mmbtu / d 3 150 , 000 mmbtu / d $ 0 . 03 / mmbtu / d 4 150 , 000 mmbtu / d $ 0 . 035 / mmbtu / d 5 150 , 000 mmbtu / d $ 0 . 04 / mmbtu / d option : red cedar shall have a one - time option to reduce its contract mdq for contract years 4 - 5 to a volume between 100 , 000 mmbtu / d - 150 , 000 mmbtu / d . red cedar may trigger this option anytime before november 30 , 2003 . option fee is an incremental one - tenth of one cent / mmbtu ( additive to the above quoted rates ) over the five year term . facility modifications : the current cost estimate to increase the meter capacity ( from 200 , 000 mmbtu / d to 300 , 000 mmbtu / d ) at the arkansas loop plant into transwestern is $ 378 , 000 . * year 1 capacity of 125 , 000 mmbtu is dependent upon the completion of these facility modifications . red cedar will fund these facility modifications ( by a one - time payment of $ 378 , 000 payable prior to transwestern ordering material for the modifications ) . in order to avoid the tax gross - up of approximately $ 130 , 000 , the $ 378 , 000 will be amortized over the term of the contract and booked as " pre - paid " transportation fees . ( the net effect of this will be zero because the slight increase / mmbtu which will show up on the monthly transportation invoice will be negated by the corresponding credit for the pre - paid transportation . ) please call me to discuss . thanks . lorraine