fw : negotiated rates audrey d . robertson
transwestern pipeline company
email address : audrey . robertson @ enron . com
( 713 ) 853 - 5849
( 713 ) 646 - 2551 fax
- - - - - original message - - - - -
from : pavlou , maria
sent : thursday , june 21 , 2001 9 : 34 am
to : robertson , audrey
subject : fw : negotiated rates
audrey , pls . forward this memo to the tw commercial team . thanks , maria
i recently discussed above - maximum rate deals with northern ' s commercial team and wanted to forward what i shared with them to you . pls . call me if you have any questions about this memo . thanks , maria
- - - - - original message - - - - -
from : pavlou , maria
sent : wednesday , june 13 , 2001 3 : 01 pm
to : cappiello , deborah
cc : dornan , dari ; kirk , steve ; fossum , drew ; miller , mary kay
subject : negotiated rates
pursuant to our conversation yesterday , here are some guidelines for the northern marketers to follow when doing above - maximum rate negotiated rate transactions .
the commission permits a pipeline to charge above - maximum rates under negotiated rate authority provided that the capacity also remains available at the maximum recourse rate . in other words , we cannot unilaterally require a customer to purchase capacity at a rate above the max rate ; however , customers may willingly choose to pay a negotiated rate ( above max rates or below minimum rates ) .
below are some faqs and the appropriate response when negotiating rates with customers in an above - maximum rate environment .
1 . is it better to use a fixed rate or an index / formula based rate ? it is better to use an index or formula based negotiated rate as opposed to a fixed rate , as the index or formula - based rates provide a reasonable basis as to why a customer would enter into a negotiated rate transaction exceeding max rates , e . g . to accommodate the customer ' s risk profile .
2 . who should propose the rate ? it is better for the customer to propose the rate . you may ask questions like : have you seen the spread ? what do you think ? what can you give me for the subject capacity ? will you split the upside ? if so , what is a fair split ? the goal here is to have the customer come up with the rate . if the customer won ' t go there , it is never appropriate to bully , cajole , or use undue pressure to get an above - maximum rate deal . moreover , we can never imply or otherwise indicate that the capacity is unavailable if the customer does not pay a negotiated rate or above - maximum rate .
3 . do i have to offer the maximum rate or say this capacity is also available at the maximum rate ? our capacity is always offered at the maximum tariff rate because that is the rate on file which the shipper sees when he / she looks at our tariff . we don ' t have to expressly state the capacity is available at our maximum recourse rate , but if the customer requests to pay the maximum rate , no further conversations about paying a negotiated rate should take place . in other words , we have to sell available capacity at the maximum rate once a shipper asks for that rate unless we are negotiating a longer term maximum rate deal for such capacity at the same time . in such circumstances , please confer with regulatory and legal so that we can determine what action is appropriate to take given the specific facts .
4 . can a shipper get a higher priority by paying more than the maximum rate ? no . shippers willing to pay more than the maximum recourse rate are considered to have paid the maximum recourse rate for capacity allocation and priority purposes . a shipper willing to pay only the recourse rate cannot lose access to capacity merely because someone else is willing to pay a negotiated rate . where there are more requests for capacity than there is capacity available , the pipeline must allocate capacity among those shippers willing to pay either the negotiated rate or the maximum recourse rate on the allocation basis required by the tariff .
given that customers have recorded phone lines , be careful what you say . we cannot deny the availability of capacity at the recourse rate , nor can we mislead customers into believing that the maximum rate is unavailable for certain capacity for any reason .
fw : negotiated rates
audrey d . robertson
transwestern pipeline company
email address : audrey . robertson @ enron . com
( 713 ) 853 - 5849
( 713 ) 646 - 2551 fax
- - - - - original message - - - - -
from : pavlou , maria
sent : thursday , june 21 , 2001 9 : 34 am
to : robertson , audrey
subject : fw : negotiated rates
audrey , pls . forward this memo to the tw commercial team . thanks , maria
i recently discussed above - maximum rate deals with northern ' s commercial team and wanted to forward what i shared with them to you . pls . call me if you have any questions about this memo . thanks , maria
- - - - - original message - - - - -
from : pavlou , maria
sent : wednesday , june 13 , 2001 3 : 01 pm
to : cappiello , deborah
cc : dornan , dari ; kirk , steve ; fossum , drew ; miller , mary kay
subject : negotiated rates
pursuant to our conversation yesterday , here are some guidelines for the northern marketers to follow when doing above - maximum rate negotiated rate transactions .
the commission permits a pipeline to charge above - maximum rates under negotiated rate authority provided that the capacity also remains available at the maximum recourse rate . in other words , we cannot unilaterally require a customer to purchase capacity at a rate above the max rate ; however , customers may willingly choose to pay a negotiated rate ( above max rates or below minimum rates ) .
below are some faqs and the appropriate response when negotiating rates with customers in an above - maximum rate environment .
1 . is it better to use a fixed rate or an index / formula based rate ? it is better to use an index or formula based negotiated rate as opposed to a fixed rate , as the index or formula - based rates provide a reasonable basis as to why a customer would enter into a negotiated rate transaction exceeding max rates , e . g . to accommodate the customer ' s risk profile .
2 . who should propose the rate ? it is better for the customer to propose the rate . you may ask questions like : have you seen the spread ? what do you think ? what can you give me for the subject capacity ? will you split the upside ? if so , what is a fair split ? the goal here is to have the customer come up with the rate . if the customer won ' t go there , it is never appropriate to bully , cajole , or use undue pressure to get an above - maximum rate deal . moreover , we can never imply or otherwise indicate that the capacity is unavailable if the customer does not pay a negotiated rate or above - maximum rate .
3 . do i have to offer the maximum rate or say this capacity is also available at the maximum rate ? our capacity is always offered at the maximum tariff rate because that is the rate on file which the shipper sees when he / she looks at our tariff . we don ' t have to expressly state the capacity is available at our maximum recourse rate , but if the customer requests to pay the maximum rate , no further conversations about paying a negotiated rate should take place . in other words , we have to sell available capacity at the maximum rate once a shipper asks for that rate unless we are negotiating a longer term maximum rate deal for such capacity at the same time . in such circumstances , please confer with regulatory and legal so that we can determine what action is appropriate to take given the specific facts .
4 . can a shipper get a higher priority by paying more than the maximum rate ? no . shippers willing to pay more than the maximum recourse rate are considered to have paid the maximum recourse rate for capacity allocation and priority purposes . a shipper willing to pay only the recourse rate cannot lose access to capacity merely because someone else is willing to pay a negotiated rate . where there are more requests for capacity than there is capacity available , the pipeline must allocate capacity among those shippers willing to pay either the negotiated rate or the maximum recourse rate on the allocation basis required by the tariff .
given that customers have recorded phone lines , be careful what you say . we cannot deny the availability of capacity at the recourse rate , nor can we mislead customers into believing that the maximum rate is unavailable for certain capacity for any reason .