El Paso Natural Gas Company Docket Nos. RP , RP , RP , and RP Robert Petrocelli, Ingrid Olson, Elizabeth Zerby

FERC High Pressure System San Juan Basin Maricopa Line Havasu Line Permian Basin Low Pressure System Eunice Station Keystone Station Waha Station Arizona New Mexico Texas Plains Station Dumas Station Topock Ehrenberg Anadarko Basin Permian-San Juan Crossover Valve City El Paso Natural Gas System Nevada CA

FERC 3 Capacity Peak Demand (in MMcf/d)

FERC 4 Should FR service be converted to CD service? Staff recommends converting FR service to CD service maintain existing rate structure maintain FT-2 FR contracts –Benefits provides certainty for all shippers unspecified rights degrade firm CD service

FERC 5 What level of contact demand should be assigned to FT-1 full requirements shippers? Settlement Billing Determinants (BD) Coincidental Peak Demand (CP) Non-Coincidental Peak Demand (NCP) Some combination of the above

FERC 6 Benefits of Using the Greater of BD or CP Reflects FR customer current usage (Dec. 12, 2001 system peak day) No shipper is allocated less than the capacity they pay for under the Settlement Maintains CD service at contract levels Matches contract demand to system capacity to preserve reliability Places all customers on equal footing and sends proper price signals for expansion

FERC 7 Should specific receipt point rights be assigned? Consistent with Commission-approved delivery point allocation order in BR/Amoco/Topock complaint case Provides certainty of supply for all firm shippers Eliminates daily pro-rata curtailments Enhances value and tradability of capacity

FERC High Pressure System San Juan Basin Maricopa Line Havasu Line Permian Basin Low Pressure System Eunice Station Keystone Station Waha Station Arizona New Mexico Texas Plains Station Dumas Station Topock Ehrenberg Anadarko Basin Permian-San Juan Crossover Valve City Current Pooling Areas Blanco Bondad Plains Anadarko Keystone Waha

FERC High Pressure System San Juan Basin Maricopa Line Havasu Line Permian Basin Low Pressure System Eunice Station Keystone Station Waha Station Arizona New Mexico Texas Plains Station Dumas Station Topock Ehrenberg Anadarko Basin Permian-San Juan Crossover Valve City MCCAMEY or LINE Proposed Pooling Areas

FERC 10 Conclusion Conversion aids shippers by restoring certainty to firm services and by providing equal access to supplies Ensures proper relationship between rates paid and services rendered Next step: Convene a conference to receive comments on staff’s recommendation