Talking Points

•	Subject
Enron North America Corp. (“Enron”) and NUI Corporation (“NUI”) have been engaged in discussions concerning NUI providing Enron with an option to receive natural gas transportation service on NUI’s natural gas distribution system (“Project”) extending from West Palm Beach to Fort Myers, Florida. 

•	Agreements
The parties would execute an Option Agreement revolving around the points below, once agreed to by both parties, to be followed by a Gas Transportation Agreement at the time Enron chooses to exercise its rights under the Option Agreement.

•	Services:  
NUI would provide Enron with an option to receive natural gas transportation service at its proposed electric generation project site adjacent to the FPL Corbett Transmission Station.

Volume:  nominally up to 140 million Btu per day

Pressure:  nominally 550 psig subject to FGT operating pressure at the NUI city gate

•	Option Agreement:	
In exchange for granting Enron an Option Agreement, NUI would receive  from Enron a 10% carried equity interest in the project to be fueled by the Option Agreement.  NUI’s equity shall be taken in cash distributions in the same form as other equity investors or, as elected by NUI, as electric output from the project at cost.

The Option Agreement shall have a term of 5 years and shall evergreen yearly thereafter as agreed to by the parties.

•	Gas Transportation Agreement
Under the Gas Transportation Agreement NUI would construct facilities to provide natural gas transportation service to Enron and would charge Enron a transportation charge that allows NUI to earn a rate of return equal to its allowable overall rate of return.  NUI’s allowable overall rate of return would be as set by the Florida Public Service Commission for its Florida based utility, City Gas Company of Florida.

The transportation charge would in the form of a yearly take or pay minimum, paid monthly in 12 equal payments, and be designed to allow NUI to recover the cost of its investment to provide natural gas transportation service to Enron while yielding NUI a return on its investment equal to its allowable rate of return.

The Gas Transportation Agreement would have a term of 25 years.

•	Exclusivity
During the term of the Gas Transportation Agreement Enron would take transportation service for the project exclusively from NUI.