8. OFO/EFO Noncompliance Charges

Your California Gas Transmission Detail of Bill includes a section that details any charges or credits incurred as a result of Operational Flow Orders (OFOs) or Emergency Flow Orders (EFOs). Noncompliance charges appear on the Detail of Bill one month after the month in which the charges were incurred (e.g. May OFO noncompliance charges will be reflected in the June Detail of Bill). If you had no out of tolerance volumes during an OFO or an EFO, this section will not be included in your Detail of Bill.

The information below describes how noncompliance volumes and total noncompliance charges are calculated. OFO Tolerance Bands and Associated Noncompliance Charges and Emergency Flow Orders detail noncompliance charge rates ($/Dth or $/therm) that are applied to noncompliance volumes. OFO compliance is governed by Pacific Gas and Electric Company's gas Rule 14.

Noncore Customers and NBAAs

For noncore customers individually and noncore customers aggregated under a Noncore Balancing Aggregation Agreement (NBAA), noncompliance charges are incurred when customers do not balance supply and usage within the specified tolerance band on a day when Pacific Gas and Electric Company's California Gas Transmission implements an OFO or an EFO.

The OFO Charge Details section of the bill lists each customer in your NBAA on a separate line. Supply and usage data for each day of noncompliance is subtotaled across the NBAA members, resulting in a subtotal line item upon which the noncompliance charges are based. For NBAA holders, any noncompliance charge is calculated based on aggregated supply and usage.

Any noncore customers that have not contracted to be part of an NBAA will be billed noncompliance charges directly. The Detail of Bill shows all volumetric data in therms.

Formulas for Noncore Customer and NBAA Holder Noncompliance Charges

The following formulas are used to calculate noncompliance charges for noncore customers and NBAA holders:

Supply/Usage Difference = Supply - (Usage + Distribution Shrinkage)

Tolerance Volume = Usage * Tolerance % (as posted in OFO notification)

Noncompliance Volume (Out of Tolerance Volume) during a high inventory OFO = Supply/Usage Difference - Tolerance Volume

For a high inventory OFO, the Detail of Bill and this formula will indicate noncompliance volumes with a positive number (>0).

Noncompliance Volume (Out of Tolerance Volume) during a low inventory OFO or an EFO = Supply/Usage Difference + Tolerance Volume

For a low inventory OFO or an EFO, the Detail of Bill and this formula will indicate noncompliance volumes with a negative number (<0). To calculate noncompliance charges, however, this negative number is changed to a positive.

Total Noncompliance Charge = (Noncompliance Volume) * ($/Dth Noncompliance Charge Rate announced with OFO notification)

Noncore Usage Volumes and Noncompliance Charges

For noncore customers with automated meter reading (AMR) capability and PG&E's Electric Generation Department, compliance during an OFO and the calculation of any applicable noncompliance charges is based on actual daily metered usage. In these cases, usage shown in the Detail of Bill's OFO Charge Details is labeled "M" for metered.

For noncore customers without AMR capability, compliance during an OFO is based on the customer's contract average daily quantity (ADQ). However, for noncore customers without AMR capability noncompliance charges are calculated based on one of the following measures of usage, whichever results in a lesser charge:

• the customer's ADQ
• the customer's actual daily metered usage
• when actual daily metered usage is not available, average daily metered usage will be substituted

When AMR data is unavailable and one of these measures is used, usage shown in the Detail of Bill's OFO Charge Details is labeled"F" for forecast.

Sample OFO Noncompliance Charges for NBAA Holder

OFO Stage: 3 Inventory Level: High
Noncompliance Charge: $5.00/Dth
Tolerance Band: 1%

OFO Stage: 2
Inventory Level: Low
Noncompliance Charge: $1.00/Dth
Tolerance Band: 1%

Core Transport Agents

For Pacific Gas and Electric Company's Core Procurement Department and Core Transport Agents, the noncompliance volume calculation is based on the difference between the scheduled volumes and the Determined Usage forecast (same day forecast) on the day of the OFO or EFO event plus core customer distribution shrinkage. This means that Core Procurement and Core Transport Agents may have to adjust supplies on the day of flow to stay within tolerance. If the Determined Usage forecast is not posted by 7:15 a.m., Pacific time, the most recent previous forecast will be used.

Noncompliance charges for an EFO will be reduced to the extent that later evaluation of the actual total core flows would be more favorable than the Determined Usage forecast.

The same formulas described above apply to the calculation of noncompliance charges for Core Procurement and Core Transport Agents, substituting "Determined Usage Forecast" for "Usage."

California Production Balancing Agents

For California Production Balancing Agreement (CPBA) holders, noncompliance charges are incurred when agents do not balance scheduled nominations with actual daily production deliveries within the specified tolerance band on a day when Pacific Gas and Electric Company's California Gas Transmission implements an OFO or an EFO.

Formulas for CPBA Noncompliance Charges

The following formulas are used to calculate noncompliance charges for CPBAs:

Actual/Scheduled Difference = Scheduled Volumes - Actual Daily Production Deliveries

Tolerance Volume = Actual Daily Production Deliveries * Tolerance % (as posted in the OFO notification)

Noncompliance Volume (Out of Tolerance Volume) on the day of a high inventory OFO = Actual/Scheduled Difference + Tolerance Volume

For CPBAs during a high inventory OFO, the Detail of Bill and this formula will indicate noncompliance volumes with a negative number (<0). To calculate noncompliance charges, however, this negative number is changed to a positive.

Noncompliance Volume (Out of Tolerance Volume) on the day of a low inventory OFO or an EFO = Actual/Scheduled Difference - Tolerance Volume

For CPBAs during a low inventory OFO or an EFO, the Detail of Bill and this formula will indicate noncompliance volumes with a positive number (>0).

Total Noncompliance Charge = (Noncompliance Volume) * ($/Dth Noncompliance Charge Rate announced with OFO notification)

Note: A scheduled nomination made to an imbalance account on the day of the OFO/EFO event will be used in the calculation. A scheduled nomination made out of an imbalance account on the day of the OFO/EFO event will not be used in the calculation.

Sample OFO Noncompliance Charges for CPBA Holder

OFO Stage: 2
Inventory Level: High
Noncompliance Charge: $1.00/Dth
Tolerance Band: 3%

OFO Stage: 3
Inventory Level: Low
Noncompliance Charge: $5.00/Dth
Tolerance Band: 2%

If you have questions about OFO or EFO noncompliance charges, please contact your CGT Account Manager.

Back to Introduction to Operational Flow Orders (OFO) Index.