1. Operational Flow Order (OFO) Overview

An Operational Flow Order is a mechanism to protect the operational integrity of the pipeline. Pacific Gas and Electric Company’s California Gas Transmission may issue and implement System-Wide or Customer-Specific OFOs in the event of high or low pipeline inventory. OFOs require shippers to take action to balance their supply with their customers' usage on a daily basis within a specified tolerance band. Shippers may deliver additional supply or limit supply delivered to match usage.

Five times each day, CGT prepares a customer load forecast and a supply forecast, and from these develops a three-day pipeline inventory forecast. This pipeline inventory forecast is compared against CGT's pipeline inventory limits. When the forecasted pipeline inventory is greater than or less than the pipeline inventory limits, CGT uses storage assets reserved for balancing to help manage either the excess or the insufficient pipeline inventory.

If this measure is not adequate to correct the imbalance, CGT issues an OFO notice stating:

1. OFO stage (from 1 to 5)
2. system inventory level (high or low)
3. noncompliance charge:
   • Stage 1 - $0.25/Dth;
   • Stage 2 - $1.00/Dth;
   • Stage 3 - $5.00/Dth;
   • Stage 3.1 - $10.00/Dth;
   • Stage 3.2 - $15.00/Dth;
   • Stage 3.3 - $20.00/Dth;
   • Stage 4 - $25.00/Dth; and
   • Stage 5 - $25.00/Dth plus the Daily Citygate Index price/Dth.
4. tolerance band (percent of allowable variance)

If, for example, CGT declares a Stage 1 OFO with a tolerance band of 5% for high inventory, supplies must not be more than 105% of actual usage or a noncompliance charge is assessed.

In the event of a supply shortage that would not be rectified by a low inventory OFO, CGT may issue an Emergency Flow Order (EFO). In cases of severe supply shortage, an EFO or an Involuntary Diversion may be called without a prior OFO notice.

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