May 30 System-Wide OFO

Tuesday, July 09, 2002

For gas day May 30, 2001, PG&E called a System-Wide OFO even though the requirements for a Customer-Specific OFO were met. This notice is provided in accordance with the OFO Settlement, which states "PG&E will post an explanation of the factors causing PG&E to determine not to call a customer-specific OFO..."(Section C.3.b (9), page 9).

Recent operating experience and the current market conditions led PG&E to call the System-Wide OFO. The recent high inventory Customer-Specific OFOs have not resulted in improved pipeline system conditions. Rather, we have seen non-targeted customers create significant imbalances.

In four of the last five Customer-Specific OFOs, the overall market response has resulted in additional System-Wide OFOs being called on subsequent days. Additionally, the response has been so poor in three of these previous Customer-Specific OFOs that a Receipt Point Capacity Allocation (RPCA) event has been required on the day of the Customer-Specific OFO.

In an RPCA, nominations coming in at all receipt points are reduced because of excessive system inventory. The RPCA events and string of continuous OFO days are disruptive to the market. PG&E is hopeful that these will be avoided in the current situation by implementing the system-wide OFO.