California Production Now Subject to OFOs (Low Inv.)

Thursday, January 22, 2004

Effective January 1, 2004, Authorized Agents of California Production Balancing Agreements (CPBA) are subject to the same Operational Flow Order (OFO) and Emergency Flow Order (EFO) rules applicable to end-use customers and Noncore Balancing Aggregation Agreement holders.

Pacific Gas and Electric Company's California Gas Transmission has called a low inventory OFO for tomorrow's gas day. This means that a CPBA Authorized Agent's scheduled nominations for the gas day may not exceed the actual daily production deliveries for that day by more than the indicated tolerance band percentage in order to avoid OFO noncompliance charges. Scheduled nominations less than actual daily production deliveries are not subject to OFO noncompliance charges during a low inventory OFO.

As an example, if the low inventory OFO were called with a 5% tolerance band, and the CPBA's actual daily production deliveries were 120 Dth, than the tolerance band would equal 5% of 120 Dth, or 6 Dth. The scheduled nominations for this CPBA could be no greater than 126 Dth for the gas day, in order to avoid noncompliance charges.

Please contact your CGT Account Services Representative at 1.800.343.4743 if you have any questions.

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