Revised OFO Rules for 2004

Tuesday, March 29, 2005

The first OFO of 2004 brings with it a few revised policies.

OFOs Now Impact CPBAs

Effective January 1, 2004, Authorized Agents for 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 high inventory OFO for tomorrow's gas day. This means that a CPBA Authorized Agent's scheduled nominations for the gas day may not be less than actual daily production deliveries for that day by more than the indicated tolerance band percentage in order to avoid OFO noncompliance charges. Scheduled nominations greater than actual daily production deliveries are not subject to OFO noncompliance charges during a high inventory OFO.

As an example, if the high 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 lower than 114 Dth for the gas day, in order to avoid noncompliance charges.

Noncompliance Charge Calculation for Core Procurement Groups

For Core Procurement Groups, OFO noncompliance charges will be calculated based on the determined usage forecast (same-day forecast) rather than the 24-hour (day-ahead) forecast used in 2003. This means Core Procurement Groups may have to adjust supplies on the day of flow to stay within tolerance.

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

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