Change in Approach: OFOs in the Afternoon

Thursday, October 12, 2006

PG&E's California Gas Transmission is currently in a period of high system inventory. Additionally, pipeline balancing injections have been suspended because the entire inventory reserved for pipeline balancing has been exceeded. As a result, CGT is looking at calling late afternoon OFOs as a way to manage ongoing overdeliveries that exceed demand.

When an OFO is necessary, CGT makes every effort to call the OFO by 7:30 a.m. Pacific time the day prior to the gas flow day, using a forecast of demand and scheduled supply. However, the forecast of system conditions at 7:30 a.m. does not always indicate the necessity for an OFO. When subsequent changes in system demand and/or scheduled supply necessitate some inventory control action, CGT's two options are either to call an OFO later in the day or hold the interconnect constraints in a nomination cycle to the constraints which existed in a previous cycle.

Customers have indicated a strong preference for CGT to call OFOs rather than holding to interconnect constraints. Therefore, we will consider calling an OFO as late as 6:00 p.m. Pacific time for the following gas day. We anticipate that calling an OFO, if deemed necessary, after reviewing the evening cycle nominations may reduce the need to hold the interconnect constraints to control pipeline system inventory.

If you have any questions, please contact your CGT Account Services Representative.

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