Enron Mail

From:lynn.blair@enron.com
To:steve.january@enron.com
Subject:FW: Borderline #22 - November 1 OFO Changes
Cc:
Bcc:
Date:Tue, 30 Oct 2001 14:28:22 -0800 (PST)

FYI. Wasn't sure if you saw this? Thanks. Lynn
-----Original Message-----
From: Johnson, Robert=20
Sent: Tuesday, October 30, 2001 3:32 PM
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Johnson, Robert; Strom, Colin; Willimon, Ted
Subject: Borderline #22 - November 1 OFO Changes


Borderline
No. 2001-22
October 30, 2001<?xml:namespace prefix =3D o ns =3D "urn:schemas-microsoft-=
com:office:office" /<

=20

November 1 Tariff Change

Tariff revisions detailing and addressing the use of an Operational Flow Or=
der (OFO) on Northern Border, which were part of Northern Border's approved=
Park and Loan (PAL) filing, will become effective on November 1. Here is=
a brief overview of the upcoming changes.

=20
Purpose of an OFO
=20
An OFO will be used by Northern Border to 1) alleviate conditions that thre=
aten the integrity of the system, 2) maintain pipeline operations at pressu=
res required to provide efficient and reliable transportation service, 3) a=
ssure adequate system line pack, and 4) maintain service for all of Norther=
n Border's firm shippers. =20
=20
An OFO will be treated as a tool of last resort. Northern Border will firs=
t attempt to utilize its system, its services (transportation and PAL), and=
if necessary, assistance of interconnecting systems to alleviate operation=
al problems before invoking its OFO tariff provisions.
=20
=20
Posting of an OFO Watch
=20
If resolution of an operational problem is unlikely, such as when a daily o=
r cumulative OBA imbalance with an interconnected party is outside of a def=
ined tolerance range, Northern Border will post an OFO watch. Similar to a=
severe weather notice, the purpose of an OFO watch is to pre-alert shipper=
s and interconnecting systems to a location or area on Northern Border's sy=
stem in which underlying operational conditions could prompt the issuance o=
f an OFO.
=20


OFO Issuance
=20
Northern Border will issue an OFO if it is determined that an OFO watch has=
failed to serve as a catalyst for corrective action.=20
=20
A Northern Border OFO will be as localized as is reasonably possible. Furt=
hermore, each OFO will be tailored to match the severity of the known or an=
ticipated problem being addressed.
=20
=20
OFO Impact
=20
An OFO can result in either the curtailment of interruptible services and/o=
r the forced balancing of nominations and actual flows through the confirma=
tion process. =20
=20
If service is reduced or interrupted due to an OFO, Northern Border will di=
rectly provide affected shippers, as soon as possible, a summary of the ser=
vice interruption that will include the operational variables that prompted=
such action. In addition, affected shippers will be notified of any imbal=
ances that require immediate resolution.
=20
Routine status updates will be posted throughout the period in which the OF=
O is in effect.
=20
=20
Failure to Comply
=20
When an OFO is issued, it is the responsibility of the affected shippers to=
make a good faith effort to comply. If such shippers fail to respond to t=
he OFO, or their response is insufficient to correct the problem, Northern =
Border may take further action including the curtailment of firm service or=
the immediate cash out of cumulative imbalances that are in excess of 10% =
of the Historical Flow Quantity.
=20
Northern Border will not be liable for any costs incurred by a shipper in c=
omplying with or be exposed to any damages that result from an interruption=
in service due to an OFO.
=20
=20
Impact of OFO Tariff Changes on Interconnects
=20
FERC Order No. 637 requires that pipelines "take all reasonable actions to =
minimize the issuance and adverse impact of Operational Flow Orders (OFOs).=
" Northern Border recognizes that maintaining daily and cumulative OBA imb=
alances with its interconnected parties within reasonable tolerances levels=
is critical in meeting such obligation across the grid. Consequently, the=
November 1 tariff changes includes language which define what is an accept=
able tolerance range on a Northern Border OBA imbalance.
=20
To serve as a benchmark, Northern Border has already begun calculating a Hi=
storical Flow Quantity (HFQ) for each point of interconnection on Northern =
Border's system. The HFQ is the lesser of the average daily scheduled quan=
tity for the previous 15 consecutive Gas Days or the actual daily flow quan=
tity for such time period. =20
=20
On November 1, the default cumulative OBA imbalance tolerance level for a g=
iven interconnect on Northern Border's system will be +/- 10% of the point'=
s HFQ. If such approach fails to meet the needs of an interconnected part=
y, Northern Border's tariff does permit the use of an alternative tolerance=
level at a given point of interconnect as long as it has been mutually agr=
eed to both OBA parties.
=20
Furthermore, the daily OBA swings at interconnects on Northern Border that =
are on pressure control will also be monitored more closely; the default da=
ily OBA imbalance tolerance level will be +/- 5% of the daily scheduled qua=
ntity. Once again, Northern Border's tariff does permit deviation from thi=
s "standardized" daily tolerance if an alternative method is mutually accep=
table to the OBA parties.=20
=20
For those who would like to initiate discussions on establishing OBA imbala=
nce tolerance levels with Northern Border that deviate from the defaults de=
scribed above, please contact Scott Coburn at (402) 398.7760.
=20
=20