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Operational Flow Order Concerns

This document discusses the operational flow and concerns related to pipeline services, particularly regarding the issuance and abuse of Operational Flow Orders (OFOs). It highlights initiatives taken by the Gary Mahrenholz Division of Market Development in the Office of Markets, Rates, and Tariffs Commission to achieve reliable pipeline service, minimize OFOs, maximize market forces and customer flexibility, and provide shippers with the necessary information to maintain balance. The document also addresses the issues addressed by Order No. 637 and outlines the remedies proposed to improve the effectiveness of OFOs. Market monitoring initiatives are also discussed.

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Operational Flow Order Concerns

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  1. Operational Flow Order Concerns Gary Mahrenholz Division of Market Development Office of Markets Rates and Tariffs

  2. Commission Goals • Ensure reliable pipeline service • Minimize OFOs, maximize market forces and customer flexibility • Give shippers information needed to keep in balance • Monitor OFOs for abuse and to identify system constraint points

  3. Initiatives to Achieve Goals • Order No. 637 to enhance market design rules • Market monitoring • Necessary infrastructure additions

  4. DiscussionOverview • OFO definition and need • How OFOs can be abused • Commission action to minimize the issuance of OFOs

  5. OFO: Definition and Uses • Issued by a pipeline to maintain service reliability • Can be system-wide or limited to specific pipeline segments • Typically restricts use of secondary receipt and delivery points

  6. OFO: Definition and Uses • Requires shippers to stay in balance at tightened tolerance levels • Can also limit shipper storage delivery and withdrawal rates

  7. OFO Issues Addressed by Order No. 637 • OFOs ill-defined; too large in scope • OFOs remain in effect too long • Marketing affiliates unduly benefit • Shippers not informed of OFOs in a timely manner • Excessive penalties

  8. Order No. 637 Remedies • Improve pipeline-specific OFO definitions • Develop a continuum of emergency measures • Timely inform shippers of OFOs • Set a proper OFO penalty level and credit revenues to shippers • Require OFO activity report

  9. Market Monitoring • Staff will oversee OFO activity • This oversight will rely on EBB postings, pipeline reports and other sources

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