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

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 Commission Goals

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

Discussion Overview OFO definition and need How OFOs can be abused Commission action to minimize the issuance of OFOs

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

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

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

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

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