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

 

November 1 Tariff Change

Tariff revisions detailing and addressing the use of an Operational Flow Order (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.

 
Purpose of an OFO
 
An OFO will be used by Northern Border to 1) alleviate conditions that threaten the integrity of the system, 2) maintain pipeline operations at pressures required to provide efficient and reliable transportation service, 3) assure adequate system line pack, and 4) maintain service for all of Northern Border's firm shippers.   
 
An OFO will be treated as a tool of last resort.  Northern Border will first attempt to utilize its system, its services (transportation and PAL), and if necessary, assistance of interconnecting systems to alleviate operational problems before invoking its OFO tariff provisions.
 
 
Posting of an OFO Watch
 
If resolution of an operational problem is unlikely, such as when a daily or cumulative OBA imbalance with an interconnected party is outside of a defined 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 shippers and interconnecting systems to a location or area on Northern Border's system in which underlying operational conditions could prompt the issuance of an OFO.
 


OFO Issuance
 
Northern Border will issue an OFO if it is determined that an OFO watch has failed to serve as a catalyst for corrective action. 
 
A Northern Border OFO will be as localized as is reasonably possible.  Furthermore, each OFO will be tailored to match the severity of the known or anticipated problem being addressed.
 
 
OFO Impact
 
An OFO can result in either the curtailment of interruptible services and/or the forced balancing of nominations and actual flows through the confirmation process.   
 
If service is reduced or interrupted due to an OFO, Northern Border will directly provide affected shippers, as soon as possible, a summary of the service interruption that will include the operational variables that prompted such action.  In addition, affected shippers will be notified of any imbalances that require immediate resolution.
 
Routine status updates will be posted throughout the period in which the OFO is in effect.
 
 
Failure to Comply
 
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 the 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.
 
Northern Border will not be liable for any costs incurred by a shipper in complying with or be exposed to any damages that result from an interruption in service due to an OFO.
 
 
Impact of OFO Tariff Changes on Interconnects
 
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 imbalances 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 acceptable tolerance range on a Northern Border OBA imbalance.
 
To serve as a benchmark, Northern Border has already begun calculating a Historical Flow Quantity (HFQ) for each point of interconnection on Northern Border's system.  The HFQ is the lesser of the average daily scheduled quantity for the previous 15 consecutive Gas Days or the actual daily flow quantity for such time period.   
 
On November 1, the default cumulative OBA imbalance tolerance level for a given 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 party, 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 agreed to both OBA parties.
 
Furthermore, the daily OBA swings at interconnects on Northern Border that are on pressure control will also be monitored more closely; the default daily OBA imbalance tolerance level will be +/- 5% of the daily scheduled quantity.  Once again, Northern Border's tariff does permit deviation from this "standardized" daily tolerance if an alternative method is mutually acceptable to the OBA parties. 
 
For those who would like to initiate discussions on establishing OBA imbalance tolerance levels with Northern Border that deviate from the defaults described above, please contact Scott Coburn at (402) 398.7760.