OFO and Curtailment
Sometimes energy usage comes close to exceeding capacity,
particularly during peak-load seasons. When this happens IGS
Energy relies on two common methods to protect the operational
integrity of the pipeline: curtailment and operational flow
Each of the local distribution companies (LDCs) and market areas
that we serve treat curtailments differently. In the Georgia
market, we are responsible for contacting each of our
interruptible customers to communicate curtailment or OFOs. In
North Carolina, curtailment orders are issued directly to the
customer from the LDC.
Learn how these methods can impact your company’s supply
of natural gas and your costs by clicking on the links below.
Operational Flow Order (OFO)
Operational Flow Order (OFO)
IGS Energy prepares customer load forecasts and supply
forecasts, and from these develops a pipeline inventory
forecast. That forecast is compared against our pipeline
inventory limits. When the forecasted inventory is greater than
or less than the pipeline inventory limits, we use storage
assets (reserved for balancing) to help manage either the excess
or insufficient inventory.
If this isn’t adequate to correct the imbalance, we issue
an Operational Flow Order (OFO) notice. An OFO requires shippers
to balance their supply with their customers' usage on a daily
basis, within a specified tolerance band. Shippers may deliver
additional supply or limit their supply in order to match
customers’ usage. If the supply isn’t balanced,
shippers may incur noncompliance charges.
The OFO typically states:
- The OFO stage (from 1 to 5)
- The system inventory level (high or low)
- The noncompliance charge
- The tolerance band (percent of allowable variance)
For example, if we declare a Stage 1 OFO with a tolerance band
of 5% for high inventory, supplies must not be more than 105% of
actual usage or a noncompliance charge is assessed.
When you contract for natural gas transportation services with
IGS Energy, you have the choice of two types of contracts:
Firm transportation, in which there is no
interruption in service. This is the highest quality sales or
transmission service offered to customers under a filed rate
schedule that anticipates no planned interruption. Firm
transportation service is usually associated with distribution
companies that serve residential customers and other "high
priority end-users," but can also apply to upstream pipelines
and other customers.
Interruptible transportation, which provides
certain customers – mainly larger commercial and
industrial customers that have dual-fuel capability –
the opportunity to pay lower transportation charges by
permitting us to interrupt their gas usage on short notice,
generally in peak-load seasons. This type of natural gas
service is subject to interruption at the option of the
pipeline. It’s also sometimes referred to as "best
efforts." Tariffs for interruptible service are cheaper than
It’s important to fully understand the specific
operational requirements of your firm transportation or
Interruptible transportation account. Speak to your account
manager if you have questions.
For our customers who choose interruptible transportation, we
issue a curtailment order when we have to interrupt your
service. This means energy reserves have dropped or are expected
to drop below a certain level. The curtailment order signals
that rotating outages are going to occur.
Most customers with alternative fuel sources (#2 oil, #6 oil,
waste oil, coal and others) choose interruptible service for the
majority of their energy load. However, customers agreeing to
interruptible service must comply with curtailment orders or pay
Interruptible customers are curtailed in order of priority to
ensure firm deliveries are met. Residential customers, small
general service rate customers and other end users holding firm
transportation contracts will not be curtailed.
The following is an example of a curtailment notice:
Effective Wednesday, January 2, 2004 at 10 a.m. and until
further notice, IGS Energy is curtailing interruptible volumes
in response to AGLC issuing a demand mismatch order for ALL
This demand mismatch order carries a $30 per dekatherm penalty
for every dekatherm of usage over your supply!
A curtailment notice is extremely important in that it may
result in significant penalties (upwards of $30 per dekatherm)
for customers who do not comply.
In the event a curtailment notice is issued, we will detail the
specific action(s) required.