News Briefs

East Tennessee Receives Waiver of OFO Penalty Collection, Crediting

Mark Reishus
February 7, 2019 at 13:37:28 ET

On Feb. 7, 2019, FERC granted a request from East Tennessee Natural Gas LLC (East Tennessee) for waiver of the collection and crediting of operational flow order (OFO) penalties incurred by its customers from Dec. 15, 2018 through Dec. 29, 2018.

In its Jan. 24, 2019 waiver request, East Tennessee said it declared a force majeure on its system on Dec. 15, 2018, and issued an OFO that “required that balancing parties under Rate Schedules LMS-MA and LMS-PA must be balanced such that actual deliveries of gas out of the system must be equal to or less than scheduled deliveries out of the system and actual receipts of gas into the system must be equal to or greater than scheduled receipts into the system. The OFO provided for a tolerance of 2% of scheduled quantities or 500 dekatherms (whichever is greater). The OFO remained in effect until 10:13 a.m. on December 30, 2019.”

According to East Tennessee, “aggregate customer behavior resulted in pipeline operations that were sufficiently balanced throughout the OFO Period. Certain customers did not adhere completely to the OFO, and, as a result, are subject to a Balancing Alert Penalty.”

East Tennessee said it “believes that a waiver of all such penalties is appropriate since the aggregate level of compliance with the OFO was sufficient to address the situation on the East Tennessee system and the minor amount of non-compliance did not impair East Tennessee’s ability to operate its system or require further restrictions on primary firm transportation service.”

East Tennessee noted that it has not yet collected the penalty revenues.

FERC found that “there is nothing to indicate that such waiver is in any way discriminatory. Moreover, no party has opposed the request to waive the OFO penalties. For good cause shown, the Commission grants the requested waiver.”

See ¶461: Operational Flow Orders (OFOs) for more information on the waiver of OFO penalty collection and crediting.

East Tennessee Natural Gas LLC, Letter Order Granting Request for Waiver, 166 FERC ¶61,096 (2019) [Docket No. RP19-576-000].

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