The advent of an open access competitive natural gas transportation market has created many changes in the natural gas industry. One of these changes is the pressure the competitive market places on gas pipeline companies to reduce operating costs. Customers choose pipelines that can get the job done at the lowest cost. As a result, many gas pipeline companies are interested in computer programs that will provide operating recommendations to minimize compressor fuel and operating costs. However, the effort to develop optimization programs is complex. Unlike typical pipeline simulation software that determines system pressures, flows and other parameters for a single operating condition, optimization programs must perform this function for thousand of possible operating conditions, and determine lowest cost operations. This paper discusses the goals, simulation methods, and benefits of a unique custom optimization program that minimizes transmission system fuel costs. This program is unique because:It was custom designed specific to the PG&E transmission system by PG&E planning engineers. It is used daily by Gas Control operators due to its ease of use, its ability to always provide a solution and run on a PC in an Excel environment Goals of the Program PG&E had a number of specific goals for the optimization program. The program should:be usable by operators be robust and always provide a solution 1 provide fuel costs for a variety of operating scenarios so the operator can make an informed operating decision that balances costs with other operating considerations provide an environment where operators learn how operations affects efficiency and costs allow for the timely addition of custom features specifically required by PG&E operators to promote increased usefulness and operator buy-in of the program include all physical operating capabilities that could significantly affect fuel costs in the optimization algorithm be obtained at the lowest possible cost Each of these goals is discussed below: Usable By Operators - Our most critical goal was that the program must be usable by PG&E operators. PG&E strongly believes in the need to place tools that simulate operations in the hands of those making operating decisions. To accomplish this, the program should be user-friendly, operate in a familiar, non-intimidating environment, be easy to learn and always reach a solution. Provide Operating Costs for a Variety of Operating Scenarios - The operator must consider many factors when making operating decisions besides just operating cost minimization. Operating margin, equipment condition, and changing operating requirements are some of the factors that should be weighed to make an intelligent operating choice. Therefore, PG&E determined that the program must provide more than the optimum solution, but must also provide a variety of operating scenarios, with their associated costs, operating margins and other related information. Provide Operators a Learning Environment - PG&E viewed this effort as more than just the development of a program that optimizes our system operations.

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