Pipelines, Asset Purchase, Construction and Operation
In this decision, the CER approved an application from Trans Québec and Maritimes Pipeline Inc. (“TQM”) to purchase and operate the Sabrevois Assets owned by Énergir L.P (“Énergir”), as well as to construct and operate the Bromont Compressor Station and Saint-Basile Interconnect. The Sabrevois Assets, the Bromont Compressor Station and Saint-Basile Interconnect are collectively referred to as the “Project”.
The Reinforcement and Asset Purchase Application
In its application, TQM requested that the National Energy Board (now CER):
-
Grant leave to purchase the Sabrevois Assets from Énergir in accordance with the Sale Agreement;
-
Issue a report recommending the issuance of a Certificate of Public Convenience (“Certificate”) for the continued operation of the Sabrevois Assets;
-
Authorize TQM to include the purchase price of the Sabrevois Assets plus adjustments in the TQM System rate base;
-
Grant leave to open (“LTO”) the Sabrevois Assets;
-
authorize the construction and operation of and exempting TQM from the requirements of paragraph 30(1)(a), and sections 31 and 33 of the NEB Act in relation to the Bromont Compressor Station and the Saint-Basile Interconnect;
-
Issue an order affirming that prudently incurred costs required to provide service on the Sabrevois Assets, the Bromont Compressor Station and the Saint-Basile Interconnect would be included in the determination of the TQM System revenue requirement, and that the tolls for services on the applied-for facilities would be calculated using the same methodology used to calculate tolls for services on the TQM System, as determined through CER order from time to time; and
-
Grant such further and other relief as TQM may request or the CER considered appropriate.
Background
The Sabrevois Assets are located in the Sabrevois area of Québec and consist of:
-
Approximately 64 km of the pipeline currently operated by Énergir (“Sabrevois Pipeline”), extending from Énergir’s Sabrevois Delivery Station to Énergir’s Shefford Station
-
Seven laterals, approximately 11 km total in length
-
The following facilities which are attached to and form part of the Sabrevois Asset Purchase:
-
Sabrevois Delivery Station
-
Launcher and receiver facilities
-
Valve sites
-
The land rights associated with the Sabrevois Asset Purchase and other interests of Énergir necessary for TQM’s ownership, operation and maintenance of the Sabrevois Assets.
-
The construction of the Bromont Compressor Station consists of the construction of a compressor station comprised of one electrical compressor unit and one gas compressor unit and related components (collectively referred to as the “Bromont Compressor Station”). The Saint-Basile Interconnect consists of approximately 20 m of NPS 12 pipe connecting the TQM System to a planned Énergir delivery station at Saint-Basile-le-Grand, Québec (collectively referred to as the “Saint-Basile Interconnect”).
Recommendations and Decision
Leave to TQM to Purchase the Sabrevois Assets and Section 52 Certificate Requiring Governor in Council (“GIC”) Approval to Continue Operation of the Sabrevois Assets
Subject to the issuance of a Certificate, the CER decided that it was in the public interest to grant TQM leave to purchase the Sabrevois Assets from Énergir pursuant to paragraph 74(1)(b) of the NEB Act.
The CER recommended that a Certificate be issued for the continued operation by TQM of the Sabrevois Assets. The CER found that the continued operation of the Sabrevois Assets was required for present and future convenience and necessity, in accordance with section 52 of the NEB Act.
Authorization Pursuant to Section 59 of the NEB Act Regarding the Sabrevois Assets
Subject to the issuance of a Certificate, the CER approved TQM’s request to include the purchase price of the Sabrevois Assets plus adjustments as detailed in Schedule C of the Sale Agreement in the TQM System rate base at closing.
Leave to Open the Sabrevois Assets Pursuant to Section 47 of the NEB Act
The CER was satisfied that the Sabrevois Assets met the Canadian Energy Regulator Onshore Pipeline Regulations (“OPR”) requirements, and that the facilities were fit for their designed service. The CER consequently granted leave to TQM to open these facilities pursuant to section 47 of the NEB Act.
Order Pursuant to Section 58 of the NEB Act for the Bromont Compressor Station and the Saint-Basile Interconnect
Subject to issuance of a Certificate, the CER decided to issue an order pursuant to section 58 of the NEB Act, exempting TQM from the requirements of paragraph 30(1)(a), and sections 31 and 33 of the NEB Act for the Bromont Compressor Station and the Saint-Basile Interconnect.
Order Pursuant to Part IV of NEB Act
Should a Certificate be issued for the Sabrevois Asserts, the CER decided to grant the requested relief pursuant to Part IV of the NEB Act. Incurred costs required to provide service on the Sabrevois Assets, the Bromont Compressor Station and the Saint-Basile Interconnect will therefore be included in the determination of the TQM System revenue requirement, and the tolls for services on the applied-for facilities would be calculated using the same methodology used to calculate tolls for services on the TQM System.
Reasons for Decision
After setting out the CER’s recommendations and decisions on the Project, the CER outlined the CER’s reasons for decision. This included an examination of the public interest, as well as an analysis of the topics outlined below.
Economic and Financial Matters
The CER found the Project to be economically feasible and would likely be used at a reasonable level over its economic life. The CER found that TQM demonstrated a need for the Project and the Project was the least costly alternative that would allow TQM, Énergir, and TransCanada to meet existing contracts and position the pipelines to meet growing and shifting market demand from the abundant gas supply that TQM connects to through upstream pipelines. The CER had no concerns with TQM’s ability to finance the purchase and construction, operation, and abandonment of the Project. The CER found TQM’s proposal to roll the cost of the Project into TQM’s rate base and to apply the existing TQM toll methodology to be reasonable.
Facilities and Emergency Response Matters
The CER was satisfied that the general design of the assets was appropriate for the intended use and that the assets would be operated in accordance with Onshore Pipeline Regulation (“OPR”) and Canadian Standards Association (“CSA”) standards.
The CER was satisfied that the Project will be constructed using accepted industry practices, and will comply with the requirements of the OPR and CSA Z662-19, with the exception of exemptions granted in the decision.
The CER found that the pressure control and overpressure protections proposed were appropriate and would meet the requirements of the OPR and CSA-Z662-19.
The CER was further satisfied that TQM considered issues related to coating and integrity threats and coating of the pipeline during construction and operation and implemented appropriate measures.
The CER noted that in line inspection (“ILI”) could provide important data on the integrity status of the pipeline. The CER was of the view that ILI is a widely used pipeline industry best practice to monitor the condition of a pipeline and was satisfied with TQM’s collected historical ILI data from Énergir for the Sabrevois Assets.
The CER understood that integrity monitoring is a continuous improvement process and conducted throughout the lifecycle of a project. The CER was satisfied that potential integrity threats would be identified and mitigated and that the Project would be incorporated into TransCanada’s integrity management program once operations commence.
Emergency Management
While the CER was satisfied with TQM’s commitment to continue refining the interoperability between the emergency management system it utilized, and the system used in the Province of Québec, the CER included Condition 7 in the Certificate in order to have TQM confirm that all agencies that may be involved in an emergency response on the Pipeline had been notified of the change of ownership.
Public Consultation
Regarding the Sabrevois Assets, the Bromont Compressor Station and the Saint-Basile Interconnect, the CER was of the view that TQM adequately and appropriately identified stakeholders and potentially affected landowners, and developed appropriate engagement materials. The CER was also of the view that TQM adequately designed and implemented engagement activities for the Project. The CER imposed Condition 8 to the Certificate to ensure TQM would update its signage to reflect the change in ownership.
Engagement of Indigenous Peoples
The CER was of the view that there was adequate consultation for the purpose of the CER’s decision on this Project and that any potential Project impacts on the rights and interests of affected Indigenous peoples were not likely to be significant and could be effectively addressed. The CER found that the approval of this Project would be consistent with section 35 of the Constitution Act, 1982 and the honour of the Crown.
Environment and Socio-Economic Matters
The CER concluded that the residual adverse environmental and socio-economic effects, including any residual cumulative effects, associated with the Project components would be of low magnitude, limited in extent, and therefore not significant.
