Gas – Facilities
In this decision, the AUC approved applications from ATCO Pipelines, a division of ATCO Gas and Pipelines Ltd., for the sale and transfer, to NOVA Gas Transmission Ltd. (“NGTL”), of a 29.9-km segment of the Pioneer Pipeline Inc. pipeline and associated facilities that are within the NGTL geographic service area, and a request to amend the existing pipeline licence.
In considering this application under subsection 26(2)(d) of the Gas Utilities Act (“GUA”), the AUC typically applies a “no-harm” test that considers the proposed transaction in the context of both potential financial impacts and service level impacts to customers.
AUC Findings
In Decision 25937-D01-2021, the AUC approved ATCO Pipelines’ application to acquire the approximately 130.3 km-long, high-pressure sweet natural gas Pioneer pipeline and directed ATCO Pipelines to true-up its revenue requirement to reflect the approval of the acquisition in its next rates application. In doing so, the AUC acknowledged that this was necessary to ensure that the existing integrated Alberta System (defined below) has the capacity to meet incremental contract demand and that the purchase price of the pipeline and other acquisition-related costs were prudent.
ATCO Pipelines requested that the facilities of the proposed transfer be exempt from subsection 26(2)(d) of the GUA. Alternatively, ATCO Pipelines requested approval to transfer that portion of the pipeline to NGTL, according to subsection 26(2)(d) of the GUA. The AUC found that granting the requested approval is appropriate in the circumstances. The AUC noted that granting the declaration that subsection 26(2)(d) does not apply to “any transaction” concerning the sale of the pipeline segment may allow ATCO Pipelines to alter a material term of the proposed transaction without informing or having approval from the AUC. The alternative was found to be the better solution, as it ensures that the terns of the proposed transaction on which the AUC relied would remain unchanged. Accordingly, the AUC found that it was in the public interest to approve the transfer to NGTL, pursuant to subsection 26(2)(d) of the GUA.
Because the integrated NGTL and ATCO pipeline systems (the “Alberta System”) are operated collaboratively, and because both pipelines are subject to regulatory oversight, the AUC was satisfied that the transfer would not affect service quality or reliability and that there would be no negative impact on ratepayers.
Accordingly, the AUC found that the proposed transfer to NGTL of the 29.9 km portion of the existing Pioneer pipeline meets the no-harm test, is consistent with the Integration Agreement, and supports the overall benefits of integration.
Decision
The AUC approved the transfer from ATCO Gas and Pipelines Ltd. to NGTL under subsection 26(2)(d) of the GUA. The AUC also approved the amendment to Licence 60496 pursuant to Section 11 of the Pipeline Act and Section 4.1 of the GUA.
