Facilities – Amendment Order – Discontinuation of Review
In a previous decision, the CER found Kingston Midstream Westspur Limited (“Kingston”) to be in breach of common carrier obligations. Kingston was ordered to provide new facilities for connection at its Westspur Pipeline (the previous “Order”). The Westspur Pipeline is operated under the Westspur tariff (“Westspur Tariff”). Kingston, its affiliates, and Secure Energy Services Inc (“Secure”) subsequently negotiated an agreement to use existing provincially regulated facilities to access the Westspur Pipeline. Kingston and Secure filed a joint submission to the CER requesting that the CER amend certain aspects of its previous Order, provide tariff direction, and discontinue the review and variance application filed by Kingston in July 2021. Several shippers on the Westspur Pipeline the (“Producer Group”) raised concerns regarding the relief requested.
The CER granted the following relief:
the Order was varied as Kingston and Secure requested, to remove Condition 2, that required Kingston to provide new facilities connecting the Westspur Pipeline to the Secure Alida Terminal, and Condition 4, that sets the tolls for the use of the new facilities;
Kingston was directed to include the Kingston Saskatchewan Pipeline Alida Interconnection as receipt and delivery points in the Westspur Tariff; and
the proceedings related to the review and variance application were discontinued.
Canadian Energy Regulator Act, SC 2019, c 28, s 10 – ss. 69(1), 239(1), 239(3)
In respect of procedural aspects, the CER was of the view that the requested relief in the amendment and directive constitutes an application for review and variance of a decision or order pursuant to subsection 69(1) of the CER Act. The CER found that the threshold for Phase I was met. The CER was of the view that the resulting settlement negotiated by Secure, Kingston, and their affiliates constituted changed circumstances and new facts that have arisen since the close of the original proceeding, which raised doubt as to the correctness of the previous decision and Order. The CER proceeded to Phase II of the review and set out a process inviting comments on the merits of the relief requested.
The CER found that utilizing existing facilities, as envisioned in the settlement removed the need for new facilities and associated tolls. The Producer Group, however, argued that the amendment relief would alter the CER’s assertion of regulatory oversight over transportation service afforded to the Kingston Alida and Secure terminals. The CER was not persuaded that the amendment would affect the CER’s regulatory oversight and found that the variation of the Order should be granted.
The CER agreed with Secure and Kingston that it is not appropriate to list the Secure Alida Terminal as a receipt or delivery point on the Westspur Pipeline as the terminal is not directly connected to the Westspur Pipeline. However, the CER also agreed with the Producer Group that the fact that Kingston would only provide an indirect connection through its affiliate does not reduce or limit the need for Kingston to have and maintain receipt and delivery points at the point of interconnection. Kingston and Secure’s joint preference were to maintain the historical practice of transferring crude as part of the Notice of Shipment process. The CER did not accept this historical practice, as this process has resulted in confusion in at least two regulatory proceedings. The CER’s direction to include the Kingston Saskatchewan Pipeline Alida Interconnection as a receipt and delivery point reflects the alternate approach that was proposed by Kingston if the CER did not accept the historical practice.
Finally, given Kingston and Secure’s negotiated settlement and the relief granted in this proceeding, the relief sought in the review and variance application was no longer relevant and therefore discontinued.