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NEB rejects TransCanada request to raise STS charges

25th November 2016

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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VANCOUVER (miningweekly.com) – The National Energy Board (NEB) has rejected an application by TransCanada Pipelines to adjust tariffs for services allowing shippers to move their gas to and from storage to manage both seasonal and daily fluctuations in their market demand.

The NEB was not persuaded by TransCanada that the current differences between the nonstandard storage transportation service (STS) contracts constituted unjust discrimination. The board did not agree that continuation of the existing STS contracts resulted in services and tolling that was unjustly discriminatory and no longer just and reasonable under the board’s applicable tolling standards and principles.

The NEB added that now was not the time to make significant changes to a fundamental service that STS shippers had relied on for many years. The NEB also said that it would be unfair and inequitable to impose significant changes on shippers, given the unique circumstances of the mainline, including the upcoming matter of mainline segmentation.

TARIFF MODERNISATION
TransCanada has argued that many of the existing contracts for its STSs were negotiated individually, going back to the 1970s. Thus, there was a wide variation in the terms of the contracts signed by different shippers. TransCanada indicated that this made the transportation service overly complex, inconsistent and discriminatory.

TransCanada said the proposed changes would enhance consistency with the NEB’s tolling principles of no unjust discrimination, cost-based user-pay, no acquired rights and economic efficiency.

Some of the shippers who were intervenors in the hearing submitted that the impacts of the changes proposed by TransCanada were high. For example, total Mainline costs could increase by 27% for Centra Gas Manitoba and by 30% for Union Gas.

The intervenors also counter-argued that it would be unfair to make changes to the transportation service now, suggesting the upcoming tolling application for post-2020 tolls would be a better time to renegotiate tariffs when the segmentation of the mainline is considered. They submitted that, since long-haul firm transportation on the mainline was likely to change then, the STS was also likely to change at that time.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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