NGI The Weekly Gas Market Report
Canada’s National Energy Board has shaved about $2.2 million offof Maritimes & Northeast Pipeline’s requested cost of serviceand cut about $11.6 million out of the pipeline’s requested ratebase. The NEB also altered Maritimes’ plans regarding discounts.
In a decision released yesterday that covers the pipeline’stolls from Dec. 1, 1999 through the end of this month, the boardauthorized M&NP a revenue requirement for the period of $95.9million and approved a rate base of $716.9 million. The rate ofreturn on rate base approved by the board was set at 8.6%.
The board struck down a last minute change in plans by Maritimesto restrict discounts to only primary delivery points within theprovinces. In joint evidence filed by the provinces of Nova Scotiaand New Brunswick, it was indicated that a distinction betweenprimary and secondary delivery points was never made or discussedduring negotiations that led to a June 1997 agreement between thepipeline, the provinces and the Sable Offshore Energy Project. Theprovinces said in their testimony that it was their understandingthat the discounts would apply to all deliveries under firm servicecontracts within each province. During the hearing, M&NPaltered its original position and offered instead a compromiseposition. It proposed that the provincial discount would apply toall firm service contracts based on the contract demand at primarydelivery points. No discounts will apply to export volumes.
The board considered M&NP’s application for final tolls at apublic hearing held in Halifax, NS, from June 26 to July 7. Copiesof the NEB’s Reasons for Decision RH-1- 2000 are available athttps://www.neb.gc.ca.
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