ebo 188 reporting and monitoring - rolling project ... · ebo 188 reporting and monitoring -...

21
Gas RRR 2.1.1 Net Present Value (“NPV”) and Profitability Index (“PI”) for Rolling Project Portfolio EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach On January 30, 1998 the Board issued a Report “EBO 188 In the Matter of the Ontario Energy Board Act and in the Matter of a Hearing to Inquire into, Hear and Determine Matters Relating to Natural Gas System Expansion for the Consumers’ Gas Company Ltd., Union Gas Limited and Centra Gas Ontario Inc 1 .” (“EBO 188” or “the Report”). This Report established a set of standards that the utilities were to adhere to for all distribution system expansion projects. EBO 188 directed: a financial and environmental assessment of distribution expansions based on a portfolio approach; Discounted Cash Flow method for financial feasibility analysis; customer connection and contribution policies; and environmental planning; monitoring and reporting requirements. Enbridge and Union have been filing the required information on a regular basis since 2005. Requirement This reporting requirement is filed quarterly as directed by the EBO 188 and reads as follows: A utility shall provide in the form and manner required by the Board, quarterly, on the last day of the second month following the quarter end for the first three quarters and the last day of the fourth month following the quarter end for the last quarter, a detailed economic evaluation including Net Present Value and Profitability Index of the rolling distribution system expansion project portfolio for a 12 month period, referenced in EBO 188, section 6.3.15 and in Appendix B, section 1.2. Purpose Data under the Gas RRR 2.1.1 have been reported to the Board quarterly by Union and Enbridge. The purpose of the filing is to put on the record that Union and Enbridge comply with the standards as set in the EBO 188. 1 On January 1, 1998 Union and Centra merged to form Union Gas Limited.

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Page 1: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

Gas RRR 2.1.1 Net Present Value (“NPV”) and Profitability Index (“PI”) for Rolling Project Portfolio EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach On January 30, 1998 the Board issued a Report “EBO 188 In the Matter of the Ontario Energy Board Act and in the Matter of a Hearing to Inquire into, Hear and Determine Matters Relating to Natural Gas System Expansion for the Consumers’ Gas Company Ltd., Union Gas Limited and Centra Gas Ontario Inc1.” (“EBO 188” or “the Report”). This Report established a set of standards that the utilities were to adhere to for all distribution system expansion projects. EBO 188 directed:

a financial and environmental assessment of distribution expansions based on a portfolio approach;

Discounted Cash Flow method for financial feasibility analysis;

customer connection and contribution policies; and

environmental planning; monitoring and reporting requirements.

Enbridge and Union have been filing the required information on a regular basis since 2005. Requirement This reporting requirement is filed quarterly as directed by the EBO 188 and reads as follows:

A utility shall provide in the form and manner required by the Board, quarterly,

on the last day of the second month following the quarter end for the first three quarters and the last day of the fourth month following the quarter end for the last quarter, a detailed economic evaluation including Net Present Value and Profitability Index of the rolling distribution system expansion project portfolio for a 12 month period, referenced in EBO 188, section 6.3.15 and in Appendix B, section 1.2.

Purpose Data under the Gas RRR 2.1.1 have been reported to the Board quarterly by Union and Enbridge. The purpose of the filing is to put on the record that Union and Enbridge comply with the standards as set in the EBO 188.

1 On January 1, 1998 Union and Centra merged to form Union Gas Limited.

Page 2: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

DATA REPORTED 2006-2008 Interpretation Original data were filed by Enbridge quarterly, from the third quarter of 2005 to the last quarter of 2008, in the format required by the Board. In the reporting period from 2005 to 2008, Enbridge’s Rolling Project Portfolio was always reported to have a positive NPV and a PI above 1.0. The Average PI is 1.9. This adheres to the EBO 188 requirements. The following charts show the NPV and the PI values over the reporting years.

Net Present Value (NPV) of a Rolling Portfolio on a 12-month period

Gas RRR 2.1.1

-

10

20

30

40

50

60

2005-Q3

2005-Q4

2006-Q1

2006-Q2

2006-Q3

2006-Q4

2007-Q1

2007-Q2

2007-Q3

2007-Q4

2008-Q1

2008-Q2

2008-Q3

2008-Q4

Mill

ion

s

$

Enbridge

Profitability Index (PI) of a Rolling Portfolio on a 12-month period

Gas RRR 2.1.1

1.0

1.2

1.4

1.6

1.8

2.0

2.2

Ra

tio

Enbridge

Enbridge 1.9 1.9 1.9 1.8 1.8 1.8 1.7 1.9 2.0 1.9 1.9 2.0 2.0 1.9

2005-Q3

2005-Q4

2006-Q1

2006-Q2

2006-Q3

2006-Q4

2007-Q1

2007-Q2

2007-Q3

2007-Q4

2008-Q1

2008-Q2

2008-Q3

2008-Q4

Page 3: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

Action

No action is required.

Page 4: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

Gas RRR 2.1.1 Net Present Value (“NPV”) and Profitability Index (“PI”) for Rolling Project Portfolio EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach On January 30, 1998 the Board issued a Report “EBO 188 In the Matter of the Ontario Energy Board Act and in the Matter of a Hearing to Inquire into, Hear and Determine Matters Relating to Natural Gas System Expansion for the Consumers’ Gas Company Ltd., Union Gas Limited and Centra Gas Ontario Inc1.” (“EBO 188” or “the Report”). This Report established a set of standards that the utilities were to adhere to for all distribution system expansion projects. EBO 188 directed:

a financial and environmental assessment of distribution expansions based on a portfolio approach;

Discounted Cash Flow method for financial feasibility analysis;

customer connection and contribution policies; and

environmental planning; monitoring and reporting requirements.

Enbridge and Union have been filing the required information on a regular basis since 2005. Requirement This reporting requirement is filed quarterly as directed by the EBO 188 and reads as follows:

A utility shall provide in the form and manner required by the Board, quarterly,

on the last day of the second month following the quarter end for the first three quarters and the last day of the fourth month following the quarter end for the last quarter, a detailed economic evaluation including Net Present Value and Profitability Index of the rolling distribution system expansion project portfolio for a 12 month period, referenced in EBO 188, section 6.3.15 and in Appendix B, section 1.2.

Purpose Data under the Gas RRR 2.1.1 have been reported to the Board quarterly by Union and Enbridge. The purpose of the filing is to put on the record that Union and Enbridge comply with the standards as set in the EBO 188.

1 On January 1, 1998 Union and Centra merged to form Union Gas Limited.

Page 5: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

According to the EBO 188, utilities are not allowed to conduct an expansion project and include it in a portfolio if it brings the PI below 1.0. A portfolio PI above 1.0 and a positive NPV ensure that the existing customers will not cross-subsidize these expansion projects through rate increases. DATA REPORTED 2006-2008 Interpretation Original data filed by Union quarterly, from the third quarter of 2005 to the last quarter of 2008, in the format required by the Board. In the reporting period from 2005 to 2008, Union’s Rolling Project Portfolio was always reported to have a positive NPV and a PI above 1.0. The Average PI is 1.7. This compiles with the EBO 188 requirements. The following charts show the NPV and PI values over time.

Net Present Value (NPV) of a Rolling Portfolio on a 12-month period

Gas RRR 2.1.1

-

5

10

15

20

25

30

2005-Q3

2005-Q4

2006-Q1

2006-Q2

2006-Q3

2006-Q4

2007-Q1

2007-Q2

2007-Q3

2007-Q4

2008-Q1

2008-Q2

2008-Q3

2008-Q4

Mill

ion

s

$

Union

Page 6: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

Profitability Index (PI) of a Rolling Portfolio on a 12-month period

Gas RRR 2.1.1

1.0

1.2

1.4

1.6

1.8

2.0

2.2

Ra

tio

Union 1.5 1.5 1.5 1.6 1.5 1.5 1.9 1.9 1.8 1.6 2.0 1.9 2.0 1.8

2005-Q3

2005-Q4

2006-Q1

2006-Q2

2006-Q3

2006-Q4

2007-Q1

2007-Q2

2007-Q3

2007-Q4

2008-Q1

2008-Q2

2008-Q3

2008-Q4

Action

No action is recommended

Page 7: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO
Page 8: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

Gas RRR 2.1.11- Customer additions, costs and revenues: actual vs. forecast for selected projects EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach On January 30, 1998 the Board issued a Report “EBO 188 In the Matter of the Ontario Energy Board Act and in the Matter of a Hearing to Inquire into, Hear and Determine Matters Relating to Natural Gas System Expansion for the Consumers’ Gas Company Ltd., Union Gas Limited and Centra Gas Ontario Inc1.” (“EBO 188” or “the Report”). This Report established a set of standards that the utilities were to adhere to for all distribution system expansion projects. EBO 188 directed:

a financial and environmental assessment of distribution expansions based on a portfolio approach;

Discounted Cash Flow method for financial feasibility analysis;

customer connection and contribution policies; and

environmental planning; monitoring and reporting requirements.

Enbridge and Union have been filing the required information on a regular basis since 2005. Requirement This reporting requirement is filed annually for a sample of projects as directed in the EBO 188. The requirement reads: A utility shall provide in the form and manner required by the Board, annually, by

the last day of the fourth month after the financial year end, a report on actual cumulative customer additions compared to forecast, and costs and revenues cumulative to the end of the third year from the in-service date, for projects in the rolling distribution system expansion project portfolio referenced in EBO 188, Appendix B, section 3.2A.

In the Appendix B, section 3.2A the Board specified the requirement for reporting:

“In consultation with Board Staff2, the utilities shall select projects from their Rolling Project Portfolios on an annual basis and shall file the following with respect to the sample: (a) the cumulative number of customers attached at the end of the 3rd full year and the associated revenues and costs; and

1 On January 1, 1998 Union and Centra merged to form Union Gas Limited. 2 Projects have been selected by utilities without direct input of Board Staff. This may be considered acceptable as long as projects satisfy the criteria to be included in Rolling Project Portfolio.

Page 9: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

(b) the corresponding year 3 customer attachment forecasts and associated revenues and cost ”

Purpose Union and Enbridge annually file data for selected projects within the Rolling Project Portfolio. The purpose of the data review is to determine if there are discrepancies between forecasts and actuals for customer additions, revenues and costs. If there are considerable variances (e.g. 10%) between actual and forecast numbers the utilities are required to file an explanation to the Board. DATA REPORTED 2006-2008 Annually, Enbridge filed data with the Board on actual vs. projected number of customer additions, associated costs and revenues for 3 different selected distribution expansion projects in each of the following reporting years 2006, 2007 and 2008. These projects have been in-service for 3 years at the time of annual reporting on Gas RRR 2.1.11. The original data was filed in the format required by the Board. Interpretation The explanation of the variance from the projected number of customer additions, costs and revenues is provided where the variances are greater than 10%.

Page 10: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

ENBRIDGECustomer Additions

Gas RRR 2.1.11

0

100

200

300

400

500

600

700

2006

Sou

th U

nion

ville

2006

Wes

ton

Village

2006

Lan

tern

Fly

Hollow

2007

Tow

path

Villa

ge

2007

Wes

t Wind

Far

ms

2007

Sug

arbu

sh

2008

Map

le W

oodla

nds

2008

JT-C

ottre

lle B

lvd

2008

Mar

ch R

d

Projects

Nu

mb

er o

f C

ust

om

ers

Forecast Actuals

ENBRIDGEProject Costs

Gas RRR 2.1.11

-

200

400

600

800

1,000

1,200

1,400

2006

Sou

th U

nion

ville

2006

Wes

ton

Village

2006

Lan

tern

Fly

Hollow

2007

Tow

path

Villa

ge

2007

Wes

t Wind

Far

ms

2007

Sug

arbu

sh

2008

Map

le W

oodla

nds

2008

JT-C

ottre

lle B

lvd

2008

Mar

ch R

d

Th

ou

sa

nd

s

Projects

$

Forecast Actuals

Page 11: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

ENBRIDGEProject Revenues

Gas RRR 2.1.11

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2006

South

Unio

nville

2006

Westo

n Villa

ge

2006

Lan

tern

Fly

Hollow

2007

Tow

path

Villa

ge

2007

Wes

t Wind

Far

ms

2007

Suga

rbus

h

2008

Maple

Woo

dlands

2008

JT-C

ottre

lle B

lvd

2008

Marc

h Rd

Mil

lio

ns

Projects

$Forecast Actuals

As may be seen from the above charts the actual values follow closely the projected values. The reported variances are explained in a meaningful way. Action No action is recommended.

Page 12: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

Gas RRR 2.1.11- Customer additions, costs and revenues: actual vs. forecast for selected projects EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach On January 30, 1998 the Board issued a Report “EBO 188 In the Matter of the Ontario Energy Board Act and in the Matter of a Hearing to Inquire into, Hear and Determine Matters Relating to Natural Gas System Expansion for the Consumers’ Gas Company Ltd., Union Gas Limited and Centra Gas Ontario Inc1.” (“EBO 188” or “the Report”). This Report established a set of standards that the utilities were to adhere to for all distribution system expansion projects. EBO 188 directed:

a financial and environmental assessment of distribution expansions based on a portfolio approach;

Discounted Cash Flow method for financial feasibility analysis;

customer connection and contribution policies; and

environmental planning; monitoring and reporting requirements.

Enbridge and Union have been filing the required information on a regular basis since 2005. Requirement This reporting requirement is filed annually for a sample of projects as directed in the EBO 188. The requirement reads: A utility shall provide in the form and manner required by the Board, annually, by

the last day of the fourth month after the financial year end, a report on actual cumulative customer additions compared to forecast, and costs and revenues cumulative to the end of the third year from the in-service date, for projects in the rolling distribution system expansion project portfolio referenced in EBO 188, Appendix B, section 3.2A.

In the Appendix B, section 3.2A the Board specified the requirement for reporting:

“In consultation with Board Staff2, the utilities shall select projects from their Rolling Project Portfolios on an annual basis and shall file the following with respect to the sample: (a) the cumulative number of customers attached at the end of the 3rd full year and the associated revenues and costs; and

1 On January 1, 1998 Union and Centra merged to form Union Gas Limited. 2 Projects have been selected by utilities without direct input of Board Staff. This may be considered acceptable as long as projects satisfy the criteria to be included in Rolling Project Portfolio.

Page 13: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

(b) the corresponding year 3 customer attachment forecasts and associated revenues and cost ”

Purpose Union and Enbridge annually file data for selected projects within the Rolling Project Portfolio. The purpose of the data review is to determine if there are discrepancies between forecasts and actuals for customer additions, revenues and costs. If there are considerable variances (e.g. 10%) between actual and forecast numbers the utilities are required to file an explanation to the Board. DATA REPORTED 2006-2008 Annually, Union filed data with the Board on actual vs. projected number of customer additions, associated costs and associated revenues for 3 different selected distribution expansion projects in each of the following reporting years 2006, 2007 and 2008. These projects have been in-service for 3 years at the time of annual reporting on Gas RRR 2.1.11. The original data were filed in the format required by the Board. Interpretation Union provided explanations of the variance from the projected number of customer additions, costs and revenues where variances from the actual numbers were above or below the projections by 10%. The explanations are acceptable.

Page 14: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

UNIONCustomer Additions

Gas RRR 2.1.11

0

1

2

3

4

5

6

7

2006

Bulk

e/Rea

ume

Subdi.

..

2006

Sou

thwoo

d Tr

ail S

ubd.

..

2006

Loe

bach

Driv

e

2007

Lyo

ns A

ve &

Lyo

ness

...

2007

Wyn

field

Subdiv

ision

2007

Que

en S

t/Nas

h Crt,

...

2008

Mon

arch

Bro

nte

Cree.

..

2008

Wel

lingt

on T

erra

ce 0

...

2008

War

bler W

oods

Wal

k ...

Hu

nd

red

s

Projects

Nu

mb

er o

f C

ust

om

ers Forecast Actuals

UNIONCustomer Additions

Gas RRR 2.1.11

0

100

200

300

400

500

600

700

Bulke-

06

South

wood-

06

Loeb

ach

Dr-06

Lyon

s-07

Wyn

field-

07

Queen

St-0

7

Mon

arch

-08

Wel

lingt

on-0

8

War

bler-0

8

Snyde

r-09

4041

N Ser

v -0

9

Mea

dowcr

eek-

09

Projects

Nu

mb

er o

f C

ust

om

ers

Forecast Actuals

Page 15: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

UNIONProject Revenues

Gas RRR 2.1.11

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2006

Bulk

e/Rea

ume

Subdi.

..

2006

Sou

thwoo

d Tr

ail S

ubd.

..

2006

Loe

bach

Driv

e

2007

Lyo

ns A

ve &

Lyo

ness

...

2007

Wyn

field

Subdiv

ision

2007

Que

en S

t/Nas

h Crt,

...

2008

Mon

arch

Bro

nte

Cree.

..

2008

Wel

lingt

on T

erra

ce 0

...

2008

War

bler W

oods

Wal

k ...

Mill

ion

s

Projects

$ Forecast Actuals

As shown in the above charts the actual values follow closely the projected values. The reported variances have been explained in a meaningful way. Action No action is recommended.

Page 16: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

Gas RRR 2.1.13 Environmental screening for selected projects BACKGROUND On January 30, 1998 the Board issued a Report “EBO 188 In the Matter of the Ontario Energy Board Act and in the Matter of a Hearing to Inquire into, Hear and Determine Matters Relating to Natural Gas System Expansion for the Consumers’ Gas Company Ltd., Union Gas Limited and Centra Gas Ontario Inc1.” (“EBO 188” or “the Report”). This Report established a set of standards that the utilities were to adhere to for all distribution system expansion projects. EBO 188 directed:

a financial and environmental assessment of distribution expansions based on a portfolio approach;

Discounted Cash Flow method for financial feasibility analysis;

customer connection and contribution policies; and

environmental planning; monitoring and reporting requirements.

Enbridge and Union have been filing the required information on a regular basis since 2005. REQUIREMENT GAS RRR 2.1.13

A utility shall provide in the form and manner required by the Board, annually, by the last day of the fourth month after the financial year end, an environmental monitoring report on completed natural gas system expansion projects of distribution pipelines and facilities not subject to leave to construct under the Ontario Energy Board Act, 1998, section 91, referenced in EBO 188, Appendix B, section 3.2B.

EBO 188 Appendix B, section 3.2B defines reporting requirements very specifically, as follows:

“In consultation with Board Staff2, the utilities shall select a set of completed projects and file data on those projects on an annual basis as described below. The projects chosen should be selected in a random, stratified manner, reflecting the range of environmental impacts encountered in the time period and the various levels of environmental planning, documentation and reporting required.

1 On January 1, 1998 Union and Centra merged to form Union Gas Limited. 2 Projects have been selected within district areas. Board Staff agreed that this is the acceptable method to select a sample of projects for this reporting.

Page 17: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

The selection should be reviewed by an independent auditing group within the utility, which group shall include (a) trained environmental auditor(s). The utility shall file the following with respect to each sample: 1. a description of how the project complied with the Board-approved environmental screening, planning, documentation and reporting requirements; 2. a table of significant features, how they were avoided or mitigated, and resulting impacts; 3. a table displaying the concerns raised by affected parties including member ministries of the Ontario Pipeline Coordination Committee, how they were addressed, and reasons for any outstanding concerns; 4. issues of significance arising from any post-construction monitoring; 5. where alternatives were investigated, a display of alternatives (routes/sites) which show the various trade-offs between customer attachments, and environmental, social and financial costs and a discussion of how the preferred alternative was chosen; 6. evidence that all necessary approvals (permits, licences) were obtained; and 7. forecast versus actual costs of the environmental planning.”

PURPOSE OF REPORTING In accordance with the EBO 188 Union and Enbridge annually file data on environmental screening for selected projects not subject to leave to construct. It should be noted that both Union and Enbridge developed environmental screening methodologies to implement the directions of the EBO 188. Union and Enbridge presented the screening methodologies to the Board after the EBO 188 was issued. Both methodologies are applied to implement the Gas RRR 2.1.13 environmental planning requirements to the system expansion projects. The purpose of the reporting is to ensure that the Board has on the record that Union and Enbridge consistently apply the environmental screening methodology to the system expansion projects as directed by the EBO 188. DATA REPORTED 2006-2008 In 2007 Enbridge filed data for 2 selected projects completed in 2006 construction year. In 2006 Enbridge filed data for 3 selected projects completed in 2005 construction year. Enbridge has note yet filed data for 2008.

Page 18: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

The original data are filed in the format required by the Board and are available upon request. Interpretation The data filed are mainly descriptive and qualitative. The analysis of the data confirms that the environmental screening methodology has been implemented by Enbridge for planning and assessment of the selected projects. Enbridge provided an explanation of the rationale for the preferred alternative selection, comparison of alternative routes and impact identification and mitigation measures. The filing for 2006 and 2007 raise no concerns regarding the environmental screening. Action Board Staff contacted Enbridge to seek an explanation for filing no data for 2008. Enbridge stated it would provide an explanation.

Page 19: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

Gas RRR 2.1.13 Environmental screening for selected projects BACKGROUND On January 30, 1998 the Board issued a Report “EBO 188 In the Matter of the Ontario Energy Board Act and in the Matter of a Hearing to Inquire into, Hear and Determine Matters Relating to Natural Gas System Expansion for the Consumers’ Gas Company Ltd., Union Gas Limited and Centra Gas Ontario Inc1.” (“EBO 188” or “the Report”). This Report established a set of standards that the utilities were to adhere to for all distribution system expansion projects. EBO 188 directed:

a financial and environmental assessment of distribution expansions based on a portfolio approach;

Discounted Cash Flow method for financial feasibility analysis;

customer connection and contribution policies; and

environmental planning; monitoring and reporting requirements.

Enbridge and Union have been filing the required information on a regular basis since 2005. REQUIREMENT GAS RRR 2.1.13

A utility shall provide in the form and manner required by the Board, annually, by the last day of the fourth month after the financial year end, an environmental monitoring report on completed natural gas system expansion projects of distribution pipelines and facilities not subject to leave to construct under the Ontario Energy Board Act, 1998, section 91, referenced in EBO 188, Appendix B, section 3.2B.

EBO 188 Appendix B, section 3.2B defines reporting requirements very specifically, as follows:

“In consultation with Board Staff2, the utilities shall select a set of completed projects and file data on those projects on an annual basis as described below. The projects chosen should be selected in a random, stratified manner, reflecting the range of environmental impacts encountered in the time period and the various levels of environmental planning, documentation and reporting required.

1 On January 1, 1998 Union and Centra merged to form Union Gas Limited. 2 Projects have been selected within district areas. Board Staff agreed that this is the acceptable method to select a sample of projects for this reporting.

Page 20: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

The selection should be reviewed by an independent auditing group within the utility, which group shall include (a) trained environmental auditor(s). The utility shall file the following with respect to each sample: 1. a description of how the project complied with the Board-approved environmental screening, planning, documentation and reporting requirements; 2. a table of significant features, how they were avoided or mitigated, and resulting impacts; 3. a table displaying the concerns raised by affected parties including member ministries of the Ontario Pipeline Coordination Committee, how they were addressed, and reasons for any outstanding concerns; 4. issues of significance arising from any post-construction monitoring; 5. where alternatives were investigated, a display of alternatives (routes/sites) which show the various trade-offs between customer attachments, and environmental, social and financial costs and a discussion of how the preferred alternative was chosen; 6. evidence that all necessary approvals (permits, licences) were obtained; and 7. forecast versus actual costs of the environmental planning.”

PURPOSE OF REPORTING In accordance with the EBO 188 Union and Enbridge annually file data on environmental screening for selected projects not subject to leave to construct. It should be noted that both Union and Enbridge developed environmental screening methodologies to implement the directions of the EBO 188. Union and Enbridge presented the screening methodologies to the Board after the EBO 188 was issued. Both methodologies are applied to implement the Gas RRR 2.1.13 environmental planning requirements to the system expansion projects. The purpose of the reporting is to ensure that the Board has on the record that Union and Enbridge consistently apply the environmental screening methodology to the system expansion projects as directed by the EBO 188. DATA REPORTED 2006-2008 Annually, Union filed data on environmental screening for 3 different selected projects in 2008; 2007 and 2006. The projects were completed between 2008 and 2005. The original data filed in the format required by the Board are available upon request.

Page 21: EBO 188 Reporting and Monitoring - Rolling Project ... · EBO 188 Reporting and Monitoring - Rolling Project Portfolio Approach . On January 30, 1998 the Board issued a Report “EBO

Interpretation The information filed is descriptive and qualitative. The analysis of the data confirms that the environmental screening methodology has been consistently implemented by Union for environmental planning and assessment of the selected projects. All the data was filed as requested. The exception is the values for environmental mitigation and monitoring costs. Union noted that these costs are incorporated in project costs. This is deemed acceptable. Action There are no concerns regarding the environmental screening reports. No action is required.