Canada’s Pipeline Transportation System 2016

Westcoast Energy Inc.’s Westcoast Transmission System

Table 10.5.1: Westcoast Energy Inc.’s Westcoast Transmission System

Commodity and NEB Group	Natural Gas (Group 1)
Average annual capacity (T-South)	44 106m³/d (1.6 Bcf/d)
Average utilization 2015	92%
Primary receipt points	T-North
Primary delivery points	Lower Mainland, Huntingdon, BC
Rate base 2015	$1.3 billion
Cost of Service 2014	$377 million
Abandonment Cost Estimate and Collection PeriodNote a	$684 million; 40 years

Overview

Westcoast Energy Inc., carrying on business as Spectra Energy Transmission, owns the Westcoast Transmission System (Westcoast). Westcoast extends from points in Yukon, the Northwest Territories, Alberta and BC, to the Canada-U.S. border near Huntingdon, BC. At the border Westcoast connects to Williams Northwest Pipeline, which supplies natural gas to the U.S. Pacific Northwest. Westcoast’s transmission system is composed of two parts: T-North which is north of Station 2 just west of Chetwynd (deliveries to NGTL and T-South) and T-South south of Station 2 (deliveries to BC Lower Mainland and the Huntingdon export point). T-North connects to NGTL at two points: Nova Gordondale and Sunset/Groundbirch. Westcoast’s gathering and processing system, which is regulated by the Board under the Framework for Light-handed Regulation, is also shown on the map.

Source: NEB

Text version of this map

This map provides an overview of the Westcoast Energy system Throughout Northeast B.C. and down to Huntingdon.

Key Developments

Westcoast submitted two applications to the Board that would provide additional firm service in the Peace River area of BC. The Jackfish Lake Expansion Project was approved by the Board on 15 July 2016. The High Pine Expansion is still before the Board.

Utilization

Figure 10.5.1 shows throughput and capacity for T-North for 2010-2015. In 2015, capacity averaged 81 10⁶m³/d (2.9 Bcf/d) and throughputs averaged 58 10⁶m³/d (2.1 Bcf/d). Deliveries from Westcoast to NGTL averaged 14 10⁶m³/d (0.5 Bcf/d) in 2015.

Figure 10.5.1: Westcoast T-North Throughput vs. Capacity

Sources: Westcoast, NEB

Figure 10.5.2 shows throughput and capacity on Westcoast’s T-South Segment for 2010-2015. In 2015, capacity fluctuated between 41 10⁶m³/d (1.45 Bcf/d) and 48 10⁶m³/d (1.70 Bcf/d), and throughput averaged 40 10⁶m³/d (1.4 Bcf/d). Throughputs at the Huntingdon export point averaged 31 10⁶m³/d (1.08 Bcf/d) in 2015.

Figure 10.5.2: Westcoast T-South Throughput vs. Capacity

Sources: Westcoast, NEB

Tolls

Westcoast transmission services are tolled according to the terms of a negotiated settlement, which uses a cost of service framework. Westcoast operated under toll settlements from 2011 to 2015.

Figure 10.5.3 shows the Westcoast benchmark toll^{Footnote 1} (Firm Transportation Service – T-South, 2-year contract delivered to the Huntingdon Delivery Area) and the GDP deflator (normalized) for 2010-2015. The benchmark toll moved in line with the GDP deflator from 2010 to 2013 and increased in 2014 due to forecasts of lower throughput and costs associated with added facilities such as its North Montney project and the T-North Expansion. Actual throughput was higher than expected in 2014 so the extra revenue was applied to tolls in 2015. Along with higher forecast throughput for 2015, this resulted in lower tolls in 2015.

Figure 10.5.3: Westcoast Benchmark Toll

Sources: NEB toll filings and NEB calculations

Financial

Westcoast Energy Inc.’s revenue, net income, and rate base have been growing due to system expansions and increased throughput. Coverage ratios continue to be stable and credit ratings are investment grade.

Date modified:

2022-01-28