NEB declines TransCanada's request for changes to Storage Transportation Service

TransCanada applied to amend the tariff that applies to its Storage Transportation Service and Storage Transportation Service–Linked. These services allow shippers to move their gas to and from storage in order to manage both seasonal and daily fluctuations in their market demand.

During the NEB’s assessment of the application, TransCanada said that many of the existing contracts for Storage Transportation Service were negotiated individually, going back to the 1970s. As a result, 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 submitted that 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 Inc. and by 30% for Union Gas Limited.

Intervenors also indicated that it would be unfair to make changes to the transportation service at this time. They suggested that the appropriate time to review changes to the Storage Transportation Service would be during the upcoming tolling application for post-2020 tolls when the segmentation of the Mainline would be considered. They submitted that, since long-haul firm transportation on the Mainline is likely to change at this time, Storage Transportation Service is also likely to change.

The NEB was not persuaded by TransCanada that the current differences between the non-standard Storage Transportation Service contracts constitute unjust discrimination. The Board did not agree that continuation of the existing Storage Transportation Service contracts results in service and tolling that are unjustly discriminatory and no longer just and reasonable under the Board’s applicable tolling standards and principles.

The NEB also said that now is not the time to make significant changes to a fundamental service that STS shippers have relied upon 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.

Read the article online at: https://www.hydrocarbonengineering.com/tanks-terminals/25112016/neb-declines-transcanadas-request-for-changes-to-storage-transportation-service/