RP-2000-0110	November 21, 2000

Board Staff Interrogatories - Draft

Union Gas

Trafalgar Facilities Expansion Program 2001/2002

PROJECT SUMMARY

1.	Ref. Section 1, Page 1, Para. 3

Please specify the Ontario Energy Board document when the Trafalgar Facilities Expansion Program ("TFEP") was previously approved by the Board.

2.	Ref. Section 2, Schedule 1

Why is the Tecumsch Gas Ltd. line marked in yellow? Is this an indication that the latter facility will be required to be expanded to supply the required incremental gas to be moved on Union's Dawn-To-Trafalgar line?

3.	Are there facilities on the Dawn-To-Trafalgar line, upstream of the proposed Beachville-to-
Bright proposed section that will require capacity increases to accommodate the increased volumes anticipated? Are there increased storage capacity needs on Unions' System that are associated with the 2001/2002 incremental volumes anticipated to flow through the Dawn- Trafalgar System?

MARKET REQUIREMENTS

4.	Ref. Sections 3, Para. 2, Para 8

Please provide the annual throughput increase or decrease in each of the last 5 years for in- franchise volumes for the classes: "General Service", "Contract" and "M12"

5.	Section 3, Tab 3, TransCanada Letter

Does Unions' design flow demand requirements for years 2000/01 through 2002/03 make allowance for TCPL's reduced throughput requirement of 163,999 GJ/day?

6.	Ref. Section 3, Page 2, Para. 7

To determine General Service demand in the In-franchise area, Union referred to the use of the 1996/1997 Winter 44 degree day as the basis for the In-franchise volumes projections. Please provide a tabulation listing the degree-day of the coldest day in Union's Southern Area in each of the last 10 years.

7.	For Union's Southern Area please provide the actual delivered General Service annual volumes, Normalized General Service annual volumes, Winter season actual volumes, Winter season normalized volumes and total season degree days for each of the past 5 years.

8.	Ref. Section 3, Schedule 1

Please provide the information and background explaining the 15% contract in-franchise annual throughput increase anticipated for year 2004. An explanation of the meaning of the "TFEP System Total Throughput Volumes" is requested. Do these volumes represent the throughput from West-to-East or East-to-West or both added together?

PLANNING OF PROPOSED FACILITIES

9.	Ref. Section 4, Page, Para. 9

How many days are there in the Winter Season? Please reconcile how the design day demand volumes for 2001/2002 relates to the Winter Season demand and the annual demand for general service in Union's Southern Area.

10.	Ref. Section 4, Para. 4.2, 15

In view of possible reductions of throughput on the TCPL System, have discussions been held with TCPL to deliver additional winter design day volumes to Parkway/Kirkwall in order to reduce the facilities requirements needed on the Trafalgar System? If so, what were the results of these discussions?

11.	Ref. Section 4, Schedule 7 and

Ref. Section 4, page 4, Para. 15, 16 and 17

Re. Design Day Surplus at Parkway

The Winter design criteria includes delivery of a gas volume entitled "Design Day Surplus at Parkway". Does this component represent a physical volume that travels east down the enhanced Trafalgar line on winter design day, or does the designed capacity assume that this volume (700,544 GJ/day) is delivered by the relevant in-franchise (or other) customers through some other route to Parkway/Kirkwall? If the latter, how is the volume of 780,544 GJ/day delivered to Parkway/Kirkwall?

12.	Ref: Section 4, Page 4, Para. 16

Please explain the entity described as "parties committing to deliver at Parkway for peak days. Please comment on the probability of such occurrences, and any implications which could result in a reduced necessity for some additional facilities on the Trafalgar System.

13.	Ref. Section 4, Page 6, Para. 23

Please explain how Winter Peaking Service can bridge the gap between the capacity of the 2000/2001 enhanced Trafalgar system facilities and the design day demand, which apparently exceeds the enhanced capacity on that design day by 21,081 GJ/day.

14.	Ref. Section 4, Page 6, Para. 4.5, 27

Can the 2001/2002 design day demand be met by a partial looping of the Beachville-to- Bright portion together with a partial looping of the Owen-Sound-to-Brandford valves sites portion?

If so, please provide a 37 year DCF analysis of such an alternative.

15.	Ref. Section 4, Page 7, Para. 31

Have negotiations been held with TCPL for further release of, or purchase of that company's FT delivery volume capacity at Parkway and Kirkwall?

Please provide quantitative evidence that purchase of this TCPL FT service is not an economically viable alternative to physical facility additions on the Trafalgar line.

16.	Ref. Section 4, Page 7, Para. 33

What were the reasons that Union had no alternative facilities options outside of the applied for facilities?

17.	Ref. Section 4, Page 8, Para. 33

In view of the negative NPV of $21 million and P.I. of 0.75 of this project in isolation (of the effects of further facilities additions in later years), is Union intending to apply for a rate increase in the affected rate classes to offset the short-term unfavorable economies of the project?

18.	Ref. Section 4, Schedule 4

Please explain the reasons for the 22.2% jump in contract demand volumes for the design day, comparing 2003/4 over 2002/3

19.	Ref. Section 4, Schedule 7

Re: Winter Design Day Design Criteria:

Are the criteria used in determining the throughput capacity on the Trafalgar line for the subject 2001/2002 expansion, the same criteria as used in the last three expansions?

If not, please list the differences and the reasons for the differences.

20.	Ref. Section 4, Schedule 7

Please provide a graph representing, on a hourly basis, a typical February day's profile of deliveries off the Trafalgar System.

PROJECT COSTS AND ECONOMICS

21.	Ref. Section 5, Page 2, Para. 5.2, Para. 7

Re. Rate Impact

Under the PBR rate framework, if the assumed incremental throughput volumes for 2001/2002 are less than those contracted for in the current application, are rates affected or is all the risk on the Union shareholder? Please explain.

22.	Ref. Section 5, Appendix A, Schedule 3

Please list the various unit rates assumed in the calculation for the incremental revenue anticipated for the incremental volumes anticipated in the above reference. How do these assumed rates compare with rates approved in the last Union rate case? Please provide a quantitative comparison. Please confirm that the rates used in this DCF analysis are expressed in constant year 2001 dollars.

23.	Ref. Section 5, Schedule 1

Please provide the cost estimates (as filed) and the actual costs on a dollar per metre basis for each of the years 1990, 1991,1993, 1994, 1996 and 1999 Trafalgar NPS 48 Pipeline expansions in the following format:

Year of Construction	1990	1991	1993	1994	1996	1999
Length =	Length =	Length =	Length =	Length =	Length =
Cost Estimate $/m	Actual Cost

$/m	Cost Estimate $/m	Actual Cost

$/m	Cost Estimate $/m	Actual Cost

$/m	Cost Estimate $/m	Actual Cost

$/m	Cost Estimate $/m	Actual Cost

$/m	Cost Estimate $/m	Actual Cost

$/m
Pipeline and Equipment material costs
"To Lay" Costs
Miscellaneous Contracts, Labour, Boring, Weights etc.
Easements, Lands and Damages
Contingencies
Interest during construction
Total

The estimates and actual costs should be for the pipeline only, excluding compression or compressor station tie-ins.

24.	Ref. Section 5, Appendix A, Schedule 1

Re. Design Day and Capacity Requirements

Please explain why Union's In-franchise design day for the Southern Region demand volumes jump from 1,593,620 to 1,732,620 GJ/day, (a 8.76% increase) between 2002 to 2003?

Please explain why total M12 transportation volumes jump from 6,133,811 to 6,502,678 GJ/day (a 6% increase) between 2002 to 2003?

25.	Ref. Section 5, Schedule 1, Easements, Land and Damages Costs; and Section 8, Page 4, Para. 15

Considering that cost per acre for easement and damages is historically approximately $12,000/acre, please reconcile an estimate of $6.5 million for this item for 54.1 hectares of permanent easement and 10.5 hectares of temporary easement and associated damages. The figures of 54.1 and 10.5 hectares are the stated easements to be acquired for this project.

26.	Ref. Section 5, Appendix A, Schedule 3 and Section 5, Schedule 6

Please confirm that the DFC analysis excludes any stage 2 and 3 benefits/costs.

Please list the defining economic parameters and the values used in the analysis, which should include: depreciation rates used, CCA rates used, return on rate base used, capital structure and rates assumed for each capital component. Please provide the calculation deriving the discount rate of 5.88% used.

27.	Ref. Section 5, Appendix A, Page 4, Para. 11

Economic life of compressors and pipeline is stated to be 30 and 55 years respectively. What were the depreciation rates used in Union's latest rate case for compressors and large diameter transmission steel pipe?

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