Rep: OEB Doc: 12YPB Rev: 0 ONTARIO ENERGY BOARD Volume: ISSUES DAY 25 MARCH 2004 BEFORE: R. BETTS PRESIDING MEMBER P. NOWINA MEMBER 1 RP-2003-0203 2 IN THE MATTER OF a hearing held on Thursday, 25 March 2004 in Toronto, Ontario; IN THE MATTER OF the Ontario Energy Board Act, 1998, S.O. 1998, c.15 (Schedule B); AND IN THE MATTER OF an Application by Enbridge Gas Distribution Inc. for an Order or Orders approving or fixing just and reasonable rates and other charges for the sale, distribution, transmission and storage of gas commencing October 1, 2004. 3 RP-2003-0203 4 25 MARCH 2004 5 HEARING HELD AT TORONTO, ONTARIO 6 APPEARANCES 7 JENNIFER LEA Board Counsel COLIN SCHUCH Board Staff FRED CASS Enbridge Gas Distribution Inc. MELANIE AITKEN Direct Energy JAY SHEPHERD School Energy Coalition ELISABETH DeMARCO Ontario Energy Savings Corp. & Superior Energy Management BRIAN DINGWALL Energy Probe ROGER HIGGIN VECC VILKO ZBOGAR Pollution Probe MURRAY ROSS TransCanada Pipelines JOHN MacPHERSON Petro Canada CAROL STREET Canadian Manufacturers & Exporters 8 TABLE OF CONTENTS 9 PRELIMINARY MATTERS: [15] APPEARANCES: [23] PRELIMINARY MATTERS: [50] DISCUSSION REGARDING ISSUES LIST: [58] SUBMISSIONS BY MR. CASS: [59] SUBMISSIONS OF PARTIES READ IN BY MS. LEA: [117] SUBMISSIONS BY MR. SHEPHERD: [167] SUBMISSIONS BY MS. STREET: [181] SUBMISSIONS BY MR. ZBOGAR: [186] SUBMISSIONS BY MR. ROSS: [190] SUBMISSIONS BY MR. MacPHERSON: [194] SUBMISSIONS BY MR. DINGWALL: [208] SUBMISSIONS BY MS. AITKEN: [228] SUBMISSIONS BY MS. DeMARCO: [259] REPLY SUBMISSIONS BY MR. CASS: [304] QUESTIONS FROM THE BOARD: [327] 10 EXHIBITS 11 12 UNDERTAKINGS 13 14 --- Upon commencing at 9:45 a.m. 15 PRELIMINARY MATTERS: 16 MR. BETTS: Good morning, everybody. Please be seated. 17 Can everybody hear me at the back, by the way? How's the volume? All right. Thank you. 18 Good morning, everybody. Welcome back. It seems like we were here not too long ago on similar matters. It's good to see familiar faces out there. 19 The Board is sitting today in the matter of application RP-2003-0203, submitted by Enbridge Gas Distribution Inc. for an order or orders approving or fixing rates for the sale, distribution, transmission and storage of gas in the fiscal year 2005. An issues conference involving the company, intervenors, and Board Staff was held on March 23rd, 2004, to clarify issues and to identify proposed modifications or additions to an issues list. The Board understands that the parties have reached an agreement on the issues to be pursued in the hearing of this application. The Board sits today to consider the proposed list as being appropriate in defining the framework for the hearing process. 20 The Board at this point, or the Board Panel, largely accepts the issues list as generated, with the exception of item 5.5 and the Panel requires further understanding of that and its direction prior to making a decision on that particular item. So although the Panel is prepared to hear any discussion on any of those issues at this time, certainly we would ask parties to focus on 5.5. 21 My name is Bob Betts. I'm the presiding member. With me is Board Member Pamela Nowina. Perhaps, at this point, let me go into a request for appearances. 22 First from the applicant. 23 APPEARANCES: 24 MR. CASS: Yes, thank you, Mr. Chair. Fred Cass for Enbridge Gas Distribution. 25 MR. BETTS: Mr. Cass, thank you. 26 Board staff. 27 MS. LEA: Jennifer Lea for Board staff. 28 MR. BETTS: Thank you, Ms. Lea. And other parties present. 29 MS. AITKEN: Melanie Aitken for Direct Energy. 30 MR. SHEPHERD: Jay Shepherd for School Energy Coalition. 31 MR. BETTS: Mr. Shepherd. 32 MS. DeMARCO: Elisabeth DeMarco for Ontario Energy Savings Corporation and Superior Energy Management. 33 MR. BETTS: Thank you, Ms. DeMarco. 34 MR. DINGWALL: Brian Dingwall. In this proceeding I'm representing Energy Probe and the HVAC Coalition. For purpose of today's submissions, however, I will solely making those submissions for Energy Probe. 35 MR. BETTS: Thank you, Mr. Dingwall. 36 MR. HIGGIN: Roger Higgin, consultant to VECC, and Mr. Janigan is unable to attend. He has provided a written submission. 37 MR. BETTS: Thank you, Mr. Higgin. 38 MR. ZBOGAR: Vilko Zbogar, I'm here for Murray Klippenstein who is unable to attend, representing Pollution Probe. 39 MR. BETTS: Thank you. And could I ask you to spell your last name? 40 MR. ZBOGAR: Absolutely. It's Z-b-o-g-a-r. 41 MR. BETTS: Thank you very much. And others? 42 MR. ROSS: Murray Ross for TransCanada PipeLines. 43 MR. BETTS: Mr. Ross, thank you. 44 MR. MacPHERSON: John MacPherson with Petro Canada. Mr. Scott Miller cannot be with us today. 45 MR. BETTS: Thank you, Mr. MacPherson. 46 MS. STREET: Carol Street for Canadian Manufacturers & Exporters. 47 MR. BETTS: Thank you, Ms. Street. 48 Any others? Thank you. 49 Are there any initial or preliminary matters that you need to bring to the attention of the Board? 50 PRELIMINARY MATTERS: 51 MS. LEA: I have one, Mr. Chairman. 52 If we look at the proposed issues list, which I understand the Board has largely accepted, there is an error on it which I would like to change now on the record, please. Issue 14.1, which is indicated as cost allocation, first sentence following the figures 14.1, it presently reads "proposed changes to the 2005 cost allocation methodology," it should read "proposed changes to the existing cost allocation methodology, including the following." 53 So if you could please stroke out "2005" and replace it with the word "existing." Thank you. 54 MR. BETTS: Thank you. 55 It's Board panel's understanding that issue 5.5 was certainly an issue, if not supported, promoted by the applicant, and I assume, Mr. Cass, you would like to make the first submission with respect to that issue? 56 MR. CASS: I'd be happy to do, Mr. Chairman, if I may. 57 MR. BETTS: Please proceed, then. 58 DISCUSSION REGARDING ISSUES LIST: 59 SUBMISSIONS BY MR. CASS: 60 MR. CASS: Just by way of clarification at the outset, Mr. Chair, indeed, the company was the proponent of an issue that, through the course of the issues conference, took the form of what is now issue 5.5. I should emphasise at the start that the company was the proponent of an issue that related to what I'll just generally call right now contracting practices for gas supply. The wording that you now see of issue 5.5 is a result of the efforts of all parties at the issues conference. 61 MR. BETTS: Thank you. 62 MR. CASS: What I'd like to do, if I may, Mr. Chair, is describe for the Board what the company would be looking for by way of an issue in this case, and then elaborate on the reasons why the company is looking for that sort of issue to be addressed in this proceeding. 63 May I also emphasise at the outset that the company is not looking for a generic examination of a policy issue, and there are two explanations for this that I will provide more detail on. But to summarise them, first, what the company is looking for is direction from the Board as to the course that it should follow with regard to its contracting practices unless and until there is some generic examination of a policy issue that provides direction in that regard. 64 Indeed, as you will see, this was explicitly reflected in the wording of issue 5.5, which states that the issue for this proceeding concerns matters pending the outcome of the Natural Gas Policy Forum. So at least from the company's perspective, the very intent of having an issue on the issues list for this proceeding is not to prejudge or preempt a generic consideration of a policy issue elsewhere; it's to address what the company should be doing until such generic determination of a policy issue occurs. 65 Second, and again I will take the Board to the evidence on this, the company at this point in time is faced with live issues, real issues and specific decisions that it must make. These are not generic or policy issues or decisions. These are matters confronting the company in respect of which it must come to a decision as to what course of action to adopt. And in my submission, there is no reason whatever, in respect of these issues and decisions that I'm going to describe, to think that they can somehow better be addressed at a later time in a generic proceeding, than they can be addressed in this proceeding. 66 So having said that, and attempted to describe for the Board the company's position, I would like to take the Board to some of the evidence in this regard. We put together a small package of extracts from the evidence in this case. The Board would otherwise already have these items of evidence, but I thought just for simplicity and convenience, it would be easiest to separate them into a small package. 67 So what I hope you have is a package with several interrogatory responses and also some short extracts from previous Board decisions attached at the back of the package. 68 MR. BETTS: Thank you. We have that. 69 MR. CASS: If your package is the same order as mine, the first item in it would be the company's response to Direct Energy's Interrogatory No. 1. This response is somewhat lengthy, but it really provides the answer as to what direction the company is seeking in this case, what issue the company is asking the Board to address in this case. So I, of course, won't read through it. I've endeavoured to highlight for the Board some of the areas that the Board might want to look at in the interrogatory response. But this really is the explanation of the issue that the company requests that the Board provide guidance on. 70 Bearing in mind that the Board is probably looking at this for the first time right this minute, I will try to summarize what I believe to be stated in this interrogatory response. First, there is considerable discussion in here, and many references to which I won't go into, but discussion of an industry-wide recognition that gas supplies are, at this juncture, tightening relative to demand. There is discussion in here, and I believe perhaps in other interrogatory responses, about the effect of this. One effect, obviously, is to drive up the price of natural gas, but not only that, in effect, is to make prices more volatile. What Direct Energy -- the response to Direct Energy Interrogatory No. 1 deals with is the fact that the natural gas industry at large in North America is looking at, right now, as we speak, looking at many options to address these types of concerns, and they include things like coal bed methane, Arctic gas, and LNG, liquefied natural gas, imported from offshore. 71 And what all of these options have in common is that they are alternatives that require very major infrastructure investments with long lead times. And another subject of the response to Direct Energy Interrogatory No. 1 is that these types of major infrastructure investments don't occur without long-term contractual commitments to support them. And this, of course, is where the company then becomes faced with an issue, because those looking to enhance, in a significant way, the natural gas infrastructure in North America and particularly Canada look to the major distributors like Enbridge Gas Distribution to see what sort of commitments might be available to support the development and the capital investment that is necessary for these infrastructure projects. 72 So in summary, the response to Direct Energy Interrogatory No. 1 explains the company's position that right now, the company is being faced with making decisions about long-term commitments, and that in respect of these live issues, these real issues, not generic or policy issues but these real issues about long-term commitments, the company cannot afford to wait for the outcome of a generic proceeding. That's what is addressed in Direct Energy Interrogatory No. 1. 73 Now, I included an extract from the Board's decision in Union's -- Union Gas's rate case RP-2001-0029 in the package that was provided to the Board. I don't suggest that a lot turns on this. It has been provided as an example of the fact that long-term contracting is indeed the type of issue that the Board concerns itself with in rate cases. And the Board concerns itself with this issue notwithstanding that one might argue, Well, a long-term contracting issue does not necessarily have direct impact on test-year rates. 74 So it may be the second last item from the back of the package that was provided, but if I could ask the Board to just look quickly at the extract from the Union decision I described, and in particular the last page of that extract. 75 MR. BETTS: Just for clarity, Mr. Cass, we are referring now to the decision RP-2001-0029? 76 MR. CASS: That is correct. 77 MR. BETTS: Thank you. 78 MR. CASS: Now, at page 24 of that decision, which I believe is the last page of the extract that I have provided, the Board addresses Union's arrangements in -- at this point, the Board is in the course of addressing Union's arrangements with respect to capacity on the Alliance and Vector pipelines. As you will see in paragraphs 2.52 to 2.56, one of the items the Board addresses in that context 1 the length of the term of the arrangements, which was a 15-year term. I've pointed out already, as indicated in the interrogatory response, that economically long-term commitments are needed to support major infrastructure investments. In fact, in paragraph 2.55 here, the Board itself points out that, even from a regulatory point of view, those seeking to make these infrastructure investments will generally need long-term commitments in order to get the permission they need to proceed with construction. 79 Again, the purpose of providing this extract is to point out that, in this case, the Board expressed its concern about a term of the contract, considered whether it was appropriate, and ultimately I think decided that it was. But this was all in the context of a rate case and it was all in the context of a similar issue to that which the company is bringing forward, and that is what to do about requests for long-term contractual commitments. 80 Now, also included in the package, and I'm sorry I'm skipping around a bit here, I'm going to I think take you back towards the front of the package, is the response to Energy Probe Interrogatory No. 22. It, I think, should be the third item in the group of documents that's been provided to the Board. 81 MR. BETTS: And that was CME Interrogatory No. 32? 82 MR. CASS: I'm sorry, I should have said 22. Energy Probe 22. 83 MR. BETTS: Thanks. We have that. 84 MR. CASS: And the purpose for providing this to the Board is to provide the evidence of my assertion previously that Enbridge Gas Distribution is facing live issues at this point in time and important issues. These are not necessarily generic or policy issues but they are very real and they are confronting the company right now. 85 So what you will see in this interrogatory response is that the company has been in discussions with potential constructors, if I could use that word, of LNG facilities and, at this time, has under consideration the merits of entering into a contract for supply with at least one of them. 86 The interrogatory response also goes on to explain that Enbridge Inc., the utility's parent, is assessing its involvement in large-scale LNG opportunities in North America. In fact, the very project that Enbridge Gas Distribution has been requested to consider a long-term commitment to, Enbridge Inc. is looking at possible involvement in as an investor. 87 This interrogatory response makes clear that it is not Enbridge Inc. as the operator or primary sponsor of this project, it's an arm's-length party that is the primary sponsor and the proposed operator. But I think the Board can see from this interrogatory response the types of issues that are arising because Enbridge Gas Distribution is being asked to make a commitment as a major natural gas distributor to support this investment in infrastructure, and Enbridge Inc. is looking at involvement from an ownership point of view. 88 So this is, in fact, an example of the type of decision that Enbridge Gas Distribution is confronted with right now and does not believe that a generic hearing is going to address, and certainly is not going to address in a timely manner such that Enbridge Gas Distribution can make the decision it's being asked to make. 89 Now, my submission to the Board is that when a major Canadian natural gas distributor, like Enbridge Gas Distribution, is asked whether it can make a form of commitment to advance an infrastructure investment like this, it's hardly an appropriate response to say, "Well, come back later because we understand there may be a generic proceeding and we may have direction in the future, at some undetermined time." In my submission, that's not in anybody's interest. 90 As the response to Direct Energy Interrogatory No. 1 points out, the industry, at least according to the evidence, is at a critical juncture. People are looking at making significant infrastructure investments. And in my submission, the response from Ontario should not be, "Well, you need to wait for us to have a generic policy review; we can't answer right now." 91 In my submission, that brings to mind the type of uncertainty from Ontario that has affected investment in electricity infrastructure. And in my submission, that would be absolutely the wrong signal to send at this point in time. It would be absolutely wrong to suggest that people, who are prepared to step up to the plate and make major investments in infrastructure, need to wait for a generic proceeding in Ontario. 92 But I don't mean to suggest that any decision in this case is somehow going to prejudge or preempt any sort of generic proceeding that the Board may hold in the future. As I said at the outset, the point is that the company seeks direction as to what it should do with these live issues pending whatever generic proceeding and outcome the Board may produce in the future. 93 In fact, to the extent that the Board has signalled that there may be some future generic proceeding on these issues, that, in a strange sort of way, is part of the reason why there is a need for direction now, because on the one hand, the company is being confronted with live issues about real projects, and on the other hand, there is some form of signal that the Board may have a generic proceeding in the future that may have some effect on these decisions. Well, putting those two things together in itself begs the very question: What is the company to do in the meantime? What are the Board's expectations for how the company will deal with these live issues pending this generic review that apparently the Board will embark upon in the future? 94 Now, the other important aspect of this from the point of view of Enbridge Gas Distribution that I've already alluded to is also the potential for Enbridge Inc.'s involvement in a different role than Enbridge Gas Distribution in these major infrastructure investments. I think in the Canadian context, it's logical for any of us to think that if there are major infrastructure investments to be made, Enbridge Inc. is a logical candidate to be looking at investment in those sorts of projects. On the other hand, for those who are proponents of the projects and need long-term commitments, Enbridge Gas Distribution is a logical candidate for the proponents to go to to request long-term commitments. 95 This results in the issue about how Enbridge Gas Distribution should treat these requests in respect of projects that its parent may take an interest in, and not necessarily anything more than a minority interest. 96 This is discussed in a little more detail in the other interrogatory that I was fumbling with when I was trying to give references. That's the response to CME Interrogatory No. 32. But if we go back a step to Energy Probe, the response to Energy Probe Interrogatory No. 22, I just remind the Board of the issue of what is the company to do when it's being contacted by the proponent of a project, the primary proponent or a proposed operator that is an arm's-length company, but there is the potential for Enbridge Inc.'s involved as an investor. 97 And then the response to CME Interrogatory No. 32 goes on to discuss why the company requests direction in this regard. I won't read the entire answer, obviously, but the point is that in at least one previous decision, prior transactions where there's been related-party involvement, have attracted a higher standard of scrutiny than traditionally required for unrelated parties. So what is the Board's expectation as to how the company would approach a contract where the proponent requesting the commitment is not in any way a related party but there's potential related-party involvement? 98 So in summary, the issue that the company is bringing forward is -- it's actually described in two separate places but I think consistently, it's described at the end of the response to Direct Energy Interrogatory No. 1; it's also described in the response to Direct Energy Interrogatory No. 2. The company is looking for guidance from the Board in respect of these live issues that are now in front of it with respect to contractual duration of commitments that it's being asked to make and with respect to contractual counterparties, particularly in respect of projects where there's the potential for Enbridge Inc. to hold an interest that may be a minority interest. 99 These are the issues that the company is bringing forward in this case. And again, they are described in the two places that I've referred you to. I believe it would be the last paragraph of the response to Direct Energy Interrogatory No. 1, and then the entire one paragraph response to Direct Energy Interrogatory No. 2. 100 Now, the other point that I would like to bring forward, Mr. Chair, relates to just a brief extract from a decision previously rendered in one of Enbridge Gas Distribution's rate cases, that being RP-2001-0032. I could have included -- and that should be at the end of the package, if my memory serves. 101 MR. BETTS: We have it, thank you. 102 MR. CASS: I could have included much more from this decision, but I've found one sentence which I think accurately depicts what is, perhaps, something of a theme in the decision and which is, I think, very useful for today's purposes. So from page 197 of the decision that I've described, at paragraph 6.2.21, one can see the statement by the Board that: 103 "The Board has always relied on the good faith of the utilities in making timely, complete, and accurate disclosure of all information relevant to the operations of the utility whether or not the specific information has a direct impact on the Board's rate-making function." 104 Here we have the company confronted with what it believes are very important issues. These issues arise from situations where the company is being asked to make long-term gas supply commitments. These issues surely are, looking back to the words of the Board, relevant to the operations of the utility. In fact, it would be hard to find anything that is more relevant to the operations of the utility. In my submission, these issues are squarely within the Board's stated expectation about disclosure by Enbridge Gas Distribution, and the gas company believes it's very important to bring these forward for consideration by the Board. 105 I point out that notwithstanding what the Board may hear this morning, and I don't know what the Board is going to hear this morning, all parties were prepared to have issue 5.5 as currently framed come forward as an uncontested issue. Now, I appreciate that there was a caveat that certain parties were intending to attach to it. But all parties were prepared to have that issue go forward in this case. 106 In my submission, Mr. Chair, the prospect of that issue brought forward on an uncontested basis being potentially even removed from the issues list puts the company in a very uncertain position. On the one hand, the company is to understand that it has this obligation to make disclosure of matters such as this; on the other hand, if the issue were to be removed from the issues list, I, for one, don't know what that would mean in relation to the company's obligation to disclose. And I apologize for perhaps moving into some rhetorical questions here, but it certainly causes me to wonder if the company is not to comply with its obligation to disclose in the fashion that it has in this case, what do the Board's words about disclosure mean? When might the company get further direction in that regard if it's not in this case? I don't see a generic proceeding that's going -- that's intended to give direction about the obligation to disclose. If issues about long-term gas supply contracts are not within the scope of what the Board said, then exactly what is within the scope? What is the company to do as this case progresses if similar matters come forward? If the issue is taken off the issues list, is the company to understand, then, if new matters like this come forward as the case progresses that the Board does not want to hear about them? 107 Again, I apologize for the rhetorical questions, but perhaps rhetorical questions are good to show there is an issue, and that is why there is something needed on the issues list. 108 If I may, then, summarize what I've attempted to submit to the Board. The company is not asking that the Board set generic policy in this case. The company has provided evidence to the Board that this point is unquestioned, that it is facing some live issues, and the company is seeking direction as to how to deal with those live issues pending any future policy determination by the Board. Specifically, the company is concerned about direction in the areas of contract duration and contractual counterparties where there may be some related party involvement that may be nothing more than a minority interest. 109 The issue, as it is now framed in 5.5, is presented on the basis that any direction in this case would be pending the natural gas policy review. The company fully understands that any direction in this case would not tie anybody's hands in any future generic proceeding, and I think that's a given. 110 Now, just in conclusion, if I may, Mr. Chair, I sense that perhaps there's a concern that somehow considering specific issues in a rate case is somehow inconsistent with moving on to a review of policy issues in a generic proceeding. This is not the case, Mr. Chair. And in fact, I would have said exactly the opposite. 111 My submission would be that if one thinks about the history of generic proceedings before this Board, they tend to arise because of specific issues and specific facts in rate cases that then feed into a more generic determination. The presence of live issues and real facts, in my view, can do nothing but enhance some later attempt to address things on a generic and policy basis. 112 So to the extent that the Board, in this case, considers some live issues and some specific facts, I would suggest that that can feed into and help the Board set the course of any future generic proceeding that it may choose to hold. The two are not inconsistent. In fact, one can feed into and assist the other. 113 Those are my submissions. 114 MR. BETTS: Thank you, Mr. Cass. 115 I think the Panel would like to proceed on the basis of receiving submissions from everybody, and then we would like to be able to ask any questions that we might have of anybody that's provided a submission. 116 May I ask, then, first for submissions from any parties that would be supporting the inclusion of 5.5 on the issues list, and I believe that, Ms. Lea, there are some that have arrived by fax or e-mail and perhaps we could have those dealt with first. 117 SUBMISSIONS OF PARTIES READ IN BY MS. LEA: 118 MS. LEA: Thank you, Mr. Chairman. 119 Board Staff received three submissions by fax and e-mail, and I understand from the reporter that it assists her job if I actually read these into the record, so I would ask you to bear with me while I do that. 120 The first is from the Industrial Gas Users Association, Mr. Thompson, on behalf of IGUA, as it's known. IGUA's position with respect to the question before the Board on the inclusion of this issue is as follows: 121 "(a) For the purposes of establishing an Issues List, IGUA does not dispute or challenge EGD's," that's Enbridge Gas Distribution's, "contention that Issue 5.5 on the Proposed Issues List is relevant to matters which EGD raises in its Application. 122 "(b) It is clear that Issue 5.5 raises policy matters of a generic nature and that these topics are likely to be matters in issue in other proceedings before the Board. 123 "(c) In IGUA's view, EGD has the onus of satisfying the Board that the issue is one that falls within the ambit of these particular proceedings." 124 The second one that we received is from Mr. Warren on behalf of the Consumers Association of Canada and the Consumers Council of Canada, referred to respectively as CAC and CCC. The position of CAC and CCC regarding the issue of issue 5.5 on the issues list for the proceeding is as follows. Mr. Warren's letter states: 125 "The issue is now drafted in the following way:" and he recites the issue 5.5. Then he goes on to say -- 126 MR. BETTS: Ms. Lea, since we've got this on the transcript, I think that would be the first opportunity to have the 5.5 spelled out, so let's do that, let's read it into the record. 127 MS. LEA: I'll read it directly, then, from his letter. 128 "The issue is now drafted in the following way: 129 "5.5. The role of the utility in providing system gas pending the outcome of the Natural Gas Policy Forum, including: 130 "(a) contracting practices, including entering into long term commitments of the acquisition of system gas; 131 "(b) relationships of EGDI to projects and/or transactions in which EGDI affiliates have an interest; and 132 "(c) EGDI's proposed actions in promoting system gas and/or retaining system gas customers and its consequential effect on system gas pricing, if any." 133 Mr. Warren goes on to submit: 134 "Enbridge Gas Distribution Inc. has indicated in Exhibit I, Tab 8, Schedule 1, that it is seeking, within the context of this proceeding, to obtain direction from the Board regarding gas supply commitments and also regarding gas supply arrangements with projects or sources in which Enbridge Inc. may hold an interest. It is not clear, from the evidence filed to date, to what extent exclusion of this issue from the list may compromise the ability of EGD to provide system supply to its customers. CAC and CCC take the position that the onus is on EGDI to demonstrate to the Board that the relief it is seeking is relevant to its 2005 rate application and to indicate the extent to which exclusion of the issue from the list may impact the provision of system supply. To the extent that onus is not met, CAC and CCC do not support the inclusion of the issue on the list. 135 "Having said that, CAC and CCC recognize that the points raised by EGDI, specifically those set out in Discussion Paper (Exhibit A3, Tab 5, Schedule 2) are important and urgent issues for the Board to consider. The issues are, in our view, relevant to the issues identified through the Board's Natural Gas Forum. Given the importance of these issues to residential consumers, in the absence of a consideration of these issues in the EGDI rate proceeding, CAC and CCC urgent the Board to initiate a process as soon as possible whereby they can be considered. 136 "We believe that a generic proceeding, which allows for the positions of both EGDI and Union Gas Limited to be presented, as well as those of other stakeholders, is the best possible forum for the Board to resolve these issues and provide the natural gas utilities with direction on the future role of system supply." 137 Mr. Cass, do you have a copy of this? 138 MR. CASS: No, I don't. 139 MS. LEA: I don't think we have enough copies for everyone, but you just heard it so... We can provide copies later. 140 MR. BETTS: Does anyone feel they would like a copy at this time of that document? 141 Mr. Dingwall. Certainly one can be given to everybody. It's just a matter of making sure that you have it as you need it. Those of you who can wait until we're through, I'd appreciate that. Thank you. 142 MS. LEA: The third submission that we received was from VECC. Mr. Higgin, do you wish me to read this into the record, or do you wish to do so? 143 MR. HIGGIN: No, you do that, please? 144 MS. LEA: All right. Thank you. 145 These are submissions from Michael Janigan, counsel for the Vulnerable Energy Consumers Coalition. He indicates initially that: 146 "The Vulnerable Energy Consumers Coalition (VECC) represents the low and fixed income segment of EGD's residential customer base." 147 He goes on to say: "We believe that the overwhelming majority of these customers are system gas users." 148 Counsel for VECC is not available to attend today and is presenting these submissions. 149 There's a section entitled "Relevant Background." 150 "During the past several years, there have been indications in the evidence before the Board that EGDI has considered an exit from the system gas supply function, for example, RP-2001-0032 and RP-2002-0133. The discussion paper filed in evidence in this proceeding as Exhibit A3/T5/S2 is, in part, a response to concerns expressed by VECC and others in submissions in those prior proceedings. 151 "VECC understands that, in the discussion paper, EGDI does not seek any relief from the Board in respect of 2005 rates. 152 "VECC acknowledges that in November 2003, the Board commenced a process of consultation on natural gas market issues known as the Natural Gas Policy Forum, and that the next steps of this process are underway with a target date of late 2004 for the issuance of a report. 153 "VECC understands, from EGDI's response to interrogatories posed by Direct Energy and others, that the company is seeking certain guidance in respect of system gas supply procurement and contracting beyond the 2005 test year, as indicated in the proposed wording in parts a), b), and c) of proposed Issue 5.5. 154 "VECC submits that: 155 1. The establishment of a workably competitive market in natural gas supply is critical to any reliance upon that market by Ontario low and fixed income gas consumers. The current market is not sufficiently robust to provide effective choice without a utility supply or similar regulated supply function. Facilitating choice is an historic role of the Board, a role that was confirmed in statute by section 2 of the Ontario Energy Board Act 1998. 156 "2. The Discussion Paper filed at A3/T5/S2 provides background to the specific issues identified in Proposed Issue 5.5. 157 "3. While the onus is on EGDI to justify why it needs to have an issue determined by the Board in this proceeding, if EGDI is seeking guidance as indicated in parts a), b), and c) of Issue 5.5, then VECC submits that the Issue 5.5 is relevant and should be included on the issues list. The exercise of these named utility roles does have rate consequences in a time frame that may be difficult to predict or quarantine to the confines of a particular rate case. 158 "4. Having heard the matter, the Board can determine, based on the evidence and submissions of the parties, whether the relief requested by EGDI is appropriate, or an alternative disposition of the matter is appropriate. 159 "5. There are many issues to be addressed in the Natural Gas Policy Forum. 160 "6. The Board's practice has been to take a practical business-as-usual approach pending completion of such policy reviews, in keeping with its statutory mandate, unless there is specific generic hearing scheduled. 161 "7. In the result, VECC supports the inclusion of issue 5.5. on the issues list." 162 All of which is respectfully submitted by Mr. Janigan. 163 Thank you very much, Mr. Chair and parties, for your indulgence. Those are the submissions Board Staff received by mail. 164 MR. BETTS: Thank you, Ms. Lea. 165 Are there any other parties that would like to speak in support of inclusion of this issue on the issues list? 166 Mr. Shepherd, please proceed. 167 SUBMISSIONS BY MR. SHEPHERD: 168 MR. SHEPHERD: Mr. Chairman, I'll be brief. It seems to me that we start with the question: If there was no Natural Gas Policy Forum, if there was no generic proceeding coming up, would it be legitimate for the company to ask you for guidance on these issues? 169 I think it's straightforward: The answer is yes. And the submissions of Mr. Cass in that regard, I think, are self-explanatory. 170 I do note that there have been past situations in which the company hasn't asked for guidance in situations like this, and the Board has been critical that it hasn't, that it's gone ahead and done things that the Board didn't like and, in fact, has disallowed some expenditures as a result. 171 So then once we've concluded, as I think is obvious, that without the Natural Gas Policy Forum we would have to have this on the issues list, then we ask, Well, is that changed because we have a process which does not currently have a schedule and which does not currently have the specific question on its issues list, that we can't look at it now? And I take the point of some people that there are generic policy issues involved here and that probably some sort of generic process is the best way to deal with generic policy issues. But the fact is that the company, in the meantime, does have to make decisions about things. And I don't think it's fair for parties or the Board to say, "Well, sorry, there's a process coming up and so you'll just have to wait." 172 I agree with the submissions of Mr. Janigan that the Board has generally taken a business-as-usual approach to how to deal with rate cases while they are generic processes going on, and I think that's appropriate here. 173 We've also -- one other comment I'll make on that issue is we've also -- we also have another generic proceeding, I believe, coming up which relates to part of this issue and that is the review of the Affiliate Relationships Code. One of the components of this issue is what about situations in which an entity is not really an affiliate but there's still some question as to whether there's a conflict. And I think it's fair to say that that general issue should be dealt with in considering the Affiliates Relationship Code, which presumably is coming up in the next few months. But in the meantime, as with the issue of length of contract, the company still has to have some guidance on what they should do now. 174 Finally, I note that so far nobody has talked about part (c) of issue 5.5. The company has in -- I don't remember the reference, but it's been referred to already in the system gas paper which is filed in evidence -- has said that they intend, in the test year, to actively market and promote system gas as a choice, as an option for their customers. Presumably they'll be spending ratepayer money to do that. It seems to me that it's legitimate for parties to ask: Should they be doing that, and what are the implications of that if they do? 175 And so while nobody else has talked about that, I think that it is straightforward that that issue is a legitimate one for this rate case. 176 Mr. Chairman, those are my submissions. 177 MR. BETTS: Thank you, Mr. Shepherd. 178 Are there any other submissions in favour? 179 Yes, Ms. Street. 180 MS. STREET: Thank you, Mr. Chair. 181 SUBMISSIONS BY MS. STREET: 182 MS. STREET: Just on behalf of CME and without repeating the submissions of Mr. Shepherd and those before you in writing, CME at this point supports the inclusion of issue 5.5, and agrees that it is something that should be canvassed until the generic hearing proceeds and provides some direction. And in light of the company's agreement that it is not seeking to set aside the generic process, at this point, CME agrees it should be on the issues list. 183 MR. BETTS: Thank you. 184 Yes, Mr. Zbogar. 185 MR. ZBOGAR: Thank you. 186 SUBMISSIONS BY MR. ZBOGAR: 187 MR. ZBOGAR: Very briefly, Pollution Probe supports the inclusion of issue 5.5 in this hearing, given the importance of natural gas as an environmentally preferable energy source to many of the alternatives, it's important that the long-term supply be protected, including by long-term commitments if necessary. And an early review of that issue in this hearing can make an important contribution in that regard. 188 MR. BETTS: Thank you. 189 Further submissions. Mr. Ross. 190 SUBMISSIONS BY MR. ROSS: 191 MR. ROSS: TransCanada PipeLines would support inclusion of issue 5.5 in this proceeding and in event that it's not, would certainly support Mr. Warren's suggestion that an open proceeding take place as soon as possible. That would address this issue and allow all parties to make submissions. 192 MR. BETTS: Thank you. 193 Mr. MacPherson. 194 SUBMISSIONS BY MR. MacPHERSON: 195 MR. MacPHERSON: Petro Canada supports the issue remaining on the list. I think to remove it would present Enbridge with a dilemma as to how to go forward with here until the policy paper has been -- until a policy changes have been made. 196 MS. LEA: I couldn't hear your last two sentences. 197 MR. MacPHERSON: I just said to remove the issue from this hearing would leave Enbridge in a dilemma, I think, until policy changes have been completed. 198 MR. BETTS: Thank you. Further submissions in support. 199 Ms. Aitken. 200 MR. DINGWALL: Before Ms. Aitken begins, Energy Probe is of kind of a hybrid position that partially supports the inclusion of the issues but partially does not, and I'm wondering if that might put us kind of with our feet in both camps and therefore next to go before those who are firmly against. 201 MS. AITKEN: Mr. Dingwall anticipates what I was going to say, which is that Direct Energy also has a hybrid position in the following sense: Direct Energy does have some responses to some of Mr. Cass's submissions this morning, and in particular the apparent, perhaps, narrowing, if I can put it that way, of the issues as we perceive they are expressed in issue 5.5. That said, however, Direct Energy's position will be that, provided we have comfort that issue 5.5 has the scope that we perceive it does on its face, and we perceive it properly should have, and that Direct Energy has a proper opportunity along with all the other intervenors to put in proper and fulsome submissions, we, Direct Energy, have no objection to the issue being included in the rate hearing. I am in your hands, I guess as is Mr. Dingwall, as quasi-supporters or along with, shall we say, the objectors to the issue being included. Thank you. 202 MR. BETTS: Let me ask if there are any parties that will speak in opposition to the inclusion of this. 203 MS. DeMARCO: I guess that would be me, Mr. Chair. 204 MR. BETTS: Ms. DeMarco. Well, I think then -- how shall we do this. Let's hear from those that are in the middle, on the fence here, and then we will allow you to speak in opposition. 205 MS. DeMARCO: If I might clarify, I am, in effect, also a hybrid, but the opposite hybrid to Ms. Aitken currently. We, in fact, don't support the inclusion, but should the Board proceed, we'll be largely in agreement with Ms. Aitken in that a full and fair consideration of the issues allowing for appropriate notice, number 1; number 2, evidence and procedure to be reflected. 206 MR. BETTS: Okay. I think I'm just going to pick some orders here. We'll go Mr. Dingwall, Ms. Aitken, and Ms. DeMarco. Please proceed. 207 MR. DINGWALL: Thank you, Mr. Chairman. 208 SUBMISSIONS BY MR. DINGWALL: 209 MR. DINGWALL: The crux of the debate appears to be in the separation of policy from rate making for the 2005 test year in that there appears to be some form that may be imminent which may address the policy questions. 210 One of the new things that faces us this year is that, for this particular Enbridge case, we now have legislation which not only enables but which obliges the Board to facilitate competition in its deliberations. And there's some question as to how that impacts this case versus any other forum which might either derive from this case or which might occur independently. 211 In looking at the issues list and section 5.5 specifically, we note that there are three distinct parts to section 5.5. The first of these relates to long-term contracting for commodity, which is something that utilities have not done in Ontario. With respect to this, Energy Probe supports the inclusion of this particular facet of the issue solely as it might relate to 2005 costs for review in this case. So if there are any proposed and specific transactions which Enbridge is suggesting it wishes to undertake that would have an impact on the 2005 costs, then Energy Probe supports that they be reviewed as to whether they are prudent or whether, in fact, they should be done in this case. And we believe that Enbridge's bringing forward of any such transactions on a specific basis within this time frame would be appropriate and should be dealt with in a timely fashion. 212 With respect to the issue of long-term contracting for commodity in general, we see that there's some generic concerns that should be dealt with in a forum which -- or in a process which enables all parties which might be affected, including other distributors, to have the opportunity to make comments and to participate. These concerns include whether or not long-term contracting is appropriate at all; two, if so, for what portion of system supply should long-term contracting exist, how should that portion of system supply be determined, what form of forecasting should be used to indicate what system supply will be in the future given competition, and what system supply will not be in the future given competition? 213 In addition, the views of stakeholders that system to relate to low income customers should be given a voice in order to determine whether or not system supply is a multifacetted animal as it tends to be in some jurisdictions in the States, where there might be some form of low income system supply versus a generic system of supply, whether there might be terms and conditions attached to that that might affect the contracting for those customers. 214 In addition, we also believe it's necessary in a generic proceeding to look at what form of reporting requirements and approval processes would be necessary if, in fact, the Board is of the position that any form of long-term contracting for the system supply commodity is appropriate. 215 All of those concerns are generic in nature. We don't believe that in a specific case with Enbridge's proposals or Enbridge's specific needs, that those concerns could be dealt with. 216 Moving on to the relationship of Enbridge Gas Distribution to projects or transactions with affiliates. The specific concerns that we could see relating to this case and being appropriate to this case would have to relate to specific transactions, and we are of the view that any such transactions should be put forward on a preapproval basis, they should be visible, and there should be a demarcation of the specific relationships that are being considered in this case if there are any transactions being put forward. 217 However, when looking at the issue from a generic basis, there raises the question which is bolstered by experience in the past few years in trying to collect enough cereal boxtops to obtain the magic decoder ring to get through the various affiliates that are being proffered in these proceedings, and gain the information, sometimes through multiple applications or whatever, as to whether the Affiliate Relations Code is sufficient to contemplate any such transactions. That may be a question that can be resolved on a case-by-case basis. In this case, it may be a question of where Enbridge is proposing specific transactions, those transactions might give rise to some concern or direction from the Board as to what the sufficiencies or insufficiencies are in the Affiliate Relations Code which could feed in, as Mr. Cass was suggesting, to a generic process. 218 The third area that I would like to address is part (c) of 5.5, which is EGD's proposed actions in promoting system gas or retaining system gas customers and its consequential effect on system gas pricing, if any. 219 It seems that this particular issue is somewhat interdependent on whether or not long-term contracting might take place, on what the nature of system gas supply might be going forward, and on what the regulatory construct around the description of system supply might be going forward. At this particular point in time, the most significant piece of legislation which affects the marketing of natural gas or the promotion of natural gas is the Consumer Protection Act. The Consumer Protection Act specifically exempts natural gas distributors. It seems that if there were to be any form of promotion of system supply, that there would need to be, as a precondition, an even playing field from a regulatory perspective on how system supply would be marketed by a utility, would be described by a utility and what the ramifications of any crossing of the lines would be. 220 In addition to that, there's a code of conduct before the Board which applies to the marketing of natural gas; however, it relates only to natural gas marketers. While a utility's rate might be specifically approved by the Board, and while that may give rise to a defensive regulatory conduct in the event of any suggestion that there's a misdescription, any act of promotion or comparison of system gas versus competitive offerings in the marketplace will lead to a decision made by residential or other customers. So again, we believe that it's a precondition for any form of activity to promote or retain system customers, that there be an even playing field with respect to codes of conduct as they relate to descriptions of services, as they relate to pricing, et cetera. 221 With respect to the consequential effect on system gas pricing, there are significant questions as to who should pay for such efforts, whether it be all customers, whether it be some specific individuals, whether it be solely those customers who have been the subject of programmes. It's quite a mire to cut through. 222 Now, it is appreciated that the company is seeking some degree of guidance for its future operations. But in terms of the priorities and in terms of the urgency, I think it's up to the Board to consider the time frame of this case in which we anticipate a decision by August, the time frame of any additional policy forum that may exist to which, frankly, I'm not aware at this point, how those time frames relate, and whether there would be any material adverse effect to the company or to ratepayers, who I believe are the principal test in this case, of any delay in the consideration of the generic aspects in this issues. With respect to the rate-based aspects of these issues, they should be considered in this case. 223 As a final comment, I would like to open up the potential that the Board could, as it has done in many other cases, bifurcate this proceeding in order to deal with the rate-making aspects of these issues in one phase so that the deadlines and the regulatory certainty needed for rate-making purposes are not undermined by any sidetracking that might take place with the presence of additional generic issues in this case. And secondly, put in place a subsequent proceeding with a separate procedural order that would invite whatever our affected parties might be interested in some of these issues from a generic perspective, to participate on a subsequent or coincident time frame, which might give rise to the timely addressment of the issues that Enbridge is proposing as having some degree of urgency. 224 Those are my submissions. Thank you. 225 MR. BETTS: Thank you, Mr. Dingwall. 226 Ms. Aitken. 227 MS. AITKEN: Thank you, Mr. Chairman. 228 SUBMISSIONS BY MS. AITKEN: 229 MS. AITKEN: I'd like to note at the outset that Mr. Cass this morning emphasised that this is not a policy issue of a generic kind, but rather an immediate need, an urgent live issue that needs to be dealt with, and that issue being the opportunity that Enbridge foresees it has to enter into certain long-term contracts. 230 Direct Energy simply raises the question as to whether there has, in fact, been sufficient evidence to demonstrate the urgency of that issue, and in particular, whether other options have been exhausted. But most significantly, in our submission, there is no way to divorce the policy content from this issue of engaging in long-term contracts. And if I could trouble you to just pull up that Union Gas case that my friend submitted to us all this morning, to that last page, to paragraph 2.56. 231 And Mr. Cass had highlighted the first sentence which speaks about the Board accepting the utility's supply strategy, and then goes on to say in the non-highlighted portion: 232 "The utility should ensure, however, that such a policy is adapted to changing circumstances in the marketplace and the regulatory environment." 233 Well, we are in our regulatory environment, at a place right now where there has been initiated a review of the policy considerations we say are implicit in issue 5.5. And part of the circumstances in this case, indeed as acknowledged by Enbridge in the preamble to issue 5.5, is the role of the utility in providing system gas. And we say it is the role of the utility in providing system gas in its entirety that is in issue and is engaged by the subissue that Mr. Cass raises in connection with long-term contracts. 234 In our submission, in these circumstances, you can't compartmentalize sub issues that derive from a much larger issue on the model that is to be pursued and the objectives that that model is designed to realise. Indeed, I noted that Mr. Cass this morning, perhaps for expedition, but has glossed over the issue raised quite squarely in the discussion paper submitted with respect to having a critical mass of captive customers in the system gas supply side of things. And in our submission, that's the very kind of issue that cannot be divorced from the notion of long-term contracts. If one tried to do that, of course, Enbridge would be stuck in the position of having potentially stranded costs, if not furnished with the customer base sufficient to deal with them. 235 The point is at the end of the day, if Enbridge enters into these long-term contracts further to a very discrete examination in the way proposed by Mr. Cass, we're going to be stuck with those contracts. They can't be undone. And so I do take issue with Mr. Cass's representation that this would not tie the hands of the Board or other participants and stakeholders. It would tie their hands in two ways. First of all, certain positions may be decided in a bit of a vacuum on a policy basis, and secondly -- sorry, am I doing something wrong with my mic? 236 MR. BETTS: You could probably actually sit kind of comfortably further back. 237 MS. AITKEN: Would that work? I'll try that. Thanks. 238 We're just concerned that if a decision was made like this at this time in the vacuum that's proposed, there would be some tying of hands in the sense that, first of all, contracts would have been entered into which could be difficult, if not impossible to extract from; and secondly, it might well entrench the Board in terms of the policy approach to these sorts of questions. 239 Now, if EGD wants to pursue these issues and the Board wants to hear them, the Panel wants to hear them, Direct Energy doesn't have any objection to them being made part of this rate case. However, that is only provided that we have comfort that the role of the utility, as identified in the preamble to issue 5.5, is broadly understood. 240 In our submission, it can only be understood in that broad sense. In our submission, you can't just pluck out the issues that Mr. Cass has done this morning, or indeed was done in the discussion paper, and look at those and some way divorced from the broader policy and rate policy issues that are engaged in this case. 241 In our submission, we need to be looking at the role, the future role of the utility in its entirety and it all of its complexity, in an unconstrained and unlimited sense. 242 Enbridge, in its discussion paper, has advanced a particular model, a very model that addresses very specific ways in which the objectives inherent in that model shall be achieved. In our submission, you first have to figure out what the objective is before you evaluate the credibility or efficacy of a model and in turn evaluate the appropriateness of certain measures such as this subissue of long-term contracts. So in our submission, we've got the cart ahead of the horse here in that we've got to sort out what the objective is, then design the model vis-a-vis pricing and all the other issues that are engaged in doing so, and then evaluate the particular measures in issue. 243 No great surprise, Direct Energy would have a different model that it would intend to lead evidence about at whatever appropriate time this matter is heard. I don't propose to go into the merits of that, but it would involve a different model pursuing a different objective. And so in our submission, to pull this event ahead by looking at a particular measure designed to further a particular model, designed to advance a particular objective, is simply far to premature and risks, in fact, hampering the Board's ability, the panel's ability to deal with this properly. 244 With that said, Direct Energy is perfectly satisfied to have this issue included in the rate hearing, provided the scope of the issue is understood, as we say, is evident in the preamble to 5.5 but which we want to have some comfort in the fact that is the panel's view. 245 The only other proviso we have is just that Direct Energy and other intervenors, as appropriate, are able to file evidence, again, in an unconstrained, unlimited matter on the scope of the issues we say are engaged. 246 As sort of a procedural matter, I suppose, I would simply note that, in light of the fact that we understood the Board was going to be resisting this issue and just the scope that has become clearly apparently in issue with respect to issue 5.5, we just raise and perhaps put in a marker that there may not be sufficient time in this current schedule to have a proper fulsome canvass of the appropriate commercial and academic evidence in place by May 3rd. But that's rather a procedural matter that perhaps we can address at your convenience. 247 I guess just in closing, I want to note that Direct Energy does have some sympathy with those who object to this matter being included in the rate hearing. It doesn't obviously have any immediate impact on rates. It will certainly cause delay. And indeed there is, as it happens, this broad inquiry process in place in the Natural Gas Forum. So while we don't object, provided the issue is understood within the parameters we understand it to be, and Direct Energy has a full and unconstrained ability to file evidence, we do understand the position of those who object to it proceeding in this forum as to why they do. And I think I echo other's comments in this final regard, and that is, in fact, if the matter is not dealt with in its entirety in this proceeding, Direct Energy would very much support any indication in the Board's ruling that would lead to an expeditious resolution and canvassing of this issue, being as ripe as it is, for a determination. 248 Thank you. Those are Direct Energy's submissions. 249 MR. BETTS: Thank you, Ms. Aitken. 250 Ms. DeMarco. 251 MS. DeMARCO: Thank you, Mr. Chair. I do have a number of documents that I will distribute if I might now. 252 MR. BETTS: Thank you. Ms. DeMarco, how long do you anticipate being? 253 MS. DeMARCO: Probably about 20 minutes maximum. 254 MR. BETTS: I think it would probably be appropriate if we just take a short refreshment break, and we'll try and keep it short and hear your submission before we go into a longer break or ideally break for the day. So let's allow for 15 minutes and we'll return -- in fact, let's press it even a bit quicker, let's try to be back by 11:15 by that clock, so what's that, about 10 or 12 minutes, something like that. Thank you. We will adjourn for that time period. 255 --- Recess taken at 11:04 a.m. 256 --- On resuming at 11:20 a.m. 257 MR. BETTS: Thank you, everybody. Please be seated. Thank you. 258 Has anything popped up during the break period? Then, Ms. DeMarco, please continue. 259 SUBMISSIONS BY MS. DeMARCO: 260 MS. DeMARCO: Thank you, Mr. Chair. If I might first just start with a bit of a clarification to the record regarding one of Mr. Cass's submissions. Specifically, he indicated that the issues list was agreed to by all parties subject to a caveat. The clarification should be in the form of what that caveat included. Specifically, it in relation to the issue at issue, issue 5.5, being without prejudice to any parties arguing that this was not the appropriate forum to, in fact, discuss the issue, and without prejudice to that issue being fully examined in the context of the Natural Gas Forum. So the substance of that caveat is of some importance to Ontario Energy Savings Corporation and Superior Energy Management. 261 I would also like to clarify that although I do represent a number of parties in this proceeding, I'm here today to speak to issue 5.5 only on behalf of OESC and Superior Energy Management. 262 So with that I will try not to be repetitive of what parties have said today and proceed as succinctly as possible. So it is basically OESC's and SEM's position that the current EGD rates case is not the appropriate forum to consider this fundamental industry-wide policy issue, and specifically, there is a process that has been initiated by the Board to better consider and decide upon such issue. And in the alternative, our submissions would be in relation to what Ms. Aitken has covered for Direct Energy, specifically, that should the issue be included on the issues list, that full consideration be given to the preliminary phrase of the issue, that is, being the role of the utility in providing system gas with all the procedural benefits that would go along with consideration of that issue. 263 So if I could first start with the basic submission of the parties, and that is this is not the appropriate forum and a better forum for decision on this issue exists. I will have three central points that I will be making. 264 Firstly, this is an industry-wide issue that supports both consideration and decision-making in an industry-wide forum. 265 Secondly, is that that forum, that industry-wide forum does exist and should be used to most efficiently allocate the Board's resources to consideration of this issue. 266 And thirdly, that there is, contrary to Mr. Cass's submissions, a significant impact of proceeding with the issue in this proceeding as it applies to only Enbridge Gas Distribution. 267 So, first, if I could start with my first point, and that is that this is an industry-wide issue that warrants both decision-making and consideration in an industry-wide forum. If I can refer you to, first, the substance of the evidence that the company has filed to support this issue, and that is Exhibit A3, tab 5, schedule 2, which is the discussion paper on the utility's role in the provision of natural gas, and specifically page 3 -- 268 MR. BETTS: Ms. DeMarco, should we have that in front of us? We don't have that in front of us, so can you help us? Or should I -- 269 MS. DeMARCO: I can certainly read into the record the appropriate portion. I don't find it integral that you have it in front of you, but should you want it, I'd be happy to -- 270 MS. LEA: We have a copy. Could you repeat the reference, please? 271 MS. DeMARCO: It is Exhibit A3, tab 5, schedule 2, which is the discussion paper entitled "The Utility Role in Gas Supply" dated December 18th, 2003. 272 MR. BETTS: Thank you. We have that now. 273 MS. DeMARCO: Contrary to Mr. Cass's submissions that this is an Enbridge-specific immediate decision, if you refer to page 3, the evidence itself supports that this is, in fact, an industry-wide issue warranting industry consideration. And if I can read to you starting at the first paragraph, it indicates: 274 "Today's natural gas industry is one that is marked by price volatility and supply uncertainty. These concerns emphasise the need for the industry to address issues related to long-term supply, transportation and storage of natural gas." 275 The concerns are not unique to Enbridge Gas Distribution but face all industry participants, whether they are local distribution companies, marketers, regulators, or end-use customers. Certainly in our submission, this supports an industry-wide forum to ensure that all views and all stakeholders are appropriately represented and the decisions of the Board are made on the basis of such views. 276 Secondly, if I can refer you to the package that Mr. Cass did submit, and again as directed, I'd refer you to the Union decision, which is RP-2001-0029, not for any aspect of its substance but more for the fact that it was included in this package. What you see is a Union decision being put forward as relevant to the determination of this issue in relation to the entire industry. And this is not a Union rates case, this is an Enbridge rates case. As a result, we submit this strongly supports, these issues, the issues regarding the role of the utility in system gas should be decided in an industry-wide forum. 277 Secondly, our submission -- our second point is that such a forum exists, and not only does it exist, but it is an OEB can we initiative. If I can refer you to an excerpt that I passed out, that's an excerpt from the OEB web page which identifies, under the title "OEB Key Initiatives," that the Natural Gas Forum, looking at competitive gas supply, is in fact a key initiative for 2003 and 2004. 278 As a result, there are a number of other factors that support looking at the precise issues that are contemplated in issue 5.5, which deals with the role of utility in providing system gas in that forum, in that key initiative of the Ontario Energy Board, and the remainder of the package that I've handed out revolves around the issues that support inclusion not in this specific Enbridge rates case, but rather, in the Natural Gas Forum. 279 Contrary to Mr. Shepherd's submissions, in fact the issues are specifically identified in the Natural Gas Forum as being of importance. If I could next refer you to the October 24th, 2003 letter of the Board where the essence of the issue that we are talking about is specifically identified. Specifically, two paragraphs down, third line into that paragraph, the letter indicates: 280 "The Board intends to continue these initiatives through the development of policies which consider, among other things," and then the first bullet is, "what should the role of the gas distributor be with respect to transportation, storage and supply of natural gas." 281 You also have in front of you the agenda from the first meeting of the Natural Gas Forum, which took place on November 12th, 2003. And you will see, I think reflecting the importance of the issue, the first issue up on the bill is 9:20, discussion of market evolution issues. The second issue is system gas, including discussion of the continuing appropriateness of utilities providing system gas and the costing methodology applied to utilities. 282 And then finally in the package you have in front of you, you've got the consultant's report on the Ontario Energy Board Natural Gas Forum. The report itself was dated December 9th, 2003. And if you examine page 2 of that, you can see that under the heading "System Supply," the diverse positions of a number of parties regarding the role of the utility in system gas are reflected in that summary and later throughout the document. So certainly our point is the forum does exist, the issue is being considered in that forum, and is more appropriately considered in that forum which is, in effect, applicable to the entire industry and not simply one utility. 283 As a corollary of that point, there are some administrative efficiencies that should be considered by the Board in deciding how to proceed in this particular proceeding. It might be that, in effect, the Board is hearing the same evidence from similar but not all parties in two proceedings, and you may wish to consider whether that's the most efficient allocation of the Board's resources pertaining to this issue. 284 Now, we do have some sympathy for the company's position, however, that there is no specific proceeding yet commenced to consider the issues raised in the Natural Gas Policy Forum. To outline the process that the Board intends to proceed with in relation to this forum, if I could refer you to, I believe it's page 6 of the consultant's report, which at the second paragraph, second sentence, outlines the process that the Board intends to follow. It specifically indicates that. 285 "The process is envisaged over the next 12 months --" sorry, "The process that is envisaged over the next 12 months is intended to improve the regulation of natural gas in the areas of supply, storage, and upstream transportation, and to promote industry development in general. There will be stakeholder consultation as well as discussion papers in the development of policy. It is the Board's intention to take the lead in setting policy and not necessarily to depend upon consensus to establish change." 286 Despite the Board's intention to take the lead in establishing policy in this area, we have yet to see a specific proceeding initiative as a result. 287 To that end, my friend, Mr. Cass, advocates that specific action is required in this proceeding that would allow for some of the activities that will ultimately be decided upon in the industry-wide forum. Specifically, there are long-term contracting activities in the proposals they've made in relation to Direct Energy Interrogatory No. 1 and Energy Probe Interrogatory No. 22 require some directional support of the Board. And while we certainly agree on the point that the forum and the proceeding needs to be commenced to give direction and certainty to the company, OESC and SEM disagree on what to do in the interim. 288 Certainly we submit that the best response for the Board is not to directionally sanction something that it may later overrule in a forum of all industry participants, but rather to have the company fully explore in evidence all other options, and I believe Direct Energy referred to this in the beginning of its submissions, that we didn't have full and comprehensive exploration of all the alternatives available to Direct immediately, so that would be the first thing. And secondly, to proceed rapidly with the next phase of the Natural Gas Forum, and that is convening a proceeding to look at this issues among all industry participants. 289 So in summary, it's our belief on this point that the most appropriate forum to discuss the issues regarding the role of the utility in the provision of system gas is not the instant Enbridge Gas Distribution proceeding but rather the Natural Gas Forum, and that some direction and action would be warranted to facilitate the certainty concerns that the company has. 290 Our last point in submission is in relation to Mr. Cass's point that, really, any such action that the Board has in relation to this issue would be -- would not prejudge or preempt action by the Board in the context of the Natural Gas Forum. In fact, it's our submission that that simply is not the case. The practical effect of the Board giving direction in this policy forum, in this, sorry, rate forum to a policy issue that may then be determined in another forum is quite significant and will, in effect, prejudge or effectively preempt both the consideration and the implementation of any policy decisions that result in the broader forum. 291 While not legally, certainly the practical effect is such that there are prejudices to the decisions made. 292 Mr. Cass has attempted to characterize this issue as one largely of disclosure; they are disclosing actions to be taken. Certainly, it's our view that that characterization doesn't give full consideration to the real impact of what we're talking about in relation to issue 5.5. What we are talking about is the entering into very significant, large financial investments that involve long-term contracts, among other things. 293 Another element of what we're talking about is taking measures to invest and potentially strand costs to obtain and keep a critical mass of customers. This is by the company's own evidence. 294 These decisions are not minor decisions that can be easily reversed without impact. These decisions are certainly broad, long-term impact with financial long-term impacts both to the company and to the industry. As a result, it's our submission that these should be considered in that context in the forum which, according to the Board's schedule, is to be convened in 2004. 295 Failure to do so certainly would skew the Board's consideration in the Natural Gas Forum of at least the financial impacts of change in policy should the company proceed as it intends to. 296 So in conclusion on our main point, it's our submission that as a result of both the industry-wide nature, the forum already convened is a key priority of the Board, and thirdly, the potential impacts, that this issues list and rather considered in the context of the Natural Gas Forum. However, should the Board proceed with the issue on the issues list as it currently stands, we do believe there does need to be clarification in relation to the issue to ensure that there is: A, a full consideration of the entire policy issue which was properly characterized, in our view, by Direct Energy; and B, to potentially revise the notice which does not specifically indicate that the role of the utility in the provision of system gas would be a central issue in this proceeding; and C, require the company to explore alternatives, or limit the actions of the company in relation to what the options we're looking at are in relation to the long-term contracting proposal provided. 297 Subject to any points of clarification, those are my submissions. 298 MR. BETTS: Thank you, Ms. DeMarco. 299 Before we return to Mr. Cass for reply, I'll just ask if Board Staff counsel have -- I know you have no position, are there any points that you feel require clarification at this point? 300 MS. LEA: No, thank you, sir. We have no further submissions or questions. 301 MR. BETTS: Thank you. 302 Mr. Cass, would you like to reply? 303 MR. CASS: If I may, I would appreciate an opportunity to do that, Mr. Chair. Thank you. 304 REPLY SUBMISSIONS BY MR. CASS: 305 MR. CASS: I'll try to make it quick. 306 In listening to a number of the submissions that have been made, particularly by those who described their positions as being of a hybrid nature, I can't help escaping the conclusion that when one looks at these submissions in the right light, they really reinforce and take us all back to the points that I made in my original argument. 307 We've heard from a number of parties about how they are industry-wide issues, about how important these issues are, about how the Board should proceed to hear the issues as quickly as possible. There seems to be virtually a consensus on that. Mr. Dingwall listed, I think at length, a number of generic issues that could and should be determined by the Board. 308 I don't mean to disparage in any way the expectations of the parties that the Board may address these on a generic basis. I think these are very legitimate concerns, to have these issues addressed on a generic basis. My point, though, Mr. Chair, is when you hear the extent and the scope of what parties expect to have the Board address, it just takes us right back to what I said in my original submission: The company had no expectation that in the context of this proceeding, the Board could tackle all of that. But when you listen to how much of it it is, and how industry-wide it is and how many people you're going to have to hear from on these issues and how important it is to everyone, you realise that it's going to take time, and if parties' expectations are going to be filled, there will be a lot of new policy. And what the company is saying is if it's going to take time and if there's going to be all this new policy, we simply need to know what to do in the meantime, particularly in light of live issues that are described in the evidence. 309 In my submission, the more people emphasise how much there is and how industry-wide it is, the more it just brings us back to the company's point that if there's going to be all this consideration and all this policy developed, the company all the more needs the direction in the meantime as to what it should be doing on specific issues. 310 Having said that, Mr. Chair, I'd like to then address some particular points that were made by Ms. Aitken and by Ms. DeMarco. 311 You were taken by Direct Energy's counsel to the extract from Union Gas decision that I provided. A comment was made about the highlighting. I should point out, I realised that I was putting a number of pieces of paper in front of the Board that the Board may not be able to read as I was making my submissions, so I quickly just did some highlighting to try to take the Board's eyes to the spots that I thought were important. There was no intent to try to exclude things that were not highlighted. 312 But in any event, Ms. Aitken referred to a sentence that was not highlighted, that: 313 "The utility should ensure, however, that such a policy is adapted to changing circumstances in the marketplace and the regulatory environment." 314 Again, Mr. Chair, in my submission, that takes us right back to what I said in my submissions in chief. You are hearing from certain parties that there is a Natural Gas Forum that the Board is in charge of, that that may lead to some significant policy directions, and Ms. Aitken points out to you that the company is expected to adapt to those changing circumstances. Well, how is the company to take into account these changing circumstances, that the Board is in control of through the Natural Gas Forum, without some direction from the Board in this case about what to do in the meantime. That is precisely what the company is saying. 315 Now, Ms. Aitken also pointed out, or submitted that I had not addressed submissions to the system gas issue, and it really takes us back, again, to my original submissions which were an attempt to describe what the company seeks by way of an issue in this case. Now, what the company seeks by way of an issue in this case is described in the responses to Direct Energy Interrogatories No. 1 and No. 2. That's why I spent so much time on those two interrogatories. That's the company's position about the sort of direction that it requests from the Board in this case. 316 I didn't gloss over anything. I went to the evidence which is those two interrogatory responses describing specifically what the company is asking for. And I don't think you need to turn it up. But if you look at the questions, Direct Energy No. 1 and No. 2, that's what the questions were. What is the company looking for in this case? And that's where the answer can be found. 317 Now, Ms. Aitken also had a submission that it's incorrect to say that there would be no tying of hands coming out of a Board determination in this case because contracts would be entered into. Again, if you look at the evidence, Mr. Chair, and by memory I think it is also Direct Energy Interrogatory No. 1, the point is made that one of the things the company can do in the interim is negotiate for out-clauses, but those come at a cost. So nobody is saying here that the issue is necessarily that hands are going to be tied. And I think Ms. Aitken was perhaps a little incorrect in suggesting that that is entirely what the issue is about. 318 Ms. DeMarco had a similar sort of submission, which is that the practical effect of the Board's decision -- sorry, I'm not sure she meant to say the Board's decision, but I submit that's really what she was talking about -- the practical effect of proceeding in this case is going to be to prejudice an ultimate generic hearing. Well, in my submission, that's entirely up to what the Board decides to do in its decision in this case. The company is looking for a very specific sort of direction. One example is the situation where a primary proponent of a project comes to the company and looks for some sort of commitment, and there is either potential or real involvement of Enbridge Inc. in that project. The company is asking the Board for direction. How do we handle this sort of situation in light of what the Board has said in the past? I don't see that that sort of direction has to prejudice anything coming out of a generic proceeding. 319 In any event, I have every confidence that the Board can provide whatever extent of direction it feels necessary and appropriate when it truly hears the issue in this case, without doing something to prejudice some other proceeding. It's entirely a function of what the Board in this case says in its final decision, and I think it's wrong to presume that that decision will prejudice some other proceeding. 320 And similarly, Ms. DeMarco had a submission to the effect that the best response is for the Board not to directionally sanction something. Again, that's prejudging what the Board might say if it chooses to allow this issue to go forward and if it chooses to hear it in this case. The company is asking for whatever direction the Board is capable and comfortable providing. In my submission, it's wrong to prejudge that the Board is going to make some sort of an ultimate determination that's going to directionally sanction something in a way to the prejudice of a future proceeding. 321 Ms. DeMarco took the Board back to the company's discussion paper in support of her submission about what generic issue there is presented in this case. But, again, this goes back to what I've been saying all along, which is yes, the company presented a discussion paper, and that's exactly what its name implies, a discussion paper, but the company was specifically asked, What are you looking for in this case? And that's where one goes to Direct Energy Interrogatory No. 1 and No. 2, because that's where the company says what it is looking for in this case, not the discussion paper, which again is just what its name implies. 322 Now, there was also some effort to compare the wording of issue 5.5 to what's going on in the Natural Gas Forum and to draw some conclusions from that. Again, I take the Board back to my original submissions in chief. Issue 5.5 is the outcome of an issues conference involving all the parties who were at that conference, having whatever input they wished into the framing of that issue. Issue 5.5 is not solely the company's framing of an issue. So I urge the Board to treat with a little caution, submissions which appear from parties who participated in the issues conference and had every opportunity for input into the framing of the issue, when they then use the framing of the issue as an argument that the requests the company is making should not proceed in this case. The requests the company is making, I know I'm repeating myself, but they are found in the responses to Direct Energy Interrogatories No. 1 and No. 2. Issue 5.5 is the result of an issues conference that all parties participated in or had an opportunity to participate in. 323 And that's all I have to say in reply, Mr. Chair. Thank you. 324 MR. BETTS: Thank you, Mr. Cass. 325 I believe the Board Panel does have questions maybe of more than one of you. We'll see if we can get through those questions and we'll see how time will lay out for the remainder of this process. So we'll start off with that. Ms. Nowina has some questions. 326 MS. NOWINA: I have only one question for Mr. Cass. 327 QUESTIONS FROM THE BOARD: 328 MS. NOWINA: I recognize the issue before the gas industry in terms of supply, and I think you've clearly articulated the issue for Enbridge. The only question I have is, in terms of the urgency for your need for direction, can you give us more specific information on what that urgency is? 329 MR. CASS: Yes. I think the urgency is the specific project or projects that are the subject of the interrogatory response, and I'm sorry, I'm never very good at getting the right references, but Energy Probe Interrogatory No. 22. So that's the specific urgency. This is what I mean when I refer to a live issue and specific facts. The company is being asked for its commitment to at least one LNG facility. 330 If I might add to that, though, Ms. Nowina. It's not to say that in the course of this proceeding, that something else might not come up and that the direction -- whatever direction the Board feels it's capable of giving might apply to a different situation where the company is asked to make a commitment. But this is the one that's live right at this time, as we speak. 331 MS. NOWINA: Thank you. 332 MR. CASS: Might I just add something as well. 333 MR. BETTS: Yes, please. 334 MR. CASS: Just in the interests of complete disclosure, Ms. Hare has pointed out to me that it's perfectly -- that I really should go further and point out that this -- the timing of this project is such that a commitment may be needed even before a decision in this case, if that helps with the urgency. That's the sort of urgency behind commitments that parties are looking for for long-term investments in infrastructure. Again, I think that is in the interrogatory response. So I just want to be sure that nobody is being misled. It could be that urgent, that even a decision in this case might not be quick enough. 335 MR. BETTS: Thank you, Mr. Cass. That was a perfect lead-in for my question, or one question. 336 If -- and I read that, in fact, in the response to Direct Energy's Interrogatory No. 1, an indication that the decision may have to be made prior to a decision of this Panel. If that's foreseen, how do you see the issue supporting that problem, supporting your decision or Enbridge's decision? 337 MR. CASS: I confess, Mr. Chair, I don't have the complete answer, not knowing how this may play out and what we may have to deal with in the future. I'm inclined to say, it's a bridge that Enbridge Gas Distribution will have to cross when it comes to it. But speaking for myself, again it comes back to the disclosure point, that if that juncture is reached, then it's something that would have to be disclosed to everybody and then we'd have to address what could be done at that time. 338 MR. BETTS: If I could refer you to the response to that interrogatory, the wording is such that it says: "In fact, it is likely that Enbridge Gas Distribution will be required to make contractual decisions even before the Board can provide guidance in this case." 339 That likelihood, I have to pose this question to you: Does that make this whole debate moot? There's a question here of probability. 340 MR. CASS: Yes. 341 MR. BETTS: I appreciate that you've indicated that you're not sure when it's going to come out. 342 MR. CASS: Yes. 343 MR. BETTS: The wording here suggests that it's probably going to have -- this decision will probably have to be made prior to the decision coming out. Is that a fair assessment? 344 MR. CASS: That's what the wording states. I personally can't provide the Board any better information than what's in the interrogatory response. I believe that what was meant here, though, was guidance in the form of the ultimate final decision in this case. Whether there's anything else that -- any other way of addressing it, I can't say, sitting here today. But you're quite right, that there is that likelihood and that concern about the urgency of this issue. Again, as I said, it's not as if one can assume that this is the only issue that may come up as the case progresses. 345 MR. BETTS: In response to Ms. Nowina's question regarding the urgency, did you actually give a date in your response? I might have missed it. 346 MR. CASS: No. 347 MR. BETTS: Is there any idea when a decision must be made? 348 MR. CASS: The reason I'm hesitating on this, Mr. Chair, is I have heard different things. I've heard about a need for negotiations in April. Whether that is cast in stone, I'm not in a position to say. Again, it's a party looking at a long-term commitment to LNG infrastructure and trying to decide when it needs to get its commitments in place to meet a time line to have this project in operation at a suitable time. What the drop-dead date is for that proponent of the project, it's very hard for me to say. But, yes, certainly I've heard discussion about a need for negotiating terms in April. 349 MR. BETTS: Thank you. And I appreciate that that may be somewhat unfirm. 350 MS. NOWINA: Mr. Cass, I have one additional question. So it sounds like Enbridge is considering contracts for long-term gas, one with a particular party but there may be others in the future. 351 MR. CASS: I'm sorry. Yes, this is the one that is a live issue. 352 MS. NOWINA: Right. 353 MR. CASS: But the evidence alludes to others being out there, and I suppose I would say the fact that this one is so apparently urgent only would, I think, lead one to conclude that the likelihood of some of the other ones being advanced perhaps exists. 354 MS. NOWINA: And I guess tied to the urgency is the importance of the question or materiality, and that would be how large is the contract that you're contemplating? What percentage of supply are you contemplating and therefore how material is the issue? 355 MR. CASS: I don't have any answer to that question, Ms. Nowina, I'm sorry. I just don't know. I would presume the proponent of this project is looking for the largest possible commitments to get the -- to create the feasibility to build the project. But what Enbridge Gas Distribution, from its end, is looking at, I simply do not know. 356 MR. BETTS: I've heard -- there has been some discussion about the relationship of this issue to the 2005 rates, and it's been discussed by various parties in the room. And I wonder if you can point out any specific, first of all, impact on 2005 rates that we should be aware of. 357 MR. CASS: No, Mr. Chair. I am not contending for a direct impact on fiscal 2005 rates. I meant to say that in argument in chief, and if I didn't say it clearly, I apologize. 358 MR. BETTS: I think you probably did, but I'm just wanting to make sure that I understand it clearly. 359 MR. CASS: Yes. 360 MR. BETTS: You and others, though, have indicated that a rates hearing is an appropriate place to deal with this; correct? 361 MR. CASS: Correct. 362 MR. BETTS: Okay. 363 MR. CASS: For a number of reasons which I could go into, but I won't -- 364 MR. BETTS: I think I've heard several already, so I'm all right with that, thank you. 365 If the Board agreed that this should be an issue for consideration in this, is it likely that the applicant would be bringing forth detailed information regarding the contracts? 366 MR. CASS: In the sense of detailed contract information, Mr. Chair, I don't know. Certainly, the company would come forward and say yes, there is a real issue here and a real project and an issue for the company about long-term contracting and potentially contracting that would involve a project with some related-company involvement. I think there would be evidence presented going to those concerns of the company. But more broadly, specific contract terms and an examination of specific contract terms, that wouldn't be my expectation and I simply don't know the likelihood that that even could be done. 367 MR. BETTS: So I'm sensing that you want to talk about this particular contract in a more generic way, not in the specifics of analysing the quality or the prudence of the decision being made. 368 MR. CASS: I accept that, Mr. Chair, in using the word generic, not in the sense that it's used for a generic hearing. It's a specific issue for a specific company. I don't believe there are many participants in a potential -- I don't know of any participants in a potential generic hearing that are coming forward and saying that they have this request that's being put in front of them, or even one like it, and they need some direction on the issues that the company is bringing forward. So I don't -- I wouldn't use the word generic in the sense that one would for generic hearing like industry-wide. But, yes, in the context of the company's rate case, it's more general direction than specifically looking at contract terms item by item. 369 MR. BETTS: Okay. I'm afraid that, in a sense, is confusing me a little because I'm trying to sort out, really, what you would want the Board to do in this particular rate hearing with respect to these particular contracts, which I believe you framed this, to help you with the decision that may very well be made prior to our advice being given. 370 MR. CASS: Yes. Well, again, the timing issue is a problem given the urgency that it's now being presented for this project, and I concede that. But in terms of the specific advice, Mr. Chair, again, when a proponent of a project comes forward to Enbridge Gas Distribution, it is a totally arm's-length proponent, and there is this issue or potential issue about an Enbridge Inc. involvement, brought quite possibly on a minority basis, how is the company to treat that proponent and deal with that arm's-length proponent to avoid any suggestion, as in past cases, because of some parent involvement there's an influence or something like that. So any direction the Board can provide on that. Also, any direction the Board can provide in terms of what the company should do in terms of long-term contracting pending all these important generic issues that you've heard other parties talk about. I don't pretend to sit here and presume what direction the Board can provide. I'm very confident the Board can be helpful, but those are the areas. 371 MR. BETTS: By the way, I can appreciate the dilemma that exists there, particularly when it's known that there is a process underway. So I'm sympathetic to that. But I would have to ask a pointed question as well: Could this not be taken as a request to get an early answer for a process that's underway that will generate an answer later on? 372 MR. CASS: One could take it that way, Mr. Chair. If you were to ask me my prediction about the probabilities of that the process you've heard a number of parties describing today leading to that sort of early answer, I would have to put it at an extremely low likelihood that that sort of answer could be generated. You've heard from other parties that they would want to take the issue, essentially, and it would very quickly, in a generic context, blow up into something very big, I believe. That's why I'm emphasising that in the context of this case it is not the company's intention to blow it up into something that big. It's to deal with the interim solution. 373 MR. BETTS: Mr. Cass, first of all, I do appreciate the company's desire to disclose this kind of consideration in advance, and I believe you've rightfully laid out that the Board appreciates that and has, in fact, suggested that's important to do so. That is important, I agree with that. Do you not consider the very fact that it's included in your application and we're discussing it now in a public forum in a transcribed room, is that not disclosure? 374 MR. CASS: That may well be the case, Mr. Chair. It's really the uncertainty as to what is disclosure. 375 MR. BETTS: Well, let me ask you this question. 376 MR. CASS: Is the company to understand that that is disclosure? Again, as I said, if, during the course of this case, something similar comes up with the issue not on the issues list, what then is disclosure in that context? I think my fundamental point is the uncertainty around what this disclosure is, if it isn't actually having something on an issues list in a rate case. 377 MR. BETTS: Let me just pursue that, then. You've indicated that you don't foresee the need to bring forward detailed information about contracts. What additional form of disclosure do you anticipate bringing forward? 378 MR. CASS: Well, again, Mr. Chair, I'm looking ahead here to things that I don't know for sure, so please don't take my comments on this as coming from someone who is able to predict with accuracy. But what I would anticipate is the company would present evidence on the areas where it is looking for direction. So at the time the evidence comes forward, the company would present the best evidence at that point in time about whatever Enbridge Inc.'s involvement might be, who the major proponents of the project are, the extent to which the major proponents are arm's length, those sorts of things, evidence about the issue that the company is seeking direction on. 379 MR. BETTS: So there is a willingness to fill in the blanks with respect to the requests? 380 MR. CASS: Oh, yes. 381 MR. BETTS: I believe, if I understood the position of some of the parties, there was the suggestion that perhaps the Board could consider another proceeding to deal with this in a more timely manner. Have you any reply to that position? 382 MR. CASS: Might I just clarify, Mr. Chair? Now, by the other proceeding, are you referring to the generic proceeding or the notion of perhaps bifurcating this proceeding? 383 MR. BETTS: The latter. 384 MR. CASS: In principle, I don't think the company has difficulty with the latter, in principle. 385 MR. BETTS: And with your knowledge of our processes at the Board, do you feel that by doing so, we could improve the probability of delivering advice or guidance to the company on a timely basis? 386 MR. CASS: I think that's quite potentially the case, sir, yes. 387 MR. BETTS: All right. I may have some more for you. I have a question for Ms. Aitken, and I probably should know what this date was. But you mentioned the date of May 3rd. What was that? 388 MS. AITKEN: I was referring merely to the Procedural Order of the order. If I got it wrong, I apologize, but I believe it was the 3rd of May. 389 MR. BETTS: Thank you. I just wanted to make sure it didn't relate to some other decision there. Thanks. Excuse us for just a moment. 390 The panel has concluded that you've given us enough thought here that we are not going to be able to give you a decision on this today, and I appreciate the input from all of the parties. It has created a challenging question for the Board and one that's, in some ways, far-reaching. So I'm asking all of you to allow us to adjourn at this point and we will issue a decision as quickly as we can, probably via Procedural Order, indicating what we will do with the issues list and any refinements to it or changes to it, if that's our recommendation as well. 391 Mr. Shepherd, you had a comment or question? 392 MR. SHEPHERD: Mr. Chairman, I have a procedural request. It's a bit unusual. It's the Board's normal practice on issues lists not to provide reasons as to why an issue is on or off. We've seen that as the regular sort of practice. In this case, I wonder whether -- it would be of assistance to us, certainly, maybe to other parties -- if the Board could advise us, if you decide not to put this on the issues list, whether that means the company can or cannot enter into long-term contracts in the meantime; whether the company can or cannot enter into contracts with non-affiliates as if they are arm's length; and whether the company can or cannot spend money promoting system gas during the test year. That would be of assistance to us, certainly, if it's not an issue in this proceeding. 393 MR. BETTS: We will give that consideration in drafting our information. Thank you. 394 Any other questions or comments? 395 Thank you all for participating. We didn't really expect to have so many participants, but we have truly benefited from you being here and your comments. So thank you once again and we will adjourn this Issues Day hearing. 396 --- Whereupon the hearing was adjourned at 12:12 p.m.