In May 2014, Alliance applied to the National Energy Board (NEB) - an independent federal regulator of parts of Canada's energy industry with its purpose of regulating pipelines, energy development and trade in the Canadian public interest - requesting approval to implement new services and related tolls and tariffs to commence in December 2015. These new services included fixed tolls for medium and long-term services, as well as flexibility for shippers to choose services specific to their needs.
What the NEB regulates
The NEB regulates pipeline tolls and tariffs under its jurisdiction to ensure they are reasonable, and that there is no unjust discrimination in tolls, tariffs, or services. Through a public hearing process, the NEB considered the appropriateness of the proposed toll and surcharge methodologies for services; the process that Alliance adopted for shippers to express interest in using the pipeline, the impact of Alliance's proposal on customers with existing contracts, and whether the proposal supports a safe and economically viable pipeline.
The Alliance deal
The NEB has approved the proposed firm tolls. The NEB did not grant the company's request for unlimited pricing discretion for discretionary services. Alliance is granted the ability to establish bid floors for these services but only within a certain range as determined by the Board. The NEB has also imposed increased reporting requirements to more closely monitor the company's performance over time.
Press release edited by Stephanie Roker