Pipeline Profiles: Foothills Pipeline System

Sources: Foothills Pipe lines Ltd., NEB

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Foothills is approximately 1,240 km in length and transports natural gas from an interconnect with the NOVA Gas Transmission Ltd. Pipeline near Caroline, Alberta through British Columbia and Saskatchewan. The Foothills BC system transports natural gas from the Western Canadian Sedimentary Basin (WCSB) to a point on the Canada/U.S. border near Kingsgate, British Columbia. At the border, the Foothills BC system connects to the Gas Transmission Northwest Pipeline, which serves markets in the Pacific Northwest, California and Nevada. The Foothills SK system transports natural gas from the WCSB to the Canada/U.S. border near Monchy, Saskatchewan. At the border, it connects to the Northern Border Pipeline, which serves markets in the U.S. Midwest.

In 2016, export capacity at Monchy averaged 63.41 million cubic metres per day (2.24 billion cubic feet per day) and throughput averaged 43.47 million cubic metres per day (1.54 billion cubic feet per day). The average utilization of Monchy in 2016 was 68.56%.

Flows measured at Monchy are exports. The Foothills Pipeline connects to the Northern Border Pipeline at the Canada/U.S. border near Monchy, Saskatchewan.

In 2016, export capacity at Kingsgate averaged 82.78 million cubic metres per day (2.92 billion cubic feet per day) and throughput averaged 56.08 million cubic metres per day (1.98 billion cubic feet per day). The average utilization of Kingsgate in 2016 was 67.74%.

Flows measured at Kingsgate are exports. The Foothills Pipeline connects to the Gas Transmission Northwest Pipeline at the Canada/U.S. border near Kingsgate, British Columbia.

The physical capacity of a pipeline is based on many factors such as the product(s) being carried, direction of flow, ambient temperature, pipeline compression, and maintenance work or other pressure restrictions. The operational capacity at each key point may also reflect contracts for transportation service, and supply and demand across the system. The actual physical capacity of the pipeline may be higher than the assumed operational capacity stated here.

Open data can be freely used, modified and shared by anyone for any purpose. The data for these graphs are available here.

Key Developments

Last updated: August 2016

Throughput on Foothills SK decreased in 2014 and 2015 as Canadian exports to the U.S. Midwest declined. Throughputs on Foothills BC have remained relatively steady.

Regulatory Documents

Last updated: August 2016

Tolls

Last updated: August 2016

Foothills operated under a settlement agreement from 2003-2015. Figure 1 shows the benchmark tolls for Foothills SK and BC and the GDP deflator (normalized) for 2010-2015. The Foothills BC benchmark toll (FS-1 Firm Service) increased in 2011 and 2012 due to declines in the volume of firm contracts. In 2012, this was partially offset by higher revenue from other services. The toll declined in 2013 due to lower expenses and refunding of over-collections in 2012.

Figure 1: Foothills Benchmark Tolls

Figure 1: Foothills Benchmark Tolls

Sources: NEB toll filings and NEB calculations

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This graph shows the benchmark toll for Foothills B.C. as a solid red line, the benchmark toll for Foothills SK as a solid blue line and the GDP deflator as a black dashed line. The B.C. toll varied between a high of 9.4 cents and low of 7.6 cents. The SK toll varied between a high of 6.3 cents and a low of 2.7 cents.

The Foothills SK benchmark toll (Zone 9 FT Demand Rate) decreased in 2011 due to higher interruptible and short-term firm volumes and lower expenses. The toll increased in 2012 due to a large decline in firm contracts. In 2013, tolls dropped due to refunding of over-collections in 2012. Tolls increased in 2014 and 2015 with lower throughput.

Financial

Last updated: August 2016

Foothills operates under a cost of service tolling methodology as negotiated with shippers. This has allowed return on equity to remain stable in recent years, while throughput and revenue have decreased. Foothills is a wholly-owned subsidiary of TransCanada Pipelines Ltd, which is a subsidiary of TransCanada Corporation. Foothills represents approximately 2% of TransCanada Corporations’ earnings. See the appendix in section 12 for TCPL credit ratings.

Table 1: Foothills Pipe Lines Ltd. (all Zones)
Foothills Pipe Lines Ltd. (all Zones) 2010 2011 2012 2013 2014 2015
Revenues (millions) $204.1 $192.3 $194.2 $193.4 $181.8 $178.9
Net Income (millions) $25.4 $23.5 $21.7 $20.9 $19.4 $17.7
Rate Base (millions) $654.6 $605.1 $557.3 $518.4 $480.6 $437.7
Deemed Equity Ratio 40% 40% 40% 40% 40% 40%
Return on Equity 9.7% 9.7% 9.7% 10.1% 10.1% 10.1%

 

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