TransCanada line put to federal watch
Jon Harding, with files from Gordon Jaremko, Edmonton Journal, Calgary Herald
Published: Wednesday, June 18, 2008
After years of resistance, Alberta says it will let Ottawa oversee regulation of TransCanada Corp.'s inter-Alberta natural gas pipeline web, known as the Nova system.
Canada's largest pipeline company applied Tuesday to the National Energy Board to recognize that its vast, 50-year-old pipeline system in Alberta should fall within federal jurisdiction, rather than under the watch of Alberta's regulator, the Alberta Utilities Commission.
TransCanada CEO Hal Kvisle said the move is necessary if the company is to expand services at competitive rates to gas producers outside of the province.
"The ability to attract gas produced in British Columbia and the North, including the Territories and Alaska, is important as it will enhance the competitiveness of the Alberta system," Kvisle said.
There would also be the benefit of regulatory efficiency as TransCanada expansions into Alberta would only fall under one regulatory agency -- the NEB.
Jason Chance, a spokesman for Alberta's department of energy, said the province would not fight the switch.
Alberta-based gas production that has fed the hub for years is on the decline, Chance said, while natural gas from new production hot spots such as northeastern B.C. could increasingly take a greater share, which means keeping the Alberta hub full.
"There are obviously tremendous benefits for Alberta in terms of providing additional feedstock for the Alberta hub and from additional opportunities like value-added upgrading, petrochemical development etc.," Chance said. "A change would still offer the province the opportunity to intervene at NEB regulatory hearings if that we deemed necessary."
The move is a sign Alberta accepts that times have changed since the original grid was built in 1954 as Alberta Gas Trunk Line, with a corporate charter enacted by the legislature to create an independent delivery service.
AGTL was born as an Alberta investor-owned and provincially supervised network of routes between all gas fields and inlets to national and international pipelines. The province fiercely defended its jurisdiction over the grid as a counter to greater economic power of gas consumers, especially in central Canada.
The old regime unravelled in the late 1990s, when gas deregulation across Canada and the United States heightened pipeline competition. AGTL, which was renamed Nova in a 1970s corporate reorganization, was taken over by TransCanada 10 years ago.
TransCanada is now trying to win an approval in Alaska to build a $27-billion US gas link between Alaska and Alberta to feed new gas supplies to the hub.
Doug Matthews, a Calgary-based consultant, worked for years for the government of the Northwest Territories pushing for the inter-Alberta system to be turned over to the NEB as a way to encourage development of the Mackenzie Gas Project. Alberta resisted.
"The problem back then, as it was cited, was that when gas within Alberta is regulated by a provincial regulator, it is hard for ex-Alberta gas to get the regulatory treatment it seeks," Matthews said.
jharding@theherald.canwest.com
© The Calgary Herald 2008
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