ORDER NUMBER

P-4-21

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

and

Kinder Morgan Canada (Jet Fuel) Inc.

2019 Tariff Filing Application

BEFORE:

B. A. Magnan, Panel Chair

C. Brewer, Commissioner

T. A. Loski, Commissioner

on April 15, 2021

ORDER

WHEREAS:

A.      On November 29, 2018, Kinder Morgan Canada (Jet Fuel) Inc. (KMJF) filed with the British Columbia Utilities Commission (BCUC) an application for approval of Tariff No. 40, which extends the existing terms of service and tolls payable for the transportation of turbine fuel to Vancouver International Airport and the Burnaby Terminal (Application), effective January 1, 2019;

B.      By Order P-1-18 dated December 14, 2018, the BCUC established a public written submission process and a regulatory timetable to explore stakeholders’ submissions or other potential issues;

C.      By April 24, 2019, the Vancouver Airport Fuel Facilities Corporation (VAFFC) and Parkland Fuel Corporation (Parkland) registered as interveners in the proceeding;

D.      On January 6, 2020, Pembina Pipeline Corporation informed the BCUC that it had acquired KMJF, including the Jet Fuel Line, and changed the name to PKM Canada (Jet Fuel) Inc. (PKMJF);

E.       On March 12, 2020, pursuant to Order P-1-20, which adjourned the proceeding for 60 days, PKMJF filed a letter submitting no amendments to the Application were necessary because of the acquisition and requesting resumption of the proceeding;

F.       On December 16, 2020, VAFFC and Parkland each filed intervener evidence on the Application;

G.      On March 8, 2021, PKMJF filed rebuttal evidence, as well as amendments to the revenue requirement (Amended Application), which the BCUC accepted into the evidentiary record by Order P-2-21, dated March 16, 2021;

H.      By letters dated April 9, 2021, VAFFC and Parkland jointly requested that the regulatory timetable for review of the Application be suspended temporarily to allow the parties to explore the possibility of a negotiated settlement (Joint Suspension Request); and

I.         By letter dated April 12, 2021, PKMJF requested that the BCUC deny the Joint Suspension Request;

J.        By letters dated April 12, 2021 and April 13, 2021, VAFFC and Parkland, respectively, responded to PKMJF’s objection; and

K.       The BCUC has reviewed the Joint Suspension Request and associated submissions and makes the following determinations.

NOW THEREFORE for the reasons attached as Appendix A to this order, the BCUC orders as follows:

1.       The Joint Suspension Request is denied.

2.       The parties are directed to provide an update to the BCUC on the status of settlement discussions by April 27, 2021.

DATED at the City of Vancouver, in the Province of British Columbia, this                 15^th              day of April 2021.

BY ORDER

Original signed by:

B. A. Magnan

Commissioner

Attachment

Kinder Morgan Canada (Jet Fuel) Inc.

2019 Tariff Filing Application

Table of Contents

                                                                                                                                                                                                              Page no.

1.0         Background. 1

2.0         VAFFC and Parkland Joint Suspension Request. 1

3.0         BCUC Determination. 2

1.0               Background

On November 29, 2018, Kinder Morgan Canada (Jet Fuel) Inc. (KMJF) filed with the British Columbia Utilities Commission (BCUC) an application for approval of Tariff No. 40, which extends the existing terms of service and tolls payable for the transportation of turbine fuel to Vancouver International Airport and the Burnaby Terminal (Application), effective January 1, 2019.

By Order P-10-19[1], the BCUC amended the regulatory timetable for review of the Application to include, among other things, an opportunity for interveners to file evidence in the proceeding and for KMJF to file rebuttal evidence. This regulatory timetable was further amended on several occasions in response to requests from the parties.[2]

By letter dated January 2, 2020, KMJF informed the BCUC that Pembina Pipeline Corporation (Pembina) had acquired Kinder Morgan Canada Ltd., including KMJF. On January 6, 2020, Pembina filed a letter with the BCUC to provide notice of Pembina acquiring KMJF, including the Jet Fuel Line, and subsequently changing the name to PKM Canada (Jet Fuel) Inc. (PKMJF).

On March 8, 2021, PKMJF filed rebuttal evidence, as well as amendments to its requested revenue requirement (Amended Application). By Order P-2-21[3], the BCUC accepted PKMJF’s Amended Application into the evidentiary record for the proceeding and amended the regulatory timetable to include an opportunity for BCUC and intervener information requests (IR) on PKMJF’s rebuttal evidence and the Amended Application. Following a request by Parkland Fuel Corporation (Parkland), the deadline for filing intervener IRs on PKMJF’s rebuttal evidence and the Amended Application was extended by two weeks to April 13, 2021, pursuant to Order P‑3‑21.[4]

2.0               VAFFC and Parkland Joint Suspension Request

On April 9, 2021, Vancouver Airport Fuel Facilities Corporation (VAFFC) and Parkland filed submissions with the BCUC requesting that the regulatory timetable for review of PKMJF’s Application be suspended temporarily (Joint Suspension Request). VAFFC and Parkland state that suspending the regulatory timetable would allow shippers to explore the possibility of a negotiated settlement and to engage with PKMJF. VAFFC and Parkland state that if the Joint Suspension Request is accepted, the shippers would update the BCUC regarding the status of settlement discussions on April 26, 2021.[5]

On April 12, 2021, PKMJF filed a reply submission with the BCUC, requesting that the Joint Suspension Request be denied. PKMJF states that “[w]hile PKMJF is interested in exploring the possibility of a settlement that would be agreeable to all parties… a suspension of the Proceeding at this point is unnecessary and would not ensure the fairest, most expeditious and efficient determination of the Proceeding.” PKMJF submits that the Joint Suspension Request is (i) unnecessary, given the respective workloads of the parties between now and April 26, 2021; and (ii) unreasonable, given the “already lengthy nature” of the proceeding.^[6]

PKMJF notes that under the existing regulatory timetable following submission of intervener IRs “there are currently no further scheduled regulatory steps for which VAFFC and Parkland must prepare materials or expend resources.” As such, PKMJF submits that “VAFFC and Parkland are free to devote the majority, if not the entirety, of their Jet Fuel Line-related resources to exploring a settlement during the period prior to PKMJF filing its IR responses on April 27, 2021.” PKMJF submits that it is in a position to engage in settlement discussions with shippers while also continuing its participation in the BCUC proceeding. PKMJF offers to provide the BCUC with an update on the state of settlement negotiations on April 27, 2021, when it files its IR responses.^[7]

In response to PKMJF’s objection, VAFFC and Parkland submit that suspending the regulatory timetable will allow the parties to focus their efforts on settlement negotiations.^[8] VAFFC states that “pursuing settlement discussions in parallel with the regulatory timetable risks parties leveraging regulatory deadlines to deliver settlement discussion responses, and will divide parties’ focus, in each case leading to a more protracted process.”^[9]

3.0               BCUC Determination

The Panel is supportive of the parties’ efforts to explore the possibility of a negotiated settlement. Nevertheless, the Panel notes that review of the Application began in late 2018 and the regulatory timetable has been amended several times to accommodate extensions requested by each of the participants. The Panel is concerned with the additional delay that would result from suspending the regulatory timetable at this juncture and is not persuaded that settlement negotiations cannot be undertaken at the same time as the proceeding.

As noted by PKMJF, following the submission of intervener IRs, the burden of participating in the proceeding lies solely with the applicant until after IR responses have been filed on April 27, 2021. PKMJF has also offered to provide an update to the BCUC on the status of settlement discussions when it files its IR responses. The Panel notes that this timing is consistent with shippers’ expectations of when greater clarity on the likelihood of a negotiated settlement would be available. PKMJF has further indicated that it has sufficient resources to proceed with settlement discussions while simultaneously fulfilling its obligations in the proceeding. The Panel concludes that this would be the most efficient course of action and encourages the parties to pursue settlement discussions in parallel with the BCUC’s review of the Application.

In consideration of the above, the Panel determines that suspension of the regulatory timetable is not warranted at this time. The Panel directs the parties to provide an update on the status of settlement discussions by April 27, 2021.