ORDER NUMBER

G-77-25

 

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

 

and

 

Plateau Pipe Line Ltd.

Abandonment of Service as a Common Carrier

on the Northern Segment of the Western Pipeline System

 

BEFORE:

T. A. Loski, Panel Chair

E. A. Brown, Commissioner

B. A. Magnan, Commissioner

 

on March 27, 2025

 

ORDER

WHEREAS:

 

A.      On October 7, 2024, Plateau Pipe Line Ltd. (Plateau), a wholly-owned subsidiary of Pembina Pipeline Corporation and general partner of Pembina West Limited Partnership, filed an application (Application) with the British Columbia Utilities Commission (BCUC) for approval to abandon common carrier service on the northern segment (Northern Segment) of the western pipeline system (Western System) pursuant to sections 65 and 72(2) of the Utilities Commission Act;

B.      By Order G-262-24 dated October 18, 2024, the BCUC established a public hearing process and regulatory timetable to review the Application. The regulatory timetable currently in effect for the proceeding was established by Order G-74-25 dated March 20, 2025;

C.      By letter dated March 19, 2025, Tidewater Midstream and Infrastructure Ltd. (Tidewater) requested that Plateau be compelled to file substantive responses to certain Tidewater information requests (Tidewater Letter);

D.      By letter dated March 24, 2025, Plateau responded to the Tidewater Letter; and

E.       The BCUC considers the following determination to be warranted.

 

 

NOW THEREFORE for the reasons outlined in the decision accompanying this order, the BCUC denies Tidewater’s request for further information request responses.

 

DATED at the City of Vancouver, in the Province of British Columbia, this       27^th        day of March 2025.

 

BY ORDER

 

Electronically signed by Tom Loski

 

T. A. Loski

Commissioner

 

 

Attachment

 

Plateau Pipe Line Ltd.

Abandonment of Service as a Common Carrier

on the Northern Segment of the Western Pipeline System

 

1.0              Tidewater Request

On March 19, 2025, Tidewater Midstream and Infrastructure Ltd. (Tidewater) filed a letter (Tidewater Letter) with the British Columbia Utilities Commission (BCUC) requesting that Plateau Pipe Line Ltd.[1] (Plateau), be compelled to file substantive responses to certain information requests (IRs) filed by Tidewater in the above-noted matter.[2] Tidewater submits that the information sought is important to issues that the BCUC must consider in making its decision on Plateau's application and that Tidewater anticipates requiring this information in response to Plateau's final argument.[3]

 

In Tidewater’s IR 4.1 to Plateau, Tidewater requested that Plateau produce a copy of its retainer contract with DNV, the author of Plateau’s routine integrity cost study. In the Tidewater Letter, Tidewater submits that, according to the law, no privilege exists in communication with an expert tendered as a witness whose information is relied upon for evidence. Tidewater submits it is “entitled to know whether there may be something in the retainer that undermines its use of DNV's evidence in trying to justify unprecedented escalation in integrity costs driving up tolls on the Western System.”[4]

 

In Tidewater’s IR 4.8 to Plateau, Tidewater requested that Plateau supply the historical integrity costs incurred over the past ten years on the Blueberry Gathering System (Blueberry System). In the Tidewater Letter, Tidewater argues that whether the difference in risk associated with the pipelines justify orders of magnitudes of difference in integrity work and associated costs is a matter for argument, but does not impact the relevance of the information and the need to produce it.[5]

 

In Tidewater’s IRs 6.13, 6.15 and 6.16 to Plateau, Tidewater requested a detailed asset listing of the Western Pipeline assets that Plateau acquired from Federated Pipeline in 2000, as well as information pertaining to the municipal tax assessments, net book value and current market value of the lands relating to the Taylor Tank Farm (TTF). In the Tidewater Letter, Tidewater submits that the TTF was owned and used to provide service to the Western System, and that Plateau must account for the value of these lands for the purpose of calculating current tolls and for the collection of ARO.[6]

 

In Tidewater’s IRs 9.4, 9.5, 9.8, 9.9, 9.9.2 and 10.11 to Plateau, Tidewater sought information regarding evidence given by Plateau, ADIT Engineering Inc. (ADIT) and BGC Engineering (BGC) concerning the failed Westcoast Energy Inc. (Westcoast) horizontal directional drilling (HDD) project. In the Tidewater Letter, Tidewater states “the feasibility (and hence prudency) of the South Taylor Hill HDD is a central issue in this proceeding.”[7] Tidewater further submits that Tidewater must be permitted to fully understand the evidence underpinning Plateau’s position regarding the feasibility of the South Taylor Hill HDD, including the basis for the opinions offered by Plateau's consultants. Tidewater submits that although Plateau has referred to contractual and ethical obligations as reasons that Plateau is unable to provide further information, information filed in this proceeding is subject to confidential treatment, and Tidewater itself has been required to provide commercially sensitive information on a confidential basis.[8]

 

In Tidewater’s IRs 13.6 and 13.7 to Plateau, Tidewater requested information regarding certain parameters related to a drilling execution plan in the ADIT report. In the Tidewater Letter, Tidewater submits that Plateau has neither responded to IRs 13.6 and 13.7 nor provided an explanation for the lack of responses.[9]

 

In Tidewater’s IR 16.5 to Plateau, Tidewater requested confirmation that Plateau has not prepared a final project execution plan, a drilling execution plan, or a contingency plan for the South Taylor Hill HDD, or copies of all such documents, if not confirmed. In the Tidewater Letter, Tidewater notes that while Plateau’s response to this IR has indicated that it does not have a final project execution plan or drilling execution plan, it does refer to a drill execution plan in its response to BCUC IR 13.1. Accordingly, Tidewater submits that Plateau should be compelled to provide the documentation referenced in its response to the BCUC.[10]

 

In Tidewater’s IRs 17.2, 17.3, 17.3.1 and 17.4 to Plateau, Tidewater requested information related to integrity work, costs and tolls for to Plateau’s affiliate pipelines, including third party integrity reports on these other pipelines and Pembina’s allocation of integrity cost risk between itself and shippers. In the Tidewater Letter, Tidewater states that, in response to concerns raised by Plateau regarding the scope of the request, Tidewater is prepared to limit its request to pipelines of 8" to 24" and vintages between 1950 to 1960 and 1961 to 1970. Tidewater further submits that this information is relevant, as it would disclose integrity work and cost trajectories based on pipeline vintage, and assist in determining whether the risks faced on these pipeline systems and recommendations regarding integrity work differ materially from the Western System. With regard to Pembina’s allocation of integrity cost risk, Tidewater submits that it believes the allocation of integrity cost risk will be a significant factor reflected in integrity costs incurred.[11]

 

In Tidewater’s IRs 18.19 to 18.24 to Plateau, Tidewater sought information related to Pouce Coupé, a Plateau affiliate. In the Tidewater Letter, Tidewater submits that these IRs relate to information that would quantify the benefit to Plateau affiliates if it were able to shut-down the Western System, which is relevant because Plateau and its affiliates are also Tidewater’s competitors. Tidewater points specifically to the Plateau/Pouce Coupé Taylor to Gordondale proposal that it says would make the abandonment of the Western System particularly advantageous to Plateau and Pembina by creating significant excess capacity to ship crude oil to Edmonton. Tidewater submits that Plateau’s responses to these IRs would allow Tidewater to “validate its position that Plateau/Pembina's competitive interests are a key factor driving up tolls on the Western System to justify its abandonment.”[12]

Plateau’s Reply

In reply, Plateau submits that the Tidewater Letter lacks merit, serves to further delay the proceeding, and was not filed in a timely manner. Plateau further asserts that the “Tidewater Letter seeks information that is not relevant, not available, or cannot be provided with reasonable effort.”[13] Plateau considers that it acted in accordance with the BCUC’s Rules of Practice and Procedure by declining to provide certain requested information and submits that the Tidewater Letter should be dismissed in its entirety. Plateau also requests that, in the event it is required to provide further responses to Tidewater IRs, the regulatory timetable for this proceeding, including the final argument deadline, be adjusted accordingly.[14]

 

Notwithstanding the above, Plateau filed a copy of the DNV retainer with Osler, Hoskin & Harcourt LLP in response to Tidewater IR 4.1, along with its reply submission.

 

With respect to Tidewater IR 4.8, Plateau submits that while it has provided the requested information in part, annual integrity expenditures on the Blueberry System for the last ten years cannot be provided with reasonable effort, nor are they relevant to this proceeding. Specifically, Plateau argues that “[h]istorical integrity expenditures on unrelated pipeline systems with vastly different characteristics and locations has no relevance to assessing the economic viability of the Western System, or to the Commission’s assessment of Plateau’s or DNV’s estimates of significant future integrity costs on the Western System”.[15]

 

With respect to Tidewater IRs 6.13 and 6.15, Plateau states that the listing of the Western Pipeline assets that Plateau acquired from Federated Pipeline in 2000 requested in Tidewater IR 6.13 is not available, as this was a share purchase transaction. Plateau submits further that the tax assessments for land at the TTF sought in IR 6.15 are irrelevant to this proceeding and that, as one of the three parcels of land is leased from a private landowner, municipal tax assessments are not available for this parcel.[16]

 

With respect to Tidewater IR 6.16, Plateau submits that it has fully and adequately responded to Tidewater’s request for the net book value of TTF lands, and that Plateau does not have an assessment of the market value of these lands. Plateau is of the view that obtaining property valuations for these parcels would require unreasonable efforts given the lack of relevance or materiality of the information sought.

 

In response to Tidewater IRs 9.4, 9.5, 9.8, 9.9, 9.9.2, and 10.11, Plateau states that the information sought is not available to or in the possession of Plateau. For IR 9.4, specifically, Plateau states that the information sought is proprietary to Westcoast and is not available to ADIT or Plateau to share. Further, Plateau considers that it has already fully and adequately responded to these IRs. Plateau also notes that ADIT is unable to submit the requested additional information due to contractual and ethical obligations to its former client, Westcoast. Plateau submits it cannot compel ADIT to provide further information.[17]

 

Plateau similarly disputes that further responses are required for Tidewater IRs 13.6 and 13.7, noting that the response to IR 13.5 clearly identifies which parameters are necessary parts of a strong drilling execution plan.[18]

 

With respect to Tidewater IR 16.5, Plateau states that it has not prepared a final project execution plan, drilling execution plan, or contingency plan for the South Taylor Hill HDD and corrects its response to BCUC IR 13.1 to read “This recommendation will be adopted into the drill execution plan” (emphasis in original).[19]

 

In response to Tidewater IR 17.2, Plateau submits that its does not have aggregated integrity expenditures for individual pipelines and that, while Tidewater seeks to narrow the scope of the information sought through this motion, even narrowed the request is likely to result in an approximately six-week delay to this proceeding, which would prejudice Plateau. Plateau considers the request to be unreasonable due to the limited relevance that integrity work and cost trajectories on significantly different pipeline systems operated by Plateau’s affiliates would have to the BCUC’s determination regarding integrity costs for the Western System.[20]

 

Plateau submits that Tidewater is seeking DNV analyses and reports regarding integrity threats in relation to each of its 371 Conventional Business Unit pipelines in IRs 17.3 and 17.3.1 on the basis that such reports might indicate that the risks faced on these pipelines differ from the Western System. Plateau states that this is a fishing expedition and outside the scope of information requests contemplated under BCUC Rule 12.01. Plateau concludes that the information sought through these IRs is of no relevance to the economic viability of the Western System.[21]

 

Plateau views Tidewater IR 17.4 to be similarly unreasonably broad and to constitute a fishing expedition, as how Plateau’s affiliates allocate risk, including integrity risks, under “discrete negotiated tolls with other shippers on other pipelines under vastly different circumstances” is not relevant to the appropriate allocation of counterparty risks on the Western System.[22] Plateau contends it cannot provide this information without unreasonable effort or without significant delays.[23]

 

Finally, Plateau notes that the information requested in Tidewater IRs 18.19 to 18.24 pertains to pipeline service offered by Plateau’s affiliate on an entirely different pipeline system and that Tidewater has made no attempt to connect this or any other questions related to the Pouce Coupé pipeline system to issues in the present abandonment proceeding. Plateau states that while Tidewater has attempted to refute the irrelevance of the requested information by asserting there is a competitive incentive for Plateau’s parent corporation and affiliates to divert crude volumes to the Pouce Coupé pipeline system, even if such incentive exists (which Plateau expressly denies) Plateau’s motivations are irrelevant to the merits of the abandonment application. Further, Plateau notes that the majority of the information requested by Tidewater is publicly available or, in the case of Tidewater IR 18.24, both irrelevant and highly confidential.[24]

Panel Determination

The Panel finds, for the reasons outlined below, that an order to compel Plateau to file further responses to Tidewater’s IRs is not warranted.

 

First, as Plateau has provided the DNV retainer requested by Tidewater, no further response to IR 4.1 is necessary. Similarly, because Plateau has revised its response to BCUC IR 13.1 such that any ambiguity regarding the status of the drilling execution plan has been resolved, the Panel is satisfied that no further response is needed to IR 16.5.

 

Regarding IRs 4.8, 17.2, 17.3, 17.3.1 and 17.4, in which Tidewater seeks extensive historical integrity-related information on Plateau’s affiliate pipelines, the Panel is persuaded by Plateau’s submission that the information sought is of limited relevance to the merits of the abandonment application. Plateau has explained that its affiliated pipelines have distinct characteristics and circumstances relative to those of the Western System, limiting the comparative value of the data sought. Further, the Panel is also mindful of Plateau’s submissions regarding the extent of the effort that would be required to produce this information. In light of the effort required and the limited relevance, the Panel considers that no further response to these IRs is warranted.

 

With respect to IR 6.13, as explained by Plateau, due to the nature of Plateau’s acquisition of the Western System, a detailed listing of the Western Pipeline assets Plateau acquired from Federated Pipeline in 2000 is not available. As such, the Panel declines to direct a further response to this IR.

 

With respect to IRs 6.15 and 6.16, the Panel is persuaded by Plateau’s submission that Tidewater’s request for the production of ten years of tax assessments applicable to Plateau’s parent company is not reasonable, and that records are not available for all of the TTF parcels. Further, the Panel notes that Plateau has already provided a partial response to IR 6.16, by providing the net book value of the TTF. The Panel considers this information to be sufficient for the purposes of this proceeding.[25]

 

With respect to IRs 9.4, 9.5, 9.8, 9.9, 9.9.2 and 10.11, Tidewater seeks further information regarding the unsuccessful Westcoast HDD. The Panel is satisfied that the requested information is proprietary to Westcoast. As such, the information is not available to Plateau nor is ADIT at liberty to disclose it in this proceeding.

 

With respect to IRs 13.6 and 13.7, the Panel considers Plateau’s response to IR 13.5, in which ADIT identifies the parameters that it considers are necessary parts of a strong drilling execution plan, and Plateau’s submission that these parameters will necessarily dictate drilling implementation and experience requirements[26] to sufficiently and reasonably address the questions posed in IRs 13.6 and 13.7.

 

Finally, with respect to IRs 18.19 to 18.24, the Panel is not persuaded of the relevance of the information sought regarding pipeline services offered by Plateau’s affiliate. Neither party disputes that there is a competitive market for crude oil produced in British Columbia, nor that there are alternative pipelines available aside from the Western System on which to ship this crude. The potential benefits that Plateau’s affiliates may realize if common carrier service on the Western System is abandoned are not relevant to the merits of Plateau’s present abandonment application. As such, no further response is warranted.

 

 

 

DATED at the City of Vancouver, in the Province of British Columbia, this       27^th       day of March 2025.

 

 

Electronically signed by Tom Loski

_________________________________

T. A. Loski

Panel Chair/Commissioner

 

 

Electronically signed by Elizabeth A. (Lisa) Brown

_________________________________

E. A. Brown

Commissioner

 

 

Electronically signed by Bernard Magnan

_________________________________

B. A. Magnan

Commissioner