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Appendix A: Financial Tables
The following list and financial tables represent an overview of the Northern Pipeline Agency's 2006-2007 financial performance.
- Table 1 - Summary of Voted Appropriations
- Table 2 - Comparison of Total Planned Spending to Actual Spending
- Table 3 - Historical Comparison of Total Planned Spending to Actual Spending
- Table 4 - Non-respendable Revenues
- Table 5 - External Charging
Table 1 - Summary of Voted Appropriations
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Financial Requirements by Authority ($ thousands) |
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2006 – 2007 ________________________________________ Main Planned Total Actual Vote Northern Pipeline Agency Estimates Spending Authorities Spending |
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35 Operating Expenditures 870 870 932 382 S Contribution to Employee Benefit Plans 76 76 9 9 Total NPA 946 946 941 391 |
Table 2 - Comparison of Total Planned Spending to Actual Spending
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Agency Planned versus Actual Spending |
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2006 – 2007 ________________________________________ Main Planned Total Actual Northern Pipeline Agency Estimates Spending Authorities Spending |
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FTEs 4.0 4.0 4.0 2.0 ________________________________________
Operating 946 946 941 391
Capital - - - -
Voted Grants and Contributions - - - - ________________________________________
Total Gross Expenditures 946 946 941 391
Less: Respendable Revenues __ -__________-__________ -__________ -___
Total Net Expenditures 946 946 941 391
Other Revenues & Expenditures - - - -
Non Respendable Revenues(1) (946) (970) (965) (595)
Cost of Services Received Without Charge - 24 24 53 ________________________________________
Net Cost of Program - - - 151
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(1) Of the $595K actual non respendable revenue, $27K does not represent revenue to the NPA. It is an amount collected from Foothills Pipelines Ltd. and remitted directly to the Government of Canada by the Agency.
Table 3 - Historical Comparison of Total Planned Spending to Actual Spending
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Agency Planned Spending versus Actual Spending ($ thousands) |
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2006-2007 ____________________________________ Actual Actual Main Planned Total 2004-2005 2005-2006 Estimates Spending Authorities Actual |
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Northern Pipeline 496 627 946 946 941 391 Agency Total 496 627 946 946 941 391 |
Table 4 - Non-Respendable Revenues
Non-Respendable Revenues($ thousands) |
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2006-2007 _________________________________ Actual Actual Planned Total 2004-2005 2005-2006 Revenues Authorities Actual |
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Northern Pipeline 598 951 970 965 595 Agency Unplanned - - - - - Total Non-Respendable Revenues 598 951 970 965 595 Total Revenues(1) 598 951 970 965 595 |
(1) Refer to Note 1 on page 10.
Table 5 - DPR 2007 - External Charging Information for NPA
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Regulation of construction of the Alaska Highway Gas Pipeline |
The NPA regulates the planning and construction of the Canadian portion of the Alaska Highway Gas Pipeline. |
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Fee Type |
Regulatory |
|
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Fee Setting Authority (e.g. Legislative, Regulatory) |
The NPA external charging is in accordance with section 29 of the Northern Pipeline Act and section 24.1 of the National Energy Board Act and the National Energy Board Cost Recovery Regulations. |
|
|
Date Last ModifiedB |
See section B below for fees amended in fiscal year 2003-04. |
November 6, 2002 |
|
2006-2007 |
||
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Forecast Revenue |
Regulatory |
970.0 |
|
Actual Revenue (1) |
Regulatory |
595.0 |
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Estimated Full Cost |
Regulatory a) NPA costs to provide service = $ 391.0 b) Services received without charge = $ 53.0 |
444.0 |
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Service Standard |
The construction of Phase II of the Alaska Highway Gas Pipeline has been put on hold due to adverse market conditions. The NPA has shrunk to a skeleton organization but in a state of readiness in the event Phase II of the pipeline project is reactivated. There are no formally developed measurable service standards at this time. |
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|
Performance Results |
Please refer to notes regarding service standards. |
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(1) Refer to Note 1 on page 10.
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Planning Years |
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Fiscal Year |
2007-08 |
|
|
Forecast Revenue |
Sub-Total (2007-08) |
72.5 290.0 290.0 652.5 |
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Estimated Full Cost |
Sub-Total (2007-08) |
72.5 290.0 290.0 652.5 |
B: Date Last Modified
The NPA cost recovery is determined in accordance with section 24.1 of the National Energy Board Act. Although amendments were made to the NEB Cost Recovery Regulations on November 6, 2002, they do not affect the calculation of the NPA cost recovery charges.
C: Other Information:
1) Cost Recovery and Revenue Accrual:
In accordance with Section 29 of the Northern Pipeline Act and with the National Energy Board Cost Recovery Regulations, the Agency is required to recover all its annual operating costs from the companies holding certificates of public convenience and necessity issued by the Agency. Currently, Foothills Pipe Lines Ltd. is the sole holder of such certificates. The NPA corresponds with Foothills regularly on the level of and expected activities of the Agency including its operating costs.
Program appropriation for each planning year is presented on a fiscal year basis while cost recovery charges, according to the regulations, are calculated on a calendar year basis and billed quarterly. In addition, forecast revenue figures are presented on an accrual basis. As a result, the program appropriation and the forecast revenue amounts do not reconcile although the NPA recovers 100% of its operating costs.
2) Dispute Management:
Due to the current level of activities, a dispute management policy, a pre-requisite for the implementation of the External Charging Policy, has not been developed. However, frequent consultation with Foothills on changes to activities and the associated costs precludes disputes affecting cost recovery. A dispute management policy will be developed to support increased operational requirements.
Appendix B: Organization
The NPA has been designated as a department for the purposes of the Financial Administration Act. The Agency reports to Parliament through the Minister of NRCan who is responsible for the management and direction of the Agency. The Agency has two senior officers, namely a Commissioner and an Assistant Commissioner and Comptroller. The Commissioner of the Agency, currently the Deputy Minister for NRCan, is appointed by the Governor in Council.
Given the continued low level of Agency activity, arrangements are in place whereby the Agency relies largely on NRCan for administrative and technical assistance. This assistance is provided on a cost-recoverable basis. In addition, NRCan also provides policy advice to the Agency.
To further assist the Minister responsible for the Agency in carrying out the Agency's mandate, there is provision for two federally appointed advisory councils. The Councils consist of Aboriginal, business and other interested parties representing communities in northern British Columbia and the Yukon Territory. Membership in these Councils has lapsed over the years in view of the dormant state of Phase II of this project.
As a separate employer, the Agency conforms closely with the principles of personnel administration that apply in the Public Service of Canada and has developed various systems to implement policy appropriate to the Agency's operating requirements.
Figure 3 provides a schematic of the reporting relationships of the key officers of the Agency.
Appendix C: History/Chronology
The Agency's activities are dictated by the timing and pace of the construction of the pipeline. The following provides a brief description and chronology of the pipeline.
The project is the largest proposed pipeline in North America, encompassing approximately 7 700 kilometres (4,800 miles) of large-diameter mainline pipe, about 42 percent of which would be located in Canada. The route for the project in Canada and the United Sates is depicted in Figure 1. Once in full operation, the pipeline would be capable of initially transporting 68 million cubic meters (2.4 billion cubic feet) per day of Alaskan gas, and the system could be expanded to transport additional volumes subject to regulatory approval. The system, as designed, could also accommodate the receipt and onward delivery of 34 million cubic meters (1.2 billion cubic feet) per day of northern Canadian gas via a connecting pipeline from the Mackenzie Delta/Beaufort Sea region.
As far back as 1977, the concept of prebuilding the southern portions of the pipeline was identified as a benefit of the project, providing Canadian natural gas producers with additional export opportunities and supplying U.S. consumers with much-needed gas. This prebuild, which constituted Phase I of the pipeline, included a western leg to transport Canadian gas to markets in California and the Pacific northwest and an eastern leg to serve primarily the U.S. midwest market. At the same time it was contemplated that Phase II of the pipeline, consisting of the northern portions and the remaining sections to be constructed in southern Canada and the lower 48 regions, would follow in the near term.
The construction of the prebuild went ahead as planned and Canadian gas started flowing through the system for export in the 1981-1982 time frame. The Agency's activity level reached its peak during the construction of the prebuild, with a corresponding staff complement of over 100 employees.
In 1982, at about the same time the prebuild was completed, adverse market conditions led the sponsors of the pipeline to put a hold on Phase II. The adverse market conditions were a result of:
- a decline in demand for natural gas due to economic recession and energy conservation measures;
- an increase in U.S. supply in response to higher wellhead prices; and
- escalating forecast costs of construction due to inflation and rising interest rates.
It was originally anticipated that the completion of the project would be delayed by only about two years, however, Phase II of the pipeline remains on hold to this day. In response, the Agency shrank to a skeleton organization in the mid-1980's. Arrangements
are in place whereby the Agency relies largely on NRCan for administrative, technical assistance and policy advice.
There have been five expansions completed since 1988, all of which were designed to either increase system capacity or enhance system reliability. The most significant of these expansion projects involved (i) the addition of two new compressor stations on the eastern leg in Alberta and of an additional compressor station and a further compressor unit in Saskatchewan, (ii) the completion of the western leg mainline in southeastern British Columbia, and (iii) a further expansion of the eastern leg in 1998.
The flow capacity of the prebuild continues to approach the 102 million cubic meters (3.6 billion cubic feet) per day rate provided for in the underlying agreement between Canada and the U.S. The fifth and latest expansion of the prebuild, which came into service in 1998, raised its capacity to about 94 million cubic meters (3.3 billion cubic feet) per day.
On behalf of the Government of Canada, the Agency coordinates implementation of the agreement reached with the United States in 1980 respecting the procurement of certain designated items such as compressors and large-diameter line pipe, valves, and fittings for the construction of the pipeline. This agreement provides that both Canadian and American suppliers be afforded the opportunity to bid on a generally competitive basis. Canada suspended implementation of the agreement for the latest Foothills expansion due to the lack of U.S. reciprocity.
Appendix E: Other Information
A. Contacts for Further Information
Northern Pipeline Agency
580 Booth Street,
Ottawa, Ontario K1A 0E9
Telephone: (613) 992-9612
Fax: (613) 9951913
B. Legislation and Associated Regulations Administered Acts
Northern Pipeline Act RSC 1977-78, c. 20,s.1
National Energy Board Cost Recovery Regulations SOR/91-7
C. Socio-Economic and Environmental Terms and Conditions (1980-1981)
Northern Pipeline Socio-Economic and Environmental Terms and Conditions for the Province of Alberta(Order NP-MO-1-80 dated 12 June 1980)
Northern Pipeline Socio-Economic and Environmental Terms and Conditions for Southern British Columbia(Order NP-MO-2-80 dated 12 June 1980)
Northern Pipeline Socio-Economic and Environmental Terms and Conditions for the Swift River Portion of the Pipeline in the Province of British Columbia (Order NP-MO-11-80 dated 29 August 1980)
Northern Pipeline Socio-Economic and Environmental Terms and Conditions for Northern British Columbia(Order NP-MO-12-80 dated 29 August 1980)
Northern Pipeline Socio-Economic and Environmental Terms and Conditions for the Province of Saskatchewan(Order NP-MO-13-80 dated 29 August 1980)
Listing of Statutory and Departmental Reports
2007 Annual Report