Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 1 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 1 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

Enbridge Pipelines Inc. ("Enbridge") Canadian Mainline Contracting Application ("Application") RH-001-2020 File OF-Tolls-Group1-E101-2019-02 02 Filed 19 December 2019

Enbridge Response to Valero Energy Inc. ("Valero") Information Request No. 1

1.1 Interconnections to the Enbridge Mainline

Reference: (i) Enbridge Mainline Contracting Application - Appendix 6 Evidence of Jeffrey Church [C03823-6 at PDF 27 and 86].

(ii) Enbridge Response to CER IR No. 1, CER-ENB 1.10.b [Ex C06801- 2 at PDF 59-60].

(iii) Exhibit B-2-05-02 – Evidence of Valero Energy Inc – Complaint Regarding the Enbridge Pipelines Inc. Tolls on Line 9 [A66227, at PDF 4].

(iv) Exhibit B-2-05-03 – Appendix A to Evidence of Valero Energy Inc. – Complaint Regarding the Enbridge Pipelines Inc. Tolls on Line 9 - Enbridge Line 9 Pro Forma TSA and Enbridge Line 9 Amending Agreement dated December 17, 2014, [A66227 at PDF 1-58].

(v) Exhibit B-2-05-04 – Appendix B to Evidence of Valero Energy Inc. – Complaint Regarding the Enbridge Pipelines Inc. Tolls on Line 9 - Enbridge Letter to Valero [A66227 at PDF 1].

Preamble: In reference (i), Dr. Church discusses supply sources for the refineries in Québec and provides a table outlining the capacity of those refineries. In reference (i), Dr. French states:

Table 4 shows the supply sources for the refiners in Quebec. It shows total feedstock requirements in 2018 and the source of those feedstock requirements. The estimates indicate that the total feedstock requirements, approximately 210 kbpd are sourced on Enbridge’s Line 9, while approximately 140 kbpd are delivered using alternative sources of supply, including production in Atlantic Canada, the U.S., and overseas.

In reference (ii), Enbridge lists the pipelines on which downstream take- or-pay commitments are held, including each of Enbridge Line 9, Enbridge Southern Access Extension Pipeline (Line 63), Enbridge Spearhead Pipeline (Line 55) and Enbridge Flanagan South Pipeline (Line 59).

In reference (iii) Valero states that it executed a TSA for firm service on Enbridge Line 9 on June 15, 2012.

In reference (iv) Valero provides a copy of Enbridge’s Pro Forma Transportation Service Agreement for Line 9B (“Line 9B TSA”). Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 2 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

In reference (v) Enbridge states that the Shipper Committed Volume for Valero is 130,000 bpd, and provides the anticipated in-service date of Enbridge Line 9B.

Request: (a) Please confirm that Enbridge “Line 9” consists of two sections – Line 9A and Line 9B. If not confirmed why not?

(b) Please confirm that Line 9A originates in Sarnia, Ontario and terminates at Enbridge’s Westover Station. If not confirmed, why not?

(c) Please confirm that Line 9B originates at Sarnia, Ontario and terminates in Montreal, Québec. If not confirmed, why not?

(d) Please confirm that when Enbridge refers to Line 9 take-or-pay commitments or to Line 9 committed shippers or committed volumes in the Application, it is referring to take-or-pay commitments on Line 9B and TSAs for committed service on Line 9B. If not confirmed, why not?

(e) Please confirm that the Line 9 take-or-pay commitments referred to in reference (ii) relate to volume commitments for transportation from Sarnia, Ontario to Montreal Québec on Line 9B. If not confirmed, why not?

(f) Please confirm that all volumes shipped on Line 9A are uncommitted and are subject to uncommitted tolls. If not confirmed, why not?

(g) Please confirm that Line 9A serves Imperial Oil Limited Nanticoke refinery in Nanticoke, Ontario. If not confirmed, why not?

(h) Please confirm that Valero executed a Line 9B TSA on or about June 15, 2012. If not confirmed, please provide the date that Valero executed a Line 9B TSA. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application

(i) Please confirm that Valero executed an amendment to the Line 9B TSA on or about December 17, 2014. If not confirmed, please provide the date that Valero executed an amendment to the Line 9B TSA. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application

(j) Please provide a copy of reference (iv).

(k) Please confirm that the term of the Line 9B TSA is 120 months from the In-Service Date of Line 9B, with an optional extended term of 60 months. If not confirmed, why not?

(l) Please confirm that the In-Service Date of Line 9B, for the purposes of the Line 9B TSA was the later of (i) 12 days following March 7, 2015 or (ii) 12 days following the date Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 3 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

Enbridge received leave to open approval. In providing a response, please confirm the actual In- Service Date of Line 9B.

(m) Please confirm that the initial term of Valero’s Line 9B TSA will expire in or about November 2025. If not confirmed, please provide the date upon which the initial term of Valero’s Line 9B TSA will expire. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application.

(n) Please confirm that the Line 9B TSA includes a take-or-pay provision, and that Valero must pay a penalty or deficiency payment under the Line 9B TSA if it fails to meet its volume commitment during a nomination cycle. If not confirmed, why not?

(o) Please confirm that the Line 9B TSA obligates Valero to pay committed tolls on Line 9B.

Response: (a) Confirmed.

(b) Line 9A is the 194-kilometre segment of Line 9 between Sarnia Terminal and North Westover Station in Ontario.

(c) Not confirmed. Line 9B is the 639 km-long section of Line 9 between North Westover Station and Montreal Terminal. Refer to Figure 2.2.1 at PDF p. 22 of the Enbridge Pipelines Inc. Line 9B Reversal and Line 9 Capacity Expansion Project Application, filed with the National Energy Board (“NEB”) on November 29, 2012 (A3D7I1).

(d) Not confirmed. When Enbridge refers to Line 9 take-or-pay commitments or Line 9 committed shippers or volumes, it is referring to commitments on the entire Line 9, which originates at Sarnia Terminal and terminates at Montreal Terminal.

(e) Enbridge confirms that the Line 9 take-or-pay commitments in reference (ii) relate to commitments for transportation from Sarnia Terminal to Montreal Terminal. However, those commitments are for the entire Line 9 and not only commitments on Line 9B, which runs from North Westover Station to Montreal Terminal as described in the response to (c). Enbridge refers to commitments on Line 9 and not only on Line 9B in the remainder of the responses to Valero IR No. 1, as the Line 9 Transportation Services Agreements ("TSAs") provide committed transportation service from Sarnia Terminal to Montreal Terminal.

(f) Not confirmed. Any volumes shipped on Line 9A by shippers that have executed Line 9 TSAs and that do not exceed those shippers' monthly volume commitments in their TSAs are committed volumes that are subject to the Line 9 committed tolls. Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 4 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

(g) While Line 9A does serve the Imperial Oil Nanticoke refinery, Line 9A also serves all Line 9 shippers as it is the segment of Line 9 between Sarnia Terminal and North Westover Station in Ontario.

(h) Not confirmed. Valero executed a Line 9 TSA on September 7, 2012.

(i) Confirmed, for the Line 9 TSA.

(j) Enbridge notes that reference (iv) was filed by Valero with the NEB on February 17, 2015 (A4H7D1).

(k) Confirmed, for the Line 9 TSA.

(l) The in-service date for the purposes of the Line 9 TSA was November 23, 2015.

(m) Confirmed, for Valero's Line 9 TSA.

(n) Confirmed; under the Line 9 TSA, a committed shipper must pay a deficiency payment if it fails to meet its monthly volume commitment, except in circumstances including extended carrier force majeure, Line 9 apportionment and Enbridge Mainline apportionment.

(o) The Line 9 TSA covers the payment of committed tolls on Line 9.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 5 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.2 Interconnections to the Enbridge Mainline

Reference: (i) Enbridge Mainline Contracting Application - Appendix 6 Evidence of Jeffrey Church [C03823-6 at PDF 27 and 86].

(ii) Enbridge Mainline Contracting Application – Appendix 3 Enbridge Mainline Commodity Movements, Receipt and Delivery Points [C03823-5].

Preamble: In reference (i), Dr. Church discusses supply sources for the refineries in Québec and provides a table outlining the capacity of those refineries. In reference (i), Dr. French states:

Reference (ii) outlines receipt and delivery points on the Enbridge Mainline (Canadian Mainline and Lakehead System).

Request: (a) Please confirm that, the Suncor Refinery in Montreal and the Valero Lévis Refinery in Québec City are the only two refineries in Québec. If not confirmed, why not?

(b) Please confirm that there are only two refineries in the Atlantic provinces (Newfoundland and Labrador, Prince Edward Island, New Brunswick, Nova Scotia) – the North Atlantic Refining Corp. Come By Chance Refinery in Newfoundland; and the Irving Oil Refinery in Saint John, New Brunswick. If not confirmed, why not?

(d) Please confirm that the reference to Line 9 in reference (i) is to Line 9B. If not confirmed, why not?

(e) Please confirm that Valero is a shipper on the Enbridge Canadian Mainline. If not confirmed, why not?

(f) Please provide the first date – month and year – that Valero started shipping on the Enbridge Canadian Mainline. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application.

(g) Please confirm that as a shipper under the current Enbridge Canadian Mainline service and toll structure, Valero currently Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 6 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

has no minimum volume obligation nor any take-or-pay or deficiency payment obligation. If not confirmed, why not?

(h) Please confirm that Valero Energy Inc. is a shipper on Enbridge Line 9B. If not confirmed, why not?

(i) Please provide the first date – month and year – that Valero started shipping on Enbridge Line 9B. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application.

(j) Without revealing the specific volumes shipped, please confirm that for the years 2015, 2016, 2017, 2018, 2019 and 2020, a portion of the volumes shipped by Valero on Line 9B originated at receipt points in Canada and were shipped on the Enbridge Mainline (i.e. the Canadian Mainline and the Lakehead System) to Sarnia, Ontario for receipt into Line 9B. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application.

(k) Without revealing the specific volumes nominated, starting with the date (month and year) provided in (i) above and continuing to the month and year for which the most recent data is available, please list the months (month and year) in which Valero nominated volumes for shipment on the Canadian Mainline for delivery in Montreal via Line 9B. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application

(l) Without revealing the specific volumes nominated, starting with the date (month and year) provided in (i) above and continuing to the month and year for which the most recent data is available, please list the months (month and year) in which Valero did not nominate its full volume commitment under the Line 9B TSA. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application.

(m) Without revealing the specific volumes nominated, starting with the date (month and year) provided in (i) above and continuing to the month and year for which the most recent data is available, please list the months (month and year) in which Valero was allocated an apportioned volume that was less than its full volume commitment under the Line 9B TSA. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application.

(n) Without revealing the amounts paid, starting with the date (month and year) provided in (i) above and continuing to the month and year for which the most recent data is available, please list the months (month and year) in which Valero paid Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 7 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

any amount of penalty or deficiency payment for not meeting its delivery obligation under the Line 9B TSA. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application

(o) Please confirm that during the months listed in (n) above, Valero did not pay any deficiency payment associated with not shipping on the Canadian Mainline. If not confirmed, why not? To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application

(p) To the extent that any of the information requested in this information request is confidential, will Enbridge make application to the Canada Energy Regulator, pursuant to section 60 of the Canadian Energy Regulator Act, seeking to file that information as confidential? If not, why not?

Response: (a) Confirmed.

(b) There are two refineries in the Atlantic provinces: the Irving Come By Chance refinery in Newfoundland and Labrador and the Irving Saint John refinery in New Brunswick.

(c) Based on the information in the CAPP Canadian and U.S. Crude Oil Pipelines and Refineries – 2019 map, Enbridge understands the capacity of each of the refineries in (a) is:

• Suncor Refinery in Montreal: 137,000 bpd; and • Valero Lévis Refinery in Québec City: 235,000 bpd.

Based on the information in the CAPP 2019 Crude Oil Forecast, Markets and Transportation report (at PDF p. 12), Enbridge understands the capacity of each of the refineries in (b) is:

• Come By Chance Refinery in Newfoundland: 130,000 bpd; and • Irving Oil Refinery in Saint John, New Brunswick: 320,000 bpd.

(d) Not confirmed. Line 9 in reference (i) refers to the entire Line 9, which originates at Sarnia Terminal and terminates at Montreal Terminal.

(e) Confirmed.

(f) Valero's first batch movement shipped on the Enbridge Canadian Mainline was injected into the Mainline in October 2015 and delivered off of Line 9 at Montreal in December 2015.

(g) Confirmed, for the Enbridge Canadian Mainline. Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 8 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

(h) Confirmed. Valero is a shipper on Enbridge Line 9, which consists of Line 9A and Line 9B.

(i) Valero delivered its first batch of crude oil off Line 9 at Montreal in December 2015.

(j) Confirmed, although the volumes were delivered off the Mainline at Sarnia, Ontario for receipt into Line 9A, and not Line 9B, which originates at North Westover, Ontario.

(k) Valero has nominated volumes for shipment on the Canadian Mainline for delivery to Montreal on Line 9 in all months between December 2015 and July 2020.

(l) Valero nominated materially its full Line 9 commitment on average over the five-year period.

(m) The Mainline was apportioned for 29 months in which Valero nominated its Line 9 monthly volume commitment or more than its Line 9 monthly volume commitment. Of those 29 months, Valero's Mainline allocated nominations were lower than Valero's Line 9 monthly volume commitment in 16 months. In five of the 29 months, Line 9 was also apportioned; while Valero’s allocated volume was never below Valero’s Line 9 monthly volume commitment as a result of Line 9 apportionment, in each of those five months Valero's volumes were subsequently reduced below Valero’s Line 9 monthly volume commitment as a result of Mainline apportionment.

(n) • November and December 2015 • March to November 2016 • May to November 2017 • April, May and June 2018 • 2019 N/A • April and May 2020

(o) Confirmed, as there is currently no deficiency payment for the Canadian Mainline.

(p) Not applicable.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 9 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.3 Interconnections to the Enbridge Mainline

Reference: (i) Enbridge Mainline Contracting Application - Appendix 6 Evidence of Jeffrey Church [C03823-6 at PDF 27 and 86].

(ii) Enbridge Response to CER IR No. 1, CER-ENB 1.10.a [Ex C06801- 2 at PDF 59-60] and Attachment 1 to CER IR 1.10.a [Ex C06801-15].

Preamble: In reference (i), Dr. Church discusses supply sources for the refineries in Québec and provides a table outlining the capacity of those refineries. In reference (i), Dr. French states:

Table 4 in reference (i) identifies the Suncor Refinery in Montreal and the Valero Lévis Refinery in Québec City, as refineries located in Québec and provides an analysis of the supply sources for those refineries.

In reference (ii), Enbridge provides a listing of refineries the Enbridge Mainline delivers crude oil to and a listing of pipelines interconnected to the Mainline and on which downstream take-or-pay commitments are held, including each of Enbridge Line 9, Enbridge Southern Access Extension Pipeline (Line 63), Enbridge Spearhead Pipeline (Line 55) and Enbridge Flanagan South Pipeline (Line 59).

Request: (a) Please confirm that with the exception of Enbridge Line 9B, the Québec refineries identified in reference (i) do not otherwise source supply from pipelines. If not confirmed, why not?

(b) If the response to (a) above is not confirmed, please identify the other pipeline(s) that supply each of the Québec refineries identified in reference (i) and in doing so, please confirm the receipt and delivery points and capacity of each of those pipelines.

(c) If the response to (a) above is not confirmed, please re-do the analysis in reference (i) to identify and account for historical supply (i.e. in 2018) from those other pipelines.

Response: (a) Not confirmed. Enbridge understands that the Portland- Montreal pipeline system transports crude oil from South Portland, Maine to Montreal, Quebec.

(b) Refer to the response to (a). Based on publicly available information, Enbridge understands that the Portland-Montreal pipeline system has a capacity of 223 kbpd and that its main Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 10 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

receipt point is located in South Portland, Maine, and the main delivery point is located in Montreal, Quebec. (CER, “Pipeline Profile: Montreal,” https://www.cer- rec.gc.ca/nrg/ntgrtd/pplnprtl/pplnprfls/crdl/mntrl-eng.html.)

(c) The 2018 throughput on the Portland-Montreal pipeline system was 2.4 kbpd and is accounted for in the analysis identified in reference (i). Table 4 was mislabeled where it says, "by Ship", as the source used for exports from PADD1/3 to Canada includes all exports, including those occurring from PADD1 through the Portland-Montreal pipeline system. (US Energy Information Administration (EIA), PAD District Exports by Destination; https://www.eia.gov/dnav/pet/pet_move_expcp_d_r10_NCA_mb blpd_a.htm.) Enbridge is filing an updated version of Table 4 with the CER concurrently with these IR responses. Refer to the response to CER IR 2.4.e.4.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 11 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.4 Interconnections to the Enbridge Mainline

Reference: (i) Enbridge Mainline Contracting Application - Appendix 6 Evidence of Jeffrey Church [C03823-6 at PDF 27 and 86].

(ii) Enbridge Response to CER IR No. 1, CER-ENB 1.2 [C06801-2 at PDF 8-9].

(iii) Enbridge Mainline Contracting Application – Appendix 3 Enbridge Mainline Commodity Movements, Receipt and Delivery Points [C03823-5].

Preamble: In reference (i), Dr. Church discusses supply sources for the refineries in Québec and provides a table outlining the capacity of those refineries. In reference (i), Dr. French states:

In reference (ii), Enbridge discusses how, in its view, the proposed new contract service offering on the Canadian Mainline may assist in WCSB crude reaching refineries in Québec.

Reference (iii) outlines receipt and delivery points on the Enbridge Mainline (Canadian Mainline and Lakehead System).

Request: (a) Please confirm that Enbridge Line 9B originates in Sarnia, Ontario. If not confirmed, why not?

(b) Please provide a listing of Enbridge Mainline pipelines that deliver crude oil to the originating point of Line 9B and can be received by Line 9B for delivery in Québec. In doing so, please provide the daily capacity and the source of crude supply for each of those pipelines.

(c) Please provide a listing of all other pipelines, beyond those listed in (b) above, and any other connections (e.g. rail) that deliver crude oil into Sarnia that can then be received by Line 9B for delivery in Québec. In doing so, please identify the daily capacity and the source of crude supply for each of those connections.

(d) For each individual pipeline and other connection (e.g. rail) identified in (b) and (c) above, please provide the aggregate Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 12 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

total volumes for each of 2015, 2016, 2017, 2018, 2019 and 2020 delivered from those individual pipelines subsequent shipment on Line 9B, as a percentage of the aggregate total volume of shipments on Line 9B for the same years.

(e) Please confirm that the Enbridge Mainline is the only source of WCSB crude oil available to shippers wishing to ship WCSB crude on Line 9 (i.e. both Line 9A and Line 9B). If not confirmed, why not?

(f) Please confirm that Line 9B is currently the only source of WCSB crude oil for Québec refiners. If not confirmed, why not?

(g) In light of what is stated in reference (ii) does Enbridge have any plans to expand the maximum capacity of Line 9B in the next five to ten years?

Response: (a) Not confirmed. See the responses to Valero IRs 1.1.a to .c.

(b) Line 9 originates at Sarnia, Ontario. The 300 kbpd Line 9A segment from Sarnia to North Westover provides all volumes to the Line 9B segment, which originates at North Westover and terminates at Montreal.

At Sarnia, Line 5 and Line 78 deliver crude oil to Line 9A. Line 5 has a capacity of 540 kbpd, and Line 78 has a capacity of 500 kbpd.

For additional details on each pipeline's specifications and commodities transported, please refer to the Pipeline System Configuration, Appendix 1 to the Application (C03823-3).

(d) 100% of volume transported on Line 9B is from either Line 5 or Line 78, with approximately 50% of the Line 9 volumes transported on each.

(e) Confirmed.

(f) Not confirmed. Enbridge is aware of Western Canada Sedimentary Basin (“WCSB”) rail opportunities into Quebec when pricing opportunities exist and the Enbridge Mainline is apportioned and cannot confirm that WCSB volumes are never transported to Quebec refineries by tanker.

(g) Enbridge regularly evaluates market demand for Line 9 capacity.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 13 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.5 Interconnections to the Enbridge Mainline

Reference: (i) Enbridge Mainline Contracting Application - Appendix 6 Evidence of Jeffrey Church [C03823-6 at PDF 27].

(ii) Enbridge Mainline Contracting Application - Appendix 6 Evidence of Jeffrey Church [C03823-6 at PDF 86].

(iii) Enbridge Response to CER IR No. 1, CER-ENB 1.2 [C06801-2 at PDF 8-9].

(iv) Enbridge Mainline Contracting Application – Appendix 3 Enbridge Mainline Commodity Movements, Receipt and Delivery Points [C03823-5].

Preamble: In reference (i), Dr. Church discusses supply sources for the refineries in Québec in 2018 and states:

The capacity of Line 9 is 300 kbpd and there was approximately 90 kbpd of unused capacity in 2018. This is consistent with a misallocation of capacity if the preferred source of supply by the Quebec refiners is deliveries from Line 9. If so, this capacity would be used and the 90 kbpd would displace some of the 140 or so kbpd obtained by refiners in Quebec from higher-cost sources if there was not apportionment with uncommitted service, but instead firm service. That is, Line 9 shipments could have been below capacity in 2018 by 90 kbpd because of apportionment upstream on the Enbridge system.

Reference (ii) is a table (Table 4) that provides the analysis described in reference (i).

In reference (iii), Enbridge states:

Canadian consumers of refined products and Canadian shareholders of refineries served by Line 9 would therefore benefit from the conversion to Mainline Contracting if, under 100% uncommitted service, least- cost supply from the WCSB is not available because inefficient capacity allocation on the Enbridge Canadian Mainline, but would be under Mainline Contracting. The Church Evidence suggests that under Mainline Contracting up to an additional 90 kbpd of supply from Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 14 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

the WCSB would reach refineries in Quebec that currently does not because of inefficient capacity allocation under100% uncommitted service when capacity is constrained.

Reference (iv) outlines receipt and delivery points on the Enbridge Mainline (Canadian Mainline and Lakehead System).

Request: (a) Please confirm that volumes delivered to Sarnia on the Canadian Mainline can originate at receipt points either in Canada on the Canadian Mainline System or in the United States on the Lakehead System. If not confirmed, why not?

(b) Please confirm that under the current uncommitted service design on the Canadian Mainline, Line 9B shippers can make a single nomination from receipt points on the Canadian Mainline (e.g. Edmonton) to delivery points on Line 9B. That is, separate nominations to each of the Canadian Mainline and Line 9B are not required for a single movement. If not confirmed, why not?

(c) Please confirm that under the current uncommitted service design on the Canadian Mainline, Line 9B shippers do make single movement nominations from receipt points on the Canadian Mainline (e.g. Edmonton) for delivery point on Line 9B. If not confirmed, why not?

(d) Please provide the 2018 volumes sourced by Québec refiners from Line 9B: (1) that originated at receipt points on the Canadian Mainline; and (2) that originated at receipt points on the Lakehead System, as a percentage of the total approximate volume of 210 kbpd sourced from Line 9B in 2018 as outlined in reference (i).

(e) Please provide the same table as shown in reference (ii) for each of 2015, 2016, 2017, 2019 and 2020.

(f) For each table produced in response to (e) above, please provide the same information as requested in (d), but for the applicable year. That is, for each calendar year in (e), please provide the volumes sourced by Québec refiners from Line 9B: (i) that originated at receipt points on the Canadian Mainline; and (ii) that originated at receipt points on the Lakehead System, as a percentage of the total approximate volume sourced from Line 9B during that calendar year.

(g) Without revealing the specific volumes shipped, please confirm that the majority of volumes shipped by Valero on Line 9B in each of 2015, 2016, 2017, 2018, 2019 and 2020 originated at receipt points on the Canadian Mainline. If not confirmed, why not? To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application.

(h) To the extent that any of the information requested in this information request is confidential, will Enbridge make Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 15 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

application to the Canada Energy Regulator, pursuant to section 60 of the Canadian Energy Regulator Act, seeking to file that information as confidential? If not, why not?

Response: (a) Confirmed.

(b) Confirmed.

(d) There are two shippers on Line 9 that ship to Montreal. As such, Enbridge cannot provide the requested information as to do so would reveal to Valero confidential shipper information regarding the other shipper's receipt splits between the Canadian Mainline and the Lakehead System.

(e) In Table 4 (reference (ii)), Dr. Church used only public sources to estimate Line 9 shipments to Quebec refiners in 2018 to be 211 kbpd, with 89 kbpd of unused capacity on Line 9. Assuming that no crude oil produced in Atlantic Canada is shipped to Quebec reduces the estimate of unused capacity of Line 9 in 2018 to 77 kbpd (see the response to CER IR 2.4.e.4). Actual shipments and unused capacity on Line 9 from 2015 to 2020 by year are shown in Valero IR 1.5.e - Attachment - Line 9 Montreal Deliveries 2015-2020.

(f) There are two shippers on Line 9 that ship to Montreal. As such, Enbridge cannot provide the requested information as to do so would reveal to Valero confidential shipper information regarding the other shipper's receipt splits between the Canadian Mainline and the Lakehead System.

(g) Confirmed.

(h) No, as providing the information requested in (d) and (f) would disclose the confidential information of the other Line 9 committed shipper that delivers to Montreal. Valero already has all of its own information that it is requesting in this IR.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 16 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.6 Service Offering and Toll Methodology

Reference: (i) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 25].

(ii) Enbridge Response to CER IR No. 1, CER-ENB 1.9.a [Ex C06801-2 at PDF 54].

Preamble: In reference (i), Enbridge states that the beginning of 2018 it met with a number of shippers to gain an understanding of the terms and conditions of service those shippers desired on the Enbridge Mainline after the expiry of the Competitive Toll Settlement. Enbridge states that during these discussions, some of Enbridge’s shippers requested that Enbridge provide priority access to Canadian Mainline capacity.

In reference (ii), Enbridge states:

The uncommitted toll premium was determined by negotiation with prospective shippers that planned on being both committed and uncommitted shippers.

Request: (a) Without revealing the content of negotiations with any particular shipper, please confirm that Enbridge did not introduce the concept of priority access or contract carriage on the Canadian Mainline to any Enbridge Mainline shippers prior to 2018. If not confirmed, then when did Enbridge first introduce the concept of priority access or contract carriage on the Canadian Mainline with any Enbridge Mainline shipper?

(b) Please confirm that Valero has never requested priority access or contract service on the Canadian Mainline. To the extent that Enbridge considers the requested information confidential, Valero consents its disclosure for the purposes of the Application

(c) To the extent that any of the information requested in this information request is confidential, will Enbridge make application to the Canada Energy Regulator, pursuant to section 60 of the Canadian Energy Regulator Act, seeking to file that information as confidential? If not, why not?

Response: (a) Not confirmed. Enbridge has had discussions with shippers with respect to priority access or contract carriage on the Canadian Mainline since at least 2006.

(b) Enbridge is unable to confirm this request.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 17 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.7 Service Offering and Toll Methodology

Reference: (i) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 37].

(ii) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 30].

(iii) Enbridge Response to CER IR No. 1, CER-ENB 1.10.b [Ex C06801- 2 at PDF 59-60].

(iv) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 27].

Preamble: In reference (i), Enbridge outlines that during the open season, a shipper may elect a TSA term ranging from 8 to 20 years and that the TSA terms will commence on one of three TSA Commencement Dates. One of those Commencement dates is July 1, 2021.

In reference (ii), Enbridge states:

Through its negotiation and consultation process, Enbridge attempted to accommodate the interests of as many stakeholders as possible; however Enbridge did not negotiate the terms and conditions of firm service with a view to reaching an agreement with 100+ stakeholders, many of which have competing interests.

In reference (iii), Enbridge lists the pipelines on which downstream take- or-pay commitments are held, including each of Enbridge Line 9, Enbridge Southern Access Extension Pipeline (Line 63), Enbridge Spearhead Pipeline (Line 55) and Enbridge Flanagan South Pipeline (Line 59).

In reference (iv), Enbridge states that committed shippers can select the Flex Service Term, which allows shippers who do not want to commit to a minimum eight year contract term to contract for a shorter term of not less than three years.

Request: (a) Please confirm that the existing take-or-pay commitments for Line 9B shippers do not have terms that either commence or terminate on the TSA Commencement Dates in reference (i). If not confirmed, why not?

(b) Please confirm that using a Commencement Date of July 1, 2021, the termination date of any 8-year or longer TSA under the proposed new contract service offering will not align with the termination dates for existing take-or-pay commitments on Line 9B. If not confirmed, why not?

(c) Please provide a listing of options in the proposed new service offering that will allow shippers with existing take-or-pay commitments on Line 9B to align the termination of those existing commitments with the termination of any committed Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 18 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

service obtained as part of the proposed new contract service offering on the mainline.

(d) Please provide a listing of options in the proposed new contract service offering that will allow shippers with existing take-or-pay commitments on Line 9B to align their existing volume commitments on Line 9B with volume commitments of any committed service obtained as part of the proposed new contract service offering on the mainline.

(e) Please provide a listing of options in the proposed new service offering on the Canadian Mainline that was included so as to accommodate shippers with existing take-or-pay commitments on Line 9B.

(f) Please provide a listing of measures contained in the proposed new service offering that will preserve the contract rights of those shippers with existing take-or-pay obligations on Line 9B.

Response: (a) Please refer to the response to Phillips 66 IR 1.12.a. As discussed in the response to Valero IR 1.1.d and e, the Line 9 take-or-pay commitments are for Line 9, which is comprised of Line 9A and Line 9B. Enbridge has assumed that references to Line 9B in (a) to (f) of this request are intended to refer to the entire Line 9, from Sarnia to Montreal.

(b) Not confirmed. The Line 9 TSA has a five-year extension right that will expire in late November 2030. This can align with a Mainline TSA term of approximately nine years, depending on the exact effective date of the Mainline TSAs. Since the Mainline Contract Offering allows shippers to choose a specific expiry month, rather than having annual anniversary dates, the expiries can align exactly. Furthermore, if Line 9 shippers elect for even longer Mainline Contracting terms (for instance, to capture greater Mainline toll discounts), Enbridge could be asked by shippers to run an open season for new contracts on Line 9 that could be effective upon termination of the existing Line 9 contracts, as extended. That new Line 9 TSA's termination date could match the termination date chosen for the Mainline TSA. For example, in the event that Line 9 shippers chose 20-year terms for the Mainline TSAs, Enbridge could run a Line 9 open season for TSAs of approximately 11 years and ensure that the two contracts expired contemporaneously. Shippers could also subscribe to a Flex Service Term to align the termination dates if they elected not to extend their Line 9 TSAs.

(d) Please refer to the response to Phillips 66 IR 1.12.d.

(e) Please refer to the response to Phillips 66 IR.1.12.e.

(f) The Line 9 TSA will remain in full force and effect and is unaltered by the Mainline TSA. Please refer to Section 7.5 - Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 19 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

Payment of Tolls Pursuant to Other Service Arrangements of the Mainline Contracting TSAs (Appendices 9-16 of the Application) (C03823).

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 20 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.8 Service Offering and Toll Methodology

Reference: (i) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 37].

(ii) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 40].

(iii) Enbridge Response to CER IR No. 1, CER-ENB 1.10.a [Ex C06801- 2 at PDF 59-60] and Attachment 1 to CER IR 1.10.a [Ex C06801-15].

(iv) Enbridge Mainline Contracting Application - Appendix 6 Evidence of Jeffrey Church [C03823-6 at PDF 27 and 86].

(v) Enbridge Response to CER IR No. 1, CER-ENB 1.2 [C06801-2 at PDF 8-9].

Preamble: In reference (i), Enbridge outlines that during the open season, shipper may elect a TSA term ranging from 8 to 20 years.

In reference (ii), Enbridge states:

Committed shippers will also be relieved from their delivery and deficiency payment obligations under the TSAs if: (1) Enbridge is unable to deliver committed shipper’s monthly volume commitment as a result of Enbridge Mainline apportionment; or (2) a portion of a committed shipper’s nomination is subject to apportionment at a receipt terminal on the Canadian Mainline as a result of Enbridge being unable to provide sufficient receipt tankage facilities to accommodate aggregate nominations of a specific commodity type.

In reference (iii), Enbridge provides a listing of refineries the Enbridge Mainline delivers crude oil to and a listing of pipelines interconnected to the Mainline and on which downstream take-or-pay commitments are held, including each of Enbridge Line 9, Enbridge Southern Access Extension Pipeline (Line 63), Enbridge Spearhead Pipeline (Line 55) and Enbridge Flanagan South Pipeline (Line 59).

In reference (iv), Dr. Church discusses potential impacts of the misallocation of Canadian Mainline capacity on Québec refineries served by Line 9.

In reference (v), Enbridge discusses how, in its view, the proposed new contract service offering on the Canadian Mainline may assist in WCSB crude reaching refineries in Québec

Request: (a) Please confirm that the Line 9B TSAs that are currently in effect contain both delivery and deficiency payment obligations on the part of the shippers holding those TSAs. If not confirmed, why not? Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 21 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

(b) Please confirm that under the current Enbridge Canadian Mainline service and toll structure and Line 9B TSAs, the inability of a Line 9B committed shipper to ship on the Canadian Mainline in a given nomination cycle does not relieve that shipper of its delivery and payment obligations under the Line 9B TSA. If not confirmed, why not?

(c) Please confirm that under the terms of the TSAs for the proposed new contract service offering, the inability of a Line 9B committed shipper who also contracted for the new contract service offering to ship on the Canadian Mainline to Sarnia in a given nomination cycle will not relieve that shipper of its delivery and payment obligations under the Line 9B TSA. If not confirmed, why not?

(d) Please confirm that under both the current Enbridge Canadian Mainline service and toll structure and the proposed new contract service offering, if some or all of the volumes nominated on the Canadian Mainline for delivery to Montreal by a Line 9B committed shipper are not shipped, that shipper must obtain the shortfall volumes from an alternate source at Sarnia, Ontario in order to fulfill its delivery commitment on Line 9B. If not confirmed, why not?

(e) Please confirm that in the scenario presented in (d) immediately above, the inability of a Line 9B committed shipper to obtain the shortfall volumes from an alternate source at Sarnia, Ontario does not relieve that shipper of its deficiency payment obligations. If not confirmed, why not?

(f) Please confirm that under the proposed new contract service offering, a Line 9B committed shipper’s only options for sourcing crude oil on the Canadian Mainline for delivery to Montreal are: entering into a “Take or Pay Contract”; entering into a “Requirements Contract”; or relying on the uncommitted capacity made available in any given month. If not confirmed, why not?

Response: (a) Enbridge confirms that under the terms of the Line 9 TSA, the failure by a Line 9 committed shipper to deliver its entire monthly committed volume off of Line 9 requires the committed shipper to pay a deficiency payment, other than in specified circumstances including extended carrier force majeure, Line 9 apportionment, and Enbridge Mainline apportionment. Such deficiency payments are treated as pre-payments and may be applied to future shipments in excess of Line 9 shippers’ committed volumes.

(b) Not confirmed. Line 9 TSA Section 7.09 provides that if a Line 9 committed shipper nominates its full Line 9 commitment to the Enbridge Mainline and is allocated less volume on the Enbridge Mainline than its Line 9 commitment as a result of apportionment or for any other reason, the Line 9 committed shipper's deficiency payment that would otherwise be payable is waived to the extent of the difference between the Line 9 Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 22 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

commitment and the capacity allocated to the shipper on the Enbridge Mainline.

(d) Not confirmed. The Line 9 committed shipper's Line 9 TSA obligations vary depending on the reason why the shipper did not ship its full Line 9 committed volume on the Enbridge Mainline. Refer to the response to (b) for details regarding deficiency payment waiver if a Line 9 committed shipper's Mainline nomination of Line 9 committed volumes is curtailed on the Enbridge Mainline as a result of apportionment or any other reason. After Mainline apportionment is calculated and the Line 9 committed shipper receives its accepted nomination on the Mainline, if the shipper then does not ship its full accepted nomination to Sarnia, that shipper is required to otherwise obtain volumes to ship on Line 9 to meet its Line 9 TSA obligations or pay a deficiency payment for the shortfall. In such a circumstance, the Line 9 committed shipper could obtain shortfall volumes in the secondary market, which is likely to be more liquid and efficient under the Mainline Contract Offering than under uncommitted service, as discussed in the Church Evidence, para. 77 (Appendix 6 of the Application, PDF p. 24) (C03823-8).

(e) Enbridge assumes the reference to "deficiency payment obligations" in the question refers to the deficiency payment obligations under the Line 9 TSA and not the proposed Mainline TSA. Please refer to the response to (d).

(f) Not confirmed. In addition to entering into a Take or Pay Contract or a Requirements Contract, and shipping crude oil utilizing the uncommitted capacity, a Line 9 committed shipper will have the ability to source crude oil in the secondary market, which as discussed in the response to (d) is likely to be more liquid and efficient under the Mainline Contract Offering than under uncommitted service. Furthermore, a third party could hold a Receiving Refiner Requirements Contract and designate a Line 9 committed shipper’s refinery as the contract designated facility. This option would be available to any shipper with a long-term feedstock supply agreement in place with the Line 9 committed shipper. In this situation, the third party could claim an excused event under its TSA if the Line 9 committed shipper had a refinery upset. Refer to Section 5.7 of the Mainline TSA.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 23 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.9 Service Offering and Toll Methodology

Reference: (i) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 8].

(ii) Enbridge Technical Conference Presentation [ExC06800-2 at PDF 34]

Preamble: In reference (i), Enbridge states:

Enbridge’s new service and tolling framework will reserve 10% of the available capacity of the Canadian Mainline for shipments of spot or uncommitted volumes. Any contracted capacity that is not used for contract shipments will also be made available for spot shipments, which means that more than 10% of the Canadian Mainline capacity may be available for spot shipments in any given month. Uncommitted capacity will continue to be available on a month-to-month basis, just as it is now.

In reference (ii), Enbridge provides an annotated graphical representation of the nomination process and timelines under the current Canadian Mainline service and toll structure.

Request: (a) Please provide an annotated graphical representation of the nomination process and timelines for the proposed new contract service offering that is the same or similar to the one shown in reference (ii). In doing so, please identify when committed and uncommitted shippers will nominate volumes; when contracted capacity not used for contract shipments will be made available for uncommitted volumes; and when committed and uncommitted shippers will be made aware of nomination acceptance and any applicable apportionment.

(b) Please confirm that under the proposed new contract service offering there is no guarantee that in any given month more than 10% of the available capacity will be made available for spot or uncommitted shipments. If not confirmed, why not?

(c) Prior to filing the Application, did Enbridge conduct any forecasts or analysis to estimate the frequency of which more than 10% of the Canadian Mainline capacity may be available for spot shipments in any given month over the life of the proposed new contract service offering? If so, please provide those forecasts or analysis.

(d) Prior to filing the Application, did Enbridge conduct any forecasts or analysis to estimate the frequency of which the Canadian Mainline will be subject to apportionment in any given month over the life of the proposed new contract service offering? If so, please provide those forecasts or analysis. Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 24 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

Response: (a) The nomination process and timelines for contract service will not change from what is shown in the Technical Conference Presentation. As such, no new annotated graphical representation has been provided.

The deadline for shippers to submit nominations under Mainline Contracting will be the same whether the nomination is for committed or uncommitted volumes. Shippers will be required to provide additional information identifying which volumes are to be considered as committed volumes, and which volumes are deemed uncommitted volumes. The apportionment calculation process will include identifying the availability of capacity for uncommitted volumes that was originally reserved for committed volumes. Shippers will be notified of all allocated nominations, both committed and uncommitted, at the same time.

(b) Confirmed.

(c) Refer to the response to CER IR 2.36.b for information regarding the analysis Enbridge performed to determine the size of the contractible limits, and to the response to CER IR 2.12.c for information regarding the expected range of available uncommitted capacity.

(d) No such forecast was developed.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 25 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.10 Service Offering and Toll Methodology

Reference: (i) Enbridge Response to CER IR No. 1, CER-ENB 1.10.b [Ex C06801- 2 at PDF 59-60].

(ii) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 14].

(iii) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 29].

(iv) Enbridge Mainline Contracting Application - Appendix 6 Evidence of Jeffrey Church [C03823-6 at PDF 27 and 86].

Preamble: In reference (i), Enbridge lists the pipelines on which downstream take- or- pay commitments are held, including each of Enbridge Line 9, Enbridge Southern Access Extension Pipeline (Line 63), Enbridge Spearhead Pipeline (Line 55) and Enbridge Flanagan South Pipeline (Line 59).

In reference (ii), Enbridge states that it currently has 120 approved shippers on the Enbridge Mainline.

In reference (iii), Enbridge states that it entered into over 130 confidentiality agreements with individual parties when initiating its discussions with shippers about the proposed new contract service offering.

In reference (iv), Dr. Church discusses potential impacts of the misallocation of Canadian Mainline capacity on Québec refineries served by Line 9.

Request: (a) Please provide the number of shippers that currently hold take- or- pay commitments on Line 9B.

(b) Please provide the number of shippers that shipped on Line 9B in each of calendar year 2015, 2016, 2017, 2018, 2019 and in 2020. In doing so, please confirm how many of those shippers held take-or- pay commitments on Line 9B.

(c) Please provide the number of shippers that shipped on the Canadian Mainline in each of calendar year 2015, 2016, 2017, 2018, 2019 and in 2020. In doing so, please confirm how many of those shippers held take-or-pay commitments on each of the pipelines identified in reference (i).

(d) Of the 120 approved shippers identified in reference (ii), how many have shipped on Line 9B since 2018?

(e) Of the 130 shippers identified in reference (iii), how many have shipped on Line 9B since 2018?

(f) To the extent that any of the information requested in this information request is confidential, will Enbridge make application to the Canada Energy Regulator, pursuant to section Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 26 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

60 of the Canadian Energy Regulator Act, seeking to file that information as confidential? If not, why not?

Response: (a) Two shippers have Line 9 TSAs with commitments on Line 9 to Montreal.

(b) For the years 2015 - 2020, two shippers, both with Line 9 take- or-pay commitments, shipped on Line 9B.

(c) The number of shippers that shipped on the Canadian Mainline are as follows. All affiliated shippers are counted as a single shipper.

• 2015 - 45 • 2016 - 43 • 2017 - 45 • 2018 - 54 • 2019 - 55 • Jan - June 2020 - 47

Of those shippers that shipped on the Canadian Mainline between January 2015 and June 2020, three shippers held take-or-pay commitments on Line 9; two shippers held take-or- pay commitments on the Southern Access Extension Pipeline; between five and six shippers held take-or-pay commitments on the Spearhead Pipeline; and between 12 and 16 shippers held take-or-pay commitments on the Flanagan South Pipeline.

(d) Of the 120 approved shippers identified in reference (ii), two have shipped and delivered volumes in their names to Montreal off of Line 9 since 2018.

(e) Of the 130 shippers identified in reference (iii), two have shipped and delivered volumes in their names to Montreal off of Line 9 since 2018.

(f) Not applicable.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 27 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.11 Service Offering and Open Season

Reference: (i) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 68-69].

(ii) Enbridge Mainline Contracting Application - Appendix 6 Evidence of Jeffrey Church [C03823-6 at PDF 27 and 86].

(iii) Enbridge Response to CER IR No. 1, CER-ENB 1.2 [C06801-2 at PDF 8-9].

(iv) Enbridge Response to CER IR No. 1, CER-ENB 1.10.b [Ex C06801- 2 at PDF 59-60].

Preamble: In reference (i), Enbridge outlines how capacity will be allocated in the event that any open season for the new contract service offering is oversubscribed.

In reference (ii), Dr. Church discusses supply sources for the refineries in Québec in 2018 and states:

In reference (iii), Enbridge states:

Canadian consumers of refined products and Canadian shareholders of refineries served by Line 9 would therefore benefit from the conversion to Mainline Contracting if, under 100% uncommitted service, least- Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 28 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

cost supply from the WCSB is not available because inefficient capacity allocation on the Enbridge Canadian Mainline, but would be under Mainline Contracting. The Church Evidence suggests that under Mainline Contracting up to an additional 90 kbpd of supply from the WCSB would reach refineries in Quebec that currently does not because of inefficient capacity allocation under 100% uncommitted service when capacity is constrained.

In reference (iv), Enbridge lists the pipelines on which downstream take- or-pay commitments are held, including each of Enbridge Line 9, Enbridge Southern Access Extension Pipeline (Line 63), Enbridge Spearhead Pipeline (Line 55) and Enbridge Flanagan South Pipeline (Line 59).

Request: (a) Please confirm that under the proposed new contract service offering and associated open season procedures, if Valero were to participate in the open season by subscribing for a capacity equal to its current take-or-pay volume commitment on Line 9B, it may still receive a committed capacity allocation on the Canadian Mainline that is less than its current take-or-pay volume commitment on Line 9B. If not confirmed, why not?

(b) Please confirm it is Dr. Church’s view that Line 9 is the preferred source of supply for Québec refineries. If confirmed, please:

(i) provide the basis and/or reasons for this view; and

(ii) please provide the basis and/or reasons that Valero’s preferred source of supply is Line 9B.

(c) In reference (ii), Dr. Church states: “…the 90 kpbd would displace some of the 140 or so kbpd obtained by refiners in Quebec from higher-cost sources if there was not apportionment of uncommitted service.” Please provide the basis, and analysis, for the view that alternate crude supply sources to Line 9 for Québec refineries are “higher-cost sources”.

(d) Aside from Dr. Church’s views, please provide any other basis or justification for the statement in reference (iii) that: “Canadian consumers of refined product and Canadian shareholders of refineries served by Line 9 would therefore benefit from the conversion to Mainline Contracting if, under 100% uncommitted service, least-cost supply from the WCSB is not available because of in-efficient capacity allocation on the Enbridge Canadian Mainline...”.

(e) Prior to filing the Application, did Enbridge know what portion of the refined products output from the Valero Lévis Refinery is destined for Canadian markets?

(f) In addition to the perceived benefits expressed by Dr. Church and Enbridge in references (i) and (ii), what other benefits to Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 29 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

Line 9B shippers will arise from the proposed new contract service offering?

Response: (a) As discussed in the response to Valero IR 1.1.e, Valero's current take-or-pay commitment is on Line 9 and not only on Line 9B.

If the open season was oversubscribed for long haul contracts and Valero subscribed for a volume equal to its current take-or- pay commitment on Line 9, then it is confirmed that pro rata allocation would result in Valero receiving committed capacity on the Canadian Mainline that is less than its current take-or- pay volume commitment on Line 9.

(b) Dr. Church has no view on whether Line 9 is the preferred source of supply for Quebec refineries. Dr. Church was making the observation in his evidence that there is excess capacity on Line 9 such that if WCSB crude was the least-cost or preferred source of supply, then under Mainline Contracting that capacity might be used if Quebec refiners had a higher willingness to pay for capacity than other refiners, in particular refiners south of Chicago.

(d) The full quote is “Canadian consumers of refined products and Canadian shareholders of refineries served by Line 9 would therefore benefit from the conversion to Mainline Contracting if, under 100% uncommitted service, least-cost supply from WCSB is not available because of inefficient capacity allocation on the Enbridge Canadian Mainline, but would be under Mainline Contracting.” This is a matter of logic.

(e) No.

(f) Shippers may derive the same benefits as described previously in the Application, as well as those noted in the responses to CER IR 2.5.a-b and Phillips 66 IR 1.10.c, among others.

As individual shippers will value each provision of the new contract service offering differently, there are likely other benefits not listed above.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 30 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.12 Interconnections to the Enbridge Mainline

Reference: (i) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 11, footnote 2].

(ii) Enbridge Response to CER IR No. 1, CER-ENB 1.10.b [Ex C06801- 2 at PDF 59-60].

(iii) Enbridge Application for Mainline Contracting, Appendix 1 [Ex C03823-3].

(iv) Enbridge Application for Mainline Contracting, Appendix 3 [Ex C03823-5].

(v) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 7].

(vi) Enbridge Application for Mainline Contracting, Appendix 4 Shipper Support Letters [Ex C03823-6].

Preamble: In reference (i), Enbridge states:

Line [sic] 8 and 9 are not considered part of the Canadian Mainline. Line 9 originates at Sarnia and terminates at Montreal, Québec. Line 9 is currently under contracts approved by the NEB in OH-002-2013. Line 8 originates at Sarnia and terminates at Mill Grove Junction near Hamilton, Ontario. It is currently leased to a third party that operates the line.

In reference (iii), Enbridge provides a schematic outlining the Enbridge Pipeline System Configuration.

In reference (iv), Enbridge provides a schematic outlining Enbridge Mainline Commodity Movement, Receipt and Delivery Points.

In reference (v), Enbridge states:

Although it was not possible to a contract offering that satisfied all of the needs of all of Enbridge’s stakeholders, shippers that currently transport 70% of the crude oil volumes on the Canadian Mainline, and that have indicated interest in contracting for an even greater percentage of the contractible crude oil capacity, have provided letters indicating that they want to contract for firm service on the Canadian Mainline and that they support the contract offering proposed in this Application. Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 31 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

In reference (vi), Enbridge lists the 12 shippers that currently transport 70% of the crude oil volumes on the Canadian Mainline.

Request: (a) Please confirm that Canadian Mainline deliveries to Sarnia, Ontario can be, and are, subsequently received and shipped on Line 8 for delivery off of Line 8. If not confirmed, why not?

(b) Please confirm that Enbridge annually prepares and publishes a “Firm Service Toll Charge for the Line 8 Oil Transportation System”. If not confirmed, why not?

(c) Please confirm that Enbridge annually files the “Firm Service Toll Charge for the Line 8 Oil Transportation System”, with the CER. If not confirmed, why not?

(d) Please provide the date upon which Enbridge most recently filed the “Firm Service Toll Charge for the Line 8 Oil Transportation System”, with the CER.

(e) Please confirm that Enbridge has in place a published Tariff for the Line 8 Oil Transportation System”. If not confirmed, why not?

(f) Please provide the date upon which Enbridge most recently filed a Tariff for the Line 8 Oil Transportation System”, with the National Energy Board or the CER.

(g) Please confirm that under the current uncommitted service design on the Canadian Mainline, Line 8 shippers can make a single nomination from receipt points on the Canadian Mainline (e.g. Edmonton) to delivery points on Line 8. That is, separate nominations to each of the Canadian Mainline and Line 8 are not required for a single movement. If not confirmed, why not?

(h) Please confirm that under the current uncommitted service design on the Canadian Mainline, Line 8 shippers do make single movement nominations from receipt points on the Canadian Mainline (e.g. Edmonton) for delivery point on Line 8. If not confirmed, why not?

(i) Please provide the dates upon which the lease identified in reference (i) commenced and terminates. In doing so, please explain any provisions within that lease that would allow for its extension, including what the ultimate termination date may be.

(j) Please explain why Line 8 is not shown on references (iii) and (iv) when Line 9 is shown.

(k) Please update and provide the schematics in references (iii) and (iv) showing Line 8.

(l) Please explain why Line 8 is not listed in reference (ii).

(m) Please identify the third party that currently leases Line 8 and operates it. In doing so, please provide references to the Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 32 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

National Energy Board or CER filing(s) or proceeding(s) where this leasing arrangement is discussed.

(n) Are any of the 12 shippers identified in reference (vi), or their affiliates, the third party who currently leases and operates Line 8? If so, which of those shippers or its affiliate currently leases and operates Line 8.

(o) Please provide the capacity of Line 8 in kbpd and a listing of commodities shipped on Line 8?

(p) Please provide a listing of refineries and other facilities that are served by commodities shipped on Line 8. In doing so, please provide the capacity of any such refineries and/or facilities.

(q) For each calendar year of 2015, 2016, 2017, 2018 and 2020 year-to- date, please provide the total number of shippers on Line 8.

(r) Pease provide a listing of all Canadian Mainline pipelines that deliver to Sarna, Ontario. In doing so, please identify the capacity (in kbpd) of those pipelines and the commodities shipped on them.

(s) Please confirm that all of the volumes shipped on Line 8 are received from the Canadian Mainline at Sarnia, Ontario. If not confirmed, why not?

(t) Without revealing the specific volumes shipped, for each calendar year of 2015, 2016, 2017, 2018 and 2019, please provide the annual total volume shipped on Line 8 as a percentage of the total annual volume on the Canadian Mainline that originated at receipt points in Canada and were delivered in Sarnia, Ontario for receipt into Line 8.

(u) In addition to Line 8 and Line 9 (both Line 9A and 9B), what other Enbridge pipelines are capable of subsequently receiving and shipping commodities delivered by the Canadian Mainline at Sarnia, Ontario? Please provide the capacity (in kbpd) of those pipelines as well as a listing of commodities shipped.

(v) To the extent that any of the information requested in this information request is confidential, will Enbridge make application to the Canada Energy Regulator, pursuant to section 60 of the Canadian Energy Regulator Act, seeking to file that information as confidential? If not, why not?

Response: (a) Not confirmed. Canadian Mainline volumes have no direct access to Line 8 from the Enbridge Sarnia Terminal or from Lines 5 or 78. There is no Enbridge Mainline Connectivity to Line 8.

(b) Confirmed.

(c) Confirmed. Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 33 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

(d) Enbridge filed the Firm Service Toll Charge for the Line 8 Oil Transportation System with the CER on March 26, 2020 for tolls to take effect April 1, 2020.

(e) Enbridge has two tariffs in place for Line 8, a Tolls Tariff (see the response to (d)) as well as a Rules & Regulations tariff.

(f) See the response to (d).

(g)-(h) Not confirmed. A Canadian Mainline shipper cannot nominate to a Line 8 delivery point.

(i) The Firm Service Agreement for Line 8 commenced on October 2, 1995 and has an initial term of 25 years after the first day of the month first following the in-service date, with a provision for a 10-year extension. Line 8 commenced service for oil products transportation on December 31, 1997.

(j) Since Enbridge leases Line 8 to Imperial Oil through a long-term lease arrangement, it did not include it in the references provided.

(k) Enbridge's Application does not include Line 8. Therefore, providing a schematic for Line 8 would not serve any purpose for the CER's consideration of the Application.

(l) Line 8 is not listed in the response to CER 1.10.b (C06801-2) as a pipeline on which downstream take or pay commitments are held because it is not a take or pay arrangement, but a lease arrangement between Imperial Oil and Enbridge.

(m) The party that currently leases Line 8 under the long-term lease agreement is Imperial Oil, which also operates Line 8.

Enbridge searched the CER repository and found the following proceedings which include references to the Line 8 Financial Support and Service Agreement (“FSA”):

• OH-4-96

• TO-5-96 (Attachment to Valero IR 1.12.m since Enbridge was unable to find the link on the CER website.)

• RH-2-2007

• Enbridge IR responses in RH-2-2010

In addition, Enbridge refers to the Line 8 FSA in its annual tariff filings associated with Line 8 which can be found at https://apps.cer-rec.gc.ca/REGDOCS/Item/View/256889.

(n) Please see the response to (m).

(o) Line 8 has a capacity of approximately 90 kbpd and is in oil product service. Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 34 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

(p) Line 8 is leased by Enbridge to Imperial Oil. Enbridge does not have information on the facilities served.

(q) Enbridge has leased Line 8 to Imperial Oil and as such does not know how many shippers ship on Line 8.

(r) Line 5 and Line 78 deliver to Sarnia, Ontario. Line 5 capacity is 540 kbpd and delivers light crude oil and NGL. Line 78 capacity is 500 kbpd and delivers light and heavy crude oil.

For additional details on each pipeline’s specifications and commodities transported please see Appendices 1 (C03823-3) and 3 (C03823-5) to the Application.

(s) Not confirmed. Enbridge does not have knowledge regarding the oil products that are transported on Line 8, as Enbridge does not operate that line.

(t) The Enbridge Mainline has no facility connectivity to Line 8, and Enbridge has no line of sight to the operation, products or volumes moved on Line 8.

(u) At Sarnia, crude oil can be received for delivery to Line 7 and Line 9. Line 7 capacity is 180 kbpd and transports light and heavy crude oil. Line 9 capacity is 300 kbpd and transports light and heavy crude oil. Line 8 is leased to a third party and does not receive crude oil from the Enbridge Mainline as there is no connectivity with Enbridge facilities at Sarnia.

For additional details on each pipeline’s specifications and commodities transported please see Appendices 1 and 3 to the Application (C03823-3 and C03823-5).

(v) Not applicable.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 35 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.13 Service Offering and Toll Methodology

Reference: (i) Additional Written Evidence of Concentric Energy Advisors, Inc. [Ex C06800-3 at PDF 7].

(ii) Additional Written Evidence of Concentric Energy Advisors, Inc. [Ex C06800-3 at PDF 21].

(iii) Additional Written Evidence of Concentric Energy Advisors, Inc. [Ex C06800-3 at PDF 24].

(iv) Additional Written Evidence of Concentric Energy Advisors, Inc. [Ex C06800-3 at PDF 44].

(v) Additional Written Evidence of Concentric Energy Advisors, Inc. [Ex C06800-3 at PDF 53 – 59.].

Preamble: In reference (i), Concentric states that, given the same set of business risks and different commercial realities, the alternative 100% uncommitted service structure on the Canadian Mainline is likely to produce tolls that are higher than the tolls expected under the proposed new contract service offering.

In reference (ii), Concentric states that there is sufficient supply to the Enbridge Mainline for a 30-year period, and that supply – absent consideration of other factors – would support a 30-year economic planning horizon (EPH) for the Enbridge Mainline.

In reference (iii), Concentric indicates it has assumed a 30-year EPH in its consideration of the tolling methodology for the proposed new contract service offering.

In reference (iv), Concentric indicates it recommends a 20-year EPH be adopted in the circumstances of an 100% uncommitted service structure on the Enbridge Mainline.

In reference (v), Concentric presents its 20-year (2021 to 2041) estimate of projected cost of service tolls on the Canadian Mainline and compares those tolls with estimated tolls for the new contract service offering. In doing so, it provides Figures 4, 5 and 6; and Tables 12, 13 and 14.

Request: (a) Please confirm that the 20-year estimate of projected cost of service tolls on the Canadian Mainline in reference (v) was based on a 20- year EPH. If not confirmed, why not?

(b) Please confirm that the 20-year estimate of tolls for the new contract service offerings on the Canadian Mainline in reference (v) was based on a 30-year EPH. If not confirmed, why not?

(c) Holding all else equal, please provide a 20-year estimate of projected cost of service tolls on the Canadian Mainline – like that done in reference (v) – using a 30-year EPH. In doing so, please update and provide the figures and tables in reference (v) – specifically Figures 4, 5 and 6 and Tables 12, 13 and 14 – Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 36 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

so as to reflect the 20-year estimate of projected cost of service tolls using a 30-year EPH.

Response: (a) Confirmed.

(b) Confirmed.

(c) Enbridge has provided in the response to Cenovus IR 1.3 the model used to determine the cost of service for the Mainline. Valero can use the model to determine a cost of service for the Canadian Mainline based on its own assumptions.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 37 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.14 Service Offering and Toll Methodology

Reference: (i) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 8].

(ii) Additional Written Evidence of Concentric Energy Advisors, Inc. [Ex C06800-3 at PDF 11-12].

(iii) Additional Written Evidence of Concentric Energy Advisors, Inc. [Ex C06800-3 at PDF 13].

Preamble: In reference (i), Enbridge states:

In reference (ii), Concentric states:

It is important to stress that under the Mainline Contracting, tolls will not fixed, and that Enbridge has proposed a tolling methodology rather than a fixed toll….The negotiated package constitutes a set of negotiated tolls that are commodity and distance adjusted and shippers can receive a variety of discounts based on, among other things, the length of their volume commitment, contract term, and the total volumes committed during the open season and an annual adjustment methodology over time. As noted further below, certain clauses of the TSAs excuse committed shippers from paying deficiency charges on their contract volumes, which, in conjunction with re- contracting risk, means Enbridge still assumes long-term volume risk under the Mainline tolling methodology.

In reference (iii), Concentric states:

The Mainline Contracting tolling methodology does not insulate Enbridge from many of these risks [risks influencing throughput risk] because the excused events clauses in the Mainline Contracting TSAs may relieve committed shippers from their contractual obligations to make deficiency payments….It is critical to understand that the excused events clauses in the TSAs result in Enbridge bearing some of the volume risks under the Mainline Contracting tolling methodology.

Request: (a) Please confirm that in all instances where a committed shipper does not ship under its applicable “Requirements Contract” or Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 38 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

“Take or Pay TSA”, any unused committed volumes will be made available for uncommitted service. If not confirmed, why not?

(b) Please confirm that in all instances where a committed shipper does not ship under its applicable “Requirements Contract” or “Take or Pay TSA”, and the unused committed volumes are made available for uncommitted service, the uncommitted tolls charged for those unused committed volumes flow to Enbridge and not to the committed shipper whose committed volumes were made available for uncommitted service. If not confirmed, why not?

(c) Please provide two tables, once each for a “Producer Requirements Contract” (Crude Oil) for a “Long Haul Segment” and a “Take or Pay TSA” (Crude Oil) for a “Long Haul Segment” that: in column #1 lists each excused event clause in the applicable Mainline Contracting TSAs/Requirements Contract; in column #2 provides a description of the excused event that corresponds with the excused event listed in column #1; in column #3 outlines the applicable toll as a measure of the “Base Toll” payable for volumes shipped assuming no discounts and that corresponds with the excused event listed in column #1; in column #4 outlines the applicable toll as a measure of the “Base Toll” payable for volumes shipped assuming the maximum amount of discount available and that corresponds with the excused event listed in column #1; in column #5 outlines the deficiency payment amount as a measure of the “Base Toll” that is foregone (or excused) for the corresponding excused event in column #1; and in column #6 outlines the uncommitted volume toll as a measure of the “Base Toll” that would be charged for any committed volume not used by the committed shipper but made available for uncommitted service.

Response: (a) Please see the response to CER IR 2.17.a.1.

(b) Confirmed. Please see the response to TOTAL IR 1.040.a.

Note for Column #3 and #4: If there is an excused event, then the corresponding volumes will not have shipped, so the toll charged for these unshipped volumes is $0 and is reflected as such in the table.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 39 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.15 Service Offering and Open Season

Reference: (i) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 17].

(ii) Enbridge Response to CER IR No. 1, CER-ENB 1.5.b.1 [Ex C06801- 2 at PDF 17-20].

(iii) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 31].

(iv) Enbridge Application for Mainline Contracting [Ex C03823-2 at PDF 25].

Preamble: In reference (i), Enbridge states that the Enbridge Mainline faces competition from existing and potential future pipelines including the Keystone pipeline, the Keystone XL pipeline, the Trans Mountain pipeline, and the Trans Mountain Expansion Project. Enbridge states that these pipelines, excluding the Trans Mountain Pipeline, have contracts in place that commit the majority of their capacity to firm service on a long- term basis.

In reference (ii), Enbridge provides a listing of pipelines it views competes with the Enbridge Mainline, which includes those pipelines identified in reference (i).

In reference (iii), Enbridge states:

The Mainline Contract Offering is a complex deal that takes into account both the operational requirements of the Enbridge Mainline and the diverse, often diverging needs of a wide variety of shippers.

The Mainline Contract Offering is comprised of eight TSAs, which fall into two broad contract categories: Requirements Contracts and Take or Pay Contracts. Within these two categories, there are individual TSAs for each petroleum type: crude oil, refined petroleum products and NGL.

In reference (iv), Enbridge indicates it initiated discussions with shippers about the proposed new contract service offering in the beginning of 2018.

Request: (a) At any stage in developing the proposed new contract service offering, did Enbridge consider using only one broad contract category? If so, when and why did it decide to consider using two broad contract categories?

(b) Please briefly explain the reasoning behind using two broad contract categories under the proposed new contract offering.

(c) Please identify which, if any, of the pipelines listed in references (i) and (ii) that offer firm service, use contracts that are the same Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 40 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

as, or are similar to, the “Requirements Contracts” that form part of the proposed new contract service offering.

(d) Please identify any pipelines that Enbridge is aware of that use contracts that are the same as, or are similar to, the “Requirements Contracts” that form part of the proposed new contract service offering.

(e) Please identify which, if any, of the pipelines listed in references (i) and (ii) that offer firm service, use contracts that fall into two or more contract categories in a similar fashion to the proposed new contract service offering. In each case, please briefly explain the two or more contract categories.

(f) Please identify any pipelines that Enbridge is aware of that use contracts that fall into two or more contract categories in a similar fashion to the proposed new contract service offering. In each case, please briefly explain the two or more contract categories.

Response: (a) Early in the development of the contract offering, prior to the term sheet being issued, Enbridge did contemplate having only a typical take or pay type TSA. The contract offering was later expanded to include the new concept of a Requirements Contract. As described in the Application in section 5.1.1, the Requirements Contract was a response to potential shippers' concerns about the impact that a take or pay contract would have on shippers’ balance sheets.

(b) In addition to the response to (a), Enbridge developed two broad contract categories to account for the different needs of a wide variety of shippers. Typical take or pay contracts do not require shippers to dedicate production interests or production or refining facilities and contain different payment relief rights than Requirements Contracts. In order to qualify for a Requirements Contract, a shipper is required to dedicate a portion of its own crude oil production, NGL production capacity or refining capacity to be shipped on the Canadian Mainline. More details are provided in sections 5.1.1 and 5.1.2 of the Application. Given the reasons outlined in the response to (a) and that not all shippers qualify for a Requirements Contract, Enbridge retained the option for shippers of a take or pay contract.

(c)-(d) Enbridge's knowledge of competitors' commercial offerings is limited to what is publicly available through pro forma contracts filed with regulators. To Enbridge’s knowledge, no other pipeline offers contracts that are the same as or similar to the Requirements Contract. The Requirements Contract may seem similar to reserve dedication contracts, which are common in unregulated smaller gathering systems. However, the Requirements Contract offers more flexibility and relief to the shipper and less upside for the carrier. Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 41 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

Most reserve dedications require the production from the dedicated area to flow to the facility or pipeline for which it is dedicated. In those agreements there is typically a requirement that all production be dedicated to the facility and production from the area cannot flow on other systems. With the proposed Requirements Contracts, Enbridge is offering a designation of a production area or designation of a refinery solely for the purpose of shipper relief in the form of an excused event from its contract obligation. As a result, a Requirements Contract offers shippers more flexibility than traditional take or pay agreements in terms of accommodating planned or unplanned impacts to production or refining capacity (including for economic decisions made by a shipper), thereby reducing the long-term liability a producer or refiner must take on, while at the same time increasing the long-term volume risk to Enbridge relative to a reserve dedication. A shipper does not have to dedicate its entire production to the Mainline; it has to pay tolls for its volume commitment but is entitled to relief to the extent that the volumes produced from or processed by its designated interest or facility in a month fall below the shipper’s monthly volume commitment for that interest or facility. A shipper is not required to bring more volume to the system if it is producing above its volume commitment; thus Enbridge does not derive the same incremental upside in revenue as it would from a traditional area dedication.

(e)-(f) Enbridge's knowledge of competitors' commercial offerings is limited to what is publicly available through pro forma contracts filed with regulators. To Enbridge’s knowledge, no other pipeline uses contracts that fall into two or more contract categories in a similar fashion to the proposed new contract service offering on the Enbridge Mainline. No other pipeline has given the same variety of contracts to suit the circumstances of different types of shippers while assuming additional financial risk.

Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 42 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

1.16 Service Offering and Open Season

Reference: (i) Enbridge Response to CER IR No. 1, CER-ENB 1.10.b [Ex C06801- 2 at PDF 59-60].

(ii) Additional Written Evidence of Concentric Energy Advisors, Inc. [Ex C06800-3 at PDF 46].

In reference (ii), Concentric discusses “market access discounts” Enbridge offered on three expansion projects, including Line 9.

Request: (a) Please explain Enbridge’s view of what is meant by “market access” in the context of the expansion projects listed in reference (ii).

(b) Please confirm that when Enbridge offered the “market access discounts” in reference (ii), the Canadian Mainline was operating under the current uncommitted service design. If not confirmed, why not?

(c) Please provide the dates (month and year) on which Enbridge commenced offering the market access discounts on each of the pipelines in reference (ii).

(d) Please provide the dates (month and year) on which Enbridge stopped offering the market access discounts on each of the pipelines in reference (ii).

(e) Please identify any of the market access discounts for the pipelines in reference (ii) that were associated with or were somehow otherwise linked to the Competitive Toll Settlement (CTS) and related CTS tolls. In doing so, please explain the association and/or link.

(f) Please list those market access discounts for the pipelines in reference (ii) that will continue beyond the expiry of the CTS. In doing so, please confirm when the market access discounts will cease.

Response: (a) Within the context of the original and Revised Additional Written Evidence of Concentric Energy Advisors, being filed concurrently with these IR responses, "market access" refers to the three market access projects that are underpinned by joint tolling arrangements with the Enbridge Mainline: Flanagan South, Toledo and Line 9.

(b) Confirmed. Enbridge Pipelines Inc. Enbridge Response to Valero IR No.1 Application for Canadian Mainline Contracting Page 43 of 43 RH-001-2020 File No.: OF-Tolls-Group-E101-2019-02 02

(c) Market access discounts are provided by Enbridge in relation to the Toledo, Flanagan South and Line 9 IJTs, which commenced on the following dates:

• Toledo IJT went into effect on May 1, 2013

• FSP IJT went into effect on October 14, 2014

• Line 9 IJT went into effect on November 14, 2015.

The market access discounts on each of the pipelines in (a) are currently in effect.

(d) The market access discounts provided through the Toledo IJT, the Flanagan South IJT and the Line 9 IJT were provided by Enbridge under CTS Section 14.

(e) Please see the response to TOTAL IR 1.003 for further information.

(f) The discount relating to the Mainline and Toledo IJT tariff is assumed to expire in 2023. The discount relating to the Mainline and Line 9 IJT tariff is assumed to expire in 2031. The discount relating to the Flanagan South Pipeline is assumed to continue through the 2022 - 2041 time period.