ATTACHMENT 1 STATE OF ILLINOIS ILLINOIS COMMERCE COMMISSION ENERGY TRANSFER CRUDE OIL COMPANY, LLC ) ) Docket No. 14-0755 ) APPLICATION PURSUANT TO SECTION 15-401 ) OF THE COMMON CARRIER ) BY PIPELINE LAW AND SECTIONS 8-503 ) AND 8-509 OF THE PUBLIC UTILITIES ACT ) AND FOR A CERTIFICATE IN GOOD STANDING ) AND RELATED AUTHORITY TO CONSTRUCT AND ) OPERATE A PETROLEUM PIPELINE AS A COMMON ) CARRIER PIPELINE AND WHEN ) NECESSARY TO TAKE PRIVATE PROPERTY AS ) PROVIDED BY THE LAW OF EMINENT DOMAIN ) PREPARED TESTIMONY ON REOPENING OF DAMON RAHBAR-DANIELS ON BEHALF OF ENERGY TRANSFTER CRUDE OIL COMPANY, LLC ETCO EXHIBIT 5.12 JULY 31, 2015 ETCO Exhibit 3.10 Page 1 of 20 PREPARED TESTIMONY ON REOPENING OF DAMON RAHBAR-DANIELS ON BEHALF OF ENERGY TRANSFER CRUDE OIL COMPANY, LLC 1 I. WITNESS INTRODUCTION AND PURPOSE OF TESTIMONY 2 Q. Please state your name, present position and business address. 3 A. My name is Damon Rahbar-Daniels. I am the Vice President – Commercial Operations 4 of Energy Transfer Partners, L.P. (“ETP”). ETP is one of the equity owners of Energy 5 Transfer Crude Oil Company, LLC (“ETCO”), the applicant in this proceeding. My 6 business address is 1300 Main Street, Houston, Texas 77002. 7 Q. Have you previously submitted prepared testimony and exhibits in this proceeding? 8 A. Yes, I have previously submitted prepared direct testimony, dated January 21, 2015, 9 which is identified as ETCO Exhibit 3.0, and accompanying exhibits identified as ETCO 10 Exhibits 3.1 through 3.3. In addition, I have previously submitted prepared supplemental 11 testimony, dated May 15, 2015, which is identified as ETCO Exhibit 3.4, and 12 accompanying exhibits identified as ETCO Exhibits 3.5 through 3.7. Finally, I have 13 previously submitted prepared surrebuttal testimony identified as ETCO Exhibit 3.8, and 14 an accompanying exhibit identified as ETCO Exhibit 3.9. 15 Q. What is the purpose of your testimony on reopening? 16 A. The purpose of my testimony on reopening is to demonstrate that there is a separate, 17 stand-alone need and demand for the ETCO Pipeline from Patoka, Illinois, to Nederland, 18 Texas, even if the Dakota Access Pipeline were not built or were not yet placed into 19 service. My testimony on reopening will support ETCO’s position that it should be ETCO Exhibit 3.10 Page 2 of 20 20 granted a certificate of good standing to construct, operate and maintain the ETCO 21 Pipeline and authority under Sections 8-503 and 8-509 of the Public Utilities Act to use, 22 if necessary, eminent domain to acquire easements for the new-build portion of the 23 ETCO Pipeline, without having the certificate of good standing and the Section 8-503 24 and 8-509 authorities conditioned on Dakota Access also receiving an order granting it a 25 certificate in good standing. 26 Q. In addition to your prepared testimony on reopening, which is identified as ETCO 27 Exhibit 3.10, are you sponsoring any other exhibits? 28 A. Yes, I am also sponsoring ETCO Exhibit 3.11, which was prepared under my supervision 29 and direction. 30 II. STAND-ALONE NEED FOR THE ETCO PIPELINE 31 Q. Is the ETCO Pipeline Project solely a companion project to the Dakota Access 32 Pipeline? 33 A. No. The ETCO Pipeline will be a stand-alone interstate crude oil pipeline that will 34 provide service from the crude oil terminalling hub near Patoka, Illinois, (the “Patoka 35 Hub”) to the crude oil terminalling hub in Nederland, Texas, to meet the need for crude 36 oil transportation service from the Midwest to the Gulf Coast to serve refineries in that 37 region. In accordance with the Interstate Commerce Act, ETCO will provide the public 38 with service on the ETCO Pipeline pursuant to local tariff rates publicly filed with the 39 Federal Energy Regulatory Commission (“FERC”) for crude oil transportation service 40 from Patoka, Illinois, to Nederland, Texas. Service offered by ETCO under the local 41 tariff rates will be provided in accordance with a rules and regulations tariff also publicly 42 filed with the FERC under the Interstate Commerce Act and FERC’s regulations. Like ETCO Exhibit 3.10 Page 3 of 20 43 ETCO, Dakota Access, LLC will have publicly filed local tariff rates for service between 44 points of origin and destination on the Dakota Access Pipeline, as well as a publicly filed 45 rules and regulations tariff for that service. 46 Q. Are there pipeline systems that currently transport crude oil to the Patoka Hub? 47 A. Yes. Currently, four major pipeline systems deliver crude oil to the Patoka Hub. The 48 WoodPat Pipeline has a delivery capacity into the Patoka Hub of approximately 315,000 49 barrels per day (“BPD”). The Mustang Pipeline has a delivery capacity into the Patoka 50 Hub of approximately 100,000 bpd. The Keystone Pipeline has a delivery capacity into 51 the Patoka Hub of approximately 500,000 bpd. The Capline Pipeline has a delivery 52 capacity into the Patoka Hub of over 1,000,000 bpd. 53 Q. In the future, will other pipeline systems also deliver crude oil to the Patoka Hub? 54 A. Yes. Illinois Extension Pipeline, L.L.C. is in the process of building the Southern Access 55 Extension Pipeline (“SAX Pipeline”) to deliver crude oil to the Patoka Hub. The SAX 56 Pipeline is a 168-mile long, 24-inch-diameter pipeline that will be capable of delivering 57 crude oil from Flanagan Terminal near Pontiac, Illinois, to the Patoka Hub. The delivery 58 capacity of the SAX Pipeline to the Patoka Hub will be at least 300,000 bpd, and it is 59 anticipated to be in-service by late 2015. 60 Q. Is all of the 300,000 barrels per day of capacity of the SAX Pipeline subscribed 61 under shipper contracts, or will the SAX Pipeline have capacity available beyond 62 what is subscribed under contractual commitments? 63 A. According to Illinois Extension Pipeline, L.L.C., a significant percentage – i.e., 90,000 64 bpd of the 300,000 bpd capacity – of the SAX Pipeline will be available for shippers 65 other than the two parties that entered contracts for service on the pipeline system. ETCO Exhibit 3.10 Page 4 of 20 66 (Illinois Extension Pipeline LLC, Docket 07-0446, Order on Reopening (Dec. 17, 2014), 67 at 6 and 52.) 68 Q. Is the SAX Pipeline the only new pipeline project, other than the Dakota Access 69 Pipeline, that is proposing to deliver crude oil to the Patoka Hub in the future? 70 A. No. The SAX Pipeline and the Dakota Access Pipeline are the most advanced among the 71 pipeline projects that are proposing to deliver crude oil to the Patoka Hub, but they are 72 certainly not alone. On October 10, 2014, Spectra Energy and Spectra Energy Partners 73 (collectively, “Spectra”) announced a proposed expansion of their existing crude oil 74 pipeline network, with construction of a new crude oil pipeline to provide transportation 75 service from Guernsey, Wyoming to Patoka, Illinois. The anticipated delivery capacity 76 of that pipeline to the Patoka Hub is 400,000 bpd. Spectra has said that it anticipates the 77 expansion project to be in-service in 2017. ETCO Exhibit 3.11 is a copy of Spectra’s 78 announcement concerning the project. 79 Q. Are you aware of other proposed projects that are looking to deliver crude oil to the 80 Patoka Hub? 81 Yes. Since the announcement of the ETCO Pipeline, we have received inquiries from 82 other infrastructure project developers about future potential projects to bring crude oil to 83 the Patoka Hub. The proposed projects are attracted to the Patoka Hub because the hub 84 will offer connections to both Midwest refineries and, upon the ETCO Pipeline being 85 placed in-service, Gulf Coast refineries. Generally speaking, these projects do not appear 86 to be as advanced as the SAX Pipeline and the Spectra project. Nevertheless, they are 87 indicative of the interest that the ETCO Pipeline has spurred in the Patoka Hub. ETCO Exhibit 3.10 Page 5 of 20 88 Q. Is there evidence of market demand specifically for crude oil transportation service 89 from the Patoka Hub to the Gulf Coast? 90 A. Yes. In fact, the Pegasus Pipeline provided crude oil transportation service of up to 91 approximately 95,000 bpd from the Patoka Hub to Nederland, Texas, until it ceased 92 operations on May 29, 2013. Additionally, as I will describe in greater detail later in my 93 testimony, there is significant demand for crude oil to move to the Gulf Coast through 94 upstream pipeline systems that deliver to the crude oil terminalling hub in Cushing, 95 Oklahoma (the “Cushing Hub”), where the crude oil can then be transported on pipeline 96 systems that connect the Cushing Hub to the Gulf Coast. Shippers on those upstream 97 pipeline systems will gain the opportunity to route their crude oil to the Gulf Coast or 98 other Midwest destinations through the Patoka Hub, instead of through the Cushing Hub, 99 if there is a pipeline to connect the Patoka Hub to the Gulf Coast. 100 Q. Focusing first on the Pegasus Pipeline, did that pipeline system cease service from 101 the Patoka Hub to Nederland, Texas, in May of 2013 due to a lack of market 102 demand for that transportation service? 103 A. No, to the contrary, the system transported a significant volume of crude oil up until that 104 date, when the operator ceased service to address issues from a rupture of the pipeline in 105 Arkansas.