Filing Manual – Chapter 4 – Physical Projects

An applicant must:

  • complete the common application requirements outlined in Chapter 3;
  • confirm that the application is for a physical project;
  • address section 4.1 – Description of the Project and section 4.2 – Economic Feasibility, Alternatives and Justification; and
  • identify which Guides within Chapter 4 are applicable (see Figure 2-1) and provide the required information.

4.1 Description of the Project

Goal

The application will include a clear description of the project, including:

  • project components, activities and location;
  • cost information;
  • construction schedules; and
  • related undertakings.

Filing Requirements

1. Identify and describe the project components, activities and related undertakings (e.g., pipe, valves, compressors, pumps, access roads including temporary and permanent bridges, construction camps, marine terminals and loading facilities).

2. Describe the project location and the criteria used to determine the proposed route or site.

3. Describe how and when the project will be carried out.

4. Provide a description of any facilities to be constructed by others which are required to accommodate the proposed facilities, including temporary facilities.

5. Provide an estimate of the total capital costs and incremental operating costs, if applicable; and changes to abandonment cost estimates, where applicable, for the following categories:

  • pipelines;
  • compression or pumps;
  • metering and regulating;
  • tankage;
  • other facilities;
  • allowance for funds used during construction (AFUDC) including rates used; and
  • capitalized overhead, showing a separate breakdown of the main cost elements such as materials, installation, land and land rights.

6. Indicate the expected in-service date.

Guidance

Description of Project Components

The description of the project components should address the following:

  • what the project is, including:
    • a complete list and thorough description of the project components and activities, including any components or activities required for the project to proceed (e.g., construction camps, means of access including temporary and permanent bridges, electrical grid connections, marine terminals and loading facilities);
    • the location and size of any temporary work space;
    • a description of replacements or expansions of physical facilities and activities that are anticipated over the life of the project; and
    • preliminary drawings if available.
  • where the project is located, including:
    • a general description of the route or facility location, including identification of:
      • general land tenure, including any federal lands;
      • navigable waterways;
      • current land uses;
      • nearest residences and communities;
      • unique features;
      • the positioning of project endpoints for linear developments;
      • the location of any alternate routes or sites considered; and
      • preliminary drawings, if available.
  • how the project will be carried out, including:
    • a thorough description of how project activities (e.g., clearing, hydrostatic testing, watercourse crossings, inspection, monitoring and surveillance programs) would be carried out during the construction and operations phases;
    • the anticipated workforce (i.e., person days and skills required for construction and operations activities); and
    • a list of other permits, licences, or authorizations that will be required before part or all of the project can proceed.
  • when the project would likely be carried out, including:
    • a breakdown of all construction and operations activities by major activity;
    • construction and operations schedules;
    • a description of how any changes to schedules can affect the project; and
    • a description of when proposed decommissioning and abandonment of the project might take place.
Description of Project Costs

When describing any estimated capital costs, specify what year dollars are used, and describe whether the estimated costs include any inflation and contingency provisions. For any estimate of incremental operating costs, specify what year dollars are used.

When estimating new or changes to abandonment costs, follow the format set out in March 2010 Revisions to Preliminary Base Case Assumptions [Filing A24600], Tables A-1, A-2, A-4, as revised from time to time. Table A-3 was revised in December 2010 and is available at Filing A27778.

For companies with no facilities currently regulated by the NEB, the estimated costs will have some bearing on the allocation of NEB costs, as set out in the Cost Recovery Regulations, section 5.2(1).

4.2 Economic Feasibility, Alternatives and Justification

Goal

The application includes an integrated discussion that demonstrates the economic feasibility, financial resources, and justification for the proposed project, including a description of any alternatives considered.

4.2.1 Filing Requirement – Economic Feasibility

Describe the economic feasibility of the project.

Guidance – Economic Feasibility

The discussion of economic feasibility should combine evidence provided elsewhere in the application with evidence provided according to Guide A, Section A.3 – Economics and Financing, to show that the applied-for facilities are economically feasible. Also, the evidence should demonstrate plans to manage all potential costs associated with the risks and liabilities that may arise during the construction or operation of the Project, including a significant incident involving a product release (see the NEB’s Event Reporting Guidelines for a definition of “significant incident”).

4.2.2 Filing Requirements – Alternatives and Justification

1. Describe the need for the project along with the rationale for selecting the applied for project over other possible options.

2. Describe and justify the selection of the proposed route and site including a comparison of the options evaluated using appropriate selection criteria.

3. Describe the rationale for the chosen design and construction methods. Where appropriate, describe any alternative designs and methods evaluated and explain why these other options were eliminated.

FYI – Example

In the GSX project, the Panel ruled that other ways of meeting the energy demands of Canadians, such as wind, solar, and tidal power were not relevant to the Panel’s public interest determinations under Section 52 of the NEB Act because this information did not have sufficient connection or nexus to the application before the Board and would not inform its decision. Joint Review Panel for the Georgia Strait Canada Pipeline Project, GH-4-2001, Joint Review Panel Report, Georgia Strait Crossing Pipline Ltd. July 2003, Appendix D, Panel Rulings, Ruling: 20 January 2003.

Guidance – Alternatives

Alternatives Evaluated

In the context of economic feasibility, alternatives are other technically, economically and environmentally-feasible means of meeting the need for the project and its eventual retirement, such as a different:

  • transportation mode;
  • transmission system that could achieve the same purpose as the proposed facilities;
  • route or site;
  • facility design; or
  • construction method, including different means of development, implementation and mitigation.
Selection Criteria

Different project, routing, design and construction alternatives must be summarized and compared using criteria that justify and demonstrate how the proposed option was selected and why it is the preferred option. The level of detail provided by the applicant may reflect the more conceptual nature of the options.

When comparing project routing, design or construction options, elaborate on the following criteria, as appropriate:

  • engineering design;
  • economic feasibility or life spanFootnote 4 costs;
  • effect on reliability and security of the existing system;
  • demonstrated public concern; and
  • environmental and socio-economic constraints or potential effects.

4.2.3 Filing Requirement – Justification

Provide a justification for the proposed project.

Guidance – Justification

Describe the needs that would be satisfied by the project and demonstrate that, taking into consideration all viable alternatives available, the proposed project is the most appropriate option to meet the needs while serving the public interest.

Next Steps...

Determine which of the Guides included within this chapter are applicable to the application being filed and complete the necessary filing requirements.

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