Pipeline Profiles: Foothills

Pipeline system and key points

Updated September 2018

Foothills pipeline system map

The Foothills pipeline system transports natural gas produced in the Western Canadian Sedimentary Basin and to markets in Alberta, British Columbia and Saskatchewan, as well as the United States. The pipeline commenced operations in 1981. At the end of 2016, NEB-regulated assets included 1 241 km of pipeline and various auxiliary infrastructures.

The Foothills pipeline receives natural gas from an interconnect with the NOVA Gas Transmission Ltd. system near Caroline, Alberta and other interconnection points further south.

Key points on the Foothills system include:

  • Monchy – export interconnect with the Northern Border Pipeline at the Canada U.S. border near Monchy, Saskatchewan. Northern Border supplies markets in the mid–continent U.S. and Chicago.
  • Kingsgate – export interconnect with the Gas Transmission Northwest Pipeline (GTN) at the Canada-U.S. border near Kingsgate, British Columbia. GTN supplies markets in the Pacific Northwest, California and Nevada.

Official Board documents related to the construction, operation and maintenance of the Foothills pipeline can be found here: Foothills regulatory documents [Folder 90702].

You can see the Foothills Pipeline and all NEB-regulated pipelines on the Board’s Interactive Pipeline Map. The map shows more detailed location information, the products carried by each pipeline, the operating status and more.

Condition Compliance

Updated September 2018

Every pipeline company in Canada must meet federal, provincial or territorial, and local requirements. This includes Acts, Regulations, rules, bylaws, and zoning restrictions. Pipelines are also bound by technical, safety, and environmental standards along with company rules, protocols and management systems. In addition to these requirements, the Board may add conditions to regulatory instruments that each company must meet. Condition compliance is monitored by the Board and enforcement action is taken when required. For a detailed list of conditions that Foothills must meet, and their status, please see the condition compliance table and search for “Foothills Pipe Lines Ltd.”

Safety Performance

Updated September 2018

The Board holds the companies it regulates accountable to protect the safety of Canadians and the environment. As part of this accountability, companies must report events such as incidents and unauthorized activities to the Board. For a summary of pipeline incidents and unauthorized activities on the Foothills pipeline since 2008, visit the Safety performance dashboard and select “Foothills Pipe Lines Ltd.”

Emergency Management

Updated September 2018

The NEB checks to make sure companies are keeping pipelines safe by doing inspections, in-depth safety audits, and other activities. Yet, even with these precautions, an emergency could still happen. Sound emergency management practices improve public safety and environmental protection outcomes, and provide for more effective emergency response.

The NEB holds its regulated companies responsible for anticipating, preventing, mitigating, and managing incidents of any size or duration. Each company must have an emergency management program that includes detailed emergency procedures manuals to guide its response in an emergency situation. We oversee the emergency management program of a regulated company’s projects until they cease to operate.

The Board requires companies to publish information on their emergency management program and their emergency procedures manuals on their websites so Canadians can access emergency management information. To view Foothills’ Emergency Response Plans, see TransCanada’s Rocky Mountain Region and Wild Rose Region plans at its Emergency Preparedness website.

Throughput and capacityFootnote 1

Updated quarterly

Open data can be freely used and shared by anyone for any purpose. The data for these graphs are available.

Tolls

Updated September 2018

A toll is the price charged by a pipeline company for transportation and other services. Tolls allow pipeline companies to safely operate and maintain pipelines. Tolls also provide funds for companies to recover capital (the money used to build the pipeline), pay debts, and provide a return to investors. The interactive graph below shows the tolls for key paths on the pipeline since 2006.

Open data can be freely used and shared by anyone for any purpose. The data for these graphs are available.

Foothills operated under a negotiated settlement from 2003-2017. Tolls on Foothills are zone-based and are set according to a full cost of service model. Foothills Zones 6 and 7 are located in Alberta. Zone 8 is located in British Columbia and Zone 9 in Saskatchewan. Zones 7 and 8 are also referred to as the Western Leg segment of the Foothills system; while Zones 6 and 9 are referred to as the Eastern Leg segment.

Official Board documents related to the traffic, tolls and tariffs for the Foothills pipeline can be found here: Foothills regulatory documents (tolls and tariffs) [Folder 92840].

A list of shippers on the Foothills pipeline is available in an annual filing Foothills submits to the NEB, the Statement of Rates and Charges effective January 1, 2018, (Schedule F, PDF page 19 of 24) [Folder 3346854].

Abandonment funding

Updated May 2018

The Board requires all pipelines to set aside funds to safely cease operation of a pipeline at the end of its useful life. In 2016, Foothills estimated it would cost $245 million to do this. These funds will be collected over 30 years and are being set aside in a trust. Official Board documents related to abandonment funding can be found here, sorted by year and by company: abandonment funding documents [Folder 3300366].

Pipeline financial information

Updated March 2018

Foothills operates under a cost of service tolling methodology as negotiated with shippers. Under this methodology the return on equity has remained stable in recent years, while revenue has decreased.

Pipeline companies report important financial information to the Board quarterly or annually. A solid financial position enables companies to maintain their pipeline systems, attract capital to build new infrastructure, and meet the market’s evolving needs. The data in this table comes from Foothills’ annual Surveillance Reports [Folder 155864].

Table 1: Foothills Pipeline financial data
Foothills Pipeline financial data 2010 2011 2012 2013 2014 2015 2016 2017
Revenues (millions) $204.1 $192.2 $194.2 $193.4 $181.8 $178.9 $173.4 $180.7
Net income (millions) $25.4 $23.5 $21.7 $20.9 $19.4 $17.7 $16.0 $18.3
Average rate base (millions) $654.6 $605.1 $559.3 $518.4 $480.6 $437.7 $398.4 $369.1
Deemed equity ratio 40% 40% 40% 40% 40% 40% 40% 40%
Return on equity 9.7% 9.7% 9.7% 10.1% 10.1% 10.1% 10.1% 10.1%

Corporate financial information

Updated January 2018

Foothills Pipe Lines Ltd. owns the Foothills pipeline system. Foothills Pipe Lines Ltd. is a wholly-owned subsidiary of TransCanada PipeLines Limited (TCPL). All financial ratios have remained stable and TCPL’s credit ratings remain investment grade.

Credit ratings and financial ratios provide an idea of the financial strength of a company, including its ability to attract capital to build new infrastructure and meet financial obligations. The credit ratings below are expert opinions of how likely the debt issuer is to live up to its obligations. The financial ratios provided below were calculated by DBRS.

Table 2: TransCanada PipeLines Limited financial ratios and credit ratings
TransCanada PipeLines Limited financial ratios and credit ratings 2013 2014 2015 2016 2017
Interest and fixed-charges coverage ratio 2.40 2.68 2.55 2.37 n/a
Cash flow-to-total debt and equivalents ratio 15.5% 15.9% 13.8% 11.0% n/a
DBRS credit rating A (low) A (low) A (low) A (low) A (low)
S&P credit rating A- A- A- A- A-
Moody’s credit rating A3 A3 A3 A3 A3

Financial regulatory audits

Updated March 2018

The Board audits pipeline companies to confirm compliance with the National Energy Board Act, regulations, Board orders and Board decisions. Financial regulatory audits focus on toll and tariff matters such as detecting cross-subsidies. Foothills’ last audit was completed in August 2009. Official Board documents related to Foothills’ financial regulatory audits can be found: [Folder 568135].

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