Pipeline Profiles: Foothills

Pipeline system and key points

Updated January 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].

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.

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].

Tolls

Updated January 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.

 

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].

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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