File OF-GEN06-FRR 15 July 2019 Alliance Pipeline Ltd

File OF-GEN06-FRR 15 July 2019 Alliance Pipeline Ltd. Canadian-Montana Pipe Line Corporation Emera Brunswick Pipeline Company Ltd. Foothills Pipe Lines Ltd. Glenogle Energy Inc. Great Lakes Pipeline Canada Ltd. Many Islands Pipe Lines (Canada) Ltd. Maritimes & Northeast Pipeline Management Limited Minell Pipeline Ltd. NorthRiver Midstream Canada Pipelines Inc. NorthRiver Midstream G and P Canada Pipelines Inc. NOVA Gas Transmission Ltd. Pembina Energy Services Ltd. SCL Pipeline Inc. Steel Reef Pipelines Canada Corp. Sunoco Pipeline L.P.

TransCanada Pipelines Limited Trans Quebec & Maritimes Pipelines Inc.

National Energy Board (NEB or Board) Pipeline Financial Requirements Information Request No. 1 to Gas Companies (Gas IR No. 1) Subsection 48.13(1) of the National Energy Board Act (NEB Act) requires pipeline companies to maintain financial resources equal to their absolute liability level. The Pipeline Financial Requirements Regulations (Regulations) set out absolute liability limits for the non-major oil pipeline companies1 (i.e., all other oil, gas, and commodity pipeline companies), which come into force on 11 July 2019.

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1 Non-major oil pipeline companies are Board-regulated pipeline companies that do not meet the definition of a major oil pipeline. Major oil pipeline companies have the capacity to transport greater than 250,000 barrels of oil per day. Refer to the Pipeline Financial Requirement Guidelines for detailed definitions and additional background on financial requirements.

2- On 29 March 2019, the Board issued the Pipeline Financial Requirements Guidelines (Guidelines). Included in the Guidelines was a schedule for companies to submit their financial resources plans for Board review and approval.

The schedule would enable the Board to assess as many financial resources plans as practicable prior to the coming into force date of the Regulations on 11 July 2019. In its letter, the Board directed all Gas companies to file their financial resource plans by 14 May 2019. The Board is reviewing the financial resources plan filings from those companies with an absolute liability class of Gas Class 1, 2, 3, and 4, and has determined that further information is required.

The Board’s Gas IR No. 1 is contained in one document and is grouped by company. Companies need only respond to the IRs specifically directed to them. The IRs are found in Appendix I. The responses to the IRs are due by noon, Calgary time, 29 July 2019. Yours truly, Original signed by L. George for Sheri Young Secretary of the Board Attachment

Attachment to Board Letter dated 12 July 2019 Page 1 of 44 Appendix I Implementation of Financial Resource Requirements Subsections 48.12 & 48.13 of the National Energy Board Act Financial Resources Plan Filings File OF-Gen-06 FRR Filed 14 May 2019 National Energy Board (NEB or Board) Gas Information Request No.

1 Table of Contents Alliance Pipeline Ltd. (Alliance ___ 3
Gas 1.1 Operating Credit Facility ___ 3
Canadian-Montana Pipe Line Corporation (CMPL ___ 3
Gas 1.2 Insurance ___ 3
Gas 1.3 Reliance on Insurance and Alternatives ___ 4
Emera Brunswick Pipeline Company Ltd. (Emera ___ 6
Gas 1.4 Financial Resources ___ 6
Gas 1.5 Insurance Claims Response ___ 9
Foothills Pipe Lines Ltd. (Foothills ___ 10
Gas 1.6 Parental Guarantee ___ 10
Gas 1.7 Certificate of Insurance ___ 11
Glenogle Energy Inc. (Glenogle ___ 12
Gas 1.8 Financial Resource Plan ___ 12
Gas 1.9 Insurance ___ 13
Gas 1.10 Line of Credit/Readily Accessible Funds ___ 14
Gas 1.11 Reliance on Insurance ___ 15
Great Lakes Pipeline Canada Ltd.

(GLC ___ 17
Gas 1.12 Parental Guarantee ___ 17
Gas 1.13 Certificate of Insurance ___ 19
Many Islands Pipe Lines (Canada) Ltd. (MIPL ___ 19
Gas 1.14 Line of Credit and Parental Guarantee ___ 19
Gas 1.15 Certificate of Insurance ___ 22
Maritimes & Northeast Pipeline Management Limited (M&NP ___ 23
Gas 1.16 M&NP Equity Holding Co. Guarantee ___ 23
Gas 1.17 M&NP & Emera Arrangement ___ 25
Minell Pipeline Ltd. (Minell ___ 26
Gas 1.18 Parental Guarantee ___ 26
NorthRiver Midstream Canada Pipelines Inc. (NorthRiver ___ 27
Gas 1.19 Access to Parent’s Financial Resources .

Attachment to Board Letter dated 12 July 2019 Page 2 of 44 Gas 1.20 Lines of Credit ___ 29
NorthRiver Midstream G and P Canada Pipelines Inc. (NorthRiver G and P ___ 30
Gas 1.21 Access to Parent’s Financial Resources ___ 30
Gas 1.22 Lines of Credit ___ 31
NOVA Gas Transmission Ltd. (NGTL ___ 32
Gas 1.23 Parental Guarantee ___ 32
Gas 1.24 Certificate of Insurance ___ 34
Pembina Energy Services Ltd ___ 34
Gas 1.25 Commodity ___ 34
SCL Pipeline Inc. (SCL ___ 35
Gas 1.26 Shell Canada Limited Line of Credit ___ 35
Steel Reef Pipelines Canada Corp. (Steel Reef ___ 36
Gas 1.27 Parental Guarantee ___ 36
Gas 1.28 Certificate of Insurance ___ 38
Gas 1.29 Capacity of Parent Company ___ 39
Sunoco Pipeline L.P.

(SPLP ___ 40
Gas 1.30 Letter of Credit ___ 40
TransCanada Pipelines Limited (TCPL ___ 40
Gas 1.31 Certificate of Insurance ___ 40
Trans Quebec & Maritimes Pipelines Inc. (TQM ___ 41
Gas 1.32 Parental Guarantee ___ 41
Gas 1.33 Certificate of Insurance . 43

Attachment to Board Letter dated 12 July 2019 Page 3 of 44 National Energy Board (NEB or Board) Gas Information Request No. 1 Alliance Pipeline Ltd. (Alliance) Gas 1.1 Operating Credit Facility Reference: i) A99430-2 Alliance, Financial Resources Plan, PDF page 1 of 2 ii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 7.2(d), PDF page 25 of 28 Preamble: In reference i), Alliance states that it had $120 million undrawn on the credit facility as at 31 December 2018. It also has unrestricted cash on hand from time to time.

In reference ii), the Pipeline Financial Requirements Guidelines (Guidelines) state that lines of credit be accompanied by a description of the structure (and balance) of the line of credit including notice of cancellation, secured/unsecured, total amount, and the undrawn portion.

Request: a) Provide updated amounts for: a.1) the credit facility’s undrawn portion as at Alliance’s most recent fiscal quarter ended; and a.2) the unrestricted cash balance as at Alliance’s most recent fiscal quarter ended.

Canadian-Montana Pipe Line Corporation (CMPL) Gas 1.2 Insurance Reference: i) A99416-1 CMPL, Financial Resources Plan, PDF page 2 of 3 ii) A99416-10 CMPL, Certificate of Insurance, PDF page 1 of 1 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 7.2(a), PDF page 24 of 28 Preamble: Reference i) indicates that CMPL is a named insured under a liability insurance program with $100 million of coverage that can be modified to $300 million, if needed. Reference ii) lists the Insured as NorthWestern Corporation. Under the additional description section, it states that “Name insured includes: Canadian-Montana Pipeline Company Ltd, a wholly owned subsidiary company of NorthWestern Energy”.

The certificate lists the insurers as

Attachment to Board Letter dated 12 July 2019 Page 4 of 44 “Associated Electric & Gas Ins Svcs” and “Energy Ins Mut Ltd”. The certificate also states an expiration date of 1 July 2019. In reference iii), the Pipeline Financial Requirements Guidelines (Guidelines) state that: “A Company relying on insurance must provide a certificate of insurance, containing an overview of its insurance policies, detailing at a minimum:  Coverage/policy types, and limits of each policy type;  Deductible amounts, per incident and policy type;  A list of insured parties under the policy(ies);  Effective date(s) and expiry date(s); and,  The insurance providers, and the providers’ respective A.M.

Best Ratings (or equivalent).” Request: a) Provide a pro-forma (or executed) certificate(s) of insurance: a.1) detailing, at minimum, the criteria listed in reference iii). Examples of detailed items that were not provided in references i) or ii) include, and are not limited to, deductible amounts and the insurance provider’s A.M. Best Rating (or equivalent). a.2) showing that the policy(ies) is (or will be) in effect beyond 1 July 2019, as indicated in reference ii).

Provide the relevant excerpt of the insurance policy(ies) detailing the clauses providing for the coverage of subsidiary companies of NorthWestern Corporation, including CMP. CMPL Gas 1.3 Reliance on Insurance and Alternatives Reference: i) A99416-1 CMPL, Financial Resources Plan, PDF page 2 of 3 ii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 4.3, PDF page 20 of 28 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 5, PDF page 22 of 28 iv) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 7.1, PDF page 23 of 28

Attachment to Board Letter dated 12 July 2019 Page 5 of 44 Preamble: In reference i), CMPL states that it is a named insured under a liability insurance program with $100 million of coverage that can be modified to $300 million, if needed. Reference ii) states that if a Company chooses to place a high degree of reliance on insurance as part of its Financial Resources Plan (for example, >50% of its financial resources being composed of insurance), the Board would expect the Company to further justify this approach in part by describing its risk, operating characteristics, and potential exposure to sudden financial resource draws in the event of a release.

Reference iii) states that if the Board is not satisfied with a pipeline Company’s Financial Resources Plan , the Board may direct a Company to maintain Financial Resources in certain types and in certain amounts of each type. This may be necessary for various reasons, including but not limited to: [...]  A Company’s Financial Resources Plan is too heavily reliant on contingent resources of a third party, (e.g. sole reliance on insurance, with no internal financial means to respond to an incident prior to availability of insurance proceeds). Reference iv) states that: “The Pipeline Financial Requirements Regulations (Regulations) prescribe a list of financial resource types, and a list of readily accessible types from which the Board may choose to direct Companies to maintain.

The financial resource types are prescribed via the Regulations as follows:  Insurance policy:  Escrow agreement;  Letter of credit;  Line of credit;  Participation in a pooled fund referred to in subsection 48.14(1) of the NEB Act;  Parent company guarantees;  Surety bond or pledge agreement, or indemnity bond or suretyship agreement; and  Cash or cash equivalents.” Request: a) Regarding reference ii), explain whether CMPL has performed any analysis regarding the expected cost of a release, including response, remediation, and potential claims.

a.3) If CMPL has performed such an analysis, provide this analysis.

Attachment to Board Letter dated 12 July 2019 Page 6 of 44 a.4) If CMPL has not quantified its potential cost exposure in the event of a release, describe CMPL’s risk, operating characteristics, and potential exposure to sudden financial draws in the event of a release. b) Explain whether it would be feasible for CMPL to obtain further access to readily accessible resources, including additional funding under its parental guarantee or via other means such as obtaining direct credit capacity from a financial institution.

c) Should the Board not be satisfied with the Financial Resources Plan submitted by CMPL and determine that it is necessary to direct CMPL to maintain additional financial resources, select from the following list (as described in reference iv)) the financial resource type CMPL would prefer the Board direct it to maintain, and provide a rationale for the selection:  a letter of credit;  a line of credit (from a financial institution);  participation in a pooled fund referred to in subsection 48.14(1) of the Act; or  cash or cash equivalents. Emera Brunswick Pipeline Company Ltd. (Emera) Gas 1.4 Financial Resources Reference: i) A99400-1 Emera, Financial Resource Plan, PDF pages 1-2 of 4 ii) A99400-1 Emera, Financial Resource Plan, PDF page 2 of 4 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.1, PDF page 23 of 28 iv) National Energy Board’s Pipeline Financial Requirements Guidelines, section 4.2, PDF page 20 of 28 v) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.2(f), PDF pages 26-27 of 28 vi) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.2(d), PDF page 25 of 28 Preamble: In reference i), Emera submits that it maintains the required amounts of financial resources to meet its Absolute Liability Limit through a combination of ENB’s cash working capital and its insurance policies.

Emera further explains that it maintains $10 million in working capital that is readily accessible to Emera immediately following a loss event, and

Attachment to Board Letter dated 12 July 2019 Page 7 of 44 has access to continued cash flow thereafter from interim payments made under Emera’s insurance policies. In reference ii), Emera submits that working capital is one source of Readily Accessible Funds. Emera further indicates that it has other instruments available to it at the Authorization Holder and Parent Company level that would also be sources of Readily Accessible Funds and Emera may substitute (or supplement) its cash working capital to satisfy its Readily Accessible Funds obligation with these other instruments as circumstances dictate.

In reference iii), the Pipeline Financial Requirements Guidelines (Guidelines) state that: “The [Pipeline Financial Requirements Regulations] set out that a Company must maintain certain minimum amounts of Financial Resources in a form that is readily accessible to the Company, as reiterated in Table 2 above. The financial instruments the NEB could order a Company to use are set out in the Regulations and would be one or more of the following for the purposes of the Readily Accessible Portion:  Letter of credit;  Line of credit;  Participation in a pooled fund referred to in the NEB Act; and,  Cash or cash equivalents.” In reference iv), the Guidelines state that: “...the Board will not rely on Financial Resources of a parent or affiliate as a demonstration of ‘maintaining’ Financial Resources at the operating Company level, absent a parental/affiliate guarantee, a line of credit with a parent/affiliate guarantor, or some other instrument or mechanism providing direct, unencumbered access to those parent company Financial Resources at the authorization holder Company’s sole discretion.” The Guidelines also state that: “For any Financial Resources Plan that intends to place reliance on the resources of a parent or affiliate, a detailed corporate structure diagram must be provided.

Additionally, a description of the mechanism or instrument that provides access to parent/affiliate funds (such as a letter of guarantee or line of credit), as well as a copy of the instrument, must be provided.” In reference v), the Guidelines list the requirements for parental guarantee agreements. The reference also states that a parental guarantee agreement must provide proof that there are sufficient funds at a parent company

Attachment to Board Letter dated 12 July 2019 Page 8 of 44 level to cover the Financial Resources for its NEB-regulated company. Further, the Guidelines require parental guarantee agreements must be accompanied by the most recent audited financial statements of the parent company. In reference vi), the Guidelines provide a list of the minimum requirements for lines of credit that may satisfy the Board:  Issued by a bank acceptable to the Board;  Be explicit as to the amount of Financial Resources covered;  Provide the Company with funds on demand; and,  Be accompanied by a description of the structure (and balance) of the line of credit including notice of cancellation, secured/unsecured, total amount, undrawn portion.

Request: a) Discuss how the entity identified as “ENB” in reference i) relates to Emera.

b) Provide a detailed corporate structure diagram for Emera. c) If Emera, as indicated in reference i), is relying on “ENB’s cash working capital”, provide a description of the mechanism or instrument that provides access to ENB’s funds (such as a letter of guarantee or line of credit), as well as a copy of the instrument. c.1) Provide ENB’s most recent audited financial statements. d) In reference i), Emera identified it meets its Absolute Liability Limit through a combination of “cash working capital” and insurance. d.1) Discuss the differences, if any, between the Financial Resources Emera has identified as “cash working capital” and “working capital”.

d.2) Explain how “cash working capital” and “working capital” compare to the financial instruments identified by the Board in reference iii). e) In reference ii), Emera submitted that “working capital” is one source of Readily Accessible Funds to meet the above requirements and that Emera has other instrument available that would also be sources of Readily Accessible Funds. e.1) List and describe the other sources of Financial Resources identified by Emera in reference ii) that are available at the Authorization Holder level, and that meet the Board’s definition of Readily Accessible Funds.

e.2) Confirm whether Emera currently maintains revolving credit facilities or commercial paper programs.

If so, describe the

Attachment to Board Letter dated 12 July 2019 Page 9 of 44 financial instruments and include in your description the minimum requirements listed in reference vi). Emera Gas 1.5 Insurance Claims Response Reference: i) A99400-3 Emera, Financial Resource Plan, PDF pages 24-25 of 44 ii) A99400-3 Emera, Financial Resource Plan, PDF page 4 of 44 Preamble: In reference i), Emera submitted that subsequent to funding through Emera’s “working capital”, the projected timeline for claims recovery via “ENB” insurance program is:  For the primary layer of insurance, consisting of $10 million, 8 weeks under the “norm” and 16 weeks “in case of delay”, and  For the section interim payment of insurance, consisting of $50 million, 12 weeks (3 months) under the “norm” and 24 week (6 months) “in case of delay”.

Further, Emera stated that: “In Marsh's experience, typically, with a loss of this size, given the inherent 'duty of utmost good faith' of all parties to the insurance program, if liability and damages are agreed upon by insurers, an interim payment representing an agreed upon portion of the liability assessed against Emera, can be requested as early as 2 to 4 months from the date of the initial event.” In reference ii), Emera stated that: “Indirect costs such as resulting lawsuits, loss of life payments, and insurance subrogation are not included in these estimates, as any such costs for which ENB were deemed legally liable would be funded by ENB's liability insurance program and are not included as part of this analysis.” Request: a) Discuss the most probable cause(s) for a delay to the payment of the primary insurance layer.

a.1) For each cause identified in a), discuss their likelihood of causing delay to the payment of the primary insurance layer. b) Regarding the indirect costs identified by Emera in reference ii), discuss the earliest Emera could be required to make payments to cover indirect costs.

Attachment to Board Letter dated 12 July 2019 Page 10 of 44 b.1) Discuss the likelihood that Emera could be required to make payment to cover indirect costs while also incurring direct costs. b.2) If Emera is required to make payment to cover indirect costs while also incurring direct costs, explain whether Emera will have sufficient Financial Resources to incur both types of costs simultaneously.

Foothills Pipe Lines Ltd. (Foothills) Gas 1.6 Parental Guarantee Reference: i) A99406-1 Foothills, Financial Resources Plan, PDF page 4 of 174 ii) A99406-1 Foothills, Financial Resources Plan, PDF pages 10-14 of 174 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.2(f), PDF pages 26-27 of 28 Preamble: In reference i), Foothills stated that its parent, TransCanada PipeLines Limited (TCPL), is prepared to issue a parental guarantee to Foothills for $100 million for the purposes of Foothills’ financial resources plan. Reference ii) is a draft form of the parental guarantee made by TCPL in favour of Foothills, dated effective 11 July 2019.

In reference iii), the Pipeline Financial Requirements Guidelines (Guidelines) state that: “... the [parental] guarantee should:  Provide the Authorization holder with unconditional, ondemand access to funds;” Although Foothills’ draft parental guarantee is consistent with this aspect of the Guidelines, a guarantee fundamentally is a promise of a guarantor to a third party (i.e., the NEB) to fulfil the obligations owed by the debtor (i.e., Foothills) to the third party in the event the debtor fails to meet those obligations. The parental guarantee made by TCPL is a promise from TCPL directly to Foothills for any liabilities it may incur under the National Energy Board Act, making the obligations thereunder more analogous to an indemnity obligation.

To avoid uncertainty as to the parental guarantee’s enforceability and to meet the intent of the Guidelines, a valid guarantee should therefore name the NEB as the beneficiary.

Request: a) Explain whether Foothills would like to (i) revise its parental guarantee such that the Board, or any successor administrative body,

Attachment to Board Letter dated 12 July 2019 Page 11 of 44 be named as the beneficiary thereunder; (ii) rely on the proposed indemnity-type instrument provided in reference ii); or (iii) rely on a line of credit or other financial instrument to be provided directly from TCPL to Foothills as part of Foothills’ financial resources plan. b) If Foothills would like to revise its parental guarantee, provide a draft form of a financial instrument that reflects a typical commercial guarantee relationship.

In this financial instrument, be sure to name “Her Majesty the Queen in Right of Canada as represented by the NEB or any successor administrative body” as the beneficiary of the parental guarantee, as well as ensuring compliance with all other requirements set forth in section 7.2(f) of the Guidelines. c) If Foothills would like to rely on the proposed indemnity-type instrument provided in reference ii), resubmit the financial instrument, providing for a clear indemnity instrument by TCPL to Foothills. For clarity, the Board will require similar characteristics for such indemnity instrument as is set forth in section 7.2(f) of the Guidelines, as applicable, and such other characteristics as it deems relevant and necessary.

d) If Foothills would like to rely on a parental line of credit or an alternative financial instrument that provides access to parent/affiliate funds, provide a copy of this instrument, which is to be in compliance with the Guidelines. Foothills Gas 1.7 Certificate of Insurance Reference: i) A99406-1 Foothills, Financial Resources Plan, PDF page 16 of 174 ii) A99406-1 Foothills, Financial Resources Plan, PDF page 17 of 174 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.2(a), PDF page 24 of 28 Preamble: Reference i) is Foothills’ certificate of insurance.

The certificate of insurance specified that the listed insurance policies expired on 1 June 2019.

Reference ii) is a letter setting out the A.M. Best Ratings of the insurers listed in the certificate of insurance in reference i). In reference iii), the Guidelines state that: “A Company relying on insurance must provide a certificate of insurance, containing an overview of its insurance policies, detailing at a minimum:

Attachment to Board Letter dated 12 July 2019 Page 12 of 44  Coverage/policy types, and limits of each policy type;  Deductible amounts, per incident and policy type;  A list of insured parties under the policy(ies);  Effective date(s) and expiry date(s); and,  The insurance providers, and the providers’ respective A.M.

Best Ratings (or equivalent).” Request: a) Confirm that the insurance policies listed in reference i), including the types of insurance, insurers, policy numbers, sums insured/limits of liability, and the named insured, have been renewed and are currently in effect.

a.1) If not confirmed, provide a new certificate of insurance that details the information listed in reference iii). In addition, if the insurers on the certificate of insurance have changed from those included in reference ii), provide a letter setting out the A.M. Best Ratings of the new insurers. Glenogle Energy Inc. (Glenogle) Gas 1.8 Financial Resource Plan Reference: i) A98911-1 Glenogle, Financial Resources Plan, PDF pages 1-3 of 3 ii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 1.2, PDF page 9 of 28 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 3.1, PDF page 13 of 28 iv) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 4.4, PDF page 20 of 28 Preamble: In reference i), Glenogle states that it operates a Gas Class 2 pipeline.

Glenogle provided a table specifying its Financial Resources Plan consists of undrawn Lines of Credit of $900,000 and Insurance policy(ies) of $10 million.

Glenogle states that it is currently involved in renewing its insurance policies for the ensuing year and has requested a quotation to increase the Limits of Liability specific to the subject pipeline to $50 million, in accordance with the Pipeline Financial Requirements Guidelines. In reference ii), the Pipeline Financial Requirements Guidelines (Guidelines) state that neither the NEB Act nor the Regulations provide authority to the Board to grant exemptions from Absolute Liability provisions of the NEB Act and Regulations; to lower Absolute Liability

Attachment to Board Letter dated 12 July 2019 Page 13 of 44 limits; introduce new Absolute Liability Classes; or to accept lower amounts of financial resources that companies must maintain.

In reference iii), the Guidelines state that Absolute Liability Limit for a Gas Class 2 Company (for a Company that operates one or more Authorized Gas pipelines whose Risk Value is at least 100,000 but less than 1,000,000) is $50 million. In reference iv), the Guidelines state that a Company must maintain at least 5 per cent of the amount of Financial Resources in types that are readily accessible.

Request: a) Given that reference i) does not demonstrate an appropriate Financial Resources Plan, provide a revised Financial Resources Plan demonstrating that: a.1) the Absolute Liability Limit as stated in reference ii) and iii) has been met. (As stated in reference ii) the Board is not able to grant exemptions to the limits set out in the Act and regulations.) a.2) the readily accessible funds amount, as described in reference iv), has been met. Glenogle Gas 1.9 Insurance Reference: i) A98911-1 Glenogle, Financial Resources Plan, PDF pages 1-3 of 3 ii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 7.2(a), PDF page 24 of 28 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 3.1, PDF page 13 of 28 Preamble: In reference i), Glenogle states that it relies principally on insurance to satisfy its requirement to maintain Financial Resources for the subject pipeline.

A copy of the current certificate of insurance provided shows $10 million policy limits and an expiration date of 31 July 2019. The certificate also shows that HSBC Bank Canada is “First Loss Payee as their interests may appear”.

Glenogle states that it is currently involved in renewing its insurance policies for the ensuing year and has requested a quotation to increase the Limits of Liability specific to the subject pipeline to $50 million, in accordance with the Pipeline Financial Requirements Guidelines. In reference ii), the Guidelines state that:

Attachment to Board Letter dated 12 July 2019 Page 14 of 44 “A Company relying on insurance must provide a certificate of insurance, containing an overview of its insurance policies, detailing at a minimum:  Coverage/policy types, and limits of each policy type;  Deductible amounts, per incident and policy type;  A list of insured parties under the policy(ies);  Effective date(s) and expiry date(s); and,  The insurance providers, and the providers’ respective A.M.

Best Ratings (or equivalent).” In reference iii), the Guidelines state that Absolute Liability Limit for a Gas Class 2 Company (for a Company that operates one or more Authorized Gas pipelines whose Risk Value is at least 100,000 but less than 1,000,000) is $50 million.

Request: a) Provide a pro-forma (or executed) certificate(s) of insurance showing coverage sufficient to meet the Absolute Liability Limit specified in reference iii). The certificate(s) should detail, at minimum, the criteria listed in reference ii). Alternately, provide evidence of another type of Financial Resources used to meet the Absolute Liability Limit specified in iii). b) Provide the relevant excerpt of Glenogle’s insurance policy(ies) detailing the clauses providing for the described “first loss payee” provision in the policy(ies).

Glenogle Gas 1.10 Line of Credit/Readily Accessible Funds Reference: i) A98911-1 Glenogle, Financial Resources Plan, PDF page 1 of 3 ii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 7.2(d), PDF page 25 of 28 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 4.4, PDF page 20 of 28 Preamble: In reference i), Glenogle states that it has $900,000 in undrawn Lines of Credit as of 31 December 2018.

No further details were provided. In reference ii), the Guidelines state that: “Lines of credit from a financial institution meeting the following minimum requirements may be satisfactory:  Issued by a bank acceptable to the Board;

Attachment to Board Letter dated 12 July 2019 Page 15 of 44  Be explicit as to the amount of Financial Resources covered;  Provide the Company with funds on demand; and,  Be accompanied by a description of the structure (and balance) of the line of credit including notice of cancellation, secured/unsecured, total amount, undrawn portion.” Reference ii) also states that: “The Board will only rely on the undrawn portion of a line of credit in consideration of the sum of Financial Resources a Company is maintaining. The Board may direct Companies to report if the undrawn portion of a credit line drops below a certain threshold, as required.” In reference iii), the Guidelines state that a Company must maintain at least 5 per cent of the amount of Financial Resources in types that are readily accessible.

Request: a) Provide an update detailing how much of the line of credit facility noted in reference i) remained available and undrawn as of 31 May 2019. b) Accounting for the factors noted in reference ii), describe the characteristics of the line of credit facility, including: b.1) a list of the bank(s) providing the operating credit facility, and indicate whether it is a (they are) Schedule 1 Canadian bank(s) under the Canada Bank Act. b.2) a description of the structure (and balance) of the line of credit including notice of cancellation, secured/unsecured, total amount, undrawn portion.

c) If the undrawn portion of the line of credit provided in a) does not meet the minimum Financial Resources amount that must be readily accessible as indicated in reference iii), include details of what instruments will be used to meet the difference.

Glenogle Gas 1.11 Reliance on Insurance Reference: i) A98911-1 Glenogle, Financial Resources Plan, PDF page of 3 ii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 4.3, PDF page 20 of 28 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 5, PDF page 22 of 28

Attachment to Board Letter dated 12 July 2019 Page 16 of 44 iv) National Energy Board’s Pipeline Financial Requirements Guidelines, Section 7.1, PDF pages 23 of 28 Preamble: In reference i), Glenogle states that it relies principally on insurance to satisfy its requirement to maintain Financial Resources for the subject pipeline. Reference ii) states that: “Further, if a Company chooses to place a high degree of reliance on insurance as part of its Financial Resources Plan (for example, >50% of its financial resources being composed of insurance), the Board would expect the Company to further justify this approach in part by describing its risk, operating characteristics, and potential exposure to sudden financial resource draws in the event of a release.” Reference iii) states that: “If the Board is not satisfied with a pipeline Company’s Financial Resources Plan [...] the Board may direct a Company to maintain Financial Resources in certain types and in certain amounts of each type.

This may be necessary for various reasons, including but not limited to: [...]  A Company’s Financial Resources Plan is too heavily reliant on contingent resources of a third party, (e.g. sole reliance on insurance, with no internal financial means to respond to an incident prior to availability of insurance proceeds).” Reference iv) states that: “The Pipeline Financial Requirements Regulations (Regulations) prescribe a list of financial resource types, and a list of readily accessible types from which the Board may choose to direct Companies to maintain. The financial resource types are prescribed via the Regulations as follows:  Insurance policy:  Escrow agreement;  Letter of credit;  Line of credit;  Participation in a pooled fund referred to in subsection 48.14(1) of the NEB Act;  Parent company guarantees;  Surety bond or pledge agreement, or indemnity bond or suretyship agreement; and  Cash or cash equivalents.”

Attachment to Board Letter dated 12 July 2019 Page 17 of 44 Request: a) Regarding reference ii), explain whether Glenogle has performed any analysis regarding the expected cost of a release, including response, remediation, and potential claims. a.1) If Glenogle has performed such an analysis, provide this analysis. a.2) If Glenogle has not quantified its potential cost exposure in the event of a release, describe Glenogle’s risk, operating characteristics, and potential exposure to sudden financial draws in the event of a release.

b) Explain whether Glenogle has any other sources of readily accessible funds and whether it would be feasible for Glenogle to obtain further access to readily accessible resources via other means, such as obtaining further credit capacity from a financial institution.

c) Should the Board not be satisfied with the Financial Resources Plan submitted by Glenogle, and determine that it is necessary to direct Glenogle to maintain additional financial resources, select from the following list (as described in reference iv)) the financial resource type Glenogle would prefer the Board direct it to maintain, and provide rationale:  a letter of credit;  a line of credit (from an parent/affiliate);  a line of credit (from a financial institution);  participation in a pooled fund referred to in subsection 48.14(1) of the Act; or  cash or cash equivalents. Great Lakes Pipeline Canada Ltd.

(GLC) Gas 1.12 Parental Guarantee Reference: i) A99407-1 GLC, Financial Resources Plan, PDF page 4 of 174 ii) A99407-1 GLC, Financial Resources Plan, PDF pages 10-14 of 174 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.2(f), PDF pages 26-27 of 28 Preamble: In reference i), GLC stated that its parent, TransCanada PipeLines Limited (TCPL), is prepared to issue a parental guarantee to GLC for $100 million for the purposes of GLC’s Financial Resources Plan.

Attachment to Board Letter dated 12 July 2019 Page 18 of 44 Reference ii) is a draft form of the parental guarantee made by TCPL in favour of GLC, dated effective 11 July 2019. In reference iii), the Pipeline Financial Requirements Guidelines (Guidelines) state that: “... the [parental] guarantee should:  Provide the Authorization holder with unconditional, ondemand access to funds;” Although GLC’s draft parental guarantee is consistent with this aspect of the Guidelines, a guarantee fundamentally is a promise of a guarantor to a third party (i.e., the NEB) to fulfil the obligations owed by the debtor (i.e., GLC) to the third party in the event the debtor fails to meet those obligations.

The parental guarantee made by TCPL is a promise from TCPL directly to GLC for any liabilities it may incur under the National Energy Board Act, making the obligations thereunder more analogous to an indemnity obligation. To avoid uncertainty as to the parental guarantee’s enforceability and to meet the intent of the Guidelines, a valid guarantee should therefore name the NEB as the beneficiary. Request: a) Explain whether GLC would like to (i) revise its parental guarantee such that the Board, or any successor administrative body, be named as the beneficiary thereunder; (ii) rely on the proposed indemnitytype instrument provided in reference ii); or (iii) rely on a line of credit or other financial instrument to be provided directly from TCPL to GLC as part of GLC’s financial resources plan.

b) If GLC would like to revise its parental guarantee, provide a draft form of a financial instrument that reflects a typical commercial guarantee relationship. In this financial instrument, be sure to name “Her Majesty the Queen in Right of Canada as represented by the NEB or any successor administrative body” as the beneficiary of the parental guarantee, as well as ensuring compliance with all other requirements set forth in section 7.2(f) of the Guidelines. c) If GLC would like to rely on the proposed indemnity-type instrument provided in reference ii), resubmit the financial instrument, providing for a clear indemnity instrument by TCPL to GLC.

For clarity, the Board will require similar characteristics for such indemnity instrument as is set forth in section 7.2(f) of the Guidelines, as applicable, and such other characteristics as it deems relevant and necessary.

d) If GLC would like to rely on a parental line of credit or an alternative financial instrument that provides access to parent/affiliate funds, provide a copy of this instrument, which is to be in compliance with the Guidelines.

Attachment to Board Letter dated 12 July 2019 Page 19 of 44 GLC Gas 1.13 Certificate of Insurance Reference: i) A99407-1 GLC, Financial Resources Plan, PDF page 16 of 174 ii) A99407-1 GLC, Financial Resources Plan, PDF page 17 of 174 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.2(a), PDF page 24 of 28 Preamble: Reference i) is GLC’s certificate of insurance.

The certificate of insurance specified that the listed insurance policies expired on 1 June 2019. Reference ii) is a letter setting out the A.M. Best Ratings of the insurers listed in the certificate of insurance in reference i). In reference iii), the Guidelines state that: “A Company relying on insurance must provide a certificate of insurance, containing an overview of its insurance policies, detailing at a minimum:  Coverage/policy types, and limits of each policy type;  Deductible amounts, per incident and policy type;  A list of insured parties under the policy(ies);  Effective date(s) and expiry date(s); and,  The insurance providers, and the providers’ respective A.M.

Best Ratings (or equivalent).” Request: a) Confirm that the insurance policies listed in reference i), including the types of insurance, insurers, policy numbers, sums insured/limits of liability, and the named insured, have been renewed and are currently in effect.

a.1) If not confirmed, provide a new certificate of insurance that details the information listed in reference iii). In addition, if the insurers on the certificate of insurance have changed from those included in reference ii), provide a letter setting out the A.M. Best Ratings of the new insurers. Many Islands Pipe Lines (Canada) Ltd. (MIPL) Gas 1.14 Line of Credit and Parental Guarantee Reference: i) A99398-1 MIPL, Financial Resources Plan, PDF page 2 of 4 ii) A99398-1 MIPL, Financial Resources Plan, PDF page 3 of 4

Attachment to Board Letter dated 12 July 2019 Page 20 of 44 iii) National Energy Board’s Pipeline Financial Requirements Guidelines, section 4.2, PDF page 20 of 28 iv) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.2(d), PDF page 25 of 28 v) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.2(f), PDF pages 26-27 of 28 Preamble: In reference i), MIPL stated that its parent, SaskEnergy Incorporated (SaskEnergy), maintains a line of credit with the Ministry of Finance of Saskatchewan, and that SaskEnergy will in turn make a similar credit facility available to MIPL, to the extent and on terms necessary to meet the requirements of the Pipeline Financial Requirements Regulations.

In reference ii), MIPL indicated that SaskEnergy has requested approval from the Ministry of Finance of Saskatchewan to provide MIPL with a parental guarantee that would, if approved, provide additional financial resources to MIPL’s financial resources plan. MIPL explained that a Crown corporation must receive approval from the Ministry of Finance to provide guarantees, and that SaskEnergy’s request is currently being reviewed by the Province of Saskatchewan.

In reference iii), the Pipeline Financial Requirements Guidelines (Guidelines) state that: “For any Financial Resources Plan that intends to place reliance on the resources of a parent or affiliate, a detailed corporate structure diagram must be provided. Additionally, a description of the mechanism or instrument that provides access to parent/affiliate funds (such as a letter of guarantee or line of credit), as well as a copy of the instrument, must be provided.” In reference iv), the Guidelines state that: “The Board has also approved lines of credit from parent companies/affiliates as acceptable Financial Resources, with the following attributes:  Provides the Company with funds on demand and at its sole discretion;  Provides funds within five (5) business days on written demand from the Company;  Non-transferrable and non-assignable, except with prior written approval of the Board or any successor administrative body;

Attachment to Board Letter dated 12 July 2019 Page 21 of 44  Does not allow termination, amendment, or modification, except with prior written approval of the Board or any successor administrative body;  Contains explicit provision to notify the Board or any successor administrative body in writing of any event of default, within two (2) business days of the guarantor or Company’s knowledge of default; and,  Automatically renews and remains in force unless the Board or any successor administrative body has granted approval of alternative types of Financial Resources.” In reference v), the Guidelines state that: “A parental guarantee agreement must provide proof that there are sufficient funds at a parent company level to cover the Financial Resources for its NEB-regulated Company.

This parental guarantee agreement must be accompanied by the most recent audited financial statements of the parent company, as well as any subsequently completed unaudited quarterly statements and, if available, the most recent credit rating reports from the guarantor. The Financial Resources of the parent company will only be relied on for the amount of the guarantee agreement.

Furthermore, the guarantee should:  Provide the Authorization holder with unconditional, ondemand access to funds;  Specify the amount of the funds being guaranteed for the purpose of the Financial Resource Requirements established in the NEB Act and Regulations;  Provide funds within five (5) business days of written demand from the Company;  Be irrevocable, non-transferrable and non-assignable, except with prior written approval of the Board or any successor administrative body;  Not allow termination, amendment, or modification, except with prior written approval of the Board or any successor administrative body;  Automatically renew and remain in force unless the Board or any successor administrative body has granted approval of alternative types of Financial Resources; and,  Require that in the event of default of either the guarantor or the NEB-regulated Company, the Board or any successor administrative body be served notice of default within two (2) business days.”

Attachment to Board Letter dated 12 July 2019 Page 22 of 44 Request: a) With respect to the line of credit that will be made available to MIPL by SaskEnergy (as per reference i)), respond to the following: a.1) Provide a copy (draft or executed) of the line of credit agreement between MIPL and SaskEnergy. a.2) Discuss the amount of financial resources that are covered by the line of credit. a.3) Discuss whether the line of credit agreement contains each of the attributes listed in reference iv). For each attribute that the proposed line of credit does not contain, if any, explain why the attribute is not included in the line of credit.

b) With respect to the pending parental guarantee described in reference ii), respond to the following: b.1) Provide a copy (draft or executed) of the parental guarantee. b.2) Discuss the amount of financial resources that are covered by the parental guarantee.

b.3) Discuss whether the parental guarantee contains each of the attributes listed in reference v). For each attribute that the parental guarantee does not contain, if any, explain why the attribute is not included in the parental guarantee. MIPL Gas 1.15 Certificate of Insurance Reference: i) A99398-1 MIPL, Financial Resources Plan, PDF page 4 of 4 ii) National Energy Board’s Pipeline Financial Requirements Guidelines, section 7.2(a), PDF page 24 of 28 Preamble: Reference i) is MIPL’s certificate of insurance. The certificate of insurance specified that the listed insurance policies expired on 30 June 2019.

In reference ii), the Guidelines state that: “A Company relying on insurance must provide a certificate of insurance, containing an overview of its insurance policies, detailing at a minimum:  Coverage/policy types, and limits of each policy type;  Deductible amounts, per incident and policy type;  A list of insured parties under the policy(ies);

Attachment to Board Letter dated 12 July 2019 Page 23 of 44  Effective date(s) and expiry date(s); and,  The insurance providers, and the providers’ respective A.M. Best Ratings (or equivalent).” Request: a) Confirm that the insurance policies listed in reference i), including the types of insurance, insurers, policy numbers, sums insured/limits of liability, and the named insured, have been renewed and are currently in effect.

a.1) If not confirmed, provide a new certificate of insurance that details all of the information listed in reference ii). Maritimes & Northeast Pipeline Management Limited (M&NP) Gas 1.16 M&NP Equity Holding Co. Guarantee Reference: i) A99425-2 M&NP, Financial Resources Plan, PDF page 1 of 3 ii) A99425-4 M&NP, Financial Resources Plan summary table, PDF page 1 of 2 iii) C00442-2 M&NP, Guarantee Agreement Between Exxon Equity Holding Company dated 26 June 2019 iv) National Energy Board’s Pipeline Financial Requirements Guidelines, (Guidelines) section 7.2(f), PDF pages 26-27 of 28 Preamble: In reference i), M&NP states that as part of its financial resources plan, it will rely on a parental guarantee arrangement on behalf of ExxonMobil Canada Hibernia Finance Ltd.

using Exxon Equity Holding Company as the guarantor, in the amount of $9.55 million.

In reference ii), under the column labelled “Parent/Affiliate of M&NP Partner ExxonMobil Canada Hibernia Finance Ltd. (Exxon Equity Holding Co.)”, it shows that $7,591 in deposits receivable from Exxon Mobil Corporation are available with one (1) day timing of access. In reference iii), M&NP filed a Guarantee Agreement between Exxon Equity Holding Company and M&NP. In reference iv), the Guidelines state that: “... the [parental] guarantee should:  Provide the Authorization holder with unconditional, ondemand access to funds;“ A guarantee fundamentally is a promise of a guarantor to a third party (i.e., the NEB) to fulfil the obligations owed by the debtor (i.e., M&NP) to the third party in the event the debtor fails to meet those obligations.

Attachment to Board Letter dated 12 July 2019 Page 24 of 44 parental guarantee made by Exxon Equity Holding Company is a promise from Exxon Equity Holding Company directly to M&NP for any liabilities it may incur under the National Energy Board Act, making the obligations thereunder more analogous to an indemnity obligation. To avoid uncertainty as to the parental guarantee’s enforceability and to meet the intent of the Guidelines, a valid guarantee should therefore name the NEB as the beneficiary.

Request: a) With regard to reference ii), explain: a.1) how Exxon Equity Holding Co. can backstop the parental guarantee agreement; a.2) whether the $7,591 figure represents assets at Exxon Mobil Corporation, Exxon Mobil Canada Hibernia, or Exxon Equity Holding co.

the proposed guarantor to the agreement; and a.3) whether, and if so how, the cash referenced is available to Exxon Equity Holding Co. on an unencumbered basis and at its sole discretion. If not, explain why not. b) Explain whether M&NP would like to (i) revise its parental guarantee such that the Board, or any successor administrative body, be named as the beneficiary thereunder; (ii) rely on the proposed indemnitytype instrument provided in reference ii); or (iii) rely on a line of credit or other financial instrument to be provided directly from Exxon Equity Holding Company to M&NP as part of M&NP’s financial resources plan.

c) If M&NP would like to revise its parental guarantee, provide a draft form of a financial instrument that reflects a typical commercial guarantee relationship. In this financial instrument, be sure to name “Her Majesty the Queen in Right of Canada as represented by the NEB or any successor administrative body” as the beneficiary of the parental guarantee, as well as ensuring compliance with all other requirements set forth in section 7.2(f) of the Guidelines. d) If M&NP would like to rely on the proposed indemnity-type instrument provided in reference ii), resubmit the financial instrument, providing for a clear indemnity instrument by Exxon Equity Holding Company to M&NP.

For clarity, the Board will require similar characteristics for such indemnity instrument as is set forth in section 7.2(f) of the Guidelines, as applicable, and such other characteristics as it deems relevant and necessary. d.1) If M&NP would like to rely on a parental line of credit or an alternative financial instrument that provides access to parent/affiliate funds, provide a copy of this instrument, which is to be in compliance with the Guidelines.

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