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GLOSSARY

 
Anchor Loads A large potential natural gas customer that is willing to sign a long-term contract with a pipeline for gas transportation service. The pipeline needs anchor customers in order to provide the economic justification for constructing the project. Anchor customers tend to be large industrial facilities or electric generating facilities. [charges majeures]
Balancing The process of adjusting physical gas takes or deliveries to match the volumes that have been scheduled by the customer. Each day the gas actually taken by a customer will vary from the amount scheduled. A pipeline or distribution company needs to have the ability to manage the differences in volume. [équilibrage]
Bundled Service A service provided by a pipeline or LDC that includes the natural gas as well as all the necessary services required for a consistent, reliable supply (including balancing and storage). Under a bundled LDC service, the customer purchases its gas at its meter. Under an unbundled LDC service, the customer purchases its gas from a different supplier and transports its gas through the distribution system. [service groupé]
Burner Tip Literally the point at which gas is ignited; the end of the gas delivery system. This is typically used in reference to the point at which an industrial, commercial or residential customer takes gas from its distribution utility, the customer's meter. [bec du brûleur]
Bypass The method by which a customer gains access to direct deliveries of gas from a supplier other than its traditional supplier. Local distribution companies may bypass their pipeline supplier(s) by building interconnects with other pipelines; industrial customers may bypass their local distributor by tapping directly into an inter-provincial or intra-provincial pipeline. [contournement]
City-Gate Station The physical location where an LDC measures and receives gas from a pipeline company. [poste de livraison]
Commodity Charge A charge that is applied to the amount of gas purchased or transported during a billing period. A commodity charge is a variable charge. In an unbundled environment, an end-user would typically buy gas from a marketer or supplier under a commodity charge and pay separate commodity and demand charges for transportation. [frais liés au produit]
Contribution in Aid of Construction A payment made by a new customer of a pipeline or distribution company that makes the company's cost of constructing a new project for the customer consistent with the rate the company charges to other customers. If the construction of a new M&NE lateral did not meet the $0.60/MMBtu threshold test, the pipeline would calculate the amount of "excess cost". If the customer pays the pipeline a contribution in aid of construction equal to the excess cost, the pipeline would then be able to construct the lateral within the lateral policy. [contribution d'aide à la construction]
Cost of Service The total costs incurred by a utility in providing utility service. Under traditional cost of service regulation, a utility is allowed to charge rates that cover expected operating costs and other necessary costs such as taxes, depreciation and debt, as well as provide an opportunity to earn a reasonable return on equity. [coût de service]
Cost of Service Methodology The traditional approach for regulatory commissions to set rates for regulated utilities. The utility demonstrates to the regulatory body what its actual cost of doing business was during a historical test period. The utility also proposes what it considers to be a reasonable cost of equity. The regulatory body reviews the historical costs and the proposed rate of return (cost of equity) and eventually sets the utility's rates based on what the utility needs in order to collect sufficient revenues to cover the cost of service approved by the regulatory board. The cost of service methodology contrasts with incentive rate methodologies where rates are set based on performance standards instead of actual costs. [méthode du coût de service]
Demand Charge A charge imposed by a pipeline or LDC that is designed to recover the pipeline's or LDC's fixed cost of being able to provide service. The demand charge is also referred to as a reservation charge. The demand charge must be paid whether gas is taken or not. Most pipelines charge two-part rates consisting of a demand (reservation) charge and a commodity charge. Some LDCs use two-part rates for large industrial customers, but most distribution rates do not include demand charges. [frais liés à la demande]
Direct Access Occurs when a natural gas customer is directly connected to a pipeline instead of being connected to a distribution company. This allows the customer to avoid any charges that might be imposed by the distribution company because the customer is not connected to a distribution company. [accès direct]
Discount Toll (4%) Under the rates approved by the NEB for the M&NE Pipeline, the rates for gas delivered to New Brunswick customers would be discounted by 4% for the first three years of the pipeline's operations. [droit d'escompte]
Distillate Fuel Oil The type of fuel oil generally used by residential and small commercial customers for heating purposes. It is also referred to as No. 2 Oil. It is a fuel that natural gas must compete with in the residential and commercial markets. [mazout léger]
Distribution Franchise The right granted by the provincial regulatory body that allows a person holding the right to distribute gas to end-users. The Committee recommends the creation of three classes of distribution franchises: general, single end-user, and local producer. [concession de distribution]
Distributor A company engaged in the activity of distributing natural gas to end-users. Distributors are in control of the gas between the city gate and the end-user's meter. Distributors are frequently referred to as LDCs. [distributeur]
DNRE The New Brunswick Department of Natural Resources and Energy. [MRNE]
Dual-fuel Customer An end-user of gas (generally a large commercial or industrial customer) that has the ability to burn an alternative fuel as well as natural gas. [client mixte]
FERC The Federal Energy Regulatory Commission. The U.S. Government Federal agency that has jurisdiction over all interstate gas pipelines, wholesale electric rates, hydroelectric licensing and oil pipeline rates. [FERC]
Firm Service A service that is not subject to interruption. Both pipelines and distribution companies generally offer firm and interruptible service. Pipelines generally charge two-part rates for firm service: a reservation charge, which is a fixed fee based on the amount of capacity reserved by the customer under its contract, and a variable charge, which is applied to each unit of gas that it transported. Firm service is the highest-quality service available and is more expensive than interruptible service. (See Interruptible Service.) [service garanti]
Fixed Costs Costs that do not vary according to throughput or the amount of service provided. For example, the cost of debt is a fixed cost for a pipeline or an LDC. Pipeline and LDC costs are classified as either fixed or variable. Pipeline rates are generally designed on a two-part basis, with fixed costs covered by a reservation charge and variable costs covered by a commodity charge. A pipeline's average cost for a period of time is very dependent upon the volume for the period of time because a large potion of the pipeline's cost is fixed cost. (Compare with variable cost.) [coûts fixes]
Gas Processing Facilities Facilities located in or near the location where natural gas is produced that are designed to remove impurities from the gas stream. The impurities must be removed before the gas is mingled with "clean" pipeline or LDC gas. Depending on the characteristics of the produced gas, additional processing may be done to remove valuable liquid hydrocarbons from the gas stream for direct sale to other markets. These liquids often include ethane, propane, and butane. [installations de traitement du gaz]
Gas-fired Electric Generating Stations Electric generating stations that use natural gas as a fuel. Several different types of facilities can use gas. One type is a conventional steam generating facility. This type of facility can typically use residual fuel oil (No. 6 fuel oil) as an alternative fuel. Another type of electric generation facility is a combined cycle or a combustion turbine generating facility. These types of facilities often can use distillate fuel oil as an alternative fuel. [centrales électriques alimentées au gaz]
Greenfield System A gas distribution system that has no pre-existing facilities or infrastructure. The economics of developing a greenfield distribution system are quite different from those involved in expanding an existing system. [nouveau réseau]
Gulf Coast A major oil and gas producing region in the United States near the Gulf of Mexico. The Gulf Coast area produces much of the natural gas used in the Northeastern United States and the Midwest. The Gulf Coast consists primarily of the onshore and offshore production areas in the states of Texas and Louisiana. [côte du golfe du Mexique]
Incentive Rates An alternative to traditional cost of service rates where a regulated utility's rates are not directly tied to the utility's actual costs for a particular period. The utility is allowed to retain some of the benefits of lowering its cost of providing service as an incentive for more efficient operation. Under traditional cost of service rates, rates are set on the actual cost of providing service and utilities do not have strong incentives to reduce their costs. (See Cost of Service.) [tarifs incitatifs]
Interruptible Service A service offered by a pipeline or distribution company that can be interrupted by the pipeline or distribution company if capacity is not available. Pipelines and LDCs are not obligated to construct capacity for interruptible customers; however, they design their systems to meet the requirements of the firm customers. Interruptible customers have lower rates than firm customers because the quality of the service is lower. [service interruptible]
Lateral Line A section of pipeline in a transmission system or distribution system that branches away from the central and primary pipeline (mainline) in order to serve loads not near the primary pipeline. (See Mainline.) [embranchement]
Load Factor The ratio of average load to peak load for a specified period, usually expressed as a percentage. [facteur de charge]
LDC [distributeur local] A local distribution company, a company that engages in the distribution of gas to end-users. Also referred to as Distributor.
M&NE Pipeline The Maritimes and Northeast Pipeline. [M&NE Pipeline]
Mainline The main transmission facilities required to transport gas from its source to major markets. Laterals are smaller lines that connect the mainline to other markets, typically LDCs and large end-users. (See Lateral Line.) [conduite principale]
Marketer A company involved in the business of purchasing and reselling natural gas. The company may be independent or affiliated with transmission and production companies as well as LDCs. [négociant]
Merchant Function In a traditional gas distribution company, the LDC bought gas from producers or pipelines and sold the gas to end-users at the end-users' meter. The merchant function refers to the sale of gas by the LDC. In an unbundled environment, the LDC simply provides transportation service between the city gate and the customers' meter without selling any gas. Other parties sell the gas to the customers. [fonction de commerçant]
Natural Monopoly A condition where competition would not be expected to develop. For example, the gas distribution function is a natural monopoly because it is extremely unlikely that once a distribution company was established in an area a competing company would enter the same market and construct additional distribution facilities. However, the selling of gas to retail customers is not a natural monopoly because a relatively large number of companies would be able to offer competitive alternatives. [monopole naturel]
NEB The Canadian National Energy Board. The NEB is the Canadian Federal regulatory board that deals with energy-related policy issues. Among other responsibilities, it regulates the construction and tolls (rates) of all inter-provincial natural gas pipelines. [ONE]
Nomination Requests by shippers for transportation under a service agreement. [commande]
Postage Stamp Rate A rate that applies to a particular area that does not vary by the distance between the receipt point and the delivery point. The M&NE Pipeline will have a postage stamp rate in New Brunswick because the rates will be the same for all gas delivered by the pipeline to any location in New Brunswick served by the mainline or any of the laterals. [tarif « timbre-poste »]
Precedent Agreement A contract between two parties that obligates the parties to enter into definitive agreements, subject to certain conditions occurring. An example of a precedent agreement would be a large industrial customer signing a long-term agreement to pay for pipeline services subject to a condition that the pipeline is authorized to build a lateral and if the industrial customer is not obligated to take service from an LDC. If the conditions precedent do not occur, then the contract is terminated without penalties to either party. [entente sous condition préalable]
PUB The New Brunswick Public Utilities Board, the provincial regulatory authority responsible for regulating utilities in New Brunswick. [CESP]
Residual Fuel Oil A low-quality oil left over after the refining process has converted the crude oil to higher-value refined products. The residual oil is also referred to as No. 6 oil. Large industrial customers generally use it. It is less expensive than distillate fuel oil and generally has higher emissions of air pollutants than refined oil products or natural gas. [mazout lourd]
Revenue Cycle Services Services traditionally provided by utilities as part of the revenue cycle. The revenue cycle includes reading meters, sending out bills to customers, answering customer billing inquiries, and managing credit and collections. In an unbundled environment, parties other than the LDC may be able to offer these types of services on a more economical basis than the LDC itself. [services liés au cycle des revenus]
RFP Request for Proposals. The RFP is a document that describes the requirements that potential bidders must meet in a competitive bidding process. [demande de propositions]
Rolled-in Rate Rates derived by using average costs. For example, under the NEB lateral policy, the costs of constructing a lateral in New Brunswick would be averaged with the cost of the mainline facilities. This is different than an incremental lateral policy used in other cases where a customer pays an additional, separate rate for the use of the lateral in addition to the cost of the mainline. [tarif calculé selon la méthode de péréquation]
Shippers Parties that use the pipeline or distribution company to transport their gas. If an end-user purchases its gas from the distribution company at the customer's meter, it is not the shipper of the gas on the LDC system. If an end-user purchases its gas from a Sable Island producer at Goldboro, it would be the shipper on the Maritimes pipeline, as well as on the LDC. If an end-user bought its gas at the city-gate station from a marketer who purchased the gas from a Sable Island producer at Goldboro, the marketer would be the shipper on the pipeline and the customer would be the shipper on the LDC system. [expéditeurs]
Stage I and Stage II Processes The processes by which the Government of New Brunswick decided to solicit competitive bids to determine who would be grated franchises to establish gas distribution companies in New Brunswick. Stage I required any party that was interested in possibly becoming a franchise applicant to indicate its intention by making a filing with the Ministry of Natural Resources and Energy. In the application, potential applicants were required to state their positions on a number of policy issues. Each of the potential applicants was given an opportunity to address the Select Committee on Energy during the public hearing process. In Phase II, parties participating in Phase I will have the opportunity to apply for a gas distribution franchise. In addition, customers served directly by the M&NE Pipeline will also be allowed to apply for singe end-user franchises. All potential bidders will have to submit the same type of information. The information developed in the Phase I process will be used to design the Stage II process. [étape I et étape II]
Supplier of Last Resort The party that has the residual obligation to serve any customers who have not signed a supply agreement with a supplier. The supplier of last resort is a major issue when an LDC converts from bundled services to an open access transportation system. Some residual customers may not select a supplier even though they need service. Some marketers may choose not to serve certain customers for various reasons. These customers need to have access to a supplier of last resort. [fournisseur de dernier ressort]
TCF Trillion Cubic Feet. A volumetric unit of measurement used in the gas industry equal to one trillion cubic feet. A standard unit of measurement of daily quantities of gas transported by LDCs is the MCF (thousand cubic feet). The next largest unit used is the MMCF, which is equal to a thousand MCF or a million cubic feet. BCF stands for billion cubic feet. [1012pi3]
Threshold Toll Test Under the NEB-approved lateral policy for the M&NE Pipeline, a proposed lateral would meet the "threshold toll test" if, as a result of averaging the cost of the proposed lateral with the cost of the mainline, the mainline rate was less than $0.60/MMBtu. By setting the threshold toll test, the NEB placed limits on the extent to which U.S. shippers would subsidize the construction of Canadian laterals. [seuil des droits acceptables]
Throughput The amount of gas that is transported by a pipeline or distribution system over a period of time. It includes gas owned by the pipeline/distributor as well as gas owned by the pipeline/distributor's customers. In a completely bundled system, all of the throughput would be owned by the pipeline/distributor. In a completely unbundled system, transportation customers would own the entire throughput. [débit]
TransCanada PipeLines The main inter-provincial pipeline that provides transportation service from Alberta to the Province of Quebec. [TransCanada Pipelines]
Unbundled Service A type of service where a customer purchases its gas from one party and receives its transportation service from a separate company. [service séparé]
Unbundling The breaking down of a bundled service into its component parts so that a customer can choose to purchase different components of the service that they require from different parties. When LDCs offered only bundled services, their customers could purchase gas only from the LDC. In an unbundled environment, the customer can choose to purchase its gas supply from any supplier it wants and the LDC provides transportation to the customer's meter. Additional unbundling may allow other parties to provide other components of service, such as billing, meter reading, and credit and collection services. [séparation]
Variable Costs Costs that vary according to the amount of services being provided. In general, variable costs are recovered from a variable rate component. (See Fixed Costs.) [coûts variables]



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