Appendices

A. Credit Rating Scale Comparison Chart and Recent Ratings Changes

This chart provides a comparison of the credit rating scales used by DBRS Morningstar, S&P, and Moody's, when rating long-term debt. Because of differences between these agencies’ rating approaches and definitions, some subjectivity is required in comparing their rating scales. Each agency also provides a rating outlook or trend, which assesses the potential direction of a credit rating. Common outlooks or trends are: 'Positive', 'Negative', and 'Stable.'

Table A.1. Credit Rating Scale Comparison

Credit Quality DBRS Morningstar S&P Moody's
Investment Grade
Highest Credit Quality AAA AAA Aaa
Superior/High Quality AA (high) AA+ Aa1
AA AA Aa2
AA (low) AA- Aa3
Good/Upper-Medium A (high) A+ A1
A A A2
A (low) A- A3
Adequate/Medium BBB (high) BBB+ Baa1
BBB BBB Baa2
BBB (low) BBB- Baa3
Non-Investment Grade
Speculative BB (high) BB+ Ba1
BB BB Ba2
BB (low) BB- Ba3
Highly speculative B (high) B+ B1
B B B2
B (low) B- B3
Very highly speculative CCC (high) CCC+ Caa1
CCC CCC Caa2
CCC (low) CCC- Caa3
CC (high) Ca
CC CC
CC (low)
C (high) C
C C
C (low)
Default D D

Note:
DBRS Morningstar has subcategories “high” and “low” contained in all ratings other than AAA and D. S&P modifies ratings by (+) or (-) from AA to CCC. The absence of a "high/+" or "low/-" designation indicates the rating is in the middle of the category. Moody’s adds modifiers 1, 2, and 3 to each generic rating classification from AA through CAA. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.

DBRS Morningstar

DBRS Morningstar’s credit ratings for most Group 1 pipeline companies, as well as their parent companies, are shown below. All remained investment grade, but some companies’ ratings were changed between 2015 and 2020, and some were discontinued.

Table A.2. DBRS Morningstar’s Credit Ratings

Pipeline 2015 2016 2017 2018 2019 2020
Alliance Pipeline Ltd. BBB n/a n/a n/a n/a n/a
Emera Inc. BBB (High) BBB (High) n/a n/a n/a n/a
Enbridge Inc. BBB (High) BBB (High) BBB (High) BBB (High) BBB (High) BBB (High)
Enbridge Pipelines Inc. A A A A A A
Express Pipeline Ltd. A (low) A (low) A (low) A (low) A (low) n/a
Imperial Oil Limited AA (High) AA (High) AA AA AA AA
Maritimes & Northeast Pipeline Management Ltd. A A A A A n/a
NOVA Gas Transmission Ltd. A (low) A (low) A (low) A (low) A (low) A (low)
Suncor Energy Inc. A (low) A (low) A (low) A (low) A (low) A (low)
TC Energy Corporation A (low) A (low) A (low) A (low) A (low) A (low)
Trans Québec and Maritimes Pipeline Inc. A (low) A (low) A (low) A (low) A (low) A (low)
TransCanada PipeLines Limited A (low) A (low) A (low) A (low) A (low) A (low)
Westcoast Energy Inc. A (low) A (low) A (low) A (low) A (low) A (low)
  • In 2019, DBRS discontinued ratings of Maritimes & Northeast Pipeline Limited Partnership in 2019, following repayment of all of its outstanding public securities.
  • In March 2019, DBRS downgraded Kinder Morgan Cochin ULC to BBB from BBB (high) and downgraded the preferred shares of Kinder Morgan Canada Limited as well. The downgrades followed the Government of Canada’s purchase of Trans Mountain Asset Group. DBRS noted that the remaining assets had a relatively weaker credit profile compared with the assets sold, resulting in the downgrades. The Trans Mountain Asset Group is no longer rated.

S&P

S&P’s credit ratings for most Group 1 pipeline companies, as well as their parent companies, are shown below. All remained investment grade, but some companies’ ratings were changed between 2015 and 2020.

Table A.3. S&P’s Credit Ratings

Pipeline 2015 2016 2017 2018 2019 2020
Alliance Pipeline Ltd. n/a n/a BBB+ BBB+ BBB+ BBB+
Emera Inc. BBB+ BBB+ BBB+ BBB+ BBB+ BBB
Enbridge Inc. BBB+ BBB+ BBB+ BBB+ BBB+ BBB+
Enbridge Pipelines Inc. BBB+ BBB+ BBB+ BBB+ BBB+ Check
Imperial Oil Limited AAA AA+ AA+ AA+ AA+ AA
NOVA Gas Transmission Ltd. A- A- A- BBB+ BBB+ BBB+
Suncor Energy Inc. A- A- A- A- A- BBB+
TC Energy Corporation A- A- A- BBB+ BBB+ BBB+
Trans Québec and Maritimes Pipeline Inc. A- A- A- A- A- A-
TransCanada PipeLines Limited A- A- A- BBB+ BBB+ BBB+
Westcoast Energy Inc. BBB BBB BBB+ BBB+ BBB+ BBB+
  • In February 2017, Westcoast Energy Inc. (Westcoast) was upgraded to BBB+ from BBB following parent company, Spectra Energy Corp.’s merger with Enbridge Inc. (Enbridge). The upgrade with stable outlook on Westcoast reflects S&P’s view of the outlook on ultimate parent, Enbridge.
  • In May 2018, TransCanada Corp. (TransCanada) and TransCanada Pipelines Ltd. (TCPL) were downgraded to BBB+ from A- reflecting S&P’s view that TransCanada will not achieve sufficient funds from operations relative to debt levels in the next two years, which is a requirement set for an "A-" rating. TransCanada acquired U.S. midstream company Columbia Pipeline Group Inc. in 2016, which in S&P’s view diluted the quality of TransCanada’s assets. TCPL had been rated at A- since 1995 and TransCanada had been rated at A- since 2009.

Moody's

Moody’s credit rating histories for several Group 1 pipeline companies, as well as their parent companies, are shown in Figure 32. All remain investment grade, but some companies’ ratings or outlooks were changed between 2015 and 2020.

Table A.4. Moody’s Credit Ratings

Pipeline 2015 2016 2017 2018 2019 2020
Alliance Pipeline Ltd. Baa2 Baa2 Baa2 Baa2 Baa2 Baa2
Emera Inc. Check Baa3 Baa3 Baa3 Baa3 Baa3
Enbridge Inc. Baa2 Baa2 Baa3 Baa3 Baa2 Baa2
NOVA Gas Transmission Ltd. A3 A3 A3 A3 Baa1 Baa1
Suncor Energy Inc. A3 Baa1 Baa1 Baa1 Baa1 Baa1
TC Energy Corporation Baa1 Baa1 Baa1 Baa1 Baa2 Baa2
TransCanada PipeLines Limited A3 A3 A3 A3 Baa1 Baa1
  • In December 2017, Moody’s downgraded Enbridge to Baa3 from Baa2 reflecting its high leverage, a persistently large capital investment program, and material corporate and capital structure complexity. However, in January 2019, Enbridge was upgraded back to Baa2 due to Enbridge’s actions to reduce structural complexity in its organizational and capital structure and Moody’s expectation for sustained improvement in leverage metrics.
  • In April 2019, Moody’s downgraded TCPL to BAA1 from A3 due to weak financial metrics and leverage ratios, which in Moody’s view stemmed from challenges in executing its large capital program leading to delays in earnings growth and some cost-overruns. Prior to this, TCPL had been rated A3 since 2008. At the same time, Moody’s also downgraded TCPL subsidiary NOVA Gas Transmission Ltd. (NGTL) to Baa1 from A3 and downgraded TransCanada, TCPL’s ultimate parent company, issuer rating to Baa2 from Baa1, reflecting a 1-notch adjustment below the rating of TCPL as a result of its structural subordination to TCPL.
  • In March 2020, Moody’s reduced its outlook on TC Energy Corporation (TC Energy) to ‘negative’ from ‘stable’ due to its decision to move forward with the Keystone XL (KXL) project, which Moody’s viewed as having a very high level of execution risk related to environmental, social and governance factors. While Moody’s reduced the outlook to ‘negative’, it affirmed the company’s credit rating due to the considerable financial support for KXL from the Alberta government. At the same time, Moody’s affirmed the ratings of TCPL and NGTL, and reduced their outlooks to ‘negative.’
  • In July 2020, Moody’s reduced its outlook on Alliance Pipeline LP to ‘negative’ due to the high percentage of contracts expiring over the near term (approximately 70%). Increased re-contracting risk raises the business risk and is driving the negative outlook.

B. Absolute Liability Limits and Readily Accessible Resource Levels for Oil and Gas Pipeline Companies

Table B.1. Absolute Liability Limits and Readily Accessible Resource Levels for Oil and Gas Pipeline Companies

CommodityFootnote 84 Company Absolute Liability Class Absolute Liability Limit Readily Accessible Resource Level
Oil Oil Class 1: a company that is authorized to construct or operate one or more pipelines that individually or in the aggregate have the capacity to transport at least 250 000 barrels of oil per day. $1 000 000 000 Not Specified in the Act or in regulations
Oil Oil Class 2: a company that operates one or more authorized oil pipelines that individually or in the aggregate have the capacity to transport at least 50 000, but fewer than 250 000, barrels of oil per day. $300 000 000 $15 000 000
Oil Oil Class 3: a company that operates one or more authorized oil pipelines that individually or in the aggregate have the capacity to transport at least one, but fewer than 50 000, barrels of oil per day. $200 000 000 $10 000 000
Gas Gas Class 1: a company that operates one or more authorized gas pipelines whose risk valueFootnote 85 is at least 1 000 000. $200 000 000 $10 000 000
Gas Gas Class 2: a company that operates one or more authorized gas pipelines whose risk value is at least 100 000 but less than 1 000 000. $50 000 000 $2 500 000
Gas Gas Class 3: a company that operates one or more authorized gas pipelines whose risk value is at least 15 000 but less than 100 000. $50 000 000 $1 250 000
Gas Gas Class 4: a company that operates one or more authorized gas pipelines whose risk value is at least one but less than 15 000. $10 000 000 $250 000
Source

Source: CER – Pipeline Financial Requirements Guidelines

Table B.2. Financial Resource Requirements of Major Pipeline Companies

Commodity Absolute Liability Class Absolute Liability Limit (ALL) in millions $ Readily Accessible Resource Level in millions $
Group 1 Companies
Alliance Pipeline Limited Partnership Gas Gas Class 1 200 10
Enbridge Pipelines (NW) Inc. Oil Oil Class 3 200 10
Enbridge Pipelines Inc. Oil Oil Class 1 1 000 Not Specified
Foothills Pipe Lines Ltd. Gas Gas Class 1 200 10
Maritimes & Northeast Pipeline Management Limited Gas Gas Class 1 200 10
NOVA Gas Transmission Ltd. Gas Gas Class 1 200 10
PKM Cochin ULC Oil Oil Class 2 300 15
Trans Mountain Pipeline ULC Oil Oil Class 1 1 000 Not Specified
Trans Northern Pipelines Inc. Oil Oil Class 2 300 15
Trans Quebec Maritimes Pipeline Inc. Gas Gas Class 1 200 10
TransCanada Keystone Pipeline GP Ltd. Oil Oil Class 1 1 000 Not Specified
TransCanada Pipelines Ltd. Gas Gas Class 1 200 10
Westcoast Energy Inc. Gas Gas Class 1 200 10
Group 2 Companies
Aurora Pipeline Company Ltd. Oil Oil Class 2 300 15
Enbridge Bakken Pipeline Company Inc., on behalf of Enrbidge Bakken Pipeline Limited Partnership Oil Oil Class 2 300 15
Enbridge Southern Lights GP Inc. on behalf of enbridge Southern Lights LP Oil Oil Class 2 300 15
Express Pipeline Ltd., as a General Partner of Express Pipeline Limited Partnership Oil Oil Class 1 1 000 Not Specified
Plains Midstream Canada Oil Oil Class 1 1 000 Not Specified
Source

Source: CER - REGDOCS

C. Abandonment Cost Estimates and Amounts Set Aside for Major Oil and Gas Pipeline Companies

Table C. Abandonment Cost Estimates and Amounts Set Aside for Major Oil and Gas Pipeline Companies

Company Estimated Costs to Abandon Pipeline System
(millions of dollars)
Amounts Set Aside
(millions of dollars)
Alliance Pipeline Ltd. 364.9 59.6
Enbridge Pipelines (NW) Inc. 45.0 13.1
Enbridge Pipelines Inc. 1 743.2 246.1
Foothills Pipelines Ltd. 244.7 48.0
PKM Cochin ULC 28.1 8.8
Maritimes & Northeast Pipeline Management Limited 166.8 68.8
Nova Gas Transmission Ltd. 2 535.3 527.9
Trans Mountain Pipeline Inc. 367.8 73.2
Trans Québec & Maritimes Pipeline (TQM) Inc. 115.5 28.6
TransCanada Keystone Pipeline GP Ltd. 268.1 64.3
TransCanada Pipelines Limited 2 904.9 816.4
Trans-Northern Pipelines Inc. 87.0 15.2
Westcoast G & P 446.1 39.3
Westcoast Transmission 363.6 43.9
Total Group 1 Pipelines 9 681.2 2 053.2
Total Group 2 Pipelines 683.8 242.2
Total CER-regulated Pipelines 10 365.0 2 295.3
Source

Source: CER - REGDOCS

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