Economic Regulation – Pipeline Tolls and Tariffs
The CER is an economic regulator that regulates pipeline tolls and tariffs under its jurisdiction so that they are just and reasonable. The CER also regulates so that there is no unjust discrimination in tolls, service or facilities.
A toll is the price charged by a pipeline operator to a shipper to transport a commodity through a pipeline. A pipeline company cannot charge a toll unless it is included in a tariff filed with the CER or approved by a CER Commission order.
A tariff is the terms and conditions under which a pipeline company provides service (e.g. different types of service, priority of access, and tolls).
The Commission will typically follow one of two processes when assessing toll and tariff matters:
- The first option is to assess a detailed tolls application filed by the company, which usually leads to a formal public hearing, followed by a Commission decision. Tolls set during this process cover the company’s cost of service, including a fair and reasonable return to pipeline investors.
- The second process option involves the Commission considering a negotiated toll settlement reached between the pipeline company, its shippers and other stakeholders. If negotiations are successful, the pipeline company will file a document that details the terms of the settlement and requests CER approval.
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