The National Energy Board has rejected four requests from the City of Burnaby, including one for Kinder Morgan's advertising costs for the proposed expansion of the Trans Mountain pipeline.
Burnaby made the requests in January, and on Friday, March 13, the NEB released its decision saying no to all four items.
"Basically, (Burnaby's requests) are not within the scope of this application (to review the Trans Mountain pipeline expansion)," said NEB spokesperson Tara O'Donovan. "That's why it was dismissed."
The City of Burnaby's concerns focus on the firm service fees Kinder Morgan has been charging on oil headed to the Westridge Marine Terminal, fees that were already approved by the NEB in 2011. Kinder Morgan has been using those fees - about $1.45 per barrel or $28.6 million per year - to help fund the Trans Mountain expansion proposal, which alleviates some of the risk investors face should the project be rejected.
Economist Robyn Allan and the City of Burnaby cried foul, arguing those extra fees charged to pipeline users would drive up the price of crude and eventually be passed down to consumers at the gas pump. Kinder Morgan refuted the claim, stating gas prices are determined by global market conditions and local taxes.
The NEB already decided in a previous ruling that Kinder Morgan can use the firm service fees for a project in its development stage, so there's nothing stopping Kinder Morgan from spending that money on advertising.
Burnaby asked for the company's actual and projected advertising costs and whether these would be passed down to consumers. The NEB rejected this request, but Kinder Morgan ended up releasing that data in response to a separate query from Burnaby. Since April 2012, Kinder Morgan has spent roughly $3 million on advertising, which includes notices about public events, such as open houses, and ads about the expansion project. The company's projected advertising budget for the remainder of 2015 is $3.22 million.
The second part of Burnaby's request was that the firm service fees not be used to fund the expansion project, which the NEB rejected, since the board already granted permission for that back in 2011.
Thirdly, Burnaby wanted Kinder Morgan to file records of the collection and investments of the firm service fees, a request the NEB rejected as it was outside the scope of the current expansion hearing.
Lastly, Burnaby wanted Kinder Morgan to inform the public of the potential risks and impacts of the proposed expansion. The NEB decided this last item was worth considering but that it was premature to judge whether the company has adequately conducted its public engagement exercises.
