ENBRIDGE INC
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
ENB$46.89-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0000895728-24-000013
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0000895728-24-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 210 previous paragraphs and 287 current paragraphs.
101 unchanged; 66 reworded; 106 added; 43 removed; 0 previous and 14 current paragraphs rearranged.
Tables are not compared: 14 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (106)
Current report
AT-THE-MARKET EQUITY ISSUANCE PROGRAM
Current report
On May 15, 2024, we filed prospectus supplements in Canada and the US to establish an at-the-market equity issuance program (the ATM Program) that allowed us to issue and sell, at our discretion, up to $2.75 billion (or the US dollar equivalent) of our common shares from treasury to the public from time to time at the market prices prevailing at the time of sale through the Toronto Stock Exchange, the New York Stock Exchange or any other marketplace in Canada or the US where the common shares may be traded.
Current report
During the period from May 15, 2024 to June 30, 2024, 51,298,629 common shares were issued and sold under the ATM Program at average prices of CAD$48.72 and US$35.77 per common share for aggregate gross proceeds of $2.50 billion ($2.48 billion, net of aggregate commissions paid of $16.3 million and other issuance costs). On August 1, 2024, we terminated the ATM Program. Net proceeds from sales of common shares under the ATM Program were used to partially fund the acquisition of Questar Gas Company (Questar) and its related Wexpro companies (Wexpro) and will be used to fund a portion of the purchase price for the acquisition of Public Service Company of North Carolina, Incorporated (PSNC) and any adjustments thereto and to pay related fees and expenses.
Current report
US Gas Utilities
Current report
On May 31, 2024, through a wholly-owned US subsidiary, we acquired all of the membership interests of Fall West Holdco LLC which owns 100% of Questar and Wexpro for cash consideration of $4.1 billion (US$3.0 billion) (the Questar Acquisition). Questar is a public natural gas utility providing distribution, storage and transmission services to residential, commercial and industrial customers in Utah, southwestern Wyoming and southeastern Idaho. The Public Utilities Commissions of Utah, Wyoming and Idaho have granted Questar the necessary regulatory approvals to serve these areas. Wexpro develops and produces cost-of-service gas reserves for Questar and operates under agreements with the states of Utah and Wyoming. The Questar Acquisition further diversifies, and is complementary to, our existing gas distribution operations in the US. Going forward, Questar will conduct business as Enbridge Gas Utah, Enbridge Gas Wyoming and Enbridge Gas Idaho in those respective states.
Current report
Texas Eastern
Current report
In May 2024, Texas Eastern Transmission, LP (Texas Eastern) reached a negotiated settlement with customers to increase rates starting October 1, 2024 and filed a Stipulation and Agreement with the Federal Energy Regulatory Commission (FERC) on June 3, 2024. Texas Eastern received approval on July 31, 2024 from the FERC of its uncontested settlement with customers.
Current report
Algonquin
Current report
Algonquin Gas Transmission, LLC (Algonquin) filed a rate case on May 30, 2024. On June 28, 2024, the FERC issued an order accepting and suspending tariff records, subject to refund, conditions, and establishing hearing procedures. In compliance with the order, Algonquin will make a motion filing to implement the rates to be effective December 1, 2024, subject to refund. Algonquin expects settlement discussions with shippers to commence in the third quarter of 2024.
Current report
Maritimes & Northeast (M&N) US filed a rate case on May 30, 2024. On June 27, 2024, the FERC issued an order accepting and suspending tariff records, subject to refund, conditions, and establishing hearing procedures. In compliance with the order, M&N US will make a motion filing to implement the rates to be effective December 1, 2024, subject to refund. M&N US expects settlement discussions with shippers to commence in the third quarter of 2024.
Current report
In March 2024, we entered into a delayed-draw term loan facility in support of sustainable retrofit projects for large buildings using decarbonization solutions for $200 million which matures in March 2049.
Current report
On May 15, 2024, we established ATM Program which provides us with additional flexibility to partially fund the Acquisitions. From May 15, 2024 to June 30, 2024, 51,298,629 common shares were issued on Canadian and US exchanges at average prices of CAD$48.72 and US$35.77 per common share for aggregate gross proceeds of $2.50 billion. Refer to At-the-Market Equity Issuance Program for more information.
Current report
In June 2024, we entered into a five-year, non-revolving term loan facility of US$250 million which matures in June 2029.
Current report
In July 2024, Algonquin closed an offering of 10-year senior notes for US$350 million which mature in July 2034.
Current report
In July 2024, Enbridge Gas Ontario extended the maturity date of its 364-day extendible credit facility to July 2026, which includes a one-year term out provision from July 2025.
Current report
In July 2024, Enbridge Pipelines Inc. extended the maturity date of its 364-day extendible credit facility to July 2026, which includes a one-year term out provision from July 2025.
Current report
In July 2024, we renewed approximately $8.8 billion of our 364-day extendible credit facilities, extending the maturity dates to July 2026, which includes a one-year term out provision from July 2025. We also renewed approximately $7.8 billion of our five-year credit facilities, extending the maturity dates to July 2029. Further, we extended the maturity dates of our three-year credit facilities to July 2027.
Current report
In June 2024, Standard & Poor's Global revised Enbridge's and Enbridge Energy Partners, L.P.'s (EEP) outlooks from negative to stable.
Current report
On June 28, 2024, Morningstar DBRS (DBRS) upgraded Enbridge's credit ratings for our senior unsecured debt ratings to A (low) from BBB (high). DBRS also updated the credit rating of EEP to A (low) with a stable trend.
Current report
Earnings attributable to common shareholders were positively impacted by $134 million due to certain infrequent or other non-operating factors, primarily explained by the following:
Current report
•a gain on sale of $1.1 billion ($765 million after-tax) related to the disposition of interests in the Alliance Pipeline, Aux Sable and NRGreen to Pembina; partially offset by
Current report
•a non-cash revaluation loss of $29 million ($21 million after-tax) to the gas inventory at the Aitken Creek Gas Storage Facility (Aitken Creek);
Current report
•a loss of $25 million ($19 million after-tax) as a result of the contribution of our 100% interest in the Rio Bravo Pipeline project to the Whistler Parent JV; and
Current report
•$16 million ($13 million after-tax) of integration and transaction costs incurred related to the Acquisitions.
Current report
•lower contributions from the Mainline System in our Liquids Pipelines segment driven by lower Mainline System tolls as a result of revised tolls effective July 1, 2023 and a lower Line 3 Replacement (L3R) surcharge, net of stronger performance due to higher Mainline System throughput and longer haul volumes;
Current report
•higher interest expense primarily due to higher interest rates and higher average principal outstanding;
Current report
•higher depreciation and amortization expense as a result of acquisitions and projects placed into service after June 2023; and
Current report
•absence of contributions from our Gas Transmission segment due to the sale of our interests in the Alliance Pipeline and Aux Sable in April 2024.
Current report
•higher contributions from our Gas Transmission segment primarily due to acquisitions completed after June 2023, and lower operating costs in our US Gas Transmission assets.
Current report
•$30 million ($23 million after-tax) of integration and transaction costs incurred related to the Acquisitions;
Current report
•a non-cash revaluation loss of $29 million ($21 million after-tax) to the gas inventory at Aitken Creek; and
Current report
•a loss of $25 million ($19 million after-tax) as a result of the contribution of our 100% interest in the Rio Bravo Pipeline project to the Whistler Parent JV; partially offset by
Current report
•a gain on sale of $1.1 billion ($765 million after-tax) related to the disposition of interests in the Alliance Pipeline, Aux Sable and NRGreen to Pembina; and
Current report
•contributions from the Acquisitions completed in 2024 and higher distribution charges resulting from increases in rates and customer base in our Gas Distribution and Storage segment;
Current report
•lower contributions from the Mainline System in our Liquids Pipelines segment driven by lower Mainline System tolls as a result of revised tolls effective July 1, 2023 and a lower L3R surcharge, net of stronger performance due to higher Mainline System throughput and longer haul volumes;
Current report
•higher interest expense primarily due to higher interest rates and higher average principal outstanding;
Current report
•higher income tax expense largely driven by higher US minimum tax, changes to the state apportionment and the effects of rate-regulated accounting for income taxes;
Current report
•higher depreciation and amortization expense as a result of acquisitions and projects placed into service after June 2023;
Current report
•negative impact on earnings due to warmer than normal weather in Enbridge Gas Ontario of our Gas Distribution and Storage segment; and
Current report
After taking into consideration the factors above, the remaining $27 million increase is primarily explained by the following significant business factors:
Showing the first 40 of 106 passages. Open the source sections for the rest.
Removed paragraphs (43)
Previous report
MAINLINE TOLLING AGREEMENT
Previous report
We reached an agreement on a negotiated settlement with shippers for tolls on the Mainline System in May 2023 and filed an application with the Canada Energy Regulator (CER) for approval of the Mainline Tolling Settlement (MTS) on December 15, 2023, with unanimous support from its Representative Stakeholder Group. The CER issued an order on March 4, 2024 approving our application as filed.
Previous report
The MTS covers both the Canadian and US portions of the Mainline and has the Mainline continue to operate as a common carrier system available to all shippers on a monthly nomination basis. The term of the MTS is seven and a half years through to the end of 2028.
Previous report
The MTS includes:
Previous report
•an International Joint Toll (IJT), for heavy crude oil movements from Hardisty to Chicago, comprised of a Canadian Mainline Toll of $1.65 per barrel plus a Lakehead System Toll of US$2.57 per barrel, plus the applicable Line 3 Replacement surcharge;
Previous report
•toll escalation for operation, administration, and power costs tied to US consumer price and power indices;
Previous report
•tolls continue to be distance and commodity adjusted, and now utilize a dual currency IJT; and
Previous report
•a financial performance collar providing incentives for Enbridge to optimize throughput and cost, but also providing downside protection in the event of extreme supply or demand disruptions or unforeseen operating cost exposure. This performance collar is intended to ensure the Mainline earns 11% to 14.5% returns, on a deemed 50% equity capitalization, which is similar to the returns earned on average during the previous tolling agreement.
Previous report
Approximately 70% of Mainline deliveries are tolled under this settlement, while approximately 30% of deliveries are tolled on a full path basis to markets downstream of the Mainline. The other continuing feature is that the Mainline toll flexes up or down US$0.035 per barrel for 50,000 barrel per day changes in throughput.
Previous report
The expected financial outcome from this settlement is in line with previously reported financial results after taking into consideration the previously recognized provision, inflationary cost adjustments and increased volumes.
Previous report
SOUTHERN LIGHTS FIXED TOLL CONTRACTS
Previous report
During the fourth quarter of 2023, Southern Lights Pipeline (Southern Lights) successfully completed an open season that resulted in new transportation service agreements. These new five-year fixed toll contracts were executed in the first quarter of 2024, and have a commencement date of July 1, 2025. As at December 31, 2023, Southern Lights discontinued its rate-regulated accounting as the new agreements will not follow a cost of service toll methodology.
Previous report
The East Ohio Gas Company
Previous report
Acquisition of RNG Facilities
Previous report
On January 2, 2024, through a wholly-owned US subsidiary, we acquired six Morrow Renewables operating landfill gas-to-renewable natural gas (RNG) production facilities (Tomorrow RNG) located in Texas and Arkansas for total consideration of $1.3 billion (US$1.0 billion), of which $584 million (US$439 million) was paid at close and an additional deferred consideration is payable within two years with a fair value of $757 million (US$568 million) . The acquired assets align with and advance our low-carbon strategy.
Previous report
The toll settlement agreement for the Canadian portion of Maritimes & Northeast (M&N) Pipeline system expired in December 2023. M&N Pipeline reached a toll settlement with shippers for the effective period from January 1, 2024 to December 31, 2025. On November 28, 2023 M&N Canada filed the 2024-2025 toll settlement agreement with the CER, which was approved on February 14, 2024, as filed.
Previous report
Purchase Gas Variance
Previous report
The Purchase Gas Variance Account (PGVA) captures the difference between actual and forecasted natural gas prices reflected in rates. Account balances are typically recovered or refunded over a prospective 12-month period through Quarterly Rate Adjustment Mechanism (QRAM) applications.
Previous report
In March 2024, the April 1, 2024 QRAM application was filed and approved by the OEB. The application included no rate mitigation measures, as the mitigation plans from the April and July 2022 QRAM applications concluded at the end of March 2024..
Previous report
As at March 31, 2024, Enbridge Gas' PGVA payable balance was $226 million.
Previous report
On March 29, 2024 Moody's Investor Service (Moody's) downgraded Enbridge's credit ratings for our senior unsecured debt ratings to Baa2 from Baa1. Moody's also downgraded the credit ratings of our subsidiaries: Enbridge Energy Partners, L.P. (EEP), Enbridge Energy Limited Partnership, Spectra Energy Partners, LP (SEP) and Texas Eastern Transmission L.P. (Texas Eastern). The outlooks of all five entities were changed to stable from negative. The credit ratings from DBRS, Fitch and Standard & Poor's remained unchanged at BBB (high), BBB+ and BBB+, respectively.
Previous report
•higher contributions from our Renewable Power Generation segment mainly due to contributions from our investment in Fox Squirrel Solar LLC (Fox Squirrel), an additional 24.45% interest acquired in the Hohe See and Albatros Offshore Wind Facilities in November 2023, and stronger wind resources at European wind facilities in 2024.
Previous report
The factors above were partially offset by:
Previous report
•higher interest expense due to higher long-term debt principal and interest rates;
Previous report
•warmer weather in 2024 negatively impacting earnings in our Gas Distribution and Storage segment; and
Previous report
EBITDA was negatively impacted by $67 million due to certain infrequent or other non-operating factors, primarily explained by:
Previous report
•a non-cash, net unrealized loss of $35 million in 2024, compared with a net unrealized gain of $615 million in 2023, reflecting changes in the mark-to-market value of derivative financial instruments used to manage foreign exchange and commodity price risks; and
Previous report
After taking into consideration the factors above, the remaining $118 million increase is primarily explained by the following significant business factors:
Previous report
•the absence in 2024 of a non-cash, net positive equity earnings adjustment of $8 million relating to our share of changes in the mark-to-market value of derivative financial instruments of our equity method investee, DCP Midstream, LP.
Previous report
The remaining $85 million increase is primarily explained by the following significant business factors:
Previous report
•favorable contracting on our US Gas Transmission and Storage assets;
Previous report
•contributions from the EOG Acquisition in the first quarter of 2024; and
Previous report
The remaining $140 million increase is primarily due to the following significant business factors:
Previous report
•lower operating and administrative costs; partially offset by
Previous report
4 Current estimated capital cost is based on two liquefaction trains and an update to the estimated capital cost is expected to be provided in 2024. Our ownership interest and our share of project capital will be reduced once the transaction with WhiteWater/I Squared and MPLX is closed. See Recent Developments - Acquisitions for further discussion.
Previous report
LONG-TERM DEBT ISSUANCE
Previous report
The factors above were partially offset by:
Previous report
Line 5 Easement (Bad River Band)
Previous report
On July 23, 2019, the Bad River Band of the Lake Superior Tribe of Chippewa Indians (the Band) filed a complaint in the US District Court for the Western District of Wisconsin (the Court) over our Line 5 pipeline and right-of-way across the Bad River Reservation (the Reservation). Only a small portion of the total easements across 12 miles of the Reservation are at issue. The Band alleges that our continued use of Line 5 to transport crude oil and related liquids across the Reservation is a public nuisance under federal and state law and that the pipeline is in trespass on certain tracts of land in which the Band possesses ownership interests. The complaint seeks an Order prohibiting us from using Line 5 to transport crude oil and related liquids across the Reservation and requiring removal of the pipeline from the Reservation. Subsequently amended versions of the complaint also seek recovery of profits-based damages based on an unjust enrichment theory. Enbridge has responded to each claim in the initial and amended complaints with an answer, defenses and counterclaims.
Previous report
On August 29, 2022, the Government of Canada released a statement formally invoking the dispute settlement provisions of the 1977 Transit Pipelines Treaty in respect of this litigation; reiterating its concerns about the uninterrupted transmission of hydrocarbons through Line 5. On September 7, 2022, the Court issued a decision on cross-motions for summary judgment. The Court determined that the Band's nuisance claim raised factual issues that could not be resolved on summary judgment. The Court further determined that Enbridge is in trespass on 12 parcels on the Reservation and that the Band is entitled to some measure of profits-based damages and to an injunction, with the level of damages and scope of the injunction to be determined at trial, which occurred October 24 through November 1, 2022.
Showing the first 40 of 43 passages. Open the source sections for the rest.
Reworded paragraphs (66)
Previous wording
On September 5, 2023, Enbridge entered into three separate definitive agreements with Dominion Energy, Inc. to acquire EOG, Questar Gas Company and its related Wexpro companies, and Public Service Company of North Carolina for an aggregate purchase price of $19.1 billion (US$14.0 billion), comprised of $12.8 billion (US$9.4 billion) of cash consideration and $6.3 billion (US$4.6 billion) of assumed debt, subject to customary closing adjustments (the Acquisitions). We continue to expect the remaining Acquisitions to close in 2024, subject to the satisfaction of customary closing conditions, including the receipt of required US federal and state regulatory approvals.
Current wording
On September 5, 2023, Enbridge entered into three separate definitive agreements with Dominion Energy, Inc. to acquire The East Ohio Gas Company (EOG), Questar and Wexpro, and PSNC for an aggregate purchase price of $19.1 billion (US$14.0 billion), comprised of $12.8 billion (US$9.4 billion) of cash consideration and $6.3 billion (US$4.6 billion) of assumed debt, subject to customary closing adjustments (the Acquisitions).
Previous wording
On March 6, 2024, through a wholly-owned US subsidiary, we acquired all of the outstanding shares of capital stock in The East Ohio Gas Company (EOG) for cash consideration of $5.8 billion (US$4.3 billion) (the EOG Acquisition). EOG is a public natural gas utility providing distribution, storage and transmission services to residential, commercial and industrial customers in Ohio and is regulated by the Public Utilities Commission of Ohio and the Federal Energy Regulatory Commission. The EOG Acquisition is complementary to our other operations in Ohio. Going forward, EOG will conduct business as Enbridge Gas Ohio.
Current wording
On March 6, 2024, through a wholly-owned US subsidiary, we acquired all of the outstanding shares of capital stock of EOG for cash consideration of $5.8 billion (US$4.3 billion) (the EOG Acquisition). EOG is a public natural gas utility providing distribution, storage and transmission services to residential, commercial and industrial customers in Ohio and is regulated by the Public Utilities Commission of Ohio. The EOG Acquisition is complementary to our other operations in Ohio. EOG conducts business as Enbridge Gas Ohio.
Previous wording
On March 26, 2024, we announced that Enbridge Inc. (Enbridge) entered into a definitive agreement with WhiteWater/I Squared Capital (WhiteWater/I Squared) and MPLX LP (MPLX) to form a joint venture (the Whistler Parent JV) that will develop, construct, own, and operate natural gas pipeline and storage assets connecting Permian Basin natural gas supply to growing liquefied natural gas (LNG) and other US Gulf Coast demand.
Current wording
On May 29, 2024, through a wholly-owned US subsidiary, we formed a joint venture (the Whistler Parent JV) with WhiteWater/I Squared Capital (WhiteWater/I Squared) and MPLX LP (MPLX) that will develop, construct, own and operate natural gas pipeline and storage assets connecting Permian Basin natural gas supply to growing liquefied natural gas (LNG) and other US Gulf Coast demand.
Previous wording
The Whistler Parent JV will be owned by WhiteWater/I Squared (50.6%), MPLX (30.4%), and Enbridge (19.0%) and will include the following assets:
Current wording
The Whistler Parent JV is owned by WhiteWater/I Squared (50.6%), MPLX (30.4%), and Enbridge (19.0%) and owns the following assets:
Previous wording
•70% interest in the ADCC pipeline, a new 40-mile pipeline designed to transport 1.7 billion cubic feet per day (bcf/d) of natural gas from the terminus of the Whistler pipeline in Agua Dulce, Texas to Cheniere's Corpus Christi LNG export facility; and
Current wording
•70% interest in the ADCC pipeline, a new 40-mile pipeline which was placed into service in July 2024, and is designed to transport 1.7 billion cubic feet per day (bcf/d) of natural gas from the terminus of the Whistler pipeline in Agua Dulce, Texas to Cheniere's Corpus Christi LNG export facility; and
Previous wording
Upon closing of the transaction, Enbridge will contribute its wholly-owned Rio Bravo pipeline project and approximately US$350 million in cash to the Whistler Parent JV. In addition to the 19% equity interest in the Whistler Parent JV, Enbridge will receive a special equity interest in the Whistler Parent JV providing for a 25% economic interest in the Rio Bravo pipeline project (which interest is subject to certain redemption rights held by Whitewater/I Squared and MPLX). After the closing, Enbridge’s share of the post-closing capital expenditures to complete the Rio Bravo pipeline project will be 100% for the first approximate US$150 million and, thereafter, proportionate to its aggregate economic interest in the project. Closing is expected in the second quarter of 2024, subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions.
Current wording
In connection with the formation of the Whistler Parent JV, we contributed our 100% interest in the Rio Bravo Pipeline project and $487 million (US$357 million) of cash to the Whistler Parent JV. In addition to our 19.0% equity interest in the Whistler Parent JV, we received a special equity interest in the Whistler Parent JV which provides for a 25.0% economic interest in the Rio Bravo Pipeline project. This interest is subject to certain redemption rights held by Whitewater/I Squared and MPLX. After the closing on May 29, 2024, we accrued for our share of the post-closing mandatory capital expenditures of approximately US$150 million for the Rio Bravo Pipeline project. Additional capital expenditures to complete the Rio Bravo Pipeline project will be proportionate to our economic interest.
Previous wording
Disposition of Alliance Pipeline and Aux Sable
Current wording
Disposition of Alliance Pipeline and Aux Sable Interests
Previous wording
On April 1, 2024, we closed the sale of our 50.0% interest in the Alliance Pipeline and our interest in Aux Sable (includes a 42.7% interest in Aux Sable Midstream LLC and Aux Sable Liquid Products L.P., and a 50% interest in Aux Sable Canada LP) to Pembina Pipeline Corporation for $3.1 billion, including approximately $327 million of non-recourse debt, subject to customary closing adjustments. As part of the net gain on sale of approximately $1.1 billion before tax, we will allocate approximately $1.0 billion of the goodwill in our Gas Transmission segment to the disposal group.
Current wording
On April 1, 2024, we closed the sale of our 50.0% interest in the Alliance Pipeline, our interest in Aux Sable (includes a 42.7% interest in Aux Sable Midstream LLC and Aux Sable Liquid Products L.P., and a 50.0% interest in Aux Sable Canada LP) and our interest in NRGreen Power Limited Partnership (NRGreen) to Pembina Pipeline Corporation (Pembina) for $3.1 billion, including $327 million of non-recourse debt, subject to customary closing adjustments. A gain on disposal of $1.1 billion before tax, which is net of $1.0 billion of the goodwill from our Gas Transmission segment allocated to the disposal group, is included in Gain on disposition of equity investments in the Consolidated Statements of Earnings for the three and six months ended June 30, 2024.
Previous wording
In October 2022, Enbridge Gas Inc. (Enbridge Gas) filed its application with the Ontario Energy Board (OEB) to establish a 2024 through 2028 Incentive Regulation (IR) rate setting framework. The application initially sought approval in two phases to establish 2024 base rates (Phase 1) on a cost-of-service basis and to establish a price cap rate setting mechanism (Phase 2) to be used for the remainder of the IR term (2025–2028). A third phase (Phase 3) has been established with the OEB as part of the Phase 1 Partial Settlement Proposal.
Current wording
In October 2022, Enbridge Gas Inc. (Enbridge Gas Ontario) filed its application with the Ontario Energy Board (OEB) to establish a 2024 through 2028 Incentive Regulation (IR) rate setting framework. The application initially sought approval in two phases to establish 2024 base rates (Phase 1) on a cost-of-service basis and to establish a price cap rate setting mechanism (Phase 2) to be used for the remainder of the IR term (2025–2028). A third phase (Phase 3) was established with the OEB in 2023. Phase 3 will address cost allocation and the harmonization of rates and rate classes between legacy rate zones.
Previous wording
On December 21, 2023, the OEB issued its Decision and Order on Phase 1 (Phase 1 Decision). Enbridge Gas filed a Notice of Appeal with the Ontario Divisional Court on January 22, 2024 regarding four aspects of the Phase 1 Decision: small volume customer revenue horizon, the 2024 capital plan reduction, the extension of service life for certain asset classes and equity thickness. On January 29, 2024 Enbridge Gas also filed a Notice of Motion with the OEB requesting the OEB to review and vary five aspects of the Phase 1 Decision: small volume customer revenue horizon, the 2024 capital plan reduction, integration capital, depreciation and equity thickness. The outcome of these proceedings is uncertain.
Current wording
On December 21, 2023, the OEB issued its Decision and Order on Phase 1 (Phase 1 Decision). Enbridge Gas Ontario filed a Notice of Appeal with the Ontario Divisional Court on January 22, 2024 regarding various aspects of the Phase 1 Decision. On January 29, 2024, Enbridge Gas Ontario also filed a Notice of Motion with the OEB requesting the OEB to review and vary various aspects of the Phase 1 Decision which was subsequently amended on May 29, 2024. The Amended Motion focuses on two aspects of the Phase 1 Decision: asset class average useful lives for depreciation purposes and the recoverability of integration capital. The outcome and timing of these proceedings is uncertain.
Previous wording
On February 24, 2024 the Government of Ontario introduced Bill 165, the Keeping Energy Costs Down Act (the Act), in response to the Phase 1 Decision. If passed, the Act would give the Government of Ontario time-limited authority to set the revenue horizon for small volume customers, effectively reversing that aspect of the OEB's Phase 1 Decision. The Act is currently proceeding to a third reading and final vote in the provincial legislature.
Current wording
On February 24, 2024, the Government of Ontario introduced Bill 165, the Keeping Energy Costs Down Act (the Act). The Act gives the Government of Ontario time-limited authority to set the revenue horizon for small volume customers, effectively reversing that aspect of the OEB's Phase 1 Decision. The Act proceeded to and passed a final vote in the provincial legislature on May 15, 2024 and received royal assent on May 16, 2024. Regulations are now in place setting the revenue horizon for new customer connections to 40 years.
Previous wording
The Phase 1 Decision resulted in interim 2024 rates, pending Phase 2 of the proceeding and resolution of the Notice of Motion. An updated Draft Interim Rate Order reflecting the Phase 1 Decision was filed March 15, 2024 and subsequently approved by the OEB on April 11, 2024. The Interim Rate Order implemented 2024 rates on May 1, 2024, along with retroactive treatment to January 1, 2024.
Current wording
The Phase 1 Decision resulted in interim 2024 rates, pending Phase 2 of the proceeding and resolution of the Amended Notice of Motion. An updated Draft Interim Rate Order reflecting the Phase 1 Decision was filed on March 15, 2024 and subsequently approved by the OEB on April 11, 2024. The Interim Rate Order implemented 2024 rates on May 1, 2024, with an effective date of January 1, 2024.
Previous wording
Enbridge Gas filed its Phase 2 evidence on April 26, 2024. Phase 2 will establish the incentive rate mechanism for 2025-2028, and will also address unregulated storage cost allocation and new energy transition proposals. Phase 3 will address cost allocation and the harmonization of rates and rate classes between legacy rate zones.
Current wording
Enbridge Gas Ontario filed its Phase 2 evidence on April 26, 2024. Phase 2 will establish the incentive rate mechanism for 2025-2028, and will also address unregulated storage cost allocation and new energy transition proposals. Phase 3 is anticipated to be executed in 2024.
Previous wording
In April 2024, we closed a four-tranche offering consisting of three-year senior notes, five-year senior notes, 10-year senior notes, and 30-year senior notes for an aggregate principal amount of US$3.5 billion, which mature in April 2027, April 2029, April 2034 and April 2054, respectively.
Current wording
In June 2024, we closed an offering consisting of a tranche of 30.75-year non-call 5.5-year fixed-to-fixed subordinated notes and a tranche of 30-year non-call 9.75-year fixed-to-fixed subordinated notes, for an aggregate principal amount of US$1.2 billion, which mature in March 2055 and June 2054, respectively.
Previous wording
As at March 31, 2024, after adjusting for the impact of floating-to-fixed interest rate swap hedges, 6% of our total debt is exposed to floating rates. Refer to Part I. Item 1. Financial Statements - Note 9 - Risk Management and Financial Instruments for more information on our interest rate hedging program.
Current wording
As at June 30, 2024, after adjusting for the impact of floating-to-fixed interest rate swap hedges, less than 5% of our total debt is exposed to floating rates. Refer to Part I. Item 1. Financial Statements - Note 10 - Risk Management and Financial Instruments for more information on our interest rate hedging program.
Previous wording
Effective January 1, 2024, to better align how the chief operating decision-maker reviews operating performance and resource allocation across operating segments, we transferred our Canadian and United States (US) crude oil marketing businesses from the Energy Services segment to the Liquids Pipelines segment. As a result, the Energy Services segment ceased to exist and the remainder of the business, comprising natural gas and power marketing, are now reported in the Eliminations and Other segment. Beginning in the first quarter of 2024, prior period comparable results for segmented information have been recast to reflect the change in reportable segments. This segment reporting change does not have an impact on our consolidated results.
Current wording
Effective January 1, 2024, to better align how the chief operating decision-maker reviews operating performance and resource allocation across operating segments, we transferred our Canadian and US crude oil marketing businesses from the Energy Services segment to the Liquids Pipelines segment. As a result, the Energy Services segment ceased to exist and the remainder of the business, comprising natural gas and power marketing, are now reported in the Eliminations and Other segment. Beginning in the first quarter of 2024, prior period comparable results for segmented information have been recast to reflect the change in reportable segments. This segment reporting change does not have an impact on our consolidated results.
Previous wording
•a non-cash, net unrealized derivative fair value loss of $677 million ($518 million after-tax) in 2024, compared with a net unrealized gain of $542 million ($406 million after-tax) in 2023, reflecting changes in the mark-to-market value of derivative financial instruments used to manage foreign exchange, interest rate and commodity price risks;
Current wording
•a non-cash, net unrealized derivative fair value loss of $208 million ($160 million after-tax) in 2024, compared with a net unrealized gain of $595 million ($456 million after-tax) in 2023, reflecting changes in the mark-to-market value of derivative financial instruments used to manage foreign exchange, interest rate and commodity price risks;
Previous wording
After taking into consideration the factors above, the remaining $229 million increase in earnings attributable to common shareholders is primarily explained by:
Current wording
After taking into consideration the factors above, the remaining $134 million decrease in earnings attributable to common shareholders is primarily explained by:
Previous wording
•higher income tax expense driven by higher earnings;
Current wording
•higher income tax expense largely driven by higher US minimum tax, changes to the state apportionment and the effects of rate-regulated accounting for income taxes;
Previous wording
•contributions from the EOG Acquisition in the first quarter of 2024 and higher distribution charges at our Gas Distribution and Storage segment resulting from increases in rates and customer base;
Current wording
•contributions from the Acquisitions completed in 2024 and higher distribution charges resulting from increases in rates and customer base in our Gas Distribution and Storage segment;
Previous wording
•higher investment income primarily due to pre-funding of the Acquisitions and lower operating and administrative costs in our Eliminations and Other segment; and
Current wording
•higher investment income primarily due to pre-funding of the Acquisitions in our Eliminations and Other segment; and
Previous wording
Earnings attributable to common shareholders were negatively impacted by $543 million due to certain infrequent or other non-operating factors, primarily explained by the following:
Current wording
Earnings attributable to common shareholders were negatively impacted by $409 million due to certain infrequent or other non-operating factors, primarily explained by the following:
Previous wording
•severance costs of $105 million ($79 million after-tax) as a result of workforce reduction in February 2024; and
Current wording
•severance costs of $105 million ($79 million after-tax) as a result of a workforce reduction in February 2024;
Previous wording
•the absence in 2024 of the receipt of a litigation claim settlement of $68 million ($52 million after-tax); partially offset by
Current wording
•the absence in 2024 of the receipt of a litigation claim settlement of $68 million ($52 million after-tax);
Previous wording
•the absence in 2024 of a realized loss of $638 million ($479 million after-tax) due to termination of foreign exchange hedges, as foreign exchange risks inherent within the Competitive Toll Settlement (CTS) are not present in the MTS.
Current wording
•the absence in 2024 of a realized loss of $638 million ($479 million after-tax) due to termination of foreign exchange hedges, as foreign exchange risks inherent within the Competitive Toll Settlement (CTS) are not present in the Mainline Tolling Settlement (MTS).
Previous wording
•higher contributions from our Liquids Pipelines segment due to higher volumes on the Flanagan South Pipeline and from the Enbridge Ingleside Energy Center (EIEC), greater long-haul deliveries from the Express-Platte System, and discontinuation of rate-regulated accounting of Southern Lights Pipeline in 2023;
Current wording
•higher contributions from our Liquids Pipelines segment due to higher volumes on the Flanagan South Pipeline, from the Enbridge Ingleside Energy Center (EIEC), and certain Feeder pipelines, greater long-haul deliveries from the Express-Platte System, and discontinuation of rate-regulated accounting of Southern Lights Pipeline as at December 31, 2023;
Previous wording
•higher contributions from our Gas Transmission segment primarily due to favorable contracting in our Gas Transmission and Storage assets and acquisitions completed after the first quarter of 2023;
Current wording
•higher contributions from our Gas Transmission segment primarily due to favorable contracting and lower operating costs in our US Gas Transmission assets, and acquisitions completed after June 2023.
Previous wording
•the absence in 2024 of the recognition of revenues attributable to the Texas Eastern rate case settlement in our Gas Transmission segment.
Current wording
•lower contributions from our Gas Transmission segment due to the sale of our interests in the Alliance Pipeline and Aux Sable and the absence of revenues attributable to the Texas Eastern 2022 rate case settlement in 2024;
Previous wording
•realized foreign exchange loss on hedge settlements in our Eliminations and Other segment in 2024, compared to a gain in 2023;
Current wording
•realized loss on foreign exchange hedge settlement in 2024 compared to a realized gain in 2023 in our Eliminations and Other segment.
Previous wording
EBITDA was negatively impacted by $19 million due to certain infrequent or other non-operating factors, primarily explained by a non-cash, net unrealized loss of $11 million in 2024, compared with a net unrealized gain of $2 million in 2023, reflecting changes in the mark-to-market value of derivative financial instruments used to manage foreign exchange and commodity price risks.
Current wording
EBITDA was negatively impacted by $4 million due to certain infrequent or other non-operating factors, primarily explained by a non-cash, net unrealized gain of $29 million in 2024, compared with a net unrealized gain of $35 million in 2023, reflecting changes in the mark-to-market value of derivative financial instruments used to manage foreign exchange and commodity price risks.
Previous wording
•higher contributions from the Gulf Coast and Mid-Continent System due to higher volumes on the Flanagan South Pipeline and from the EIEC;
Current wording
•higher contributions from the Gulf Coast and Mid-Continent System due primarily to higher volumes on the Flanagan South Pipeline driven by the open season commitments that commenced in the first quarter of 2024;
Previous wording
•the absence in 2024 of a realized loss of $638 million due to termination of foreign exchange hedges, as foreign exchange risks inherent within the CTS are not present in the MTS.
Current wording
•the absence in 2024 of a realized loss of $638 million due to termination of foreign exchange hedges, as foreign exchange risks inherent within the CTS framework are not present in the MTS.
Previous wording
•higher contributions from Southern Lights Pipeline due primarily to the discontinuation of rate-regulated accounting in the fourth quarter of 2023.
Current wording
•higher contributions from Southern Lights Pipeline due primarily to the discontinuation of rate-regulated accounting as at December 31, 2023;
Previous wording
•higher contributions from the Express-Platte System due primarily to greater long-haul deliveries; and
Current wording
•higher contributions from the Express-Platte System due primarily to greater long-haul deliveries;
Previous wording
•a non-cash, net unrealized loss of $17 million in 2024 reflecting changes in the mark-to-market value of derivative financial instruments used to manage commodity price risks; and
Current wording
•a non-cash, net unrealized loss of $17 million in 2024 reflecting changes in the mark-to-market value of derivative financial instruments used to manage commodity price risks.
Previous wording
•contributions from the acquisition of Tres Palacios in the second quarter of 2023, Aitken Creek in the fourth quarter of 2023, and Tomorrow RNG in the first quarter of 2024; and
Current wording
•contributions from the acquisitions of Tres Palacios in the second quarter of 2023, Aitken Creek in the fourth quarter of 2023 and Tomorrow RNG in the first quarter of 2024; and
Previous wording
•higher earnings at Aux Sable joint venture due to favorable contracting; partially offset by
Current wording
•higher first quarter earnings at Aux Sable joint venture due to favorable contracting; partially offset by
Previous wording
•the absence in 2024 of recognition of revenues attributable to the Texas Eastern rate case settlement in 2023.
Current wording
•the absence in 2024 of recognition of revenues attributable to the Texas Eastern 2022 rate case settlement.
Previous wording
EBITDA was positively impacted by $49 million primarily due to the following significant business factors:
Current wording
EBITDA was positively impacted by $200 million primarily due to the following significant business factors:
Previous wording
•when compared with the normal weather forecast embedded in rates, warmer than normal weather in 2024 negatively impacted 2024 EBITDA by approximately $42 million period over period.
Current wording
•warmer than normal weather in 2024, when compared with the normal weather forecast embedded in rates, which negatively impacted Enbridge Gas Ontario 2024 EBITDA by approximately $23 million period over period.
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Current report — wording carried from elsewhere
We continue to expect that our acquisition of PSNC will close in 2024, subject to the satisfaction of customary closing conditions, including the receipt of required US federal and state regulatory approvals.
Current report — wording carried from elsewhere
•higher contributions from our Liquids Pipelines segment due to higher volumes on the Flanagan South Pipeline and certain Feeder pipelines, greater long-haul deliveries from the Express-Platte System, and discontinuation of rate-regulated accounting of Southern Lights Pipeline as at December 31, 2023;
Current report — wording carried from elsewhere
•a non-cash, net unrealized derivative fair value loss of $885 million ($678 million after-tax) in 2024, compared with a net unrealized gain of $1.1 billion ($868 million after-tax) in 2023, reflecting changes in the mark-to-market value of derivative financial instruments used to manage foreign exchange, interest rate and commodity price risks;
Current report — wording carried from elsewhere
After taking into consideration the factors above, the remaining $95 million increase in earnings attributable to common shareholders is primarily explained by the following significant business factors:
Current report — wording carried from elsewhere
•higher investment income primarily due to pre-funding of the Acquisitions in our Eliminations and Other segment; and
Current report — wording carried from elsewhere
•higher contributions from Southern Lights Pipeline due primarily to the discontinuation of rate-regulated accounting as at December 31, 2023; and
Current report — wording carried from elsewhere
•higher contributions from the Express-Platte System due primarily to greater long-haul deliveries; partially offset by
Current report — wording carried from elsewhere
•contributions from the acquisitions of Aitken Creek in the fourth quarter of 2023 and Tomorrow RNG in the first quarter of 2024; and
Current report — wording carried from elsewhere
EBITDA was positively impacted by $249 million primarily due to the following significant business factors:
Current report — wording carried from elsewhere
•higher distribution charges resulting from increases in rates and customer base; partially offset by
Current report — wording carried from elsewhere
•warmer than normal weather in 2024, when compared with the normal weather forecast embedded in rates, which negatively impacted Enbridge Gas Ontario 2024 EBITDA by approximately $65 million period over period.
Current report — wording carried from elsewhere
The remaining $15 million increase is primarily due to higher contributions from the Hohe See and Albatros Offshore Wind Facilities as a result of the November 2023 acquisition of an additional 24.45% interest in these facilities.
Current report — wording carried from elsewhere
EBITDA was negatively impacted by $1,519 million due to certain infrequent or non-operating factors, primarily explained by:
Current report — wording carried from elsewhere
During the six months ended June 30, 2024, we completed the following long-term debt issuances totaling US$4.7 billion: