8-K

ENBRIDGE INC 8-K Report (Jul 2, 2013)

Filed July 2, 2013For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

This 8-K filing from Enbridge Inc. (ENB) on July 2, 2013, primarily consists of two important press releases that provide updates on the company's operations and strategic initiatives. The first release details Enbridge's second open season for the Southern Access Extension pipeline project, a new crude oil pipeline intended to transport oil from Flanagan, Illinois, to Patoka, Illinois. This initiative aims to secure additional shipper commitments for the pipeline, which is expected to be in service by Q2 2015, and is being developed in conjunction with Energy Transfer Equity, L.P. and Energy Transfer Partners, L.P. for a related Eastern Gulf Coast project. The second release announces adjustments to natural gas distribution rates by Enbridge Gas Distribution in Ontario, effective July 1, 2013. While most residential customers will see an annual increase due to higher commodity and transportation costs, the filing emphasizes that natural gas remains the most economical heating option in Ontario compared to electricity and oil, and highlights a significant reduction in annual bills over the past five years. Investors should note the ongoing expansion of Enbridge's pipeline infrastructure and its efforts to manage energy distribution costs for consumers.

Key Highlights

  • 1Enbridge Inc. is launching a second binding open season for its Southern Access Extension pipeline project, seeking additional shipper commitments.
  • 2The Southern Access Extension is a proposed 165-mile, 24-inch diameter pipeline transporting crude oil from Flanagan, Illinois to Patoka, Illinois, with an anticipated in-service date in Q2 2015.
  • 3This project is being developed in conjunction with Energy Transfer Equity and Energy Transfer Partners for the Eastern Gulf Crude Access Project (EGCAP), creating a broader transportation network.
  • 4Shippers in the open season will have the option of ten or fifteen-year terms for service, with provisions for cost-sharing on construction overruns.
  • 5Enbridge Gas Distribution has received approval from the Ontario Energy Board for new natural gas rates effective July 1, 2013.
  • 6The new rates will result in an approximate annual increase for typical residential customers due to higher commodity and transportation costs.
  • 7Despite the rate adjustment, natural gas remains the most economical heating choice in Ontario compared to electricity and oil.
  • 8Enbridge highlights a significant decrease in typical residential annual natural gas bills over the past five years.

Frequently Asked Questions

The second open season is intended to solicit additional binding commitments from shippers for capacity on the proposed Southern Access Extension pipeline. While sufficient commitments were received in the first open season to support the 24-inch pipeline, this second phase provides an opportunity for more shippers to secure capacity.

For typical residential customers who buy both gas supply and transportation from Enbridge Gas Distribution, the new rates effective July 1, 2013, will result in an overall annual increase of approximately $87, primarily due to increased commodity and transportation costs. Customers who purchase gas supply from a marketer and use Enbridge for transportation will see a smaller increase of about $7 annually.

The Southern Access Extension is designed to bring crude oil from Enbridge's Lakehead System to Patoka, Illinois. Its joint development with Energy Transfer's EGCAP creates a more comprehensive crude oil transportation network, extending reach from Illinois to the Eastern Gulf Coast refinery markets. This enhances Enbridge's ability to serve a wider range of customers and markets.

Enbridge states that natural gas remains the most economical choice for home and water heating in Ontario. It is approximately 67% less expensive than electricity and 71% less expensive than oil, based on approved residential rates and historical pricing data.