Reply Comments of North Dakota Pipeline Company LLC to Protests of and Comments on Petition for Declaratory Order in OR14-21.

THE UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION North Dakota Pipeline Company LLC ) Docket No. OR14-21-000 REPLY COMMENTS OF NORTH DAKOTA PIPELINE COMPANY LLC TO PROTESTS OF AND COMMENTS ON PETITION FOR DECLARATORY ORDER Of Counsel: Steven Reed Helene C. Long Bizunesh Scott Associate General Counsel Joseph Hicks Liquids Pipeline Regulatory Law Glenna Riley Enbridge Pipelines Inc. Steptoe & Johnson LLP 3000, 425 1st Street, S.W. 1330 Connecticut Ave., N.W. Calgary, Alberta T2P 3L8 Washington, DC 20036-1795 (403) 231-5774 (202) 429-6232 helene.long@enbridge.com sreed@steptoe.com bscott@steptoe.com Counsel for North Dakota Pipeline Company, LLC Table of Contents I. EXECUTIVE SUMMARY ....................................................................................... 3 II. ARGUMENT ............................................................................................................. 9 A. Contrary to Protestants Claims the Proposed ERC Mechanism Is Reasonable and Supported by Commission Precedent. ................................. 10 B. Approval of the Proposed ERC Mechanism to Recover Project Costs Is Consistent With Commission Precedent Under Colonial and Calnev. ......... 16 C. Sandpiper Enjoys Support from Shippers and Other Interested Parties. ... 18 D. Protestants Criticisms of the Sandpiper Project Lack Merit. ...................... 23 1. North Dakota Pipeline Does Not Disproportionately Impose the Costs of Sandpiper or Risk of Underutilization on Current Shippers. .................... 24 2. The Sandpiper Project Will Benefit Shippers.............................................. 29 III. CONCLUSION ...................................................................................................... 36 THE UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION North Dakota Pipeline Company LLC ) Docket No. OR14-21-000 REPLY COMMENTS OF NORTH DAKOTA PIPELINE COMPANY LLC TO PROTESTS OF AND COMMENTS ON PETITION FOR DECLARATORY ORDER Pursuant to Rule 213 of the Commissions Rules of Practice and Procedure, 18 C.F.R. 385.213 (2012), North Dakota Pipeline Company LLC (North Dakota Pipeline) submits these reply comments to the protests and comments filed on March 14, 2014 in the above-captioned proceeding.1 These filings concern the Petition for Declaratory Order (Petition) filed by North Dakota Pipeline on February 12, 2014 regarding the Sandpiper Project. The Petition seeks certain limited regulatory assurances regarding the rate framework and related contractual commitments to recover the $2.7 billion that North Dakota Pipeline is proposing to invest in Sandpiper to expand its pipeline capacity to transport Bakken crude oil to market. Five shipper parties representing about 3 percent of North Dakota Pipelines total shipper community have 1 North Dakota Pipeline recognizes that Rule 213 does not typically provide for answers to protests. 18 C.F.R. 385.213. North Dakota Pipeline does not believe