10q10k10q10k.net
ENBRIDGE INC

ENBRIDGE INCENB财报

NYSE · petroleum industry

Enbridge Inc. is a multinational pipeline and energy company headquartered in Calgary, Alberta, Canada. Enbridge owns and operates pipelines throughout Canada and the United States, transporting crude oil, natural gas, and natural gas liquids, and also generates renewable energy. Enbridge's pipeline system is the longest in North America and the largest oil export pipeline network in the world. Its crude oil system consists of 28,661 kilometres of pipelines. Its 38,300 kilometre natural gas p...

What changed in ENBRIDGE INC's 10-K — 2022 vs 2023

Top changes in ENBRIDGE INC's 2023 10-K

652 paragraphs added · 600 removed · 441 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

120 edited+46 added−25 removed28 unchanged
It transports liquids-rich natural gas from northeast BC, northwest Alberta and the Bakken area in North Dakota to the Alliance Chicago gas exchange hub downstream of the Aux Sable Liquid Products LP natural gas liquids (NGL) extraction and fractionation plant at Channahon, Illinois. The system has a peak day capacity of 1.8 bcf/d of natural gas.
It transports liquids-rich natural gas from northeast BC, northwest Alberta and the Bakken area in North Dakota to the Alliance Chicago gas exchange hub downstream of the Aux Sable Liquid Products LP NGL extraction and fractionation plant at Channahon, Illinois. The system has a peak day capacity of 1.8 bcf/d of natural gas.
The Algonquin interstate natural gas transmission system connects with Texas Eastern’s facilities in New Jersey and extends through New Jersey, New York, Connecticut, Rhode Island and Massachusetts where it connects to M&N US. The system has a peak day capacity of 3.09 bcf/d of natural gas on approximately 1,820 kilometers (1,131 miles) of pipeline with associated compressor stations.
The Algonquin interstate natural gas transmission system connects with Texas Eastern’s facilities in New Jersey and extends through New Jersey, New York, Connecticut, Rhode Island and Massachusetts where it connects to M&N US. The system has a peak day capacity of 3.1 bcf/d of natural gas on approximately 1,820 kilometers (1,131 miles) of pipeline with associated compressor stations.
We believe that we are well positioned to meet these evolving supply and demand fundamentals through expansion of system capacity for incremental access to the US Gulf Coast, and through further development of our new EIEC in Corpus Christi, the largest crude oil export facility in North America.
We believe that we are well positioned to meet these evolving supply and demand fundamentals through expansion of system capacity for incremental access to the US Gulf Coast, and through further development of our EIEC in Corpus Christi, the largest crude oil export facility in North America.
The Canadian Mainline is a common carrier pipeline system which transports various grades of crude oil and other liquid hydrocarbons within western Canada and from western Canada to the Canada/US border near Gretna, Manitoba and Neche, North Dakota and from the US/Canada border near Port Huron, Michigan and Sarnia, Ontario to eastern Canada and the northeastern US.
The Canadian Mainline is a common carrier pipeline system which transports various grades of crude oil and other liquid hydrocarbons within western Canada and from western Canada to the Canada/US border near Gretna, Manitoba and Neche, North Dakota and from the US/Canada border near Port Huron, Michigan and Sarnia, Ontario to eastern Canada.
The interstate portion of the system has both US and Canadian components that extend from Berthold, North Dakota into Cromer, Manitoba. Tariffs on the US portion of the North Dakota System are governed by the FERC. The Canadian portion is categorized as a Group 2 pipeline, and as such, its tolls are regulated by the CER on a complaint basis.
The interstate portion of the system has both US and Canadian components that extend from Berthold, North Dakota into Cromer, Manitoba. Tariffs on the US portion of the North Dakota System are regulated by the FERC. The Canadian portion is categorized as a Group 2 pipeline, and as such, its tolls are regulated by the CER on a complaint basis.
Competitors include interstate/interprovincial and intrastate/intraprovincial pipelines or their affiliates and other midstream businesses that transport, gather, treat, process and market natural gas or NGL. Because pipelines are generally the most efficient mode of transportation for natural gas over land, the most significant competitors of our natural gas pipelines are other pipeline companies.
Competitors predominantly include interstate/interprovincial and intrastate/intraprovincial pipelines or their affiliates and other midstream businesses that transport, gather, treat, process and market natural gas or NGL. Because pipelines are generally the most efficient mode of transportation for natural gas over land, the most significant competitors of our natural gas pipelines are other pipeline companies.
One of the few vital links to demand centers in the Pacific Northwest are our own systems in the region, which are highly utilized. The continental supply profile has shifted to natural gas shale plays such as the Montney and Duvernay within western Canada.
One of the few vital links to demand centers in the Pacific Northwest is our own systems in the region, which are highly utilized. The continental supply profile has shifted to natural gas shale plays such as the Montney and Duvernay within western Canada.
Our systems have been integral to the transition in supply and demand markets over the last decade, and we expect to continue to play a part as the energy landscape evolves. 23 Natural gas production in the Appalachian and Permian basins has grown dramatically in the past decade.
Our systems have been integral to the transition in supply and demand markets over the last decade, and we expect to continue to play a part as the energy landscape evolves. Natural gas production in the Appalachian and Permian Basins has grown dramatically in the past decade.
Flanagan South has a capacity of approximately 660 kbpd. Spearhead Pipeline is a long-haul pipeline that delivers crude oil from Flanagan, Illinois, a delivery point on the Lakehead System, to Cushing, Oklahoma. The Spearhead pipeline has a capacity of approximately 193 kbpd.
Flanagan South has a capacity of approximately 660 kbpd. 17 Spearhead Pipeline is a long-haul pipeline that delivers crude oil from Flanagan, Illinois, a delivery point on the Lakehead System, to Cushing, Oklahoma. The Spearhead Pipeline has a capacity of approximately 193 kbpd.
Opposition to fossil fuel development in conjunction with evolving consumer preferences and new technology could underpin accelerated energy transition scenarios impacting long-term supply and demand of crude oil.
Opposition to fossil fuel development in conjunction with evolving consumer preferences and new technology could underpin energy transition scenarios impacting long-term supply and demand of crude oil.
Extend Growth The cornerstone of our growth lies in the successful execution of our slate of secured projects (currently $18 billion through 2028) on schedule and at the lowest practical cost, while maintaining the highest standards for safety, quality, customer satisfaction, and environmental and regulatory compliance. For a discussion of our current portfolio of capital projects refer to Part II.
Extend Growth The cornerstone of our growth lies in the successful execution of our slate of secured projects (currently $24 billion through 2028) on schedule, at the lowest practical cost, while maintaining the highest standards for safety, quality, customer satisfaction, and environmental and regulatory compliance. For a discussion of our current portfolio of capital projects refer to Part II.
East Tennessee’s interstate natural gas transmission system has a peak day capacity of 1.86 bcf/d of natural gas, crosses Texas Eastern’s system at two locations in Tennessee and consists of two mainline systems totaling approximately 2,449 kilometers (1,522 miles) of pipeline in Tennessee, Georgia, North Carolina and Virginia, with associated compressor stations.
East Tennessee’s interstate natural gas transmission system has a peak day capacity of 1.9 bcf/d of natural gas, crosses Texas Eastern’s system at two locations in Tennessee and consists of two mainline systems totaling approximately 2,449 kilometers (1,522 miles) of pipeline in Tennessee, Georgia, North Carolina and Virginia, with associated compressor stations.
M&N Canada has a peak day capacity of 0.55 bcf/d on approximately 885 kilometers (550 miles) of interprovincial natural gas transmission mainline system that extends from Goldboro, Nova Scotia to the US border near Baileyville, Maine. We have a 78% interest in M&N US and M&N Canada.
M&N Canada has a peak day capacity of 0.5 bcf/d on approximately 885 kilometers (550 miles) of interprovincial natural gas transmission mainline system that extends from Goldboro, Nova Scotia to the US border near Baileyville, Maine. We have a 78% interest in M&N US and M&N Canada.
Today, these regions produce more than 47 bcf/d of natural gas on a combined basis. Improved technology and increased shale gas drilling have increased the supply of low-cost natural gas. As well, there has been, and continues to be, a corresponding increase in demand for our natural gas infrastructure in North America.
Today, these regions produce more than 53 bcf/d of natural gas on a combined basis. Improved technology and increased shale gas drilling have increased the supply of low-cost natural gas. As well, there has been, and continues to be, a corresponding increase in demand for our natural gas infrastructure in North America.
M&N US has a peak day capacity of 0.83 bcf/d of natural gas on approximately 552 kilometers (343 miles) of mainline interstate natural gas transmission system, including associated compressor stations, which extends from northeastern Massachusetts to the border of Canada near Baileyville, Maine.
M&N US has a peak day capacity of 0.8 bcf/d of natural gas on approximately 552 kilometers (343 miles) of mainline interstate natural gas transmission system, including associated compressor stations, which extends from northeastern Massachusetts to the border of Canada near Baileyville, Maine.
The 101 kbpd Toledo pipeline system connects with the Lakehead System and delivers to Ohio and Michigan. The 45 kbpd NW System transports crude oil from Norman Wells in the Northwest Territories to Zama, Alberta and has a cost-of-service rate structure based on established terms with shippers.
The 180 kbpd Toledo pipeline system connects with the Lakehead System and delivers to Ohio and Michigan. The 45 kbpd NW System transports crude oil from Norman Wells in the Northwest Territories to Zama, Alberta and has a cost-of-service rate structure based on established terms with shippers.
REGIONAL OIL SANDS SYSTEM The Regional Oil Sands System includes five intra-Alberta long-haul pipelines: the Athabasca Pipeline, Waupisoo Pipeline, Woodland Pipeline, Wood Buffalo Extension/Athabasca Twin pipeline system and the Norlite Pipeline System (Norlite), as well as two large terminals: the Athabasca Terminal located north of Fort McMurray, Alberta and the Cheecham Terminal, located south of Fort McMurray, Alberta.
REGIONAL OIL SANDS SYSTEM The Regional Oil Sands System includes seven intra-Alberta long-haul pipelines: the Athabasca Pipeline, Waupisoo Pipeline, Woodland and Woodland Extension Pipelines, Wood Buffalo and Wood Buffalo Extension/Athabasca Twin pipeline system and the Norlite Pipeline System (Norlite), as well as two large terminals: the Athabasca Terminal located north of Fort McMurray, Alberta and the Cheecham Terminal, located south of Fort McMurray, Alberta.
We screen, analyze, and assess opportunities using a disciplined investment framework with the objective of effectively deploying capital to grow while achieving attractive risk-adjusted returns, within our low-risk "utility-like" business model. All investment opportunities are evaluated based on their potential to advance our strategy, mitigate risks, support our ESG goals, and create additional financial flexibility.
We screen, analyze, and assess opportunities using a disciplined investment framework with the objective of effectively deploying capital to grow while driving attractive risk-adjusted returns, within our low-risk "utility-like" business model. 11 All investment opportunities are evaluated based on their potential to advance our strategy, mitigate risks, support our ESG goals, and create additional financial flexibility.
Gulfstream has a peak day capacity of 1.39 bcf/d of natural gas from Mississippi, Alabama, Louisiana and Texas, crossing the Gulf of Mexico to markets in central and southern Florida. We have a 50% interest in Gulfstream. Sabal Trail is an approximately 832 kilometer (517 mile) interstate pipeline that provides firm natural gas transportation.
Gulfstream has a peak day capacity of 1.4 bcf/d of natural gas from Mississippi, Alabama, Louisiana and Texas, crossing the Gulf of Mexico to markets in central and southern Florida. We have a 50% interest in Gulfstream. 22 Sabal Trail is an approximately 832 kilometer (517 mile) interstate pipeline that provides firm natural gas transportation.
COMPETITION Competition for our liquids pipelines network comes primarily from infrastructure or logistics alternatives that transport liquid hydrocarbons from production basins in which we operate to markets in Canada, the US and internationally.
COMPETITION Competition for our liquids pipelines network comes primarily from infrastructure or logistics alternatives (rail, trucking) that transport liquid hydrocarbons from production basins in which we operate to markets in Canada, the US and internationally.
Flexibility in supply for this market is especially critical to maintaining liquidity and price stability as natural gas continues to replace coal-fired generation. Gulf Coast demand growth is being driven by an increase in the volume of LNG exports, an ongoing wave of gas-intensive petrochemical facilities, along with power generation and additional pipeline exports to Mexico.
Flexibility in supply for this market is especially critical to maintaining liquidity and price stability as natural gas continues to replace coal-fired generation. Gulf Coast demand growth is being driven by an increase in the volume of LNG exports, an ongoing wave of gas-intensive petrochemical facilities and additional pipeline exports to Mexico.
Our primary emphasis in the near term is on low capital intensity opportunities to enhance returns in existing businesses (organic expansions and optimizations), modernization of our systems, and utility rate-based investments. We also remain focused on larger projects where commercial constructs fit our investor value proposition and where we can effectively manage risks during the execution phase.
Our primary emphasis in the near term is on low capital intensity opportunities to enhance returns across existing businesses (organic expansions and optimizations), system modernization, and utility rate-based investments. We also remain focused on larger projects where commercial constructs fit our investor value proposition and where we can effectively manage risks during the execution phase.
The Bakken Pipeline System consists of the Dakota Access Pipeline (DAPL) from the Bakken area in North Dakota to Patoka, Illinois, and the Energy Transfer Crude Oil Pipeline (ETCO) from Patoka, Illinois to Nederland, Texas. Current capacity is 750 kbpd of crude oil with the potential to be expanded through additional pumping horsepower.
The Bakken Pipeline System consists of the Dakota Access Pipeline from the Bakken area in North Dakota to Patoka, Illinois, and the Energy Transfer Crude Oil Pipeline from Patoka, Illinois to Nederland, Texas. Current capacity is approximately 750 kbpd of crude oil with the potential to be expanded through additional pumping horsepower.
On October 5, 2022, we completed a transaction with Athabasca Indigenous Investments Limited Partnership (Aii), a newly created entity representing 23 First Nation and Metis communities, pursuant to which Aii acquired an 11.6% non-operating interest in seven Regional Oil Sands pipelines in the Regional Oil Sands System.
On October 5, 2022, we completed a transaction with Athabasca Indigenous Investments Limited Partnership (Aii), a newly created entity representing 23 First Nation and Metis communities, pursuant to which Aii acquired an 11.6% non-operating interest in the seven intra-Alberta long-haul pipelines in the Regional Oil Sands System.
The combined capacity of the intra-Alberta long-haul pipelines is approximately 1,090 thousand barrels per day (kbpd) to Edmonton and 1,370 kbpd into Hardisty, with Norlite providing approximately 218 kbpd of diluent capacity into the Fort McMurray region. We have a 50% interest in the Woodland Pipeline and a 70% interest in Norlite.
The combined capacity of the intra-Alberta long-haul pipelines is approximately 1,120 thousand barrels per day (kbpd) to Edmonton and 1,415 kbpd into Hardisty, with Norlite providing approximately 218 kbpd of diluent capacity into the Fort McMurray region. We have a 50% interest in the Woodland Pipeline and a 70% interest in Norlite.
GULF COAST AND MID-CONTINENT Gulf Coast includes Seaway Crude Pipeline System (Seaway Pipeline), Flanagan South Pipeline (Flanagan South), Spearhead Pipeline, Gray Oak Pipeline and the EIEC, as well as the Mid-Continent System (Cushing Terminal).
GULF COAST AND MID-CONTINENT Gulf Coast includes Flanagan South, Spearhead Pipeline, Seaway Crude Pipeline System (Seaway Pipeline), the Mid-Continent System (Cushing Terminal), Gray Oak, and the EIEC.
We will remain disciplined and will strive to deploy capital towards the best uses, prioritizing balance sheet strength, investment in low capital intensity growth, and regulated utility or utility-like projects.
We will remain disciplined and deploy capital towards only the best uses, prioritizing balance sheet strength, investment in low capital intensity growth, and regulated utility or utility-like projects.
Global crude oil demand in most base case forecasts is expected to grow into the next decade, primarily driven by emerging economies in regions outside the Organization for Economic Cooperation and Development (OECD), such as India and China.
Under most base case forecasts, demand is expected to grow into the next decade, primarily driven by emerging economies in regions outside the Organization for Economic Cooperation and Development (OECD), such as India and China.
Through its interconnect with Vector, NEXUS provides a connection to Dawn Hub, the largest integrated underground storage facility in Canada and one of the largest in North America, located in southwestern Ontario adjacent to the Greater Toronto Area.
Through its interconnect with Vector, NEXUS provides a connection to Dawn Hub, the largest integrated underground storage facility in Canada and one of the largest in North America, located in southwestern Ontario adjacent to the Greater Toronto Area. We have a 50% interest in NEXUS.
The CTS was a 10-year negotiated agreement and provided for a Canadian Local Toll (CLT) for deliveries within western Canada, as well as an International Joint Tariff (IJT) for crude oil shipments originating in western Canada, on the Canadian Mainline, and delivered into the US, via the Lakehead System, and into eastern Canada.
The CTS was a 10-year negotiated agreement and provided for a Canadian Local Toll for deliveries within western Canada, as well as an International Joint Tariff (IJT) for crude oil shipments originating in western Canada, on the Canadian Mainline, and delivered into the US, via the Lakehead System, and into eastern Canada. The IJT tolls were denominated in US dollars.
In particular, we: • Made meaningful progress towards our interim emissions intensity and net-zero GHG emissions goals through modernization and innovation of our system, efficiency improvements, and continued investment in solar self-power; • Enhanced our efforts to ensure that our workforce and Board better reflect the diversity of our communities, empowering our workforce through employee resource groups and advancing on our diversity, equity, and inclusion commitments; and • Continued to drive improvements towards our goal of zero safety incidents and injuries and progressed implementation of robust cyber defense programs.
In particular, we: • made meaningful progress towards our interim emissions intensity and net-zero GHG emissions goals through modernization and innovation of our system, and continued investment in solar self-power, front of the meter renewables, and execution of additional renewable power PPAs; • enhanced our efforts to ensure that our workforce and the Board better reflect the diversity of our communities, empowering our workforce through employee resource groups and advancing on our diversity, equity, and inclusion commitments; and • continued to drive improvements towards our goal of zero safety incidents and injuries and progressed implementation of robust cyber defense programs.
Tolling Framework The Competitive Toll Settlement (CTS) which governed tolls paid for products shipped on the Canadian Mainline, with the exception of Lines 8 and 9 which are tolled on a separate basis, expired on June 30, 2021.
Tolling Framework The Competitive Toll Settlement (CTS) which governed tolls on the Canadian Mainline, with the exception of Lines 8 and 9 which are tolled on a separate basis, expired on June 30, 2021.
We test various value enhancement and maximization options, and we regularly engage with our Board of Directors (the Board) to ensure alignment and maintain active oversight, including updates and discussions throughout the year and a dedicated annual Strategic Planning session. Going forward, we plan to use this comprehensive approach to guide our investment and portfolio decisions.
We test various value enhancement and maximization options, and we regularly engage with our Board of Directors (the Board) to ensure alignment and maintain active oversight. This Board participation includes updates and discussions throughout the year and a dedicated annual Strategic Planning session. Going forward, we will continue to use this comprehensive approach to guide our investment and portfolio decisions.
DCP owns and operates more than 36 plants and approximately 86,905 kilometers (54,000 miles) of natural gas and natural gas liquids pipelines, with operations in nine states across major producing regions. OTHER Other consists primarily of our offshore assets. Enbridge Offshore Pipelines is comprised of 11 natural gas gathering and FERC regulated transmission pipelines and four oil pipelines.
DCP owns and operates more than 36 plants and approximately 86,905 kilometers (54,000 miles) of natural gas and NGL pipelines, with operations in nine states across major producing regions. OTHER Other consists primarily of our offshore assets. Enbridge Offshore Pipelines is comprised of 12 natural gas gathering and FERC regulated transmission pipelines and five oil pipelines.
These pipelines are located in four major corridors in the Gulf of Mexico, extending to deepwater developments, and include almost 2,100 kilometers (1,300 miles) of underwater pipe and onshore facilities with total capacity of approximately 6.5 bcf/d.
These pipelines are located in four major corridors in the Gulf of Mexico, extending to deepwater developments, and include almost 2,200 kilometers (1,365 miles) of underwater pipe and onshore facilities with total capacity of approximately 6.6 bcf/d.
BUSINESS SEGMENTS Our activities are carried out through five business segments: Liquids Pipelines; Gas Transmission and Midstream; Gas Distribution and Storage; Renewable Power Generation; and Energy Services, as discussed below. 13 LIQUIDS PIPELINES Liquids Pipelines consists of pipelines and terminals in Canada and the US that transport and export various grades of crude oil and other liquid hydrocarbons. 14 MAINLINE SYSTEM The Mainline System is comprised of the Canadian Mainline and the Lakehead System.
BUSINESS SEGMENTS During 2023, the activities were carried out through five business segments: Liquids Pipelines; Gas Transmission and Midstream; Gas Distribution and Storage; Renewable Power Generation; and Energy Services, as discussed below. 14 LIQUIDS PIPELINES Liquids Pipelines consists of pipelines and terminals in Canada and the US that transport and export various grades of crude oil and other liquid hydrocarbons. 15 MAINLINE SYSTEM The Mainline System is comprised of the Canadian Mainline and the Lakehead System.
We have a 50% interest in Alliance Pipeline. The majority of transportation services provided by Canadian Gas Transmission are under firm agreements, which provide for fixed reservation charges that are paid monthly regardless of actual volumes transported on the pipeline, plus a small variable component that is based on volumes transported to recover variable costs.
The majority of transportation services provided by Canadian Gas Transmission are under firm agreements, which provide for fixed reservation charges that are paid monthly regardless of actual volumes transported on the pipeline, plus a small variable component that is based on volumes transported to recover variable costs.
The North Dakota System services the Bakken in North Dakota and is comprised of a crude oil gathering and interstate pipeline transportation system. The gathering system provides delivery to Clearbrook, Minnesota for service on the Lakehead system or a variety of interconnecting pipeline and rail export facilities.
The North Dakota System services the Bakken Basin in North Dakota and is comprised of a crude oil gathering and interstate pipeline transportation system. The gathering system provides delivery to Clearbrook, Minnesota for service on the Lakehead system or a variety of interconnecting pipelines.
Our investor value proposition is founded on our ability to deliver predictable cash flows and a growing stream of dividends year-over-year through investment in, and efficient operation of, energy infrastructure assets that are strategically positioned between key supply basins and strong demand-pull markets.
Our leading investor value proposition is founded on our ability to deliver predictable cash flows and a growing stream of dividends year-over-year through investment in, and efficient operation of, energy infrastructure assets that are strategically positioned between key supply basins and strong demand-pull markets as well as targeted areas of growing renewable and new energy demand.
(Vector) and certain other gas pipeline and storage assets. The US Gas Transmission business primarily provides transmission and storage of natural gas through interstate pipeline systems for customers in various regions of the northeastern, southern and midwestern US.
The US Gas Transmission business primarily provides transmission and storage of natural gas through interstate pipeline systems for customers in various regions of the northeastern, southern and midwestern US.
DCP is a master limited partnership, with a diversified portfolio of assets, engaged in the business of gathering, compressing, treating, processing, transporting, storing and selling natural gas; producing, fractionating, transporting, storing and selling NGL; and recovering and selling condensate.
DCP is a joint venture, with a diversified portfolio of assets, engaged in the business of gathering, compressing, treating, processing, transporting, storing and selling natural gas; producing, fractionating, transporting, storing and selling NGL; and recovering and selling condensate.
With connectivity to Appalachian and western Canadian supply through our systems, the Midwest market has access to two of the lowest cost gas producing regions on the continent. As demand in the region is expected to continue to grow by over 2.0 bcf/d over the next decade, maintaining this link will remain important.
With connectivity to Appalachian and western Canadian supply through our systems, the Midwest market has access to two of the lowest cost gas producing regions on the continent. As demand in the region is expected to remain stable over the next decade, maintaining this link will remain important.
Factors that influence the demand for natural gas include price changes, the availability of natural gas and other forms of energy, levels of business activity, long-term economic conditions, conservation, legislation, governmental regulations, the ability to convert to alternative fuels, weather and other factors. Competition exists in all markets that our businesses serve.
Factors that influence the demand for natural gas include price changes, the availability of natural gas and other forms of energy, levels of business activity, long-term economic conditions, conservation, legislation, governmental regulations, the ability to convert to alternative fuels, weather and other factors.
Competition from existing and proposed pipelines is based primarily on access to supply, end use markets, the cost of transportation, contract structure and the quality and reliability of service.
Competition from existing and proposed pipelines, such as the Trans Mountain Pipeline expansion, is based primarily on access to supply, end use markets, the cost of transportation, contract structure and the quality and reliability of service.
We remain confident in our two-pronged growth strategy and expect to selectively invest in our diversified footprint of both conventional businesses and complementary lower-carbon platforms, such as renewables, Carbon Capture and Storage (CCS), Hydrogen (H2), and Renewable Natural Gas (RNG).
We remain confident in our balanced growth strategy and expect to continue to selectively invest in our diversified footprint of both conventional businesses and complementary lower-carbon platforms, such as renewable power, renewable natural gas (RNG), carbon capture and storage (CCS), blue ammonia, and hydrogen gas (H2).
The Facilities Surcharge Mechanism allows the Lakehead System to recover costs associated with certain shipper-requested projects through an incremental surcharge in addition to the existing base rates and is subject to annual adjustment on April 1 of each year.
The Facilities Surcharge Mechanism allows the Lakehead System to recover costs associated with certain shipper-requested projects through an incremental surcharge in addition to the existing base rates and is subject to annual adjustment on April 1 of each year. On May 24, 2023, Enbridge filed an Offer of Settlement with the FERC for the Lakehead System (the Lakehead System Settlement).
Maintain a Strong Balance Sheet The maintenance of our balance sheet strength is critical to our strategy. Our financing strategies are designed to retain strong, investment-grade credit ratings to ensure we have the financial capacity to meet our capital funding needs and the flexibility to manage capital market disruptions.
Maintain Financial Strength and Flexibility Our financing strategies are designed to retain strong, investment-grade credit ratings to ensure we have the financial capacity to meet our capital funding needs and the flexibility to manage capital market disruptions.
We strive to achieve and maintain industry leadership in all facets of safety - process, public, and personal - and ensure the highest standards of reliability and integrity across our system to protect our communities and the environment.
Our key strategic priorities include: Safety and Operational Reliability Safety and operational reliability are the foundation of our strategy. We strive to achieve and maintain industry leadership in all facets of safety - process, public, and personal - and ensure the highest standards of reliability and integrity across our system to protect our communities and the environment.
We continue to closely monitor the evolution of all of these factors to be able to pro-actively adapt our business to help meet our customers’ and society’s energy needs. 19 GAS TRANSMISSION AND MIDSTREAM Gas Transmission and Midstream consists of our investments in natural gas pipelines and gathering and processing facilities in Canada and the US, including US Gas Transmission, Canadian Gas Transmission, US Midstream and other assets. 20 US GAS TRANSMISSION US Gas Transmission includes ownership interests in Texas Eastern Transmission, L.P.
We continue to closely monitor the evolution of all of these factors to be able to pro-actively adapt our business to help meet our customers’ and society’s energy needs. 20 GAS TRANSMISSION AND MIDSTREAM Gas Transmission and Midstream consists of our investments in natural gas pipelines and gathering and processing facilities in Canada and the US, including US Gas Transmission, Canadian Gas Transmission, US Midstream and other assets. 21 US GAS TRANSMISSION US Gas Transmission includes ownership interests in Texas Eastern Transmission, LP (Texas Eastern), Algonquin Gas Transmission, LLC (Algonquin), Maritimes & Northeast (M&N) (US and Canada), East Tennessee Natural Gas, LLC (East Tennessee), Gulfstream Natural Gas System, L.L.C.
BC Pipeline is regulated by the CER under cost-of-service regulation. Alliance Pipeline is an approximately 3,000 kilometer (1,864 mile) integrated, high-pressure natural gas transmission pipeline with approximately 860 kilometers (534 miles) of lateral pipelines and related infrastructure.
Alliance Pipeline is an approximately 3,000 kilometer (1,864 mile) integrated, high-pressure natural gas transmission pipeline with approximately 860 kilometers (534 miles) of lateral pipelines and related infrastructure.
Express pipeline capacity is typically committed under long-term take-or-pay contracts with shippers. A small portion of Express pipeline capacity and all of the Platte pipeline capacity is used by uncommitted shippers who pay only for the pipeline capacity they actually use in a given month. 17 The Bakken System consists of the North Dakota System and the Bakken Pipeline System.
A small portion of the Express Pipeline capacity and all of the Platte Pipeline capacity is used by uncommitted shippers who pay only for the pipeline capacity they actually use in a given month. The Bakken System consists of the North Dakota System and the Bakken Pipeline System.
Examples include: the application of drag-reducing agents and pump station modifications to optimize throughput on our liquids system, the execution of toll settlements and rate case filings to optimize revenue within our gas transmission franchises, the expansion of lower-carbon offerings to utility customers and investments in lower-carbon supply connections to the gas grid, and more generally, the creation of sustainable cost savings across the organization through innovation, process improvement and/or system enhancements.
Examples include: the application of drag-reducing agents and pump station modifications to optimize throughput on our liquids system, the execution of toll settlements and rate case filings to optimize revenue within our liquids pipeline and gas transmission franchises, the expansion of lower-carbon gas offerings to modernize and integrate value chains at our gas utility, and the creation of sustainable cost savings across the organization through innovation, process improvement and system enhancements.
The Canadian Mainline includes six adjacent pipelines with a combined operating capacity of approximately 3.1 million barrels per day (mmbpd) that connect with the Lakehead System at the Canada/US border, as well as five pipelines that deliver crude oil and refined products into eastern Canada and the northeastern US.
The Canadian Mainline includes six adjacent pipelines with a combined operating capacity of approximately 3.2 million barrels per day (mmbpd) that connect with the Lakehead System at the Canada/US border, as well as five pipelines that deliver crude oil and refined products into eastern Canada. Through our predecessors, we have operated, and frequently expanded, the Canadian Mainline since 1949.
Through our predecessors, we have operated, and frequently expanded, the Canadian Mainline since 1949. The Lakehead System is the portion of the Mainline System in the US. It is an interstate common carrier pipeline system regulated by the Federal Energy Regulatory Commission (FERC) and is the primary transporter of crude oil and liquid petroleum from western Canada to the US.
The Lakehead System is the portion of the Mainline System in the US. It is an interstate common carrier pipeline system regulated by the Federal Energy Regulatory Commission (FERC) and is the primary transporter of crude oil and liquid petroleum from western Canada to the US.
East Tennessee has a LNG storage facility in Tennessee and also connects to the Saltville storage facilities in Virginia. Gulfstream is an approximately 1,199 kilometer (745 mile) interstate natural gas transmission system with associated compressor stations.
East Tennessee has a LNG storage facility in Tennessee and also connects to the Saltville storage facilities in Virginia. Valley Crossing is an approximately 285 kilometer (177 mile) intrastate natural gas transmission system, with associated compressor stations.
We value diversity, and diverse thought, and have embedded inclusive practices in our programs, processes, and approach to people management. Furthermore, we strive to maintain industry competitive compensation, flexibility, and retention programs that provide both short- and long-term performance incentives. Technology We recognize the vital role technology plays in helping us achieve our strategic objectives.
Furthermore, we strive to maintain industry-competitive compensation, flexibility, and retention programs that provide both short- and long-term performance incentives. Technology We recognize the vital role technology plays in helping us achieve our strategic objectives.
In 2022, the US exported over 10.6 bcf/d of natural gas to LNG markets, primarily from the Gulf Coast region. Western Canada, not unlike other supply hubs, is a source of low-cost supply seeking access to premium markets in North America and globally.
In 2023, the US exported over 11.9 bcf/d of natural gas to LNG markets, primarily from the Gulf Coast region. 25 Western Canada is also a source of low-cost supply seeking access to premium markets in North America and globally.
How well we perform as a steward of our environment; as a safe operator of essential energy infrastructure; as a diverse and inclusive employer; and as a responsible corporate citizen is inextricably linked to our ability to achieve our strategic priorities and create long-term value for all our stakeholders.
How well we perform as a steward of our environment; as a safe operator of essential energy infrastructure; as a diverse and inclusive employer; and as a responsible corporate citizen is inextricably linked to our ability to achieve our strategic priorities and create long-term value for all our stakeholders. 12 In 2023, we published our 22nd annual Sustainability Report outlining our progress against our ESG goals 1 .
Canadian Gas Transmission also provides interruptible transmission services where customers can use capacity if it is available at the time of request.
Canadian Gas Transmission also provides interruptible transmission services where customers can use capacity if it is available at the time of request. Payments under these services are based on volumes transported.
The natural gas transported in our business competes with other forms of energy available to our customers and end-users, including electricity, coal, propane, fuel oils, nuclear and renewable energy.
The principal elements of competition are location, rates, terms of service, flexibility and reliability of service. 24 The natural gas transported in our business competes with other forms of energy available to our customers and end-users, including electricity, coal, propane, fuel oils, nuclear and renewable energy.
The emergence of CCS offers the potential to provide new growth opportunities over the long term. • Our natural gas transmission business will seek extension and expansion opportunities driven by new load demand from gas-fired power generation, industrial growth, and coastal LNG plants.
Building on our early experience, we expect CCS to provide additional new growth opportunities, over the longer-term. • Our natural gas transmission business will seek extension and expansion opportunities driven by new load demand from gas-fired power generation, industrial growth, and coastal LNG plants.
Unless otherwise specifically stated, none of the information contained on, or connected to, the Enbridge website, including our annual Sustainability Report, is incorporated by reference in, or otherwise part of, this Annual Report on Form 10-K .
We provide annual progress updates in our annual Sustainability Report which can be found at https://www.enbridge.com/sustainability-reports . Unless otherwise specifically stated, none of the information contained on, or connected to, the Enbridge website, including our annual Sustainability Report, is incorporated by reference in, or otherwise part of, this Annual Report on Form 10-K .
Seaway Pipeline also includes 8.8 million barrels of crude oil storage tank capacity on the Texas Gulf Coast. 16 Flanagan South is a 950 kilometer (590 mile), 36-inch diameter interstate crude oil pipeline that originates at our terminal at Flanagan, Illinois, a delivery point on the Lakehead System, and terminates in Cushing, Oklahoma.
Flanagan South is a 950 kilometer (590 mile), 36-inch diameter interstate crude oil pipeline that originates at our terminal at Flanagan, Illinois, a delivery point on the Lakehead System, and terminates in Cushing, Oklahoma.
Demand in these markets in the region is anticipated to grow by more than 20.0 bcf/d through 2040. The Gulf Coast market has been the beneficiary of low-cost capacity on our assets as the relationship between supply and market centers has shifted.
Demand in these markets in the region is anticipated to grow by approximately 20 bcf/d through 2040. The Gulf Coast market has been the beneficiary of low-cost capacity on our assets as the relationship between supply and market centers has shifted. Such cost-effective capacity is difficult to access or replicate, offering existing shippers and transporters stability of capacity and utilization.
COMPETITION Our natural gas transmission and storage businesses compete with similar facilities that serve our supply and market areas in the transmission and storage of natural gas. The principal elements of competition are location, rates, terms of service, flexibility and reliability of service.
COMPETITION Our natural gas transmission and storage businesses compete with similar facilities that serve our supply and market areas in the transmission and storage of natural gas.
In October 2021, we acquired Moda Midstream Operating, LLC, which included the Ingleside Energy Center (renamed the Enbridge Ingleside Energy Center or EIEC), located near Corpus Christi, Texas. This terminal is comprised of 15.6 million barrels of storage and 1.5 million barrels per day of export capacity.
We assumed operatorship of Gray Oak in April 2023. In October 2021, we acquired Moda Midstream Operating, LLC, which included the EIEC, located near Corpus Christi, Texas. This terminal is comprised of 15.6 million barrels of storage and 1.5 mmbpd of export capacity.
A more detailed description of each of our businesses and underlying assets is provided below under Business Segments . CORPORATE VISION AND STRATEGY VISION Our primary purpose as a company is to fuel people’s quality of life in a safe, clean, and socially responsible manner.
A more detailed description of each of our businesses and underlying assets is provided below under Business Segments . CORPORATE VISION AND STRATEGY VISION Enbridge exists to fuel people’s quality of life in a safe, clean, and socially responsible manner. Our vision is to provide energy, in a planet-friendly way, everywhere people need it.
These supply shifts have shaped our growth strategies and affect the nature of the projects anticipated in the capital expenditures discussed below in Part II.
These supply shifts have shaped our growth strategies and affect the nature of the projects anticipated in the capital expenditures discussed below in Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Growth Projects - Commercially Secured Projects.
Additionally, ESG continues to be integral to our strategy; we are committed to reducing our emissions, building lasting relationships with our stakeholders, and promoting diversity, equity, and inclusion. In alignment with our strategy, we progressed several of our priorities in 2022.
Additionally, ESG continues to be integral to our strategy; we are committed to reducing our emissions, building lasting relationships with our stakeholders, and promoting diversity, equity, and inclusion. In alignment with our strategy, we progressed several of our priorities in 2023. For example: • We announced the strategic acquisition of three US gas utilities in Ohio, Utah, and North Carolina.
In North America, demand growth for transportation fuels is expected to moderate over time due to vehicle fuel efficiency improvement and increasing sales of electric vehicles. New supply to meet this growing demand is expected to primarily come from Organization of the Petroleum Exporting Countries (OPEC) countries and North America.
In North America, demand growth for transportation fuels is expected to moderate over time due to vehicle fuel efficiency improvement and increasing sales of electric vehicles.
Through disciplined capital allocation that is aligned with our outlook on energy markets, we have become an industry leader with a diversified portfolio across both conventional and lower-carbon energies.
Through disciplined capital allocation, which is aligned with our outlook on energy markets, we have become an industry leader with a diversified portfolio across both conventional and lower-carbon energies. Our assets have reliably generated low-risk, resilient cash flows through many different commodity, economic, and geopolitical environments.
The Regional Oil Sands System also includes numerous laterals and related facilities which currently provide access for oil sands production from twelve producing oil sands projects.
The Regional Oil Sands System also includes numerous laterals and related facilities which currently provide access for oil sands production from the three major oil sands deposits, Athabasca, Cold Lake and Peace River.
Such cost-effective capacity is difficult to access or replicate, offering existing shippers and transporters stability of capacity and utilization. Tide-water market access and proximity to Mexico continue to make this region a platform of global trade as pipeline and LNG exports continue their growth trajectory.
Tide-water market access and proximity to Mexico continue to make this region a platform of global trade as pipeline and LNG exports continue their growth trajectory.
We will carefully assess our remaining investable capacity, deploying capital to what we believe are the most value-enhancing opportunities available to us, including further organic growth, complementary accretive "tuck-in" acquisitions that improve our competitive positioning, share repurchases, or further deleveraging of our balance sheet.
We will carefully assess our remaining investable capacity, deploying capital to the most value-enhancing opportunities available to us, including further organic growth, complementary accretive "tuck-in" acquisitions that improve our competitive positioning, or further strengthening of our balance sheet. 10 Looking ahead, we see strong utilization of our existing network and opportunities for future growth within each of our businesses.
The Mid-Continent System is comprised of storage terminals at Cushing, Oklahoma (Cushing Terminal), consisting of over 110 individual storage tanks ranging in size from 78 to 570 thousand barrels. Total storage shell capacity of Cushing Terminal is approximately 26 million barrels.
Total aggregate capacity on the Seaway Pipeline system is approximately 950 kbpd. Seaway Pipeline also includes 8.8 million barrels of crude oil storage tank capacity on the Texas Gulf Coast. The Mid-Continent System is comprised of storage terminals at Cushing Terminal, consisting of over 110 individual storage tanks ranging in size from 78 to 570 thousand barrels.
We also employ long-term agreements with shippers, which mitigates competition risk by ensuring consistent supply to our liquids pipelines network.
We also employ long-term agreements with shippers, which mitigates competition risk by ensuring consistent supply to our liquids pipelines network. We have a proven track record of successfully executing projects to meet the needs of our customers.
Looking ahead, we see strong utilization of our existing network and opportunities for future growth within each of our businesses. For example, we expect that: • Our liquids pipelines infrastructure will remain a vital connection between key supply basins and demand-pull markets such as the refinery hubs in the US Midwest, eastern Canada, and the US Gulf Coast.
For example, we expect that: • Our liquids pipelines infrastructure will remain a vital connection between key supply basins and demand-pull markets such as the refinery hubs in the US Midwest, eastern Canada, and the US Gulf Coast. Our premier liquids system and export infrastructure will also enable crude, clean fuels, and other export opportunities.
Tolls on the interstate pipeline system are based on long-term take-or-pay agreements with anchor shippers . We have an effective 27.6% interest in the Bakken Pipeline System, which connects the Bakken formation in North Dakota to markets in eastern PADD II and the US Gulf Coast.
We have an effective 27.6% interest in the Bakken Pipeline System, which connects the Bakken Basin in North Dakota to markets in eastern PADD II and the US Gulf Coast.
BC Pipeline provides natural gas transmission services, transporting processed natural gas from facilities located primarily in northeastern BC to markets in BC and the US Pacific Northwest. It has a peak day capacity of 3.6 bcf/d of natural gas on approximately 2,950 kilometers (1,833 miles) of transmission pipeline in BC and Alberta, as well as associated mainline compressor stations.
It has a peak day capacity of 3.6 bcf/d of natural gas on approximately 2,950 kilometers (1,833 miles) of transmission pipeline in BC and Alberta, as well as associated mainline compressor stations. BC Pipeline is regulated by the CER under cost-of-service regulation.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Growth Projects - Commercially Secured Projects . Beyond that, we seek to continually identify additional high-quality growth opportunities across all our platforms.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Growth Projects - Commercially Secured Projects . In the near term we will be focused on closing the US gas utilities transactions and successfully integrating each utility. Beyond that, we will continue to seek to identify additional high-quality growth opportunities across all our platforms.

… 111 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

79 edited+41 added−31 removed67 unchanged
Our operations are subject to numerous environmental and climate laws and regulations, including those relating to climate change and GHG emissions and climate-related disclosure, compliance with which may require significant capital expenditures, increase our cost of operations, and affect or limit our business plans, or expose us to environmental liabilities.
Our operations are subject to numerous environmental laws and regulations, including those relating to climate change, GHG emissions and climate-related disclosure, compliance with which may require significant capital expenditures, increase our cost of operations, and affect or limit our business plans, or expose us to environmental liabilities.
Competition among existing pipelines is based primarily on the cost of transportation, access to supply, the quality and reliability of service, contract carrier alternatives and proximity to markets. The liquids transported in our pipelines currently, or are expected to increasingly, compete with other emerging alternatives for end-users, including, but not limited to, electric batteries, biofuels, and hydrogen.
Competition among existing pipelines is based primarily on the cost of transportation, access to supply, the quality and reliability of service, contract carrier alternatives and proximity to markets. The liquids transported in our pipelines currently, or are expected to increasingly, compete with other emerging alternatives for end-users, including, but not limited to, electricity, electric batteries, biofuels, and hydrogen.
Additionally, inefficiencies or interruptions of Renewable Power Generation facilities due to operational disturbances or outages resulting from weather conditions or other factors, could also impact earnings. Our assets vary in age and were constructed over many decades which causes our inspection, maintenance or repair costs to increase. Our pipelines vary in age and were constructed over many decades.
Additionally, inefficiencies or interruptions of Renewable Power Generation facilities due to operational disturbances or outages resulting from weather conditions or other factors, could also impact earnings. 51 Our assets vary in age and were constructed over many decades which causes our inspection, maintenance or repair costs to increase. Our pipelines vary in age and were constructed over many decades.
A service interruption due to a major power disruption, curtailment of commodity supply, operational incident, security incident (cyber or physical), availability of gas supply or distribution or other reasons could have a significant impact on our operations and negatively impact financial results, relationships with stakeholders, our reputation or the safety of our end customers.
A service interruption due to a major power disruption, curtailment of commodity supply, operational incident, security incident (cyber or physical), availability of gas supply or distribution or other reasons could have a significant impact on our operations and negatively impact financial results, relationships with stakeholders, our reputation or the safety of our end-use customers.
To a lesser degree, the financial results of our US Transmission business are subject to fluctuation in power prices which impact electric power costs associated with operating compressor stations. Energy Services generates margin by capitalizing on quality, time and location differentials when opportunities arise.
To a lesser degree, the financial results of our US Transmission business are subject to fluctuation in power prices which impact electric power costs associated with operating compressor stations. 56 Energy Services generates margin by capitalizing on quality, time and location differentials when opportunities arise.
We expect that changes in environmental laws and regulations, including those related to climate change and GHG emissions, could result in a material increase in our cost of compliance with such laws and regulations, such as costs to monitor and report our emissions and install new emission controls to reduce emissions.
We expect that changes in environmental laws and regulations, including those related to climate change, GHG emissions and climate-related disclosure, could result in a material increase in our cost of compliance with such laws and regulations, such as costs to monitor and report our emissions and install new emission controls to reduce emissions.
Any significant increase in these expenditures could adversely affect our business, operations or financial results. 48 Competition may result in a reduction in demand for our services, fewer project opportunities or assumption of risk that results in weaker or more volatile financial performance than expected.
Any significant increase in these expenditures could adversely affect our business, operations or financial results. Competition may result in a reduction in demand for our services, fewer project opportunities or assumption of risk that results in weaker or more volatile financial performance than expected.
These include acute physical risks, such as heavy snowfall, heavy rainfall, floods, landslides, fires, hurricanes, cyclones, tornados, tropical storms, ice storms, and extreme temperatures, and chronic physical risks, such as long-term changes in precipitation patterns, or sustained higher temperatures. 44 Our assets and operations are exposed to potential damage or other negative impacts from these operational risks, which could result in reduced revenue from business disruption or reduced capacity and may also lead to increased costs due to repairs and required adaptation measures.
These include acute physical risks, such as heavy snowfall, heavy rainfall, floods, landslides, fires, hurricanes, cyclones, tornados, tropical storms, ice storms, and extreme temperatures, and chronic physical risks, such as long-term changes in precipitation patterns, or sustained higher temperatures. 47 Our assets and operations are exposed to potential damage or other negative impacts from these operational risks, which could result in reduced revenue from business disruption or reduced capacity and may also lead to increased costs due to repairs and required adaptation measures.
We are subject to numerous environmental laws and regulations affecting many aspects of our past, current, and future operations, including air emissions, water quality, wastewater discharges, solid waste and hazardous waste.
We are subject to numerous environmental laws and regulations affecting many aspects of our past, current, and future operations, including air emissions, water and soil quality, wastewater discharges, solid waste and hazardous waste.
COVID-19 and government responses interrupted business activities and supply chains, disrupted travel, and contributed to significant volatility in the financial and commodity markets. Disruptions related to pandemics, epidemics or infectious disease outbreaks could have the effect of heightening many of the other risks described in this Item 1A. Risk Factors .
COVID-19 and government responses interrupted business activities and supply chains, disrupted travel, and contributed to significant volatility in the financial and commodity markets. Disruptions related to pandemics, epidemics or infectious disease outbreaks could have the effect of heightening many of the other risks described in this Item 1A.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Legal and Other Updates . 54 Regulatory scrutiny over our assets and operations has the potential to increase operating costs or limit future projects. Regulatory enforcement actions issued by regulators for non-compliant findings can increase operating costs and negatively impact reputation.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Legal and Other Updates . 58 Regulatory scrutiny over our assets and operations has the potential to increase operating costs or limit future projects. Regulatory enforcement actions issued by regulators for non-compliant findings can increase operating costs and negatively impact reputation.
Strategic critical infrastructure targets, such as energy-related assets, are at greater risk of cyber attack and may be at greater risk of other future attacks than other targets in the US and Canada. The Company’s infrastructure and projects under construction could be direct targets or indirect casualties of a cyber or physical attack.
Strategic critical infrastructure targets, such as energy-related assets, are at greater risk of cyber attack and may be at greater risk of other future attacks than other targets in the US and Canada. Enbridge’s infrastructure and projects under construction could be direct targets or indirect casualties of a cyber or physical attack.
For energy companies, climate change, GHG emissions, safety and stakeholder and Indigenous relations remain primary focus areas, while other environmental elements such as biodiversity and supply chain are ascendant.
For energy companies, climate change, GHG emissions, safety and stakeholder and Indigenous relations remain primary focus areas, while other environmental elements such as biodiversity, human rights, and supply chain are ascendant.
The changing or rejecting of commercial arrangements, including decisions by regulators on the applicable permits and tariff structure or changes in interpretations of existing regulations by courts or regulators such as with respect to the Mainline Commercial Framework, could have an adverse effect on our revenues and earnings.
The changing or rejecting of commercial arrangements, including decisions by regulators on the applicable permits and tariff structure or changes in interpretations of existing regulations by courts or regulators such as with respect to the negotiated settlements applicable to our Mainline System, could have an adverse effect on our revenues and earnings.
Within our US Midstream assets, through our investments in DCP and Aux Sable, we are engaged in the businesses of gathering, treating and processing natural gas and natural gas liquids. The financial results of these businesses are directly impacted by changes in commodity prices.
Within our US Midstream assets, we hold investments in DCP and Aux Sable, which are engaged in the businesses of gathering, treating, processing and selling natural gas and natural gas liquids. The financial results of these businesses are directly impacted by changes in commodity prices.
Such events have led to, could in the future lead to, rupture or release of product from our pipeline systems and facilities, or loss of life or injury to people, which could result in substantial losses for which insurance may not be sufficient or available and for which we may bear part or all of the cost.
Such events have led to, and could in the future lead to, rupture or release of product from our pipeline systems and facilities, resulting in damage to property and the environment, personal injury or loss of life, which could result in substantial losses for which insurance may not be sufficient or available and for which we may bear part or all of the cost.
The current US administration may take further action to modify or reverse regulations that were promulgated by the previous US administration. In March of 2023, the Supreme Court of Canada will hear the Attorney General of Canada’s appeal of the Alberta Court of Appeal’s non-binding decision that the federal Impact Assessment Act (“IAA”) is unconstitutional.
The current US administration may take further action to modify or reverse regulations that were promulgated by the previous US administration. 57 In March of 2023, the Supreme Court of Canada heard the Attorney General of Canada’s appeal of the Alberta Court of Appeal’s non-binding decision that the federal Impact Assessment Act (IAA) is unconstitutional.
Our information systems or those of our vendors or other service providers are expected to become the target of further cyber attacks or security breaches which could compromise our data and systems, affect our ability to correctly record, process and report transactions, result in the loss of information, or cause operational disruption or incidents.
Our technology systems or those of our vendors or other service providers are expected to become the target of further cyber attacks or security breaches which could compromise our data and systems or our access thereto by us, our customers or others, affect our ability to correctly record, process and report transactions, result in the loss of information, or cause operational disruption or incidents.
In addition, to the extent that we hedge our foreign exchange rates, interest rates or commodity prices, we will forego the benefits we would otherwise experience if these were to change in our favor. In addition, hedging activities can result in losses that might be material to our financial condition, results of operations and cash flows.
To the extent that we hedge our exposure to market prices, we will forego the benefits we would otherwise experience if these were to change in our favor. In addition, hedging activities can result in losses that might be material to our financial condition, results of operations and cash flows.
As cyber attacks continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. 46 Furthermore, media reports about a cyber attack or other significant security incident affecting the Company, whether accurate or not, or, under certain circumstances, our failure to make adequate or timely disclosures to the public, law enforcement, other regulatory agencies or affected individuals following any such event, whether due to delayed discovery or otherwise, could negatively impact our operating results and result in other negative consequences, including damage to our reputation or competitiveness, harm to our relationships with customers, partners, suppliers and other third parties, interruption to our management, remediation or increased protection costs, significant litigation or regulatory action, fines or penalties, all of which could materially adversely affect our business, operations, reputation or financial results.
Furthermore, media reports about a cyber attack or other significant security incident affecting Enbridge, whether accurate or not, or, under certain circumstances, our failure to make adequate or timely disclosures to the public, law enforcement, other regulatory agencies or affected individuals following any such event, whether due to delayed discovery or otherwise, could negatively impact our operating results and result in other negative consequences, including damage to our reputation or competitiveness, harm to our relationships with customers, partners, suppliers, investors, and other third parties, interruption to our management, remediation or increased protection costs, significant litigation or regulatory action, fines or penalties, all of which could materially adversely affect our business, operations, reputation or financial results.
Our loss of these rights could have an adverse effect on our reputation, operations and financial results. We have experienced litigation in relation to certain Line 5 easements; refer to Part II. Item 7.
Our loss of these rights, including through our inability to renew them as they expire, could have an adverse effect on our reputation, operations and financial results. We have experienced litigation in relation to certain Line 5 and other easements; refer to Part II. Item 7.
Similarly, there is a risk that emissions reduction technology does not materialize as expected, making it more difficult to reduce emissions. • Market risks Climate change concerns, increase in demand for lower-carbon and zero-emissions energy, alternative and new energy sources and technologies, changing customer behavior and reduced energy consumption could impact the demand for our services or securities.
There is also a risk that GHG emissions reduction technology does not materialize as expected, making it more difficult to reduce emissions, or that political or public opinion regarding such technologies continues to evolve. 46 • Market risks Climate change concerns, increased demand for lower-carbon and zero-emissions energy, alternative and new energy sources and technologies, changing customer behavior and reduced energy consumption could impact the demand for our services or securities.
Similarly, uncertainty in market signals, such as abrupt and unexpected shifts in energy costs and demands, including due to climate change concerns, can impact revenue through reduced throughput volumes on our pipeline transportation systems. 43 • Reputational risks We have long been committed to strong ESG practices and performance, and in November 2020, we introduced a set of ESG goals to strengthen transparency and accountability.
Similarly, unexpected shifts in energy demands, including due to climate change concerns, can impact revenue through reduced throughput volumes on our pipeline transportation systems. 53 We have long been committed to strong ESG practices, performance and reporting, and in 2020 introduced a set of ESG goals to strengthen transparency and accountability.
Within the US and in Canada, pipeline companies continue to face opposition from anti-energy/anti-pipeline activists, Indigenous and tribal groups and communities, citizens, environmental groups, and politicians concerned with either the safety of pipelines or their potential environmental effects.
Within the US and in Canada, pipeline companies continue to face opposition from anti-energy/anti-pipeline activists, Indigenous and tribal groups and communities, citizens, environmental groups, and politicians concerned with the safety of pipelines and their potential environmental effects. In the US, the EPA redefined the Waters of the United States to align with the U.S.
In addition, increased environmental activism against pipeline construction and operation could potentially result in work delays, reduced demand for our products and services, new legislation or public policy or increased stringency thereof, or denial or delay of permits and rights-of-way. RISKS RELATED TO OUR BUSINESS AND INDUSTRY There are utilization risks with respect to our assets.
In addition, increased environmental activism against pipeline construction and operation could potentially result in work delays, reduced demand for our products and services, new legislation or public policy or increased stringency thereof, or denial or delay of permits and rights-of-way.
Wide commodity price basis between Western Canada and global tidewater markets have negatively impacted producer netbacks and margins in the past years that largely resulted from pipeline infrastructure takeaway capacity from producing regions in Western Canada and North Dakota which are operating at capacity.
Our Liquids Pipelines growth rate and results may be indirectly affected by commodity prices. Wide commodity price basis between Western Canada and global tidewater markets have negatively impacted producer netbacks and margins in the past years that largely resulted from pipeline infrastructure takeaway capacity from producing regions in Western Canada and North Dakota which are operating at capacity.
If we are not able to achieve our GHG emissions reduction goals, are not able to meet future climate, emissions or other reporting requirements of regulators, or are not able to meet or manage current and future expectations and issues important to investors or other stakeholders, including those related to climate change, it could negatively impact our reputation and our business, operations or financial results. • Disclosure risks Finally, we currently provide certain climate-related disclosures, and from time to time, we establish and publicly announce goals and commitments to reduce our GHG emissions.
If we are not able to achieve our GHG emissions reduction goals and targets, are not able to meet future climate, emissions or other regulatory or reporting requirements, or are not able to meet or manage current and future expectations and issues regarding climate change that are important to our stakeholders, it could negatively impact our reputation and, in turn, our business, operations or financial results. • Disclosure risks Enbridge currently provides certain climate-related disclosures, and from time to time, establishes and publicly announces goals and commitments related to climate change, including reduction of GHG emissions.
A public safety incident or an injury or loss of life to our workers or contractors, which we have experienced in the past and, despite the precautions we take, may experience in the future, could result in reputational damage to us, material repair costs or increased operating and insurance costs. 45 Cyber attacks pose threats to our technology systems and could materially adversely affect our business, operations, reputation or financial results.
A public safety incident or an injury or loss of life to our workers or contractors, which we have experienced in the past and, despite the precautions we take, may experience in the future, could result in reputational damage to us, material repair costs or increased operating and insurance costs.
We maintain an insurance program for us, our subsidiaries and certain of our affiliates to mitigate a certain portion of our risks. However, not all potential risks arising from our operations are insurable, or are insured by us as a result of availability, high premiums and for various other reasons.
However, not all potential risks arising from our operations are insurable, or are insured by us as a result of availability, high premiums and for various other reasons.
Our operations, projects and growth opportunities require us to have strong relationships with key stakeholders, including local communities, Indigenous groups and others directly impacted by our activities, as well as governments, regulatory agencies, investors and investor advocacy groups, investment funds, financial institutions, insurers and others, which are increasingly focused on ESG practices and performance. 49 Enhanced public awareness of climate change has driven an increase in demand for lower-carbon and zero-emissions energy.
Our operations, projects and growth opportunities require us to have strong relationships with key stakeholders, including local communities, Indigenous groups and others directly impacted by our activities, as well as governments, regulatory agencies, investors and investor advocacy groups, investment funds, financial institutions, insurers and others, which are increasingly focused on ESG practices and performance.
Market fundamentals, such as commodity prices and price differentials, weather, gasoline price and consumption, alternative and new energy sources and technologies, and global supply disruptions outside of our control can impact both the supply of and demand for crude oil and other liquid hydrocarbons transported on our pipelines. 47 With respect to our Gas Transmission and Midstream assets, gas supply and demand dynamics continue to change due to shifts in regional and global production and consumption.
Market fundamentals, such as commodity prices and price differentials, weather, gasoline price and consumption, alternative and new energy sources and technologies, and global supply disruptions outside of our control can impact both the supply of and demand for crude oil and other liquid hydrocarbons transported on our pipelines.
In addition, a cyber attack could occur and persist for an extended period without detection. Any investigation of a cyber attack or other security incident may be inherently unpredictable, and it would take time before the completion of any investigation and availability of full and reliable information.
Any investigation of a cyber attack or other security incident may be inherently unpredictable, and it would take time before the completion of any investigation and availability of full and reliable information.
PHYSICAL RISKS Climate-related physical risks as a result of changing and more extreme weather, can damage our assets and affect the safety and reliability of our operations and has had such impacts in the past. Climate-related physical risks may be acute or chronic.
PHYSICAL RISKS Climate-related physical risks, resulting from changing and more extreme weather, can damage our assets and affect the safety and reliability of our operations. Climate-related physical risks may be acute or chronic.
There can be no assurance that our current or future disclosures and goals, the pathways by which we plan to reach our goals, or the methodologies that we currently use to support our disclosures and progress towards our goals, will satisfy any new and evolving regulations and legal requirements or expectations of our stakeholders, and the costs of aligning our current disclosures and goals to any new legal requirements may be significant.
There can be no assurance that our current or future disclosures and goals, the pathways by which we plan to reach our goals, or the methodologies that we currently use to measure and report on progress, will align with new and evolving standards and processes, legal requirements or expectations of stakeholders.
We are subject to changes in our tax rates, the adoption of new US, Canadian or international tax legislation or exposure to additional tax liabilities. We are subject to taxes in the US, Canada and numerous foreign jurisdictions. Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change.
We are subject to taxes in the US, Canada and numerous foreign jurisdictions. Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change.
Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation.
Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation. In particular, Canada and other OECD countries have introduced a minimum tax rate to be applied on a global basis.
For pipeline and storage assets located near populated areas, including residential communities, commercial business centers, industrial sites and other public gathering locations, the level of damage resulting from these events could be greater.
For pipeline and storage assets located near populated areas, including residential communities, commercial business centers, industrial sites and other public gathering locations, the level of damage resulting from these events could be greater. We have experienced such events in the past, and expect to continue to incur significant costs in preparing for or responding to operational risks and events.
We rely on access to short-term and long-term capital markets to finance capital requirements and support liquidity needs. Cost effective access to those markets can be affected, particularly if we or our rated subsidiaries are unable to maintain an investment-grade credit rating. A significant portion of our consolidated asset base is financed with debt.
Financial Statements and Supplementary Data for a discussion of our derivative instruments and related hedging activities. 55 We rely on access to short-term and long-term capital markets to finance capital requirements and support liquidity needs. Cost effective access to those markets can be affected, particularly if we or our rated subsidiaries are unable to maintain an investment-grade credit rating.
If our effective tax rates were to increase, particularly in the US or Canada, or if the ultimate determination of our taxes owed is for an amount in excess of amounts previously accrued, our financial condition and operating results could be materially adversely affected. 55 We are involved in numerous legal proceedings, the outcomes of which are uncertain, and resolutions adverse to us could adversely affect our financial results.
There can be no assurance as to the outcome of these examinations. If our effective tax rates were to increase, particularly in the US or Canada, or if the ultimate determination of our taxes owed is for an amount in excess of amounts previously accrued, our financial condition and operating results could be materially adversely affected.
Our success in executing our strategic plan, including adapting to the energy transition over time and attaining our GHG emissions reduction goals and targets depends, in part, on technology (including technology still under development), innovation and continued diversification with renewable power and other lower-carbon energy infrastructure, as well as modernization of our infrastructure to reduce GHG emissions, all of which could require significant capital expenditures and resources.
In recent years, there has been an increase in climate-related regulatory action and litigation which has the potential to adversely impact our reputation, business, operations and financial results. • Technology risks Our success in executing our strategic plan, including adapting to the energy transition over time and attaining our GHG emissions reduction goals and targets, depends, in part, on technology (including technology still under development), innovation and continued diversification with renewable power and other lower-carbon energy infrastructure as well as modernization of our infrastructure, all of which could require significant capital expenditures and resources, that could materially differ from our original estimates and expectations.
Cybersecurity risks have increased in recent years as a result of the proliferation of new technologies and the increased sophistication of cyber attacks and data security breaches, as well as due to international and domestic political factors including geopolitical tensions, armed hostilities, war, civil unrest, sabotage and terrorism.
The secure processing, maintenance and transmission of information is critical to our operations. 48 Cybersecurity risks have increased in recent years as a result of the proliferation of new technologies and the increased sophistication of cyber attacks and financially motivated cybercrime, as well as due to international and domestic political factors including geopolitical tensions, armed hostilities, war, civil unrest, sabotage, terrorism and state-sponsored or other cyber espionage.
Cyber threat actors have attacked and threatened to attack energy infrastructure, and various government agencies have increasingly stressed that these attacks are targeting critical infrastructure, and are increasing in sophistication, magnitude, and frequency.
Cyber threat actors have attacked and threatened to attack energy infrastructure, and various government agencies have increasingly stressed that these attacks are targeting critical infrastructure, including pipelines, public utilities, and power generation, and are increasing in sophistication, magnitude, and frequency. Additionally, these risks may escalate during periods of heightened geopolitical tensions.
With respect to our Liquids Pipelines assets, we may be exposed to throughput risk on the Canadian Mainline depending upon the tolling framework we adopt for that system, and we are exposed to throughput risk under certain tolling agreements applicable to other Liquids Pipelines assets, such as the Lakehead System.
Risk Factors . 50 RISKS RELATED TO OUR BUSINESS AND INDUSTRY There are utilization risks with respect to our assets. With respect to our Liquids Pipelines assets, we are exposed to throughput risk on the Canadian Mainline, and we are exposed to throughput risk under certain tolling agreements applicable to other Liquids Pipelines assets, such as the Lakehead System.
The maturity and repayment profile of debt used to finance investments often does not correlate to cash flows from assets. Accordingly, we rely on access to both short-term and long-term capital markets as a source of liquidity for capital requirements not satisfied by cash flows from operations and to refinance investments originally financed with debt.
Accordingly, we rely on access to both short-term and long-term capital markets as a source of liquidity for capital requirements not satisfied by cash flows from operations and to refinance investments originally financed with debt. Our senior unsecured long-term debt is currently rated investment-grade by various rating agencies.
Furthermore, we and some of our vendors collect and store sensitive data in the ordinary course of our business, including personal information of our employees and residential gas distribution customers as well as our proprietary business information and that of our customers, suppliers, investors and other stakeholders.
Furthermore, we and some of our third-party service providers (who may in turn also use third-party service providers) collect, process or store sensitive data in the ordinary course of our business, including personal information of our employees, residential gas distribution customers, land owners and investors, as well as intellectual property or other proprietary business information of ours or our customers or suppliers.
Changing expectations of stakeholders regarding ESG practices and climate change could erode stakeholder trust and confidence, damage our reputation and influence actions or decisions about our company and industry and have negative impacts on our business, operations or financial results.
Other events that can and have delayed project completion and increased anticipated costs include contractor or supplier non-performance, extreme weather events or geological factors beyond our control. 52 Changing expectations of stakeholders regarding ESG and climate change practices could erode stakeholder trust and confidence, damage our reputation and influence actions or decisions about our company and industry and have negative impacts on our business, operations or financial results.
These disclosures and goals, and our progress towards these commitments, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Standards and processes for climate-related disclosure, setting goals and targets, and measuring and reporting on progress are still developing for our sector and continue to evolve. Our internal controls and processes also continue to evolve, and our climate-related disclosures, goals and targets are based on assumptions that are subject to change.
These operational risks could be catastrophic in nature. Operational risk is also intensified by climate change. Climate change presents physical risks that may affect the safety and reliability of our operations.
These operational risks include adverse weather conditions, natural disasters, accidents, the breakdown or failure of equipment or processes, and lower than expected levels of operating capacity and efficiency. These operational risks could be catastrophic in nature. Operational risk is also intensified by climate change. Climate change presents physical risks that may affect the safety and reliability of our operations.
We have incurred and expect to continue to incur significant costs in preparing for or responding to operational risks and events. We expect to continue to experience climate-related physical risks, potentially with increasing frequency and severity, and we cannot guarantee that we will not experience catastrophic or other events in the future.
We expect to continue to experience climate-related physical risks, potentially with increasing frequency and severity, and we cannot guarantee that we will not experience catastrophic or other events in the future. In addition, we could be subject to litigation and significant fines and penalties from regulators in connection with any such events.
We have experienced operational interruptions and damage to our assets from such weather events in the past, and we expect to experience climate-related physical risks in the future, potentially with increasing frequency or severity. 42 TRANSITION RISKS Transition risks relate to the transition to a lower-emissions economy, which may increase our cost of operations, impact our business plans, and influence stakeholder decisions about our company, each of which could adversely impact our reputation, strategic plan, business, operations or financial results.
TRANSITION RISKS Transition risks relate to the transition to a lower-emissions economy, which may increase our cost of operations, impact our business plans, and influence stakeholder decisions about our company, each of which could adversely impact our reputation, strategic plan, business, operations or financial results.
The Company self-insures a significant portion of certain risks through our wholly-owned captive insurance subsidiaries, and the Company’s insurance coverage is subject to terms and conditions, exclusions and large deductibles or self-insured retentions which may reduce or eliminate coverage in certain circumstances. 50 The Company’s insurance policies are generally renewed on an annual basis and, depending on factors such as market conditions, the premiums, terms, policy limits and/or deductibles can vary substantially.
Enbridge self-insures a significant portion of certain risks through our wholly-owned captive insurance subsidiaries, and Enbridge’s insurance coverage is subject to terms and conditions, exclusions and large deductibles or self-insured retentions which may reduce or eliminate coverage in certain circumstances.
Although this would not affect our ability to draw under our credit facilities, borrowing costs could be significantly higher. Recently, interest rates have increased significantly. If we are not able to access capital at competitive rates or at all, our ability to finance operations and implement our strategy may be affected.
If we are not able to access capital at competitive rates or at all, our ability to finance operations and implement our strategy may be affected.
Our project execution continues to face challenges with intense scrutiny on regulatory and environmental permit applications, politicized permitting, public opposition including protests, action to repeal permits, and resistance to land access. Continued challenges with global supply chains have created unpredictability in materials cost and availability. Labor shortages and union strikes have increased costs of engineering and construction services.
Our project execution continues to face challenges with intense scrutiny on regulatory and environmental permit applications, politicized permitting, public opposition including protests, action to repeal permits, and resistance to land access.
Our assets are exposed to potential damage or other negative impacts from these kinds of events, which could result in reduced revenue from business disruption or reduced capacity and may also lead to increased costs due to repairs and required adaptation measures. Such events may also result in loss of life or injury or damage to property and the environment.
Chronic physical risks are longer-term shifts in climate patterns, such as long-term changes in precipitation patterns, or sustained higher temperatures, which may cause sea level rises or chronic heat waves. 45 Our assets are exposed to potential damage or other negative impacts from these kinds of events, which could result in reduced revenue from business disruption or reduced capacity and may also lead to increased costs due to repairs and required adaptation measures.
Litigation is subject to many uncertainties, and we cannot predict the outcome of individual matters with assurance.
There is no assurance that we will not be impacted by such litigation, or by other legal proceedings. Litigation is subject to many uncertainties, and we cannot predict the outcome of individual matters with assurance.
Our business is dependent upon information systems and other digital technologies for controlling our plants, pipelines and other assets, processing transactions and summarizing and reporting results of operations. The secure processing, maintenance and transmission of information is critical to our operations.
Cyber attacks and other cybersecurity incidents pose threats to our technology systems and could materially adversely affect our business, operations, reputation or financial results. Our business is dependent upon information systems and other digital technologies for controlling our plants, pipelines and other assets, processing transactions and summarizing and reporting results of operations.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Legal and Other Updates for a discussion of certain legal proceedings with recent developments. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES Descriptions of our properties and maps depicting the locations of our liquids and natural gas systems are included in Part I. Item 1. Busin ess.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Legal and Other Updates for a discussion of certain legal proceedings with recent developments. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
The pace and scale of the transition to a lower-carbon economy may pose a risk if Enbridge diversifies either too quickly or too slowly.
Potential impacts include increased costs to manage these risks, adverse impacts to our access to and cost of capital, and reduced demand for, or value of, our securities. The pace and scale of the transition to a lower-carbon economy may pose a risk if Enbridge diversifies either too quickly or too slowly.
Potential impacts could also include changing investor sentiment regarding investment in Enbridge or impair our access to and increase our cost of capital, including penalties associated with our sustainability-linked financing. Our forecasted assumptions may not materialize as expected, including on our expansion projects, acquisitions and divestitures. We evaluate expansion projects, acquisitions and divestitures on an ongoing basis.
Potential impacts could also include changing investor sentiment regarding investment in Enbridge, which could impair our access to and increase our cost of capital, including penalties associated with our sustainability-linked financing and could adversely impact demand for, or value of, our securities.
In addition, we could be subject to litigation and significant fines and penalties from regulators in connection with any such events. A service interruption could have a significant impact on our operations, and negatively impact financial results, relationships with stakeholders and our reputation.
A service interruption could have a significant impact on our operations, and negatively impact financial results, relationships with stakeholders and our reputation.
Human error can also contribute to a cyber incident, and cyber attacks can be internal as well as external and occur at any point in our supply chain. Because of the critical nature of our infrastructure and our use of information systems and other digital technologies to control our assets, we face a heightened risk of cyber attacks.
Human error or malfeasance can also contribute to a cyber incident, and cyber attacks can be internal as well as external and occur at any point in our supply chain.
We are subject to numerous legal proceedings. In recent years, there has been an increase in climate and disclosure-related litigation against governments as well as companies involved in the energy industry. There is no assurance that we will not be impacted by such litigation, or by other legal proceedings.
We are involved in numerous legal proceedings, the outcomes of which are uncertain, and resolutions adverse to us could adversely affect our financial results. We are subject to numerous legal proceedings. In recent years, there has been an increase in climate and disclosure-related litigation against governments as well as companies involved in the energy industry.
Our Renewable Power Generation assets in Europe (France, Germany and the UK) are also subject to the directives, regulations and policies established and enforced by the EU and the UK government. These measures are variable and can include price controls, caps and demand reduction goals, all of which can have a negative impact on our revenues and earnings.
Our Renewable Power Generation assets in Europe (France, Germany and the UK) are also subject to the directives, regulations and policies established and enforced by the EU and the UK government.
The Council for Environmental Quality published immediately applicable guidance for conducting analyses under the National Environmental Policy Act that may significantly change environmental scope and cost assessments. Many other regulations adopted during the previous US presidential administration are being challenged in multiple courts and some have been overturned by reviewing courts.
Many other regulations adopted during the previous US presidential administration are being challenged in multiple courts and some have been overturned by reviewing courts.
These facilities typically include financial covenants and failure to maintain these covenants at a particular entity could preclude that entity from accessing the credit facility, which could impact liquidity. Furthermore, if our short-term debt rating were to be downgraded, access to the commercial paper market could be significantly limited.
We maintain revolving credit facilities at various entities to backstop commercial paper programs, for borrowings and for providing letters of credit. These facilities typically include financial covenants and failure to maintain these covenants at a particular entity could preclude that entity from accessing the credit facility, which could impact liquidity.
As a result of a cyber attack or security breach, we could also be liable under laws that protect the privacy of personal information, be subject to regulatory action, fines or penalties, incur additional costs for remediation, litigation, breach of contract or indemnity claims, or other costs, all of which could materially adversely affect our reputation, business, operations or financial results.
As a result of the foregoing, we could experience loss of revenues, repair, remediation or restoration costs, regulatory action, fines and penalties, litigation, breach of contract or indemnity claims, cyber extortion, ransomware, implementation costs for additional security measures, loss of customers, customer dissatisfaction, reputational harm, be liable under laws that protect the privacy of personal information, other negative consequences, or other costs or financial loss.
Our insurance coverage may not fully cover our losses in the event of an accident, natural disaster or other hazardous event, and we may encounter increased cost arising from the maintenance of, or lack of availability of, insurance. Our operations are subject to many hazards inherent in our industry.
Any failure to realize the anticipated benefits of the Acquisitions, additional unanticipated costs or other factors could negatively impact our earnings or cash flows, decrease or delay any beneficial effects of the Acquisitions and negatively impact our business, financial condition and results of operations. 54 Our insurance coverage may not fully cover our losses in the event of an accident, natural disaster or other hazardous event, and we may encounter increased cost arising from the maintenance of, or lack of availability of, insurance.
We can give no assurance that we will be able to maintain adequate insurance in the future at rates or on other terms we consider commercially reasonable. In such case, we may decide to self-insure additional risks.
Enbridge’s insurance policies are generally renewed on an annual basis and, depending on factors such as market conditions, the premiums, terms, policy limits and/or deductibles can vary substantially. We can give no assurance that we will be able to maintain adequate insurance in the future at rates or on other terms we consider commercially reasonable.
These transition risks include: • Policy and legal risks Foreign and domestic governments continue to evaluate and implement policy, legislation, and regulations regarding reduction of GHG emissions, adaptation to climate change, transition to a lower-carbon economy, and disclosure of climate-related matters.
Foreign and domestic governments continue to evaluate and implement policy, legislation, and regulations regarding reduction of GHG emissions, adaptation to climate change, and transition to a lower-carbon economy. Such policies, laws and regulations vary at the federal, state, provincial and municipal levels in which Enbridge operates and are continually evolving.
Companies across all sectors and industries are facing changing expectations or increasing scrutiny from stakeholders related to their approach to ESG matters, including climate change and GHG emissions. Companies in the energy industry are experiencing stakeholder opposition to new infrastructure, as well as organized opposition to oil and natural gas extraction and shipment of oil and natural gas products.
Companies in the energy industry are experiencing stakeholder opposition to both existing and new infrastructure, as well as organized opposition to oil and natural gas extraction and shipment of oil and natural gas products.
RISKS RELATED TO OPERATIONAL DISRUPTION OR CATASTROPHIC EVENTS Operation of complex energy infrastructure involves many hazards and risks that may adversely affect our business, financial results and the environment. These operational risks include adverse weather conditions, natural disasters, accidents, the breakdown or failure of equipment or processes, and lower than expected levels of operating capacity and efficiency.
Such misalignment may result in reputational harm, regulatory action or other legal action. RISKS RELATED TO OPERATIONAL DISRUPTION OR CATASTROPHIC EVENTS Operation of complex energy infrastructure involves many hazards and risks that may adversely affect our business, financial results and the environment.
Our operations and management require the retention and recruitment of a skilled and diverse workforce, including engineers, technical personnel, other professionals and executive officers and senior management. We and our affiliates compete with other companies in the energy industry, and for some jobs the broader labor market, for this skilled workforce.
Our business requires the retention and recruitment of a skilled and diverse workforce, and difficulties in recruiting and retaining our workforce could result in a failure to implement our business plans. Our operations and management require the retention and recruitment of a skilled and diverse workforce, including engineers, technical personnel, other professionals and executive officers and senior management.
If we are unable to retain current employees and/or recruit new employees of comparable knowledge and experience, our business could be negatively impacted. In addition, we could experience increased costs to retain and recruit these professionals. Our Liquids Pipelines growth rate and results may be directly and indirectly affected by commodity prices and government policy.
We and our affiliates compete with other companies in the energy industry, and for some jobs the broader labor market, for this skilled workforce. If we are unable to retain current employees and/or recruit new employees of comparable knowledge and experience, our business could be negatively impacted. In addition, we could experience increased costs to retain and recruit these professionals.
Planning and investment analysis is highly dependent on accurate forecasting assumptions and to the extent that these assumptions do not materialize, financial performance may be lower or more volatile than expected. Volatility and unpredictability in the economy, both locally and globally, and changes in cost estimates, project scoping and risk assessment could result in a loss of profits.
Our forecasted assumptions may not materialize as expected, including on our expansion projects, acquisitions and divestitures. We evaluate expansion projects, acquisitions and divestitures on an ongoing basis. Planning and investment analysis is highly dependent on accurate forecasting assumptions and to the extent that these assumptions do not materialize, financial performance may be lower or more volatile than expected.
The inability to implement, maintain and upgrade adequate safeguards could materially and adversely affect our results of operations, cash flows, and financial condition.
The inability to implement, maintain and upgrade adequate safeguards could materially and adversely affect our results of operations, cash flows, and financial condition. Moreover, recent rulemakings may require us to disclose information about a cybersecurity incident before it has been completely investigated or remediated in full or even in part.
Consequently, we would likely be required to pay a higher interest rate in future financings and our potential pool of investors and funding sources could decrease. 52 We maintain revolving credit facilities at various entities to backstop commercial paper programs, for borrowings and for providing letters of credit.
If the rating agencies were to rate us or our rated subsidiaries below investment-grade, our borrowing costs would increase, perhaps significantly. Consequently, we would likely be required to pay a higher interest rate in future financings and our potential pool of investors and funding sources could decrease.
In particular, Canada has introduced interest deductibility rules, the US enacted the Inflation Reduction Act and we are anticipating a minimum tax rate to be introduced on a global basis for OECD countries. All of these measures could cause our effective tax rate to increase.
The final legislation and list of the participating countries remains uncertain. In addition, the US enacted the Inflation Reduction Act in 2022 however key regulations still remain outstanding that could impact the interpretation of that act. All of these measures could cause our effective tax rate to increase.
The pace and scale of the transition to a lower-emission economy may pose a risk if Enbridge diversifies either too quickly or too slowly. Similarly, unexpected shifts in energy demands, including due to climate change concerns, can impact revenue through reduced throughput volumes on our pipeline transportation systems.
Similarly, uncertainty in market signals, such as abrupt and unexpected shifts in energy costs and demands, including due to climate change concerns, can impact revenue through reduced throughput volumes on our pipeline transportation systems. • Reputational risks Companies across all sectors and industries are facing changing expectations or increasing scrutiny from stakeholders related to their approach to climate change and GHG emissions.
These shifts can lead to fluctuations in commodity prices and price differentials, resulting in oversupply of pipeline takeaway capacity in some areas and an adverse effect to the utilization of our systems. Other factors affecting system utilization include operational incidents, regulatory restrictions, system maintenance, and increased competition.
Other factors affecting system utilization include operational incidents, regulatory restrictions, system maintenance, and increased competition.
Removed
Chronic physical risks are longer-term shifts in climate patterns, such as long-term changes in precipitation patterns, or sustained higher temperatures, which may cause sea level rises or chronic heat waves.

… 71 more changes not shown on this page.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+2 added−1 removed3 unchanged
The Minnesota Attorney General has filed a misdemeanor criminal charge for the taking of water without a permit at the Clearbrook aquifer, with this charge against us to be dismissed following one year of compliance with the state water appropriation rules. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 57 PART II
The Minnesota Attorney General filed a misdemeanor criminal charge for the taking of water without a permit at the Clearbrook aquifer, with this charge against us to be dismissed following one year of compliance with the state water appropriation rules.
Given the size of our operations, we have elected to use a threshold of US$1 million for the purposes of determining proceedings requiring disclosure. 56 On October 17, 2022, four separate comprehensive enforcement resolutions were announced with the Minnesota Pollution Control Agency, Minnesota Department of Natural Resources (DNR), Fond du Lac Band of Lake Superior Chippewa, and Minnesota Attorney General’s Office related to alleged violations that occurred during construction of Line 3 Replacement.
On October 17, 2022, four separate comprehensive enforcement resolutions were announced with the Minnesota Pollution Control Agency, Minnesota Department of Natural Resources (DNR), Fond du Lac Band of Lake Superior Chippewa, and Minnesota Attorney General’s Office related to alleged violations that occurred during construction of Line 3 Replacement (L3R).
Removed
As part of these agreements, together with the DNR’s previous Administrative Penalty Order, Enbridge will provide the various entities a total of approximately US$11 million, approximately US$7.5 million of which is to provide financial assurances and fund multiple environmental and resource enhancement projects.
Added
Given the size of our operations, we have elected to use a threshold of US$1 million for the purposes of determining proceedings requiring disclosure.
Added
As part of its ongoing post-construction monitoring activities for L3R, Enbridge reported groundwater flow near Moose Lake in Aitkin County to the DNR. Enbridge has completed the agency approved corrective action at the site. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 62 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

132 edited+75 added−65 removed52 unchanged
An impairment loss is recognized when the carrying amount of the asset exceeds its fair value. With respect to equity method investments, we assess at each balance sheet date whether there is objective evidence that the investment is impaired by completing a quantitative or qualitative analysis of factors impacting the investment.
An impairment loss is recognized when the carrying amount of the asset exceeds its fair value. With respect to equity method investments, we assess at each balance sheet date whether there is objective evidence that the investment is impaired by completing a qualitative or quantitative analysis of factors impacting the investment.
The project is expected to deliver 1.5 billion cubic feet per day (bcf/d) of natural gas to Venture Global Plaquemines LNG, LLC’s LNG export facility located in Plaquemines Parish, Louisiana and is underpinned by long-term take or pay contracts. • Texas Eastern Modernization – This program is the modernization of compression facilities in Pennsylvania and New Jersey to increase safety and reliability and reduce associated greenhouse gas emissions at multiple sites on our Texas Eastern system.
The project is expected to deliver 1.5 billion cubic feet per day (bcf/d) of natural gas to Venture Global Plaquemines LNG, LLC’s LNG export facility located in Plaquemines Parish, Louisiana and is underpinned by long-term take or pay contracts. 77 • Texas Eastern Modernization – This program is the modernization of compression facilities in Pennsylvania and New Jersey to increase safety and reliability and reduce associated greenhouse gas emissions at multiple sites on our Texas Eastern system.
Each of the Partnerships is entitled to a right of contribution from the other Partnership for 50% of all payments, damages and expenses incurred by that Partnership in discharging its obligations under the guarantees for the Guaranteed Enbridge Notes. 80 Under the terms of the guarantee agreement and applicable supplemental indentures, the guarantees of either of the Partnerships of any Guaranteed Enbridge Notes will be unconditionally released and discharged automatically upon the occurrence of any of the following events: • any direct or indirect sale, exchange or transfer, whether by way of merger, sale or transfer of equity interests or otherwise, to any person that is not an affiliate of Enbridge, of any of Enbridge’s direct or indirect limited partnership of other equity interests in that Partnership as a result of which the Partnership ceases to be a consolidated subsidiary of Enbridge; • the merger of that Partnership into Enbridge or the other Partnership or the liquidation and dissolution of that Partnership; • the repayment in full or discharge or defeasance of those Guaranteed Enbridge Notes, as contemplated by the applicable indenture or guarantee agreement; • with respect to EEP, the repayment in full or discharge or defeasance of each of the consenting EEP notes listed above; • with respect to SEP, the repayment in full or discharge or defeasance of each of the consenting SEP notes listed above; or • with respect to any series of Guaranteed Enbridge Notes, with the consent of holders of at least a majority of the outstanding principal amount of that series of Guaranteed Enbridge Notes.
Each of the Partnerships is entitled to a right of contribution from the other Partnership for 50% of all payments, damages and expenses incurred by that Partnership in discharging its obligations under the guarantees for the Guaranteed Enbridge Notes. 88 Under the terms of the guarantee agreement and applicable supplemental indentures, the guarantees of either of the Partnerships of any Guaranteed Enbridge Notes will be unconditionally released and discharged automatically upon the occurrence of any of the following events: • any direct or indirect sale, exchange or transfer, whether by way of merger, sale or transfer of equity interests or otherwise, to any person that is not an affiliate of Enbridge, of any of Enbridge’s direct or indirect limited partnership of other equity interests in that Partnership as a result of which the Partnership ceases to be a consolidated subsidiary of Enbridge; • the merger of that Partnership into Enbridge or the other Partnership or the liquidation and dissolution of that Partnership; • the repayment in full or discharge or defeasance of those Guaranteed Enbridge Notes, as contemplated by the applicable indenture or guarantee agreement; • with respect to EEP, the repayment in full or discharge or defeasance of each of the consenting EEP notes listed above; • with respect to SEP, the repayment in full or discharge or defeasance of each of the consenting SEP notes listed above; or • with respect to any series of Guaranteed Enbridge Notes, with the consent of holders of at least a majority of the outstanding principal amount of that series of Guaranteed Enbridge Notes.
When group assets are retired or otherwise disposed of, gains and losses are not reflected in earnings but are booked as an adjustment to accumulated depreciation. 86 When it is determined that the estimated service life of an asset no longer reflects the expected remaining period of benefit, prospective changes are made to the estimated service life.
When group assets are retired or otherwise disposed of, gains and losses are not reflected in earnings but are booked as an adjustment to accumulated depreciation. When it is determined that the estimated service life of an asset no longer reflects the expected remaining period of benefit, prospective changes are made to the estimated service life.
The Oglala Sioux and Yankton Sioux Tribes also filed lawsuits alleging similar claims in 2018. 82 On June 14, 2017, the District Court found the Army Corps’ environmental review to be deficient and ordered the Army Corps to conduct further study concerning spill risks from DAPL.
The Oglala Sioux and Yankton Sioux Tribes also filed lawsuits alleging similar claims in 2018. On June 14, 2017, the District Court found the Army Corps' environmental review to be deficient and ordered the Army Corps to conduct further study concerning spill risks from DAPL.
During the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.
During the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill.
OFF-BALANCE SHEET ARRANGEMENTS We enter into guarantee arrangements in the normal course of business to facilitate commercial transactions with third parties and can include financial guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. Please see Part II. Item 8. Financial Statements and Supplementary Data - Note 32. Guarantees for further discussion of guarantee arrangements.
OFF-BALANCE SHEET ARRANGEMENTS We enter into guarantee arrangements in the normal course of business to facilitate commercial transactions with third parties and can include financial guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. Please see Part II. Item 8. Financial Statements and Supplementary Data - Note 31 - Guarantees for further discussion of guarantee arrangements.
The non-cash, unrealized derivative fair value gains and losses discussed above generally arise as a result of our comprehensive economic hedging program to mitigate foreign exchange and commodity price risks. This program creates volatility in reported short-term earnings through the recognition of unrealized non-cash gains and losses on derivative instruments used to hedge these risks.
The non-cash, unrealized derivative fair value gains and losses discussed above generally arise as a result of our comprehensive economic hedging program to mitigate foreign exchange, interest rate and commodity price risks. This program creates volatility in reported short-term earnings through the recognition of unrealized non-cash gains and losses on derivative instruments used to hedge these risks.
Our reporting units are Liquids Pipelines, Gas Transmission, Gas Distribution and Storage and Renewable Power Generation. The Renewable Power Generation reporting unit had goodwill starting in the third quarter of 2022. We have the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment assessment.
Our reporting units are Liquids Pipelines, Gas Transmission, Gas Distribution and Storage, and Renewable Power Generation. The Renewable Power Generation reporting unit had goodwill beginning in the third quarter of 2022. We have the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment assessment.
Upon the conclusion of the measurement period or final determination of values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. Accounting for business combinations requires significant judgment, estimates and assumptions at the acquisition date.
Upon conclusion of the measurement period, or the final determination of values for assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our Consolidated Statements of Earnings. Accounting for business combinations requires significant judgment, estimates and assumptions at the acquisition date.
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 between October 24 and November 1, 2022.
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.
Total Restricted cash of $46 million, as reported in the Consolidated Statements of Financial Position, primarily includes cash collateral and future pipeline abandonment costs collected and held in trust. Cash and cash equivalents held by certain subsidiaries may not be readily accessible for alternative use by us.
Total Restricted cash of $84 million, as reported in the Consolidated Statements of Financial Position, primarily includes cash collateral and future pipeline abandonment costs collected and held in trust. Cash and cash equivalents held by certain subsidiaries may not be readily accessible for alternative use by us.
The removal of the AG’s case to federal court follows a November 16, 2021 ruling which held that the similar (and now dismissed) 2020 lawsuit brought by the Governor of Michigan to force Line 5’s shutdown raised important federal issues that should be heard in federal court.
The removal of the AG's case to federal court followed a November 16, 2021 ruling which held that the similar (and now dismissed) 2020 lawsuit brought by the Governor of Michigan to force Line 5's shutdown raised important federal issues that should be heard in federal court.
We regularly monitor our businesses, the market and business environments to identify indicators that could suggest an asset may not be recoverable. If it is determined that the carrying value of an asset exceeds the undiscounted cash flows expected from the asset, we will assess the fair value of the asset.
We regularly monitor our businesses, the market and business environments to identify indicators that could suggest an asset may not be recoverable. If it is determined that the carrying value of an asset exceeds its expected undiscounted cash flows, we will assess the fair value of the asset.
ITEM 6. [Reserved] 59 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION The following discussion and analysis of our financial condition and results of operations is based on and should be read in conjunction with "Forward-Looking Information" and "Non-GAAP and Other Financial Measures", Part I. Item 1A.
ITEM 6. [Reserved] 64 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION The following discussion and analysis of our financial condition and results of operations is based on and should be read in conjunction with "Forward-Looking Information" and "Non-GAAP and Other Financial Measures", Part I. Item 1A.
Following the CER's final approval of the collection mechanism and the set-aside mechanism for LMCI, we began collecting and setting aside funds to cover future abandonment costs effective January 1, 2015. The funds collected are held in trust in accordance with the CER decision.
Following the CER's final approval of the collection mechanism and the set-aside mechanism for LMCI, we began collecting and setting aside funds to cover future abandonment costs effective January 1, 2015. The funds collected are held in trusts in accordance with the CER decision.
Risk Factors and our consolidated financial statements and the accompanying notes included in Part II. Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K. This section of our Annual Report on Form 10-K discusses 2022 and 2021 items and year-over-year comparisons between 2022 and 2021.
Risk Factors and our consolidated financial statements and the accompanying notes included in Part II. Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K. This section of our Annual Report on Form 10-K discusses 2023 and 2022 items and year-over-year comparisons between 2023 and 2022.
We do not have material off-balance sheet financing entities or structures, except for guarantee arrangements and financings entered into by our equity investments. For additional information on these commitments, please refer to Part II. Item 8. Financial Statements and Supplementary Data - Note 31. Commitments and Contingencies and Note 12. Variable Interest Entities.
We do not have material off-balance sheet financing entities or structures, except for guarantee arrangements and financings entered into for our equity investments. For additional information on these commitments, please refer to Part II. Item 8. Financial Statements and Supplementary Data - Note 30 - Commitments and Contingencies and Note 12 - Variable Interest Entities.
Long-term contracts are contracts that we have signed for the purchase of services, pipe and other materials totaling $7.9 billion which are expected to be paid over the next five years.
Long-term contracts are contracts that we have signed for the purchase of services, pipe and other materials totaling $8.9 billion which are expected to be paid over the next five years.
Our 2022 financing activities have provided significant liquidity that we expect will enable us to fund our current portfolio of capital projects without requiring access to the capital markets for the next 12 months should market access be restricted or pricing be unattractive. Refer to Liquidity and Capital Resources .
Our 2023 financing activities have provided significant liquidity that we expect will enable us to fund our current portfolio of capital projects and acquisitions without requiring access to the capital markets for the next 12 months should market access be restricted or pricing be unattractive. Refer to Liquidity and Capital Resources .
LEGAL AND OTHER UPDATES LIQUIDS PIPELINES Line 5 Easement (Bad River Band) On July 23, 2019, the Bad River Band of the Lake Superior Tribe of Chippewa Indians (the Band) filed a complaint in the United States 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).
LEGAL AND OTHER UPDATES LIQUIDS PIPELINES Line 5 Easement (Bad River Band) 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).
On December 15, 2021, we removed the case to the US District Court in the Western District of Michigan (US District Court), where it was assigned to Judge Janet T. Neff.
On December 15, 2021, Enbridge removed the case to the US District Court in the Western District of Michigan (US District Court), where it was assigned to Judge Janet T. Neff.
Project revenues are underpinned by a 20-year fixed price PPA. • Calvados Offshore Wind Project – An offshore wind project located off the northwest coast of France that is expected to generate approximately 448 MW.
Project revenues are underpinned by a 20-year fixed price power purchase agreement (PPA). • Calvados Offshore Wind Project – An offshore wind project located off the northwest coast of France that is expected to generate approximately 448 MW.
In these cases, the ARO cost is considered indeterminate for accounting purposes, as there is no data or information that can be derived from past practice, industry practice or the estimated economic life of the asset.
In these cases, the fair value of ARO is considered indeterminate for accounting purposes, as there is no data or information that can be derived from past practice, industry practice or the estimated economic life of the asset.
The following commercially secured growth projects are expected to be placed into service from 2023 to 2025: • Fécamp Offshore Wind Project – An offshore wind project that will be comprised of 71 wind turbines located off the northwest coast of France and is expected to generate approximately 500 MW.
RENEWABLE POWER GENERATION The following commercially secured growth projects are expected to be placed into service from 2023 to 2025: • Fécamp Offshore Wind Project – An offshore wind project that will be comprised of 71 wind turbines located off the northwest coast of France and is expected to generate approximately 500 megawatts (MW).
Transportation and other services revenues of $18.5 billion, $16.2 billion and $16.2 billion for the years ended December 31, 2022, 2021 and 2020, respectively, were earned from our crude oil and natural gas pipeline transportation businesses and also include power generation revenues from our portfolio of renewable and power generation assets.
Transportation and other services revenues of $19.8 billion, $18.5 billion and $16.2 billion for the years ended December 31, 2023, 2022 and 2021, respectively, were earned from our crude oil and natural gas pipeline transportation businesses and also include power generation revenues from our portfolio of renewable and power generation assets.
Gas distribution sales revenues of $5.7 billion, $4.0 billion and $3.7 billion for the years ended December 31, 2022, 2021 and 2020, respectively, were recognized in a manner consistent with the underlying rate-setting mechanism mandated by the regulator.
Gas distribution sales revenues of $4.8 billion, $5.7 billion and $4.0 billion for the years ended December 31, 2023, 2022 and 2021, respectively, were recognized in a manner consistent with the underlying rate-setting mechanism mandated by the regulator.
We target to maintain sufficient liquidity through securement of committed credit facilities with a diversified group of banks and financial institutions to enable us to fund all anticipated requirements for approximately one year without accessing the capital markets.
We target maintaining sufficient liquidity through the use of committed credit facilities with a diversified group of banks and financial institutions to enable us to fund all anticipated requirements for approximately one year without accessing the capital markets.
Long-term contracts primarily consists of the following purchase obligations: firm capacity payments for natural gas and crude oil transportation and storage contracts, natural gas purchase commitments, service and product purchase obligations and power commitments.
Remaining long-term contracts primarily consist of the following purchase obligations: firm capacity payments for natural gas and crude oil transportation and storage contracts, natural gas purchase commitments, service and product purchase obligations and power commitments.
Material contractual obligations arising in the normal course of business primarily consist of long-term contracts, annual debt maturities and related interest obligations, rights-of-way and leases. See Part II. Item 8. Financial Statements and Supplementary data - Note 18 - Debt and Note 27 - Leases for amounts outstanding at December 31, 2022, related to debt and leases.
Material contractual obligations arising in the normal course of business primarily consist of long-term contracts, annual debt maturities and related interest obligations, rights-of-way and leases. See Part II. Item 8. Financial Statements and Supplementary Data - Note 17 - Debt and Note 26 - Leases for amounts outstanding at December 31, 2023, related to debt and leases.
Enbridge has responded to each claim in the initial and amended co mplaints with an answer, defenses and counterclaims. 81 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 abou t the uninterrupted transmission of hydrocarbons through Line 5.
Enbridge has responded to each claim in the initial and amended complaints with an answer, defenses and counterclaims. 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.
All dividends are payable on March 1, 2023 to shareholders of record on February 15, 2023.
All dividends are payable on March 1, 2024 to shareholders of record on February 15, 2024.
On April 1, 2022, we performed our annual goodwill impairment assessment which consisted of a qualitative assessment for the Liquids Pipelines, Gas Transmission and Gas Distribution and Storage reporting units and did not identify impairment indicators.
On April 1, 2023, we performed our annual goodwill impairment assessment which consisted of a qualitative assessment for the Liquids Pipelines, Gas Transmission, Gas Distribution and Storage, and Renewable Power Generation reporting units and did not identify impairment indicators.
If there is objective evidence of impairment, we determine whether the decline below carrying value is other than temporary. If the decline is determined to be other than temporary, an impairment charge is recorded in earnings with an offsetting reduction to the carrying value of the investment.
If there is objective evidence of impairment, we determine whether the decline below carrying value is other-than-temporary. If the decline is determined to be other-than-temporary, an impairment charge is recorded in earnings with an offsetting reduction to the carrying value of the investment. Asset fair value is determined using present value techniques.
On March 25, 2020, in response to amended complaints from the Tribes, the District Court found the Army Corps’ environmental review on remand was deficient and ordered the Army Corps to prepare an Environmental Impact Statement (EIS) to address unresolved controversy pertaining to potential spill impacts resulting from DAPL.
On March 25, 2020, in response to amended complaints from the Tribes, the District Court found that the Army Corps' subsequent environmental review completed in August 2018 was also deficient and ordered the Army Corps to prepare an Environmental Impact Statement (EIS) to address unresolved controversy pertaining to potential spill impacts resulting from DAPL.
We measure assets classified as held for sale at the lower of their carrying value and their estimated fair value less costs to sell. 85 REGULATORY ACCOUNTING Certain of our businesses are subject to regulation by various authorities, including but not limited to, the CER, the FERC, the Alberta Energy Regulator, La Régie de l’energie du Québec and the OEB.
We measure assets classified as held for sale at the lower of their carrying value and their estimated fair value less costs to sell. 93 REGULATORY ACCOUNTING Certain parts of our businesses are subject to regulation by various authorities including, but not limited to, the CER, the FERC, the Alberta Energy Regulator, the BC Energy Regulator, the OEB and the Québec Régie de l'énergie.
Refer to Part II. Item 8. Financial Statements and Supplementary Data - Note 29. Changes in Operating Assets and Liabilities. Cash provided by operating activities is also impacted by changes in earnings and certain infrequent or other non-operating factors, as discussed under Results of Operations.
Refer to Part II. Item 8. Financial Statements and Supplementary Data - Note 28. Changes in Operating Assets and Liabilities. Cash provided by operating activities is also impacted by changes in earnings and certain infrequent or other non-operating factors, as discussed under Results of Operations, as well as Distributions from equity investments.
As at December 31, 2022, our net available liquidity totaled $10.0 billion (2021 - $6.5 billion), consisting of available credit facilities of $9.1 billion (2021 - $6.2 billion) and unrestricted Cash and cash equivalents of $861 million (2021 - $286 million) as reported in the Consolidated Statements of Financial Position.
As at December 31, 2023, our net available liquidity totaled $23.0 billion (2022 - $10.0 billion), consisting of available credit facilities of $17.1 billion (2022 - $9.1 billion) and unrestricted Cash and cash equivalents of $5.9 billion (2022 - $861 million) as reported in the Consolidated Statements of Financial Position.
We do not have material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 76 PREFERENCE SHARE ISSUANCES Characteristics of our outstanding preference shares are as follows: Dividend Rate Dividend 1 Per Share Base Redemption Value 2 Redemption and Conversion Option Date 2,3 Right to Convert Into 3,4 (Canadian dollars, unless otherwise stated) Preference Shares, Series A 5.50 % $1.37500 $25 — — Preference Shares, Series B 5 5.20 % $1.30052 $25 June 1, 2027 Series C Preference Shares, Series D 4.46 % $1.11500 $25 March 1, 2023 Series E Preference Shares, Series F 4.69 % $1.17224 $25 June 1, 2023 Series G Preference Shares, Series H 4.38 % $1.09400 $25 September 1, 2023 Series I Preference Shares, Series L 6 5.86 % US$1.46448 US$25 September 1, 2027 Series M Preference Shares, Series N 5.09 % $1.27152 $25 December 1, 2023 Series O Preference Shares, Series P 4.38 % $1.09476 $25 March 1, 2024 Series Q Preference Shares, Series R 4.07 % $1.01825 $25 June 1, 2024 Series S Preference Shares, Series 1 5.95 % US$1.48728 US$25 June 1, 2023 Series 2 Preference Shares, Series 3 3.74 % $0.93425 $25 September 1, 2024 Series 4 Preference Shares, Series 5 5.38 % US$1.34383 US$25 March 1, 2024 Series 6 Preference Shares, Series 7 4.45 % $1.11224 $25 March 1, 2024 Series 8 Preference Shares, Series 9 4.10 % $1.02424 $25 December 1, 2024 Series 10 Preference Shares, Series 11 3.94 % $0.98452 $25 March 1, 2025 Series 12 Preference Shares, Series 13 3.04 % $0.76076 $25 June 1, 2025 Series 14 Preference Shares, Series 15 2.98 % $0.74576 $25 September 1, 2025 Series 16 Preference Shares, Series 19 4.90 % $1.22500 $25 March 1, 2023 Series 20 1 The holder is entitled to receive a fixed, cumulative, quarterly preferential dividend, as declared by the Board of Directors.
We do not have material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 83 OUTSTANDING PREFERENCE SHARES Characteristics of our outstanding preference shares are as follows: Dividend Rate Dividend 1 Per Share Base Redemption Value 2 Redemption and Conversion Option Date 2,3 Right to Convert Into 3,4 (Canadian dollars unless otherwise stated) Preference Shares, Series A 5.50 % $1.37500 $25 — — Preference Shares, Series B 5.20 % $1.30052 $25 June 1, 2027 Series C Preference Shares, Series D 5 5.41 % $1.35300 $25 March 1, 2028 Series E Preference Shares, Series F 6 5.54 % $1.38452 $25 June 1, 2028 Series G Preference Shares, Series G 7 6.96 % $1.90704 $25 June 1, 2028 Series F Preference Shares, Series H 8 6.11 % $1.52800 $25 September 1, 2028 Series I Preference Shares, Series I 9 7.19 % $1.81004 $25 September 1, 2028 Series H Preference Shares, Series L 5.86 % US$1.46448 US$25 September 1, 2027 Series M Preference Shares, Series N 6.70 % $1.67400 $25 December 1, 2028 Series O Preference Shares, Series P 4.38 % $1.09476 $25 March 1, 2024 Series Q Preference Shares, Series R 4.07 % $1.01825 $25 June 1, 2024 Series S Preference Shares, Series 1 10 6.70 % US$1.67592 US$25 June 1, 2028 Series 2 Preference Shares, Series 3 3.74 % $0.93425 $25 September 1, 2024 Series 4 Preference Shares, Series 5 5.38 % US$1.34383 US$25 March 1, 2024 Series 6 Preference Shares, Series 7 4.45 % $1.11224 $25 March 1, 2024 Series 8 Preference Shares, Series 9 4.10 % $1.02424 $25 December 1, 2024 Series 10 Preference Shares, Series 11 3.94 % $0.98452 $25 March 1, 2025 Series 12 Preference Shares, Series 13 3.04 % $0.76076 $25 June 1, 2025 Series 14 Preference Shares, Series 15 2.98 % $0.74576 $25 September 1, 2025 Series 16 Preference Shares, Series 19 11 6.21 % $1.55300 $25 March 1, 2028 Series 20 1 The holder is entitled to receive a fixed cumulative quarterly preferential dividend, as declared by the Board of Directors.
Regulatory liabilities represent amounts that are expected to be refunded to customers in future periods through rates or expected to be paid to cover future abandonment costs in relation to the CER’s Land Matters Consultation Initiative (LMCI) and for future removal and site restoration costs as approved by the OEB.
Regulatory liabilities represent amounts that are expected to be refunded to customers in future periods through rates, amounts collected from customers in advance of costs being incurred, or to be paid to cover future abandonment costs in relation to the CER's Land Matters Consultation Initiative (LMCI) and for future removal and site restoration costs as approved by the regulator.
In September and December 2022, the October 1, 2022 and January 1, 2023 QRAM applications were filed and approved by the OEB with no adjustments to the prior period rate mitigation plans and did not include any additional rate mitigation measures. As at December 31, 2022, Enbridge Gas' PGVA receivable balance was $434 million.
In June, September and December 2023, the July 1, 2023, October 1, 2023, and January 1, 2024 QRAM applications, respectively, were filed and approved by the OEB with no adjustments to the prior period rate mitigation plans and did not include any additional rate mitigation measures. As at December 31, 2023, Enbridge Gas' PGVA liability balance was $16 million.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Enbridge common stock is traded on the TSX and NYSE under the symbol ENB. As at February 3, 2023, there were 76,001 registered shareholders of record of Enbridge common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Enbridge common stock is traded on the TSX and NYSE under the symbol ENB. As at February 2, 2024, there were 73,123 registered shareholders of record of Enbridge common stock.
While fully supportable in our view, these tax positions, if challenged by tax authorities, may not be fully sustained on review. 83 CRITICAL ACCOUNTING ESTIMATES Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP), which require management to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
While fully supportable in our view, these tax positions, if challenged by tax authorities, may not be fully sustained on review. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements are prepared in accordance with US GAAP, which requires management to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
SOURCES AND USES OF CASH Year ended December 31, 2022 2021 2020 (millions of Canadian dollars) Operating activities 11,230 9,256 9,781 Investing activities (5,270) (10,657) (5,177) Financing activities (5,428) 1,236 (4,770) Effect of translation of foreign denominated cash and cash equivalents and restricted cash 55 (5) (20) Net change in cash and cash equivalents and restricted cash 587 (170) (186) 74 Significant sources and uses of cash for the years ended December 31, 2022 and 2021 are summarized below: Operating Activities Typically, the primary factors impacting cash flow from operating activities year-over-year include changes in our operating assets and liabilities in the normal course due to various factors, including the impact of fluctuations in commodity prices and activity levels on working capital within our business segments, the timing of tax payments, as well as timing of cash receipts and payments generally.
SOURCES AND USES OF CASH Year ended December 31, 2023 2022 2021 (millions of Canadian dollars) Operating activities 14,201 11,230 9,256 Investing activities (6,043) (5,270) (10,657) Financing activities (2,864) (5,428) 1,236 Effect of translation of foreign denominated cash and cash equivalents and restricted cash (216) 55 (5) Net change in cash and cash equivalents and restricted cash 5,078 587 (170) Significant sources and uses of cash for the years ended December 31, 2023 and 2022 are summarized below: Operating Activities Typically, the primary factors impacting cash provided by operating activities year-over-year include changes in our operating assets and liabilities in the normal course due to various factors, including the impact of fluctuations in commodity prices and activity levels on working capital within our business segments, the timing of tax payments, as well as timing of cash receipts and payments generally.
Rule 3-10 of the US Securities and Exchange Commission's (SEC) Regulation S-X provides an exemption from the reporting requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act) for fully consolidated subsidiary issuers of guaranteed securities and subsidiary guarantors and allows for summarized financial information in lieu of filing separate financial statements for each of the Partnerships. 79 The following Summarized Combined Statement of Earnings and the Summarized Combined Statements of Financial Position combines the balances of EEP, SEP and Enbridge.
Rule 3-10 of the US Securities and Exchange Commission's (SEC) Regulation S-X provides an exemption from the reporting requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act) for fully consolidated subsidiary issuers of guaranteed securities and subsidiary guarantors and allows for summarized financial information in lieu of filing separate financial statements for each of the Partnerships.
While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the date of acquisition, as well as any contingent consideration, our estimates are inherently uncertain and subject to refinement.
Goodwill represents the excess of the purchase price over the fair value of net identifiable assets. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the date of acquisition, as well as any contingent consideration, our estimates are inherently uncertain and subject to refinement.
The corresponding liability is accreted over time through charges to earnings and is reduced by actual costs of decommissioning and reclamation. Our estimates of retirement costs could change as a result of changes in cost estimates and regulatory requirements.
ARO is added to the carrying value of the associated asset and depreciated over the asset's useful life. The corresponding liability is accreted over time through charges to earnings and is reduced by actual costs of decommissioning and reclamation. Our estimates of retirement costs could change as a result of changes in cost estimates and regulatory requirements.
Enbridge Notes under Guarantees USD Denominated 1 CAD Denominated 2 Floating Rate Senior Notes due 2023 3.940% Senior Notes due 2023 Floating Rate Senior Notes due 2024 3.940% Senior Notes due 2023 4.000% Senior Notes due 2023 3.950% Senior Notes due 2024 0.550% Senior Notes due 2023 2.440% Senior Notes due 2025 3.500% Senior Notes due 2024 3.200% Senior Notes due 2027 2.150% Senior Notes due 2024 5.700% Senior Notes due 2027 2.500% Senior Notes due 2025 6.100% Senior Notes due 2028 2.500% Senior Notes due 2025 2.990% Senior Notes due 2029 4.250% Senior Notes due 2026 7.220% Senior Notes due 2030 1.600% Senior Notes due 2026 7.200% Senior Notes due 2032 3.700% Senior Notes due 2027 6.100% Sustainability-Linked Senior Notes due 2032 3.125% Senior Notes due 2029 3.100% Sustainability-Linked Senior Notes due 2033 2.500% Sustainability-Linked Senior Notes due 2033 5.570% Senior Notes due 2035 4.500% Senior Notes due 2044 5.750% Senior Notes due 2039 5.500% Senior Notes due 2046 5.120% Senior Notes due 2040 4.000% Senior Notes due 2049 4.240% Senior Notes due 2042 3.400% Senior Notes due 2051 4.570% Senior Notes due 2044 4.870% Senior Notes due 2044 4.100% Senior Notes due 2051 6.510% Senior Notes due 2052 4.560% Senior Notes due 2064 1 As at December 31, 2022, the aggregate outstanding principal amount of the Enbridge US dollar denominated notes was approximately US$11.0 billion. 2 As at December 31, 2022, the aggregate outstanding principal amount of the Enbridge Canadian dollar denominated notes was approximately $10.2 billion.
Consenting SEP notes and EEP notes under Guarantee SEP Notes 1 EEP Notes 2 4.750% Senior Notes due 2024 5.875% Notes due 2025 3.500% Senior Notes due 2025 5.950% Notes due 2033 3.375% Senior Notes due 2026 6.300% Notes due 2034 5.950% Senior Notes due 2043 7.500% Notes due 2038 4.500% Senior Notes due 2045 5.500% Notes due 2040 7.375% Notes due 2045 1 As at December 31, 2023, the aggregate outstanding principal amount of SEP notes was approximately US$3.2 billion. 2 As at December 31, 2023, the aggregate outstanding principal amount of EEP notes was approximately US$2.4 billion. 86 Enbridge Notes under Guarantees USD Denominated 1 CAD Denominated 2 Floating Rate Senior Notes due 2024 3.950% Medium-term Notes due 2024 3.500% Senior Notes due 2024 2.440% Medium-term Notes due 2025 2.150% Senior Notes due 2024 3.200% Medium-term Notes due 2027 2.500% Senior Notes due 2025 5.700% Medium-term Notes due 2027 2.500% Senior Notes due 2025 6.100% Medium-term Notes due 2028 4.250% Senior Notes due 2026 4.900% Medium-term Notes due 2028 1.600% Senior Notes due 2026 2.990% Medium-term Notes due 2029 5.969% Senior Notes due 2026 7.220% Medium-term Notes due 2030 5.900% Senior Notes due 2026 7.200% Medium-term Notes due 2032 3.700% Senior Notes due 2027 6.100% Sustainability-Linked Medium-term Notes due 2032 6.000% Senior Notes due 2028 3.100% Sustainability-Linked Medium-term Notes due 2033 3.125% Senior Notes due 2029 5.360% Sustainability-Linked Medium-term Notes due 2033 6.200% Senior Notes due 2030 5.570% Medium-term Notes due 2035 2.500% Sustainability-Linked Senior Notes due 2033 5.750% Medium-term Notes due 2039 5.700% Sustainability-Linked Senior Notes due 2033 5.120% Medium-term Notes due 2040 4.500% Senior Notes due 2044 4.240% Medium-term Notes due 2042 5.500% Senior Notes due 2046 4.570% Medium-term Notes due 2044 4.000% Senior Notes due 2049 4.870% Medium-term Notes due 2044 3.400% Senior Notes due 2051 4.100% Medium-term Notes due 2051 6.700% Senior Notes due 2053 6.510% Medium-term Notes due 2052 5.760% Medium-term Notes due 2053 4.560% Medium-term Notes due 2064 1 As at December 31, 2023, the aggregate outstanding principal amount of the Enbridge US dollar denominated notes was approximately US$15.7 billion. 2 As at December 31, 2023, the aggregate outstanding principal amount of the Enbridge Canadian dollar denominated notes was approximately $11.0 billion.
Based on our assessment of qualitative factors, if we determine it is more likely than not that the fair value of the reporting unit is less than its carrying amount, a quantitative goodwill impairment assessment is performed. 84 The quantitative goodwill impairment assessment involves determining the fair value of our reporting units and comparing those values to the carrying value of each reporting unit.
Based on our assessment of qualitative factors, if we determine it is more likely than not that the fair value of the reporting unit is less than its carrying amount, a quantitative goodwill impairment assessment is performed.
Purchases may be made through the facilities of the TSX, the NYSE and other designated exchanges and alternative trading systems. 58 Total Shareholder Return The following graph reflects the comparative changes in the value from January 1, 2018 through December 31, 2022 of $100 invested in (1) Enbridge Inc.’s common shares traded on the TSX, (2) the S&P/TSX Composite index, (3) the S&P 500 index, (4) our US peer group (comprising, by stock symbols, CNP, D, DTE, DUK, EPD, ET, KMI, MMP, NEE, NI, OKE, PAA, PCG, SO, SRE and WMB) and (5) our Canadian peer group (comprising, by stock symbols, CU, FTS, PPL and TRP).
Our NCIB permitted us to purchase, for cancellation, up to 27,938,163 of the outstanding common shares of Enbridge to an aggregate amount of up to $1.5 billion through the facilities of the TSX, the NYSE and other designated exchanges and alternative trading systems. 63 Total Shareholder Return The following graph reflects the comparative changes in the value from January 1, 2019 through December 31, 2023 of $100 invested in (1) Enbridge Inc.’s common shares traded on the TSX, (2) the S&P/TSX Composite index, (3) the S&P 500 index, (4) our US peer group (comprising, by stock symbols, CNP, D, DTE, DUK, EPD, ET, KMI, MMP, NEE, NI, OKE, PAA, PCG, SO, SRE and WMB) and (5) our Canadian peer group (comprising, by stock symbols, CU, FTS, PPL and TRP).
The determination of fair value using the discounted cash flow technique requires the use of estimates and assumptions related to discount rates, projected operating income, expected future capital expenditures and working capital levels, as well as terminal value growth rates for the Liquids Pipelines, Gas Transmission and Renewable Power Generation reporting units, and projected regulatory rate base and rate base multiplier for the Gas Distribution and Storage reporting unit.
The determination of fair value using the discounted cash flow technique requires the use of estimates and assumptions related to discount rates, projected operating income, expected future capital expenditures and working capital levels, as well as terminal value growth rates for the Liquids Pipelines, Gas Transmission, and Renewable Power Generation reporting units, and projected regulatory rate base and rate base multiple for the Gas Distribution and Storage reporting unit. 92 The allocation of goodwill to held-for-sale and disposed businesses is based on the relative fair value of businesses included in the relevant reporting unit.
RESULTS OF OPERATIONS Year ended December 31, 2022 2021 2020 (millions of Canadian dollars, except per share amounts) Segment earnings/(loss) before interest, income taxes and depreciation and amortization 1 Liquids Pipelines 8,364 7,897 7,683 Gas Transmission and Midstream 3,126 3,671 1,087 Gas Distribution and Storage 1,827 2,117 1,748 Renewable Power Generation 262 508 523 Energy Services (417) (313) (236) Eliminations and Other (1,124) 356 (113) Earnings before interest, income taxes and depreciation and amortization 1 12,038 14,236 10,692 Depreciation and amortization (4,317) (3,852) (3,712) Interest expense (3,179) (2,655) (2,790) Income tax expense (1,604) (1,415) (774) (Earnings)/loss attributable to noncontrolling interests and redeemable noncontrolling interests 65 (125) (53) Preference share dividends (414) (373) (380) Earnings attributable to common shareholders 2,589 5,816 2,983 Earnings per common share attributable to common shareholders 1.28 2.87 1.48 Diluted earnings per common share attributable to common shareholders 1.28 2.87 1.48 1 Non-GAAP financial measures.
RESULTS OF OPERATIONS Year ended December 31, 2023 2022 2021 (millions of Canadian dollars, except per share amounts) Segment earnings/(loss) before interest, income taxes and depreciation and amortization 1 Liquids Pipelines 9,499 8,364 7,897 Gas Transmission and Midstream 4,264 3,126 3,671 Gas Distribution and Storage 1,592 1,827 2,117 Renewable Power Generation 149 262 508 Energy Services (37) (417) (313) Eliminations and Other 837 (1,124) 356 Earnings before interest, income taxes and depreciation and amortization 1 16,304 12,038 14,236 Depreciation and amortization (4,613) (4,317) (3,852) Interest expense (3,812) (3,179) (2,655) Income tax expense (1,821) (1,604) (1,415) (Earnings)/loss attributable to noncontrolling interests and redeemable noncontrolling interests 133 65 (125) Preference share dividends (352) (414) (373) Earnings attributable to common shareholders 5,839 2,589 5,816 Earnings per common share attributable to common shareholders 2.84 1.28 2.87 Diluted earnings per common share attributable to common shareholders 2.84 1.28 2.87 1 Non-GAAP financial measures.
For all other series of preference shares, we may at our option, redeem all or a portion of the outstanding preference shares for the Base Redemption Value per share plus all accrued and unpaid dividends on the Redemption Option Date and on every fifth anniversary thereafter. 3 The holder will have the right, subject to certain conditions, to convert their shares into Cumulative Redeemable Preference Shares of a specified series on a one-for-one basis on the Conversion Option Date and every fifth anniversary thereafter at an ascribed issue price equal to the Base Redemption Value. 4 With the exception of Preference Shares, Series A, after the redemption and conversion option dates, holders may elect to receive quarterly floating rate cumulative dividends per share at a rate equal to: $25 x (number of days in quarter/number of days in year) x Three-Month Government of Canada treasury bill rate + 2.4% (Series C), 2.4% (Series E), 2.5% (Series G), 2.1% (Series I), 2.7% (Series O), 2.5% (Series Q), 2.5% (Series S), 2.4% (Series 4), 2.6% (Series 8), 2.7% (Series 10), 2.6% (Series 12), 2.7% (Series 14), 2.7% (Series 16), or 3.2% (Series 20); or US$25 x (number of days in quarter/number of days in year) x Three-Month US Government treasury bill rate + 3.2% (Series M), 3.1% (Series 2) or 2.8% (Series 6). 5 The quarterly dividend per share paid on Preference Shares, Series B was increased to $0.32513 from $0.21340 on June 1, 2022 due to reset of the annual dividend on June 1, 2022.
For all other series of preference shares, we may at our option, redeem all or a portion of the outstanding preference shares for the Per Share Base Redemption Value plus all accrued and unpaid dividends on the Redemption Option Date and on every fifth anniversary thereafter. 3 The holder will have the right, subject to certain conditions, to convert their shares into Cumulative Redeemable Preference Shares of a specified series on a one-for-one basis on the Conversion Option Date and every fifth anniversary thereafter at an ascribed issue price equal to the Per Share Base Redemption Value. 4 With the exception of Preference Shares, Series A, after the Redemption and Conversion Option Date, holders may elect to receive quarterly floating rate cumulative dividends per share at a rate equal to: $25 x (number of days in quarter/number of days in year) x three month Government of Canada treasury bill rate + 2.4% (Series C), 2.4% (Series E), 2.5% (Series G), 2.1% (Series I), 2.7% (Series O), 2.5% (Series Q), 2.5% (Series S), 2.4% (Series 4), 2.6% (Series 8), 2.7% (Series 10), 2.6% (Series 12), 2.7% (Series 14), 2.7% (Series 16), or 3.2% (Series 20); or US$25 x (number of days in quarter/number of days in year) x three month US Government treasury bill rate + 3.2% (Series M), 3.1% (Series 2), or 2.8% (Series 6). 5 The quarterly dividend per share paid on Preference Shares, Series D was increased to $0.33825 from $0.27875 on March 1, 2023 due to reset of the annual dividend on March 1, 2023. 6 The quarterly dividend per share paid on Preference Shares, Series F was increased to $0.34613 from $0.29306 on June 1, 2023 due to reset of the annual dividend on June 1, 2023. 7 On June 1, 2023, 1,827,695 of the outstanding Preference Shares, Series F were converted into Preference Shares, Series G. 8 The quarterly dividend per share paid on Preference Shares, Series H was increased to $0.38200 from $0.27350 on September 1, 2023 due to reset of the annual dividend on September 1, 2023. 9 On September 1, 2023, 2,350,602 of the outstanding Preference Shares, Series H were converted into Preference Shares, Series I. 10 The quarterly dividend per share paid on Preference Shares, Series 1 was increased to US$0.41898 from US$0.37182 on June 1, 2023 due to reset of the annual dividend on June 1, 2023. 11 The quarterly dividend per share paid on Preference Shares, Series 19 was increased to $0.38825 from $0.30625 on March 1, 2023 due to reset of the annual dividend on March 1, 2023. 84 DIVIDENDS We have paid common share dividends in every year since we became a publicly traded company in 1953.
August 2022 Medium-term notes $650 Texas Eastern Transmission LP December 2022 Senior notes US$600 Credit Facilities, Ratings and Liquidity To ensure ongoing liquidity and to mitigate the risk of capital market disruption, we maintain ready access to funds through committed bank credit facilities and actively manage our bank funding sources to optimize pricing and other terms.
August 2023 Medium-term notes $350 79 Credit Facilities, Ratings and Liquidity To ensure ongoing liquidity and to mitigate the risk of capital market disruption, we maintain ready access to funds through committed bank credit facilities and actively manage our bank funding sources to optimize pricing and other terms.
The following sensitivity analysis identifies the impact on the December 31, 2022 Consolidated Financial Statements of a 0.5% change in key pension and other postretirement benefit (OPEB) obligation assumptions: Canada United States Obligation Expense Obligation Expense (millions of Canadian dollars) Pension Decrease in discount rate 243 27 49 3 Decrease in expected return on assets — 23 — 6 Decrease in rate of salary increase (47) (11) (5) (1) OPEB Decrease in discount rate 13 1 5 — Decrease in expected return on assets N/A N/A — 1 CONTINGENT LIABILITIES Provisions for claims filed against us are determined on a case-by-case basis.
The following sensitivity analysis identifies the impact on the consolidated financial statements for the year ended December 31, 2023 of a 0.5% change in key pension and other postretirement benefits (OPEB) obligation assumptions: Canada United States Obligation Expense Obligation Expense (millions of Canadian dollars) Pension Decrease in discount rate 297 12 52 3 Decrease in expected return on assets — 21 — 5 Decrease in rate of salary increase (60) (5) (5) (1) OPEB Decrease in discount rate 15 1 5 — Decrease in expected return on assets N/A N/A — 1 95 CONTINGENT LIABILITIES Provisions for claims filed against us are determined on a case-by-case basis.
For discussion of 2020 items and year-over-year comparisons between 2021 and 2020, refer to Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2021. RECENT DEVELOPMENTS Chair of the Board and CEO Appointments Pamela L.
For discussion of 2021 items and year-over-year comparisons between 2022 and 2021, refer to Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022. RECENT DEVELOPMENTS MAINLINE TOLLING AGREEMENT Enbridge Inc.
For the years ended December 31, 2022 and 2021, total dividends paid were $7.0 billion and $6.8 billion, respectively, all of which were paid in cash and reflected in financing activities. 77 On November 29, 2022, our Board of Directors declared the following quarterly dividends.
For the years ended December 31, 2023 and 2022, total dividends paid were $7.3 billion and $7.0 billion, respectively, all of which were paid in cash and reflected in Cash Flows from Financing Activities in the Consolidated Statements of Cash Flows . On November 28, 2023, our Board of Directors declared the following quarterly dividends.
Our current financing plan does not include any issuances of common equity. 72 CAPITAL MARKET ACCESS We ensure ready access to capital markets, subject to market conditions, through maintenance of shelf prospectuses that allow for issuance of long-term debt, equity and other forms of long-term capital when market conditions are attractive.
CAPITAL MARKET ACCESS We ensure ready access to capital markets, subject to market conditions, through maintenance of shelf prospectuses that allow for issuance of long-term debt, equity and other forms of long-term capital when market conditions are attractive.
On August 30, 2022, the AG filed a motion to certify the US District Court’s August 18 Order to pursue an appeal on the jurisdictional issue, which Enbridge opposed. We anticipate a decision on the jurisdictional issue in 2023.
On August 30, 2022, the AG filed a motion to certify the August 18 Order to pursue an appeal on the jurisdictional issue, which Enbridge opposed.
Enbridge designed, fabricated, installed, and now operates, the Vito Gas & Oil export pipeline system consisting of pipeline and steel catenary riser. 70 The following commercially secured growth projects are currently in various stages of construction: • Texas Eastern Venice Extension Project – A reversal and expansion of Texas Eastern’s Line 40 from its existing New Roads compressor station to a new delivery point with the proposed Gator Express pipeline just south of Texas Eastern’s Larose compressor station.
GAS TRANSMISSION AND MIDSTREAM The following commercially secured growth projects are currently in various stages of construction: • Texas Eastern Venice Extension Project – A reversal and expansion of Texas Eastern’s Line 40 from its existing New Roads compressor station to a new delivery point with the proposed Gator Express pipeline just south of Texas Eastern’s Larose compressor station.
Our financing plan is regularly updated to reflect evolving capital requirements and financial market conditions and identifies a variety of potential sources of debt and equity funding alternatives.
Our financing plan is regularly updated to reflect evolving capital requirements and financial market conditions and identifies a variety of potential sources of debt and equity funding alternatives, including reinstatement of our dividend reinvestment and share purchase plan or at-the-market equity issuances.
Our credit facility agreements and term debt indentures include standard events of default and covenant provisions, whereby accelerated repayment and/or termination of the agreements may result if we were to default on payment or violate certain covenants. As at December 31, 2022, we were in compliance with all debt covenants and expect to continue to comply with such covenants.
Our credit facility agreements and term debt indentures include standard events of default and covenant provisions, whereby accelerated repayment and/or termination of the agreements may result if we were to default on payment or violate certain covenants.
Revenues from these operations depend on activity levels, which vary from year-to-year depending on market conditions and commodity prices. Our revenues also include changes in unrealized derivative fair value gains and losses related to foreign exchange and commodity price contracts used to manage exposures from movements in foreign exchange rates and commodity prices.
Our revenues also include changes in unrealized derivative fair value gains and losses related to foreign exchange and commodity price contracts used to manage exposures from movements in foreign exchange rates and commodity prices.
The application and framework seek approval to establish 2024 base rates on a cost-of-service basis and to establish a price cap IR rate setting mechanism to be used for the remainder of the IR term (2025-2028).
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.
LIQUIDITY AND CAPITAL RESOURCES The maintenance of financial strength and flexibility is fundamental to our growth strategy, particularly in light of the significant number and size of capital projects currently secured or under development.
Project revenues are underpinned by a 20-year fixed price PPA. 78 LIQUIDITY AND CAPITAL RESOURCES The maintenance of financial strength and flexibility is fundamental to our growth strategy, particularly in light of the significant number and size of capital projects and acquisitions currently secured or under development.
After taking into consideration the non-operating factors above, we saw a $239 million decrease in EBITDA that is primarily explained by: • the lower realized foreign exchange gains on hedge settlements in 2022; and • higher Operating and administrative expense largely driven by an increase in employee costs. 69 GROWTH PROJECTS - COMMERCIALLY SECURED PROJECTS The following table summarizes the status of our significant commercially secured projects, organized by business segment: Enbridge's Ownership Interest Estimated Capital Cost 1 Expenditures to Date 2 Status 2 Expected In-Service Date (Canadian dollars, unless stated otherwise) GAS TRANSMISSION AND MIDSTREAM 1.
After taking into consideration the non-operating factors above, we saw a $18 million increase in EBITDA that is primarily explained by higher investment income from the pre-funding of the Acquisitions. 76 GROWTH PROJECTS - COMMERCIALLY SECURED PROJECTS The following table summarizes the status of our significant commercially secured projects, organized by business segment: Enbridge's Ownership Interest Estimated Capital Cost 1 Expenditures to Date 2 Status 2 Expected In-Service Date (Canadian dollars, unless stated otherwise) GAS TRANSMISSION AND MIDSTREAM 1.
Excluding current maturities of long-term debt, as at December 31, 2022 and 2021, we had a negative working capital position of $2.1 billion and $3.1 billion, respectively. In both periods, the major contributing factor to the negative working capital position was the current liabilities associated with our growth capital program.
Excluding current maturities of long-term debt, as at December 31, 2023 and 2022, we had a positive and negative working capital positions of $3.0 billion and $2.1 billion, respectively. In 2023, the major contributing factor to the positive working capital position was the increase in cash associated with pre-funding of the Acquisitions.
DEPRECIATION Depreciation of property, plant and equipment, our largest asset with a net book value at December 31, 2022 and 2021, of $104.5 billion and $100.1 billion, respectively, is charged in accordance with two primary methods.
As at December 31, 2023 and 2022, our regulatory assets totaled $5.7 billion and $6.5 billion, respectively, and regulatory liabilities totaled $3.8 billion. 94 DEPRECIATION Depreciation of property, plant and equipment, our largest asset with a net book value at December 31, 2023 and 2022, of $104.6 billion and $104.5 billion, respectively, is charged in accordance with two primary methods.
As at December 31, 2022, after adjusting for the impact of floating-to-fixed interest rate swap hedges, approximately 6% of our total debt is exposed to floating rates. Refer to Part II. Item 8. Financial Statements and Supplementary Data - Note 24.
As at December 31, 2023, 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 II. Item 8.
While not an issue before the US Court of Appeals, the US Court of Appeals also recognized that the Army Corps could consider whether to allow DAPL to continue to operate in the absence of an easement.
While not an issue before, the US Court of Appeals also recognized that the Army Corps could consider whether to allow DAPL to continue to operate in the absence of an easement. The Army Corps earlier indicated that it did not intend to exercise its authority to bar DAPL's continued operation, notwithstanding the absence of an easement.
Goodwill impairments were not identified in relation to the Liquids Pipelines, Gas Distribution, or Renewable Power Generation reporting units. ASSET IMPAIRMENT We evaluate the recoverability of our property, plant and equipment when events or circumstances such as economic obsolescence, business climate, legal or regulatory changes, or other factors indicate we may not recover the carrying amount of our assets.
ASSET IMPAIRMENT We evaluate the recoverability of our property, plant and equipment when events or circumstances, such as economic obsolescence, business climate, legal or regulatory changes, or other factors, indicate that we may not recover the carrying amount of our assets.
With the exception of Preference Shares, Series A, such fixed dividend rate resets every five years beginning on the initial redemption and conversion option date. The Preference Shares, Series 19 contain a feature where the fixed dividend rate, when reset every five years, will not be less than 4.90%.
With the exception of Preference Shares, Series A, such fixed dividend rate resets every five years beginning on the initial Redemption and Conversion Option Date. Preference Shares, Series G and I contain a feature where the dividend rate resets on a quarterly basis.
A summary of additions to property, plant and equipment for the years ended December 31, 2022, 2021 and 2020 is set out below: Year ended December 31, 2022 2021 2020 (millions of Canadian dollars) Liquids Pipelines 1,418 4,051 2,032 Gas Transmission and Midstream 1,647 2,353 2,066 Gas Distribution and Storage 1,499 1,343 1,134 Renewable Power Generation 50 16 81 Energy Services — 1 2 Eliminations and Other 33 54 90 Total capital expenditures 4,647 7,818 5,405 2022 The decrease in cash used in investing activities primarily resulted from the following factors: • lower capital expenditures due to the US L3R Program that was placed into service in the fourth quarter of 2021; • lower cash outflows related to acquisitions in 2022 when compared to 2021; and • proceeds received from the completion of a joint venture merger transaction for DCP Midstream LLC in August 2022.
Cash used in investing activities is also impacted by acquisitions and dispositions as discussed under Recent Developments, and changes in contributions to, and distributions from, our equity investments. 81 A summary of additions to property, plant and equipment for the years ended December 31, 2023, 2022 and 2021 is set out below: Year ended December 31, 2023 2022 2021 (millions of Canadian dollars) Liquids Pipelines 1,158 1,418 4,051 Gas Transmission and Midstream 1,890 1,647 2,353 Gas Distribution and Storage 1,451 1,499 1,343 Renewable Power Generation 100 50 16 Energy Services — — 1 Eliminations and Other 55 33 54 Total capital expenditures 4,654 4,647 7,818 2023 The increase in cash used in investing activities primarily resulted from the following factors: • the absence in 2023 of the proceeds received from the completion of a joint venture merger transaction for DCP Midstream, LLC in August 2022; and • higher cash outflows related to acquisitions in 2023 when compared to 2022.
Year ended December 31, 2022 compared with year ended December 31, 2021 EBITDA was negatively impacted by $1.2 billion due to certain infrequent or non-operating factors, primarily explained by: • non-cash, net unrealized losses of $1,090 million in 2022, compared with unrealized gains of $55 million in 2021, reflecting the change in the mark-to-market value of derivative financial instruments used to manage foreign exchange risk; • a transaction cost of $114 million in relation to our investment purchase in the Woodfibre LNG project; and • an impairment of $44 million for lease assets due to office relocation plans in Houston.
Year ended December 31, 2023 compared with year ended December 31, 2022 EBITDA was positively impacted by $1.9 billion due to certain infrequent or non-operating factors, primarily explained by: • a non-cash, net unrealized gain of $623 million in 2023, compared with a net unrealized loss of $1,090 million in 2022, reflecting changes in the mark-to-market value of derivative financial instruments used to manage foreign exchange risk; • the absence in 2023 of: $114 million of transaction costs in relation to our investment purchase in the Woodfibre LNG Project, and an impairment of $44 million for lease assets due to office relocation plans; and • a non-cash, net unrealized gain of $35 million in 2023, compared with a net unrealized loss of $25 million in 2022, reflecting changes in the mark-to-market value of equity fund investments held by our wholly-owned captive insurance subsidiaries; partially offset by • transaction costs of $31 million incurred as a result of the Acquisitions.
Summarized Combined Statement of Earnings Year ended December 31, 2022 (millions of Canadian dollars) Operating loss (179) Earnings 1,921 Earnings attributable to common shareholders 1,507 Summarized Combined Statements of Financial Position December 31, 2022 2021 (millions of Canadian dollars) Cash and cash equivalents 425 12 Accounts receivable from affiliates 2,486 3,442 Short-term loans receivable from affiliates 5,232 4,947 Other current assets 969 593 Long-term loans receivable from affiliates 43,873 51,983 Other long-term assets 4,111 3,732 Accounts payable to affiliates 1,375 1,982 Short-term loans payable to affiliates 1,745 2,891 Other current liabilities 8,752 8,110 Long-term loans payable to affiliates 37,626 41,370 Other long-term liabilities 47,447 41,353 The Guaranteed Enbridge Notes and the Guaranteed Partnership Notes are structurally subordinated to the indebtedness of the Subsidiary Non-Guarantors in respect of the assets of those Subsidiary Non-Guarantors.
Summarized Combined Statement of Earnings Year ended December 31, 2023 (millions of Canadian dollars) Operating loss (149) Earnings 4,273 Earnings attributable to common shareholders 3,921 87 Summarized Combined Statements of Financial Position December 31, 2023 2022 (millions of Canadian dollars) Cash and cash equivalents 6,525 425 Accounts receivable from affiliates 3,440 2,486 Short-term loans receivable from affiliates 3,291 5,232 Other current assets 491 969 Long-term loans receivable from affiliates 45,702 43,873 Other long-term assets 3,303 4,111 Accounts payable to affiliates 2,264 1,375 Short-term loans payable to affiliates 807 1,745 Trade payable and accrued liabilities 743 716 Other current liabilities 7,256 8,036 Long-term loans payable to affiliates 35,556 37,626 Other long-term liabilities 52,096 47,447 The Guaranteed Enbridge Notes and the Guaranteed Partnership Notes are structurally subordinated to the indebtedness of the Subsidiary Non-Guarantors in respect of the assets of those Subsidiary Non-Guarantors.
In 2022, our credit ratings with DBRS Morningstar, Fitch Ratings, Moody's Investor Services, Inc. and Standard & Poor's were all affirmed. Key measures of financial strength that are closely managed include the ability to service debt obligations from operating cash flow and the ratio of debt to EBITDA. There are no material restrictions on our cash.
Key measures of financial strength that are closely managed include the ability to service debt obligations from operating cash flow and the ratio of debt to EBITDA. There are no material restrictions on our cash.
The fair value approximates the cost a third party would charge to perform the tasks necessary to retire such assets and is recognized at the present value of expected future cash flows.
Fair value approximates the cost a third party would charge to perform the tasks necessary to retire such assets and is recognized at the present value of expected future cash flows. The discount rates used to estimate the present value of expected future cash flows for the years ended December 31, 2023 and 2022 ranged from 1.5% to 9.0%.
The following table provides details of our committed credit facilities, inclusive of term loans, at December 31, 2022: Maturity 1 Total Facilities Draws 2 Available (millions of Canadian dollars) Enbridge Inc. 2023-2027 10,987 7,984 3,003 Enbridge (U.S.) Inc. 2024-2027 8,604 4,199 4,405 Enbridge Pipelines Inc. 2024 2,000 312 1,688 Enbridge Gas Inc. 2024 2,000 2,000 — Total committed credit facilities 23,591 14,495 9,096 1 Maturity date is inclusive of the one-year term out option for certain credit facilities. 2 Includes facility draws and commercial paper issuances that are back-stopped by credit facilities.
The following table provides details of our committed credit facilities, inclusive of term loans, at December 31, 2023: Maturity 1 Total Facilities Draws 2 Available (millions of Canadian dollars) Enbridge Inc. 2024-2028 8,876 3,177 5,699 Enbridge (U.S.) Inc. 2025-2028 8,373 670 7,703 Enbridge Pipelines Inc. 2025 2,000 449 1,551 Enbridge Gas Inc. 2025 2,500 400 2,100 Total committed credit facilities 21,749 4,696 17,053 1 Maturity date is inclusive of the one-year term out option for certain credit facilities. 2 Includes facility draws and commercial paper issuances that are back-stopped by credit facilities.
In accordance with our funding plan, we completed the following long-term debt issuances totaling US$3.2 billion and $3.4 billion in 2022: Entity Issuance date Type of issuance Amount (in millions of Canadian dollars, unless stated otherwise) Enbridge Inc. January 2022 Fixed-to-fixed subordinated notes $750 Enbridge Inc. February 2022 Floating rate senior notes US$600 Enbridge Inc.
In accordance with our funding plan, we completed the following long-term debt issuances totaling US$8.5 billion and $3.9 billion in 2023: Entity Issuance date Type of issuance Amount (in millions of Canadian dollars, unless stated otherwise) Enbridge Inc. March 2023 Sustainability-linked senior notes US$2,300 Enbridge Inc. March 2023 Senior notes US$700 Enbridge Inc. May 2023 Medium-term notes $1,100 Enbridge Inc.
DIVIDENDS We have paid common share dividends in every year since we became a publicly traded company in 1953. In November 2022, we announced a 3.2% increase in our quarterly dividend to $0.88750 per common share, or $3.55 annualized, effective with the dividend payable on March 1, 2023, thereby declaring a dividend increase for 28 straight years.
In November 2023, we announced a 3.1% increase in our quarterly dividend to $0.9150 per common share, or $3.66 annualized, effective with the dividend payable on March 1, 2024, thereby declaring a dividend increase for 29 straight years.

… 192 more changes not shown on this page.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

93 edited+47 added−34 removed61 unchanged
As such, the financial performance is not significantly impacted by fluctuating power prices arising from supply/demand imbalances or the actions of competing facilities during the term of the applicable contracts.
As such, financial performance is not significantly impacted by fluctuating power prices arising from supply/demand imbalances or the actions of competing facilities during the term of the applicable contracts.
The falling capital and operating costs of wind and solar, combined with their improving capacity factors, are expected to continue the ongoing trend of making renewable energy more competitive and support investment over the long-term, regardless of available government incentives. Generation from renewable sources is expected to double over the next two decades in North America.
Falling capital and operating costs of wind and solar, combined with their improving capacity factors, are expected to continue the ongoing trend of making renewable energy more competitive and support investment over the long-term, regardless of available government incentives. Generation from renewable sources is expected to double over the next two decades in North America.
Diversity Representation Goals PRODUCTIVITY AND DEVELOPMENT We continually invest in our people’s personal and professional development because we recognize their success is our success.
Diversity Representation Goals PRODUCTIVITY AND DEVELOPMENT We continually invest in our people’s personal and professional development and productivity because we recognize their success is our success.
These documents contain detailed disclosure with respect to Westcoast and are publicly available on SEDAR at www.sedar.com. These documents are not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K. ITEM 1A. RISK FACTORS The following risk factors could materially and adversely affect our business, operations, financial results, market price or value of our securities.
These documents contain detailed disclosure with respect to Westcoast and are publicly available on SEDAR+ at www.sedarplus.com. These documents are not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K. ITEM 1A. RISK FACTORS The following risk factors could materially and adversely affect our business, operations, financial results, market price or value of our securities.
The changes demonstrate an increased focus on the implementation of management systems to address key areas, such as emergency management, integrity management, safety, security and environmental protection. The CER also has authority to impose administrative monetary penalties for non-compliance with the regulatory regime it administers, as well as to impose financial requirements for future abandonment and major pipeline releases.
The changes demonstrate an increased focus on the implementation of management systems to address key areas, such as emergency management, integrity management, safety, security and environmental protection. The CER has authority to impose administrative monetary penalties for non-compliance with the regulatory regime it administers, as well as to impose financial requirements for future abandonment and major pipeline releases.
Regulatory or administrative actions by FERC such as rate proceedings, applications to certify construction of new facilities, and depreciation and amortization policies can affect our business, including decreasing tariff rates and revenues and increasing our costs of doing business. 32 In Canada, our pipelines are subject to safety regulations administered by the CER or provincial regulators.
Regulatory or administrative actions by the FERC such as rate proceedings, applications to certify construction of new facilities, and depreciation and amortization policies can affect our business, including decreasing tariff rates and revenues and increasing our costs of doing business. In Canada, our pipelines are subject to safety regulations administered by the CER or provincial regulators.
Energy Services retains dedicated professional staff and has a robust regulatory compliance program (including targeted training) to mitigate these potential risks associated with the business. In the US, commodity marketing is regulated by the Commodity Futures Trading Commission, the SEC, the Federal Trade Commission, the various commodity exchanges, the US Department of Justice and state regulators.
Energy Services retains dedicated professional staff and has a robust regulatory compliance program (including targeted training) to mitigate these potential risks associated with the business. In the US, commodity marketing is regulated by the Commodity Futures Trading Commission, the FERC, the SEC, the Federal Trade Commission, the various commodity exchanges, the US Department of Justice and state regulators.
Any additional governmental actions toward reducing emissions and/or increasing electrification will further accelerate renewable electricity demand growth and electrification across all sectors. On the demand side, North American economic growth over the longer term and the continued electrification and transition to lower-carbon strategies within the residential, transportation and industrial sectors are expected to drive growing electricity demand.
Any additional governmental actions toward reducing emissions and/or increasing electrification will further accelerate renewable electricity demand growth and electrification across all sectors. 32 On the demand side, North American economic growth over the longer term and the continued electrification and transition to lower-carbon strategies within the residential, transportation and industrial sectors are expected to drive growing electricity demand.
Effective January 1, 2022, Enbridge Gas transitioned out of the federal OBPS to the provincial EPS. Enbridge Gas is registered with the Ministry of the Environment, Conservation and Parks as a covered facility under the EPS and has an annual compliance obligation for its facility-related stationary combustion and flaring emissions associated with its transmission and storage operations.
Effective January 1, 2022, Enbridge Gas transitioned out of the federal OBPS to the provincial EPS. Enbridge Gas is registered with the Ontario Ministry of the Environment, Conservation and Parks as a covered facility under the EPS and has an annual compliance obligation for its facility-related stationary combustion and flaring emissions associated with its transmission and storage operations.
In accordance with the provincial GHG regulations, stationary combustion and flaring emissions related to storage and transmission operations were verified in detail by a third-party accredited verifier with no material discrepancies found. Enbridge Gas utilizes emissions data management processes and systems to help with the data capture and mandatory and voluntary reporting needs.
In accordance with the provincial GHG regulations, stationary combustion and flaring emissions related to storage and transmission operations were verified in detail by a third-party accredited verifier with no material discrepancies found. 40 Enbridge Gas utilizes emissions data management processes and systems to help with the data capture and mandatory and voluntary reporting needs.
Enbridge Gas applies to the OEB annually through a Federal Carbon Pricing Program application for approval of just and reasonable rates effective April 1 each year for the Enbridge Gas Distribution Inc. and Union rate zones, to recover the costs associated with the Federal Carbon Charge and EPS Regulation as a pass-through to customers.
Enbridge Gas applies to the OEB annually through a Federal Carbon Pricing Program application for approval of just and reasonable rates effective April 1 each year for the Enbridge Gas Distribution Inc. and Union Gas Limited rate zones, to recover the costs associated with the Federal Carbon Charge and EPS Regulation as a pass-through to customers.
Broadly defined, economic regulatory risk is the risk that governments or regulatory agencies reject proposed commercial arrangements, applications or policies, upon which future and current operations are dependent. Our pipelines are subject to the actions of various regulators, including the CER and the FERC, with respect to the tariffs and tolls.
Broadly defined, economic regulatory risk is the risk that governments or regulatory agencies reject or revise proposed commercial arrangements, applications or policies, upon which future and current operations are dependent. Our pipelines are subject to the actions of various regulators, including the CER and the FERC, with respect to tariffs and tolls.
REGULATION GOVERNMENT REGULATION Pipeline Regulation Our Liquids Pipelines and Gas Transmission and Midstream assets are subject to numerous operational rules and regulations mandated by governments or applicable regulatory authorities, breaches of which could result in fines, penalties, operating restrictions and an overall increase in operating and compliance costs.
REGULATION GOVERNMENT REGULATION Pipeline Regulation Our Liquids Pipelines and Gas Transmission and Midstream assets are subject to numerous operational rules and regulations mandated by governments and applicable regulatory authorities, breaches of which could result in fines, penalties, operating restrictions and an overall increase in operating and compliance costs.
Ebel was appointed President and Chief Executive Officer on January 1, 2023. Mr. Ebel is also a member of the Enbridge Board of Directors. Mr. Ebel served as Chair of the Enbridge Board of Directors following the merger of Enbridge and Spectra Energy Corp (Spectra Energy) in 2017 until January 1, 2023.
Ebel was appointed President and Chief Executive Officer (CEO) on January 1, 2023. Mr. Ebel is also a member of the Enbridge Board of Directors. Mr. Ebel served as Chair of the Enbridge Board of Directors following the merger of Enbridge and Spectra Energy Corp (Spectra Energy) in 2017 until January 1, 2023.
Renewable Power Generation Renewable Power Generation is subject to numerous operational rules and regulations mandated by governments or applicable regulatory authorities, breaches of which could result in fines, penalties, operating restrictions and an overall increase in operating and compliance costs.
Renewable Power Generation Renewable Power Generation is subject to numerous operational rules and regulations mandated by governments and applicable regulatory authorities, breaches of which could result in fines, penalties, operating restrictions and an overall increase in operating and compliance costs.
There are three principal interrelated aspects of the natural gas distribution business in which Enbridge Gas is directly involved: Distribution, Transportation and Storage. Distribution Enbridge Gas’ principal source of revenue arises from distribution of natural gas to customers.
There are three principal interrelated aspects of the natural gas distribution business in which Enbridge Gas is directly involved: Distribution, Transportation and Storage. 27 Distribution Enbridge Gas’ principal source of revenue arises from distribution of natural gas to customers.
These documents are not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K. WESTCOAST ENERGY INC. Additional information about Westcoast can be found in its financial statements and MD&A for the year ended December 31, 2022, which have been filed with the securities commissions or similar authorities in each of the provinces of Canada.
These documents are not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K. WESTCOAST ENERGY INC. Additional information about Westcoast can be found in its financial statements and MD&A for the year ended December 31, 2023, which have been filed with the securities commissions or similar authorities in each of the provinces of Canada.
These documents are not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K. 41 ENBRIDGE PIPELINES INC. Additional information about Enbridge Pipelines Inc.
These documents are not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K. ENBRIDGE PIPELINES INC. Additional information about Enbridge Pipelines Inc.
In Canada, the Federal Government does not generally regulate the electricity sector though it has imposed a federal carbon price on other sectors via its output-based pricing system (OBPS) and has proposed a Clean Electricity Regulation (CE Regulation) that would require Canada’s electricity grid reach net-zero by 2035. The CE Regulation is expected to come into effect in 2023.
In Canada, the Federal Government does not generally regulate the electricity sector, though it has imposed a federal carbon price on other sectors via its output-based pricing system (OBPS) and has proposed a Clean Electricity Regulation (CE Regulation) that would require Canada’s electricity grid to reach net-zero by 2035. The CE Regulation is expected to come into effect in 2024.
We also own interests in European offshore wind facilities through the following joint ventures: • a 24.9% interest in Rampion Offshore Wind, located in the United Kingdom; • a 25.4% interest in Hohe See and Albatros Offshore Wind, located in Germany; • a 25.5% interest in the Saint-Nazaire Offshore Wind project, located in France; • a 25% interest in the Provence Grande Large Floating Offshore Wind project, under construction in France; • a 17.9% interest in the Fécamp Offshore Wind project, under construction in France; and • a 21.7% interest in the Calvados Offshore Wind project, under construction in France.
We also own interests in European offshore wind facilities through the following joint ventures: • a 24.9% interest in Rampion Offshore Wind, located in the United Kingdom; • a 49.9% interest in Hohe See and Albatros Offshore Wind, located in Germany; • a 25.5% interest in the Saint-Nazaire Offshore Wind Project, located in France; • a 25% interest in the Provence Grande Large Floating Offshore Wind Project, under construction in France; • a 17.9% interest in the Fécamp Offshore Wind Project, under construction in France; and • a 21.7% interest in the Calvados Offshore Wind Project, under construction in France.
Reports, proxy statements and other information filed with the SEC may also be obtained through the SEC’s website (www.sec.gov). ENBRIDGE GAS INC.
Reports, proxy statements and other information filed with the SEC may also be obtained through the SEC’s website (www.sec.gov). 44 ENBRIDGE GAS INC.
Changes to these tax programs could impact development plans. 34 Renewable Power Generation is also subject to Provincial and State regulations governing the energy resource mix on the grid, emissions levels of the electricity grid, and market regulations related to emergency operations, extreme weather preparedness, and market participation, among others.
Changes to these tax programs could impact development plans. 37 Renewable Power Generation is also subject to provincial and state regulations governing the energy resource mix on the grid, emissions levels of the electricity grid, and market regulations related to emergency operations, extreme weather preparedness, and market participation, among others.
SUPPLY AND DEMAND We anticipate that demand for natural gas in North America will stabilize over the long term with continued growth in peak day demands, however, there are risks to the natural gas market that may challenge its growth prospects.
SUPPLY AND DEMAND We anticipate that demand for natural gas in North America will stabilize over the long term with potential growth in peak day demands; however, there are risks to the natural gas market that may challenge its growth prospects.
In executing on our ESG strategy, we continue to track progress towards these representation goals in 2022. Consistent with our culture, we remain committed to open, two-way dialogue related to our goals, enhancing transparency and accountability for all stakeholders.
In executing on our ESG strategy, we continue to track progress towards these representation goals in 2023. Consistent with our culture, we remain committed to open, two-way dialogue related to our goals, enhancing transparency and accountability for all stakeholders.
Aside from the construction of new wind and solar facilities, other growth opportunities include repowering projects to increase output from, and extending the project-life of, our existing facilities. In Europe, the renewable energy outlook is robust.
Aside from the construction of new wind and solar facilities, other growth opportunities include repowering projects to increase output from, and extend the project-life of, our existing facilities. In Europe, the renewable energy outlook is robust.
Breaches of import and export rules and permits could result in an inability to perform day to day operations, and therein negatively impact the earnings of the business. 35 The transportation of crude oil and natural gas liquids by railcar or truck is regulated by the US DOT, Transport Canada and provincial regulation.
Breaches of import and export rules and permits could result in an inability to perform day to day operations, and can negatively impact the earnings of the business. The transportation of crude oil and natural gas liquids by railcar or truck is regulated by the US DOT, Transport Canada and provincial regulation.
Policy changes may also provide new opportunities for existing assets and new developments. The United States passed the Inflation Reduction Act in late 2022, which established long-term production and investment tax credits for renewable power generation, battery storage projects and for related manufacturing supply chains.
Policy changes may also provide new opportunities for existing assets and new developments. The US passed the Inflation Reduction Act in late 2022, which established long-term production and investment tax credits for renewable power generation, battery storage projects and for related manufacturing supply chains.
COMPETITION Renewable Power Generation operates in the North American and European power markets, which are subject to competition and supply and demand fundamentals for power in the jurisdictions in which they operate. The majority of revenue is generated pursuant to long-term PPAs (or has been substantially hedged).
COMPETITION Renewable Power Generation operates in the North American and European power markets, which are subject to competition and supply and demand fundamentals for power in the jurisdictions in which it operates. The majority of revenue is generated pursuant to long-term PPAs (or has been substantially hedged).
As in previous years, in 2022, we reported operational GHG emissions, including emissions from stationary combustion, flaring, venting and fugitive sources to Environment and Climate Change Canada (ECCC), the Ontario Ministry of Environment, Conservation and Parks, and a number of voluntary reporting programs.
As in previous years, in 2023 we reported operational GHG emissions, including emissions from stationary combustion, flaring, venting and fugitive sources to Environment and Climate Change Canada, the Ontario Ministry of Environment, Conservation and Parks, and a number of voluntary reporting programs.
Enbridge Gas must remit payment annually on the portion of emissions that exceed its total annual emissions limit. Payment is due the year following a compliance period and as such, Enbridge Gas will remit payment for its 2022 EPS compliance obligation in 2023.
Enbridge Gas must remit payment annually on the portion of emissions that exceed its total annual emissions limit. Payment is due the year following a compliance period and as such, Enbridge Gas remitted payment for its 2022 EPS compliance obligation in November 2023. Enbridge Gas will remit payment for its 2023 EPS compliance obligation in 2024.
As the supply of natural gas in areas close to Ontario has continued to grow, there has been increased demand to access these diverse supplies at Dawn and transport them along the Dawn-Parkway pipeline system to markets in Ontario, eastern Canada and the northeastern US. Enbridge Gas delivered 2,162 bcf of gas through its distribution and transmission system in 2022.
As the supply of natural gas in areas close to Ontario has continued to grow, there has been increased demand to access these diverse supplies at Dawn and transport them along the Dawn-Parkway pipeline system to markets in Ontario, eastern Canada and the northeastern US. Enbridge Gas delivered 2,218 bcf of gas through its distribution and transmission system in 2023.
Additional information about Enbridge Gas can be found in its annual information form, financial statements and MD&A for the year ended December 31, 2022, which have been filed with the securities commissions or similar authorities in each of the provinces of Canada. These documents contain detailed disclosure with respect to Enbridge Gas and are publicly available on SEDAR at www.sedar.com.
Additional information about Enbridge Gas can be found in its annual information form, financial statements and MD&A for the year ended December 31, 2023, which have been filed with the securities commissions or similar authorities in each of the provinces of Canada. These documents contain detailed disclosure with respect to Enbridge Gas and are publicly available on SEDAR+ at www.sedarplus.ca.
(EPI) can be found in its annual information form, financial statements and MD&A for the year ended December 31, 2022, which have been filed with the securities commissions or similar authorities in each of the provinces of Canada. These documents contain detailed disclosure with respect to EPI and are publicly available on SEDAR at www.sedar.com.
(EPI) can be found in its annual information form, financial statements and MD&A for the year ended December 31, 2023, which have been filed with the securities commissions or similar authorities in each of the provinces of Canada. These documents contain detailed disclosure with respect to EPI and are publicly available on SEDAR+ at www.sedarplus.ca.
However, over the past year, geopolitical unrest has increased and lead to elevated concerns with energy security in regions such as Europe and Asia. In response, one of the key supply sources supporting global energy security has been US LNG, which has introduced additional competition for North American supply.
However, over the past two years, geopolitical unrest has increased and led to elevated concerns with energy security in regions such as Europe and Asia. In response, one of the key supply sources supporting global energy security has been US LNG, which has introduced additional competition for North American supply.
In addition to contracting for transportation service, Enbridge Gas offers firm and interruptible transportation services on its own Dawn-Parkway pipeline system. Enbridge Gas’ transmission system consists of approximately 5,500 kilometers (3,418 miles) of high pressure pipeline and five mainline compressor stations and has an effective peak daily demand capacity of 7.6 bcf/d.
In addition to contracting for transportation service, Enbridge Gas offers firm and interruptible transportation services on its own Dawn-Parkway pipeline system. Enbridge Gas’ transmission system consists of approximately 3,800 kilometers (2,361 miles) of high pressure pipeline and five mainline compressor stations and has an effective peak daily demand capacity of 7.6 bcf/d.
Previously, she served as our Executive Vice President, Gas Distribution and Storage from June 2019 to March 2022 and as Executive Vice President, Utilities and Power Operations from February 2017 to June 2019. Ms. Hansen is also the Executive Sponsor for Asset and Work Management Transformation across Enbridge, working with other business unit leaders. 40 Byron C.
Previously, she served as our Executive Vice President, Gas Distribution and Storage from June 2019 to March 2022 and as Executive Vice President, Utilities and Power Operations from February 2017 to June 2019. Ms. Hansen is also the Executive Sponsor for Asset and Work Management Transformation across Enbridge, working with other business unit leaders. 43 Michele E.
A substantial amount of Enbridge Gas’ storage revenue is generated by fixed annual demand charges, with the average length of a long-term contract being approximately four years and the longest remaining contract term being 14 years. GAZIFÈRE We wholly own Gazifère, a natural gas distribution company that serves approximately 44,000 customers in western Québec.
A substantial amount of Enbridge Gas’ storage revenue is generated by fixed annual demand charges, with the average length of a long-term contract being approximately three years and the longest remaining contract term being 13 years. GAZIFÈRE We wholly own Gazifère Inc. (Gazifère), a natural gas distribution company that serves approximately 45,000 customers in western Québec.
The price cap mechanism establishes new rates each year through an annual base rate escalation at inflation less a 0.3% productivity factor, annual updates for certain costs to be passed through to customers, and where applicable, the recovery of material discrete incremental capital investments beyond those that can be funded through base rates.
The price cap mechanism established new rates each year through an annual base rate escalation at inflation less a 0.3% productivity factor, in addition to annual updates for certain costs to be passed through to customers, and where applicable, provided for the recovery of material discrete incremental capital investments beyond those that could be funded through base rates.
The Ontario Energy Board (OEB) approves rates for both contract and general services. The distribution system consists of approximately 149,000 kilometers (92,584 miles) of pipelines that carry natural gas from the point of local supply to customers. Customers have a choice with respect to natural gas supply.
The Ontario Energy Board (OEB) approves rates for both contract and general services. The distribution system consists of approximately 151,000 kilometers (93,827 miles) of pipelines that carry natural gas from the point of local supply to customers. Customers have a choice with respect to natural gas supply.
Government-imposed temporary price controls, effective January 1, 2023, were introduced during 2022 to address the significant increase in energy prices. The impact of merchant exposure on our Renewable Power Generation asset in the UK is limited by fixed revenue payments backed by the UK government.
Governments have introduced temporary price controls, effective January 1, 2023, to address the significant increase in energy prices. The impact of merchant exposure on our Renewable Power Generation asset in the UK is limited by fixed revenue payments backed by the UK government.
Our overall focus on employee and contractor safety, including through the COVID-19 pandemic, continues to result in strong performance compared against industry benchmarks and we are actively engaged in continuous improvement exercises as we pursue our goal of zero incidents.
Our overall focus on employee and contractor safety, continues to result in strong performance compared against industry benchmarks and we are actively engaged in continuous improvement exercises as we pursue our goal of zero incidents.
Enbridge’s Renewable Power Generation resources are substantially non-emitting. 38 HUMAN CAPITAL RESOURCES WORKFORCE SIZE AND COMPOSITION As at December 31, 2022, we had approximately 11,100 regular employees, including approximately 1,600 unionized employees across our North American operations. This total rises to just over 13,000 if temporary employees and contractors are included.
Enbridge’s Renewable Power Generation resources are substantially non-emitting. 41 HUMAN CAPITAL RESOURCES WORKFORCE SIZE AND COMPOSITION As at December 31, 2023, we had approximately 11,500 regular employees, including approximately 1,500 unionized employees across our North American operations. This total rises to just over 13,400 if temporary employees and contractors are included.
In Europe, we hold equity interests in operating offshore wind facilities in the coastal waters of the United Kingdom, France, and Germany, as well as interests in several offshore wind projects under construction and active development in France and the United Kingdom. 29 Combined Renewable Power Generation investments represent approximately 2,175 MW of net generation capacity, which primarily consists of approximately: • 1,389 MW generated by North American wind facilities; • 377 MW generated by European offshore wind facilities; • 187 MW to be generated by the Fécamp and Calvados Offshore Wind projects in France, both of which are currently under construction; • 6 MW to be generated by the Provence Grand Large Floating Offshore Wind project in France, which is under construction; and • 93 MW generated by North American solar facilities in operation, with an additional 97 MW in projects in pre-construction and under construction.
In Europe, we hold equity interests in operating offshore wind facilities in the coastal waters of the United Kingdom, France, and Germany, as well as interests in several offshore wind projects under construction and active development in France and the United Kingdom. 31 Combined Renewable Power Generation investments represent approximately 2,371 MW of net generation capacity, which primarily consists of approximately: • 1,399 MW generated by North American wind facilities; • 526 MW generated by European offshore wind facilities; • 186 MW expected to be generated by the Fécamp and Calvados Offshore Wind Projects in France, both of which are currently under construction; • 6 MW expected to be generated by the Provence Grand Large Floating Offshore Wind Project in France, which is under construction; and • 198 MW generated by North American solar facilities in operation, with an additional 30 MW in projects in pre-construction and under construction.
JOINT VENTURES / EQUITY INVESTMENTS The investments in the Canadian wind and solar assets (excluding self-power) and two of the US renewable assets are held within a joint venture in which we maintain a 51% interest and which we manage and operate.
JOINT VENTURES / EQUITY INVESTMENTS Most of our investments in Canadian wind and solar assets and two of our US renewable assets are held within a joint venture in which we maintain a 51% interest and which we manage and operate.
The ERP details the complementary policies and programs that Canada will enact to enable it to meet its domestic climate goal. Effective January 1, 2023, the federal carbon price was increased from $50 to $65 per tonne of carbon dioxide equivalent (tCO2e).
The ERP details the complementary policies and programs that Canada will enact to enable it to meet its domestic climate goal. Effective January 1, 2023, the federal carbon price was increased from $50 to $65 per tonne of carbon dioxide equivalent (tCO2e). This will increase by $15 per tonne each year and rise to $170 per tCO2e in 2030.
To grow in an environment of heightened competition, we strategically seek opportunities to collaborate with well-established renewable power developers and financial partners and to target regions with commercial constructs consistent with our low risk business model.
To grow in an environment of heightened competition, we strategically seek opportunities to collaborate with well-established renewable power developers and financial partners and to target regions with commercial constructs consistent with our low risk business model. In addition, we have expertise in completing and delivering large scale infrastructure projects.
In addition, we have expertise in completing and delivering large scale infrastructure projects. 30 SUPPLY AND DEMAND Renewable power generation in North America and Europe is expected to grow significantly over the next 20 years due to the replacement of older fossil fuel-based sources of electricity generation in support of announced governmental carbon emissions reduction targets.
SUPPLY AND DEMAND Renewable power generation in North America and Europe is expected to grow significantly over the next 20 years due to the replacement of older fossil fuel-based sources of electricity generation in support of announced governmental carbon emissions reduction targets.
Despite the recent volatility exhibited in natural gas prices, storage values have been relatively stable. 28 RENEWABLE POWER GENERATION Renewable Power Generation consists primarily of investments in wind and solar assets, as well as geothermal, waste heat recovery, and transmission assets.
As a result of the recent volatility exhibited in natural gas prices, storage values have risen. 30 RENEWABLE POWER GENERATION Renewable Power Generation consists primarily of investments in wind and solar assets, as well as geothermal, waste heat recovery, and transmission assets.
This list is not exhaustive, and we place no priority or likelihood based on order of presentation or grouping under sub-captions. RISKS RELATED TO CLIMATE CHANGE Climate change risks could adversely affect our business, operations and financial results, and these effects could be material. Climate change is a systemic risk that presents both physical and transition risks to our organization.
This list is not exhaustive, and we place no priority or likelihood based on order of presentation or grouping under sub-captions. RISKS RELATED TO CLIMATE CHANGE Climate change risks could adversely affect our reputation, strategic plan, business, operations and financial results, and these effects could be material.
Net-zero carbon policies, evolving customer preferences for lower-carbon fuels and more efficient technologies, combined with increasing opposition to natural gas development in North America, may reduce the markets’ ability to efficiently deploy capital to connect supply and demand.
The recent decision by the OEB on Enbridge Gas' application to establish 2024 base rates, net-zero carbon policies, evolving customer preferences for lower-carbon fuels and more efficient technologies, combined with increasing opposition to natural gas development in North America, may reduce the markets’ ability to efficiently deploy capital to connect supply and demand.
The provincial and territorial securities regulators similarly regulate commodity marketing within Canada and are members of the Canadian Securities Administrators. These various regulators enforce, among other things, the prohibition of market manipulation, fraud and disruptive trading. The export of natural gas out of Alberta is regulated by the Alberta Energy Regulator (AER).
The provincial and territorial securities regulators similarly regulate commodity marketing within Canada and are members of the Canadian Securities Administrators. These various regulators enforce, among other things, the prohibition of market manipulation, fraud and disruptive trading.
Ebel also served as Spectra Energy’s Group Executive and Chief Financial Officer beginning in 2007, President of Union Gas Limited from 2005 until 2007, and Vice President, Investor & Shareholder Relations of Duke Energy Corporation from 2002 until 2005. Vern D.
Ebel also served as Spectra Energy’s Group Executive and Chief Financial Officer beginning in 2007, President of Union Gas Limited from 2005 until 2007, and Vice President, Investor & Shareholder Relations of Duke Energy Corporation from 2002 until 2005. Patrick R. Murray was appointed Executive Vice President & Chief Financial Officer (CFO) on July 1, 2023. Mr.
Specific interest in natural gas connections is expected to come from communities that are not currently serviced by natural gas in Ontario. Enbridge Gas continues to focus on promoting conservation and energy efficiency by undertaking activities focused on reducing natural gas consumption through various demand side management programs offered across all markets and sourcing supply with a smaller carbon footprint.
Enbridge Gas continues to focus on promoting conservation and energy efficiency by undertaking activities focused on reducing natural gas consumption through various demand side management programs offered across all markets and sourcing supply with a smaller carbon footprint.
The framework requires Enbridge Gas to consider facility and non-pipe demand and/or supply side alternatives (IRP alternatives) to address the systems needs of its regulated operations, where certain parameters have been met.
In 2021, we received OEB approval of an Integrated Resource Planning (IRP) framework and integrated the framework into our planning practices. The framework requires Enbridge Gas to consider facility and non-pipe demand and/or supply side alternatives (IRP alternatives) to address the systems needs of its regulated operations, where certain parameters have been met.
The IR framework includes the continuation and establishment of certain deferral and variance accounts, as well as an earnings sharing mechanism that requires Enbridge Gas to share equally with customers any earnings in excess of 150 basis points over the annual OEB approved return on equity (ROE). 33 In October 2022, Enbridge Gas filed its application with the OEB to establish a 2024 through 2028 rate setting framework.
The IR framework included the continuation and establishment of certain deferral and variance accounts, as well as an earnings sharing mechanism that required Enbridge Gas to share equally with customers any earnings in excess of 150 basis points over the annual OEB approved return on equity (ROE).
The application and framework seek approval to establish 2024 base rates on a cost-of-service basis and to establish a price cap IR rate setting mechanism to be used for the remainder of the term (2025 - 2028).
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.
During 2022, member states of the EU introduced extraordinary and temporary measures to address high energy prices including caps and demand reduction goals. As the minimum PPA prices in Germany and France will still be honored, there will not be any negative implications to our PPA prices.
The EU is also responsible for establishing environmental protection rules and permitting standards. During 2022, member states of the EU introduced extraordinary and temporary measures to address high energy prices including caps and demand reduction goals. As the minimum PPA prices in Germany and France are still honored, there are no negative implications to our PPA prices.
In accordance with the regulations, Enbridge Gas made payment for the 2021 compliance obligation in December 2022. In September 2020, Ontario and the federal government announced that the federal government has accepted that Ontario’s Emission Performance Standards (EPS) will replace the federal OBPS for industrial facilities.
In September 2020, Ontario and the federal government announced that the federal government has accepted that Ontario’s Emission Performance Standards (EPS) will replace the federal OBPS for industrial facilities.
An increase in market participants entering into similar arbitrage strategies could have an impact on our earnings. Efforts to mitigate competition risk include diversification of the marketing business by transacting at the majority of major hubs in North America and establishing long-term relationships with clients and pipelines.
Efforts to mitigate competition risk include diversification of the marketing business by transacting at the majority of major hubs in North America and establishing long-term relationships with clients and pipelines.
The aforementioned information is made available in accordance with legal requirements and is not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K.
ADDITIONAL INFORMATION Additional information about us is available on our website at www.enbridge.com, on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. The aforementioned information is made available in accordance with legal requirements and is not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K.
She is responsible for the overall leadership and operations of Ontario-based Enbridge Gas Inc., as well as Gazifère, which serves the Gatineau region of Québec. Prior to assuming her current role, Ms. Harradence was Senior Vice President and Chief Operations Officer of Enbridge’s Gas Transmission and Midstream business unit from June 2019 to March 2022.
Harradence was appointed Executive Vice President & President, Gas Distribution & Storage on March 5, 2023. She is responsible for the overall leadership and operations of Ontario-based Enbridge Gas, as well as Gazifère, which serves the Gatineau region of Québec. Prior to assuming her current role, Ms.
Dawn's configuration provides flexibility for injections, withdrawals and cycling. Customers can purchase both firm and interruptible storage services at Dawn. Dawn offers customers a wide range of market choices and options with easy access to upstream and downstream markets. During 2022, Dawn provided services such as storage, balancing, gas loans, transport, exchange and peaking services to over 200 counterparties.
Dawn offers customers a wide range of market choices and options with easy access to upstream and downstream markets. During 2023, Dawn provided services such as storage, balancing, gas loans, transport, exchange and peaking services to approximately 200 counterparties.
This will increase by $15 per tonne and rise to $170 per tCO2e in 2030. 36 Gas Distribution and Storage Our Gas Distribution and Storage operations, facilities and workers are subject to municipal, provincial and federal legislation which regulates the protection of the environment and the health and safety of workers.
Gas Distribution and Storage Our Gas Distribution and Storage operations, facilities and workers are subject to municipal, provincial and federal legislation which regulates the protection of the environment and the health and safety of workers.
Applicable legislation and regulations require us to comply with a significant set of requirements for the design, construction, maintenance and operation of our pipelines. Among other obligations, this regulatory framework imposes requirements to monitor and maintain the integrity of our pipelines. As in the US, laws and regulations addressing pipeline safety in Canada were enacted over the past few years.
Among other obligations, this regulatory framework imposes requirements to monitor and maintain the integrity of our pipelines. 34 As in the US, laws and regulations addressing enhanced pipeline safety in Canada have been enacted over the past few years.
The rejection of applications for approval of new tariff structures or proposed commercial arrangements and changes in interpretation of existing regulations by courts or regulators could have an adverse effect on our revenues and earnings. Gas Distribution and Storage Our gas distribution and storage utility operations are regulated by the OEB and the Québec Régie de l’énergie, among others.
The rejection or revision of applications for approval of new tariff structures or proposed commercial arrangements and changes in interpretation of existing regulations by courts or regulators could have an adverse effect on our revenues and earnings.
A summary of these risks is discussed below. Given the interconnected nature of climate impacts, we also discuss these risks within the context of other risks impacting Enbridge throughout Item 1A. Risk Factors . Climate change and its associated impacts may increase our exposure to, and magnitude of, other risks identified in
Climate change is a systemic risk that presents both physical and transition risks to our organization. A summary of these risks is outlined below. Given the interconnected nature of climate change-related impacts, we also discuss these risks within the context of other risks impacting Enbridge throughout Item 1A. Risk Factors .
This practice permits Enbridge Gas to minimize the annual cost of transportation of natural gas from its supply basins, assists in reducing its overall cost of natural gas supply and adds a measure of security in the event of any short-term interruption of transportation of natural gas to Enbridge Gas’ franchise areas.
This practice permits Enbridge Gas to minimize the annual cost of transportation of natural gas from its supply basins, assists in reducing its overall cost of natural gas supply and adds a measure of security in the event of any short-term interruption of transportation of natural gas to Enbridge Gas’ franchise areas. 28 Enbridge Gas’ storage facility at Dawn is located in southwestern Ontario, and has a total working capacity of approximately 284 bcf in 33 underground facilities located in depleted gas fields.
This business segment also includes natural gas distribution activities in Québec. 25 ENBRIDGE GAS Enbridge Gas is a rate-regulated natural gas distribution utility with storage and transmission services. Enbridge Gas' distribution system, supported by storage and compression assets, carries natural gas from the point of local supply to customers and serves residential, commercial and industrial customers across Ontario.
(Enbridge Gas), which serves residential, commercial and industrial customers throughout Ontario. This business segment also includes natural gas distribution activities in Québec. ENBRIDGE GAS Enbridge Gas is a rate-regulated natural gas distribution utility with storage and transmission services.
In addition, a number of states have joined regional GHG initiatives, and a number are developing their own programs that would mandate reductions in GHG emissions. Public interest groups and regulatory agencies are increasingly focusing on the emission of methane associated with natural gas development and transmission as a source of GHG emissions.
Public interest groups and regulatory agencies are increasingly focusing on the emission of methane associated with natural gas development and transmission as a source of GHG emissions.
Enbridge Gas' distribution rates, commencing in 2019, are set under a five-year incentive regulation (IR) framework using a price cap mechanism.
Enbridge Gas' distribution rates, were set under a five-year incentive regulation (IR) framework using a price cap mechanism, which ended on December 31, 2023.
Utilization of storage facilities permits Enbridge Gas to take delivery of natural gas on favorable terms during off-peak summer periods for subsequent use during the winter heating season.
Storage Enbridge Gas’ business is highly seasonal as daily market demand for natural gas fluctuates with changes in weather, with peak consumption occurring in the winter months. Utilization of storage facilities permits Enbridge Gas to take delivery of natural gas on favorable terms during off-peak summer periods for subsequent use during the winter heating season.
Renewable Power Generation also includes our 25% interest in the East-West Tie, a 450-MW transmission line in northwestern Ontario, which entered operations in March 2022.
The vast majority of the power produced from these facilities is sold under long-term PPAs. Renewable Power Generation also includes our 24.1% interest in the East-West Tie, a 450-MW transmission line in northwestern Ontario, which entered operations in March 2022.
Prior thereto, he was Senior Vice President, Strategy, Power & New Energy Technologies from October 2021 to December 2022, and Senior Vice President, Strategy & Power from June 2019 to October 2021. Mr. Akman is responsible for the overall leadership and operations of Enbridge’s power business and also leads our corporate strategy efforts. Mr.
Akman was Senior Vice President, Corporate Strategy & President, Power from January 2023 to March 2023. Prior thereto, he was Senior Vice President, Strategy, Power & New Energy Technologies from October 2021 to December 2022, and Senior Vice President, Strategy & Power from June 2019 to October 2021. Mr.
Yu has oversight for all of Enbridge’s financial affairs including investor relations, financial reporting, financial planning, treasury, tax, insurance, risk and audit management functions. He is also responsible for overseeing Enbridge’s new energy technology ventures. Previously, Mr.
Murray has oversight for all of Enbridge’s financial affairs including investor relations, financial reporting, financial planning, treasury, tax, insurance, risk and audit management functions. He also leads Enbridge’s technology and information services teams. Prior to assuming his current role, Mr.
In North America, assets are primarily located in the provinces of Alberta, Saskatchewan, Ontario and Québec, and in the states of Colorado, Texas, Indiana and West Virginia. We are also developing several solar self-power projects along our oil and gas rights-of-way in North America.
In North America, assets are primarily located in the provinces of Alberta, Ontario and Québec, and in the states of Colorado, Texas, Indiana, Ohio and West Virginia.
To execute these strategies, Energy Services transports and stores on both Enbridge-owned and third party assets using a combination of contracted long-term and short-term pipeline, storage, railcar, and truck capacity agreements. 31 COMPETITION Energy Services’ earnings are primarily generated from arbitrage opportunities which, by their nature, can be replicated by competitors.
To execute these strategies, Energy Services transports and stores on both Enbridge-owned and third-party assets using a combination of contracted pipeline, storage, railcar, and truck capacity agreements.
Similarly, Canada proposed in its Fall Economic Statement competitive tax credits for renewable power generation and battery storage projects, which it anticipates passing in 2023.
Similarly, Canada has prepared legislation that would establish competitive tax credits for renewable power generation and battery storage projects, which it anticipates passing in early 2024.
Gazifère is regulated by the Québec Régie de l’énergie. COMPETITION Enbridge Gas’ distribution system is regulated by the OEB and is subject to regulation in a number of areas, including rates. Enbridge Gas is not generally subject to third-party distribution competition within its franchise areas.
COMPETITION Enbridge Gas’ distribution system is regulated by the OEB and is subject to regulation in a number of areas, including rates. Enbridge Gas is not generally subject to third-party distribution competition within its franchise areas. Enbridge Gas competes with other forms of energy available to its customers and end-users, including electricity, coal, propane and fuel oils.
A substantial amount of Enbridge Gas’ transportation revenue is generated by fixed annual demand charges, with the average length of a long-term contract being approximately 15 years and the longest remaining contract term being 18 years. 26 Storage Enbridge Gas’ business is highly seasonal as daily market demand for natural gas fluctuates with changes in weather, with peak consumption occurring in the winter months.
A substantial amount of Enbridge Gas’ transportation revenue is generated by fixed annual demand charges, with the average length of a long-term contract being approximately 17 years and the longest remaining contract term being 17 years.
Approximately 180 bcf of the total working capacity is available to Enbridge Gas for utility operations. Enbridge Gas also has storage contracts with third parties for 21 bcf of storage capacity. Dawn offers customers an important link in the movement of natural gas from western Canadian and US supply basins to markets in central Canada and the northeast US.
Dawn is the largest integrated underground storage facility in Canada and one of the largest in North America. Approximately 180 bcf of the total working capacity is available to Enbridge Gas for utility operations. Enbridge Gas also has storage contracts with third parties for 21 bcf of storage capacity.

… 94 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

15 edited+0 added−3 removed13 unchanged
We have exposure to our own common share price through the issuance of various forms of stock-based compensation, which affect earnings through revaluation of the outstanding units every period. We use equity derivatives to manage the earnings volatility derived from one form of stock-based compensation, restricted share units.
We have exposure to our own common share price through the issuance of various forms of stock-based compensation, which affect earnings through the revaluation of outstanding units every period. We use equity derivatives to manage the earnings volatility derived from one form of stock-based compensation, restricted stock units.
Commodity Price Risk Our earnings and cash flows are exposed to changes in commodity prices as a result of our ownership interests in certain assets and investments, as well as through the activities of our energy services subsidiaries. These commodities include natural gas, crude oil, power and NGL.
Commodity Price Risk Our earnings, cash flows and OCI are exposed to changes in commodity prices as a result of our ownership interests in certain assets and investments, as well as through the activities of our energy services subsidiaries. These commodities include natural gas, crude oil, power and NGL.
We use a combination of qualifying and non-qualifying derivative instruments to manage the risks noted below. Foreign Exchange Risk We generate certain revenues, incur expenses and hold a number of investments and subsidiaries that are denominated in currencies other than Canadian dollars.
We use a combination of qualifying and non-qualifying derivative instruments to manage the risks noted below. 96 Foreign Exchange Risk We generate certain revenues, incur expenses and hold a number of investments and subsidiaries that are denominated in currencies other than Canadian dollars.
The fair value of financial instruments reflects our best estimates of market value based on generally accepted valuation techniques or models and is supported by observable market prices and rates. When such values are not available, we use discounted cash flow analysis from applicable yield curves based on observable market inputs to estimate fair value. 90
The fair value of financial instruments reflects our best estimates of market value based on generally accepted valuation techniques or models and is supported by observable market prices and rates. When such values are not available, we use discounted cash flow analysis from applicable yield curves based on observable market inputs to estimate fair value. 98
We monitor our debt portfolio mix of fixed and variable rate debt instruments to manage a consolidated portfolio of floating rate debt within the Board of Directors approved policy limit of a maximum of 30% of floating rate debt as a percentage of total debt outstanding. We primarily use qualifying derivative instruments to manage interest rate risk.
We monitor our debt portfolio mix of fixed and variable rate debt instruments to manage a consolidated portfolio of floating rate debt within the Board of Directors' approved policy limit of a maximum of 30% of floating rate debt as a percentage of total debt outstanding. We primarily use qualifying derivative instruments to manage interest rate risk.
Our market risk metric is Cash Flow at Risk (CFaR). 89 CFaR is a statistically derived measurement used to measure the maximum cash flow loss that could potentially result from adverse market price movements over a one month holding period for price sensitive non-derivative exposures and for derivative instruments we hold or issue as recorded in the Consolidated Statements of Financial Position as at December 31, 2022.
Our market risk metric is Cash Flow at Risk (CFaR). 97 CFaR is a statistically derived measurement used to measure the maximum cash flow loss that could potentially result from adverse market price movements over a one month holding period for price sensitive non-derivative exposures and for derivative instruments we hold or issue as recorded in the Consolidated Statements of Financial Position as at December 31, 2023.
FAIR VALUE MEASUREMENTS Our financial assets and liabilities measured at fair value on a recurring basis include derivative instruments. We also disclose the fair value of other financial instruments not measured at fair value.
FAIR VALUE MEASUREMENTS Our financial assets and liabilities measured at fair value on a recurring basis include derivatives and other financial instruments. We also disclose the fair value of other financial instruments not measured at fair value.
We are in compliance with all the terms and conditions of our committed credit facility agreements and term debt indentures as at December 31, 2022. As a result, all credit facilities are available to us and the banks are obligated to fund us under the terms of the facilities.
We were in compliance with all the terms and conditions of our committed credit facility agreements and term debt indentures as at December 31, 2023. As a result, all credit facilities are available to us and the banks are obligated to fund us under the terms of the facilities.
We have established a program including some of our subsidiaries to partially mitigate our exposure to long-term interest rate variability on forecasted term debt issuances via execution of floating to fixed interest rate swaps with an average swap rate of 2.2%.
We have established a program including some of our subsidiaries to partially mitigate our exposure to long-term interest rate variability on forecasted term debt issuances via execution of floating-to-fixed interest rate swaps with an average swap rate of 3.5%.
The consolidated CFaR policy limit for Enbridge is 3.5% of its forward 12 month normalized cash flow. At December 31, 2022 and 2021 CFaR was $144 million and $103 million or 1.3% and 0.9%, respectively, of estimated 12 month forward normalized cash flow.
The consolidated CFaR policy limit for Enbridge is 3.5% of its forward 12 month normalized cash flow. At December 31, 2023 and 2022 CFaR was $100 million and $144 million or 0.9% and 1.3%, respectively, of estimated 12 month forward normalized cash flow.
Pay fixed-receive floating interest rate swaps may be used to hedge against the effect of future interest rate movements. We have implemented a hedging program to partially mitigate the impact of short-term interest rate volatility on interest expense via execution of floating to fixed interest rate swaps. These hedges have an average fixed rate of 4.0%.
Pay fixed-receive floating interest rate swaps may be used to hedge against the effect of future interest rate movements. We have implemented a hedging program to partially mitigate the impact of short-term interest rate volatility on interest expense via the execution of floating-to-fixed interest rate swaps and costless collars. These swaps have an average fixed rate of 4.1%.
As a result, our earnings, cash flows and OCI are exposed to fluctuations resulting from foreign exchange rate variability. 88 We employ financial derivative instruments to hedge foreign currency denominated earnings exposure.
As a result, our earnings, cash flows and OCI are exposed to fluctuations resulting from foreign exchange rate variability. We employ financial derivative instruments to hedge foreign currency denominated earnings exposure. A combination of qualifying and non-qualifying derivative instruments is used to hedge anticipated foreign currency denominated revenues and expenses and to manage variability in cash flows.
Interest Rate Risk Our earnings and cash flows are exposed to short-term interest rate variability due to the regular repricing of our variable rate debt, primarily commercial paper.
We hedge certain net investments in US dollar-denominated investments and subsidiaries using foreign currency derivatives and US dollar-denominated debt. Interest Rate Risk Our earnings and cash flows are exposed to short-term interest rate variability due to the regular repricing of our variable rate debt, primarily commercial paper.
Credit risk relating to derivative counterparties is mitigated through maintenance and monitoring of credit exposure limits and contractual requirements, netting arrangements, and ongoing monitoring of counterparty credit exposure using external credit rating services and other analytical tools.
In order to mitigate this risk, we enter into risk management transactions primarily with institutions that possess strong investment grade credit ratings. Credit risk relating to derivative counterparties is mitigated through the maintenance and monitoring of credit exposure limits and contractual requirements, netting arrangements and ongoing monitoring of counterparty credit exposure using external credit rating services and other analytical tools.
CREDIT RISK Entering into derivative instruments may result in exposure to credit risk from the possibility that a counterparty will default on its contractual obligations. In order to mitigate this risk, we enter into risk management transactions primarily with institutions that possess strong investment grade credit ratings.
We also identify a variety of other potential sources of debt and equity funding alternatives, including reinstatement of our dividend reinvestment and share purchase plan or at-the-market equity issuances. CREDIT RISK Entering into derivative instruments may result in exposure to credit risk from the possibility that a counterparty will default on its contractual obligations.
Removed
A combination of qualifying cash flow, fair value and non-qualifying derivative instruments is used to hedge anticipated foreign currency denominated revenues and expenses and to manage variability in cash flows. We hedge certain net investments in US dollar-denominated investments and subsidiaries using foreign currency derivatives and US dollar-denominated debt.
Removed
We are exposed to changes in the fair value of fixed rate debt that arise as a result of changes in market interest rates.
Removed
Pay floating-receive fixed interest rate swaps are used, when applicable, to hedge against future changes to the fair value of fixed rate debt which mitigates the impact of fluctuations in fair value via execution of fixed to floating interest rate swaps. As at December 31, 2022, we do not have any pay floating-receive fixed interest rate swaps outstanding.

Other ENB 10-K year-over-year comparisons