State regulators ask critical questions of Enbridge, other players in pipeline case

State utility regulators pressed Enbridge on Tuesday for more details on recent pledges that could weigh in the company's favor during continued hearings on a controversial $2.6 billion proposal to build a pipeline across northern Minnesota.

The pipeline would replace Enbridge's Line 3, which is corroding and is not running at full capacity. The voluminous record on the case for a new Line 3 was built over three years, and was largely closed earlier this year.

Enbridge, though, has made significant new pledges this week and earlier this month.

The company, one of the largest in Canada, said Monday it would give its corporate guarantee to cover environmental damages from oil spills from the new pipeline. The state has been pressing for such a guarantee, but Enbridge has resisted.

"I am a little bothered by how this has come forward," said Public Utilities Commission (PUC) Commissioner John Tuma. "I would expect more details on the how the process will go forward. These are not minor details."

An Enbridge attorney said the company will make a filing with more information on the corporate guarantee.

Also submitted this week is a letter in favor of the project from the Pipeline and Hazardous Materials Safety Administration, the nation's top pipeline-safety regulator.

"We are in regular contact with each agency having supervision and permitting authority of our operations," it said in a statement.

The letter is a recommendation, but the safety administration has no authority over siting pipelines in Minnesota.

The PUC will continue hearings next week and is expected to make a decision on the pipeline project by June 28.

The pipeline would ferry Canadian oil across Minnesota to Enbridge's terminal in Superior, Wis.

PUC Commissioner Katie Sieben asked Enbridge for more details on its announcement earlier this month that it will work with northern Minnesota counties to help them cope with an adverse pipeline ruling in Minnesota Tax Court this spring.

The counties face refunding tens of millions of dollars to Enbridge, a "shockingly high" amount, Sieben said.

Enbridge did not give any more details on how it may aid counties, prompting Sieben to call the company's response "somewhat unsatisfying."

The company has said in the past that if a new Line 3 is approved, the tax revenue it generates would help mitigate the counties' losses.

The commission discussed a multitude of issues Tuesday, including Enbridge's forecast of need for future Canadian oil production, and thus demand for pipeline capacity. The Minnesota Department of Commerce, which represents consumers in front of the PUC, concluded last fall that a new Line 3 is not necessary, and found flaws in Enbridge's forecast.

Administrative Law Judge Ann O'Reilly, in a report this spring, also found the company forecast to be flawed. However, she criticized the Commerce Department, too, saying it failed to commission its own forecast and only critiqued Enbridge's.

Bill Grant, the state's deputy commerce commissioner for energy and telecommunications, acknowledged the agency should have done its own forecast. "It's a failing of the department and the record in this case, and we will own that."