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                      ONTARIO ENERGY BOARD

          Volume: PRESENTATION OF SETTLEMENT PROPOSAL

                         11 MARCH 2004


BEFORE:



A. C. SPOEL
PRESIDING MEMBER


R. BETTS
MEMBER



                                                                 1
                          RP-2000-0005


                                                                 2
            IN THE MATTER OF a hearing held on Thursday, 11 March
            2004 in Toronto, Ontario; IN THE MATTER OF the Ontario
            Energy Board Act, 1998, S.O. 1998, c.15 (Sched. B); AND IN
            THE MATTER OF an Application by the landowners in the
            Amended Application for just and equitable compensation in
            respect of gas or oil rights or the right to store gas under section
            38(3) of the Ontario Energy Board Act; AND IN THE
            MATTER OF an Application by the landowners in pools being
            the subject of proceedings in Board file RP-1999-0047 (Century
            Pools Phase II) pursuant to the Board's order of February 2,
            2000, for just and equitable compensation for the Century Pools
            Phase II development under section 38(2) of the Ontario Energy
            Board Act.
            
                                                                 3




                          RP-2000-0005




                                                                 4
                         11 MARCH 2004

                                                                 5
                HEARING HELD AT TORONTO, ONTARIO


                                                                 6
                          APPEARANCES

                                                                 7

JENNIFER LEA
Board Counsel


ZORA CRNOJACKI
Board Staff


ROMAN CHYCHOTA
Board Staff


PAUL VOGEL
Represented Applicants


ROBYN MARTTILA
Represented Applicants


KAREN FOURNIE
Self-represented Applicant


JOSEPH FOURNIE
Self-represented Applicant


PATRICIA JACKSON
Union Gas Limited


CRAWFORD SMITH
Union Gas Limited



                                                                 8
                       TABLE OF CONTENTS

                                                                 9
APPEARANCES:[19]
PRELIMINARY MATTERS:[29]
PRESENTATION OF SETTLEMENT PROPOSAL:[38]
          SUBMISSIONS BY MR. VOGEL:[39]
          SUBMISSIONS BY MS. JACKSON:[48]
          REPLY SUBMISSIONS BY MR. VOGEL:[71]
          QUESTIONS FROM THE BOARD:[76]
          SUBMISSIONS BY MS. FOURNIE:[107]
          QUESTIONS FROM THE BOARD:[114]
RULING:[151]
PROCEDURAL MATTERS:[163]
                                                                10
                            EXHIBITS

                                                                11
                                                                12
                          UNDERTAKINGS

                                                                13
                                                                14
--- Upon commencing at 10:20 a.m.
                                                                15
               MS. SPOEL:     Good morning. Please be seated.

                                                                16
Sorry, I have to get the electronic stuff working here.

                                                                17
Good morning. The Board is sitting this morning in the matter of an application by landowners for
compensation for storage rights, matter RP-2000-0005. My name is Cathy Spoel and I'm presiding on this
matter today. With me is Mr. Bob Betts.

                                                                18
Could I have appearances, please.

                                                                19
APPEARANCES:



                                                                20
               MR. VOGEL:     My name is Paul Vogel. With me is Robyn Marttila. And we are here on behalf of the
               representative applicants.

                                                                21
               MS. JACKSON:   My name is Patricia Jackson and I'm with Crawford Smith, representing Union
               Gas Limited. Seated with us are Karen Hockin and Bill Wachsmuth of Union
               Gas.

                                                                22
          MS. LEA:  I'm Jennifer Lea, counsel to the Board.

                                                                23
               MS. SPOEL:     Thank you.

                                                                24
Are there any other appearances?

                                                                25
               MS. FOURNIE:   I'm Karen Fournie, and this is my husband Joseph, and we are applicants
               representing ourselves.

                                                                26
               MS. SPOEL:     Thank you. And is there anyone else who wishes to address the Board today?

                                                                27
               MR. VOGEL:     I believe the others are members of the LCSA Steering Committee.

                                                                28
               MS. SPOEL:     Thank you, Mr. Vogel.

                                                                29
PRELIMINARY MATTERS:



                                                                30
               MS. SPOEL:     Can everybody hear me? Is this better?

                                                                31
Right now, Ms. Jackson and Mr. Vogel, I understand that the represented parties and Union Gas have
come to an agreement which you wish to present to the Board this morning for our consideration.

                                                                32
I'm not sure how you would like to proceed. We'd like to hear some submissions, I guess, as to the
appropriateness.

                                                                33
               MS. JACKSON:   I think we actually hadn't discussed who was going to go first. We just have.

                                                                34
But in every other respect I hope we're very well organized. And Mr. Vogel, I think, as counsel for the
applicants, will address you first, and then followed by me.

                                                                35
               MS. SPOEL:     All right. And then Ms. Fournie, I understand you want to make submissions. We have
               your letter. I understand you want to make submissions to us as well, and we'll deal with
               that following the presentation by Mr. Vogel and Ms. Jackson, if that's acceptable.

                                                                36
               MS. FOURNIE:   Yes.

                                                                37
               MS. SPOEL:     Thank you.

                                                                38
PRESENTATION OF SETTLEMENT PROPOSAL:



                                                                39
SUBMISSIONS BY MR. VOGEL:

                                                                40
               MR. VOGEL:     Thank you, Madam Chair.

                                                                41
Madam Chair, we filed with the Board -- and I believe you have a proposed form of order which disposes
of this application on behalf of the represented applicants. I don't propose to go through the whole of the
order with you, since I understand you have had an opportunity to review it. But you'll note that the term
of the order is from 1999 to 2008. And, as part of this settlement, the represented applicants are agreeing
that the compensation as set out in the order represents just and equitable compensation.

                                                                42
The amounts are set out starting in paragraph 1. And you'll see both the inside-acre and outside-acre
amounts, as agreed, set out there. The roadway payment and the wellhead payment. I can tell you that the
per-acre payment represents about a 30 percent increase over the current compensation. The roadway
payment is about a 27 percent increase over the current compensation. And the wellhead payment
represents about a 77 percent increase over the current compensation.

                                                                43
The proposed form of order in paragraph 3 provides for a retroactive payment for each of those four
settlement components. The total value of that for the represented applicants is something in the
neighbourhood of $766,000.

                                                                44
The order, draft order, in paragraph 2 also provides for a future adjustment of this compensation for the
balance of the term of the order to 2008, being each year the lesser of the Consumer Price Index, or 5
percent. Without taking into account the CPI adjustment, that amount for represented applicants totals
approximately $977,000.

                                                                45
With the costs provision as well in the draft order, the total value of this settlement for the represented
applicants is something in the range of $2 million. And as I indicated, as part of this settlement, the
represented applicants do acknowledge that as just and equitable compensation and the order in itself
provides for payment of those amounts within 60 days.

                                                                46
So, in essence, that is the settlement as resolved between the parties. I'm not sure that I can add much
more to that. I'm happy to answer any questions that the Board may have concerning the settlement. And
I'm sure my friend, Ms. Jackson, will want to address the order from Union's perspective.

                                                                47
               MS. SPOEL:     Perhaps we'll hear from Ms. Jackson first, and then if there are lingering questions we'll
               deal with them then. It's probably easier that way.

                                                                48
SUBMISSIONS BY MS. JACKSON:

                                                                49
               MS. JACKSON:   Thank you, Madam Chair. May I, just so that the record is clear, also report on
               the record to the Board what I think the Board has been advised of in writing
               prior to this hearing, and that is that Union Gas has settled with Mrs. Lang, who
               previously was a claimant. We have settled with her, and she has withdrawn her
               application and her evidence.

                                                                50
Mr. and Mrs. Crowe were previously unrepresented applicants. Union Gas has settled with them, and
they have withdrawn their application. Mrs. and Mrs. Fournie, who are here today with respect to a
portion of their application, had filed evidence dealing with a claim relating to representation by Union
as to the amounts of compensation they would receive at the time that they acquired their farm. That
claim, which is the matter on which they filed evidence, has been settled as between Union and the
Fournies.

                                                                51
I do understand that the Fournies are here in respect of the balance of their application which was, simply
stated as they put it in their letter, they would like a compensation in the same amounts as the LCSA. But
on those they did not file evidence.

                                                                52
As Mr. Vogel has correctly said, we have arrived at a settlement with respect to the remaining
represented applicants. And it's an important condition of that settlement for a host of reasons, which I'm
sure are obvious to the Board, that the Board conclude with us that the resulting compensation is, in the
words of the Act "just and equitable."

                                                                53
It is, I think, an important element of the Board's determination on that point that this is a settlement
achieved by parties in the face of evidence which posited an enormous range as to what was just and
equitable compensation. It is a settlement after substantial negotiation and consideration, and it is a
settlement in an area which is inevitably a matter of judgment. There is no uniquely right number for
what is just and equitable compensation, and that fact alone is clearly demonstrated by the extent of the
gap between the starting positions of the applicants and Union Gas and the substantial evidence that each
has filed in support of its position.

                                                                54
So I do urge you, as you consider this request, to determine that it's just and equitable to recognize two
things. It is a matter of judgment, and there is both evidence and agreement, which I think provides the
Board with a substantial reason for concluding that the result is just and equitable, particularly given the
array of landowner interests that Mr. Vogel represents.

                                                                55
Mr. Vogel correctly notes -- I think there may have been a little confusion because there was a slight
redrafting of the order at the request of counsel for Board Staff, so what Mr. Vogel's submissions called
paragraphs 1, 2, 3, and 4, are, in fact, I believe, now preambles to the order that is proposed before you,
and that is on page 2 of the proposed order.

                                                                56
As he correctly notes, there are increases in the annual payments to be made in respect of inside and
outside acres and in respect of roadways and wellheads. And just by way of illustration of what I called
"the gap," in respect of roadways and wellhead, which are now fixed at, for the year 2004, $825 and
$1050 respectively. The evidence led by the applicants would have provided for minimum compensations
in those areas in excess of $25,000.

                                                                57
So, when I say it's judgment in an area where there are differing opinions, that's by way of illustration of
what I mean. But I think what the parties have recognized is, first of all there is value in settlement, and
the Board has communicated that to the parties over the course of their negotiations. Inevitably, of
course, if there's to be settlement, there has to be compromise. If there's to be settlement, it's clear that
Union was going to have to move from its initial position. And Union recognized the value of doing so,
recognized the Board's admonitions to be reasonable in settlement, and recognized that we're operating in
an area of judgment, where we had evidence before us from the applicants indicating that these numbers
should be very substantially higher. So, on that basis, in my submission, increases of the kinds that are
recommended to you by the parties from their different interest can, in the circumstances -- and should be
-- concluded to be just and equitable.

                                                                58
The settlement also includes -- I will quickly dispose of paragraph 4 of the preamble. This was an issue
which, while it had never formally been finalized, was never substantially an issue, and that is that Union
Gas was always prepared to pay for residual gas down to 50 psi. Neither do I think there is any more
need be said about the going-forward payment. There is, as well, though, a retroactive payment that has
been agreed on by the parties, which is dealt with in paragraph 3 of the preamble, and again in
paragraphs 1 and 2 of the proposed Board order.

                                                                59
That retroactive amount recognized that it would be appropriate to provide some compensation for the
years that have already passed, and also, and importantly, the parties all recognized that this result was
possible because of substantial evidence and effort that had been undertaken by the applicants, at
considerable cost to them. The position that Union arrived at as just and equitable is, in fact, in response
to substantial evidence from the applicants, who, amongst them, paid both legal costs and consulting
costs for that position. The settlement appropriately recognizes that Union make some contribution to
that, and as well that the applicants reduce the retroactive payments they would otherwise pay to make
their own contribution to those costs. And those costs therefore are total, as you can see in the proposed
order, $845,000, of which Union will contribute $250,000, and the represented applicants by the
adjustment of the retroactive payments would contribute $595,000; with the result that they will each of
them receive the amounts that are shown as the appropriate retroactive payment which results from the
hearing as set out in the schedules.

                                                                60
I should say first of all, Union considers that an appropriate result and an appropriate contribution. And
it's apparent that the applicants do as well, as they have -- as counsel has confirmed to us, and I take it in
his submissions to you today, confirmed to you, that all of his clients are content with that mechanism for
contribution. In the circumstances, we think that's an appropriate and just and equitable way of
recognizing that for these proceedings to come forward for the results to be had, and for the process to
work, there are costs, and they are not insignificant, and they should be contributed to in the case of a
settlement by both parties.

                                                                61
Now, that is why, in sum, we recommend that the Board do accept this settlement, and accept it in the
sense that the Board agree with us that the resulting payments are just and equitable. It is, I must say, a
necessary condition of the settlement that that determination be made. So it is an important one, from our
point of view. And, of course, it's the reason that we're before you; otherwise we could have done this as
a matter of private conversation. But I think the reasons why we want that determination by the Board are
reasonably evident to everybody in this room.

                                                                62
I should say that that deals with Union Gas's settlement with the represented applicants. And, if that
settlement is effective, in other words, if the Board is prepared to grant the order which is a necessary
condition to it, Union would then be prepared to offer the equivalent amount to those landowners, some
of whom are parties to this proceeding, a large number of whom are not here in the numbers of
approximately 150 landowners who have never been party to these proceedings. Union Gas is prepared to
offer the same compensation, that is, the same numbers going forward, from 2004 and the same net
retroactive compensation.

                                                                63
We have also made the same offers to the Fournies and the Zavitzes. Now, I think it's important to
recognize that the offer that we have made and the only offer we are making or are prepared to make is at
that level. In other words, that the compensation for those who did not pay for the costs of this
application and the expert evidence that supported it should be no higher than those who did pay those
costs. This is, I suppose, insofar as it concerns people who aren't before you today, this is simply by way
of explanation of what we are prepared to do on a voluntary basis, in the event that the settlement is
approved by the Board in the terms I have discussed. It has particular focus, I think, though, because of
the Fournies' position before you today, and I'd like to just say briefly a word about that.

                                                                64
We have advised the Board of the offer we've made to the Fournies. It is the only offer we have made to
the Fournies. I think it's important to remember when the Fournies and the Zavitzes came before you,
they take the position that they want, effectively, the equivalent compensation of the represented
applicant. They have on these issues filed no evidence of their own.

                                                                65
The position we have arrived at, the offer we have made, and the settlement we hope we have achieved
with the represented applicants is as a result of that evidence and that effort and those costs. The
Fournies and the Zavitzes, we also understood, were seeking equivalent compensation and no more. I
now understand that today they are seeking more. They would like -- what they have achieved, and what,
if the Board approves this settlement, other landowners will have achieved is a level of compensation
achieved through the effort, costs, and expense of the represented applicants. So while the represented
applicants have paid for that evidence and effort, we're prepared to make the same compensation
available to others. So others will have achieved the benefit that has been paid for by the represented
applicants. That by itself, in a sense, is a benefit.

                                                                66
We're not prepared to provide a windfall benefit beyond that, one which would signal to landowners and
others that you can hold back, allow somebody else to bear the expense, go through the negotiations,
arrive at a result, and then get more. We don't consider -- Union doesn't consider that that's fair; that it
will lead in the future to problems of enormous free-ridership. I think the Board, certainly Union,
recognizes there is an advantage in these proceedings to having people represented and ably represented
as a group. To indicate to landowners generally that they don't need to do that in order to achieve the
benefits is, in our submission, not a desirable procedural outcome.

                                                                67
I think I should also say, in that respect, that the offer that we have made to the Fournies and the Zavitzes
is the offer that we have made. Union Gas is, for the reasons I hope I've described to you, not prepared to
offer them more. And if they're not prepared to accept it, we'll, of course, need to proceed to a hearing of
their application. I'm not sure, quite frankly, how that will proceed, since they have not filed any
evidence. But we would have to go to a hearing of the application. I would suggest not today. I would
suggest that's not desirable. But I do have to tell you that Union is not prepared to proceed on the basis of
windfall compensation to the non-represented applicants. And that's the reason for the offer that we've
made, and, I hope, an explanation of it.

                                                                68
I should mention one further matter, just leaping ahead and in a perhaps more optimistic vein. Were the
Board to accept this settlement and determine that it was just and equitable, in due course Union Gas
would expect to be applying for the creation of a deferral account. It is, of course, the expectation of
Union Gas that the costs we're here talking about are properly included in rates, but that's not a matter
clearly before this panel. We would, though, be seeking a deferral account in due course, and rate
treatment that would follow from that.

                                                                69
Thank you. Those are my submissions.

                                                                70
               MS. SPOEL:     Mr. Vogel, do you want to add anything further to that?

                                                                71
REPLY SUBMISSIONS BY MR. VOGEL:

                                                                72
               MR. VOGEL:     Madam Chair, I think the only addition I would make to that is that I can advise the
               Board that this settlement was negotiated as a package, a significant component of
               which, as you can see, is provision for the significant costs that LCSA was required to
               incur to bring this application.

                                                                73
LCSA, of course, recognizes that those who are not members of LCSA will benefit from their efforts.
That's a fact of life and, you know, it's something that I think has always been recognized by LCSA.

                                                                74
But I would agree with my friend, Ms. Jackson, that from LCSA's perspective, it is inequitable that others
should not only reap the benefit of LCSA's efforts, which is what Union's offer, in effect, does for people
like the Zavitzes and the Fournies and others, but not only get the benefit of LCSA's efforts but, in fact,
receive something more. And that, in my submission to you, would be not appropriate, inequitable, and
not recognize the significant risk and effort that LCSA members took in bringing this application forward
and arriving at the result that has been presented for your approval today.

                                                                75
Those are my submissions.

                                                                76
QUESTIONS FROM THE BOARD:

                                                                77
               MS. SPOEL:     Thank you, Mr. Vogel.

                                                                78
Ms. Jackson, can I just ask a couple of things I think we'd like to clarify.

                                                                79
And Ms. Fournie, we'll deal with this first, and then we'll deal with your position. It looks like it's
somewhat different.

                                                                80
The 150 other landowners that you referred to, are they landowners who would also be getting some kind
of retroactive payment, or are they not parties because they weren't eligible to become parties?

                                                                81
               MS. JACKSON:   I don't think we can say that. There are approximately 150 landowners who, for
               whatever reason, chose not to be applicants in these proceedings. As I
               understand it - this pre-dated my involvement in the case - but the Board directed
               that they all have notice of these proceedings. They chose not to become
               applicants.

                                                                82
               MS. SPOEL:     But what about the applicants that Union insisted be removed from --

                                                                83
               MS. JACKSON:   There are some of those.

                                                                84
               MS. SPOEL:     Quite a few. I just wondered if you had any notion of how many people would be dealing
               with retroactive payments and how many would be simply be going forward?

                                                                85
               MS. JACKSON:   Oh, no, the proposition is simply that everybody would be offered the retroactive
               net payments that are being offered to the LCSA payments and that they would
               all get the same going-forward amounts.

                                                                86
The point of difference, to the extent that there is any contention, as I understand it, is that Union is not
prepared to offer the non-represented applicants, whether they are the Fournies or the Zavitzes or the
people who applied but didn't get standing or the people who didn't apply at all, we treat them all the
same. We're prepared to make the same dollars-in-the-pocket offer that we have made and settled on with
the represented applicants, going forward and going back, but not more.

                                                                87
               MS. SPOEL:     But that would be regardless, as I recall from -- and I know, Ms. Jackson, this pre-dated
               your involvement in the case, but it doesn't pre-date my involvement in the case. I know
               that one of the issues that we dealt with at the standing proceeding last year was that
               there were some leases that had not yet expired and therefore there was no way to deal
               with those.

                                                                88
Now, if their lease had yet to expire - let's say it expires in 2005, as an example - will those landowners
get the retroactive payment even though their lease had not expired in 1999?

                                                                89
               MS. JACKSON:   Yes. Yes. I think the important difference, from Union's point of view at the
               standing hearing and going forward, is not that Union sets out with an intention
               to treat landowners less than equivalently, because Union has not done that and
               is not proposing to do that now. But particularly with respect to the application
               we had, which sought, you know, tens of thousands of dollars of compensation
               annually, Union was not prepared to commit, nor could it be obliged to, which
               was the standing issue, to paying people who weren't entitled to anything like the
               enormous sums that were sought in the application. We have now resolved it. So
               the focus of the distinction is, we're no longer focussing on what we can legally
               be compelled to do.

                                                                90
In the event that the Board concludes that this is an appropriate level of compensation, that precise level
of compensation as it produces money in the hands of the applicants will be made to everybody else.

                                                                91
               MS. SPOEL:     Thank you. I just wanted to clarify that if it wasn't --

                                                                92
               MS. JACKSON:   But not higher.

                                                                93
               MS. SPOEL:     Right. No, I understand your position on that. I just wanted, for my own mind, to
               understand where various people stood.

                                                                94
               MS. JACKSON:   Right.

                                                                95
               MS. SPOEL:     The second thing, and I'm not sure whether this is something that would be appropriate to
               inquire of now or later -- it might be -- or later when it comes to a deferral account in a
               rates case, but is it possible to provide us with any indication with respect to the costs
               involved as to what portion of that represents expert evidence and what -- you know,
               some breakdown of those costs? Or is that a matter that you view as being between you
               and -- or Union Gas and the LCSA?

                                                                96
We have a lump sum here that clearly includes expert witness fees and legal counsel. Or I assume it
includes those two items.

                                                                97
               MS. JACKSON:   I think it does. I have to defer to Mr. Vogel on that.

                                                                98
               MR. VOGEL:     That's correct.

                                                                99
               MS. JACKSON:   As I understand, there is a compromise on that, but how that compromise was
               achieved, I don't know. Our position was recognizing that it was a costly
               enterprise, it was also a costly enterprise for Union Gas, and Union Gas was not
               prepared to add to its offer any more than $250,000 on account of those costs.
               Which is why the balance is contributed by the applicants themselves.

                                                               100
               MS. SPOEL:     Right. Is this something, Mr. Vogel, that you're prepared to share with us? I don't mean
               to compel you to. I am just wondering.

                                                               101
               MR. VOGEL:     Yes, I think I'm in this position, Madam Chair. I can tell you that the actual costs exceed
               the amounts provided for in the order. In order to facilitate this settlement, there was a
               compromise made on those costs. And the total costs, as you've noted, are in the amount
               of $845,000. But I don't think, for matters of privilege and otherwise, that I'm in a
               position to disclose anything beyond that as to the breakdown.

                                                               102
               MS. SPOEL:     But you'll confirm that this includes all the expert witnesses? That there's a provision for
               expert witnesses included in that as well as --

                                                               103
               MR. VOGEL:     Yes. A significant component, yes.

                                                               104
               MS. SPOEL:     Ms. Fournie, perhaps we could hear from you now. We've received your letter and as I
               understand, and you may not necessarily wish to add all that much to it, I don't know, I
               understand your position is that you and your husband should be receiving, in respect of
               the retroactive payments, an amount that is, if you will, gross of the equivalent of legal
               fees and costs, let's call them that, as opposed to an amount that's net of that. In a
               nutshell, have I understood it?

                                                               105
               MS. FOURNIE:   In a nutshell, that would be correct.

                                                               106
               MS. SPOEL:     Do you wish to add to anything you've put in your excellent letter?

                                                               107
SUBMISSIONS BY MS. FOURNIE:

                                                               108
               MS. FOURNIE:   You have the letter. I don't think you want me to go over it.

                                                               109
I do want to say a few words, Madam Chair, that prior to receiving Union Gas's verbal offer on March
9th, and their e-mailed letter of agreement, we were, in fact, prepared to settle. We asked for no more, we
asked for no less, but to us it appears that may not be the case. Because we feel that the retroactive, or
what they call "one-time" payment, used a basis for their formula for a right that we offered to Union Gas
as well as any other landowner in the pools would be identical. Ours is no less; ours is no more.

                                                               110
We feel perhaps we are being discriminated against by not joining the LCSA, or perhaps not hiring legal
representation; we chose not to. And, getting back to the basis for the one-time payment was due to
expired agreements from 1999 to 2004, and I do have the formula in the letter. And, if my math is still
decent, X plus Y still equals P.

                                                               111
Now, I don't think everyone in this room is aware of what those numbers are, or what the unknowns
could be. But even if you work it backwards, the net -- net -- for where I have plugged in P for the -- and
we will just look at it as a 100-acre parcel, the 1475 that Union has offered us, even when you work it
backwards, and you make Y our payment to legal counsel, which was zero, we end up with a gross of
1475. I feel that we offered to Union Gas the same benefit for leasing our storage laneway and wellheads.
We offered them no less, and we offered them no more. We offered them the same as all the other
landowners in the pools, and we trust that the Board will order fair and equitable compensation to us as
well for the same rights as LCSA members regarding the one-time payment, that being retroactive from
'99 to 2004, for the lease of storage, for petroleum and natural gas rights, as well as roadways and
wellheads.

                                                               112
Again, as in our letter to you dated February 19th, we have accepted Union Gas's limited offer to settle
the other issue. However, we were extremely disappointed that we had not been offered the same
compensation package as LCSA applicants. At this time, however, we are prepared to settle on all other
aspects to have issue except for the so-called one-time payment.

                                                               113
               MS. SPOEL:     Thank you.

                                                               114
QUESTIONS FROM THE BOARD:

                                                               115
               MR. BETTS:     Thank you. I'm not sure whether I direct this question to you, Mrs. Fournie, or -- is it
               Fournie or Fournie?

                                                               116
               MS. FOURNIE:   Fournie.

                                                               117
               MR. BETTS:     Fournie, thank you. Or whether someone from Union can help me. I am a little confused
               with the statement that this is not the same compensation as others. I'm going to ask
               perhaps Union: Are you aware of these concerns and how they arise? What is the
               difference?

                                                               118
               MS. JACKSON:   As I understand it -- first of all, I absolutely disagree with the view that it is
               different compensation. What the Fournies have been offered is exactly what's in
               paragraphs 1, 2, and the schedule. In other words, the retroactive payments are
               exactly the same. And on the contrary, the Fournies are not being discriminated
               against although they didn't undertake the risk and the expense and the time to
               put together this evidence that the LCSA members did, they are getting exactly --
               they are being offered exactly the same compensation. They want more. They
               want a larger retroactive payment than the applicants are getting. And I've told
               you why I think they shouldn't have that.

                                                               119
I should make it clear, though, to the extent that Ms. Fournie says she's prepared to accept parts of that
offer but not others, I think it's clear the offer is a package. And without that acceptance, we don't -- I say
with regret, because I think it would be regrettable, and I'm not sure that's what the Fournies intend, but I
say with regret, if they don't accept that offer, which we think is more than fair, given that they didn't
undertake the risk, the cost and the expense that the applicants did -- because it's that evidence that brings
us to the level we're at -- if they don't want that level of compensation, there is no other offer on the table;
then I say with regret, we will have to go to a hearing.

                                                               120
               MR. BETTS:     Thank you. I did hear that one clearly.

                                                               121
Ms. Fournie, can you tell me how you see these offers to be different between what has been proposed to
you and what has been -- I'll move over this way.

                                                               122
               MS. SPOEL:     So will I.

                                                               123
               MR. BETTS:     Thanks, Ms. Jackson. I appreciate that. It's a problem with the room set-up. It's nobody
               that is contributing to it. How do you see this to be different?

                                                               124
               MS. FOURNIE:   Okay. In the pools, I think Union Gas and the LCSA members will agree, we
               offer the same package with respect to our storage, our wellheads, and our
               roadways. Your wellhead is no better than mine. It's no worse than mine. It's the
               same as mine. Our storage is no better than yours, no worse, no less, no more.

                                                               125
               MR. BETTS:     I don't want to interrupt but I do understand that clearly, the infrastructure.

                                                               126
               MS. FOURNIE:   Okay.

                                                               127
               MR. BETTS:     Now tell me how the offer --

                                                               128
               MS. FOURNIE:   Then going to the net, they refer to this as the gross, and we all agree the gross
               should be equal. When you go to the net --

                                                               129
               MS. JACKSON:   We don't agree.

                                                               130
               MR. BETTS:     Sorry, Ms. Jackson --

                                                               131
               MS. FOURNIE:   If you don't agree, then you don't agree we're equal.

                                                               132
               MR. BETTS:     Just let me have your side of this, if I can, and then we'll try and get both sides.

                                                               133
               MS. FOURNIE:   Are you talking to me?

                                                               134
               MR. BETTS:     Yes, please, Ms. Fournie, continue.

                                                               135
               MS. FOURNIE:   Okay. Had there been no retroactive, and because the basis of the retroactive is
               what we have to offer, the basis of the retroactive, you have to start somewhere. I
               offer storage. I offer a roadway. I offer a well. It's all the same. It's a starting
               point, and it's a payment being paid on those rights. We are all the same at that
               point. We didn't secure legal counsel. We have never said we have. We've never
               asked for compensation for having. But if you look on the flip side, had we asked
               for -- had we hired legal counsel and we went to Union Gas and we said to them,
               Will you pay for our lawyer? What would the answer have been? Perhaps. If it
               was "no" that means you're not treating me fair. And if it's "yes," for the same
               amounts, and we know what P is in my example, if you work the math
               backwards, if you work the math backwards to the net we got, minus what Union
               Gas may have paid us, we're still at the amounts that Union Gas has offered
               gross to their landowners.

                                                               136
               MR. BETTS:     Okay. And maybe I'll have to ask you a question to see if I understand it. I'm sensing that
               the difference that you are focussing on here is the legal fees; is that fair to say?

                                                               137
               MS. FOURNIE:   That would be fair.

                                                               138
               MR. FOURNIE:   Expert.

                                                               139
               MR. BETTS:     And that if you did not -- if you were not asked to contribute to the legal fees, that then it
               would be the same offer? Is that correct?

                                                               140
               MS. FOURNIE:   Can you repeat your question? I think it all goes back to the basis of where a
               retroactive payment was made. It's the gross retroactive payment. Now, Union
               Gas just stated we've been offered more than generous. We haven't been offered
               more than generous; we've been offered. So I don't even want the more. I don't
               want the more. I want the same. I want equal.

                                                               141
               MR. BETTS:     Let me ask you another question, and then I'd be interested in the reply from others. Can
               you tell me what -- and I didn't have the opportunity, as Ms. Spoel did, to go back in
               history here. Can you tell me what involvement you and your husband had in this
               proceeding? Was there -- and I'm not looking for the testimony, at this point. I'm saying:
               Did you provide evidence throughout? Did you call witnesses? You obviously did not
               have a legal representative. Did you do something yourselves to bring that kind of
               information to the matter?

                                                               142
               MS. FOURNIE:   I think it was stated evidence. I didn't -- we didn't have witnesses. We were our
               own witnesses. Just as we're representing ourselves today. We witnessed the
               crop loss. We live it every day. We witnessed the crooked laneways. We witness
               abandoned pipelines that when we're tiling our farms have had to be pulled out.
               We are the witnesses.

                                                               143
               MR. BETTS:     And Ms. Jackson, was there any reply that you wanted to make to those comments
               received?

                                                               144
               MS. JACKSON:   Well, I have before me the Fournies' evidence, and to the extent that there is
               evidence, it is evidence in respect of the claim that we have settled.

                                                               145
In respect of the rest, they say they want the same as the offer to the LCSA, but the evidence with respect
to that is the LCSA evidence.

                                                               146
               MR. BETTS:     Thank you.

                                                               147
               MS. SPOEL:     I think that we'll just take a short break, Ms. Jackson, Mr. Vogel, Ms. Fournie, to
               consider the settlement achieved, reached, between the LCSA or the represented
               applicants to put it more precisely, and Union Gas. And we'll come back, I guess, in 15 --
               well, let's say, 20 minutes, deal with that, and then we'll discuss what is appropriate in
               respect of the Fournies, because that's really a separate matter.

                                                               148
So we'll adjourn, let's say, until 11:25 by this clock. A little different.

                                                               149
--- Recess taken at 11:02 a.m.
                                                               150
--- On resuming at 12:03 p.m.
                                                               151
RULING:



                                                               152
               MS. SPOEL:     Please be seated.

                                                               153
The Board has reviewed the settlement presented by counsel for Union Gas and the represented
applicants, and we find that it constitutes just and equitable compensation for the years 1999-2008 in
respect of the represented applicants' claims.

                                                               154
In making this finding, the Board notes that the parties have both made significant compromises in their
original positions, which has necessarily involved the preparation or review of substantial expert
evidence and opinion on what is, in the end, a matter of judgment.

                                                               155
This gives the Board added confidence that the agreement arrived at by the parties provides for just and
equitable compensation.

                                                               156
The Board agrees also that there is value in settlement, particularly in cases such as this where the parties
have an ongoing relationship, and is very appreciative of the efforts made by the parties to come to a
successful resolution of this case.

                                                               157
The Board will issue an order in due course, substantially in the form that has been provided to us. If
there are any changes to be made to it, I'll ask Board counsel to communicate with both Mr. Vogel and
Ms. Jackson as to any changes in wording, but we don't see anything substantive in it that requires any
amendment at this point in time.

                                                               158
               MS. JACKSON:   Madam Chair, I should also just mention, it wasn't in the order, but it is the
               subject of agreement between us that to the extent that there have been Board
               costs that have not already been covered, that Union Gas will bear those.

                                                               159
               MS. SPOEL:     Thank you. I'm sure our Board secretary will be pleased to hear that.

                                                               160
Is there anything, Mr. Vogel?

                                                               161
               MR. VOGEL:     No, I think that's all, Madam Chair.

                                                               162
               MS. SPOEL:     Thank you. Thank you, Ms. Jackson.

                                                               163
PROCEDURAL MATTERS:



                                                               164
               MS. SPOEL:     Now, moving to Ms. Fournie's application.

                                                               165
          MS. LEA:  Yes, I've had an opportunity, Madam Chair, to speak with the Fournies during the break,
          and they're making a request to the Board that their application be adjourned today,
          without setting a date for hearing, for an opportunity for consideration and discussion.

                                                               166
               MS. SPOEL:     Thank you, Ms. Fournie. We appreciate that.

                                                               167
               MS. FOURNIE:   Thank you.

                                                               168
               MS. SPOEL:     We realize that you've not had very much time since receiving the offer to give it your
               full consideration.

                                                               169
               MS. FOURNIE:   Thank you.

                                                               170
               MS. SPOEL:     And we appreciate you coming here before us this morning.

                                                               171
          MS. LEA:  Further, Madam Chair, there is the matter of Mr. Zavitz, who has received a letter but
          has not appeared before us. Given that again we don't have an agreement, and we don't
          have a withdrawal, the application is still before you. And I can only recommend that we
          also adjourn this one sine die, and that Board Staff will be in contact with Mr. Zavitz to
          find out what his requests are with respect to the application.

                                                               172
I think that it was assumed by him that it could be settled by the Board today without a hearing, and I
don't think that's possible in this case.

                                                               173
Ms. Jackson, are there any other applicants that we haven't dealt with besides those, Mr. Zavitz and the
Fournies?

                                                               174
               MS. JACKSON:   I don't believe so.

                                                               175
          MS. LEA:  No? Okay.

                                                               176
               MS. SPOEL:     And Ms. Jackson, is that acceptable to you --

                                                               177
               MS. JACKSON:   Yes, indeed.

                                                               178
               MS. SPOEL:     -- with respect to the Fournies and Mr. Zavitz?

                                                               179
               MS. JACKSON:   Yes, indeed. Ms. Lea had discussed it with me and I think that's an entirely
               appropriate way of proceeding.

                                                               180
               MS. SPOEL:     Thank you. Well, then, I think that concludes this matter, and thank you all for coming
               today, and thank you again for your efforts in dealing with this case.

                                                               181
               MR. VOGEL:     Thank you, Madam Chair.

                                                               182
               MS. SPOEL:     Thank you.

                                                               183
--- Whereupon the hearing adjourned at 12:06 p.m.
  
























