40. The HAF process ensures fairness and helps ensure cost causality especially where multiple incremental customers or demands are anticipated in an Area of Benefit over a period of several years. It provides a process to design and build the optimal facilities for the future and ensures each new customer or demand is allocated an appropriate portion of the Development Project as they each move through the commitment or contracting and connection process. In this way the first customer does not bear the entire economic burden, nor the last customer avoid theirs.

41. The concept of the Hourly Allocation Factor is to fairly and equitably share and allocate the costs and benefits of a Development Project that benefits multiple customers commensurate with peak hour demand. When a Development Project is proposed, it can be modelled to determine an Area of Benefit. The Area of Benefit is the geographic area that will see a noticeable increase in firm natural gas capacity as a result of the Development Project.

42. Enbridge Gas is proposing that the threshold of eligibility be scaled with the size of the Development Project. For larger projects, Enbridge Gas would propose that the HAF apply only to large volume customers. For smaller projects, all customers, large and small, would be included. In the four previously approved LTC projects, the "floor" of HAF applicability was set at 200 cubic metre per hour. Enbridge Gas determined the proposed HAFs based on the known parameters at that time, by dividing the net forecasted capital by the total forecasted capacity in cubic metres per hour made available by the project for customers who required in excess of 200 cubic metre per hour. These projects primarily targeted large volume customers, and as a result, a threshold was set that would target and capture those customers. In the future, with a smaller Development Project, that targets a mix of larger and mid-sized customers a lower threshold may be more appropriate. Enbridge Gas is