Information Request No. 1 from Alexander First Nation 1.1 CALCULATION OF ALEXANDER FIRST NATION INTEREST IN CAPITALCOST

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1 Page 1 of 5 Northern Gateway Pipelines Inc. Enbridge Northern Gateway Project NEB File OF-Fac-Oil-N Filed 27 May 2010 Information Request No. 1 from Alexander First Nation 1.1 CALCULATION OF ALEXANDER FIRST NATION INTEREST IN CAPITALCOST Reference: i. Table 2-3, Exhibit B1-2, Application Volume 1, Part 1 (A1s9X5), Section Project Cost Estimate page 2-13 At law Canada and Alberta are obligated to accommodate and compensate Alexander First Nation treaty and aboriginal rights that are impacted by the Project. Reference (i) provides a summary of the estimated total capital cost of $6.650 billion for the Project. Please identify the portion of the estimated capital cost of the Project that includes compensation to the Alexander First Nation for the loss of its aboriginal and treaty rights and detail how this amount was calculated. As an outcome of consultation conducted to date with the Alexander First Nation ( Alexander FN ), the Project has determined that the pipelines should be relocated such that they no longer cross Alexander FN Reserve lands. The Project has not considered compensation to the Alexander FN for the loss of Aboriginal and treaty rights.

2 Page 2 of ALEXANDER FIRST NATION's ROE Reference: ii. Exhibit B1-4, Application Volume 2 (A1SPX7), Section 3 iii. NGP Response to JRP Information Request No. 2.8 Reference (i) sets out a base annual return on common equity (ROE). In reference (ii) the NGP states: "Following the submission of Northern Gateway's s.52 Application in May 2010, some revisions have been made in the Toll Principles which were reflected in the updated TSA submitted to the JRP on August 11, The updates included an increase in ROE from 11% to 12% and the funding of Aboriginal Participation, which have increased the tolls from $3.21/bbl to $3.68/bbl for crude and from $4.88/bbl to $5.23/bbl for condensate." a. Please set out whether compensation payments to the Alexander First Nation will be a product of the AFN's own ROE for its equity share in the Project or whether such payments will be part of the rate base used to calculate the ROE for the proponent; b. If the later, please provide the methodology for calculating what payments to the Alexander First Nation will be part of the proponent's rate base; c. Please provide details of how the $0.47/bbl in Reference (ii) was calculated, specifically what portion of that relates to Aboriginal Participation and how any Alexander First Nation interest will be paid from the $0.47/bbl. a. With respect to the matter of compensation, please refer to Northern Gateway s response to Alexander FN IR 1.1. If the Alexander FN becomes an equity participant, revenue to the Alexander FN would be determined by the terms of the ownership agreement. It would not form part of the rate base for the pipelines. b. Not applicable. c. Term Shippers on the Oil Pipeline will pay approximately $0.02/bbl incremental to facilitate Aboriginal participation in the Oil Pipeline.

3 Page 3 of KEY PROJECT ISSUES FOR NON-TRADITIONAL LAND USE OF THE ALEXANDER FIRST NATION Reference: iv. Exhibit B3-17, Application Volume 6C (A1T0G7) Section Key Project Issues for Non-traditional Land Use page 5-4 Reference (i) suggests that the Alexander First Nation ("AFN") was not considered as a stakeholder from a relevant land use group and therefore its land use issues relating to Alexander Reserve 134, 134A and 134B ("AFN Reserve Lands") and the AFN Treaty Land Entitlement Lands ("AFN TLE Lands") were not considered in the Scope of Assessment for Non-Traditional Land Use in the Project's ESA - Human Environments. Please provide the following: d. your summary of the discussions held with the AFN in relation to land use and the AFN Reserve Lands and AFN TLE Lands; e. a summary of the discussions held with the Government of Canada in relation to the AFN Reserve Lands; f. a summary of the discussions held with the Governments of Canada and Alberta in relation to the AFN TLE Lands; g. a summary of the current valued environmental components (VECs) for Nontraditional Land Use (NTLU) of the AFN Reserve Lands, including Alexander Reserve 134A and the AFN TLE Lands; h. a summary of the AFN's long term land use plans for the AFN Reserve Lands and AFN TLE Lands; i. a summary of the outstanding land use issues of the AFN in relation to the AFN Reserve Lands, AFN TLE Lands and AFN's long term land use plans; j. Northern Gateway's response to each of the AFN's land use issues. d. The following is a summary of discussions held with the Alexander FN in relation to land use and the Alexander FN Reserve Lands and Alexander FN TLE Lands : January 2009 the Alexander FN representative expressed concern that there were already two pipelines passing through the Alexander FN Reserve near Fox Creek and another RoW would reduce the ability for planned infrastructure in the area, however, the Alexander FN did not describe the type of infrastructure. September the Alexander FN representative indicated that Nation Elders were concerned about the proposed pipeline passing through the Alexander FN Reserve near Fox Creek, as those lands were purchased for economic development. The Alexander FN representative did not express the type of economic development it had planned for the said Alexander FN

4 Page 4 of 5 Reserve. March the Alexander FN indicated that they had hoped to develop a best use plan for the Alexander FN Reserve near Fox Creek. The Alexander FN representative also indicated that they would like proposed pipeline to stay along the existing RoWs on Alexander FN Reserve near Fox Creek. The Alexander FN representative also mentioned that they could possibly designate the said lands so the existing Section 28 permits would not have to be renewed by Indian and Northern Affairs. It was also expressed that the Nation Elders were concerned about the proposed project traversing the Alexander FN Reserve near Fox Creek. June 2010 the Alexander FN representative discussed the Alexander FN s desire to develop a best use plan in collaboration with Northern Gateway that would lead to sustainable development on the Alexander FN Reserve near Fox Creek. Northern Gateway mentioned that the Nation Elders, as noted in the March 2010 meeting, were concerned with the proposed pipeline passing through the Alexander FN Reserve. October the Alexander FN representative indicated that the Alexander FN is still in discussion to turn Alexander FN TLE lands into Reserve lands and the Alexander FN may be requesting that Northern Gateway pay an access fee for access to the Alexander FN TLE lands. November 2010 the Alexander representative indicated that a tripartite agreement exists between the Alexander FN, Federal government and Provincial government and there are issues that have to be addressed between the parties before the Alexander FN TLE lands become Reserve lands. March Northern Gateway indicated to the Alexander FN that there was a possibility of Northern Gateway relocating the proposed pipeline route off the Alexander FN Reserve to address the concerns of the Nation Elders. May 2011 Northern Gateway advised Alexander FN that due to the concerns raised by the Alexander FN surrounding the proposed pipeline crossing the Alexander FN Reserve near Fox Creek a new route has been developed by Northern Gateway to address the Nation s concerns. The Alexander FN indicates that Northern Gateway may have to deal with the Alexander FN in any event, as the proposed pipeline will may still traverse the Alexander FN s TLE lands. e. Northern Gateway did not meet with the Government of Canada in relation to the Alexander FN Reserve Lands.

5 Page 5 of 5 f. Northern Gateway met with the Province of Alberta to provide information relating to the Project s Aboriginal engagement program including Alexander FN. Northern Gateway provided information relating to the possibility of the Project RoW traversing the Alexander FN reserve lands No. 134A. Northern Gateway has not had any meetings with the Government of Canada in relation to the Alexander FN TLE lands. g. Please refer to Northern Gateway s response to Federal Government IR Northern Gateway will not require the use of Alexander No. 134A Indian Reserve for the purposes of placing a portion of the proposed pipeline on the said lands. The pipeline route is currently located on the Alexander No. 134A Indian Reserve between KP and KP As stated in the Application Update (Volume 5A, Section 4.3.1), Northern Gateway will relocate the pipeline route off of the reserve to address concerns raised by the Alexander FN. This route refinement will appear in a future pipeline route revision. The pipeline route is also located on one quarter section of land, NE , from KP 65.5 to KP 66.4 that is owned by AFN TLE Land Corp. h. Please refer to Northern Gateway s response to Alexander FN IR 1.3g). i. Please refer to Northern Gateway s response to Alexander FN IR 1.3g). j. Please refer to Northern Gateway s response to Alexander FN IR 1.3g).