Erosion risks

• Adverse court or regulatory outcomes affecting key rights-of-way
• Political opposition delaying renewals/expansions
• High-profile incidents increasing regulatory scrutiny

Leading indicators

• Major permit/court milestones for corridor-critical assets
• Mainline utilization and apportionment rates
• Integrity spending and incident rate trend

Counterarguments

• Incremental capacity from other routes can reduce corridor scarcity
• Energy transition can erode long-run liquids throughput

Erosion risks

• Route-specific demand shifts (basin declines or refinery reconfigurations)
• Regulatory constraints limiting expansions
• Competition from rail/truck in niche markets

Leading indicators

• Throughput vs nameplate capacity by key system
• Capital project backlog and in-service dates
• Utilization changes after competing capacity additions

Counterarguments

• Scale does not guarantee pricing power when tolls are regulated or periodically reset
• Network value depends on matching supply/demand geography over time

Erosion risks

• Contract roll-offs in weaker basins
• Counterparty credit stress during commodity downturns
• Regulatory/tolling resets reducing allowed returns

Leading indicators

• Contracted capacity % and weighted average contract duration
• Shipper credit rating mix and concentration
• Tolling settlement outcomes and ROE allowances

Counterarguments

• Some assets still face throughput risk where contracts are not fully take-or-pay
• Long contracts mitigate cash-flow volatility but not long-run demand decline

Erosion risks

• FERC policy shifts impacting allowed ROE/cost recovery
• Political and environmental opposition increasing permitting timelines
• Technology/policy-driven demand changes (electrification, fuel switching)

Leading indicators

• FERC rulings and ROE precedent changes
• Contract renewals for major corridors
• LNG export build-out and regional basis differentials

Counterarguments

• Regulation limits true pricing power and can reset economics downward
• Competing pipelines and alternative routes can still pressure utilization

Erosion risks

• Contract roll-offs if basin economics weaken
• Counterparty credit deterioration
• Regulatory delays increasing project costs

Leading indicators

• New project sanctioning backed by firm contracts
• Average remaining contract term
• Shipper concentration and credit mix

Counterarguments

• Take-or-pay protects near-term revenue but not long-run demand
• New LNG/industrial projects can be delayed or cancelled

Erosion risks

• Permit/timeline risk for expansions
• Community opposition increasing costs
• Policy shifts limiting new gas infrastructure

Leading indicators

• Time-to-permit for major projects
• Expansion in-service slippage vs plan
• Regulatory compliance incidents

Counterarguments

• Brownfield expansions can be blocked even on existing corridors
• Demand can shift away from gas over time in some regions

Erosion risks

• Accelerated electrification reducing long-run gas demand
• Regulatory disallowances or lower allowed ROE
• Policy bans/constraints on new gas hookups in some jurisdictions

Leading indicators

• Customer count growth vs electrification trends
• Rate case outcomes (allowed ROE, cost recovery)
• Local/state/provincial decarbonization mandates

Counterarguments

• Franchise protection can be weakened by policy-driven fuel switching
• Volume risk exists if rate design doesn't fully decouple sales from earnings

Erosion risks

• Adverse regulatory outcomes on ROE or cost trackers
• Political pressure to constrain bills
• Capital disallowance for certain programs

Leading indicators

• Approved rate base growth and capex recovery
• Earnings vs allowed ROE and any earnings sharing
• Regulatory lag (timing of rate relief)

Counterarguments

• Regulators can reset allowed returns downward in response to interest rate changes
• Higher-cost decarbonization programs may face pushback

Erosion risks

• Aging infrastructure increasing replacement costs
• Cyber/physical attacks on critical infrastructure
• New safety standards increasing capex

Leading indicators

• Pipeline replacement/integrity program pace
• Leak/incident rate and safety metrics
• O&M per customer and reliability metrics

Counterarguments

• Network size does not prevent demand erosion from electrification
• New customer growth can slow due to housing and permitting constraints

Erosion risks

• PPA repricing risk at contract expiry
• Technology cost deflation compressing new-build returns
• Policy/market design changes reducing renewable support

Leading indicators

• Weighted average remaining PPA life
• Capacity factor vs resource forecasts
• Pipeline of permitted/contracted projects

Counterarguments

• PPA auctions are competitive; incumbent advantage is limited
• Returns can be diluted if build costs rise faster than PPA pricing

Erosion risks

• Supply chain constraints and construction inflation
• Permitting delays (especially offshore wind)
• Rising rates increasing project hurdle costs

Leading indicators

• Project delivery vs budget and schedule
• Financing spreads and partnership structures
• Awarded capacity and contracted backlog

Counterarguments

• Many competitors have comparable scale and access to capital
• Rapid technology shifts can compress any execution advantage