TransCanada announces 2018 - 2019 revenue requirement settlement

"This settlement is the product of a collaborative and open negotiation process between TransCanada and its shippers, which will bring greater natural gas transportation cost certainty to customers on the NGTL System," said Tracy Robinson, TransCanada's Senior Vice President and General Manager, Canadian Gas Pipelines. "We appreciate the hard work by industry and other interested parties in reaching this settlement so we can continue to provide safe, reliable and cost-effective transportation to our customers."

The settlement covers NGTL System operating costs including return on equity and depreciation. It also includes a mechanism that incentivises TransCanada to remain strongly focused on cost management as well as operating efficiencies and system reliability. The agreement:

• Encompasses a two-year period (1 January 2018 to 31 December 2019).
• Fixes the equity return at 10.1% on 40% deemed common equity.
• Establishes depreciation at a forecast composite rate of 3.45%.
• Fixes operating, maintenance and administration costs at CAN$225 million for 2018 and CAN$230 million for 2019, and includes a sharing mechanism that incents NGTL to achieve cost efficiencies.
• Provides for flow-through treatment of all other costs including pipeline integrity expenses and emissions costs.

The NGTL System is an extensive natural gas pipeline system in western Canada comprised of approximately 24 320 km of pipeline and associated facilities. Subject to regulatory approvals, TransCanada has committed approximately CAN$7.2 billion in near-term growth capital to the NGTL System.

Read the article online at: https://www.worldpipelines.com/business-news/23032018/transcanada-announces-2018--2019-revenue-requirement-settlement/