HOUSTON, March 16, 2018 /PRNewswire/ - Enbridge Energy
Partners, L.P. (NYSE:EEP) (EEP or the Partnership) today provided
its preliminary assessment of the potential impacts of the Federal
Energy Regulatory Commission's (FERC) recent policy change with
respect to the recovery of income tax amounts included in the cost
of service rates of pipelines within a master limited partnership
(MLP).
On March 15, 2018, FERC changed
its long-standing policy on the treatment of income tax amounts
included in the rates of pipelines and other entities subject to
cost of service rate regulation within an MLP. In its order
PL17-1-000, FERC revised a policy in-place since 2005 to no longer
permit entities organized as master limited partnerships (MLP's) to
recover an income tax allowance in their cost of service
rates.
EEP is organized as an MLP and certain of the rates applicable
to its expansion projects are tolled annually on a cost of service
basis, via the Lakehead Facility Surcharge Mechanism (FSM). EEP
intends to ask for rehearing of this policy change at the FERC.
FERC's new policy will take effect when the policy is published in
the Federal Register which, for purposes of estimating the 2018
impact, is assumed to be March 31,
2018. Should FERC's new policy be approved as announced, the
2018 financial impact to EEP is expected to be an approximate
$100 Million reduction in revenues
and a $60MM reduction to distributable cash flow (DCF), net of
non-controlling interests.
Based on the foregoing preliminary analysis and estimates, EEP
is adjusting its 2018 DCF guidance range to $650 million - $700
million from $720 million -
$770 million and 2018 total
distribution coverage to approximately 1.0x from approximately
1.15x.
Important details of implementing the new policy statement
require clarification and EEP will continue to assess the financial
impacts as more information becomes available.
Forward-Looking Statements
This news release includes forward-looking statements, which
are statements that frequently use words such as "anticipate,"
"believe," "consider," "continue," "could," "estimate," "evaluate,"
"expect," "explore," "forecast," "intend," "may," "opportunity,"
"plan," "position," "projection," "should," "strategy," "target,"
"will" and similar words. Although the Partnership believes that
such forward-looking statements are reasonable based on currently
available information, such statements involve risks, uncertainties
and assumptions and are not guarantees of performance. Future
actions, conditions or events and future results of operations may
differ materially from those expressed in these forward-looking
statements. Any forward-looking statement made by the Partnership
in this release speaks only as of the date on which it is made, and
the Partnership undertakes no obligation to publicly update any
forward-looking statement. Many of the factors that will determine
these results are beyond the Partnership's ability to control or
predict. Specific factors that could cause actual results to differ
from those in the forward-looking statements include: (1) the
effectiveness of the various actions the Partnership has announced
resulting from its strategic review process; (2) changes in the
demand for the supply of, forecast data for, and price trends
related to crude oil, liquid petroleum, including the rate of
development of the Alberta Oil Sands; (3) the Partnership's ability
to successfully complete and finance expansion projects; (4) the
effects of competition, in particular, by other pipeline systems;
(5) shut-downs or cutbacks at the Partnership's facilities or
refineries, petrochemical plants, utilities or other businesses for
which the Partnership transports products or to whom it sell
products; (6) hazards and operating risks that may not be covered
fully by insurance, including those related to Line 6B, (7) any fines, penalties and injunctive
relief assessed in connection with any crude oil release; (8)
changes in or challenges to the Partnership's tariff rates; (9)
changes in laws or regulations to which the Partnership is subject,
including compliance with environmental and operational safety
regulations that may increase costs of system integrity testing and
maintenance; and (10) permitting at federal, state and local level
or renewals of rights of way. Any statements regarding sponsor
expectations or intentions are based on information communicated to
the Partnership by Enbridge Inc., but there can be no assurance
that these expectations or intentions will not change in the
future.
Except to the extent required by law, we assume no obligation
to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Reference should also be made to the Partnership's filings with the
U.S. Securities and Exchange Commission (the "SEC"), including its
most recently filed 2017 Annual Report on Form 10-K dated
February 15, 2018 and any
subsequently filed Quarterly Reports on Form 10-Q or current
reports on Form 8-K for additional factors that may affect results.
These filings are available to the public over the Internet at the
SEC's website (www.sec.gov) and at the Partnership's
website.
About Enbridge Energy Partners, L.P.
Enbridge Energy Partners, L.P. owns and operates a
diversified portfolio of crude oil transportation systems in
the United States. Its principal
crude oil system is the largest pipeline transporter of growing oil
production from western Canada and
the North Dakota Bakken formation. The system's deliveries to
refining centers and connected carriers in the United States account for approximately
23 percent of total U.S. oil imports. Enbridge Energy
Partners, L.P. is traded on the New
York stock exchange under the symbol EEP; information about
the company is available on its website at
www.enbridgepartners.com.
About Enbridge Energy Management, L.L.C.
Enbridge Energy Management, L.L.C. manages the business and
affairs of the Partnership, and its sole asset is an approximate
19.9 percent limited partner interest in the Partnership. Enbridge
Energy Company, Inc., an indirect wholly owned subsidiary of
Enbridge Inc. of Calgary, Alberta,
Canada (NYSE: ENB) (TSX: ENB) is the General Partner of the
Partnership and holds an approximate 35 percent interest in the
Partnership. Enbridge Management is the delegate of the General
Partner of the Partnership.
FOR FURTHER INFORMATION PLEASE CONTACT:
Enbridge Energy Partners, L.P.
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SOURCE Enbridge Energy Partners, L.P.