TransCanada Announces 2018-2019 Revenue Requirement Settlement with NGTL System Shippers
March 23 2018 - 7:30AM
News Release – TransCanada Corporation (TSX:TRP) (NYSE:TRP)
(TransCanada) announced today that its wholly-owned subsidiary,
NOVA Gas Transmission Ltd. (NGTL), has filed an application with
the National Energy Board for approval of a negotiated settlement
with its customers and other interested parties on the annual costs
required to operate the NGTL System for 2018 and 2019.
"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 incentivizes TransCanada to remain strongly focused on cost
management as well as operating efficiencies and system
reliability. The agreement:
- encompasses a two-year period (January 1, 2018 to December 31,
2019);
- fixes the equity return at 10.1 per cent on 40 per cent deemed
common equity;
- establishes depreciation at a forecast composite rate of 3.45
per cent;
- fixes operating, maintenance and administration (OM&A)
costs at $225 million for 2018 and $230 million for 2019, and
includes a sharing mechanism that incents NGTL to achieve cost
efficiencies; and
- 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 kilometres of
pipeline and associated facilities. Subject to regulatory
approvals, TransCanada has committed approximately $7.2 billion in
near-term growth capital to the NGTL System.
With more than 65 years' experience, TransCanada is a leader in
the responsible development and reliable operation of North
American energy infrastructure including natural gas and liquids
pipelines, power generation and gas storage facilities. TransCanada
operates one of the largest natural gas transmission networks that
extends more than 91,900 kilometres (57,100 miles), tapping into
virtually all major gas supply basins in North America. TransCanada
is a leading provider of gas storage and related services with 653
billion cubic feet of storage capacity. A large independent power
producer, TransCanada currently owns or has interests in
approximately 6,100 megawatts of power generation in Canada and the
United States. TransCanada is also the developer and operator of
one of North America’s leading liquids pipeline systems that
extends approximately 4,900 kilometres (3,000 miles), connecting
growing continental oil supplies to key markets and refineries.
TransCanada’s common shares trade on the Toronto and New York stock
exchanges under the symbol TRP. Visit TransCanada.com to learn
more, or connect with us on social media and 3BL Media.
FORWARD-LOOKING INFORMATION
This publication contains certain information that is
forward-looking and is subject to important risks and uncertainties
(such statements are usually accompanied by words such as
"anticipate", "expect", "believe", "may", "will", "should",
"estimate", "intend" or other similar words). Forward-looking
statements in this document are intended to provide TransCanada
security holders and potential investors with information regarding
TransCanada and its subsidiaries, including management's assessment
of TransCanada's and its subsidiaries' future plans and financial
outlook. All forward-looking statements reflect TransCanada's
beliefs and assumptions based on information available at the time
the statements were made and as such are not guarantees of future
performance. Readers are cautioned not to place undue reliance on
this forward-looking information, which is given as of the date it
is expressed in this news release, and not to use future-oriented
information or financial outlooks for anything other than their
intended purpose. TransCanada undertakes no obligation to update or
revise any forward-looking information except as required by law.
For additional information on the assumptions made, and the risks
and uncertainties which could cause actual results to differ from
the anticipated results, refer to the Fourth Quarter 2017 Financial
Highlights release and 2017 Annual Report filed under TransCanada's
profile on SEDAR at www.sedar.com and with the U.S. Securities and
Exchange Commission at www.sec.gov.
Media Inquiries:Shawn Howard1.800.608.7859
TransCanada Investor & Analyst Enquiries:David Moneta /
Stuart Kampel403.920.7911 or 800.361.6522
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