TC Energy, Canadian Mainline customers sign long-term deal

TC Energy announced it has filed with the CER an approval of a deal with its customers and other interested parties on Canadian Mainline tolls.

TC Energy is looking for timely approval of its application to ensure certainty. TC Energy graphic.

TC Energy announced on Friday that its subsidiary, TransCanada Pipelines Limited, has filed an application with the Canada Energy Regulator for approval of a six-year deal with customers on Canadian Mainline tolls.

According to a press release issued by the Calgary-based company, TransCanada Pipelines has requested timely approval of the unanimously supported settlement in order to ensure certainty before the contract comes into effect in January, 2021.

The Canadian Mainline is a 14,100 kilometre long pipeline and associated facility that primarily transports Western Canadian Sedimentary Basin natural gas for delivery across the Prairies and into markets in Eastern Canada and the United States.

“This settlement is the product of a comprehensive collaborative process of engagement and negotiation with our Canadian Mainline customers. It enhances competitiveness and provides toll certainty for our customers while maintaining stable revenue for TC Energy,” said Russ Girling, TC Energy’s President and Chief Executive Officer.

“The settlement highlights the continued importance of the Canadian Mainline and we appreciate the efforts of industry to work with us to create innovative solutions that utilize this critical transportation link to enhance the long-term success of the WCSB,” added Girling.

The settlement runs from January 2021 through to December 2026 and sets an equity return of 10.1 per cent on 40 per cent deemed common equity.  This is subject to variance depending on actual operating costs and natural gas throughput.

It also sets tools for the term for separate segments of the Canadian Mainline, including a 20 per cent reduction from existing tolls on the western portion of the system, including the path from Empress to Emerson.

The company says the deal also includes a sharing mechanism incentivizing TC Energy to achieve cost efficiencies and increased revenues.  Finally, the agreement affirms TC Energy’s pricing flexibility and allows new market-driven services to enhance flexibility to respond to changing market conditions.



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