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On June 4, 2012, the National Energy Board began hearing an
application from TransCanada Pipelines Ltd. for approval of a
business and services restructuring plan and restructuring to
Mainline final tolls for 2012 and 2013. The company believes the
restructuring proposal is crucial to enhance the long-term economic
viability of its Mainline, as well as gas production in the Western
Canadian Sedimentary Basin as a whole.
The application has been made in order to address concerns
regarding the declining throughput on the TransCanada Mainline
which has caused increases in Mainline tolling rates. However,
producers and end-users are concerned that the proposal will
ultimately transfer to much of the cost onto suppliers and
downstream users.
A main element of the application, and one that has prompted the
strongest opposition, is the proposed Alberta System Extension
designed to reduce the transportation costs between the Western
Canadian Sedimentary Basin and downstream markets. To accomplish
the extension, Nova Gas Transmission Ltd., TransCanada's wholly
owned subsidiary, will contract for standard annual firm service on
the Mainline and Foothills systems. TransCanada proposes to
allocate fifty of the proposed transport by other costs to receipt
shippers and fifty percent to delivery shippers.
The hearing will continue through the summer in Calgary, Toronto
and Montreal. A decision is expected early in 2013.
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