TransCanada Settles With Gas Distribution Companies in Eastern Canada
TransCanada Corp. has reached a settlement with local natural gas distribution companies (LDCs) in Ontario and Québec in connection with the access to Dawn and Niagara supplies and long-term tolls that will allow TransCanada to provide customers with the flexibility to source gas from various geographic locations while ensuring that the tolls for the mainline are set at levels that recover the costs of providing that flexibility.
TransCanada has reached an agreement with Union Gas Ltd., Gaz Metro LP and Enbridge Gas Distribution Inc. that will allow for the development of new capacity through the Parkway to Maple transportation corridor near Toronto. This will result in rate stability on the Mainline with contracts that fully recover TransCanada’s costs of providing mainline natural gas transmission service in the Eastern Triangle. The agreement provides resolution to outstanding disputes between TransCanada and the LDCs relating to tolls and services in the region.
“I am very pleased that we were able to reach a mutually agreeable solution that allows for the expansion of the Eastern portion of our system to meet the changing needs of Ontario and Québec,” TransCanada’s president and CEO Russ Girling said. “It takes significant time and effort to work out these agreements and I would like to thank the parties involved for the commitment to finding a workable solution.”
As part of the settlement, TransCanada is committed to providing natural gas pipeline capacity to meet all current and future needs of Eastern gas consumers.
“We are in the gas transmission business, and we have consistently said that we will ensure there is sufficient capacity to meet the needs of our contracted gas customers,” Girling said. “Through initiatives such as this settlement, we are pursuing innovative ways to increase revenue and reduce costs from the Mainline and ensure that it is utilized in the most efficient manner for the benefit of natural gas producers, gas distributors and their consumers.”
TransCanada intends to immediately begin consulting with all remaining Mainline stakeholders. The settlement must also receive approval from the National Energy Board before being placed into effect in January 2015. TransCanada expects to file the necessary regulatory applications by the end of 2013.
While this agreement will increase consumers’ access to affordable energy, discussions between TransCanada and the three LDCs regarding TransCanada’s Energy East Pipeline project to convert a portion of its mainline system from natural gas to oil service are ongoing.
