TransCanada takes another try at toll agreement
CALGARY, Alberta (Reuters) - TransCanada Corp said on Tuesday it will ask regulators to approve a new interim tolling scheme for its cross-country natural gas pipeline, after an earlier plan was rejected last month.
The company, Canada's biggest pipeline firm, is proposing to charge shippers a long-haul rate of C$1.89 per gigajoule (0.95 million British thermal units) of gas, up from C$1.23 under the rejected proposal.
In order to lower the toll on the regulated line, it will defer recovery of C$237 million ($237 million) owed by shippers, instead if the C$300 million initially proposed, and include C$31 million as its customers' share of forecast operations and maintenance savings for 2011.
TransCanada is seeking to keep tolls on its mainline system competitive despite lagging volumes. The system once carried around 6 billion cubic feet a day and now carries about 3.1 bcfd as Western Canadian production falls because of aging fields and as producers cut production because of low prices.
Because the pipeline system is regulated, shippers on the mainline pay for the line's costs and a guaranteed return for TransCanada. But as volumes decline, there are fewer shippers to cover those fixed costs, threatening higher tolls that, at a time of weak gas prices, would cut into producer profits.
"The revised interim tolls strike a balance between the issues created by under-recovery when the final tolls are later established and the desire to keep tolls as low as possible," Russ Girling, TransCanada's chief executive, said in a statement.
In December, the National Energy Board rejected TransCanada's last attempt to come up with a new tolling scheme because, with many shippers opposing the agreement, it felt the changes were too drastic to implement on a interim basis without a full hearing.
TransCanada shares fell 10 Canadian cents to C$37.20 midmorning on the Toronto Stock Exchange.
(Reporting by Scott Haggett; editing by Rob Wilson)
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