Sept 21 (Reuters) - TransCanada Corp said its U.S. natural gas pipeline unit had reached a settlement with customers over proposed transportation rate hikes made earlier this year.
The settlement, which would still need approval from the Federal Energy Regulatory Commission (FERC), allows transportation rates to be increased by 34.8 percent.
The settlement also requires TransCanada to spend $837 million over three years to upgrade its ANR pipeline system.
ANR connects markets in Wisconsin, Michigan, Illinois and Ohio with supplies from Texas, Oklahoma and the Gulf of Mexico through its 9,400 miles of natural gas pipeline.
TransCanada said the new settlement rates are effective from Aug. 1. Storage rates would remain unchanged, and ANR will retain its seven-zone rate system, the company said.
ANR proposed to raise rates in January after nearly 20 years, citing increased competition from the emergence of new natural gas supply fields and the need to upgrade its aging pipeline system. (Reporting by Anet Josline Pinto and Siddharth Cavale in Bengaluru; Editing by Shounak Dasgupta)