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.