TC Energy Reaches Toll Deal with Gas Shippers

Canadian TC Energy said April 24 it had reached a five-year negotiated revenue requirement settlement with users of its Nova Gas Transmission Limited (NGTL) system, which moves gas within and out of the Western Canadian Sedimentary Basin (WCSB).

“This settlement is the result of a collaborative engagement with our customers and is responsive to the needs of both the industry and our business,” CEO Russ Girling said. “Recognising it is a challenging time for a number of our customers, this settlement includes incentives to keep tolls competitive while providing a stable return to TC Energy as we execute in excess of C$14bn (US$9.9bn) of pipeline projects to enhance the connectivity of WCSB natural gas supply to all markets.”

Covering a five-year term from January 2020 through December 2024, the agreement fixes NGTL’s equity return at 10.1% on 40% deemed common equity. There are provisions for NGTL to increase depreciation rates should tolls fall below projected levels, and for customers to share in benefits should certain operating costs vary from projected amounts.

NGTL expects to file an application with the Canada Energy Regulator for approval of the settlement in Q2 2020.