TransCanada Reaches Settlement on Alberta and Foothills Systems
CALGARY, Alberta – June 9, 2010 – TransCanada Corporation (TSX, NYSE: TRP) (TransCanada) today announced that its wholly-owned subsidiary NOVA Gas Transmission Ltd. (NGTL) has reached a three year settlement with shippers and other interested parties regarding the annual revenue requirement of its Alberta System for the years 2010 to 2012.
The settlement sets the equity return at 9.7 per cent with a 40 per cent deemed common equity capital structure. In addition to cost of capital, the settlement encompasses all other elements of the Alberta System costs of service. This includes operating, maintenance and administration (OM&A), income taxes, depreciation and various flow-through cost components including interest expense, property taxes and transportation by others.
TransCanada has filed an application with the National Energy Board (NEB) for approval of the settlement. TransCanada anticipates that it will file for 2010 final rates pending the outcome of the NEB’s decision on Alberta System rate design and the commercial and operational integration of the ATCO Pipelines system later this year. TransCanada is not seeking a change to the Alberta System 2010 interim rates at this time.
Foothills Pipelines Ltd. (Foothills), an indirect wholly-owned subsidiary of TransCanada, has also reached agreement to establish the equity return at 9.7 per cent with a 40 per cent deemed common equity capital structure for the years 2010 to 2012. The existing 2003 Foothills settlement agreement relating to special charge and certain general administrative expenses remains in place. Foothills has filed with the NEB for revised 2010 rates to be effective July 1, 2010.
With more than 50 years’ experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and oil pipelines, power generation and gas storage facilities. TransCanada’s network of wholly owned natural gas pipelines extends more than 60,000 kilometres (37,000 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services with approximately 380 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, over 11,700 megawatts of power generation in Canada and the United States. TransCanada is developing one of North America’s largest oil delivery systems. TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP. For more information visit: www.transcanada.com
TRANSCANADA FORWARD-LOOKING INFORMATION
This news release may contain certain information that is forward-looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "believe", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward looking information. Forward-looking statements in this document are intended to provide TransCanada security holders and potential investors with information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s and its subsidiaries’ future financial and operational plans and outlook. Forward-looking statements in this document may include, among others, statements regarding the anticipated business prospects, projects and financial performance of TransCanada and its subsidiaries, expectations or projections about the future, strategies and goals for growth and expansion, expected and future cash flows, costs, schedules, including anticipated construction and completion dates, operating and financial results and expected impact of future commitments and contingent liabilities. All forward-looking statements reflect TransCanada's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among others, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Company's pipeline and energy assets, the availability and price of energy commodities, capacity payments, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and economic conditions in North America. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause TransCanada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this news release or otherwise, and not to use future-oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
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Cecily Dobson / Terry Cunha
Investor & Analyst Inquiries:
David Moneta / Terry Hook