Prior to this settlement,
TransCanada had filed its 2003 Tariff Application with
the EUB on January 20, 2003, in compliance with an Alberta
Energy and Utilities Board (EUB) directive. Within this
application, TransCanada proposed two new tariff services,
modifications to its existing rate design methodology,
and the continuation of term differentiated rates for
Firm Transportation Receipt (FT-R) Service. As a result
of this settlement, TransCanada has amended this 2003
Tariff Application to reflect the terms as agreed to by
the parties. The amended application was filed on March
31, 2003. EUB approval of the application is required
before these changes can be implemented.
The Alberta System 2003 Tariff Settlement sets out
increased direct customer accountability associated
with the provision of Firm Transportation - Alberta
Delivery (FT-A) and Facilities Connection Service (FCS).
A commodity toll of $0.016/thousand cubic feet (Mcf)
is proposed for the FT-A Service. The FCS Minimum Annual
Volume (MAV) obligation will be increased over the current
obligation by replacing the system average receipt point
unit cost with the proposed FT-A rate. Customers will
continue to have the option of reducing the Annual Cost
of Service (ACS) related to their facilities by making
one or more payments to reduce the cost of the associated
FCS facilities.
The settlement also sets out a new Extension Annual
Volume (EAV) obligation under FCS to provide accountability
for the construction of mainline extension facilities
for intra-Alberta deliveries. Intra-Alberta delivery
customers requiring the extension of mainline facilities
will have the option of contracting for a three, four,
or five-year term. The aggregate EAV commitment will
be a minimum of 109,500 Million cubic feet (MMcf) over
the contract term and the commitment for at least one-year
of the contract term must be a minimum of 36,500 MMcf.
If the EAV is not met for any year, each customer will
be responsible for their share of the shortfall at the
Average Firm Service Receipt Price (AFSRP).
This change to the MAV and the creation of the EAV
will ensure that the parties who use the services will
pay a greater portion of the costs to provide the services
through direct service charges than they pay under the
existing rate design. Upon EUB approval, these changes
will impact holders of all existing FT-A and FCS contracts.
The settlement also establishes a new intra-Alberta
short haul service. This new Points to Point Service
(FT-P) provides transportation from a predetermined
set of receipt points to a predetermined Alberta delivery
point. The FT-P rate will be based on the maximum distance
between any of the FT-P receipt points and the FT-P
delivery point. This new service will provide customers
with an additional service choice at a rate that reflects
both the facilities used to provide the specific service
and the attributes associated with it. As of December
31, 2002, no new Point to Point Service (P2P) was offered.
P2P contracts signed before that date will remain in
effect until a decision is made by the EUB on the FT-P.
Parties to the settlement also agreed that term differentiated
rates for FT-R would be continued, based on the methodology
originally approved by the EUB in 2000. Under this methodology,
FT-R customers may obtain a discount or pay a premium
to the established FT-R rate depending on the length
of their chosen contract service term.
The Price Matching Service (FT-M) proposed for dually
connected receipt points, included in TransCanada's
2003 Tariff Application, was withdrawn. However, TransCanada
retained the ability to apply for this or another FT-M
service if the published regulated charges by another
regulated service provider, at dually connected receipt
points, are discounted to less than the fuel adjusted
FT-R rate that TransCanada charges to receive gas from
its respective dually connected receipt points.
The 2003 Tariff Settlement also includes a number
of review and reporting provisions. Specifically, a
review of TransCanada's Alberta System cost allocation,
rate design, and services will be conducted within 36
months of the implementation date of the Settlement.
The review will include an assessment of the effectiveness
of the changes agreed to in the Settlement and the impact
on all Alberta System services and recommendations for
amendments if required. A report with recommendations
will be filed with the EUB within 36 months after the
implementation date of the settlement.
The proposed service changes address rate design and
accountability for intra-Alberta deliveries and position
TransCanada to better meet the needs of the growing
intra-Alberta market.
"TransCanada is pleased that we were able to reach
consensus on these matters with our stakeholders," says
Steve Pohlod, Director, Customer Sales and Service.
"This Settlement represents an appropriate balance of
interests among those Alberta System stakeholders that
participated in the settlement negotiations, Alberta
System customers generally, and the public interest
overall."
Two parties involved in the stakeholder negotiations
have advised TransCanada they intend to oppose the 2003
Tariff Settlement. The EUB has issued a public
notice of the 2003 Tariff Application and TransCanada's
2003 Revenue Requirement Settlement Application and
has sought submissions from interested parties on the
preferred process to hear these applications. A decision
from the EUB that establishes a process and timeline
to deal with these applications is expected in the near
future.
A detailed description of the rate design and service
changes outlined above and a detailed listing of the
proposed FT-P rates is provided in the 2003
Tariff Settlement Application which is available
online.
For further information on the proposed rate and service
changes please contact your Customer Sales Representative.
