NOVA Gas Transmission Ltd. (NGTL), TransCanada’s Albertapipeline system, reached a comprehensive settlement with shippersthat fixes its revenue over the next two years, creating anincentive for Nova to continue reducing costs.

The settlement is the result of a broad consultative processthat included the Canadian Association of Petroleum Producers(CAPP), the Industrial Gas Consumers Association of Alberta(IGCAA), the Small Explorers and Producers Association of Canada(SEPAC), consumer groups, marketers, export groups and otherstakeholders.

The fixed revenue requirement (C$1.39 billion in 2001 and $1.35billion in 2002 compared with $1.42 billion in 2000), together withthe receipt-point-specific rate design previously approved by theAlberta Energy and Utilities Board (EUB), forms the basis of NGTL’stolls for the next two years. Also included in the settlement aretwo new services and a commitment by all parties to addressadditional rate and service issues over the next two years.

“The commitment in the settlement to address NGTL rate andservice issues affecting Alberta consumers is very important,” saidMark Thomas, chairman of the IGCAA. “Alberta industrial gas usersneed to benefit from being located on top of one of the largest gassupplies in North America. IGCAA is committed to work withstakeholders on rate and service issues to better reflect thisnatural advantage.”

The settlement contained a number of other terms, including thefollowing:

The settlement’s Statement of Principles will form the basis ofa formal agreement between the parties. Once NGTL and otherstakeholders have completed the formal agreement, TransCanada,through NGTL, will apply to the EUB for approval of the agreement.

CAPP represents 160 member companies that produce 95% ofCanada’s oil and natural gas. The IGCAA represents nine large gasconsumers that consume about 60% of the gas used in the industrialgas market in Alberta.

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