TransCanada Promises $70 Million in Savings
It's been a year since the completion of its C$11 billion merger
with Nova Corp., but TransCanada Pipelines finally came through on
promised savings yesterday. The pipeline company said it will give
$70 million in merger-related savings to its pipeline customers
through "targeted operating cost reductions." An agreement on the
reductions was filed with Canada's National Energy Board and the
Alberta Energy and Utilities Board yesterday.
Under the agreement, TransCanada will begin passing benefits on
to customers in 2001 in the form of a lower operating cost
component of transportation tolls. "TransCanada has a goal to
reduce overall costs by $100 million by the end of 2000 as result
of the merger, with $70 million coming from our regulated pipeline
business," said Doug Baldwin, TransCanada's president, interim CEO
and a member of the TransCanada Board of Directors. "This
agreement, which provides our customers with a minimum of $35
million in savings in 2001, demonstrates our confidence that we're
on track to achieve this goal."
TransCanada will pass the first $35 million of the $70 million
in savings to customers through a reduction in the operating cost
component of transportation tolls on its Mainline, Alberta and
British Columbia pipeline systems in 2001. The remaining $35
million will be felt in 2002.
The savings announcement follows by one week the installation of
a new executive management team at TransCanada and follows by two
weeks the resignation of CEO George Watson (see Daily GPI July 19
and July 26).
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