Northern Border Pipeline filed a stipulation and agreement thatsettles its pending rate case with the Federal Energy RegulatoryCommission (FERC). The settlement was reached between the pipelinecompany, the majority of its customers and FERC staff.

“The proposed rate settlement provides rate certainty tocustomers and allows us to remain competitive in the market place,”said Larry DeRoin, president of Northern Plains Natural Gas,operator of Northern Border.

Among the key provisions of the settlement is the conversion ofNorthern Border’s form of tariff from cost of service to statedrates based on a straight fixed variable rate design. Thestipulation and agreement further provides for the incorporationinto the company’s rate base of all of the construction costs ofThe Chicago Project, an $839 million, 700 MMcf/d expansion andextension of the Northern Border Pipeline system to Chicago fromHarper, IA. Northern Border’s annual depreciation rate will be setat 2.25%. Both Northern Border and its existing customers will havea moratorium on seeking rate changes until Nov. 1, 2005.

Northern Border, which provides transportation services tonatural gas markets in the Midwestern United States, will continueto apply its rate of $0.037 per 100 Dth miles on a uniform,system-wide mileage basis. This would result in a rate of$0.30/MMBtu for transportation from Monchy, SK, to Ventura, IA; anda rate of $0.45/MMBtu for transportation from Monchy to Chicago.

The settlement will become effective upon approval by the FERC,which is anticipated in first quarter 2001.

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