TC PipeLines LP, which owns 50% of Northern Border Pipeline Co., said Monday that Northern Border and its customers have reached a rate settlement under which 2007 transportation rates will be about 5% lower than rates in 2006. The company said the settlement has been filed with FERC in a pending rate case and is expected to be uncontested.

TC Pipeline’s general partner, TransCanada Corp., will become the operator of Northern Border pipeline on April 1, 2007. According to the company, the settlement sets a 2007 firm rate on the Northern Border system for the full transportation route from Port of Morgan, MT, to the Chicago area, of 44 cents/Dth compared to 46 cents in 2006. The settlement also provides for seasonal rates for short-term transportation services. The factors used in calculating depreciation expense are being increased from the current 2.25% to 2.40%. The settlement also includes a three-year moratorium on filing rate cases and challenges to these rates, and requires that Northern Border file a rate case within six years from the approval date of the settlement.

“By reaching a fair settlement, with rate certainty for three years and potentially up to six years, Northern Border has demonstrated the cooperative relationship it has with its customers,” said TC Pipelines CEO Russ Girling. “We are committed to continuing that collaborative relationship when TransCanada Corporation assumes operations of Northern Border in early 2007.”

After a comment period, the stipulation and agreement describing the settlement is expected to be certified by the administrative law judge presiding over the case, and then presented to the FERC for approval. Northern Border expects the approval process to be completed by late 2006. The settlement rates would become effective Jan. 1, 2007.

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