Brought on by lower earnings in its natural gas transmission segment, partially offset by higher earnings from the power business, TransCanada Corp. on Friday posted 2Q2003 net income of C$202 million or C$0.42 per share, compared to C$205 million or C$0.43 per share for the second quarter 2002. The quarter was almost like deja vu from 1Q2003, when the power segment’s contribution bailed out the company (see NGI, April 28).

Power’s net earnings soared by C$23 million over the prior year’s period to reach C$63 million in second quarter 2003, while the transmission segment’s contribution sagged from C$174 million recorded during 2Q2002 to C$144 million for the most recent quarter.

For the first six months of the year, TransCanada reported net income of C$410 million or C$0.85 per share, compared to C$392 million or C$0.82 per share for the same period last year.

“TransCanada’s accomplishments in the second quarter reflect our commitment to the long-term growth and optimization of our core businesses of natural gas transmission and power generation,” said Hal Kvisle, TransCanada’s CEO.

During the busy quarter the company bought into the Mackenzie Valley Pipeline Project, acquired the remaining 50% interest in Foothills Pipe Lines Ltd. (see NGI, May 19; June 23), agreed to construct a 550 MW Ontario power plant and created a parent company for TransCanada PipeLines Ltd.

“The Mackenzie Valley pipeline will bring tremendous benefits to the people and economy of the Northwest Territories and will help to meet growing natural gas demand across Canada and the United States,” said Kvisle. “For TransCanada, gas from northern Canada will connect and flow through our existing facilities, increasing the utilization rate of our pipelines to the benefit of both our customers and our shareholders.”

The company also received approval from the Federal Court of Appeal to appeal the National Energy Board’s (NEB) RH-R-1-2002 Decision issued February 20, 2003 (see NGI, June 2). In this Decision, the NEB dismissed TransCanada’s September 2002 request for a Review and Variance of the NEB’s June 2002 RH-4-2001 Decision on the company’s Fair Return application.

“We’re pleased that the Court has granted TransCanada leave to appeal. We are now pursuing the appeal on the two important questions of law that formed the basis of our application,” Kvisle added. “We remain concerned that recent NEB decisions have prevented TransCanada from earning a fair return on our investment in the Canadian Mainline.”

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