TC PipeLines, LP Progresses Regulatory Strategy and Reduces Estimate of Overall Tax Impact

HOUSTON, Oct. 17, 2018 (GLOBE NEWSWIRE) -- TC PipeLines, LP (NYSE:TCP) (the Partnership) is pleased to announce that its wholly-owned natural gas transmission subsidiary, Gas Transmission Northwest LLC (GTN), filed an uncontested settlement agreement between GTN and its shippers with the Federal Energy Regulatory Commission (FERC). The settlement is structured as an amendment to GTN’s previously approved settlement with shippers (the 2015 Settlement) and addresses the FERC’s Final Rule in Docket Nos. RM18-11-000 and PL17-1-001 implementing the tax changes related to the 2017 Tax Cuts and Jobs Act and the FERC’s Revised Policy Statement on Treatment of Income Tax. Among the terms of the latest settlement, GTN has agreed to (i) a refund of $10 million to its recourse rate customers in 2018, (ii) a reduction to its existing maximum system reservation rates by 10 percent effective January 1, 2019, and (iii) an additional 6.6 percent reduction effective January 1, 2020 through December 31, 2021. GTN will be required to have new rates in effect on January 1, 2022. These reductions will replace the 8.3 percent rate reduction in GTN’s reservation rates in 2020 agreed to as part of the 2015 Settlement. Further, GTN and its customers have agreed upon a moratorium on further rate changes prior to January 1, 2022, providing a greater degree of regulatory certainty for GTN going forward.

“GTN has worked closely with its shippers to arrive at this settlement in a very timely manner and has reached agreement to pass along rate benefits to its customers promptly. In return, a moratorium on further changes is included in the settlement until January 2022,” said Nathan Brown, president of TC PipeLines GP, Inc., the general partner of the Partnership. “The achievement of this mutually beneficial settlement agreement is a testament to the constructive relationship that exists among GTN and its shipper group.”

“We have also finalized our regulatory election for North Baja and PNGTS,” added Brown. “On October 11, North Baja filed its one-time report on the rate effect of the Tax Cuts and Jobs Act (Form 501-G) and FERC’s Revised Policy Statement. North Baja elected to make a limited Section 4 filing to reduce its recourse rates by approximately 11 percent and eliminate its deferred income tax balances previously used for rate setting. PNGTS also filed its Form 501-G with the FERC on October 11, 2018 and explained why no further action was required. Given that no further FERC action is expected on either of these pipelines and less than 20 percent of North Baja’s contracts will be impacted by the limited Section 4 filing, we do not anticipate a material impact to the Partnership from these regulatory actions.”