IN RATE CASE OF TRANS QUEBEC & MARITIMES PIPELINE,NATIONAL ENERGY BOARD DEPARTS FROM LONG APPLIED METHOD FOR DETERMINING COST OF CAPITAL TO ALLOW FOR CHANGES IN THE DYNAMICS OF GAS END-USE MARKETS AND SUPPLY AND GREATER BUSINESS RISK

摘要

On 3/20/09Trans Quebec & Maritimes Pipeline Inc.(TQM)received the decision of the National Energy Board(NEB)on TQM's 2007and 2008"cost of capital"application.Effectively,the review and this decision enables a variance to allow for the determination of an overall fair return on capital for TQM for the years 2007 and 2008.In its decision,the NEB agreed to vary from its previous methodology and set a 6.4% total weighted average after-tax cost of capital for each of two years.TQM was authorized to aggregate return on capital,leaving it to TQM to choose its optimal capital structure.The NEB's decision equates to a 9.85% return on 40% deemed equity in 2007 and a 9.75% return on 40% deemed equity in 2008.Had no changes been made,TQM's total allowed return would have been equal to a lower 8.46% return on 30% deemed equity in 2007 and 8.71% on 30% deemed equity in 2008.In setting the total return without identifying a capital structure,the NEB applied its goal-oriented approach to regulation,which in the Board's view is more aligned with the way capital budgeting decision-making takes place in the business world.With this decision,TQM will finalize the rates it charges to its shippers for service during the period of 1/1/07 to 12/31/08.