TCPL Fair Return Application

TCPL filed an application with the NEB yesterday seeking an increase in rate of return. They are asking for a new methodology called "After-Tax Weighted Average Cost of Capital" which would be 7.5%. Using the existing methodology this would translate to a return of 12.52% on 40% deemed equity in the capital structure (equity thickness). This would equate to a return of 16.69% if the equity thickness was 30%. Currently TCPL has a regulated return of 9.61% and 30%.

If TCPL gets what they are seeking it would result in an annualized Eastern Zone toll of CDN$1.25 (Chippawa $1.261). The invoiced toll would be higher to recover the difference from the interim toll, currently set at $1.132.

I have a copy of the three binder application if anyone wants to see it.

Kevin