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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): September 26, 2000
TC PipeLines, LP
(Exact name of registrant as specified in its charter)
Delaware 000-26091 52-2135448
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
110 Turnpike Road, Suite 203 01581
Westborough, Massachusetts (Zip Code)
(Address of principal executive offices)
(508) 871-7046
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
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ITEM 5. OTHER EVENTS
On September 26, 2000, Northern Border Pipeline Company ("Northern Border
Pipeline"), a partnership in which TC PipeLines, LP indirectly holds a 30%
general partner interest, filed a stipulation and agreement that documents the
settlement of its pending rate case. The settlement was reached between Northern
Border Pipeline, the majority of its customers and the FERC staff and will
become effective if and when approved by the FERC. Northern Border Pipeline
anticipates the FERC will act on the settlement in the first quarter of 2001.
Among the key provisions of the proposed settlement is the conversion of
Northern Border Pipeline's form of tariff from cost of service to stated rates
based on a straight-fixed variable rate design. Under the existing cost of
service tariff, firm transportation shippers contract to pay for a proportionate
share of the pipeline's cost of service. If the proposed settlement is approved,
shippers will pay stated transportation rates. Under the straight-fixed
variable rate design, approximately 98% of the payments are attributable to
demand charges, based upon contracted capacity, and 2% to commodity charges
based on the volumes of gas actually transported on the system. On a per unit
basis, the rates under the new tariff are approximately equal to the previous
level. As of June 30, 2000, Northern Border Pipeline had a reserve for rate
refunds of $16.1 million, which substantially reflects the terms of the
settlement.
In the proposed settlement, Northern Border Pipeline, through November 1, 2003,
must credit to its firm customers half of all revenues received from
interruptible transportation services and firm backhaul transportation services,
and thereafter it will be permitted to retain all of such revenues. The proposed
settlement provides for an annual depreciation rate on transmission plant in
service of 2.25% and resolves outstanding issues relating to The Chicago
Project, with all of the construction cost of The Chicago Project remaining in
its rate base. Under the proposed settlement, Northern Border Pipeline will
continue to have "rolled-in rates" resulting in uniform, system-wide mileage
based rates. The proposed settlement provides that neither Northern Border
Pipeline nor its existing customers can seek rate changes until November 1,
2005, at which time Northern Border Pipeline must file a new rate case. Northern
Border Pipeline will not be permitted to increase rates if its costs increase,
nor will it be required to reduce rates based on cost savings. Its earnings and
cashflow will depend on its future costs, contracted capacity, the volumes of
gas transported and its ability to recontract capacity at acceptable rates.
Certain statements in this Form 8-K are forward looking and relate to, among
other things anticipated financial performance, business prospects and
strategies. By their nature, such statements are subject to various risks and
uncertainties which could cause TC PipeLines, LP's actual results to differ
materially from the anticipated results. Such risks and uncertainties include,
but are not limited to: regulatory decisions, particularly those of the Federal
Energy Regulatory Commission; future demand for natural gas; and prevailing
economic conditions. For further information on additional risks and
uncertainties, you are advised to consult TC PipeLines, LP's Report on Form 10-K
under the heading "Forward Looking Information".
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TC PipeLines, LP
By TC PipeLines GP, Inc.,
its general partner
(Registrant)
October 3, 2000 By: /s/ Theresa Jang
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Theresa Jang
Controller
