TransCanada under fire for pipeline toll hikes

[CHIMO]

The surging cost of moving energy on a critical Canadian natural gas pipeline is sparking an international political row, with several groups of U.S. politicians stepping in to ask for relief from rising transportation tolls.

The expense of bringing Alberta gas to Eastern markets is now high enough that it’s threatening the power supply to a Brooklyn industrial park and wastewater treatment plant, the New York mayor’s office warns in a letter to Canada’s National Energy Board.

It’s the latest salvo from groups opposed to toll hikes on the Mainline, the troubled TransCanada Corp. (TRP-T39.56-0.12-0.30%) gas pipe network that has served as a cross-continental energy lifeline for many years. TransCanada is requesting a 50-per-cent toll increase this year that, if approved, would add roughly 60 per cent to the price of a unit of gas transported across the country. That has heightened issues surrounding the line, and New York legislators are now calling on TransCanada to take a financial hit to shield consumers and energy suppliers from cost pain.

The new opposition comes amid tough times for the Mainline, which provides about a fifth of TransCanada’s pre-tax earnings but has, in recent years, run half empty amid a dramatic reshuffling of North America’s energy geography. For decades, the West supplied energy to the East. The discovery of new Eastern energy supplies, and the looming possibility of Western gas exports to Asia, have cast into question the future usefulness of the Mainline.

http://www.theglobeandmail.com/report-on-business/transcanada-under-fire-for-pipeline-toll-hikes/article2118926/