Agreement establishes a toll methodology for an initial term of five years.
April 2, 2013
by The Canadian Press
CALGARY – Enbridge Income Fund says it expects to record a $13-million after-tax writedown related to deferred revenue that now won’t be collected due to a new toll rate for a group of shippers.
The new toll for the Westspur pipeline, which carries oil from southeastern Saskatchewan to Manitoba, became effective April 1 after a complaint filed by one of the affected shippers has been withdrawn.
Enbridge estimates that the settlement agreement will reduce Westspur’s annual after-tax cash flows by about $10 million, although the actual amount could vary depending on certain circumstances.
The agreement establishes a toll methodology for an initial term of five years and then renews for additional one-year terms unless the agreement is terminated.
Enbridge says the tolls on the Westspur System will be fixed, but will adjusted annually for inflation and volume.
In addition, tolls will be increased should integrity, regulatory or operating costs exceed defined thresholds or if new capital projects are undertaken, Enbridge said.
The Westspur system moves oil from Saskatchewan to Cromer, Man., where it connects to Enbridge Pipeline Inc.’s mainline system.
According to its latest annual information filing with Canadian regulators, Enbridge Inc. had a 32.3% ownership interest and a 67.7% economic interest in the fund, either directly or through its ownership interest in Enbridge Income Funds Holdings Inc.
©The Canadian Press