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NEB to Hear TQM 2007 and 2008 Cost of Capital Application

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08/04
For immediate release
22 January 2008

CALGARY - The National Energy Board (NEB) will hold an oral public hearing on 23 September 2008 to consider the 2007 and 2008 Cost of Capital application submitted by Trans Québec & Maritimes Inc. (TQM).

The application includes a request for the NEB to review its RH-2-94 Cost of Capital Decision released in March 1995, only as it applies to TQM. This Decision contains the formula that is used to calculate TQM's return on common equity (ROE) for 1996 and beyond.

TQM also asks the NEB for an order to approve a fair return on capital resulting from an ROE of 11.0 per cent applied to a deemed 40 per cent equity component of the company's capital structure. The calculation would also include TQM's actual cost of debt. Currently, the NEB's approved ROE based on the RH-2-94 Formula is 8.71 for 2008 and 8.46 for 2007.

If approved, these calculations would be used to determine the final tolls to be charged by TQM to its shippers between 1 January 2007 and 31 December 2008.

The NEB has identified a number of issues for discussion during the proceeding. These issues include, but are not limited to, the appropriate ROE, capital structure and cost of debt to be used by TQM during the 2007 and 2008 time period, as well as the principles and methodology that should form the basis for these determinations.

An oral public hearing for the current application will be held on Tuesday, 23 September 2008 in Montreal, Quebec at a location yet to be determined.

Any person wishing to intervene in the hearing must file an application by 2:00 p.m. (Montreal Time), Friday, 8 February 2008 with the Secretary of the Board at the following addresse:

Ms. Claudine Dutil-Berry
Secretary of the Board
National Energy Board
444 Seventh Avenue S.W.
Calgary, AB T2P 0X8

An on-line application form o intervene is also available on the NEB's Internet site at www.neb-one.gc.ca. Click on "Regulatory Documents - Submit", then "Submit documents electronically" and then scroll down and click on "Application for Intervenor Status".

The NEB is an independent federal agency that regulates several parts of Canada's energy industry. Its purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest, within the mandate set by Parliament in the regulation of pipelines, energy development and trade.

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For further information:

Carole Léger-Kubeczek
Communications Officer
National Energy Board
E-mail: carole.leger-kubeczek@neb-one.gc.ca
Telephone: 403-299-2717
Telephone (toll free): 1-800-899-1265
Telecopier: 403-292-5503
Telecopier (toll free): 1-877-288-8803
TTY (Teletype): 1-800-632-1663

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NEB to Hear TQM 2007 and 2008 Cost of Capital Application

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