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NEB approves a Return on Common Equity for 2009

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News Release

08/40
For immediate release
4 December 2008

NEB approves a Return on Common Equity for 2009

CALGARY - On 4 December 2008, the National Energy Board (NEB) set the 2009 Return on Common Equity (ROE) for certain Group 1 pipeline companies at 8.57 per cent.

The NEB approved the 8.57 per cent 2009 ROE pursuant to the adjustment mechanism, or formula, established in the Multi-Pipeline Cost of Capital Decision (RH-2-94), and revised on 14 March 1997 to eliminate rounding. The RH-2-94 Decision established a mechanism to adjust the allowed ROE for 1996 and beyond without having to go to a public hearing process.

The adjustment mechanism is designed to take into account the year-to-year change in forecast long term (30 year) Government of Canada bond yields. The forecast yield for 30 year Government of Canada bonds for 2009 is 4.36 per cent, and is 19 basis points lower than the yield forecasted for 2008, which was 4.55 per cent. The 19 basis point decrease is multiplied by 75 per cent to generate a 14 basis point decrease in the allowed ROE to 8.57 per cent in 2009 from 8.71 per cent for 2008.

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:

Stacey Squires
Communications Officer
National Energy Board
E-mail: stacey.squires@neb-one.gc.ca
Telephone: 403-221-3294
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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Date Modified:
2011-10-28