Message-ID: <31644675.1075852753796.JavaMail.evans@thyme>
Date: Thu, 7 Jun 2001 21:04:00 -0700 (PDT)
From: kevin.heal@enron.com
To: robert.hemstock@enron.com, fino.tiberi@enron.com, ruth.concannon@enron.com, 
	eric.le@enron.com, peggy.hedstrom@enron.com, rob.milnthorp@enron.com, 
	mckay.jonathan@enron.com, nicole.laporte@enron.com
Subject: TCPL Fair Return Application
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X-From: Kevin Heal <Kevin Heal/ENRON@enronXgate@ENRON>
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TCPL filed an application with the NEB yesterday seeking an increase in rate of return.  They are asking for a new methodology called "After-Tax Weighted Average Cost of Capital" which would be 7.5%.  Using the existing methodology this would translate to a return of 12.52% on 40% deemed equity in the capital structure (equity thickness).  This would equate to a return of 16.69% if the equity thickness was 30%.  Currently TCPL has a regulated return of 9.61% and 30%.

If TCPL gets what they are seeking it would result in an annualized Eastern Zone toll of CDN$1.25 (Chippawa $1.261).   The invoiced toll would be higher to recover the difference from the interim toll, currently set at $1.132.

I have a copy of the three binder application if anyone wants to see it.

Kevin