Press release from Marketwire
Enbridge Income Fund Announces Settlement on Westspur System
Monday, April 01, 2013
Enbridge Income Fund Announces Settlement on Westspur System16:15 EDT Monday, April 01, 2013
CALGARY, ALBERTA--(Marketwire - April 1, 2013) - Enbridge Income Fund (TSX:ENF) ("the Fund") today announced that a settlement ("the Settlement") has been concluded with a group of shippers relating to new tolls on the Westspur System, one of five crude oil transportation pipelines comprising the Fund's Saskatchewan System. The Westspur System transports crude oil from southeastern Saskatchewan to Enbridge Pipeline Inc.'s mainline pipeline system at Cromer, Manitoba. Pursuant to the Settlement, made with a number of shippers including the shipper who made the original toll complaint, new Westspur tolls were filed with the National Energy Board effective April 1, 2013. In conjunction with the filing of the Settlement, the complaint has been withdrawn.
The Settlement establishes a toll methodology for an initial term of five years and which renews for additional one year terms unless otherwise terminated. Pursuant to the Settlement, the tolls on the Westspur System will be fixed and increased annually with reference to a pre-identified inflation index, subject to throughput remaining within a volume band close to volumes recently transported on the Westspur System. To preserve a relatively stable cash flow profile, toll surcharges or discounts will be applied should throughput increase or decrease on a sustained basis outside this pre-defined band. Additionally, tolls will be increased should integrity, regulatory or operating costs exceed defined thresholds or if new capital projects are undertaken. At current levels of throughput, the Settlement is expected to result in a decrease of annual after tax cash flows generated by the Westspur System in the range of $10 million. The Settlement will also result in the discontinuance of rate-regulated accounting for the Westspur System and the Fund is expected to record an after tax write-down of approximately $13 million related to previously recorded deferred revenue, which will not be collected under the terms of the Settlement. The financial impact of the Settlement is not expected to materially affect the Fund's consolidated financial prospects, distribution coverage or practices.
"We are pleased to have implemented this collaborative agreement," said John Whelen, President of Enbridge Management Services Inc., the Fund's Administrator. "The Settlement will provide greater toll certainty and transparency for shippers and a strong alignment of interests, creating a foundation upon which to build longer term value for our customers and for the Fund."
About Enbridge Income Fund
The Fund is an unincorporated, open-ended trust created to provide a stable and sustainable flow of distributable cash to unitholders. The Fund, with an enterprise value of over $5 billion, owns high quality, low risk energy infrastructure assets. The Fund's assets include interests in more than 500 megawatts of renewable and alternative power generation capacity, a portfolio of liquids transportation and storage businesses and a 50% interest in the Canadian segment of the Alliance Pipeline. Public investment in the Fund is available through Enbridge Income Fund Holdings Inc. (the Company), which holds a 40.8% economic interest in the Fund. The Company trades on the Toronto Stock Exchange under the symbol "ENF". Further information about the Fund and the Company is available at www.enbridgeincomefund.com.
FORWARD LOOKING INFORMATION
Certain information provided in this news release constitute forward-looking statements, and in particular, statements regarding the performance of the Fund, its assets, cash flows and financial results. Forward-looking statements are typically identified by words such as "contemplate", "anticipate", "expect", "project", "estimate", "forecast" and similar words suggesting future outcomes or statements regarding an outlook. Although the Fund believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements and assumptions are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory approvals and parameters, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in the Canadian securities filings of the Fund. While the Fund makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, including with respect to in service dates, volumes and throughputs, expected earnings, cash flows or write-downs, may vary significantly from those expected. Readers are cautioned against placing undue reliance on forward-looking statements. Except as may be required by applicable securities laws, the Fund assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
FOR FURTHER INFORMATION PLEASE CONTACT:
Enbridge Income Fund
Enbridge Income Fund