RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2011

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 12    RELATED PARTY TRANSACTIONS

The Partnership does not have any employees. The management and operating functions are provided by the General Partner. The General Partner does not receive a management fee in connection with its management of the Partnership. The Partnership reimburses the General Partner for all costs of services provided, including the costs of employee, officer and director compensation and benefits, and all other expenses necessary or appropriate to the conduct of the business of, and allocable to, the Partnership. Such costs include (i) overhead costs (such as office space and equipment) and (ii) out-of-pocket expenses related to the provision of such services. The Partnership Agreement provides that the General Partner will determine the costs that are allocable to the Partnership in any reasonable manner determined by the General Partner in its sole discretion. Total costs charged to the Partnership by the General Partner were $2.2 million for the year ended December 31, 2011 (2010 – $2.2 million; 2009 – $2.1 million).

As operator, TransCanada's subsidiaries provide capital and operating services to Great Lakes, Northern Border, GTN, Bison, North Baja and Tuscarora (together, "our pipeline systems"). TransCanada's subsidiaries incur costs on behalf of our pipeline systems, including, but not limited to, employee salary and benefit costs, and property and liability insurance costs.

Capital and operating costs charged to our pipeline systems for the years ended December 31, 2011, 2010 and 2009 by TransCanada's subsidiaries and amounts payable to TransCanada's subsidiaries at December 31, 2011 and 2010 are summarized in the following tables:

Year ended December 31 (millions of dollars)		2011	2010	2009
Capital and operating costs charged by TransCanada's subsidiaries to:
	Great Lakes	31.2	30.3	33.8
	Northern Border	28.7	25.8	25.5
	GTN(a)	22.3	–	–
	Bison(a)	7.7	–	–
	North Baja(b)	3.7	4.4	2.9
	Tuscarora	4.7	3.7	3.0
Impact on the Partnership's net income:
	Great Lakes	14.1	12.8	14.3
	Northern Border	13.4	12.5	12.3
	GTN(a)	21.2	–	–
	Bison(a)	4.3	–	–
	North Baja(b)	3.5	3.2	2.4
	Tuscarora	4.6	3.5	2.8

December 31 (millions of dollars)		2011	2010
Amount payable to TransCanada's subsidiaries for costs charged in the year by:
	Great Lakes	3.1	3.0
	Northern Border	2.9	2.2
	GTN(a)	3.0	–
	Bison(a)	1.0	–
	North Baja	0.5	0.6
	Tuscarora	0.6	0.7

^(a)

Represents operations from GTN and Bison from May 3, 2011, date of acquisition, to December 31, 2011.

^(b)

Recast as discussed in Notes 2 and 5.

Great Lakes earns transportation revenues from TransCanada and its affiliates under contracts, some of which are provided at discounted rates and some at maximum recourse rates. The contracts have remaining terms ranging from one to six years. Great Lakes earned $80.6 million of transportation revenues under these contracts in 2011 (2010 – $148.5 million; 2009 – $141.7 million). This amount represents 32.2 percent of total revenues earned by Great Lakes in 2011 (2010 – 56.6 percent; 2009 – 48.9 percent).Great Lakes also earned $1.3 million in affiliated rental revenue in 2011 (2010 – $0.9 million; 2009 – $0.6 million).

Revenue from TransCanada and its affiliates of $38.0 million is included in the Partnership's equity income from Great Lakes in 2011 (2010 – $69.3 million; 2009 – $66.1 million). At December 31, 2011, $7.1 million was included in Great Lakes' receivables in regards to the transportation contracts with TransCanada and its affiliates (2010 – $11.0 million).