NOTE 17 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 $4 million for the year ended December 31, 2017 (2016 – $3 million, 2015 – $3 million).

As operator of most of our pipelines (except Iroquois and the PNGTS joint facilities) TransCanada's subsidiaries provide capital and operating services to 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. The Iroquois pipeline system is operated by Iroquois Pipeline Operating Company, a wholly owned subsidiary of Iroquois. The PNGTS joint facilities are operated by MNOC. Therefore, Iroquois and the PNGTS joint facilities do not receive capital and operating services from TransCanada.

Capital and operating costs charged to our pipeline systems, except for Iroquois, for the years ended December 31, 2017, 2016 and 2015 by TransCanada's subsidiaries and amounts payable to TransCanada's subsidiaries at December 31, 2017 and 2016 are summarized in the following tables:

Year ended December 31 (millions of dollars)		2017	2016	2015

Capital and operating costs charged by TransCanada's subsidiaries to:
	Great Lakes(a)	36	30	30
	Northern Border(a)	43	32	36
	PNGTS(a)(b)	9	8	8
	GTN(a)(c)	34	27	30
	Bison	6	2	4
	North Baja	4	4	5
	Tuscarora	4	5	4
Impact on the Partnership's net income attributable to controlling interests:
	Great Lakes	15	13	13
	Northern Border	16	12	14
	PNGTS(b)	5	5	5
	GTN(c)	29	24	25
	Bison	6	3	4
	North Baja	4	4	5
	Tuscarora	4	4	4

December 31 (millions of dollars)		2017	2016

Amount payable to TransCanada's subsidiaries for costs charged in the year by:
	Great Lakes(a)	3	4
	Northern Border(a)	4	4
	PNGTS(a)(b)	1	1
	GTN	3	3
	Bison	1	1
	North Baja	–	1
	Tuscarora	–	1


(a)	Represents 100 percent of the costs.
(b)	Recast to consolidate PNGTS for years ended December 31, 2016 and 2015 (Refer to Note 2).
(c)	In 2015, the Partnership acquired the remaining 30 percent interest in GTN (Refer to Note 7).

Great Lakes

Great Lakes earns significant transportation revenues from TransCanada and its affiliates, some of which are provided at discounted rates, negotiated rates and some at maximum recourse rates. For the year ended December 31, 2017, Great Lakes earned 57 percent of its transportation revenues from TransCanada and its affiliates (2016 – 68 percent; 2015 – 71 percent). Additionally, Great Lakes earned approximately one percent of its total revenues as affiliated rental revenue in 2017 (2016 – 1 percent; 2015 – 1 percent).

At December 31, 2017, $20 million was included in Great Lakes' receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2016 – $19 million).

In 2017, Great Lakes operates under a FERC approved 2013 rate settlement that includes a revenue sharing mechanism that requires Great Lakes to share with its customers certain percentages of any qualifying revenues earned above certain ROEs. A refund of $7 million was paid to shippers in 2017 relating to the year ended December 31, 2016, of which approximately 86 percent was made to affiliates of Great Lakes. For the year ended December 31, 2017, Great Lakes has recorded an estimated revenue sharing provision amounting to $40 million and Great Lakes expects that a significant percentage of the 2017 revenue sharing refund will be to its affiliates.

Under the terms of the 2017 Great Lakes Settlement, beginning 2018, the revenue sharing was eliminated (refer to Note 5. Additionally, effective October 1, 2017, Great Lakes still charged customers rates in effect prior to the 2017 Great Lakes Settlement but only recognized revenue up to the amount of the new rates in the 2017 Great Lakes Settlement. The difference between these two amounts was recognized as a provision for rate refund (liability) on Great Lakes' balance sheet amounting to $8 million. Great Lakes expects that a significant percentage of the provision for rate refund will be to its affiliates as well.

Great Lakes has a cash management agreement with TransCanada whereby Great Lakes' funds are pooled with other TransCanada affiliates. The agreement also gives Great Lakes the ability to obtain short-term borrowings to provide liquidity for Great Lakes' operating needs. At December 31, 2017 and 2016, Great Lakes has an outstanding receivable from this arrangement amounting to $64 million and $27 million, respectively.

Effective November 1, 2014, Great Lakes executed contracts with an affiliate, ANR Pipeline Company (ANR), to provide firm service in Michigan and Wisconsin. These contracts were at the maximum FERC authorized rate and were intended to replace historical contracts. On December 3, 2014, FERC accepted and suspended Great Lakes' tariff records to become effective May 3, 2015, subject to refund. On February 2, 2015, FERC issued an Order granting a rehearing and clarification request submitted by Great Lakes, which allowed additional time for FERC to consider Great Lakes' request. Following extensive discussions with numerous shippers and other stakeholders, on April 20, 2015, ANR filed a settlement with FERC that included an agreement by ANR to pay Great Lakes the difference between the historical and maximum rates (ANR Settlement). Great Lakes provided service to ANR under multiple service agreements and rates through May 3, 2015 when Great Lakes' tariff records became effective and subject to refund. Great Lakes deferred an approximate $9 million of revenue related to services performed in 2014 and approximately $14 million of additional revenue related to services performed through May 3, 2015 under such agreements. On October 15, 2015, FERC accepted and approved the ANR Settlement. As a result, Great Lakes recognized the deferred transportation revenue of approximately $23 million in the fourth quarter of 2015.

On April 24, 2017, Great Lakes reached an agreement on the terms of a new long-term transportation capacity contract with its affiliate, TransCanada. The contract, which was subject to Canada's National Energy Board (NEB) approval, is for a term of 10 years and allows TransCanada the ability to transport up to 0.711 billion cubic feet of natural gas per day on the Great Lakes system from the Manitoba/U.S. border to the U.S. border near Dawn Ontario. On September 21, 2017, TransCanada received approval from the NEB and as a result, this contract commenced on November 1, 2017. This contract contains volume reduction options up to full contract quantity beginning in year three. For the year ended December 31, 2017, the total revenue earned by Great Lakes on this contract was $13 million.

PNGTS

For the years ended December 31, 2017, 2016 and 2015, PNGTS provided transportation services to a related party. Revenues from TransCanada Energy Ltd., a subsidiary of TransCanada, for 2017, 2016 and 2015 were approximately $1 million, $2 million and $3 million, respectively. At December 31, 2017, PNGTS had nil million outstanding receivables from TransCanada Energy Ltd. in the consolidated balance sheets.

In connection with anticipated future commercial opportunities, PNGTS has entered into an arrangement with its affiliates regarding the construction of certain facilities on their systems that will be required to fulfill future contracts on the PNGTS' system. In the event the anticipated developments do not proceed, PNGTS will be required to reimburse its affiliates for any costs incurred related to the development of these facilities. As of December 31, 2017, the total costs incurred by these affiliates was approximately $3 million.