NOTE 11RELATED 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 $1 million and $3 million for the three and nine months ended September 30, 2016, respectively. Total costs charged to the Partnership by the General Partner were $1 million and $2 million for the three and nine months ended September 30, 2015, respectively.

As operator of our pipelines, 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.

Capital and operating costs charged to our pipeline systems for the three and nine months ended September 30, 2016 and 2015 by TransCanada’s subsidiaries and amounts payable to TransCanada’s subsidiaries at September 30, 2016 and December 31, 2015 are summarized in the following tables:

	Three months ended		Nine months ended
(unaudited)	September 30,		September 30,
(millions of dollars)	2016	2015	2016	2015

Capital and operating costs charged by TransCanada’s subsidiaries to:
Great Lakes (a)	8	7	22	21
Northern Border (a)	9	10	25	26
PNGTS (a), (c)	2	—	6	—
GTN (a), (b)	8	8	20	22
Bison (d)	1	1	1	3
North Baja	1	1	3	4
Tuscarora	1	1	3	3
Impact on the Partnership’s net income:
Great Lakes	3	3	9	9
Northern Border	3	3	9	10
PNGTS (c)	1	—	3	—
GTN (b)	7	6	18	17
Bison	1	1	2	3
North Baja	1	1	3	4
Tuscarora	1	1	3	3

(unaudited)
(millions of dollars)	September 30, 2016	December 31, 2015

Net amounts payable to TransCanada’s subsidiaries is as follows:
Great Lakes (a)	3	3
Northern Border (a)	3	5
PNGTS (a)	1	—
GTN	3	3
Bison	—	—
North Baja	—	—
Tuscarora	1	1

^(a)

Represents 100 percent of the costs.

^(b)

In April 2015, the Partnership acquired the remaining 30 percent interest in GTN.

^(c)

In January 2016, the Partnership acquired 49.9 percent interest in PNGTS.

^(d)

Net of proceeds of $1 million from the sale of excess pipe (at cost) to an affiliate.

Great Lakes earns transportation revenues from TransCanada and its affiliates, some of which are provided at discounted rates and some of which are at maximum recourse rates. Great Lakes earned $22 million and $91 million of transportation revenues under these contracts for the three and nine months ended September 30, 2016, respectively (2015 - $18 million and $65 million). These amounts represent 62 percent and 69 percent of total revenues earned by Great Lakes for the three and nine months ended September 30, 2016, respectively (2015 — 62 percent for both periods). Great Lakes also earned nil and $1 million of affiliated rental revenue for three and nine months ended September 30, 2016, respectively (2015 — nil and $1 million).

Accordingly, revenue from TransCanada and its affiliates of $11 million and $43 million are included in the Partnership’s equity earnings from Great Lakes for the three and nine months ended September 30, 2016, respectively (2015 - $9 million and $31 million). At September 30, 2016, $9 million was included in Great Lakes’ receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2015 - $17 million).

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, the 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.