NOTE 11 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. For both the three and six months ended June 30, 2017 and 2016, total costs charged to the Partnership by the General Partner were $1 million and $2 million, respectively.

As operator of our pipelines except Iroquois, 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. Therefore, Iroquois does not receive any capital and operating services from TransCanada.

Capital and operating costs charged to our pipeline systems for the three and six months ended June 30, 2017 and 2016 by TransCanada’s subsidiaries and amounts payable to TransCanada’s subsidiaries at June 30, 2017 and December 31, 2016 are summarized in the following tables:

	Three months ended		Six months ended
(unaudited)	June 30,		June 30,
(millions of dollars)	2017	2016	2017	2016

Capital and operating costs charged by TransCanada’s subsidiaries to:
Great Lakes (a)	9	7	17	14
Northern Border (a)	10	9	20	15
GTN	9	7	16	13
Bison	1	1	2	—
North Baja	1	1	2	2
Tuscarora	1	1	2	2
PNGTS	2	2	4	4
Impact on the Partnership’s net income:
Great Lakes (a)	4	3	7	6
Northern Border (a)	4	3	7	6
GTN	7	6	14	11
Bison	1	1	2	2
North Baja	1	1	2	2
Tuscarora	1	1	2	2
PNGTS (b)	1	1	2	2

(unaudited)
(millions of dollars)	June 30, 2017	December 31, 2016

Net amounts payable to TransCanada’s subsidiaries is as follows:
Great Lakes (a)	4	4
Northern Border (a)	4	4
GTN	3	3
Bison	1	1
North Baja	—	1
Tuscarora	—	1
PNGTS	1	1

(a)

Represents 100 percent of the costs.

(b)

Recast to consolidate PNGTS for all periods presented (Refer to Note 2).

Great Lakes earns significant transportation revenues from TransCanada and its affiliates, some of which are provided at discounted rates and some at maximum recourse rates. For the three and six months ended June 30, 2017, Great Lakes earned 43 percent and 57 percent of transportation revenues from TransCanada and its affiliates, respectively (June 30, 2016 — 64 percent and 71 percent).

At June 30, 2017, $1 million was included in Great Lakes’ receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2016 — $19 million).

Great Lakes operates under a FERC approved 2013 rate settlement that includes a revenue sharing mechanism that requires Great Lakes to share with its shippers certain percentages of any qualifying revenues earned above a certain return on equity threshold. For the year ended December 31, 2016, Great Lakes recorded an estimated 2016 revenue sharing provision of $7.2 million. For the three and six months ended June 30, 2017, Great Lakes recorded an estimated 2017 revenue sharing provision of $7 million and $10 million, respectively. Great Lakes expects that a significant percentage of this refund will be paid to its affiliates.

PNGTS earns transportation revenues from TransCanada and its affiliates. For the three and six months ended June 30, 2017, PNGTS earned 2 percent and 1 percent of transportation revenues from TransCanada and its affiliates, respectively (June 30, 2016 — 5 percent and 3 percent).

At June 30, 2017, nil was included in PNGTS’ receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2016 — nil).