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 conduct 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 months ended March 31, 2018 and 2017, total costs charged to the Partnership by the General Partner were $1 million.

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, except for Iroquois, for the three months ended March 31, 2018 and 2017 by TransCanada’s subsidiaries and amounts payable to TransCanada’s subsidiaries at March 31, 2018 and December 31, 2017 are summarized in the following tables:

	Three months ended
(unaudited)	March 31,
(millions of dollars)	2018	2017

Capital and operating costs charged by TransCanada’s subsidiaries to:
Great Lakes (a)	9	8
Northern Border (a)	9	10
GTN	8	7
Bison	2	1
North Baja	1	1
Tuscarora	1	1
PNGTS (a)	2	2	(b)
Impact on the Partnership’s net income:
Great Lakes	4	3
Northern Border	4	3
GTN	8	7
Bison	2	1
North Baja	1	1
Tuscarora	1	1
PNGTS	1	1	(b)

(unaudited)
(millions of dollars)	March 31, 2018	December 31, 2017

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

(a)

Represents 100 percent of the costs.

(b)

Recast to consolidate PNGTS (Refer to Note 2).

(c)

Excludes any amounts owed to affiliates relating to revenue sharing. See discussion below.

Great Lakes

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 months ended March 31, 2018, Great Lakes earned 68 percent of transportation revenues from TransCanada and its affiliates (2017 — 67 percent).

At March 31, 2018, $10 million was included in Great Lakes’ receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2017 — $20 million).

During 2017, Great Lakes operated under a FERC approved 2013 rate settlement that included a revenue sharing mechanism that required Great Lakes to share with its customers certain percentages of any qualifying revenues earned above certain ROEs. For the year ended December 31, 2017, Great Lakes has recorded an estimated revenue sharing provision amounting to $40 million, a significant amount of which will be payable to its affiliates. Under the terms of the 2017 Great Lakes Settlement, beginning 2018, its revenue sharing provision was eliminated (Refer to our Annual Report on form 10-K for the year ended December 31, 2017).

PNGTS

PNGTS earns transportation revenues from TransCanada and its affiliates. For the three months ended March 31, 2018, PNGTS earned approximately $1 million of its transportation revenues from TransCanada and its affiliates (2017 — nil).

At March 31, 2018, nil was included in PNGTS’ receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2017 — nil).

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. At March 31, 2018, the total costs incurred by these affiliates was approximately $5 million.