RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2011

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 10               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 $0.6 million and $1.2 million for the three and six months ended June 30, 2011 (2010 – $0.5 million and $1.0 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 three and six months ended June 30, 2011 and 2010 by TransCanada’s subsidiaries, and amounts payable to TransCanada’s subsidiaries at June 30, 2011 and December 31, 2010, are summarized in the following tables:

(unaudited)	Three months ended June 30,				Six months ended June 30,
(millions of dollars)	2011		2010		2011		2010
Capital and operating costs charged by TransCanada's subsidiaries to:
Great Lakes		7.2		8.2		15.0		15.8
Northern Border		7.5		7.7		14.2		14.6
GTN(a)		5.8		-		5.8		-
Bison(a)		2.0		-		2.0		-
North Baja		0.9		0.7		1.8		1.4
Tuscarora		1.1		0.9		2.0		1.9
Impact on the Partnership's net income:
Great Lakes		3.3		3.5		6.8		6.9
Northern Border		3.4		3.4		6.6		6.6
GTN(a)		5.5		-		5.5		-
Bison(a)		0.8		-		0.8		-
North Baja		0.9		0.7		1.6		1.4
Tuscarora		1.1		0.9		2.0		1.8

(a) Represents operations from May 3, 2011, date of acquisition, to June 30, 2011.

(unaudited)	June 30,	December 31,
(millions of dollars)	2011	2010
Amount payable to TransCanada's subsidiaries for costs charged in the period by:
Great Lakes	2.9	3.0
Northern Border	2.6	2.2
GTN(a)	0.4	-
Bison(a)	1.2	-
North Baja	0.4	0.6
Tuscarora	0.6	0.7

(a) Represents operations from May 3, 2011, date of acquisition, to June 30, 2011.

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 seven years. Great Lakes earned $17.8 million and $42.2 million of transportation revenues under these contracts for the three and six months ended June 30, 2011 (2010 – $40.4 million and $80.4 million). These amounts represent 28.0 percent and 31.6 percent of total revenues earned by Great Lakes for the three and six months ended June 30, 2011 (2010 – 64.2 percent and 59.2 percent). Great Lakes also earned $0.3 million and $0.6 million in affiliated rental revenue for the three and six months ended June 30, 2011 (2010 - $0.2 million and $0.3 million).

Revenue from TransCanada and its affiliates of $8.4 million and $19.9 million are included in the Partnership’s equity income from Great Lakes for the three and six months ended June 30, 2011 (2010 – $18.8 million and $37.4 million). At June 30, 2011, $7.1 million was included in Great Lakes’ receivables for transportation contracts with TransCanada and its affiliates (December 31, 2010 – $11.0 million).