RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2012

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 9                 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 $1 million for the three months ended March 31, 2012 (2011 – $1 million).

As operator, 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 months ended March 31, 2012 and 2011 by TransCanada’s subsidiaries and amounts payable to TransCanada’s subsidiaries at March 31, 2012 and December 31, 2011 are summarized in the following tables:

(unaudited)	Three months ended March 31,
(millions of dollars)	2012		2011
Capital and operating costs charged by TransCanada's subsidiaries to:
Great Lakes(a)		8		8
Northern Border(a)		8		7
GTN(a)(b)		7		-
Bison(a)(b)		2		-
North Baja		1		1
Tuscarora		1		1
Impact on the Partnership's net income:
Great Lakes(a)		4		4
Northern Border(a)		4		3
GTN(a)(b)		7		-
Bison(a)(b)		1		-
North Baja		1		1
Tuscarora		1		1

(a) Represents 100 percent of the costs.

(b) There were no amounts from GTN and Bison in the 2011 period as the 25 percent interests in each were acquired in May 2011.

(unaudited)	March 31,		December 31,
(millions of dollars)		2012		2011
Amount payable to TransCanada's subsidiaries for costs charged in the year by:
Great Lakes(a)		3		3
Northern Border(a)		3		3
GTN(a)		3		3
Bison(a)		1		1
North Baja		-		1
Tuscarora		-		1

(a) Represents 100 percent of the costs.

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 six years. Great Lakes earned $24 million of transportation revenues under these contracts in the three months ended March 31, 2012 (2011 - $24 million). This amount represents 48 percent of total revenues earned by Great Lakes in the three months ended March 31, 2012 (2011 – 35 percent).

Revenue from TransCanada and its affiliates of $11 million is included in the Partnership’s equity earnings from Great Lakes in the three months ended March 31, 2012 (2011 - $11 million). At March 31, 2012, $8 million was included in Great Lakes’ receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2011 - $7 million).