RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2020

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, 2020 and 2019, total costs charged to the Partnership by the General Partner were $1 million.

As operator of our pipelines, except Iroquois and a certain portion of the PNGTS facilities, TC Energy’s subsidiaries provide capital and operating services to our pipeline systems. TC Energy’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. Iroquois does not receive any capital and operating services from TC Energy (Refer to Note 5, "Equity Investments").

Capital and operating costs charged to our pipeline systems, except for Iroquois, for the three months ended March 31, 2020 and 2019 by TC Energy’s subsidiaries and amounts payable to TC Energy’s subsidiaries at March 31, 2020 and December 31, 2019 are summarized in the following tables:



	Three months ended
(unaudited)	March 31,
(millions of dollars)	2020	2019
Capital and operating costs charged by TC Energy’s subsidiaries to:
Great Lakes^(a)	11	11
Northern Border^(a)	10	9
GTN	12	10
Bison	—	1
North Baja	1	1
Tuscarora	1	1
PNGTS^(a)	2	2
Impact on the Partnership’s income ^(b):
Great Lakes	4	5
Northern Border	4	4
GTN	8	8
Bison	—	1
North Baja	1	1
Tuscarora	1	1
PNGTS	1	1



(unaudited)
(millions of dollars)	March 31, 2020	December 31, 2019
Net amounts payable to TC Energy’s subsidiaries are as follows:
Great Lakes^(a)	4	5
Northern Border^(a)	3	4
GTN	5	5
Bison	—	—
North Baja	—	1
Tuscarora	—	—
PNGTS^(a)	1	1

(a)Represents 100 percent of the costs.

(b)Represents the Partnership's proportionate share based ownership percentage of these pipelines.

Great Lakes

Great Lakes earns significant transportation revenues from TC Energy and its affiliates, some of which are provided at discounted rates and some at maximum recourse rates. For the three months ended March 31, 2020, Great Lakes earned 74 percent of its transportation revenues from TC Energy and its affiliates (March 31, 2019 - 73 percent).

At March 31, 2020, $18 million was included in Great Lakes’ receivables with regard to the transportation contracts with TC Energy and its affiliates (December 31, 2019 - $19 million).

In 2018, Great Lakes executed long-term transportation capacity contracts with its affiliate, ANR Pipeline Company (ANR) in anticipation of specific possible future needs. The original total contract value of these contracts was approximately $1.3 billion over a 15-year period. These contracts were subject to certain conditions and provisions, including a reduction option up to the full contract quantity if exercised up to certain date. During the first quarter of 2020, several amendments were made to these contracts and ANR exercised the right to terminate a significant portion of the contracts amounting to approximately $1.1 billion. The remaining maximum rate contract, which has a total capacity of approximately 168,000 Dth/Day and total contract value of $182 million over a term of 20 years, is expected to begin in late 2022. This contract, which has a full quantity reduction option at any time before October 1, 2022, is dependent on ANR being able to secure the required regulatory approvals and other requirements of the project associated with these volumes. The remaining unsubscribed capacity on Great Lakes will be available for contracting in response to developing marketing conditions.

PNGTS

In connection with the Portland XPress expansion project (PXP), which was designed to be phased in over a three year time period, PNGTS has entered into an arrangement with its affiliates regarding the construction of certain facilities on their systems that are required to fulfill future contracts on the PNGTS system. PXP Phases I and II were placed into service on November 1, 2018 and November 1, 2019, respectively. Phase III is anticipated to be in service on November 1, 2020. In the event the expansions are terminated prior to their in-service dates, PNGTS will be required to reimburse its affiliates for any costs incurred related to the development of their facilities. As a result of placing the TC Energy facilities associated with the Phase II volumes in service, PNGTS' obligation to reimburse these development costs has largely been fulfilled. PNGTS is currently obligated to reimburse costs incurred by TC Energy in relation to Phase III, which was approximately $1.5 million at March 31, 2020 and estimated to be approximately $8.6 million by November 1, 2020, when Phase III goes into service.