Canadian Supply Options for the Northeast Marketplace

Northeast Restructuring Roundtable - April 30, 2010

Don Bell, Director, Commercial East, Canadian and Eastern U.S. Pipelines

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Forward-Looking Information

This presentation may contain certain information that is forward looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "believe", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward-looking information. Forward-looking statements in this document are intended to provide TransCanada shareholders and potential investors with information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s and its subsidiaries’ future financial and operations plans and outlook. Forward-looking statements in this document may include, among others, statements regarding the anticipated business prospects and financial performance of TransCanada and its subsidiaries, expectations or projections about the future, and strategies and goals for growth and expansion. All forward-looking statements reflect TransCanada’s beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Company’s pipeline and energy assets, the availability and price of energy commodities, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy industry sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and the current economic conditions in North America. By its nature, forward‑looking information is subject to various risks and uncertainties, which could cause TransCanada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission (SEC). Readers are cautioned to not place undue reliance on this forward‑looking information, which is given as of the date it is expressed in this presentation or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update publicly or revise any forward‑looking information, whether as a result of new information, future events or otherwise, except as required by law.

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Agenda

• TransCanada Overview

• WCSB Myths and Realities

• Shale Opportunities

• Mainline Competitiveness Initiative

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Pipelines

Pipelines (Proposed)

Pipelines (In Development)

Power Facilities

Gas Storage

LNG (Proposed)

• North America’s Largest Natural Gas Pipeline Network

• 60,000 km wholly owned

• 8,800 km partially owned

• Average volume of 15 Bcf/d

• North America’s 2nd largest Natural Gas Storage Operator

• 380 BCF of capacity

• Canada’s Largest Private Sector Power Generator

• 20 plants, 11,700 MW

• Premier North American Oil Pipeline under Construction

• 1.1 million bbl/d

• 4000 Talented Employees

• In 7 provinces and 34 states

TransCanadaCorporation (TSX/NYSE: TRP)

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Myths and Realities – Canadian Shales

• Myth - Canadian Shales are not as prolific as U.S. Shales, and

even so are too far away from the market to be commercial.

• Reality:• WCSB shales are prolific• WCSB shales are competitive• NIT levels the playing field• Pipeline access

• Myth - The WCSB is in steep decline and will not recover.

• Reality:• Significant increase in productive potential in the longer term• Technology is driving WCSB unconventional growth• WCSB conventional resources can continue at high levels for

years• Step changes strengthen the WCSB conventional outlook

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Key Characteristics of Some Canadian and U.S. Shales

By any measure involving purely geological reservoir parameters, the Horn River and the Montney resource plays compare very favourably to their U.S. counterparts.

Barnett Haynesville Marcellus Utica Horn River Montney

Depth (ft) 6500 - 9000 10500 - 13500 3000 - 8500 2300-6000 6500 -13000 5000 – 10000

Thickness of Shale (ft) 100 – 500 200 - 300 50 - 250 300 - 600 300 - 600 300 – 500

Total Organic Content (%) 3.0 - 7.0 3.0 - 5.0 3.0 - 12.0 0.1 – 2.5 3.0 - 10.0 2.5 - 6.0

Original Gas in Place

(Bcf/Section)

50 – 200 150 - 250 50 - 150 75 - 300 130 - 320 60 - 150

Recovery Factor (%) 20 – 40 20 - 40 20 - 40 20 - 40 20 - 40 20 - 40

Est. Ultimate Recovery

(Bcf/Well)

1.0 - 4.0 4.5 - 8.5 2.2 - 4.1 0.5 – 2.0 3.0 - 9.0 2.0 - 6.0

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Alberta Competitiveness Initiative

Background:• Alberta Government announced new royalty program October 2007• Increase royalties from range of 5% - 35% to range of 5% to 50%• Some short term changes made, April – Nov 2008, to address unintended

consequences from original proposal plus recessionary impacts

New Framework

• Alberta government listened, heard and responded• 5% incentive for new wells set to expire in 2011 is now permanent• Maximum gas royalty falls from 50% to 36%• All royalty curves will be finalized and announced May 31, 2010• Further changes to enhance innovation recognizing higher costs of new and

advanced technologies• Alberta Government report on a process to streamline the current regulatory

process due June 2010

“We must take the necessary steps to position Alberta as one of the most competitive North American destinations for energy investment” – Ron Liepert, Alberta Energy Minister - Mar 17, 2010.

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Ultimate Potential of the WCSB

• The shift to shale development, tight gas and CBM has more than doubled the remaining production potential of the WCSB

• Conventional supply can continue to produce at high levels for many years

1. Source: ERCB & Gas Potential Committee

2. Source: TransCanada

Cumulative Production

TCF

Remaining Potential

TCF

Ultimate Potential

TCF

WCSB Conventional1 168 109 277

WCSB CBM1 1.0 55 56

Montney Shale Hybrid2 

0.1 30 – 50 30 – 50

Horn River Shale2 negligible 40 – 100 40 – 100

WCSB Total 169 234 – 314 403 – 483

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Shale Opportunities

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North Central Corridor • 300 km, 42-inch pipe• 26 MW of compression• Approximately $780 million• In-service – April 2010

Groundbirch Pipeline Project• Commitments for 1.1 Bcf/d

by 2014• 77 km, 36-inch pipe• Approximately $200 million• Expected in-service Q4 2010• NEB Approval March 4, 2010

Horn River Pipeline Project• Commitments for 503 MMcf/d

by 2014• 155 km combination of new

36-inch pipe and existing pipe• Approximately $307 million• Filed with NEB Feb 2010• Expected in-service Q2 2012

Northeast B.C. Shale Opportunities

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New Service Contracts:Horn River and Montney

MMcf/d

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Marcellus Shale Opportunities

• Various infrastructure projects announced to capture Marcellus Shale supplies

• Most projects targeted at U.S. Northeast markets

• Recently, projects announced to bring Marcellus supplies to Canada

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Proposed Projects to Bring Marcellus Gas to Canadian Markets

MARCELLUSSHALE

DEVONIANSHALE

ExistingCompressorStation 313

LEIDY

Tioga County Expansion – Empire Pipeline

Marcellus to Leidy Path – Tennessee Gas Pipeline

Aurora

Chippawa

NiagaraParkway

Marcellus to Niagara Path – Tennessee Gas Pipeline

Marcellus to East Aurora Path – Tennessee Gas Pipeline

DAWN

Tennessee

EmpireState

Iroquois

TETCO

NationalFuel Gas

Tennessee

AlgonquinMillennium

TCPL

Union

Northern Access - National Fuel Gas

ONNY

VT NH

MA

CT

NJ

PAOH

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Mainline Competitiveness

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Comprehensive Package Mainline Competitiveness

• Objective

• Lower tolls

• Toll stability and certainty

• Economic Alignment btw Shippers and TransCanada

• Flexible Product Offering

• Key Components

• Rate Design Concepts

• Service Concepts

• Business Model Concepts

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Toll Impact (¢/GJ)

Path

Initiative

NIT – Dawn

(¢/GJ)

NIT – CDA (¢/GJ) NIT – GMi EDA

(¢/GJ)

Dawn –

Iroquois

(¢/GJ)

Structural

Changes:

~ -28 ¢ ~ -45 ¢ ~ -30 ¢ ~ -5 ¢

Optional

Service

Changes:

~ -5 ¢ ~ -5 ¢ ~ -6 ¢ ~ -1 ¢

TOTAL ~ -28 ¢ to -33 ¢ ~ -45 ¢ to -50 ¢ ~ -30 ¢ to -36 ¢ ~ -5 ¢ to -6 ¢

Thank You