Russ Hantho, Director Power Growth TransCanada Corporation

1. Public/Private Partnerships:Public Sector Management Workshop 2009 “Climate Change” in the Public SectorRegina, Saskatchewan May 31 – June 2 Russ Hantho, Director Power Growth TransCanada Corporation

2. Gas Pipelines 59,000 km wholly owned 7,800 km partially owned 250 Bcf of regulated natural gas storage capacity Average volume of 15 Bcf/d Energy 19 power plants, 10,900 MW Diversified portfolio, primarily low-cost, base-load generation 120 Bcf of non-regulated natural gas storage capacity Oil Pipelines Keystone 1.1 million Bbl/d Expandable to 1.5 million Bbl/d TransCanada Corporation (TSX/NYSE: TRP)

3. Trends in the Power Industry • By 2020 Canada will have to……. • Replace 8,000 MW of coal generation • Replace 11,500 MW of old (relatively clean) generation • Meet demand growth of 30,000 MW by 2020 • Attain adequate system reliability while doing this • Add more than 4,000 MW per year from now until 2020 • Plus inadequate transmission systems • Plus export opportunities • Canadian and U.S. power capital stock needs replacing • The opportunity to participate in development, and the mechanics of participation, will vary by region • GHG policy may accelerate the retirement of certain of the capital stock • In the next 15 years the U.S. will have to…… • Spend $150 billion on new transmission infrastructure • Spend $350 billion on new generation capacity • Spend $50 billion on environmental retrofits on existing generation • Retire 52,000 MW of existing capacity • Build 230,000 MW of new capacity • Attain adequate system reliability while doing this • Add more than 15,000 MW per year from now until 2020 • Source: Cambridge Energy Research Associates.

4. GHG Regulations are changing the Power business but not overnight… 2009 2010 2011 2012 2013 2014 2016… …2008 2015 Transition Period Traditional Future • Self sustaining • Projects with CCS • market price for • power pays for CCS • No Emissions • Compliance Costs • Freely Emit CO2 • No R&D invested • in storage • No investment in • gasification/post • combustion capture • technology • Bridge the commercial • gap with subsidies • Enable implementation • of First Generation CCS Caution • Moving too fast will shock market • Flow-through CCS costs will • cause consumer power prices to spike 4

5. Public Private Partnership (P3) Option “A cooperative venture between the public and private sectors, built on the expertise of each partner, that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards.” http://www.pppcouncil.ca/aboutPPP_definition.asp “The key questions here are how to improve the efficiency of infrastructure investment, and how to finance that investment. There is evidence from other countries that public-private partnerships can both increase the efficiency of investments and support their financing. Now is the right time to encourage partnerships between the Government … and private providers, given the climate of low nominal interest rates and the presence of large pension funds that are searching for these kinds of investment opportunities.” (David Dodge, Governor of the Bank of Canada,) 5

6. Summary of P3 Models Privatization Buy-Build-Operate Build-Own-Operate Build-Own-Operate-Transfer Build-Lease-Operate-Transfer Lease-Develop-Operate Degree of Private Sector Risk Design-Build-Operate Finance Only Operation/Maintenance Service/License Design-Build Crown Corporation/Agency Government Degree of Private Sector Involvement 6

7. TransCanada and Saskatchewan Collaboration • Belle Plaine Polygeneration project • Gasification with CO2 capture • Governments of Saskatchewan and Canada and TransCanada sharing in funding • Western Transmission Grid • Nuclear generation • Wind

8. Belle Plaine Polygeneration • Utilization of low value feedstock for high grade products • Power, steam, H2, N2 • Uses Carbon Capture & Storage (CCS) • Approx. $5.0 Billion (2008$) • Feasibility study initiated • In-service potential was 2015; on hold pending GHG policy and improved economy Belle Plaine, Saskatchewan

9. Western Grid Study – Alberta to Manitoba • Converter Stations: Calgary, Regina • and Winnipeg area • HVDC technology – bi-directional • 1050 km • SaskPower, AESO, • Manitoba Hydro and Provincial • Governments • Enables large scale generation • Wind, Gasification, • Hydro, Nuclear • Capital Cost: $3.0 B

10. Nuclear • Significant GHG benefits by using nuclear to replace coal or natural gas • Bruce Power is currently evaluating nuclear sites in Saskatchewan and Alberta, or sites that could serve both Provinces • Government of Saskatchewan’s Uranium Development Partnership’s mandate: ”assess opportunities for development of the province’s uranium industry, including nuclear power generation”

11. Wind Generation • Renewable portfolio standards (RPS) have been a • catalyst for the rapid development of wind farms - many developments are currently unable to access financing. • 12 Months Ago • Wind energy in high demand • Numerous development companies launched • IPO and liquidation upside substantial • Strong project economics • Capital costs accelerating • Today • Developers move into build phase • Sale of companies and IPO’s have failed • Demand for wind energy continues to be strong • Turbine availability improves and cost declines are occurring • Saskatchewan wind 4000 + MWs (not considering operability issues)

12. Projects: Major Risks and Mitigations Risk Mitigation • Staged study work • Pre-FEED • FEED • Risk sharing • Counterparties • Governments • Seek clarity on policy and legislation • Commitments and Timing • Guarantees • Development Costs • Capital Costs • Materials • Labour • Regulatory • GHG & pollution • Siting • Fuel availability • Counter-Party Credit 12

13. Engage Federal government Regulatory Risk sharing Advance regulatory policy and legislation Public Private Partnership (P3) Repayable Loan Agreement Significant risk sharing mechanism for development costs Areas for Saskatchewan Government Involvement 13

14. Looking to the future - Public Private participation Emerging climate change policy and technological advances presents opportunities for transmission and generation Saskatchewan government has a principle and potential role for facilitating private investment / joint ventures in energy infrastructure TransCanada’s financial strength and power growth objectives good fit with Saskatchewan’s government objectives 14

15. Thank you. Russ Hantho, Director Power Growth TransCanada Corporation