Inland Project Update April 2008

1. Inland Project Update April 2008 Confidential and Commercially Sensitive

2. TransCanadaA leading energy infrastructure company • 36,500 miles of wholly owned pipeline • Interests in an additional 4,800 miles of pipeline • 15 Bcf/d • 360 Bcf of natural gas storage capacity • 16 power plants • 7,700 megawatts • Proposed crude oil pipeline and two LNG terminals

3. Current Projects • NorthernLights Project • An intertie between Canada and US linking wind, hydro and other clean energy sources in Alberta and British Columbia • Inland Project • Montana & Wyoming • large scale wind developments Only feasible with major transmission • multiple sites > 10,000 MW total • Take advantage of TransCanada’s expertise in: • developing and building large, regional infrastructure projects • Merchant developments

4. The Vision for Inland Project • Two 1,000+ mile transmission lines • Each line up to 3,000 MW and$1.4 to $2.0 billion • HVDC technology • Multi-state transmission highway avoids rate pancaking • Benefits for each state • Underpinned by long term contracts

5. Inland Environmental Attributes Wind generation from Montana and Wyoming to Las Vegas, Southern California, Arizona enhanced capability to handle fluctuations in wind regimes ability to dynamic schedule wind generation directly to load HVDC technology much smaller footprint fewer lines no EMF concerns Efficient movement of power substantially lower line losses no inadvertent flows lower per mile capital at distances greater than 400 miles

6. Project Update • Initial routing, design work and cost estimates are completed • Preferred route identified; met with counties, states & BLM Route application submitted to BLM • Good political and regulatory support Multi-state siting MOU In-service date of 2014 is achievable

7. Significant opportunity to meet RPS in West MT potential 6,000 to 8,500 WY potential 3,000 to 6,000

8. Enhanced Competition • Opportunity for new physical trading hubs • Enhanced competition • New resource options for Idaho, Nevada, Southern California and Arizona; and Montana, Wyoming, Alberta NorthernLights PG&E PGE Idaho Power MSTI PG&E Gateway West Inland Gateway South & TransWest

9. Next Steps Need to advance detailed engineering and design work on project Initial path rating process Siting and Permitting activity critical Engineering, siting and permitting work estimated to cost $35 million Commercial underpinnings are necessary to continue development phase II development work

10. Current policies require modification • FERC’s transmission incentive policy is focused on incumbent utilities • Merchant open season process too early to provide certainty • A new model is necessary that would: Ability to fund risky permit phase FERC Open Season Policy

11. Alberta Proceeds with GHG legislationAlberta’s future build will meet RPS • Alberta Federal Gov’t • Start July ’07 2010 • Intensity 2010 2015 • Reductions 12% 18% 28% • Compliance • Tech Fund 100% 70% 40% • Cost $15/t $15/t $20/t + • NOx,Sox,PM no yes 2% until 2020 5%/yr until 0%

12. Clean fuel standard for coal-fired power plants - summary Source: Environment Canada – Regulatory framework for air emissions, energy sector. April 1, 2008

13. Policies have created significant momentum EPCOR, Gov’t of Canada, Province of Alberta fund IGCC with CO2 capture project (Oct 12, 2007) Saskatchewan Gov’t and TransCanada move polygen project forward (October 05, 2007) Canada-Alberta task force recommends carbon capture investment (Jan 09, 2008) New federal funding opens door to major carbon capture demonstration project in Saskatchewan (February 27, 2008)

14. TransCanada’s – Belle Plaine CCS Pet coke gasification based poly-generation $5.0 Billion (approx 2007$) Timelines Construction ‘09 – ‘14 ISD late ’14 Significant Government funding Polygeneration at Belle Plaine 14

15. Project Overview – Belle Plaine Power Steam Steam H2 N2 CO2 CO2 • The Buyers • Power • Potash • Fertilizer • Oil POLYGENERAT I ON Grid Potash Mining Chemical & Fertilizer Enhanced Oil Recovery • The Products • Energy Commodities • Feedstocks • Cheap Black Stuff • Petroleum Coke “The most cost effective CCS plant under development in Canada”

16. Belle PlaineArial view North

17. Belle PlaineEnhanced Oil Recovery (EOR)

18. Inland Project - Next Steps • TransCanada … • is open to innovative arrangements • is willing to explore options further with wind developers and others, to tailor an optimal solution • has kept commercial options open to be able to structure a workable arrangement for the project