Conference of Western Attorneys General Regulatory Predictability Sean McMaster – TransCanada Corporation February 16, 2012

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 presentation are intended to provide TransCanada security holders and potential investors with information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s and its subsidiaries’ future financial and operational plans and outlook. Forward-looking statements in this presentation may include, among others, statements regarding the anticipated business prospects, and financial performance of TransCanada and its subsidiaries, expectations or projections about the future, strategies and goals for growth and expansion, expected and future cash flows, costs, schedules (including anticipated construction and completion dates), operating and financial results, and expected impact of future commitments and contingent liabilities. 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 others, 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 TransCanada’s pipeline and energy assets, the availability and price of energy commodities, capacity payments, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and 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 not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this presentation or otherwise, and not to 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. Forward Looking Information

Competitively positioned in pipeline and energy infrastructure Approximately $50 billion of premium pipeline and energy assets Employs over 4,200 people in nearly 50 professions, trades and fields, located in 7 provinces and 32 states Leading North American Energy Infrastructure Company 3

TransCanada Corporation (TRP) listed TSX and NYSE (Financial figures are unaudited and in Canadian dollars, at December 31, 2011) Total assets $49.0 billion Net income (attributable to common shares) $1.5 billion or $2.18 per share Comparable Earnings$1.6 billion or $2.23 per share Funds generated from operations $3.7 billion Dividends declared per common share$1.76 Corporate Statistics 4

Our Vision and Values Our Vision TransCanada will be the leading energy infrastructure company in North America With a strong focus on pipelines and power generation opportunities Located in regions where we enjoy or can develop significant competitive advantage. Our Values Integrity Collaboration Responsibility Innovation 5

TransCanada Corporation (TSX/NYSE: TRP) Natural Gas Pipelines 57,000 km (35,500 mi) wholly owned 11,500 km (7,000 mi) partially owned 250 Bcf of regulated natural gas storage capacity Average volume of 14 Bcf/d Oil Pipelines Keystone* 1.4 million Bbl/d ultimate capacity Energy 19 power plants, 10,800 MW Diversified portfolio, including wind, hydro, nuclear, coal and natural gas 130 Bcf of non-regulated natural gas storage capacity * Phases 1 and 2 in operation, Phases 3 and 4 in development 6

Natural Gas Pipelines 57,000 km (35,500 mi) of wholly owned natural gas pipeline Interests in an additional 11,500 km (7,000 mi) of natural gas pipeline 250 Bcf of regulated natural gas storage capacity Unparalleled connections from traditional and emerging basins to growing markets Average daily volume of approximately 14 Bcf 7

Oil Pipelines Keystone Pipeline - 2,154- miles, transporting crude oil from Alberta to markets at Wood River in Illinois and at Cushing Oklahoma Proposed Keystone XL Pipeline Project – a proposed 1,661- mile pipeline from Alberta to serve markets at Cushing, Oklahoma and Port Arthur, Texas 1.4 million Bbl/day ultimate capacity Bakken and Cushing Marketlink Projects would provide opportunity to transport U.S. crude production Proposed Houston lateral would expand capacity to the US Gulf Coast refining center 8

9 Keystone Oil Pipeline - Linking Growing Crude Oil Supply to Large U.S. Markets PADD III* PADD II* * millions of barrels per daySource: 2009 EIA Actuals Canadian Imports Total Foreign Imports Refining Capacity

10 Keystone Oil Pipeline - Linking Growing Crude Oil Supply to Large U.S. Markets PADD II* PADD III* Canadian Imports Total Foreign Imports Refining Capacity * millions of barrels per daySource: 2009 EIA Actuals

11 Keystone Oil Pipeline - Linking Growing Crude Oil Supply to Large U.S. Markets PADD II* PADD III* Canadian Imports Total Foreign Imports Refining Capacity * millions of barrels per daySource: 2009 EIA Actuals

12 Keystone Oil Pipeline - Linking Growing Crude Oil Supply to Large U.S. Markets PADD III* PADD II* * millions of barrels per daySource: 2009 EIA Actuals Canadian Imports Total Foreign Imports Refining Capacity

Benefits of Keystone Project The United States will derive significant benefits from the Keystone projects: Energy Security National Security Economic Stimulus Job Creation Tax revenue Promotes domestic crude oil production and improved netback pricing to domestic producers vis a vis rail/truck transport 13

Keystone XL Major Permitting Processes State Permitting South Dakota – Energy Conversion and Transmission Facilities Act permit Public informational meetings and formal evidentiary hearing Considers impacts of proposed route but not alternative routes; not a siting process per se 12-month mandatory timeline from application to Order Application filed March 12, 1009 Order issued March 12, 2010 Keystone filed Motion for limited reconsideration – April 14, 2010 Amended Order issued – June 29, 2010 Highly predictable and reliable process! 14

Keystone XL Major Permitting Processes State Permitting, continued Montana – Major Facilities Siting Act (MFSA) Detailed application to Montana Department of Environmental Quality MDEQ used DOS NEPA process to satisfy Montana Environmental Quality Act obligation, as permitted by statute Application filed December 18, 2008 Multiple rounds of information requests Application deemed complete April 2010 Final EIS issued August 26, 2011 In December 2011, Governor Schweitzer announced MFSA certificate would be issued shortly MDEQ working on final details of MFSA Certificate 15

Keystone XL Major Permitting Processes State Permitting, continued Nebraska – No siting statute prior to November 2011 Public concern over route across Sandhills region led Governor Heineman to call a Special Session of the Legislature in November 2011 (notwithstanding Final EIS approval of Sandhills route) Legislature enacted Major Oil Pipeline Siting Act Requires formal process before State Public Service Commission; regulations yet to be promulgated Legislation authorized Nebraska Department of Environmental Quality to work with Dept. of State and Keystone to develop alternate route to avoid Sandhills region State Dept. denial of Presidential Permit temporarily suspended DEQ process, pending new legislative direction in 2012 session. 16

Keystone XL Major Permitting Processes Federal Presidential Permit from US Department of State under Executive Order authorizing border crossing State Dept. conducts environmental review under NEPA State Dept. conducts “National Interest” review considering wide array of factors Numerous federal agencies participate in NEPA and NID reviews. Montana Department of Environmental Quality also served as cooperating agency in NEPA review US Army Corps of Engineers – wetland and waterbody permitting under Clean Water Act Bureau of Land Management – Grant of Right-of-Way and Temporary Use Permit for ~42 miles of federal lands crossed US Fish & Wildlife Service – Consultation with Dept. of State under Endangered Species Act re impacts to Threatened and Endangered Species State Dept. and State Historic Preservation Offices reviewed impacts to cultural resources under National Historic Preservation Act. 17

Keystone XL Major Permitting Processes Delays in the Federal Approval Process Keystone planned its permitting schedule based on the State Department processing of two similar Presidential Permit applications that were processed between 2006 and Keystone I months from application to permit Alberta Clipper months from application to permit Instead, the DOS process took 40 months, from September 2008 to January 2012 to get to a decision. The decision only occurred in January 2012 because of a Legislative deadline A number of factors impacted the DOS review timeline: EPA criticism of the Draft and Supplemental Draft EIS BP Gulf of Mexico Spill San Bruno explosion ExxonMobil Yellowstone spill Issues around scope and process were generally resolved in favor of broader scope and more process 18

Keystone XL Major Permitting Processes January 18, Decision to Deny Presidential Permit 60 day deadline imposed by Congress in Payroll Tax Relief Extension bill is insufficient time for State Dept. to obtain and assess additional information it needed DOS needed additional information about potential route alternatives in Nebraska to avoid Sandhills In light of the Nebraska reroute there is incomplete information about potential environmental, socioeconomic, environmental justice, and cultural resources impacts The project – as presented and analyzed at this time – would not serve the National Interest The determination does not preclude any subsequent permit application or applications for similar projects 19

Thank you.