Cherry Point Cogeneration Project Overview Presented to NWPPC Cogeneration Round Table June 24, 2003

TransCanada Corporation Competitively positioned in natural gas transmission & power generation services $20 billion in Assets ($C at Dec 31, 2001) A- Credit Rating (S&P) TRP trades on the TSE and NYSE Headquartered in Calgary, Alberta, Canada A leading North American energy company

TransCanada Corporation In North America, TransCanada ships the largest volumes the longest distance in the coldest weather TransCanada Williams Kinder Morgan PG&E El Paso Duke Energy Enron MidAmerican

TransCanada’s Power Portfolio 19 Plants, 3 PPAs 4,150 MW operational 1,770 MW in development * Long Term PPA’s Bear Creek 80MW MacKay River 165MW Williams Lake 66MW Sundance A&B* 913MW Redwater 40MW Carselan d 80MW Cancarb 27MW Nipigon 40MW Calstock 35MW Kapuskasing 40MW Tunis 43MW Sheerness* 100MW North Bay 40MW Curtis Palmer 60MW Castleton 64MW Ocean State 560MW Bruce Power LP 1500MW ManChief 300MW Cherry Point 720MW Becancour 550MW Portlands 500MW - Active Plant - In Development - Market Area

TransCanada’s Business Drivers Advantaged Assets relative to CC Similar Economy of Scale Similar Dispatch Flexibility Lower Variable Costs Responsive to Market Right Timing Right Size Right Location Stable, Low Risk Growth Long Term contracts with credit- worthy counter parties No surprises

Cherry Point Project Overview Seattle Cherry Point Vancouver BP Cherry Point Refinery Proposed Cogeneration Plant 720 MW Combined Cycle Cogeneration Plant 3 F-Class gas turbines 1 Steam Turbine Fully Dispatchable (Back-up Boilers) Host Site: BP Cherry Point Refinery 225,000 bbl/d state-of-art refinery; Solomon top quartile performer BP North America: AA credit Project Structure Long term steam and power to BP Refinery 450 MW of power to 3-P contracts Balance of output to TC trading operations

Cherry Point Project Overview (cont.) Exclusivity: Q4, 2002 EPC Contractor Selected: Q4, 2002 Site Release: Q4, 2003 Third party power purchase agreements (PPA’s) EFSEC Permit Firm Transmission Agreements Commercial In-Service: Q2, 2006 Project Schedule:

Cherry Point Advantages Existing Infrastructure

Cherry Point Advantages Minimize Environmental Impact Reduce air emissions from Cherry Point complex Reduce water withdrawal from Nooksack River No new pipelines or transmission lines required Build on existing industrial site Cherry Point Project Rendering looking SE from Grandview Road

Cherry Point Advantages Competitive Price Heat rate advantage ~ 0.7 MMBtu/MWh better than CC Savings of $2.80/MWh 1 Ferndale pipeline tolls ~ 50% lower than Northwest Pipe Savings of $1.40/MWh Project can be dispatched off-line to take advantage of low hydro prices Building in “down market”; equipment and EPC costs at lowest point in years. 1 Based on $4.00 /MMBtu gas price

PURPA - Qualifying Facility Status Cherry Point Cogeneration Project Fuel Input 5440 MMBtu/hr Useful Thermal Output 700 MMBtu/hr Useful Power Output 720 MWh or 2450 MMBtu/hr Useful Thermal Energy Purpa Efficiency Cherry Point 13% 51% Purpa Threshold >5% = >45% Meets Threshold

Cherry Point is an Advantaged Generation Asset Cherry Point Layout, looking NE Heat rate advantages vs. stand-alone CC Dispatchable plant Economy of scale Gas supply infrastructure advantages Strong, committed project proponents Cogen emissions offset by refinery reductions Water cooled/water reuse plan “The economy of scale and flexibility of a large combined cycle plant with a cogeneration heat rate”

The Home Stretch - Ensuring Success! Remaining basic success factors reside with BPA: Transmission Market Clarity BPA’s role as resource provider post-2006 Price of BPA hydro power post Innovative solutions also reside with BPA: Return of Canadian Entitlement Integration and dispatch of Cherry Point for BPA preference customers

Cherry Point Cogeneration Project Overview For more information contact: Craig Martin Manager, Power Marketing & Development tel: