March 10, 2005 12:13 ET

TransCanada Reaches Three Year Settlement with Alberta System Customers




MARCH 10, 2005 - 12:13 ET

TransCanada Reaches Three Year Settlement with Alberta
System Customers

CALGARY, ALBERTA--(CCNMatthews - March 10, 2005) - TransCanada
Corporation's (TSX:TRP) (NYSE:TRP) wholly-owned subsidiary NOVA Gas
Transmission Ltd. (NGTL) has reached a settlement with shippers and
other interested parties regarding the annual revenue requirements of
its Alberta System natural gas transmission system for the years 2005,
2006 and 2007. The settlement encompasses all elements of the Alberta
System revenue requirement, including operating, maintenance and
administration (OM&A) costs, return on equity, depreciation and income
and municipal taxes.

"TransCanada has reached two major settlements with our stakeholders in
the past month - a tolls settlement on the Canadian Mainline for 2005
and this multi-year revenue requirement settlement on our Alberta
System," said Hal Kvisle, TransCanada's chief executive officer.
"TransCanada is pleased to have again achieved an alignment of interests
with our shippers and we remain committed to providing value to our
customers and to exploring and developing pipeline services that benefit
all stakeholders."

In the Alberta System settlement, OM&A costs are fixed at $193 million
for 2005, $201 million for 2006, and $207 million for 2007. Any variance
between actual OM&A and other fixed costs and those agreed to in the
settlement in each year will accrue to TransCanada. The majority of
other cost elements of the 2005, 2006 and 2007 revenue requirements will
be treated on a flow through basis.

The negotiating parties agreed the return on equity capital will be
calculated annually during the term of the settlement using the Alberta
Energy and Utilities Board (EUB) formula for the purpose of establishing
the annual generic rate of return for Alberta utilities on deemed common
equity of 35 per cent. For 2005, the rate of return on common equity
under the EUB formula is 9.50 per cent. Depreciation costs will be
determined using the depreciation rates and methodology that NGTL
proposed to the EUB in its 2004 General Rate Application. They are
expected to be approximately $304 million in 2005, $285 million in 2006
and $282 million in 2007.

TransCanada will apply to the EUB for approval of the Alberta System
settlement. Upon EUB approval of this settlement, TransCanada will
withdraw its motion to the Alberta Court of Appeal filed in September
2004 for leave to appeal EUB Decision 2004-69 (Phase 1 of the 2004
General Rate Application), with respect to the disallowance of
applied-for incentive compensation costs.

TransCanada will continue to charge interim tolls for 2005 for
transportation service on the Alberta System. The interim tolls,
approved by the EUB in December 2004, will remain in effect until final
tolls are established through the Phase 2 proceeding of the Alberta
System's 2005 General Rate Application. This proceeding will address the
allocation of costs among transportation services and rate design.
TransCanada will file this application with the EUB on or before April 1.

TransCanada is a leading North American energy company. TransCanada is
focused on natural gas transmission and power services with employees
who are expert in these businesses. TransCanada's network of
approximately 41,000 kilometres (25,600 miles) of pipeline transports
the majority of Western Canada's natural gas production to the fastest
growing markets in Canada and the United States. TransCanada owns,
controls or is constructing more than 5,100 megawatts of power
generation - enough to meet the electricity needs of about 5.1 million
average households. The Company's common shares trade under the symbol
TRP on the Toronto and New York stock exchanges. Visit TransCanada on
the Internet at for more information.

Note: All financial figures are in Canadian dollars unless otherwise


Certain information in this news release is forward-looking and is
subject to important risks and uncertainties. The results or events
predicted in this information may differ from actual results or events.
Factors which 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
availability and price of energy commodities, regulatory decisions,
competitive factors in the pipeline and power industry sectors, and the
current economic conditions in North America. For additional information
on these and other factors, see the reports filed by TransCanada with
Canadian securities regulators and with the United States Securities and
Exchange Commission. TransCanada disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.


Contact Information

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    (403) 920-7859 or (800) 608-7859
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    (403) 920-7911