On February 17, 2005, a new Code of Conduct came into effect for the legal entity that owns the Alberta System, NOVA Gas Transmission Ltd. (NGTL), and its affiliated companies.

Background

NGTL filed the proposed version of a new Code of Conduct for the Alberta System in late 2003 as part of the Alberta System 2004 GRA in response to both Alberta Energy and Utilities Board (EUB) direction and commitments made to stakeholders. The Code is based on a template the EUB established for the ATCO Group, with modifications to reflect and accommodate TransCanada's integrated operational structure.

The Code

Recently approved by the EUB on November 17, 2004, the new Code of Conduct establishes standards and conditions for interactions between NGTL and our affiliates. By following the requirements of the new NGTL Code of Conduct, customers can be confident that NGTL business with affiliates is conducted appropriately and transparently.

"As a corporation that operates a number of different energy businesses, TransCanada can achieve significant efficiencies and economies of scope and scale by sharing or centralizing resources and expertise," explains Al Bellstedt, Executive Vice-President, Law and General Counsel.

"These efficiencies result in benefits for our customers and shareholders alike," says Al, who also serves as NGTL's Chief Compliance Officer, a role that is required under the Code. "If TransCanada had to staff each of our businesses independently, higher overhead and administrative costs could affect our overall competitiveness."

The new NGTL Code of Conduct establishes rules to ensure NGTL and its representatives:

• Work, interact and share information appropriately with other TransCanada employees and affiliated businesses
• Protect confidential NGTL customer information collected by NGTL in the course of providing Alberta System services
• Ensure the Alberta System does not cross-subsidize affiliate activities
• Ensure affiliates and their customers do not have preferential access to Alberta System services
• Avoid uncompetitive practices between NGTL and its affiliates, which may be detrimental to the interests of Alberta System customers

TransCanada has operated under previous codes and some of our U.S. subsidiaries now operate under the affiliate transaction requirements established by the Federal Energy Regulatory Commission in its recent FERC Order No. 2004.

Moving Forward

TransCanada will file a compliance plan with the EUB by March 17, 2005 for the Alberta System. The plan will establish the process that NGTL will follow to ensure it meets the requirements of the Code. By April 18, 2005, TransCanada will bring all existing affiliate arrangements into compliance with Code requirements.

TransCanada has plans to file proposed Code of Conducts for our other pipeline systems in the near future. Watch future issues of Update for more information.

For more information about the Code, please contact Ann Birch at 403.920.6233.