Shippers bid for 500,000+ GJ/d of short haul capacity originating at Dawn while only approximately 200,000 GJ/d was available. With demand for short haul Dawn capacity exceeding available capacity, the market will be looking for a solution to manage the additional requirement for 300,000+ GJ/d.

One solution is to provide alternative short haul capacity to the market from the North Bay Junction. By leveraging the flexibility of TransCanada's integrated system and efficiently utilizing the existing and recently non renewed 800,000+ GJ/d of capacity on the Northern Ontario Segment of the Mainline, TransCanada could meet this market need today through the North Bay Junction.

With respect to long haul, the North Bay Junction's available capacity, similar distance and tolls from Empress to the market (North Bay $1.031 / GJ, SWZ / Dawn $1.038 / GJ), complement and add flexibility to the SWZ / Dawn for shippers wanting alternative access the current and growing Eastern Canadian and Northeast US markets. (Both North Bay and Dawn tolls were calculated using approved toll methodology and distance credits).

TransCanada expects up to 1 Bcf/d of incremental gas demand in the U.S. Northeast and Eastern Canada over the next 5 years that could further utilize excess North Bay Junction capacity. Two real examples include the planned expansions on the Iroquois Gas Transmission and Maritimes & Northeast Pipeline to serve the New York and Boston market. The establishment of North Bay positions TransCanada to compete effectively for these requirements for incremental capacity, through the utilization of existing capacity or the addition of new facilities. Our hope is to attract volumes onto the System, to the benefit of all Mainline customers.

TransCanada envisions the North Bay Junction becoming a liquid and viable trading point that complements the SWZ / Dawn by leveraging existing services like diversions. Diversions would provide customers the flexibility to deliver gas to and from SWZ / Dawn to North Bay. TransCanada will consider developing an exchange type service to add additional flexibility and liquidity for deliveries to and from North Bay as part of its longer-term business model.

When will the North Bay Junction contracts be available?
The North Bay Junction application is currently before the NEB. Therefore, TransCanada's ability to contract for service to or from North Bay is conditional on TransCanada first obtaining NEB approval. Any requests for such capacity will be processed using current Open Season procedures as per the Transportation Access Procedures of the Tariff.

As the market demand for short haul services requested at Dawn significantly exceeds the available capacity, TransCanada is seeking approval as soon as possible and has asked the NEB to provide approval by November 1, 2003.

Subsequent to the filing of the North Bay Junction application on September 15, 2003, the NEB invited parties to submit comments on the appropriate process to adjudicate the North Bay Junction application. After receiving these comments, the NEB has decided to hold a facilitated workshop to discuss relevant issues. The workshop will be open to all of TransCanada's Mainline stakeholders.

TransCanada will continue to advance the discussions with industry stakeholders on the next steps required to move toward a business model with additional customer choice, added service flexibility, and competitively priced services. This is to facilitate the long haul and short haul movement of gas into and out of the market area. The addition of the South West Zone (SWZ) was one step towards achieving the objectives of TransCanada's evolving business model. The establishment of North Bay will complement the SWZ as a receipt and delivery point for both long and short haul services as TransCanada continues to progress towards enhancing access to short haul services, meeting real market demand and positioning TransCanada to take advantage of future incremental market growth.

For more information
If you are interested in contracting from or to North Bay or would like to discuss the status of the application, please contact your Customer Sales Representative or Dean Ferguson (403) 920-5553.