On May 1, 2006, TransCanada filed our Short Notice Services application with the National Energy Board (NEB). The new services are targeted for the power generation market, which may require greater flexibility to change nominations during a gas day on short notice based on real-time changes in the electricity market. Although these services were developed for the power generation market, they are available to any shipper who wishes to contract them and chooses to operate under the respective service parameters. The two services applied for are Firm Transportation - Short Notice (FT-SN) and Short Notice Balancing (SNB), as described below.

Firm Transportation - Short Notice (FT-SN)

FT-SN allows shippers to better align their supply with consumption and is aimed at addressing the need of power generators to adjust their gas supply on very short notice in response to changes in electricity demand.

FT-SN is a renewable, assignable firm service with a minimum one year contract term that permits intra-day nominations as frequently as every 15 minutes (up to 96 nominations per day). FT-SN provides a reservation of service entitlement to shippers in order to access their transportation rights at any time within the day. A separate delivery area is required for each meter station and flow control is required at the point of delivery. The toll at 100 per cent load factor is 110 per cent of the 100 per cent load factor FT toll.

In comparison to FT, FT-SN offers shippers more flexibility, certainty that service will be available when required throughout the day and lower exposure to balancing fees as it allows shippers intra-day access to service on short notice at an increased number of nomination windows. TransCanada reserves capacity for both FT-SN and FT shippers, however an FT shipper is only assured access to capacity in the first nomination window, whereas an FT-SN shipper can access capacity at any nomination window.

Short Notice Balancing (SNB)

SNB service provides a balancing tool to power generators to manage changes in consumption requirements when there are no opportunities to convey those changes to interconnecting service operators.

SNB is a balancing service that TransCanada will provide by using Mainline compression and linepack. A SNB account will be used to implement the service. The shipper will be given the ability to nominate for supply out of the SNB account or nominate gas into the SNB account as part of its FT-SN nominations, to ensure nominated receipts equal nominated deliveries. A nomination from the account reduces the account balance and a nomination into the account increases the balance. The toll for each SNB request is dependant on the facilities required to provide the service and must be calculated individually for each request.

The NEB hearing for the Short Notice Services application is scheduled for September 18, 2006 at the Radisson Hotel in Toronto, Ontario.

For further information on these proposed services, please contact Peter Exall at 403.920.5398.