In the years ahead, solar power may become an important part of TransCanada's on-going effort to produce more of its power generation portfolio from renewable sources.

TransCanada's growing commitment to increasing the supply and availability of renewable energy sources is well known. For example, our company has constructed wind power farms in Quebec and the northeastern United States. In New Hampshire, Vermont and Massachusetts, we operate 13 hydro-electrical facilities on the Connecticut and Deerfield rivers. Right now, approximately 10 per cent of TransCanada's power generation comes from wind and hydro sources.

Recently solar power has begun to attract a great deal of favourable attention. It is easy to understand why. The conversion of free sunlight into electricity, either through the use of photovoltaic cells or by concentrating the suns heat it to generate steam, has the theoretical potential to provide more than one thousand times our current global energy consumption. Furthermore, it would do so while bringing about a sharp reduction in the production of greenhouse gases.

The construction of solar generating facilities is land intensive and does require large tracts of land. For these reasons TransCanada is tracking the environmental issues associated with development in desert landscapes and seeking potential sites where impacts would be minimized, including developing projects on previously developed sites or disturbed land.

Governments around the world are beginning to recognize the inherent benefits of solar power for the security and reliability of their energy supplies. Some, such as the governments of Germany, Spain, Australia, Canada and the United States, are encouraging power generation companies to produce an ever-greater proportion of their power from renewable or alternative energy sources. The policies and legislation driving such change, whether mandated or voluntary, are typically referred to as Renewable Portfolio Standards or RPS.

As a North American power producer, TransCanada is most interested in the opportunities that exist within the United States and Canada. There, some 30 States have already committed to Renewable Portfolio Standards either as a matter of law or as an explicit policy goal. In California, for example, power companies will have to produce one-third of their energy from renewable sources by 2020. In Canada, the Province of Ontario is promoting solar development through Feed In Tarrifs (FIT) under its Green Energy and Green Economy Act. Federal governments in Canada and United States both strongly endorse the use of renewable and alternative energy sources, the source of further incentives.

In 2009, TransCanada investigated the U.S. potential in the sun-blessed Southwest. Our initial conclusion is that investment in solar power would likely be a good "fit" for our company. In the view of Brad Howard, Manager, Solar Development, "there is a huge opportunity before us. Our challenge will be to define and execute on a development strategy that makes sense for TransCanada." As a result of this initial study, we have committed greater internal resources to examining the varied opportunities within this emerging market and to acquiring the expertise needed to succeed on a commercial basis. We anticipate that this planning phase will continue over the next two years.

If investment in solar energy proves viable for us, TransCanada's participation in that market would increase the reliability and security of energy production in North America, benefit the environment by reducing the consumption of fossil fuels, create many "green" jobs and enhance the financial performance of our company.