Conference of Western Attorneys General Regulatory Predictability Sean

Conference of Western Attorneys General Regulatory Predictability Sean Mc. Master – Trans. Canada Corporation February 16, 2012

Forward Looking Information This presentation may contain certain information that is forward-looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "believe", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward-looking information. Forward-looking statements in this presentation are intended to provide Trans. Canada security holders and potential investors with information regarding Trans. Canada and its subsidiaries, including management’s assessment of Trans. Canada’s and its subsidiaries’ future financial and operational plans and outlook. Forward-looking statements in this presentation may include, among others, statements regarding the anticipated business prospects, and financial performance of Trans. Canada and its subsidiaries, expectations or projections about the future, strategies and goals for growth and expansion, expected and future cash flows, costs, schedules (including anticipated construction and completion dates), operating and financial results, and expected impact of future commitments and contingent liabilities. All forward-looking statements reflect Trans. Canada's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among others, the ability of Trans. Canada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Trans. Canada’s pipeline and energy assets, the availability and price of energy commodities, capacity payments, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and economic conditions in North America. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause Trans. Canada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by Trans. Canada with Canadian securities regulators and with the U. S. Securities and Exchange Commission (SEC). Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this presentation or otherwise, and not to use future- oriented information or financial outlooks for anything other than their intended purpose. Trans. Canada undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

Leading North American Energy Infrastructure Company • Competitively positioned in pipeline and energy infrastructure • Approximately $50 billion of premium pipeline and energy assets • Employs over 4, 200 people in nearly 50 professions, trades and fields, located in 7 provinces and 32 states 3

Corporate Statistics Trans. Canada Corporation (TRP) listed TSX and NYSE (Financial figures are unaudited and in Canadian dollars, at December 31, 2011) • Total assets • Net income (attributable to common shares) $49. 0 billion $1. 5 billion or $2. 18 per share • Comparable Earnings $1. 6 billion or $2. 23 per share • Funds generated from operations $3. 7 billion • Dividends declared per common share $1. 76 4

Our Vision and Values Our Vision Our Values • Trans. Canada will be the leading energy infrastructure company in North America Integrity • With a strong focus on pipelines and power generation opportunities Responsibility Collaboration Innovation • Located in regions where we enjoy or can develop significant competitive advantage. 5

Trans. Canada Corporation (TSX/NYSE: TRP) • Natural Gas Pipelines • 57, 000 km (35, 500 mi) wholly owned • 11, 500 km (7, 000 mi) partially owned • 250 Bcf of regulated natural gas storage capacity • Average volume of 14 Bcf/d • Oil Pipelines • Keystone* 1. 4 million Bbl/d ultimate capacity • Energy • 19 power plants, 10, 800 MW • Diversified portfolio, including wind, hydro, nuclear, coal and natural gas • 130 Bcf of non-regulated natural gas storage capacity * Phases 1 and 2 in operation, Phases 3 and 4 in development 6

Natural Gas Pipelines • 57, 000 km (35, 500 mi) of wholly owned natural gas pipeline • Interests in an additional 11, 500 km (7, 000 mi) of natural gas pipeline • 250 Bcf of regulated natural gas storage capacity • Unparalleled connections from traditional and emerging basins to growing markets • Average daily volume of approximately 14 Bcf 7

Oil Pipelines • Keystone Pipeline - 2, 154 miles, transporting crude oil from Alberta to markets at Wood River in Illinois and at Cushing Oklahoma • Proposed Keystone XL Pipeline Project – a proposed 1, 661 mile pipeline from Alberta to serve markets at Cushing, Oklahoma and Port Arthur, Texas • 1. 4 million Bbl/day ultimate capacity • Bakken and Cushing Marketlink Projects would provide opportunity to transport U. S. crude production • Proposed Houston lateral would expand capacity to the US Gulf Coast refining center 8

Keystone Oil Pipeline - Linking Growing Crude Oil Supply to Large U. S. Markets 3. 7 1. 2 1. 4 8. 4 PADD II* 5. 1 Canadian Imports Total Foreign Imports Refining Capacity 0. 1 PADD III* * millions of barrels per day Source: 2009 EIA Actuals 9

Keystone Oil Pipeline - Linking Growing Crude Oil Supply to Large U. S. Markets 3. 7 1. 2 1. 4 8. 4 PADD II* 5. 1 Canadian Imports Total Foreign Imports Refining Capacity 0. 1 PADD III* * millions of barrels per day Source: 2009 EIA Actuals 10

Keystone Oil Pipeline - Linking Growing Crude Oil Supply to Large U. S. Markets 3. 7 1. 2 1. 4 8. 4 PADD II* 5. 1 Canadian Imports Total Foreign Imports Refining Capacity 0. 1 PADD III* * millions of barrels per day Source: 2009 EIA Actuals 11

Keystone Oil Pipeline - Linking Growing Crude Oil Supply to Large U. S. Markets 3. 7 1. 2 1. 4 8. 4 PADD II* 5. 1 Canadian Imports Total Foreign Imports Refining Capacity 0. 1 PADD III* * millions of barrels per day Source: 2009 EIA Actuals 12

Benefits of Keystone Project • The United States will derive significant benefits from the Keystone projects: • Energy Security • National Security • Economic Stimulus • Job Creation • Tax revenue • Promotes domestic crude oil production and improved netback pricing to domestic producers vis a vis rail/truck transport 13

Keystone XL Major Permitting Processes • State Permitting • South Dakota – Energy Conversion and Transmission Facilities Act permit • Public informational meetings and formal evidentiary hearing • Considers impacts of proposed route but not alternative routes; not a siting process per se • 12 -month mandatory timeline from application to Order • Application filed March 12, 1009 • Order issued March 12, 2010 • Keystone filed Motion for limited reconsideration – April 14, 2010 • Amended Order issued – June 29, 2010 • Highly predictable and reliable process! 14

Keystone XL Major Permitting Processes • State Permitting, continued • Montana – Major Facilities Siting Act (MFSA) • Detailed application to Montana Department of Environmental Quality • MDEQ used DOS NEPA process to satisfy Montana Environmental Quality Act obligation, as permitted by statute • Application filed December 18, 2008 • Multiple rounds of information requests • Application deemed complete April 2010 • Final EIS issued August 26, 2011 • In December 2011, Governor Schweitzer announced MFSA certificate would be issued shortly • MDEQ working on final details of MFSA Certificate 15

Keystone XL Major Permitting Processes • State Permitting, continued • Nebraska – No siting statute prior to November 2011 • Public concern over route across Sandhills region led Governor Heineman to call a Special Session of the Legislature in November 2011 (notwithstanding Final EIS approval of Sandhills route) • Legislature enacted Major Oil Pipeline Siting Act • Requires formal process before State Public Service Commission; regulations yet to be promulgated • Legislation authorized Nebraska Department of Environmental Quality to work with Dept. of State and Keystone to develop alternate route to avoid Sandhills region • State Dept. denial of Presidential Permit temporarily suspended DEQ process, pending new legislative direction in 2012 session. 16

Keystone XL Major Permitting Processes • Federal • Presidential Permit from US Department of State under Executive Order 13337 authorizing border crossing • State Dept. conducts environmental review under NEPA • State Dept. conducts “National Interest” review considering wide array of factors • Numerous federal agencies participate in NEPA and NID reviews. Montana Department of Environmental Quality also served as cooperating agency in NEPA review • US Army Corps of Engineers – wetland waterbody permitting under Clean Water Act • Bureau of Land Management – Grant of Right-of-Way and Temporary Use Permit for ~42 miles of federal lands crossed • US Fish & Wildlife Service – Consultation with Dept. of State under Endangered Species Act re impacts to Threatened and Endangered Species • State Dept. and State Historic Preservation Offices reviewed impacts to cultural resources under National Historic Preservation Act. 17

Keystone XL Major Permitting Processes • Delays in the Federal Approval Process • Keystone planned its permitting schedule based on the State Department processing of two similar Presidential Permit applications that were processed between 2006 and 2009. • • • Keystone I -- 23 months from application to permit Alberta Clipper -- 27 months from application to permit Instead, the DOS process took 40 months, from September 2008 to January 2012 to get to a decision. The decision only occurred in January 2012 because of a Legislative deadline • A number of factors impacted the DOS review timeline: • EPA criticism of the Draft and Supplemental Draft EIS • BP Gulf of Mexico Spill • San Bruno explosion • Exxon. Mobil Yellowstone spill • Issues around scope and process were generally resolved in favor of broader scope and more process 18

Keystone XL Major Permitting Processes • January 18, 2012 - Decision to Deny Presidential Permit • 60 day deadline imposed by Congress in Payroll Tax Relief Extension bill is insufficient time for State Dept. to obtain and assess additional information it needed • DOS needed additional information about potential route alternatives in Nebraska to avoid Sandhills • In light of the Nebraska reroute there is incomplete information about potential environmental, socioeconomic, environmental justice, and cultural resources impacts • The project – as presented analyzed at this time – would not serve the National Interest • The determination does not preclude any subsequent permit application or applications for similar projects 19

Thank you.