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## Q & A 

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## Is there an appropriate level of competition in the natural gas pipeline business in Canada? Is it a good business for TransCanada? Q 

Regulators, producers and pipeline operators have made major strides in recent years, introducing elements of a com- petitive structure to the Canadian natural gas pipeline industry. However, we still have some way to go before we achieve a business model that fosters competition without undue risk of over-building. A 

Rates of return on Canadian regulated pipelines are lower than in the United States. This limits our enthusiasm for further pipeline investments in Canada and that is frustrating – we genuinely want to serve our Canadian customers and we find it difficult to do so when Canadian returns are not competitive. In an increasingly continental energy market, it’s in Canada’s best interest to have strong Canadian pipeline companies that can move quickly to add capacity as required. To attract TransCanada’s capital, our pipeline business needs to earn a fair return. That is the reason for our Fair Return Application before the National Energy Board. 

## What is TransCanada doing to better serve its customers? Q 

We envision a responsive pipeline industry that offers a menu of services and pricing, along with the cost-effective reli- ability our customers have come to expect. TransCanada is taking a leadership role in articulating a new vision for the natural gas pipeline industry in Canada – one that reflects a new regulatory framework and offers real customer choice. We see our Alberta System evolving as the western hub, serving western producers and consumers, and our central Canada system evolving as an eastern hub, serving consumers in Ontario, Quebec and the eastern U.S. The steps to achieve this vision include clarifying the regulatory jurisdiction of our mainlines within Alberta; facilitating a trading hub in central Canada; establishing a new toll regime; and expanding export connections to the U.S. In January 2002, we began to share a discussion paper outlining our vision – over the course of the year we’ll be working collab- oratively with stakeholders toward these goals. A 

## How is TransCanada positioning itself for a role in the development of northern gas reserves? Q 

TransCanada is well positioned to play a key role in bringing natural gas from the Mackenzie Delta and Alaska to mar- ket. We are working to ensure Arctic natural gas ties into our system, which provides the greatest access to North American markets. Our experience and expertise in building and operating cold weather natural gas pipeline systems is unmatched in North America, as is our track record of bringing major pipeline projects in on time and on budget. TransCanada believes it makes sense to use spare capacity in our existing systems and augment that capacity as need- ed, giving customers considerable flexibility and minimizing up-front investment. A 

