TransCanada Energy Ltd.

Napanee Generating Station

Presentation to Council of the Town of Greater Napanee

January 22, 2013

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TransCanada Corporation (TSX/NYSE: TRP)

• Natural Gas Pipelines• 57,000 km wholly owned• 11,500 km 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

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Napanee Site Selection

• Existing robust 500 kV electrical connection (Hydro One)

• Existing gas connection (Union Gas)

• Existing water supply and return facilities (Ontario Power Generation)

• Consistent with Zoning and Official plans

• Good road access and on-site rail access

• 95 acres – ample room for construction storage and parking

• Previously developed land

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Napanee Generating Station

• 95 acres –room for construction, storage and parking

• Generation facilities located at western end of the site

• Construction, storage, material handling, and parking on the east

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TransCanada Napanee Generating Station

Water Source Water ReturnGas Supply

Electrical Connection

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Renderings

Napanee GS

Lennox GS

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Renderings

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Environmental Review Process

• Project is subject to an Environmental Screening Process in accordance with Ministry of the Environment's “Guide to Environmental Assessment Requirements for Electricity Projects”

• TransCanada has voluntarily chosen a more comprehensive assessment and will prepare an Environmental Review Report (ERR)

• TransCanada further voluntarily will develop a draft ERR for public review before the submission of the final ERR

• Stakeholder engagement is critical part of the development of the ERR

• TransCanada values the input from our stakeholders and believes this input results in better decision making and a better project result

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Environmental Review Report (ERR)

• The ERR will contain detailed analysis of potential environmental effects

• Air Quality• Noise Levels• Human Health• Surface/Groundwater• Socio-Economics• Traffic• Terrestrial/Aquatic ecology • Archaeological & Heritage Resources

• ERR Schedule• Draft ERR released for public review - expected Q3 2013• Final ERR submission late 2013 /early 2014

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Municipal and Environmental Approvals

• Environmental• Project requires Environmental Compliance Approval (ECA) covering air

and noise emissions, water discharge, and storm water management• Project requires amendment or new Permit to Take Water (PTTW)• Permits required before construction begins - expected by end of 2014

• Municipal• Project Site is zoned for Power Generation and use is consistent with

Official Plan • TransCanada will seek severance of site from Ontario Power

Generation property and variances (if applicable) from Committee of Adjustment

• Project will require Site Plan Approval, Building permits before construction can begin

• Final Approvals expected by end of 2014

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Emission Reduction Technology at Napanee GS

TransCanada is committed to using responsible environmental technology on all of its power projects

Emissions From Napanee Generating StationDry Low Emissions and Selective Catalytic Reduction

0

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3Napanee GS

Ontario Ministry of the Environment

Guideline A5 Requirement

Napanee GS

Ontario Ministry of the Environment

24 hr POI Requirement

Napanee GS

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Noise Mitigation at Napanee GS

• Noise is regulated by Ministry of Environment and Town of Greater Napanee Noise Bylaw

• Major NGS equipment will be enclosed and silencers and noise-reduction equipment will be incorporated into the facility design

• Noise emissions will be modeled for different operating scenarios to assess changes in the noise environment due to the facility to ensure compliance with existing regulations respecting nearest residences and current ambient levels

• Project specific noise limits will be included in the project’s Environmental Compliance Approval (ECA)

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Community Benefits

• Near Term (Prior to Commercial Operation)

• ~$1.2 billion investment

• Construction jobs (600-700)

• Opportunities for local suppliers

• Development Charges and other fees (est. ~$200k)

• Long Term (After Commercial Operation)

• 25 high technology careers – salary & benefits (est. ~$4 million/year)

• 30 year operation and maintenance - opportunities for local suppliers

• Ongoing community investments and community partnerships

• Annual municipal tax payments (est. ~$1 million/year)

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Community Benefits – Construction Jobs

• Total Construction Workforce 600 to 700

• Trades (Direct) – 550-650

• Including Boilermakers, Carpenters, Cement masons, Electricians,

Ironworkers, Labourers, Millwrights, Operating Engineers, Pipefitters,

Sheet Metal Workers, Insulators, Painters

• Plus Project Management (Indirect on-site)

• Duration of construction 30 months with peak manpower duration of 8-12 months

• Total Expected Manhours - 1.75 to 2 million

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Stakeholder Consultation

Napanee Generating Station Project Development-Execution Timeline

Development Activities

2012 2013 2014 2016

Dec 14 2012ContractsExecuted

2017

End 2014Target StartConstruction

Operations

Construction/Commissioning

30 months Construction &commissioning

Development Milestones

Start of Commercial Operation

Municipal Approvals

Prelim. Eng’g Detailed Eng’g

2015 2018

Environmental Permits

Procurement

October 2017Target

Commercial Operation

Q3 2013Draft ERR

2nd Open House

Early 2014Final ERR

Feb 11Open House

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Contact

John Mikkelsen

Phone: 1.855.920.1910

Email: ngs@transcanada.com

Web: www.NapaneeGS.com

TransCanada – Napanee Generating Station Project

Royal Bank Plaza, 24th Flr., South Tower

200 Bay Street, P.O. Box 43

Toronto, ON M5J 2J1

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Back-up

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Combined Cycle Technology

• Combined cycle plant uses both a gas turbine and a steam turbine to produce electricity.

• Adding the steam cycle to the gas turbine cycle increases the amount of electricity generated from a given amount of natural gas.

• Greater fuel efficiency and fewer emissions produced per unit of electricity generated.

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Napanee Generating Station

Emission Controls (typ)

Pumps

ElectricGeneratorElectric

GeneratorElectric

Generator

ElectricGenerator

Reheat Steam Turbine

Power to Ontario 500 kV Grid

DuctBurners

DuctBurners

2 x M501 GAC Fast Start Gas Turbines

2 x Triple PressureHeat Recovery

Steam Generators (HRSG)

Fuel Gas Compressors

UnionNatural Gas

Pipeline

Fuel Gas Compressors

UnionNatural Gas

Pipeline

ExhaustGases (typ)

DuctBurners

DuctBurners

Cooling Tower

Condenser

Cooling Tower

Condenser

Cooling Tower

CondenserCondenserCondenser

OutsideAir

OutsideAir

Water Treatment

Raw Water fromLake Ontario

Dischargeto Lake Ontario

HRSG Blowdown

Waste Water Treatment

Cooling Tower Make-up Water

HRSGMake-up Water

SteamFlows

Drift