TransCanada Reports Fourth Quarter Results from Bruce Power L.P.

    News Editors

    CALGARY, Alberta--(BUSINESS WIRE)--Jan. 27, 2005--TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) announced today that its interest in Bruce Power L.P. (Bruce Power) contributed $5 million of pre-tax equity income in fourth quarter 2004 compared to $7 million in fourth quarter 2003. Pre-tax equity income for the year ended December 31, 2004 was $130 million compared to $99 million for 2003.

    TransCanada will issue its 2004 consolidated results February 1, 2005. The earlier release of results from its interest in Bruce Power is timed to coincide with Cameco Corporation's release of fourth quarter results, which also include earnings from Bruce Power. TransCanada and Cameco each hold a 31.6 per cent interest in Bruce Power L.P.

Bruce Power Results-at-a-Glance (millions of dollars) Three months ended Year ended December 31 December 31 2004 2003 2004 2003 (unaudited) (unaudited) --------------------------------------------------------------------- Bruce Power (100 per cent basis) Revenues 355 269 1,583 1,208 Operating expenses (345) (254) (1,178) (853) ------------------------------------- Operating income 10 15 405 355 Financial charges (17) (20) (67) (69) ------------------------------------- Income before income taxes (7) (5) 338 286 ------------------------------------- -------------------------------------

TransCanada's interest in Bruce Power income before income taxes (1) (2) (1) 107 65 Adjustments 7 8 23 34 ------------------------------------- TransCanada's income from Bruce Power before income taxes 5 7 130 99 ------------------------------------- -------------------------------------

(1) TransCanada acquired its 31.6 per cent interest in Bruce Power on February 14, 2003. Bruce Power's 100 per cent income before income taxes from February 14, 2003 to December 31, 2003 was $205 million.

    TransCanada's share of power output for fourth quarter 2004 was 2,351 gigawatt hours (GWh) compared to 1,846 GWh in fourth quarter 2003. This increase primarily reflects higher output in 2004 as a result of the restart of Bruce A Unit 4 in fourth quarter 2003 and Unit 3 in first quarter 2004, which expanded Bruce Power's capacity by approximately 1,500 megawatts (MW). Several maintenance outages occurred in fourth quarter 2004 which partially offset the increased output from Units 3 and 4. Overall prices achieved during fourth quarter 2004 were approximately $47 per megawatt hour (MWh), compared to $45 per MWh in fourth quarter 2003. Approximately 47 per cent of the output was sold into Ontario's wholesale spot market in fourth quarter 2004, as compared to approximately 30 per cent in fourth quarter 2003, with the remainder being sold under longer term contracts.

    On a per unit basis, Bruce operating expenses increased to $46 per MWh in fourth quarter 2004 from $43 per MWh in fourth quarter 2003. This increase was partly due to expenses related to the feasibility study on the restart of Bruce A Units 1 and 2. The total amounts expensed by Bruce Power in fourth quarter and full year 2004 related to the Units 1 and 2 restart feasibility study were $10 million and $16 million, respectively. The increase in total operating expenses was also the result of higher outage, fuel, depreciation and staff expenses in 2004, reflecting the move to a six- versus four-unit operation. Annual operating expenses per MWh were relatively constant for 2003 and 2004, however fourth quarter 2004 output was reduced due to planned work on the vacuum building outage and Unit 6 as well as unplanned outage days which resulted in higher operating expenses on a per MWh basis in fourth quarter 2004.

    Adjustments to TransCanada's interest in Bruce Power income before income taxes for the quarter and year ended December 31, 2004 were lower than the same periods in 2003 primarily due to the cessation of interest capitalization upon the return to service of the Bruce A units.

    Pre-tax equity income for the year ended December 31, 2004 was $130 million compared to $99 million for the same period in 2003. This increase was primarily due to higher output in 2004 as a result of the return to service of the two Bruce A units as well as a full year of earnings in 2004 compared to earnings from February 14 to December 31 in 2003, reflecting TransCanada's period of ownership in 2003. In 2004, TransCanada was not required to make any cash contributions to Bruce Power and did not receive any cash distributions from this investment.

    Operating costs for the year ended December 31, 2004 were $35 per MWh compared to $36 per MWh for the period February 14 to December 31, 2003. Average realized prices in the year ended December 31, 2004 were $47 per MWh compared to $48 per MWh during TransCanada's period of ownership in 2003. Approximately 52 per cent of Bruce Power's output for the year ended December 31, 2004 was sold into Ontario's wholesale spot market.

    The Bruce units ran at an average availability of 72 per cent in fourth quarter 2004, compared to an average availability during fourth quarter 2003 of 73 per cent reflecting slightly higher planned and unplanned maintenance outage hours in fourth quarter 2004. Availability for the year ended December 31, 2004 was 82 per cent compared to 83 per cent for the period from February 14 to December 31, 2003. A scheduled maintenance outage on Unit 6 began on September 11, 2004 and the unit returned to service on December 3, 2004. Unit 5 returned to service on November 3, 2004 after it had been kept offline following the vacuum building outage that began in third quarter 2004 in order to perform maintenance on its primary heat transport pump.

    Equity income from Bruce Power is directly impacted by fluctuations in wholesale spot market prices for electricity as well as overall plant availability which, in turn, is impacted by scheduled and unscheduled maintenance. To reduce its exposure to spot market prices, Bruce Power has entered into fixed price sales contracts for approximately 36 per cent of planned output for 2005. Bruce Power's operating expenses in 2005 are expected to increase from 2004 due to higher depreciation and amortization on the A units, higher outage costs and higher fuel costs.

    The average availability in 2005 is expected to be 85 per cent compared to 82 per cent achieved in 2004. Unit 3 began its first planned maintenance outage on January 8, 2005 and is expected to be offline for approximately two months. Unit 4 is scheduled to go offline later in first quarter 2005 for a similar inspection program. Maintenance outages of approximately two to three months each are also planned for two other units in 2005. One outage is expected to begin in second quarter 2005 and the other outage is expected to begin in third quarter 2005.

    TransCanada, together with its Bruce Power partners, is evaluating a potential investment in the refurbishment of the 680 MW Point Lepreau nuclear generating station in New Brunswick. Also, the feasibility study to examine the potential restart of Bruce A Units 1 and 2 is ongoing. Bruce Power continues talks with a provincially appointed negotiator regarding the potential restart.

    TransCanada is a leading North American energy company. TransCanada is focused on natural gas transmission and power services with employees who are expert in these businesses. TransCanada's network of approximately 41,000 kilometres (25,600 miles) of pipeline transports the majority of Western Canada's natural gas production to the fastest growing markets in Canada and the United States. TransCanada owns, controls or is constructing more than 4,700 megawatts of power generation - enough to meet the electricity needs of about 4.7 million average households. The Company's common shares trade under the symbol TRP on the Toronto and New York stock exchanges. Visit TransCanada on the Internet at www.transcanada.com for more information.

    Note: All financial figures are in Canadian dollars unless noted otherwise.

    FORWARD LOOKING INFORMATION

    Certain information in this news release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in this information may differ from actual results or events. Factors which could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability and price of energy commodities, regulatory decisions, competitive factors in the pipeline and power industry sectors, and the current economic conditions in North America. For additional information on these and other factors, see the reports filed by TransCanada with Canadian securities regulators and with the United States Securities and Exchange Commission. TransCanada disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



    TRANSCANADA (NYSE:TRP) (TSX:TRP)

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CONTACT: TransCanada Media Inquiries Hejdi Feick/Kurt Kadatz (403) 920-7859 or (800) 608-7859 OR Investor & Analyst Inquiries David Moneta (403) 920-7911 Website: www.transcanada.com

KEYWORD: NEW YORK INTERNATIONAL CANADA INDUSTRY KEYWORD: OIL/GAS ENERGY EARNINGS SOURCE: TRANSCANADA

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