TransCanada’s five-year settlement for Canadian Mainline approved by NEB

TransCanada to redeem 8.25 per cent Preferred Securities

CALGARY, Alberta – June 4, 2007 – TransCanada Corporation’s (TSX: TRP) (NYSE:TRP) (TransCanada) wholly owned subsidiary, TransCanada PipeLines Limited, announced today it has received approval from the National Energy Board (NEB) for a five-year settlement with stakeholders regarding 2007 tolls and costs for years 2008 to 2011 on its Canadian Mainline natural gas transmission system. The terms of this settlement are effective January 1, 2007 to December 31, 2011.

The settlement reflects a cost of capital based on the rate of return on common equity determined by the NEB return-on-equity formula, on a deemed common equity ratio of 40 per cent, an increase from 36 per cent. The remaining capital structure will consist of senior debt following the redemption of the US$460 million 8.25 per cent Preferred Securities currently in the Canadian Mainline’s rate base.

As a result of this settlement, TransCanada PipeLines Limited will exercise its rights to redeem all of the outstanding 8.25 per cent Preferred Securities, which are listed on the NYSE under the symbol TCAPr. The redemption date will be July 5, 2007 and holders will be entitled to US$25.02865 per US$25 principal amount of the Preferred Securities, which includes accrued and unpaid interest to the redemption date.

The settlement also allows for performance-based incentive arrangements that will provide mutual benefit to both TransCanada PipeLines Limited and its customers. As well, the NEB approved the Company’s request that interim tolls be made final tolls for 2007.

With more than 50 years experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas pipelines, power generation, gas storage facilities, and projects related to oil pipelines and LNG facilities. TransCanada’s network of wholly owned pipelines extends more than 59,000 kilometres (36,500 miles), tapping into virtually all major gas supply basins in North America.
TransCanada is one of the continent’s largest providers of gas storage and related services with approximately 360 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, approximately 7,700 megawatts of power generation in Canada and the United States. TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP.

FORWARD-LOOKING INFORMATION

This news release may contain certain information that is forward-looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward looking information. All forward-looking statements are based on TransCanada’s beliefs and assumptions based on information available at the time such statements were made. 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, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy industry sectors, construction and completion of capital projects, access to capital markets, interest and currency exchange rates, technological developments and the current economic conditions in North America. By its nature, such forward looking information is subject to various risks and uncertainties which could cause TransCanada's actual results and experience to differ materially from the anticipated results or other expectations expressed. For additional information on these and other factors, see the reports filed by TransCanada with Canadian securities regulators and with the United States Securities Exchange Commission. 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 news release or otherwise, and TransCanada 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.

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For further information, please contact:

Media Inquiries:

TransCanada
Shela Shapiro
(403) 920-7859 or Toll Free (800) 608-7859

Investor & Analyst Inquiries:

David Moneta/Myles Dougan
(403) 920-7911