TransCanada Reports 2004 Net Income of $1.032 Billion

Board of Directors Increases Quarterly Dividend by 5.2 Per Cent

CALGARY, Alberta - February 1, 2005 - (TSX: TRP) (NYSE: TRP)

Fourth Quarter and Year-End 2004 Financial Highlights

(All financial figures are in Canadian dollars unless noted otherwise)

  • The Board of Directors of TransCanada Corporation (TransCanada or the company) today declared a quarterly dividend of $0.305 per common share for the quarter ending March 31, 2005, a 5.2 per cent increase over the $0.29 paid in each of the previous four quarters. The dividend is payable on April 29, 2005 to shareholders of record at the close of business on March 31, 2005. This is the fifth consecutive annual increase in the common share dividend.
  • TransCanada's net income for fourth quarter 2004 was $185 million or $0.38 per share compared to $193 million or $0.40 per share for fourth quarter 2003.
  • For the year ended December 31, 2004, TransCanada's net income was $1,032 million or $2.13 per share, including net income from discontinued operations of $52 million or $0.11 per share. This compares to $851 million or $1.76 per share for 2003, including net income from discontinued operations of $50 million or $0.10 per share.
  • Funds generated from continuing operations for fourth quarter 2004 were $467 million, an increase of $64 million compared to fourth quarter 2003. Funds generated from continuing operations for the year ended December 31, 2004 were $1,674 million, a decrease of $136 million compared to 2003.

Hal Kvisle, TransCanada's chief executive officer said, "It has been a year of steady performance for TransCanada. We delivered solid operating and financial results, and invested approximately $2.6 billion, including the assumption of debt, in our core businesses of gas transmission and power generation.

"TransCanada's strong overall performance in 2004 was achieved despite the negative impacts of disappointing decisions from the Alberta Energy and Utilities Board related to the Alberta System and an unfavourable arbitration decision on Ocean State Power gas supply costs. In 2005, we will remain focussed on addressing these issues.

"We will also continue to implement our core strategies to grow our North American operations. That consistency, combined with our strong balance sheet, and skilled and dedicated team of people, will ensure we are well-positioned to continue to capture opportunities that create significant long-term value for our shareholders," said Mr. Kvisle. "Our announcements during the fourth quarter are excellent examples of the initiatives we are undertaking to strengthen our financial performance and create long-term value."

During the fourth quarter 2004, TransCanada:

  • Closed the purchase of the 2,174-kilometre Gas Transmission Northwest System and the 128-kilometre North Baja System (collectively GTN) for US$1.7 billion including US$0.5 billion of assumed debt.
  • Announced it will proceed with the purchase of hydroelectric generation assets from USGen New England (USGen) with a total generating capacity of 567 megawatts (MW) for US$505 million. The acquisition is subject to regulatory approvals and the pending sale of the 49 MW Bellows Falls hydroelectric facility to the Vermont Hydroelectric Power Authority (Vermont Hydroelectric). If Vermont Hydroelectric acquires Bellows Falls, on which it has exercised its option to purchase, TransCanada's purchase price would be reduced by US$72 million.
  • Completed construction of the Grandview cogeneration plant, a 90 MW gas-fired power plant in New Brunswick. The project was completed on time and within budget.
  • Announced that Hydro-Quebec Distribution awarded Cartier Wind Energy Inc. (Cartier Wind) six projects totalling 739.5 MW. They are scheduled to be commissioned between 2006 and 2012. In January 2005, TransCanada and its partner, Innergex II Inc., acquired the 20 per cent interest previously held by RES Canada resulting in TransCanada holding a 62 per cent interest and Innergex II Inc. having a 38 per cent interest.
  • Announced plans to develop an offshore liquefied natural gas (LNG) regasification facility in the New York State waters of Long Island Sound with Shell US Gas & Power LLC (Shell). Construction is subject to federal and state regulatory approvals.
  • Announced in January 2005 it is developing a $200 million natural gas storage facility near Edson, Alberta. The 50 billion cubic feet (Bcf) facility will connect to TransCanada's Alberta System. The company has also secured 40 Bcf of existing Alberta-based gas storage capacity from a third party.

TransCanada's fourth quarter news release, including unaudited financial information, replaces the fourth quarter Report to Shareholders filed by the company in prior years. TransCanada expects to issue its 2004 annual report in mid-March.

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