TransCanada Receives EUB Generic Cost of Capital Decision

CALGARY, Alberta – July 2, 2004 – (TSX: TRP) (NYSE: TRP) – TransCanada Corporation, through its subsidiary NOVA Gas Transmission Ltd. (NGTL), today received the Alberta Energy and Utilities Board’s (EUB) Decision on generic cost of capital for Alberta utilities.

The Decision establishes a rate of return on equity of 9.60 per cent based on deemed common equity of 35 per cent for 2004 on TransCanada’s Alberta System. This is less than the applied for rate of 11 per cent on deemed common equity of 40 per cent, which the Company considers a fair return. Pending the outcome of the Phase 1 General Rate Application currently before the EUB TransCanada estimates this will result in 2004 net earnings from the Alberta System of approximately $155 million compared to net earnings of $190 million in 2003.

TransCanada continues to review details of the EUB’s reasons for decision.

TransCanada is a leading North American energy company. We are focused on natural gas transmission and power services with employees who are expert in these businesses. Our network of approximately 39,000 kilometres (24,200 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 nearly 4,700 megawatts of power – an equal amount of power can meet the needs of about 4.7 million average households. Our common shares trade under the symbol TRP on the Toronto and New York stock exchanges.

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

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.

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