Ontario Power Generation and TransCanada Energy Establish Partnership for Energy Centre

TORONTO, Ontario - Dec. 19, 2002 - Ron Osborne, President and Chief Executive Officer of Ontario Power Generation (OPG), and Hal Kvisle, Chief Executive Officer of TransCanada PipeLines Limited, today announced the formation of a 50/50 limited partnership called Portlands Energy Centre L.P. (PEC). The partnership will assess the viability of developing a natural gas-fuelled energy centre to meet the growing energy needs of Toronto’s downtown core.

The partnership will immediately commence the Environmental Assessment process and, in parallel, finalize the viability studies on the project.

While discussions between OPG and TransCanada started some months ago, today’s announcement flows from the direction OPG received from Energy Minister John Baird on November 12 to accelerate its assessment of the generating project at the Hearn site through a public-private partnership.

The project is subject to the Environmental Screening Process for electricity projects as outlined in the Ontario Ministry of the Environment’s “Guide to Environmental Assessment Requirements for Electricity Projects.” The first open house will be January 23, 2003 in a downtown Toronto location. This process considers all environmental aspects of the proposed project, including but not limited to anticipated impacts on human health, air and water quality, geology and soils. The eventual document, which is delivered to the Ministry of the Environment and subject to review by the public and other stakeholders, reports on all environmental findings as well as the results of consultations with the public and regulatory agencies.

As currently envisaged, subject to the outcome of the various elements of the viability studies, the proposed PEC would include a 550 megawatt combined cycle natural gas-fuelled co-generation facility which would be located on a portion of the site of OPG’s former R.L. Hearn Generating Station in the Portlands area of Toronto’s downtown waterfront.

“I’m encouraged to see the formation of this public-private partnership and the beginning of the assessment process,” said Baird. “If we are to ensure a reliable supply of clean and affordable energy for future generations, we must continue to develop projects such as the Portlands Energy Centre.”

“Our goal in starting the approvals process is to develop an energy centre that would fit well into the local community setting. At the same time, the additional 550 megawatts of capacity could help improve the security and supply of electricity to meet the growing electricity needs of downtown Toronto,” said OPG’s Ron Osborne.

“Our partnership with OPG in the Portlands project fits well with our strategy to grow our power business," said TransCanada’s Hal Kvisle. "We believe the PEC is currently the lowest cost, most efficient and environmentally sound opportunity for new fossil fueled power generation in Ontario."

PEC and Enwave District Energy Limited, a private company owned by the City of Toronto and OMERS (the Borealis Penco Fund), have signed a Letter of Intent that could see PEC supply steam to Enwave’s district heating system. “District energy is an environmentally sound approach to provide for the heating and cooling needs of commercial and institutional users,” said Dennis Fotinos, Enwave CEO. “PEC’s energy would allow us to expand the number of customers we serve in the downtown core and would position us to serve future needs in Toronto’s developing waterfront.”

Ontario power generation is an Ontario based company, whose principal business is the generation and sale of electricity to customers in Ontario and to interconnected markets. Our focus is on the risk-managed production and sale of reliable electricity from our competitive generation assets. OPG's goal is to be a premier North American energy company, while operating in a safe, open and environmentally responsible manner.

TransCanada Energy Ltd. is a wholly-owned subsidiary of TransCanada PipeLines Ltd., a leading North American energy company focused on natural gas transmission and power services. TransCanada’s network of approximately 38,000 kilometres 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, manages or is constructing facilities for approximately 2,650 megawatts of power to meet the needs of more than two million average households. The company’s common shares trade under the symbol TRP on the Toronto and New York stock exchanges. Visit us on the internet at www.transcanada.com for more information.


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