TransCanada Pleased with Findings of Inspector General Review

WASHINGTON, DC--(Marketwire - Feb. 9, 2012) - TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) is pleased a review undertaken by the U.S. Department of State's Office of the Inspector General (OIG) has confirmed the company acted appropriately during all parts of the Keystone XL Presidential Permit review process.

"When claims made by opponents of Keystone XL were brought forward, we welcomed an independent review by the Inspector General's office so that they could be addressed," stated Russ Girling, president and chief executive officer, TransCanada. "At TransCanada, we conduct ourselves in an open, honest, transparent and ethical fashion, and this independent investigation confirms we followed all of the procedures and practices established by the Department of State and other federal agencies."

Key findings in the Inspector General's report that relate to TransCanada are as follows (emphasis in bold added):

  • OIG found no evidence that TransCanada improperly influenced the Department's selection of Cardno Entrix as the Keystone XL EIS third-party contractor. The Department followed the Federal Energy Regulatory Commission's third-party contracting process, from reviewing, editing, and approving the draft request for proposal to independently reviewing proposals and selecting a contractor…In the case of Keystone XL, the Department selected Cardno Entrix without any improper influence from TransCanada and in accordance with established third-party contracting procedures. A prime factor in the Department's selection of Cardno Entrix was the Department's previous experience in using the company as a third-party contractor on other EISs. (Review Results, p. 10)

  • The Department's analysis of the proposals noted that…"Entrix's team offered the most in-depth experience that is directly applicable to this project." The analysis further stated, "Entrix has a prior track record of experience with linear projects, has put together a team with relevant experience…and provides the support and resources that [the Department of] State needs to complete its NEPA responsibilities in a timely fashion." OIG found that these merits match the selection criteria listed in the Federal Energy Regulatory Commission Handbook. In addition to Department officials, the Bureau of Land Management and the Montana Department of Environmental Quality reviewed the proposals. The group of Department and other agency officials agreed that Cardno Entrix was the best company to conduct the Keystone XL EIS. (Review Results, p. 11-13)

  • Department officials did not consider TransCanada's ranking of the contractors as a factor in making their decision. When asked about the applicant's influence on the process because it selects and ranks three proposals for the Department to review, Department officials noted, "[The applicants] can do that all they want, but the Department conducts its own review and makes its own decision," and "We don't care who TransCanada picks." (Review Results, p. 13)

  • OIG found that Cardno Entrix has done a minimal amount of contract work (about 0.3 percent of Cardno Entrix's total revenue from TransCanada over a 9-year period…OIG determined that these relationships do not present a conflict of interest because they are not directly related to the Keystone XL project and are either federally controlled relationships or minimal financial relationships that would not "impair the contractor's objectivity in performing the contract work" or "result in an unfair competitive advantage to the contractor." (Review Results, p. 24-25)

  • …the "ongoing relationship" is with the Department and not TransCanada…In this case, while TransCanada pays Cardno Entrix for its continuing work on Keystone I, Cardno Entrix takes direction from and reports solely to the Department. (Review Results, p. 25)

  • OIG found no evidence that communications between Department officials, TransCanada, the Canadian Government, and proponents of the Keystone XL pipeline deviated from the Department's obligation under Federal law to provide an objective analysis of the project and its potential risks. Specifically, OIG found no record that Department officials had made inappropriate commitments on behalf of the Department to TransCanada or to the Canadian Government. OIG also found no support for the contention that the Department coached TransCanada on what to say during the legally mandated review process. Lastly, OIG found that the Department also kept TransCanada officials at arm's length from decision makers and other senior officials. (Review Results, p. 29-35)

  • Department officials held 15 meetings with groups opposed to the Keystone XL pipeline. Likewise, they held 11 meetings with supporters of the same pipeline. (Review Results, p. 32-33)

TransCanada remains fully committed to the construction of Keystone XL. Our shippers continue to tell us that this critical North American energy infrastructure project is needed, and they are also fully committed to Keystone XL being built and becoming operational, ultimately allowing Americans to benefit from the energy security and thousands of direct jobs that Keystone XL will create.

Plans are already underway on a number of fronts to do our part to maintain the project's construction schedule. TransCanada will re-file for a Presidential Permit and expects that a new filing can be processed in an expedited fashion due to the work that has already been completed during the review process.

With more than 60 years experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and oil pipelines, power generation and gas storage facilities. TransCanada's network of wholly owned natural gas pipelines extends more than 57,000 kilometres (35,500 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 380 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns or has interests in over 10,800 megawatts of power generation in Canada and the United States. TransCanada is developing one of North America's largest oil delivery systems. TransCanada's common shares trade on the Toronto and New York stock exchanges under the symbol TRP. For more information visit: www.transcanada.com or check us out on Twitter @TransCanada.

FORWARD LOOKING INFORMATION This publication contains certain information that is forward-looking and is subject to important risks and uncertainties (such statements are usually accompanied by words such as "anticipate", "expect", "would" or other similar words). Forward-looking statements in this document are intended to provide TransCanada security holders and potential investors with information regarding TransCanada and its subsidiaries, including management's assessment of TransCanada's and its subsidiaries' future financial and operation plans and outlook. All forward-looking statements reflect TransCanada's beliefs and assumptions based on information available at the time the statements were made. Readers are cautioned not to place undue reliance on this forward-looking information. TransCanada undertakes no obligation to update or revise any forward-looking information except as required by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the anticipated results, refer to TransCanada's Management's Discussion and Analysis dated February 14, 2011 under TransCanada's profile on SEDAR at www.sedar.com and other reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission.

TransCanada
Media Enquiries:
Terry Cunha/Shawn Howard
403.920.7859 or 800.608.7859

TransCanada
Investor & Analyst Enquiries:
David Moneta/Terry Hook/Lee Evans
403.920.7911 or 800.361.6522
www.transcanada.com