Service and Pricing Settlement Principles

1. Attached is the first draft of the TCPL settlement (prepared by TCPL). =
It=20
reads pretty much as I summarized in my previous email except TCPL has=20
written in a few extra million of incentives for themselves.

2. Assuming that TCPL wins a cost of capital rate case of 12.5% ROE and 35%=
=20
equity structure (from 9.61% & 30%) the final toll could be $1.22 annualize=
d=20
(plus an upward rest of year adjustment to recover the lower interim tolls =
in=20
effect since Jan 1).

3. The stakeholders will be reviewing it tomorrow at 2 pm. and discussing=
=20
with TCPL 8:30 Wednesday AM. =20

4 . What will Enron Canada's position be assuming there is wide stakeholder=
=20
acceptance? Will we sign this agreeement? Will we not sign but give=20
assurances we will not litigate non-cost of capital issues. Lets discuss=
=20
before Wednesday.

Kevin

---------------------- Forwarded by Kevin Heal/CAL/ECT on 02/12/2001 04:05 =
PM=20
---------------------------

"Rob Whitmore" <rob_whitmore@transcanada.com< on 02/12/2001 03:32:23 PM
To: Marg Seeger <marg_seeger@transcanada.com<
cc: John Guerriero <jguerriero@duke-energy.com<, Debbie Harris=20
<debbie_harris@transcanada.com<, Phi Dang <PDang@gazoductqm.com<, Adam Whit=
e=20
<adam_white@transalta.com<, Albert Stortchak <stortcal@est.gov.on.ca<, Bill=
=20
Wible <bill_wible@iroquois.com<, Bob Fraser <bobfraser@aec.ca<, Brian Howel=
l=20
<behowell@interlog.com<, Brian Ridley <bridley@hydro.mb.ca<, Brian Troicuk=
=20
<troicuk@capp.ca<, Brian White <bswhite@ceg.com<, Brian Woods=20
<brian_woods@email.mobil.com<, Cheryl Worthy <worthycg@bp.com<, Chuck=20
Baumgart <cbaumgart@renaissance.ca<, Debbie White=20
<debbwhit@marathoncanada.com<, Diane Cameron <diane_cameron@nexeninc.com<,=
=20
Doug Holgate <doug.holgate@husky-oil.com<, Frank Brennan=20
<frank.brennan@cgc.enbridge.com<, Gilles Favreau=20
<favreau.gilles@hydro.qc.ca<, Ken Hadley <ken_hadley@pcp.ca<, Kevin Heal=20
<kevin.heal@enron.com<, Kurt McKnight <kmcknight@uniongas.com<, Lisa McMaho=
n=20
<lisa.mcmahon@neg.pge.com<, Lyne Mercier <lmercier@gazmet.com<, Martin=20
Imbleau <mimbleau@gazmet.com<, mike verwegen <mverwegen@uniongas.com<, Mike=
=20
Stedman <mstedman@uniongas.com<, Murray Samuel=20
<murray_samuel@transcanada.com<, Robert Agnello <ragnello@edisonmission.com=
<,=20
Robert Andrews <randrews@coral-energy.com<, Peter Fournier <igua@magma.ca<,=
=20
Ron Moore <ronald.moore@esso.com<, Ronald Richard=20
<ronald.richard@mrn.gouv.qc.ca<, Shonda Day <days@epenergy.com<, Suzanne=20
Boucher-Chen <suzanne.boucher-chen@southernenergy.com<, Vern Gorr=20
<vgorr@saskenergy.sk.ca<, Frederic Morel <fmorel@gazmet.com<, Isabelle Quac=
h=20
<iquach@gazmet.com<, Robert Rowe <rob.rowe@cgc.enbridge.com<, Richard King=
=20
<rking@powerbudd.com<, Dan Collins <dacollins@negm.com<, Mike Lucy=20
<mslucy@negm.com<, Nick Schultz <schultz@capp.ca<, Howard Stephens=20
<hstephens@hydro.mb.ca<, Brent Moen <bmoen@hydro.mb.ca<, Jeremy Slasor=20
<jeremy.slasor@demloak.com<, Jim Fisher <jfisher@duke-energy.com<, Janet=20
Holder <janet.holder@cgc.enbridge.com<, Rob Hemstock <rhemsto@ect.enron.com=
<,=20
Aleck Dadson <adadson@ect.enron.com<, Normand Stevenson=20
<nstevenson@gazmet.com<, Randy Fryer <rfryer@northlandpower.com<, Alan Reid=
=20
<alan_reid@pcp.ca<, John MacPherson <macpher@petro-canada.ca<, Alain Lefebv=
re=20
<alain.lefebvre@mrn.gouv.qc.ca<, craigl <craigl@cnrl.com<, swong=20
<swong@northlandpower.com<, rinde_powell <rinde_powell@pcp.ca<, "ed.bruton"=
=20
<ed.bruton@neg.pge.com<, lnixon <lnixon@tmvgas.com<, "jill.page"=20
<jill.page@gov.ab.ca<, Max Feldman <max_feldman@transcanada.com<,=20
"bernard.kramer" <bernard.kramer@mcnenergy.com<, bartlon=20
<bartlon@epenergy.com<, sharon johnson <sharonej@telusplanet.net<, Jack Haw=
ks=20
<jack.hawks@neg.pge.com<, Tomasz Lange <tomasz.lange@southernenergy.com<,=
=20
Frank Basham <fbasham@talisman-energy.com<, John Lee=20
<john_lee@transcanada.com<, Steve Emond <steve_emond@transcanada.com<, pete=
r=20
milne <pjmilne@telusplanet.net<, Jim Bartlett <jim_bartlett@transcanada.com=
<,=20
Wendy Hanrahan <wendy_hanrahan@transcanada.com<=20
Subject: Service and Pricing Settlement Principles

Attached is the Statement of Principles under TransCanada=01,s Service and
Pricing Settlement for 2001 and 2002. The document outlines
principles of the settlement that were established as of Friday February
9 2001.

Three supporting documents have been included to assist with further
discussion. Document 1 provides information on the Merger Costs and
Benefits Agreement and the provision to amortize severance costs over 3
years. Document 2 provides a calculation of TransCanada=01,s incentive
revenue based on the proposed sharing percentages. These percentages
were raised in the proposed mechanism to compensate for the introduction
of AOS service. Document 3 reviews the calculation of marginal fuel,
used to calculate the IT price floor.

A phone conference meeting will be held in room 2902 of the TransCanada
East Tower commencing at 8:30 AM M.S.T. Long distance participants
should call 1-888-832-0082. Local participants should call 216-0900. The
Chairperson's code is 2127#, and the Participant's code is 4108#.

The meeting agenda is as follows:

1. Stakeholder Comments on Statement of Principles

2. Next Steps

TransCanada reserves the right to withdraw the Statement of Principles
in the event that it receives insufficient support.

If you require any assistance, please call Rob Whitmore at (403)
267-6181.

- Statement of Principles_ML2.doc
- Document1.doc
- Document 2.doc
- Document 3.doc