Requests of the Canadian Association of Petroleum Producers to Transcanada Pipelines Limited

National Energy Board

RH-003-2011

TransCanada PipeLines Limited, NOVA Gas Transmission Ltd. and Foothills Pipe Lines Ltd.

Application dated 1 September 2011 for Approval of the Business and Services Restructuring Proposal and Mainline Final Tolls for 2012 and 2013

Requests of the Canadian Association of Petroleum Producers to TransCanada PipeLines Limited

November 22, 2011 National Energy Board RH-003-2011

Information Requests of the Canadian Association of Petroleum Producers

to TransCanada PipeLines Limited

Question 1:

Reference: NEB Oct.21, 2011 letter

Preamble: The hearing is proposed to be held in three evidentiary phases: Alberta System extension (ASE), everything else (except ASE and cost of capital), and cost of capital.

Request: Please identify those portions of the Application that TransCanada considers relate to the first phase, ASE.

Question 2:

Reference: Application, Relief Requested, p.1 of 13, para.1 and p.12 of 13, para.30

Preamble: Para.1 says the Application is for “…approvals required to implement a proposed restructuring of the services and tolling….” of the referenced pipelines. The relief requested in para.13 in respect of the restructuring is framed as: “TransCanada requests orders of the Board under Parts I and IV of the NEB Act, as applicable: (a) approving the Restructuring Proposal in respect of the Mainline, the Alberta System and the Foothills System, as described in the Application.”

Request:

(a) Please provide, for each of the pipelines for which application is made, a list or table of the specific decision, orders and relief it is requesting the NEB to make if it were to approve the Restructuring Proposal.

(b) Please identify for each specific decision, order and item of relief in respect of the Restructuring Proposal whether it is Part I or Part IV of the NEB Act under which the decision, order or relief is requested.

(c) If not provided in (b), please identify what decisions, orders and relief are requested in respect of the Restructuring Proposal involve the exercise of authority under Part I of the NEB Act.

November 22, 2011 CAPP Information Requests to TCPL Page 1 Question 3:

Reference: Application p.1 of 13, para.1, p.2 of 13, para.9

Preamble: Foothills Pipeline Ltd. is an applicant and the Foothills system is described as having four segments referred to as Zones 6 through 9. Reference is also made to three subsidiaries that hold certificates.

Request:

(a) Which of the four zones are the subject of the Application.

(b) In what capacity does Foothills Pipeline Ltd. make application for the zones that are the subject of the Application? For example, does it apply in its capacity as the direct owner of the facilities, as operator, as the company to which certificates were issued, as an entity that would be a company as that term is defined in the NEB Act, or in some other capacity?

(d) Does each of the three subsidiaries own the facilities in one or more zones? Please explain which facilities are owned by which subsidiary.

(e) Please explain the ownership structure of the four zones.

(f) How many zones are there in the Foothills Pipeline System and what are all the companies that hold the certificates for the Foothills Pipeline System?

(g) Is Foothills Pipelines Ltd. a company within the meaning of the Northern Pipeline Act?

Question 4:

Reference: Application, p.1 of 13; para.1 and p.3 of 13, para.10; 2010 Annual Report Tab 9.3.1. NEB Filing Manual, Attachment 13.1

Preamble: The Application in para. 1 identifies the various pipelines that are making the Restructuring Proposal. The Application in para.10 states that “TransCanada manages and operates the Mainline, the Alberta System and the Foothills System in common as a single enterprise.”

November 22, 2011 CAPP Information Requests to TCPL Page 2 Request:

(a) The 2010 Annual Report shows 17 pipelines of which 14 are in operation, 1 under construction, and 2 are proposed.

(i) Which of these are managed by TransCanada?

(ii) Which of these are operated by TransCanada?

(iii) Which of these are managed and operated by TransCanada in common as a single enterprise? If there are more than one grouping of pipelines that are managed and operated in common as single enterprises please identify all such groupings.

(b) The 2010 Annual Report, p.8, shows three business segments: natural gas pipelines, oil pipelines, and energy. Are all TransCanada businesses managed and operated in common as a single enterprise (that is, there is one common single enterprise? Is each of the three business segments managed and operated in common as a single enterprise (that is, there are three common single enterprises)? How many common single enterprises are there within the TransCanada corporate structure? Please explain.

(c) Do any of TransCanada’s businesses have interests that compete with the interests of other businesses? If so, please explain how TransCanada makes decisions among the competing interests.

(d) If not explained above, please explain how TransCanada when it manages and operates more than one business as single enterprises makes decisions when the interests of one business competes with the interests of another within the common single enterprise.

(e) Suppose for example, ANR had a project that might bring U.S. gas into a market served by other TransCanada pipelines that might potentially off load another TransCanada pipeline, how does TransCanada decide if that is a good thing to do? Please explain.

Question 5:

Reference: Application, p.1 of 13, para.1 & 2

Preamble: Application p.1 of 13, para.1 says the Application is for “…approvals required to implement a proposed restructuring of the services and

November 22, 2011 CAPP Information Requests to TCPL Page 3 tolling….” of the referenced pipelines. Para.2 refers to a “Business and Services Restructuring Proposal”.

Request:

(a) Please confirm that the NEB approvals sought by the Application are only in respect of cost allocation, toll design, services, and tolls. If not confirmed, please explain.

(b) What does the term “business” in the description of the Application refer to? For example, does it refer to the undertaking by each pipeline to transport gas, does it refer to the business of TransCanada as the manager and operator of various pipelines, does it refer to TransCanada as the manager and operator of a common enterprise, or does it refer to something else?

(c) What ‘business’ is being restructured other than the cost allocation, toll design, services and tolls of each regulated pipeline that has joined in the Application?

Question 6:

Reference: Application, Revised October 31, 2011.

Preamble: On page 3 of 13, TransCanada states “The Restructuring Proposal is TransCanada’s comprehensive response to recent and dramatic changes in the business environment of natural gas supply, demand and transportation in North America that have raised significant issues that impact the long term viability of existing pipeline infrastructure and supply basins. …

Proposed cost allocation and toll design changes are intended to result in prices that are more appropriate given the current and anticipated usage of the system, the cost of transportation, the responsibility for system costs, the benefits of the system, and the value of services.”

Request:

(a) Please define the period of time encompassed in the word “recent” used in the phrase “recent and dramatic changes in the business environment”.

(b) Please provide the approved rate of return on equity and the actual rate of return on equity for the Mainline for the years 2000 to 2010.

November 22, 2011 CAPP Information Requests to TCPL Page 4 (c) Please confirm that the proposed restructuring if approved will entail significant changes to the Mainline’s long standing cost of service, cost allocation and toll design methodology. If not confirmed, please explain.

(d) Please confirm that the proposed Alberta System Extension if approved will result in shifting the cost responsibility from the Mainline and Foothills to the Alberta System. If not confirmed, please explain.

(e) Please confirm that the proposed toll design changes if approved will result in significant changes in cost responsibility between shippers. If not confirmed, please explain.

(f) Please confirm that as the owner of the pipeline system, the Mainline and TransCanada Corporation have benefited from the investments. If not confirmed, please explain.

(g) Please confirm that the proposed restructuring is not designed to increase risk to the Mainline or TransCanada Corporation. If not confirmed, please explain.

Question 7:

Reference: Executive Summary, p.1 of 21, l.1; p.6 of 21, l.8

Preamble: The Executive Summary p.1 speaks of “Recent and dramatic changes in the business environment of natural gas supply, demand and transportation in North America have raised significant issues that impact the long term economic viability of existing pipeline infrastructure and supply basins.” TransCanada then goes on to state at p.6 that the changes proposed in the Application “…will enhance the economic viability of the mainline and the WCSB, and will improve the efficiency and operating effectiveness of its pipeline systems.”

Request:

(a) Please spell out each and every case where TransCanada proposed, or is currently proposing, or subsequently built new facilities that respond to the changes in circumstances referred to in the Preamble

(b) Which natural gas pipelines have been negatively impacted by these changes? Please explain the manner and extent to which they have been negatively impacted.

November 22, 2011 CAPP Information Requests to TCPL Page 5 (c) Have there been any positive impacts for North American pipeline infrastructure and supply basins as a result of these changes? If so, please describe these positive impacts.

(d) Have any of TransCanada’s pipelines been positively impacted by these changes? Please explain.

(e) Have existing natural gas pipelines owned in whole or part by TransCanada had the opportunity to compete for expansions in this changed business environment? Please explain and also provide information on all TransCanada open seasons for new capacity since 2005 (other than open seasons for Alaska or northern gas).

(f) Have new natural gas pipelines or expansions of existing pipelines been proposed by TransCanada? Please explain and also provide information on all TransCanada proposals for new capacity since 2005

(g) Have expansions of existing natural gas pipelines owned in whole or part by TransCanada been applied for or put into operation by TransCanada? Please explain and also provide information on all new capacity since 2005

(h) Has greenfield natural gas pipe been applied for or put into operation by TransCanada? Please explain and also provide information on all new greenfield natural gas pipeline since 2005

(i) Have existing natural gas pipelines owned in whole or part by TransCanada seen increased throughput as a result of these changes? Please explain and also provide information on all TransCanada wholly or partially owned pipelines that have seen increased throughput since 2005.

(j) Which supply basins are winners or losers, positively or negatively impacted, because of these changes? Please list them and explain.

(k) Is the WCSB a winner or loser, positively or negatively impacted, because of these changes? Please explain.

Question 8:

Reference: Section 1 Executive Summary Page 10 line 18

Preamble: Section 1 at page 10 line 18 TCPL uses the term “that should more than offset the toll impact”

November 22, 2011 CAPP Information Requests to TCPL Page 6 Request: Provide all studies or workpapers or products that TCPL or its consultants have produced that indicate that the increase in the price of NIT should exceed the toll impact.

Question 9:

Reference: Section 5 Depreciation dated October 31; Part C Depreciation Study Appendix C2 pages III-5 and III-10

Preamble: Page III-5 shows the proposed depreciation while III-10 shows the status quo.

Request:

(a) Please confirm that using the status quo III-10 with a 2020 truncation for Northern Ontario and the salvage shown the Calculated Reserve is $379,368,390 higher than the Book Reserve at December 31, 2011.

(b) Please confirm that the overall shortfall between the Calculated Reserve is approximately$53 million higher than the Book reserve (III-10 Total Segregated Plant)

(c) Confirm on page III-5 that both the Truncation date (2025) and the Weighted Average Net Salvage have been changed for Northern Ontario from the status quo.

(d) Confirm that with the changes proposed the Calculated Reserve for Northern Ontario reduces from $3,628,416,146 to $3,138,365,370 or approximately $490 million.

(e) For each of the two changes, the truncation date and the weighted average net salvage made in determining the Calculated Reserve on III-5 provide the amounts that relate to each of these two items.

(f) Explain the basis of determining that the Weighted Average Net Salvage for Northern Ontario should change while the Weighted Average Net Salvage for the Eastern Triangle and Prairies remain the same in both scenarios.

(g) Please confirm that with the changes to truncation and the Weighted Average Net Salvage the Book Reserve for Northern Ontario would exceed the Calculated Reserve at December 31, 2011 by approximately $111million. If confirmation cannot be provided explain why not.

November 22, 2011 CAPP Information Requests to TCPL Page 7 (h) Provide all work papers and work products used to determine the Book Reserve at December 31, 2011 for each of the accounts shown for accounts 461.00, 462.00, 463.00, 465.00, 466.00 and 467.00 for each of Prairies, Northern Ontario and Eastern Triangle.

(i) For each of the accounts shown 461.00, 462.00, 463.00, 465.00, 466.00 and 467.00 for each of Prairies, Northern Ontario and Eastern Triangle for each Annual Accrual amount provide the amount related to the current periods depreciation and the amount, if any, related to amortization of the difference between the Calculated Reserve and the Book Reserve.

(j) If there is no amount related to the amortization of the difference between the Calculated Reserve and the Book Reserve explain why not.

(k) Since the truncation date seems to be based upon throughput, at least for Northern Ontario, explain why Gannett Fleming is not recommending the use of a unit of production method of depreciation for that segment and the other segments.

(l) Confirm that the reallocation to Northern Ontario is based upon throughput, if not explain the formula in Section 5.0 page 15 of 22 dated October 31, 2011.

(m) In a manner consistent with the data used on Section 5 page 15 of 22 dated October 31, 2011 provide the calculations for each of Prairies and the Eastern Triangle and provide the sources of the volumes used.

Question 10:

Reference: Section 5.3.3 Page 13 of 22, lines 11 to 14

Preamble: By contrast, the expected throughput, and therefore service value, of the Eastern Triangle segment has remained relatively stable over time since it is expected to continue to be used to serve Eastern markets. (underlining added)

Request:

(a) Does TransCanada agree that throughput is not the sole measure of service value? Please describe all aspects that ought to be recognized in determining service value.

November 22, 2011 CAPP Information Requests to TCPL Page 8 (b) Does TransCanada agree that price or revenue ought to be recognized in the determination of service value? If TransCanada does not agree, please explain why not.

Question 11:

Reference: Section 5.3.3, Page 13 of 22, lines 16 to 18

Preamble: The alignment between consumed service value and capital recovered would be improved by changing the allocation of accumulated depreciation across segments to better represent consumed service value across the system.

Request:

(a) Does TransCanada agree that this statement only reflects the NOL segment, not the overall system? If TransCanada does not agree, please explain why not.

(b) Please provide a quantification of the extent to which the proposal improves the alignment of consumed service value and capital recovered for each segment and for the system in total.

Question 12:

Reference: Section 5.3.3, Page 14 of 22, lines 13 to 15

Preamble: The consumed service value on the NOL segment was measured as the throughput on the segment since it first went in service in 1957 until the end of 2011, divided by the forecast of throughput from 1957 to the end of the economic planning horizon.

Request: Please provide a calculation, for each of the Prairies, NOL and Eastern Triangle segments and the total system, showing the ratio of throughput to date relative to throughput over the economic life of each segment, similar to that performed for the NOL segment, as described above.

November 22, 2011 CAPP Information Requests to TCPL Page 9 Question 13:

Reference: Section 5.3.3, Page 16 of 21, lines 1 to 3

Preamble: The amount of accumulated depreciation to allocate from each of the Prairies and Eastern Triangle segments individually is determined based on the relative accumulated depreciation balances for each segment.

Request:

(a) Please explain why the amount of accumulated depreciation reallocated to each of the Prairies and Eastern Triangle segments was not informed by a the ratio of current throughput to total throughput for each of the Prairies and Eastern Triangle segment?

(b) Please provide a calculation demonstrating the reallocation of accumulated depreciation for each segment to reflect as close as possible for each segment, the ratio of current throughput to total throughput for each of the Prairies and Eastern Triangle segments.

Question 14:

Reference: Section 5, Page 20 of 21, Figure 5.2

Request: Please provide a figure, similar to Figure 5-2, for each of the Prairies, NOL and Eastern segments under both the Proposed and Status Quo scenarios.

Question 15:

Reference: Appendix C2: Canadian Mainline Depreciation Study (GFI), Page I-2, lines 15 to 19

Request:

(a) Please confirm that the 2002 study utilized a truncation date of 2026. If this cannot be confirmed, please explain.

(b) Please confirm that the 2002 study utilized an economic life of 25 years. If this cannot be confirmed, please explain.

November 22, 2011 CAPP Information Requests to TCPL Page 10 Question 16:

Reference: Appendix C2: Canadian Mainline Depreciation Study (GFI), Page I-3, lines 13 to 16

Request:

(a) Please confirm that the 1992 study utilized a truncation date of 2026. If this cannot be confirmed, please explain.

(b) Please confirm that the 1992 study utilized an economic life of 35 years. If this cannot be confirmed, please explain.

Question 17:

Reference: Appendix C2: Canadian Mainline Depreciation Study (GFI), Page I-4, lines 13 to 16

Preamble: Over the period of 2002 through 2006 Gannett Fleming became aware of changing circumstances in the utilization of the TransCanada Mainline. In 2006, Gannett Fleming recommended to TransCanada that the use of a single system wide economic life would not appropriately match the consumption of the service value of the company’s pipeline assets to the depreciation expenses resulting from the use of a system wide economic life estimate. As such, Gannett Fleming recommended that TransCanada undertake a review of the potential segmentation of the Mainline system for depreciation purposes, and develop economic life estimates specific to each of the three Mainline segments. Based on this recommendation, TransCanada developed the three geographic segments that have unique economic life considerations. Based on these three segments, and the economic life associated with each segment, Gannett Fleming defined a depreciation expense for each segment that is used in the development of a system wide depreciation rate for each Canadian Mainline account.

Request:

(a) Please provide a copy of the depreciation study/memo/workpapers/document, prepared by GFI, which “defined a depreciation expense for each segment”.

(b) Please describe the basis for the accumulated depreciation by segment utilized by GFI in the document referenced in (a).

November 22, 2011 CAPP Information Requests to TCPL Page 11 (c) Please provide a copy of the material TCPL provided to GFI in respect of TCPL’s determination of booked accumulated depreciation by segment in 2006.

(d) Please describe the economic life and truncation date, by segment, utilized in the 2006 GFI depreciation work.

(e) Please provide all documents and workpapers in the possession of TCPL that relate to the determination of accumulated depreciation by segment as developed by TransCanada in 2006.

(f) Were the “changing circumstances” in the utilization of the Mainline the same in 2006 as they are today? If not, what has changed?

Question 18:

Reference: Appendix C2: Canadian Mainline Depreciation Study (GFI), Page I-4, lines 21 to 23

Preamble: In 2010, Gannett Fleming reviewed the appropriateness of the booked accumulated depreciation for each of the three segments as developed by TransCanada in 2006.

Request: Did GFI review the appropriateness of the accumulated depreciation as of 2010 or as of 2006?

Question 19:

Reference: Appendix C2: Canadian Mainline Depreciation Study (GFI), Page I-4, line 21 to page I-5, line 4

Preamble: In 2010, Gannett Fleming reviewed the appropriateness of the booked accumulated depreciation for each of the three segments as developed by TransCanada in 2006. In the view of Gannett Fleming, the accumulated depreciation within each segment did not match the consumed service value of the assets within each segment. In particular, Gannett Fleming noted that the Northern Ontario segment appeared to be under-recovered in comparison to the Prairies and Eastern Triangle segments.

November 22, 2011 CAPP Information Requests to TCPL Page 12 Request:

(a) Please describe the information utilized by GFI from which GFI concluded: “the accumulated depreciation within each segment did not match the consumed service value of the assets within each segment.”

(b) Was this the same information GFI utilized when it initially recommended the segmenting approach sometime between 2002 and 2006?

Question 20:

Reference: Appendix C2: Canadian Mainline Depreciation Study (GFI), Page I-5, lines 8 to 10

Preamble: TransCanada has developed a different allocation of accumulated depreciation which has been included in the depreciation calculations of this depreciation study.

Request:

(a) Does GFI agree with TransCanada’s methodology of equating past and future flows as a basis for assessing consumed service value on the NOL segment? Please discuss any shortcomings of this approach.

(b) In GFI’s opinion, is the estimated throughput on the Mainline over the next 10 years a highly predictable or stable number?

(c) If TransCanada’s proposal and your recommendation is adopted, how often would GFI recommend that the NEB update the depreciation analysis?

(d) Suppose, for example, the flows on the NOL were much higher or lower than anticipated, would GFI recommend that the method proposed by TransCanada be checked and modified to reflect those changing circumstances?

(e) Does GFI agree that TransCanada only undertook an assessment of consumed service value for the NOL segment and not the Prairie and Eastern Triangle segments? If not, please explain.

(f) In GFI’s opinion, should a consistent approach be used to evaluate the appropriate level of accumulated depreciation to be used in each of the 3 segments?

November 22, 2011 CAPP Information Requests to TCPL Page 13 Question 21:

Reference: Appendix C2: Canadian Mainline Depreciation Study (GFI), Page II-28, lines 7 to 10

Preamble: Based on the companies determination that the economic circumstances of each segment is significantly different, Gannett Fleming recommended to TransCanada that the depreciation analysis should continue the practice started in 2007, and be calculated on the basis of specific economic lives for each segment.

Request:

(a) Please provide the truncation date, by segment, utilized in the 2006 depreciation work (the work that formed the basis of the practice started in 2007).

(b) Please provide the economic life, by segment, utilized in the 2006 depreciation study (that formed the basis of the practice started in 2007).

Question 22:

Reference: Appendix C2: Canadian Mainline Depreciation Study (GFI), Pages III-5 and III-10

Preamble: Under the Proposed Case (shift of accumulated depreciation) the Northern Ontario segment has a 2025 truncation date and a composite remaining life of 13-14 years. Under the Status Quo Case, the Northern Ontario segment has a 2020 truncation date and a composite remaining life of 8-9 years.

Request: Given that the remaining life of the Northern Ontario segment is only 1/3 longer under the proposed case, is it reasonable that the annual accrual rate decrease from 4.53% to 1.35%?

Question 23:

Reference: Appendix C3: Prepared Direct Testimony of Barry E. Sullivan (BWMQ) Page 4 of 62, lines 6 to 9

Preamble: And third, TransCanada’s proposal includes an allocation of accumulated depreciation to the NOL segment from the Prairies segment and the Eastern

November 22, 2011 CAPP Information Requests to TCPL Page 14 Triangle segment to better align the remaining un-depreciated rate base of the NOL to its remaining service value.

Request: Does Mr. Sullivan agree that the TransCanada proposal to reallocate accumulated depreciation to the NOL segment will “better align the remaining un-depreciated rate base of the NOL to its remaining service value” but will not necessarily achieve the same result for the Prairies and Eastern Triangle segments? If Mr. Sullivan does not agree, please fully explain why not.

Question 24:

Reference: Appendix C3: Prepared Direct Testimony of Barry E. Sullivan (BWMQ) Page 4 of 62, lines 9 to 12

Preamble: The proposed allocation of accumulated depreciation will result in a better representation of the consumed service value of the TransCanada Mainline, by segregating the depreciation reserve by individual segment, and does not change the overall total amount of accumulated depreciation. (underlining added)

Request:

(a) Please explain how the proposed reallocation of accumulated depreciation “will result in a better representation of the consumed service value of the TransCanada Mainline” and not just the NOL segment.

(b) Beyond the “better representation of the consumed service value" what other rate design goals are served by the proposed reallocation of accumulated depreciation.

Question 25:

Reference: Appendix C3: Prepared Direct Testimony of Barry E. Sullivan (BWMQ) Page 6 of 62, lines 7 to 10

Preamble: Yes. I have reviewed the Gannett Fleming depreciation study which incorporate TransCanada’s proposal to continue the segmented approach to Mainline depreciation, and the calculations for the Prairies, NOL and Eastern Triangle facilities. I find them to be in conformance with depreciation policy and practice.

November 22, 2011 CAPP Information Requests to TCPL Page 15 Request:

(a) Can Mr. Sullivan’s statement be interpreted to indicate that he finds the proposed transfer of accumulated depreciation “in conformance with depreciation policy and practice”? If this is not a correct interpretation of Mr. Sullivan’s position, please clarify.

(b) Please have Mr. Sullivan describe all situations he has encountered where accumulated depreciation has been redistributed.

Question 26:

Reference: Appendix C3: Prepared Direct Testimony of Barry E. Sullivan (BWMQ) Page 7 of 62, lines 12 to 15

Preamble: Depreciation recovery, to the greatest extent possible, should be determined based upon the expected remaining economic life of the pipeline facilities being studied and the previously consumed service value.

Request: Does Mr. Sullivan agree that the determination of previously consumed service value is impacted by the expected remaining economic life (i.e. if the expected economic life is reduced then the previously consumed service value will increase)? If Mr. Sullivan does not agree, please explain.

Question 27:

Reference: Appendix C3: Prepared Direct Testimony of Barry E. Sullivan (BWMQ) Page 12 of 62, lines 23 to 26

Preamble: I believe that the use of an economic planning horizon of 2036 is reasonable and fully consistent with independent natural gas supply studies for the WCSB, TransCanada’s own natural gas supply studies and BWMQ’s WCSB natural gas supply study.

Request:

(a) Please supply a copy of BWMQ’s WCSB natural gas supply study.

(b) Was the BWMQ WCSB natural gas supply study completed independently of the other studies mentioned above?

November 22, 2011 CAPP Information Requests to TCPL Page 16 (d) If not included in response to (a), please provide a description of the data, assumptions and methodology used in the BWMQ WCSB natural gas supply study.

(e) Does the expected future price of gas drive any of the expected future flows on gas pipelines in the BWMQ WCSB natural gas supply study?

(f) Can the BWMQ WCSB natural gas supply study be used to predict the flows on the NOL or Eastern Triangle segments of the Mainline? If so, what does it predict?

(g) If the answer to (f) above is “no” please confirm that your model is not used at all in determining the economic planning horizons for either the NOL or the Eastern Triangle segments of the Mainline.

Question 28:

Reference: Appendix C4–Evidence of John Reed, Page 17

Request: Please provide the numerical data underlying Figure 2.

Question 29:

Reference: Appendix C-4 Evidence of John Reed, Page 18

Request: Please provide the numerical data underlying Table 2.

Question 30:

Reference: Appendix C-4 Evidence of John Reed, Page 24, Line 22

Request:

(a) What is Mr. Reed’s understanding of the term “abandonment”?

(b) What are the mechanisms for and results of abandonment?

November 22, 2011 CAPP Information Requests to TCPL Page 17 Question 31:

Reference: Appendix C-4 Evidence of John Reed, Page 27

Request: Please provide the numerical data underlying Figure 3, showing separately the billing determinants for each of the toll services.

Question 32:

Reference: Appendix C-4 Evidence of John Reed, Page 29

Preamble: Due to the dynamic natural gas industry, continued innovation for the Mainline will be important, and futures [sic] changes to the services in tolling beyond those that are reflected in the Application may be necessary.

Request:

(a) What scenarios has Mr. Reed done to determine the need for and potential magnitude of future changes?

(b) Would one possible future change be an increase in the cost of the TBO to the Alberta system?

Question 33:

Reference: Appendix C-4 Evidence of John Reed, Page 32

Preamble: I believe that the comprehensive package of services and toll design changes being proposed by TransCanada in the Application has a reasonable prospect of working to enhance the long-term economic viability of the System and the competitiveness of the WCSB.

Request:

(a) Did Mr. Reed do any independent evaluation of the effects of the toll changes to determine whether they will achieve the stated goals?

(b) Please provide copies of any analyses performed by Mr. Reed in this respect.

November 22, 2011 CAPP Information Requests to TCPL Page 18 Question 34:

Reference: Appendix C-4 Evidence of John Reed, Page 32

Preamble: Mr. Reed says that certain regulated services (including IT and FT) are “cannibalizing” demand for FT service.

Request:

(a) Please provide Mr. Reed’s understanding of the extent to which other pipelines owned, in part or in whole, by TCPL have the effect of reducing volumes from the Mainline long-haul service.

(b) Please provide Mr. Reed’s understanding of the extent to which TCPL construction of capacity for short-haul service in the Eastern markets is reducing the need and demand for long-haul service from the WCSB to Eastern markets.

Question 35:

Reference: Appendix C-4 Evidence of John Reed, Page 33

Preamble: As a result, the likelihood is that the Mainline’s captive customers would end up shouldering substantial toll increases.

Request: Please identify the “captive customers”, the contract volumes and contract expiration dates for each.

Question 36:

Reference: Appendix C-4 Evidence of John Reed, Page 33

Preamble: There is the potential that the price signals resulting from the Mainline’s existing services and pricing structure could lead to the construction of redundant pipeline facilities even though the Mainline has capacity already installed that is not fully subscribed.

Request:

(a) Please define the term “redundant” as used in this context.

(b) If there is existing pipeline capacity that is not fully utilized, is any additional capacity construction to serve the same markets necessarily “redundant”? Why or why not?

November 22, 2011 CAPP Information Requests to TCPL Page 19 (c) What are the criteria used to determine whether new construction is redundant or not?

(d) What pipeline facilities in North America would Mr. Reed currently consider to be redundant? Please explain why.

Question 37:

Reference: Appendix C-4 Evidence of John Reed, Page 48

Preamble: . . . I believe that this split in the cost responsibility for these transmission segments is reasonable, equitable, and consistent with tolling principles and market realities.

Request:

(a) Please provide all studies performed by Mr. Reed to support this belief.

(b) Which tolling principles is Mr. Reed referring to? Please describe how the proposal is consistent with each of these principles.

(c) Does Mr. Reed believe that NGTL would enter into the proposed TBO arrangements for the ASE if it was a stand-alone, independent entity? In making your response, please address the fact that the proposed TBO increases NGTL’s revenue requirement by about 36%, its primary delivery toll by about 25% and its primary receipt toll by about 32%.

(d) Does Mr. Reed’s position with respect to aggregation of supply area transmission depend on NGTL being a near-monopoly, absent Alliance Pipeline, for supply gathering in Alberta? If not, please fully explain why an independent NGTL would increase its costs by the amounts shown in (c) if it had competition for supply.

Question 38:

Reference: Appendix C-4 Evidence of John Reed, Page 48 (same issue)

Preamble: In addition, there is projected to be an average increase in the NIT prices ranging from $0.13/GJ to $0.14/GJ as a result of this toll realignment.

November 22, 2011 CAPP Information Requests to TCPL Page 20 Request:

(a) Did Mr. Reed perform any independent studies of the effect on NIT prices? If so, please provide them.

(b) Will it be possible to determine if NIT prices actually do increase as a result of the realignment? How?

(c) If NIT prices do not increase, is the effect of the Alberta System Extension still “reasonable” or “equitable” to Alberta receipt shippers? If so, why?

Question 39:

Reference: Appendix C-4 Evidence of John Reed, Page 52

Preamble: The System is dependent on supplies from the WCSB, and the WCSB is dependent, to a large extent, on the System for transporting gas to market, thus the interests of the System and the WCSB are fundamentally intertwined.

Request:

(a) Please describe in more detail how the “System” is dependent on the WCSB. In particular, explain to what extent the Eastern markets are dependent on WCSB gas and how this is expected to change over the next 10 years (with data).

(b) Please identify all paths from the WCSB to other markets that do not use the TCPL Mainline. What are the aggregate charges and netbacks for each of these alternate paths?

Question 40:

Reference: Appendix C-4 Evidence of John Reed, Page 52

Preamble: By extending the Alberta System boundaries to incorporate the WCSB supply area of the Mainline and the Foothills systems, all WCSB supply on the System will be able to be included into a common supply pool.

Request:

(a) What is the additional annual volume that will be included as a result of the Extension? Provide the basis for that estimate.

November 22, 2011 CAPP Information Requests to TCPL Page 21 (b) What happens to that portion of supply at present?

(c) Do you have any independent evidence that the resulting common supply pool will increase the demand for long term service on the Mainline?

Question 41:

Reference: Appendix C-4 Evidence of John Reed, Page 55

Preamble: The market reality is that absent a change to the status quo, the position of Intra shippers and Foothills shippers would still likely worsen.

Request:

(a) Please provide more specifics on how their condition would worsen.

(b) Please provide any studies performed by Mr. Reed that evaluate the manner and extent in which conditions would worsen.

Question 42:

Reference: Appendix C-4 Evidence of John Reed, Page 56

Preamble: Therefore, the costs of this capacity, whether part of the TBO or not, were prudently incurred to provide transportation service to Mainline and Foothills shippers, and, pursuant to the regulatory compact under which TransCanada has operated and continues to operate, TransCanada is entitled to an opportunity to recover its return on and return of these investments.

Request:

(a) Please explain why Mr. Reed considers it reasonable to recover the costs of Mainline capacity from customers who do not contract on the Mainline.

(b) Is charging customers for a service they do not use consistent with either the cost causation or user pay principles?

November 22, 2011 CAPP Information Requests to TCPL Page 22 Question 43:

Reference: Appendix C-4 Evidence of John Reed, Page 58

Preamble: I do not believe that the Alberta Extension represents an unreasonable cross-subsidization between the Alberta System and the Mainline and Foothills.

Request:

(a) Does Mr. Reed believe that it represents a cross-subsidization?

(b) What are the criteria for determining whether that cross-subsidization is reasonable or not?

Question 44:

Reference: Appendix C-4 Evidence of John Reed, Page 61

Preamble: . . . [T]here are shippers on the Mainline that currently bring gas onto the Mainline within Saskatchewan for downstream deliveries on the Mainline . . ..

Request:

(a) What is the volume of receipts onto the Mainline in Saskatchewan for each of the years 2007 to date? Please identify by receipt point and toll.

(b) What is the volume of deliveries from the Mainline to Saskatchewan for each of the years 2007 to date? Please identify by delivery point and toll.

Question 45:

Reference: Appendix C-4 Evidence of John Reed, Pages 61

Preamble: Likewise, the Extension will also provide the opportunity for such shippers to access NIT on an equivalent basis as other Alberta system shippers as part of the TBO should they so choose.

November 22, 2011 CAPP Information Requests to TCPL Page 23 Request:

(a) Has TransCanada considered other mechanisms by which such shippers could transact at NIT (e.g., backhauls on the Mainline)?

(b) Has TransCanada discussed with Saskatchewan shippers the amount of volume they would prefer to transact at NIT versus shipping only on the Mainline? If so, please provide the results of those discussions.

Question 46:

Reference: Appendix C-4 Evidence of John Reed, Page 66

Preamble: It is my understanding that when there is currently sufficient available capacity on many transportation routes, shippers do not bid more than the bid floor . . ..

Request: Please provide all the information Mr. Reed reviewed as the basis for this understanding.

Question 47:

Reference: Appendix C-4 Evidence of John Reed, Page 67

Preamble: ... Higher peak period pricing can encourage long term firm contracting ...

Request: Has TransCanada considered seasonally-differentiated tolls? If not, why not? If yes, provide any related studies and the reasons that TransCanada rejected this approach. [Note: This request is to TransCanada.]

Question 48:

Reference: Appendix C-4 Evidence of John Reed, Page 69

Preamble: However, because there is significant available capacity on many paths, these short-term firm services are no longer inferior to FT service . . ..

Request: Please identify which paths have significant available capacity and the basis for that determination.

November 22, 2011 CAPP Information Requests to TCPL Page 24 Question 49:

Reference: Appendix C5–Evidence of Robert W. Fleck, Evidence, Page 5

Preamble: Many pipeline routes out of the WCSB other than the mainline are often operating at or near capacity, reducing options and requiring producers to look to the east, where mainline capacity is available.

Request: Please identify the pipeline routes out of the WCSB, the capacity of each, and, for the months starting in 2008 to the present, the times when they are operating at or near capacity.

Question 50:

Reference: Appendix C5–Evidence of Robert W. Fleck, Evidence, Page 5

Preamble: The ‘netback’ to WCSB producers realized from sales made in the east will therefore at times be essentially setting the price, or value for gas produced throughout the WCSB.

Request:

(a) For the months starting in 2008 to the present, please identify the times during which the netback from Eastern sales set the price in the WCSB.

(b) At those times when Eastern sales prices did not set the WCSB, what did set the price? Please provide details of the information upon which the answer is based.

Question 51:

Reference: Appendix C5–Evidence of Robert W. Fleck, Evidence, Page 5

Preamble: Assuming price stability in the target market, a reduction in transportation costs on the mainline should provide a higher netback to the WCSB producers . . ..

Request:

(a) Please define what is meant by price stability, with quantification.

November 22, 2011 CAPP Information Requests to TCPL Page 25 (b) For the months starting in 2008 to date, please identify periods when there was price stability versus the periods when there was not price stability.

(c) Does the netback for WCSB depend solely on total transportation costs? What role do variable costs play in the netback?

Question 52:

Reference: Appendix C5–Evidence of Robert W. Fleck, Evidence, Page 10

Preamble: The GPCM is a linear-programmed, optimized solution model that reconciles supply, demand, price and pipeline flows throughout the North American gas marketplace and infrastructure. Wood Mackenzie uses its own analysis to customize the model by populating the supply and demand databases, the pipeline and storage infrastructure database (including tariffs) and the supply and demand elasticity database within this model with proprietary inputs.

Request:

(a) Please provide the assumed pipeline capacities for each year through 2017.

(b) Please provide the assumed pipeline tariffs for each pipeline for each year through 2017.

(d) Did Wood Mackenzie do the analysis with different scenarios (e.g., low/average/high demand; changes in exchange rates and so on)? If yes, please explain the different assumptions made and how they impact the results. If not, why was no sensitivity analysis done?

(e) What assumptions were made about changes in pipeline infrastructure in TransCanada’s Eastern market?

November 22, 2011 CAPP Information Requests to TCPL Page 26 Question 53:

Reference: Appendix C5–Evidence of Robert W. Fleck, Evidence, Page 15

Preamble: The evidence states that the model shows an “average 16% increase” in gas flows to the East through 2017 and an “average of 14 cents” price at NIT through 2017.

Request:

(a) Please provide the yearly figures for each of the above.

(b) Did the model study changes on a monthly or seasonal basis? If no, why not? If yes, please provide the monthly or seasonal results.

Question 54:

Reference: Part D: Fair Return, Section 11, page 9 lines 12 and 13

Preamble: TransCanada submits that when a regulator is considering the subject of Fair Return “the stand-alone principle requires the regulator to consider the utility on a stand-alone basis within the consolidated entity”.

Request: Does the “stand-alone principle” also require the regulator to consider that a utility should only recover its costs on a stand-alone basis within the consolidated entity?

Question 55:

Reference: (i) Part D: Fair Return, Appendix D1, page 16 lines 8-13

(ii) Part D: Fair Return, Appendix D1: Written Evidence of Paul R. Carpenter page 63 lines 13-14, lines 23-25 and page 64 lines 2-3

(iii) Part C: Business and Services Restructuring Proposal, Appendix C-4 Direct Evidence of John J. Reed page 67 lines 7-11

Preamble: In Reference (i) TransCanada states that it “has now adopted the terms fundamental risk and variability risk to distinguish two different types of risks. Fundamental risk refers to supply, competitive, market, operating and regulatory risks facing the Mainline. These risks are all structural in nature and denote fundamental factors and trends in the evolution of the overall risk landscape. Variability risk refers to factors that affect year to year earnings for the pipeline.

November 22, 2011 CAPP Information Requests to TCPL Page 27 In Reference (ii) Mr. Carpenter states “I also explained my view, with which the Board agreed in RH-1-2008, that variability risk does not necessarily impact fundamental capital recovery risk” He goes on to say that “U.S. gas pipelines have had a greater opportunity to respond, through the use of flexible pricing and service design, to the competition encouraged by regulatory policies” and on page 64 he states that these differences cause U.S. pipelines to be better positioned that Canadian gas pipelines to mitigate the risk of increased competition and bypass”.

In Reference (iii) Mr. Reed states that “by having the ability to change the minimum bid floors for the short-term services, TransCanada may be able to increase throughput and revenue during off-peak periods on paths currently fully utilized during peak periods, as well as attract new traffic to other paths throughout the year.”

Request: Against the background of the above References and in order for TransCanada to better align its interests with those of its stakeholders, why should TransCanada not be required to assume the variability risk associated with the introduction of flexibility for the pricing of short-term services?

Question 56:

Reference: Part C: Business and Services Restructuring Proposal, Appendix C4, pages 74 lines 4-5 and page 75 lines 27-33

Preamble: On page 74, Mr. Reed outlines the Board’s reasons for denying TransCanada’s proposal in RH-1-99 for pricing discretion. The Board found that, amongst other things, the proposal entailed the potential for misjudgment of the market and TransCanada had no accountability for the consequences of its discretion. In order to address the Board’s concern about direct accountability for the consequences of discretion for TransCanada’s current request for pricing discretion Mr. Reed states at page 75 “TransCanada’s proposal also addresses the issue noted by the Board in RH-1-99 regarding direct accountability for the consequences of TransCanada’s pricing discretion. Clearly, no pipeline can provide certainty that the minimum bid floors established under a flexible pricing structure would be able to optimize short-term service revenues and overall competitiveness because of the numerous market factors that go into shippers’ contracting decisions and how commodity prices are established. However, as highlighted throughout the Application, a primary basis for the filing is to improve the competitiveness of the Mainline and WCSB to ensure continued long-term economic viability”.

November 22, 2011 CAPP Information Requests to TCPL Page 28 Request:

(a) Under TransCanada’s proposal, any shortfall in the revenue collected from the sale of short-term services will be placed in a deferral account for recovery from shippers at a later date. How does Mr. Reed’s response address the Board’s concern about direct accountability?

(b) Would not TransCanada accepting the revenue risk associated with its requested pricing discretion more appropriately address the Board’s concerns regarding direct accountability for the consequences of TransCanada exercising its discretion?

Question 57:

Reference: Section 13.0: Filing Manual Summary, Attachment 13.1, Tab P.2.1.a.

Preamble: The Reference shows the plant additions and retirements.

Request: Which of the additions and retirements in 2012 and 2013 are attributable to Line 2 on the NOL?

Question 58:

Reference: Section 12.0: 2012-2013 Revenue Requirement.

Preamble: Pages 7 and 8 state that additional costs of premature retirements might include abandonment costs and facility costs required to ensure the system remains operable in the absence of the retired facilities.

Attachment 12.1, Tab 4, Tables 1 and 2 and Schedule 4.0 show the corrosion program inline inspection runs and excavation, SCC hydrotests, inline inspection runs and excavations, and pipeline integrity costs for the years 2010 to 2013 inclusive.

Request:

(a) Please provide a breakdown of the abandonment costs and costs to ensure the system remains operable in the absence of Line 2 on the NOL.

(b) Please provide the timing and associated costs to (i) decommission but not abandon Line 2 and (ii) to abandon NOL Line 2.

November 22, 2011 CAPP Information Requests to TCPL Page 29 (c) Please identify the corrosion program inline inspection runs and excavation, SCC hydrotests, inline inspection runs and excavations, and pipeline integrity costs for the years 2010 to 2013 inclusive attributable to NOL Line 2.

Question 59:

Reference: Section 12: 2012-2013 Revenue Requirement, Attachment 12.1, Tab 5.

Preamble: Page 8 of 10 provides the forecast maintenance capital plant expenditures in 2011, 2012 and 2013.

Request: Please identify the forecast amounts attributable to Line 2 on the NOL.

Question 60:

Reference: Part A Section 1; Introduction and Executive Summary page 19 of 20, lines 19-22

Preamble: 1.8.4 comparative Revenue Requirements and Tolls. The Application includes in Attachment 9.1 comparisons of tolls and full transportation costs that are intended to show the impact of the Restructuring Proposal relative to a continuation of the existing tolling methodology (i.e., Status Quo) for 2012.

Request: TCPL has loosely used the term Status Quo to mean a second case based sometimes on the existing methodology. Please define all the aspects of the TCPL case which is called Status Quo in this application for which there are any differences from the RP case.

Question 61:

Reference: Part E Section 12 ; Revenue Requirement page 4 of 8

NEB Decision letter Sept9, 2011 re TCPL application for Mainline Final Tolls Order TG-007-2011 page 2

November 22, 2011 CAPP Information Requests to TCPL Page 30 The Settlement will apply for the purpose of determining the 2011 revenue requirement. Therefore, the following 2011 costs or cost parameters that are predetermined in the Settlement will not be tested further:

(a) Operations, Maintenance and Administrative Costs,

(b) The Performance Incentive Envelope programs,

(d) Rate of return on common equity, capital structure, and the use of the weighted average cost of debt capital, and

(e) The treatment of the 8.25% junior subordinated debentures as outlined in clause 1(B)(5)(c) of the Settlement.

Preamble: Although the NEB determined that the above noted 2011 costs or cost parameters that are predetermined in the Settlement will not be tested further, the historic Settlement OM&A costs provide an invaluable trend indication for the under discussion 2012&2013 costs.

Request:

(a) Please provide the 5 years Settlement history of the cost details for OM&A costs.

(b) Please provide the 5 years Settlement history of the cost details for the Performance Incentive Envelope programs costs.

(c) Please provide the 5 years Settlement history of the cost details for the Depreciation rates and the segmented approach to depreciation costs.

(d) Please provide the 5 years Settlement history of the cost details for the Rate of return on common equity, capital structure and weighted average cost of debt .

Question 62:

Reference: Part E Attachment 12.1 Revenue Requirement Tab 12 OM&A Appendix A Schedule12.13 General Expenses Schedule 12.13

Preamble: Schedule 12.13 sheets 1 & 2 show General Expenses for Mainline, Alberta, Foothills, Other and Total Company.

November 22, 2011 CAPP Information Requests to TCPL Page 31 (a) Please explain why there are major reductions in line14 - 2010 “Pension and Benefits Adjustment” but not 2011, 2012 or 2013.

(b) Please explain why there is a large negative adjustment in line 16 of 2010 miscellaneous for the “other” while “Other” in 2011, 2012 and 2013 are all large positive charges.

(c) Please explain why the Mainline line 19 “Percent of Total” in 2010 is 27.9% which is over 13% above Alberta whereas in 2011, the Mainline line 38 “Percent of Total” is 5.1% above Alberta and in 2012 and 2013, the Mainline “Percent of Total” is just over 2% above Alberta.

Question 63:

Reference: Part E Attachment 12.1 Revenue Requirement Tab 12 OM&A Appendix A Schedule12.13 General Expenses Schedule 12.14

Preamble: Schedule 12.14 sheets 1&2, for each of the 6 OM&A major costs subdivisions, shows the salaries, benefits, employee expenses, contract services, maintenance parts and other.

With the proposed transfer of costs between the Mainline, Foothills, Alberta and Other; CAPP wishes to understand the information that relates to these businesses.

Request:

(a) Please provide the Schedule 12.14 type cost details for each of the Mainline, Foothills, Alberta, and Other totals as shown in Schedule 12.13.

(b) Please provide the FTE equivalent numbers for each of the Mainline, Foothills, Alberta, and Other totals as shown in Schedule 12.13.

Question 64:

Reference: Part C: Business and Services Restructuring Proposal Section 6: Alberta System Extension Subsection 6.3 Commercial Arrangements; page 5 to 7 of 22

Preamble: This section describes the methodology and process that NGTL will use in 2012 and 2013 to establish the TBO contract quantities it will contract for

November 22, 2011 CAPP Information Requests to TCPL Page 32 on the Mainline; Foothills (Sask.) – Zone 9 and Foothills (South B.C.) – Zone 8.

On page 7 of 22 these contract quantities are identified as 2,800 TJ/d on the Mainline; 1,900 TJ/d on Foothills Zone 8; and 1,600 TJ/d on Foothills Zone 9.

Request:

(a) Do these contract quantities represent the amount of Alberta System FT-D and FT-DW contracted on each of the TBO paths?

(b) If the contract quantities do not represent the amount of Alberta System FT-D and FT-DW contracted on each of the TBO paths please provide a detailed explanation of how the contract quantities were determined, identifying NGTL’s forecast of average daily throughput on each path; FT held by other parties on each path; and Alberta System load retention service quantities on each TBO path.

Question 65:

Reference: Part C: Business and Services Restructuring Proposal

Section 6: Alberta System Extension Attachment 6.1 Illustrative 2012 Rates (Status Quo) Attachment 6.2 Illustrative 2012 Rates (Restructuring Proposal)

NGTL Contract Demand Effective Nov 1, 2011 http://www.transcanada.com/customerexpress/847.html

Preamble: NGTL’s firm service large export point contract quantities have decreased approximately 27% in the last year as posted on Customer Express at the above link.

CAPP is interested in understanding more about NGTL’s firm export contract expiry profile for the years 2012 and 2013.

November 22, 2011 CAPP Information Requests to TCPL Page 33 NGTL FT-D / STFT / FT-DW Contracts (TJ/d)

01 Nov 2010 01 Nov 2011 Difference

FT-D1 Contracts

Empress 1,497 867 (630)

Alberta/BC 2,344 1935 (409)

McNeill 972 774 (198)

Total FT-D1 4,812 3,576 (1,236)

STFT & FT-DW

Empress 756 512 (243)

Alberta/BC 104 40 (64)

McNeill 94 100 6

Total STFT & FT-DW 954 652 (302)

Total Large Exports 5,766 4,228 (1,538)

Request:

(a) Please provide the firm contract expiry profile for each of Empress, Alberta/BC and McNeill for the years 2012 and 2013 in a format similar to the above table.

(b) With reference to Attachment 6.1 Illustrative 2012 Rates (Status Quo), please provide a reconciliation of the FT-D1 contract quantity of 2,601 TJ/d used for 2012 rate design purposes, with the total 01 Nov 2011 FT-D1 quantity of 3,576 TJ/d in the above table.

(c) Also with reference to Attachment 6.1 Illustrative 2012 Rates (Status Quo), please provide a reconciliation of the STFT + FT-DW contract quantities of 3,052 TJ/d used for 2012 rate design purposes, with the total 01 Nov 2011 STFT + FT-DW quantities of 652 TJ/d in the above table.

November 22, 2011 CAPP Information Requests to TCPL Page 34 (d) Please reproduce Attachment 6.1, allocating each of the total FT-D1 contract quantity (2,601 TJ/d); the total STFT contract quantity (3,038 TJ/d); the total FT-DW contract quantity (14 TJ/d); and, the total IT-D quantity (643 TJ/d) to each of the Empress; Alberta/BC; McNeill; and intra-Alberta delivery points. Please provide the rates for each service at each delivery point.

(e) Please reproduce Attachment 6.2, allocating each of the total FT-D1 contract quantity (2,801 TJ/d); the total STFT contract quantity (3,029 TJ/d); the total FT-DW quantity (14 TJ/d); and, the total IT-D quantity (643 TJ/d) to each of the Empress; SMB; Alberta/BC; Kingsgate; McNeill; Monchy; and intra-Alberta delivery points. Please provide the rates for each service at each delivery point.

(f) Please provide Alberta System illustrative 2013 rates for the status quo case as well as the proposed restructuring case providing rates and delivery quantities for each of the delivery points.

Question 66:

Reference: Part C: Business and Services Restructuring Proposal Section 6: Alberta System Extension Subsection 6.4.2 Mainline

Preamble: CAPP is interested in understanding more about the Mainline firm contract expiry profile for the years 2012 and 2013 for contracts with Empress as a receipt point.

Request: Please provide the firm contract expiry profile for each contract with Empress as a receipt point for the years 2012 and 2013 identifying FT and STFT separately.

Question 67:

Reference: Part C: Business and Services Restructuring Proposal Section 6: Alberta System Extension Subsection 6.4.3 Foothills

Preamble: CAPP is interested in understanding more about Foothills’ firm export contract expiry profile for the years 2012 and 2013 as well as Foothills’ forecast rates for 2012 and 2013.

November 22, 2011 CAPP Information Requests to TCPL Page 35 Request:

(a) Please provide the firm contract expiry profile for each of Kingsgate and Monchy for the years 2012 and 2013 identifying FT and STFT separately.

(b) Please provide Foothills’ Statement of Rates for 2012 and 2013 each of Zone 8 and Zone 9 assuming a status quo case as well as the proposed restructuring case.

Question 68:

Reference: Part A: Executive Summary Section 1.0: Introduction and Executive Summary Page 2

Preamble:

Request:

(a) When customers do not use a particular service because there are lower cost alternatives, is the service still an “essential” service?

(b) When customers do not use a particular service because it is unprofitable to use the service, is the service still an “essential” service?

Question 69:

Reference: Part A: Executive Summary Section 1.0: Introduction and Executive Summary Page 2

November 22, 2011 CAPP Information Requests to TCPL Page 36 Preamble:

Request:

(a) How may Canada’s public interest be dependent on the Mainline if the Mainline is largely not needed or used for WCSB’s export?

(b) Can the Mainline remain viable even if the pattern of use changes and risks have increased

Question 70:

Reference: Part A: Executive Summary Section 1.0: Introduction and Executive Summary Page 3

Preamble:

Request: If TransCanada’s proposal raises the tolls for customers not using the Mainline, how does the proposal improve these customers’ opportunity to compete?

Question 71:

Reference: Part A: Executive Summary Section 1.0: Introduction and Executive Summary Pages 4-5

Preamble:

November 22, 2011 CAPP Information Requests to TCPL Page 37

Request:

(a) Will shale gas development reduce the inter-regional trading of natural gas?

(b) Will shale gas development in the Eastern part of North America reduce the demand for West to East natural gas transmission?

Question 72:

Reference: Part A: Executive Summary Section 1.0: Introduction and Executive Summary Page 7

Preamble:

Request:

(a) Please explain “the value of services”.

(b) Is TransCanada proposing value-based pricing of its services?

November 22, 2011 CAPP Information Requests to TCPL Page 38 Question 73:

Reference: Part A: Executive Summary Section 1.0: Introduction and Executive Summary Page 10

Preamble:

Request:

(a) Does a toll increase generally reduce the net price received by a natural gas producer?

(b) Does a toll increase reduce the net price received by a natural gas producer in Alberta?

(d) If the producer could not pass any of the toll increase to the natural gas buyers, would the producer’s net price be cut by the toll increase?

(e) Even if the producer could pass 100% of the toll increase to the natural gas buyers, would the producer’s net price be, at best, the same as before the toll increase?

Question 74:

Reference: Part A: Executive Summary Section 1.0: Introduction and Executive Summary Page 10

November 22, 2011 CAPP Information Requests to TCPL Page 39 Preamble:

Request:

(a) Please list and quantify the benefits to the Alberta System users.

(b) Please show how these benefits are calculated, including, but not limited to, input assumptions, model, computation routines, and output description.

(c) What recourse is available to Alberta System users if these benefits do not occur at the levels that TransCanada estimates?

Question 75:

Reference: Part A: Executive Summary Section 1.0: Introduction and Executive Summary Page 12

Preamble:

November 22, 2011 CAPP Information Requests to TCPL Page 40

Request:

(a) Regarding the proposal to permit an increase in the bid floor to 160% for IT service (lines 4 and 5), please provide any supporting evidence, analysis or work papers regarding the anticipated impact on the volumes and revenues from this service?

(b) Regarding the proposal to permit an increase in the bid floors for STFT and Short Term Short Notice service (lines 8 and 9), please provide any supporting evidence, analysis or work papers regarding the anticipated impact on the volumes and revenues from this service?

(d) Please provide any long term projections that TransCanada might have completed on the impact of its proposal, the status quo or any other proposals on toll volumes, certainty and stability.

Question 76:

Reference: TCPL Business and Services Restructuring Proposal and 2012 and 2013 Mainline Final Tolls Application Page 1 A2C6L0_-_Application_.pdf

Preamble:

November 22, 2011 CAPP Information Requests to TCPL Page 41 Request:

(a) How might the toll application change if TransCanada, NGTL and Foothills were not affiliates?

(b) Could the proposed restructuring of services and resulting cost allocation occur among them if they were separate companies?

(c) How might the toll proposal change if cost re-allocation could not occur among the Mainline, Alberta and Foothills systems?

Question 77:

Reference: TCPL Business and Services Restructuring Proposal and 2012 and 2013 Mainline Final Tolls Application Page 4 A2C6L0_-_Application_.pdf

Preamble:

Request:

(a) Please provide details describing any customer requests for the services that would require the Alberta System Service Extension (ASSE). The response should be limited to those requests that TransCanada considers to be viable commercial projects.

(b) Will ASSE increase the tolls for any NGTL customers who have not asked for the extension?

(d) Please provide the results of any analyses that TransCanada has undertaken to evaluate the financial risk of ASSE for any NGTL customers.

November 22, 2011 CAPP Information Requests to TCPL Page 42 Question 78:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Preamble: Mr. Reid states that FERC has over time allowed pipelines various forms of pricing flexibility for its services beyond traditional cost-based rates including peak, off-peak pricing negotiated rates, capped rates and market- based pricing.

Request:

(a) What a) similarities, if any, and b) differences, if any, does TCPL identify between the capacity assignment provisions of its tariff and the capacity release rules under which FERC-regulated US pipelines operate?

(b) Is this comparison relevant in drawing analogies to TCPL’s overall proposal and FERC-related precedents? If so, please explain.

(c) Which of the flexible rate features referred to in the Evidence of John Reed as having precedential value (at 75, lines 11-16) depend on the availability of capacity release under the FERC regime of regulations? Please explain.

Question 79:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Request: What are the “market-based” rates referred to (Evidence of John Reed, page 77). Please provide specific references.

Question 80:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Request: Has TCPL conducted any market power analysis for any of the markets it serves via a) the mainline or b) the Alberta System? Please furnish any such analyses.

November 22, 2011 CAPP Information Requests to TCPL Page 43 Question 81:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Preamble: Re: Reed, p. 65: [L]ower off-peak pricing can encourage increased throughput that may not have otherwise flowed on the Mainline if there is a fixed minimum bid floor. TransCanada’s proposal provides an opportunity to maximize utilization and lower tolls by increasing revenue relative to the status quo. Thus, by having the ability to change the minimum bid floors for the short-term services, TransCanada may be able to increase throughput and revenue during off-peak periods on paths currently fully utilized during peak periods, as well as attract new traffic to other paths throughout the year.

Request:

(a) Does this analysis presume that long-term and short-term shippers represent a different roster of customers?

(b) Is there in fact any commonality, i.e., overlap, in the rosters of TCPL’s short and long-term customers? Please furnish any data consulted by TCPL in this regard.

Question 82:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Request: Does TCPL propose any change or improvements to its capacity assignment rules? Please explain.

Question 83:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Request: Please describe the process by which TCPL would adjust its minimum floor rates to be more market responsive: what factors would TCPL take into account in setting and adjusting these rates?

November 22, 2011 CAPP Information Requests to TCPL Page 44 Question 84:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Preamble: TransCanada’s proposal will provide the opportunity to more appropriately align the price of short-term services on various paths with the competitive market rate. (Reed, p. 65)

Request: Does this refer to situations in which the market rate is higher than the price of short-term services, lower than the price of short-term services, or both?

Question 85:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Preamble: Pricing flexibility for the use of peak capacity can also provide more appropriate price signals regarding the need for incremental capacity. (Reed, p. 65)

Request:

(a) Provide three illustrations of situations in which TCPL has failed to add needed incremental capacity because the pricing signals for peak capacity have been inflexible.

(b) How does TCPL know this has occurred, if it does?

Question 86:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Preamble: The fact that tolls for short-term services can be above the long-term FT toll depending on market conditions is consistent with the risk/reward profile of the short term services. (Reed, p. 66)

Request:

(a) Who has the greater risk in this scenario, the pipeline or the short-term shipper?

November 22, 2011 CAPP Information Requests to TCPL Page 45 (b) Has the FERC ever determined in its regulatory rulings that shippers using short-term pipeline services should pay a higher rate than for firm services because of the risks imposed on pipelines? Please provide any known illustrations.

Question 87:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Preamble: The TCPL proposal will produce greater toll stability (by incenting longer- term contracting). (Reed, p. 66)

Request:

(a) Will the higher short-term rates proposed by TCPL discourage usage of short-term services?

(b) Will all of the throughput volumes that would otherwise flow at the currently used, lower short-term rates gravitate to long-term services? If not, what proportion does TCPL anticipate will gravitate to long- term services?

(c) If longer-term contracting is successfully incented, and short-term revenues are reduced or eliminated, how will long-term customers benefit?

Question 88:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Request: Please explain what the term, “designated bid floor caps,” (Reed, p. 68, 70) refers to.

Question 89:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

November 22, 2011 CAPP Information Requests to TCPL Page 46 Request: If the FT rates are reduced, as anticipated because of the additional revenues from short-term services, would the stipulated multipliers used to set the bid floor also change over time? Please explain.

Question 90:

Reference: Section 8.0 Mainline services and Pricing Proposal. Appendix C-4 Evidence of John J. Reed Pages 63-80

Preamble: A formula rate would not be flexible, or optimize the discretionary revenue credited to FT shippers. (Reed, p. 73).

Request:

(a) Why would TCPL seek to optimize the discretionary revenue credited to FT shippers?

(b) Would TCPL seek to price its short-term services to optimally incent long-term contracting? Why or why not?

(d) In formulating its ratemaking policies, has the FERC expressed a stated presumption that pipelines will seek to maximize revenues from all services? Please explain.

Question 91:

Reference: Appendix D-1, Evidence of Dr. Carpenter

Preamble: US pipelines can negotiate rates, but must offer service at recourse rates. Pipelines cannot negotiate terms and conditions of service. (Evidence of Paul R. Carpenter, at p. 59, Figure 21) This feature of the U.S. model, according to Dr. Carpenter, “decreases risk in the face of competition.”

Request:

(a) What is a “recourse rate,” as Dr. Carpenter understands it, under the US model?

(b) If TCPL were given the authority to negotiate rates (but not terms and conditions) but required to offer service at recourse rates, as under the

November 22, 2011 CAPP Information Requests to TCPL Page 47 US model, would TCPL’s risk be reduced, all other things being equal? Please quantify the reduction in risk.

(c) Under TCPL’s proposal, would TCPL be given the authority to negotiate rates: (i) With the obligation to provide service at recourse rates? (ii) Without such an obligation?

Question 92:

Reference: Appendix D-1, Evidence of Dr. Carpenter

Preamble: US pipelines are allowed but not required to offer interruptible transportation services at discounted rates. (Carpenter, p. 59, Figure 21). This feature of the US model, according to Dr. Carpenter, “decreases risk in the face of competition.”

Request:

(a) What is the rate design employed for the design of interruptible rates under the US model? Please furnish citations if known.

(b) If TCPL were afforded the right to discounts, employing the same IT rate design, would TCPL’s risk be reduced, all other things being equal? Please quantify the reduction in risk.

Question 93:

Reference: Mainline Revenue Requirement Attachment 12.1 Schedules 1.1, 1.2, 1.3, 1.4

Preamble: Return and income taxes stated in terms of ATWACC

Request: Please restate in terms of debt and equity at 40% common equity those of Schedules 1.1, 1.2, 1.3, and 1.4 that show return and income taxes in terms of ATWACC and also provide restated supporting schedules 5.1, 5.2, 5.3, 5.4, 6.1, 6.2, 6.3, 6.4.

November 22, 2011 CAPP Information Requests to TCPL Page 48 Question 94:

Reference: 6.0 Alberta System Extension 6.3 Commercial Arrangements Pages 5 to 6 of 22

Preamble: NGTL will implement the Extension by contracting for standard FT service for one year terms:

• on the Mainline from Empress to SMB; • on Foothills Zone 8 from ABC to Kingsgate; and • on Foothills Zone 9 from McNeill to Monchy.

The quantity of FT service contracted on each system would be the greater of:

(a) the amount of Alberta System FT-D and FT-DW service contracted on the TBO path; or

(b) the forecast daily average throughput, less any FT service held by other parties, less the applicable Alberta System load retention service contract quantities on the applicable TBO path.

Request:

(a) Please describe circumstances in which “forecast daily average throughput” would be greater than Alberta System FT-D and FT-DW service contracted on the TBO path.

(b) Please fully describe how “forecast daily average throughput” would be estimated for the Mainline from Empress to SMB.

(c) Please fully describe how “forecast daily average throughput” would be estimated for Foothills Zone 8 from ABC to Kingsgate.

(d) Please fully describe how “forecast daily average throughput” would be estimated for Foothills Zone 9 from McNeill to Monchy.

(e) Over what period is the “forecast daily average throughput” to be calculated?

(f) Would “forecast daily average throughput” for the Mainline from Empress to SMB include short term flows such as IT and STFT? If so, why would NGTL contract for long term service to serve short term transactions?

November 22, 2011 CAPP Information Requests to TCPL Page 49 (g) Please fully describe when “forecast daily average throughput” would be estimated. For example, would the forecast be for a calendar year and estimated in October of the previous year?

Question 95:

Reference: 6.0 Alberta System Extension 6.3 Commercial Arrangements Pages 6 of 22

Preamble: Contracting at this level of capacity will:

• ensure that NGTL can meet the annual firm service requirements of its customers; • ensure capacity is available for parties who prefer to contract directly for Mainline or Foothills service; • meet the requirements of LRS, LRS-2 and LRS-3 contracts on the Alberta System; and • increase the amount of gas being transported on all three systems under annual firm service contracts. Request:

(a) Please fully explain how the proposed contracting capacity will “increase the amount of gas being transported on all three systems under annual firm service contracts”.

(b) Is the “increase [in] the amount of gas being transported on all three systems under annual firm service contracts” the result of contracting for FT service to transport volumes forecast to be shipped on short term services such as IT or STFT?

(d) Please describe in detail how the ASE will “meet the requirements of LRS, LRS-2 and LRS-3 contracts on the Alberta System.”

(e) Please describe the impact, including a numerical analysis of the toll impact, of the ASE on shippers on the Suffield Pipeline.

November 22, 2011 CAPP Information Requests to TCPL Page 50 Question 96:

Reference: 6.0 Alberta System Extension 6.3 Commercial Arrangements Page 7 of 22

Preamble: For 2012, NGTL estimated the approximate quantities it expects to contract for on the Mainline and Foothills, as summarized in Table 6-1, which also provides the estimated annual cost for each of these TBO arrangements.

Request:

(a) Please provide a detailed calculation of the $356 million annual TBO cost for Mainline Empress to SMB from the proposed Contract Quantity. Please provide a reference to the proposed Mainline toll utilized in the calculation.

(b) Please provide a detailed calculation of the $65 million annual TBO cost for Foothills Zone 8 ABC to Kingsgate from the proposed Contract Quantity. Please provide a reference to the proposed Foothills toll utilized in the calculation.

(c) Please provide a detailed calculation of the $46 million annual TBO cost for Foothills Zone 9 McNeill to Monchy from the proposed Contract Quantity. Please provide a reference to the proposed Foothills toll utilized in the calculation.

(d) For each TBO path, please provide the firm contract level under the Status Quo and the total firm contract level under the Restructuring Proposal, including proposed TBO contracting.

Question 97:

Reference: 6.0 Alberta System Extension 6.4 Toll Design and Service Implications Page 7 of 22

Preamble: Following implementation of the Alberta System Extension, NGTL proposes to continue using the existing Alberta System toll design approved by the Board in the RHW-1-2010 Decision,3 subject to a modification to FT- P service, as described below.

Request:

(a) Please confirm that the Alberta System toll design referenced above was the result of a negotiated settlement amongst NGTL stakeholders.

November 22, 2011 CAPP Information Requests to TCPL Page 51 (b) Please confirm that the Canadian Association of Petroleum Producers (CAPP) was a participant in those negotiations and a signatory to the Memorandum of Understanding that forms the basis of the settlement.

(c) Please confirm that CAPP supported NGTL’s rate design methodology application and indicated that this support was contingent on its understanding that the Alberta System major FT-D1 interconnects would remain at the current delivery points with TransCanada’s Mainline, Foothills B.C. and Foothills Saskatchewan. Please confirm that those major FT-D1 interconnects are Empress, Alberta; the Alberta/British Columbia Border (A/BC) and McNeill, Alberta.

(d) Please confirm that, in that proceeding, NGTL confirmed CAPP’s understanding as it relates to the location of the major FT-D1 interconnects. Please confirm that NGTL was not confirming that the location of the major FT-D1 interconnects would be the Saskatchewan/Manitoba Border, Kingsgate, B.C. or Monchy, Saskatchewan.

(e) If NGTL is able to confirm (c) and (d) above, please explain what NGTL believes to be the status of the MOU and settlement referenced in (b) if the Alberta System Extension is approved.

(f) If NGTL still considers the MOU and settlement referenced in (b) to be valid if the Alberta Extension is approved, please explain how NGTL draws that conclusion. If not, please explain why NGTL considers the current toll design to be valid if the Alberta Extension is approved when the settlement underpinning it is not.

Question 98:

Reference: 6.0 Alberta System Extension 6.4 Toll Design and Service Implications 6.4.2 Mainline Page 11 of 22

Preamble: The full suite of services on the Mainline between Empress and SMB will be available for those customers who do not choose to contract for Alberta System services.

Request: Please provide a comparison of the $/GJ cost to ship from Empress to Bayhurst and Empress to Moosomin on NGTL and TCPL under the restructuring proposal.

November 22, 2011 CAPP Information Requests to TCPL Page 52 Question 99:

Reference: 6.0 Alberta System Extension 6.4 Toll Design and Service Implications 6.4.3 Foothills Page 11 of 22

Preamble: Foothills tolls for standard Foothills transportation services will be calculated in the same manner as they are currently calculated and Foothills standard services would continue to be available to those shippers that do not choose to contract for Alberta System services.

Request: Please provide a comparison of the $/GJ cost to ship from McNeill to Monchy on NGTL and Foothills under the restructuring proposal.

Question 100:

Reference: 6.0 Alberta System Extension 6.5 Changes to Fuel Requirements Page 11 of 22

Preamble: Currently on the Alberta System, Fuel is recovered in kind from receipt customers, based on the energy content of the gas they put on that System. The current Alberta System toll design, approved by the Board in Order TO-04-2010, was implemented in November of 2010 and was the result of a settlement process in which Fuel allocation was not addressed

NGTL proposes to modify the recovery of Fuel by allocating it equally between receipt services and delivery services.

Request:

(a) Please explain why this change in fuel allocation is being proposed.

(b) Please explain what toll design principles support the proposed change.

(c) Please give NGTL’s views as to whether the current allocation of fuel or the proposed allocation of fuel is more consistent with the current NGTL toll design.

(d) Is the proposed change in allocation of fuel contingent upon implementation of the ASE? Please explain your response.

November 22, 2011 CAPP Information Requests to TCPL Page 53 Question 101:

Reference: 6.0 Alberta System Extension 6.6 Impacts on Transportation Costs 6.6.1 Impact from NIT to Markets Page 14 of 22

Preamble: The cost of transportation from NIT to downstream markets would include the applicable FT-D Group 1 tolls. Table 6-3 compares the FT-D tolls to six Group 1 locations with and without the Restructuring Proposal. The information included in Table 6-3 reflects the entire Restructuring Proposal rather than the Extension alone. However, no significant difference would be expected on the FT-D Toll to these Group 1 points under the Extension alone.

Table 6-3: Comparison of FT-D Group 1 Tolls Restructuring Proposal vs. Status Quo

FT-D Group 1 Point Status Quo Restructuring Difference Proposal ($/GJ) SMB N/A 0.32 0.30 - Empress 0.16 0.15 0.16 0.15 0.00 -0.01 Monchy N/A 0.23 0.22 - McNeill 0.16 0.15 0.16 0.15 0.00 -0.01 Kingsgate N/A 0.22 0.20 - ABC 0.18 0.17 0.17 0.16 -0.01

Request:

(a) Please provide the tolls to three (3) decimal places and reconcile the rates shown in Table 6-3 above and the rates shown in Attachment 6.2, Alberta System Illustrative 2012 Rates, Restructuring Proposal-Fully Transitioned, Attachment 2, Table of Rates, Tolls and Charges, Page 1 of 5

(b) Please provide a calculation comparing the FT-D toll to SMB less the FT-D toll to Empress with the Mainline toll (under the Restructuring Proposal) from Empress to SMB.

(c) Please provide a calculation comparing the FT-D toll to Monchy less the FT-D toll to McNeill with the Foothills toll (under the Restructuring Proposal) from McNeill to Monchy.

November 22, 2011 CAPP Information Requests to TCPL Page 54 (d) Please provide a calculation comparing the FT-D toll to Kingsgate less the FT-D toll to ABC with the Foothills toll (under the Restructuring Proposal) from ABC to Kingsgate.

Question 102:

Reference: 6.0 Alberta System Extension 6.6 Impacts on Transportation Costs 6.6.1 Impact from NIT to Markets Page 15 of 22

Preamble: Table 6-4 compares the tolls and total transportation costs for Foothills paths with and without the Extension. Table 6-4 reflects the entire Restructuring Proposal rather than the Extension alone; however, no significant difference would be expected under the Extension alone.

Table 6-4: Toll and Total Transportation Costs Comparisons Restructuring Proposal vs. Status Quo

Path Status Quo Restructuring Difference Proposal ($/GJ) NIT to Kingsgate

- Toll 0.278 0.259 0.219 0.205 -0.058 -0.054

- Fuel 0.038 0.040 0.026 0.027 -0.012 -0.013

- Total Cost 0.316 0.299 0.246 0.232 -0.070 -0.067 NIT to Monchy

- Toll 0.243 0.230 0.232 0.216 -0.012 -0.013

- Fuel 0.032 0.029 0.028 0.029 -0.004 0.000

- Total Cost 0.275 0.258 0.260 0.245 -0.015 -0.013

Source: Attachment 9.1, Tables 1, 2 and 3. Status Quo via ABC and MonchyMcNeill, Restructuring Proposal via only Alberta System service. Numbers may not add up due to rounding for presentation purposes.

Request:

(a) Please provide a table in a format similar to Table 6-4 with a column added to show the total cost if separate services from the Alberta

November 22, 2011 CAPP Information Requests to TCPL Page 55 System and Foothills were utilized for both NIT to Kingsgate and NIT to Monchy.

(b) Please provide a table in a format similar to Table 6-4 that demonstrates the total cost to ship from NIT to Bayhurst and NIT to Welwyn under the Status Quo and the Restructuring Proposal. Please proved a page reference for the Mainline toll used.

Question 103:

Reference: 6.0 Alberta System Extension 6.6 Impacts on Transportation Costs 6.6.2 Impact on Other Alberta System Services Page 16 of 22

Preamble: Under the Extension, FT-D transportation cost at Group 2 locations would be slightly higher than the Status Quo, approximately 0.01 $/GJ, as a result of the introduction of the requirement to provide Fuel. Similar impacts are expected at FT-D Group 3 locations.

Request:

(a) Please indicate the estimated dollar value for fuel gas to be collected from FT-D shippers by Group.

(b) Please indicate the estimated dollar value for fuel gas to be collected from FT-P shippers by Group.

(c) Please provide the fuel allocation and dollar value of fuel gas to be collected from FT-D1 shippers at each FT-D1 delivery point if fuel were allocated on the basis of distance-of-haul to each delivery point as opposed to the proposed fuel allocation based on average FT-D1 distance of haul.

Question 104:

Reference: 6.0 Alberta System Extension 6.6 Impact on Gas Prices Page 17 of 22

Preamble: Reducing the cost of transportation between NIT and downstream markets served by the Mainline and Foothills is expected to increase the price of gas at NIT and decrease the price of gas in eastern markets.

November 22, 2011 CAPP Information Requests to TCPL Page 56 Request:

(a) Please provide TCPL’s estimate of the decrease in gas prices in Eastern markets in $/GJ.

(b) Specifically, in which markets does TransCanada expect to see a decrease in gas prices?

Question 105:

Reference: 6.0 Alberta System Extension 6.0 Alberta System Extension 6.6 Impact on Gas Prices Page 17 of 22

Preamble: TransCanada estimated the impact on gas prices at NIT of the Restructuring Proposal, including the Alberta System Extension, as part of the Mainline Throughput Study, presented as Appendix C1 to the Application. TransCanada forecast that on average over the 2012-2017 period, NIT prices will increase by 0.13 $/GJ and Alberta System netback prices will increase by 0.08 $/GJ as a result of the Restructuring Proposal.

Request: Please provide a breakdown of the estimate increase in NIT prices for each year of the period 2012-2017. Please discuss the factors that contribute to the variation in estimated increases in NIT prices for each year

Question 106: .

Reference: 6.0 Alberta System Extension 6.6 Impact on Gas Prices Page 17 of 22

Preamble: Similar conclusions were independently corroborated by Robert Fleck of Wood Mackenzie, Inc., whose expert evidence is provided as Appendix C5 to the Application. Mr. Fleck estimated a similar average price increase at NIT of 0.14 $/GJ and 0.08 $/GJ at the Alberta Plant Gate through 2017, relative to the status quo. Mr. Fleck also estimated a five year average price decrease at Dawn, Ontario of 0.08 $/GJ

Combined, the two price impacts described would reduce the basis differential between AECO/NIT and Dawn.

November 22, 2011 CAPP Information Requests to TCPL Page 57 Request:

(a) Does TransCanada agree that the price movements described by Mr. Fleck would reduce the basis differential between AECO/NIT and Dawn? If not, please describe why not.

(b) Does TransCanada agree a reduction in the basis differential between AECO/NIT and Dawn decreases the “transportation value” of the Mainline? If not, please describe why not.

(c) Please discuss the impact of reducing the basis differential between AECO/NIT and Dawn by $0.22/GJ ($0.14/GJ plus $0.08/GJ) on the attractiveness of FT service on the Mainline.

(d) Please describe how the impact of reducing the basis differential between AECO/NIT and Dawn by $0.22/GJ was incorporated into the forecast of Discretionary Revenue for the mainline.

Question 107:

Reference: 6.0 Alberta System Extension 6.6 Impact on Gas Prices Page 18 of 22

Preamble: The gas price increase would negatively impact intra-Basin consumers; however this impact needs to be considered in the context of the overall benefit to WCSB stakeholders and the broader public interests that are advanced by the Proposal.

Request:

(a) Please provide an estimate for 2011 and forecast to 2020 of the annual volume of gas consumed by intra-Basin consumers who would be impacted by the suggested increase in NIT price.

(b) Please provide an estimate for 2011 and forecast to 2020 of the annual financial impact of the estimated gas price increase on intra-Basin consumers.

November 22, 2011 CAPP Information Requests to TCPL Page 58 Question 108:

Reference: 6.0 Alberta System Extension 6.10 Justification Page 20 of 22

Preamble: The increasing cost of transporting WCSB gas to markets on the TransCanada Pipeline Systems poses a risk to the long term viability of the Basin and the TransCanada Pipeline Systems, both by reduced throughput generally and by by-pass in particular.

Request: How has TransCanada been able to conclude that the long term viability of the TransCanada Pipeline Systems is more threatened by by-pass than reduced throughput generally? Please provide a copy of any analysis TransCanada has done of by-pass that supports this conclusion.

Question 109:

Reference: 6.0 Alberta System Extension 6.1 Introduction, Page 1

Preamble:

Request:

(a) Please provide, for 2004-2011, the share of all users of receipt services in the existing Alberta System that also use the Mainline firm service to be contracted by NGTL. For example, if there are 10 users of receipt services in the existing Alberta System and 3 also use the Mainline firm service, the share is 0.30 (= 3/10). For those users of receipt services that that also use the Mainline firm service please also identify the share of their Mainline firm volume to their NGTL receipt volume.

(b) Please provide, for 2004-2011, the share of all users of delivery services in the existing Alberta System that also use the Mainline firm

November 22, 2011 CAPP Information Requests to TCPL Page 59 service to be contracted by NGTL. For example, if there are 10 users of delivery services in the existing Alberta System and 3 also use the Mainline firm service, the share is 0.30 (= 3/10). For those users of delivery services that that also use the Mainline firm service please also identify the share of their Mainline firm volume to their NGTL delivery volume.

(c) Please provide, for 2004-2011, the actual volume (billion cubic feet per year) shipped via the Mainline on annual firm service by all users of the existing Alberta System receipt services.

(d) Please provide, for 2004-2011, the actual volume (billion cubic feet per year) shipped via the Mainline on annual firm service by all users of the existing Alberta System delivery services.

(e) Please provide, for 2004-2011, the annual volume (billion cubic feet per year) shipped via the Mainline on all services used by all users of the existing Alberta System receipt services.

(f) Please provide, for 2004-2011, the annual volume (billion cubic feet per year) shipped via the Mainline on all services used by all users of the existing Alberta System delivery services.

(g) Have the users of the existing Alberta System expressed their desire for the Extension? If yes, please provide documentation.

Question 110:

Reference: 6.0 Alberta System Extension 6.1 Introduction, Pages 2-3

Preamble:

November 22, 2011 CAPP Information Requests to TCPL Page 60 Request:

(a) Will the Extension increase the transportation costs of users that use the existing Alberta System, but who do not use the Mainline or Foothills Zone 8 or 9 services?

(b) If “yes”, please comment on the fairness of implementing the Extension which causes increasing costs for users of the Alberta System who do not use the Mainline or Foothills Zones 8 or 9?

Question 111:

Reference: 6.0 Alberta System Extension 6.1 Introduction, Page 3

Preamble:

Request: Please provide the calculation details for the above statements. Specifically, please:

(a) Supply the data, model (e.g., assumptions and formulae), and computation steps used to develop the finding of “an increase in the price of gas at NIT that should more than offset the toll impact.”

(b) Show the impact of the toll increase on the NIT price, before including the effects of “other elements”.

(d) Repeat (c) for the remaining elements.

(e) Summarize the NIT price effects of (b) to (d).

November 22, 2011 CAPP Information Requests to TCPL Page 61 Question 112:

Reference: 6.0 Alberta System Extension 6.1 Introduction, Page 3

Preamble:

Request:

(a) What are the benefits for users of the Alberta System that do not use the Extension?

(b) For users of the Alberta System that do not use the Mainline and Foothills, what is the regulatory justification for their paying for the costs of those systems?

(c) Should end-users in the East pay for a portion of the Mainline since they might benefit from more supplies from the West?

(d) What will happen to the tolls of the Alberta System users if the Mainline continues to under-collect after the Extension?

(e) What will happen to the tolls of the Alberta System users if the forecast volume for the Alberta Extension turns out to be too optimistic, well above the actual volume?

(f) If the restructuring is unsuccessful, can NGTL terminate the TBO contracts? Will TransCanada increase the costs to be paid by users of NGTL? Please explain.

(g) If the consensus view of NGTL users was, recognizing the result could be higher Mainline tolls and/or higher Foothills tolls than would be the case with the TBOs, that NGTL should not enter into these TBOs then

November 22, 2011 CAPP Information Requests to TCPL Page 62 would NGTL accept that result and withdraw this TBO proposal? If not, why not.

Question 113:

Reference: 6.0 Alberta System Extension 6.2 Background, Page 4

Preamble:

Request:

(a) Has the Alberta System’s “primary function” changed recently? If so, what is the Alberta System’s new “primary function”?

(b) Is delivery to points at which gas would be consumed within the Province now a part of the Alberta System’s “primary function”?

(c) If the Alberta System’s primary function has changed, how does this change justify the Extension? If not, how does TransCanada justify the Extension?

Question 114:

Reference: 6.0 Alberta System Extension 6.2 Background, Page 4

Preamble:

November 22, 2011 CAPP Information Requests to TCPL Page 63

Request: Consider the map above. If Zones 8 and 9 are and can be used as a separate system, what is the justification (besides cost shifting) for the Mainline segment of Empress – SMB becoming part of the Alberta System?

November 22, 2011 CAPP Information Requests to TCPL Page 64 Question 115:

Reference: 6.0 Alberta System Extension 6.3 Commercial Arrangements, page 6

Preamble:

Request:

(a) Will the amount of gas under all services being transported on all three systems increase? Please explain why or why not.

(b) Please explain the causes for the “increase [in] the amount of gas being transported on all three systems under annual firm service contracts.” Which customer groups (Producers? Marketers? LDCs? Industrial Consumers? Power Generators?) does TransCanada expect will hold these annual firm service contracts?

(c) What will happen to the Alberta System’s tolls if shippers (other than NGTL) do not increase their annual firm service contracts on any of the NGTL, Mainline or Foothills systems?

(d) Will the increase reduce the revenue to be collected from non-FT services?

(e) Has TransCanada considered the interaction between FT revenue and non-FT revenue when assessing the revenue and toll effects of the Extension? If “yes,” please provide details.

November 22, 2011 CAPP Information Requests to TCPL Page 65 Question 116:

Reference: 6.0 Alberta System Extension 6.3 Commercial Arrangements, page 7

Preamble: Table 6.1 provides the quantities and annual cost for each of these TBO arrangements.

Request:

(a) Do the quantities in Table 6-1 match the capacity subscription by the Alberta System users?

(b) Please provide a full explanation of how TransCanada determined that the contract Quantities in the above table are the appropriate contract levels.

(c) Please provide a volume and energy breakdown of the expected flows for each path by contract type (i.e. Firm annual contracts, Short Term Firm contracts and Interruptible flows).

(d) Please explain why TransCanada thinks it appropriate to contract firm annual TBO capacity to accommodate short term firm and interruptible flows.

(e) Is it consistent with NGTL’s existing policies and practices to build, buy or rent (TBO) pipeline capacity in order to accommodate short term firm or interruptible flows?

Question 117:

Reference: 6.0 Alberta System Extension 6.3.1 Treatment of Mainline and Foothills TBO Costs, Page 7

Preamble:

November 22, 2011 CAPP Information Requests to TCPL Page 66 Request:

(a) Will some Alberta System users pay for the TBO costs even if these users do not use Foothills Zones 8 and 9 and the Mainline Empress to SMB service?

(b) If “yes”, does the rolled-in treatment violate the cost-based/user-pay principle?

(c) NGTL proposes treating Foothills Zones 8 and 9 the same as Foothills Zones 6 and 7. Has NGTL examined the necessity of continuing to TBO Foothills Zones 6 and 7? If so, please provide that analysis. If not, please explain why that analysis has not been performed.

(d) What are the criteria NGTL has used in the past to determine whether or not to enter into a TBO? Please describe the criteria in detail with citations to cases where these criteria have been applied. Please also provide citations to decisions of the applicable regulator in regard to any such TBO arrangements.

(e) What are the criteria TCPL Mainline has used in the past to determine whether or not to enter into a TBO? Please describe the criteria in detail with citations to cases where these criteria have been applied. Please also provide citations to decisions of the NEB in regard to such TBO arrangements.

Question 118:

Reference: 6.0 Alberta System Extension 6.4.2 Mainline, page 11

Request:

(a) Will users in the Alberta System after the extension partially pay for the Mainline Empress to SMB segment, even if these users do not use this segment?

November 22, 2011 CAPP Information Requests to TCPL Page 67 (b) Will users outside the Alberta System pay for the Alberta System’s cost, even if these users choose not to contract for the Alberta System services?

(c) For users who choose not to use the extended NGTL service and who choose to contract separately, will the unit costs per kilometer for use of the Empress to SMB segment of the Mainline be the same for users who choose to contract separately as they are for users who choose to use NGTL service to SMB? Please explain. Please also respond to the same question as it relates to McNeill to Monchy and ABC to Kingsgate.

Question 119:

Reference: 6.0 Alberta System Extension 6.6 Impacts on Transportation Costs, Page 14

Preamble:

 a significant decrease in the total cost of transportation from NIT to downstream markets served through the Mainline;

 a decrease in the cost of transportation from NIT to downstream markets served through Foothills;

 a moderate increase in the cost to receive gas on the Alberta System; and

 minimal changes in the cost of FT-D service to Group 1, 2, and 3 locations and to FT-P service.

Request:

(a) Please confirm that the users of the NGTL receipt service pay for a significant portion of the transportation cost decrease of other users of the Mainline. If not, please explain.

(b) What is the economic justification for this cost shift?

(d) Does TransCanada have support from the users in (a)?

November 22, 2011 CAPP Information Requests to TCPL Page 68 Question 120:

Reference: 6.0 Alberta System Extension 6.6.1 Impact from NIT to Markets, page 15

Preamble:

Table 6-4: Toll and Total Transportation Costs Comparisons Restructuring Proposal vs. Status Quo Path Status Quo Restructuring Difference Proposal ($/GJ) NIT to Kingsgate

- Toll 0.278 0.259 0.219 0.205 -0.058 -0.054

- Fuel 0.038 0.040 0.026 0.027 -0.012 -0.013

- Total Cost 0.316 0.299 0.246 0.232 -0.070 -0.067 NIT to Monchy

- Toll 0.243 0.230 0.232 0.216 -0.012 -0.013

- Fuel 0.032 0.029 0.028 0.029 -0.004 0.000

- Total Cost 0.275 0.258 0.260 0.245 -0.015 -0.013

Request:

(a) Please confirm that the transportation cost decrease from NIT to Kingsgate is less than $0.07/GJ.

(b) Absent transportation constraint, should the price difference (basis) between an exporting market (e.g., NIT) and an importing market (e.g., Kingsgate) be close to the transportation cost?

(d) If the Kingsgate market’s price remains unchanged after the transportation cost decrease, is $0.07/GJ the maximum price increase for the NIT market?

November 22, 2011 CAPP Information Requests to TCPL Page 69 (e) If the Kingsgate market’s price drops by $0.07/GJ after the transportation cost decrease, is $0.0/GJ the maximum price increase for the NIT market?

(f) If the Kingsgate market’s price drops by $0.03/GJ after the transportation cost decrease, is $0.4/GJ the maximum price increase for the NIT market?

(g) In general, if the Kingsgate market’s price drops by $x/GJ after the transportation cost decrease, is $(0.07 – x)/GJ the maximum price increase for the NIT market?

Question 121:

Reference: 6.0 Alberta System Extension 6.7 Impact on Gas Prices, page 17

Request: To TransCanada:

(a) Please use the format identical to Table 6.4 to compare the transportation costs under the status quo and the restructuring proposal.

(b) Assuming the export market is the Eastern market, please use the table in (a) to answer the following questions:

(i) What is TransCanada’s projected price differential between the NIT and Eastern markets?

(ii) If the Eastern market’s price remains unchanged after the transportation cost decrease, what is the maximum price increase for the NIT market?

(iii)If the Eastern market’s price drops by the transportation cost decrease, what is the maximum price increase for the NIT market?

November 22, 2011 CAPP Information Requests to TCPL Page 70 (iv) If the Eastern market’s price drops by an amount less than the transportation cost decrease, what is the maximum price increase for the NIT market?

Question 122:

Reference: 6.0 Alberta System Extension 6.7 Impact on Gas Prices, page 17

Request: To Mr. Fleck:

(a) Please use the format identical to Table 6.4 to compare the transportation costs under the status quo and the restructuring proposal.

(b) Assuming the export market is the Eastern market, please use the table in (a) to answer the following questions:

(i) What is TransCanada’s projected price differential between the NIT and Eastern markets?

(ii) If the Eastern market’s price remains unchanged after the transportation cost decrease, what is the maximum price increase for the NIT market?

(iii)If the Eastern market’s price drops by the transportation cost decrease, what is the maximum price increase for the NIT market?

(iv) If the Eastern market’s price drops by an amount less than the transportation cost decrease, what is the maximum price increase for the NIT market?

Do the answers in (b) support the paragraph in the Reference?

November 22, 2011 CAPP Information Requests to TCPL Page 71 Question 123:

Reference: (i) Application, Page 3 of 31, Revised October 31, 2011.

(ii) Section 6: Alberta System Extension, Pages 1-3 of 22 Revised October 31, 2011.

Preamble: In Reference (i), TransCanada states “Proposed cost allocation and toll design changes are intended to result in prices that are more appropriate given the current and anticipated usage of the system, the cost of transportation, the responsibility for system costs, the benefits of the system, and the value of services.”

On pages 1-3 of 22, Reference (ii), TransCanada state “A map of the Alberta System that reflects the Extension appears as Figure 6-1.

Figure 6-1: Alberta System With the Extension

November 22, 2011 CAPP Information Requests to TCPL Page 72 The primary reason for extending the Alberta System is to enhance the economic viability of the Mainline and the WCSB by reducing the transportation costs between the WCSB and downstream markets on the TransCanada Pipeline Systems. … Implementation of the Extension will result in an increase in receipt tolls on the Alberta System. … This allocation of costs to Alberta System users is appropriate, given the benefits that Alberta System users derive from the Mainline and Foothills systems, the benefits that Alberta System users will derive from the Restructuring Proposal, and the associated cost responsibility of Alberta System users for the Mainline and Foothills System.”

Request:

(a) Please confirm that WCSB includes gas supplies from Saskatchewan. If not confirmed, please explain.

(b) Please confirm that TransGas transports Saskatchewan gas supplies to the Mainline for delivery to downstream markets. If not confirmed, please explain.

(d) Did TransGas, or any shipper on the TransGas system, request or support the Alberta System Extension? If so, please document.

(e) Does TransCanada believe that TransGas system users will derive benefits from the Restructuring Proposal. If so, please show those benefits. If not, please explain.

(f) Please confirm that the receipt tolls on TransGas will not increase as a result of the implementation of the Extension. If not confirmed, please explain.

(g) Did TransCanada ask TransGas to assume a portion of the cost responsibility for the Mainline? If not, please explain why not. If yes, please provide details of the discussion. The response should at a minimum include the following.

i. Please confirm that TransCanada (Mainline or Corporation) did not ask TransGas to assume a portion of the cost responsibility because TransGas is not a subsidiary of TransCanada. If not confirmed, please explain.

ii. Please confirm that TransCanada (Mainline or Corporation) did not ask TransGas to assume a portion of the cost responsibility

November 22, 2011 CAPP Information Requests to TCPL Page 73 because TransGas is not regulated by the National Energy Board. If not confirmed, please explain. If confirmed, please explain why TransCanada did not ask TransGas to apply to its regulator to assume a portion of the cost responsibility in view of the benefits TransGas system users obtained from the Mainline in the past, present and future.

Question 124:

Reference: Part C, Section 6.0 Alberta System Extension, Page 21 of 22, lines 11-12

Preamble:

“Also, as detailed in Section 2 of the Application, while producers currently contract for virtually no capacity on the TransCanada Pipeline Systems…”

Request:

(a) Please confirm that TransCanada Pipeline Systems in this quote refers to the Mainline. If not, please explain.

(b) Please provide a breakdown, to the best of TransCanada’s knowledge, showing the amount and percentage of NGTL capacity contracted by each of producers, marketers, oilsands users, other industrial end- users, local distribution companies and any other categories TransCanada thinks appropriate. Please provide the breakdown by receipt service, Group 1 delivery service, Group 2 delivery service, Group 3 delivery service and FT-P service.

(c) TransCanada uses the term “free riding” in the application. Does TransCanada consider it “free riding” for producers to contract for service from their production areas to the nearest liquid hub? Does TransCanada consider it “free riding” for end markets to take service from the nearest liquid hub to their market areas?? Please explain.

Question 125:

Reference: Part C, Section 6.0 Alberta System Extension

Preamble: The Alberta System’s Tolls, Tariffs, Facilities and Procedures Committee recently adopted a revised version of the “Report of the Guidelines For New Facilities Task Force” (the Report) from the TransCanada (Alberta System)

November 22, 2011 CAPP Information Requests to TCPL Page 74 Facilities Liaison Committee (FLC). In the Report, are five “Guiding Principles”:

• NGTL will expand its existing system to meet individual customer requests.

• NGTL will modify (expand/extend) its existing system to meet aggregate contractual obligations for receipt and delivery service.

• Customers are not precluded from building facilities. Third party construction has implications on ownership, operation and accountability.

• Guidelines would apply to the majority of situations.

• The established Annual Plan/FLC process will be followed.

The recently revised Report also includes a discussion of contract term referencing the NGTL Rate Schedule FT-D Firm Transportation – Delivery:

Delivery Connections

The Alberta System Rate Design changes that became effective November 1, 2010 revised the Term of Service under Rate Schedule FT-D Firm Transportation – Delivery. If TransCanada determines that:

(i) no new Facilities are required that are directly attributable to Customer’s request for Service, the term of the Schedule of Service shall be a Secondary Term equal to the term requested by Customer with the minimum term being one (1) year;

(ii) new metering Facilities are required to be installed or constructed at any Delivery Point to provide the Service requested, the term of the Schedule of Service shall be equal to the sum of:

a. a Primary Term of two (2) years; and

b. a Secondary Term equal to the Secondary Term requested by Customer with the minimum Secondary Term being three (3) years; or

(iii) other new Facilities are required that are directly attributable to Customer’s request for Service, the term of the Schedule of Service shall be equal to the sum of:

c. a Primary Term of five (5) years; and

November 22, 2011 CAPP Information Requests to TCPL Page 75 d. a Secondary Term equal to the Secondary Term requested by Customer with the minimum Secondary Term being three (3) years.

Request:

(a) Provide a copy of the most recent (2011) version of the “Report of the Guidelines For New Facilities Task Force”

(b) Explain what this document is and how it is applied to the TransCanada Alberta System.

(d) Explain how the first, second and fifth Guiding Principles have been applied in the case of the Alberta System Extension.

(e) If the Guidelines have not been applied to the Alberta System Extension, explain why including an explanation of why the Alberta System Extension should then be considered a prudent action by the Alberta System.

(f) Identify all cases since the Guidelines were originally adopted in 2000 where the Guiding Principles have not been applied to an Alberta System expansion or extension. In each case identified, explain why the Guiding Principles were not applied.

(g) The Report also contains a 5 step process for determining the optimal connection to the Alberta System for third party facilities. Provide the results from NGTL’s application of this process to the Alberta System Extension including:

 Cumulative volume of customer service requests as provided in completed “Applications for Service” to NGTL.

 Estimated first and future-year costs of the Alberta System Extension including third party costs.

 The “Cumulative Present Value of Cost of Service” (CPVCOS) calculation of the optimal tie-in point alternatives examined by NGTL.

Provide NGTL’s understanding of the contract term that will be required of shippers delivering to the Saskatchewan/Manitoba Border (SMB) delivery point under the Delivery Connections guidelines in the Report and in the NGTL Rate Schedule for FT-D service. If it is not

November 22, 2011 CAPP Information Requests to TCPL Page 76 NGTL’s understanding that the required contract term will be a Primary Term of five (5) years and a Secondary Term of three (3) years, explain why the Alberta System Extension is not considered “other new Facilities”.

(h) If the Alberta System Extension is not considered “other new Facilities” as noted in (h) above, explain why delivery contracts related to the Alberta System Extension should be treated differently than the delivery contracts related to the recent system expansion in the Kirby area (see notice to shippers requested in Question 32 below).

Question 126:

Preamble: On January 20, 2011, NGTL issued a Non-critical notice to shippers regarding Northeast Design Area Capacity.

Request:

(a) Provide the January 20, 2011 Non-critical notice notifying customers of a capacity constraint in the Kirby area.

(b) Was the Alberta System Extension (ASE) subject to NGTL’s facilities design process? If so, explain what parts of the process were applied to the ASE and which parts were not and why. If not, explain why not.

(c) If the facilities design process was applied to the ASE, explain what volumes were assumed for that process and identify what volumes were FT-D, STFT and IT-D.

(d) If any IT-D or STFT volumes were included in the process, explain why they were included in light of the statement in the Northeast Design Area Capacity notice that “NGTL does not include IT-D volumes in the facilities design process.”

(e) If no IT-D, and perhaps no STFT volumes, were included in the facilities design process, explain why NGTL is proposing to contract firm capacity for IT-D and STFT volumes.

November 22, 2011 CAPP Information Requests to TCPL Page 77 Question 127:

Reference: Part B, Section 2.3.2 NGTL Rate Design and Part C, Section 9

Preamble: NGTL describes their rate design in general terms in Section 2.3.2 and describes the impact of the Restructuring proposal in Section 9.

Request:

(a) Provide all assumptions underlying the analysis of the impact of the restructuring proposal on NGTL rates including, but not limited to, the forecast throughput volumes/energy, contract volumes/energy, interruptible volumes/energy (all volumes/energy by service type), non-transportation revenue, FT-P revenue, other full path transportation revenue, metering revenue by receipt and delivery, revenue requirement and distances of haul all both before and after the proposed restructuring for both 2012 and 2013.

(b) Provide all the NGTL tolls resulting from the above assumptions including: Average FT-R, FT-D2 and FT-D1 for each of Empress, McNeill, A/BC, Monchy, Kingsgate and SMB. Provide each toll for before and after the proposed restructuring for both 2012 and 2013.

(c) Provide a working version of NGTL’s toll calculation model that will replicate the results shown in Part C, Section 9, Attachment 9.1, lines 1-16 and in (b) above.

(d) Provide NGTL firm contract demand in effect for November 1, 2011 for each of the major export (Group 1) delivery locations by volume (mmcf/d) and energy (GJ/d).

(e) Provide a table comparing NGTL firm contract demand as of November 1, 2011 and forecast 2012 TBO contract quantity as per Table 6-1 on Page 7 of Section 6.0. Explain any differences including what the implied forecast of interruptible volumes is.

Question 128:

Reference: Section 6.0 Attachment 6.1 and 6.2

Preamble: CAPP in interested in the basis for the forecast of FT-D1 and STFT.

November 22, 2011 CAPP Information Requests to TCPL Page 78 Request:

(a) Please confirm that STFT demands are shown separately from FT demands. If this cannot be confirmed, please explain.

(b) Please confirm that the 2,801 TJ/d of FT-D1 service (Attachment 6.2) is for all FT-D1 points. If this cannot be confirmed, please explain.

(d) Please provide a breakdown of the 2,601 TJ/d of FT-D1 by location (Attachment 6.1).

(e) Please provide a breakdown of the 3,029 TJ/d of STFT by location.

(f) Please provide the contracted quantities for FT-D1 as of Nov. 1, 2011 by location. Please explain any significant differences (10% or greater variance at any location) between contract quantities as of Nov. 1, 2011 and the values in Attachment 6.2.

(g) Please provide the contracted quantities for STFT as of Nov. 1, 2011 by location. Please explain any significant differences (10% or greater variance at any location) between contract quantities as of Nov. 1, 2011 and the values in Attachment 6.2.

(h) Please reconcile the FT-D1 plus STFT values with the throughput forecast for 2012 as provided in Appendix C1, Attachment A, Case 1, Part C for A/BC, McNeill and Empress (page 54 of 79).

(i) Please reconcile the FT-D1 plus STFT values with the TBO contract quantities proposed in Table 6-1 (Section 6, page 7 of 22) at A/BC, McNeill and Empress. Please explain why the TBO quantity should not equal the FT-D1 contract quantity at the respective location.

Question 129:

Reference: 6.0 Alberta System Extension 6.3 Commercial Arrangements Pages 5 to 6 of 22

Preamble: NGTL will implement the Extension by contracting for standard FT service for one year terms:

• on the Mainline from Empress to SMB; • on Foothills Zone 8 from ABC to Kingsgate; and

November 22, 2011 CAPP Information Requests to TCPL Page 79 • on Foothills Zone 9 from McNeill to Monchy.

The quantity of FT service contracted on each system would be the greater of:

(a) the amount of Alberta System FT-D and FT-DW service contracted on the TBO path; or

(b) the forecast daily average throughput, less any FT service held by other parties, less the applicable Alberta System load retention service contract quantities on the applicable TBO path.

Request:

(a) Please confirm that LRS contracts terminate at Empress or McNeill, LRS-2 terminates at ABC and LRS-3 terminates at Empress. If this cannot be confirmed, please explain.

(b) Under the restructuring proposal, what services would be available for LRS, LRS-2, LRS-3 volumes to move beyond the termination points in the LRS, LRS-2, and LRS-3 contracts?

(c) Does the phrase “Alberta System load retention service contract quantities on the applicable TBO path” refer to where the LRS volumes flow downstream of the LRS termination point?

(d) Please explain how “Alberta System load retention service contract quantities” can arise on either of the Empress to SMB, ABC to Kingsgate or McNeill to Monchy TBO paths.

(e) Does the restructuring proposal mean that Alberta System load retention services would not have access to NGTL extended service from Empress, McNeill, and ABC? Pleas explain.

Question 130:

Reference: 6.0 Alberta System Extension 6.3 Commercial Arrangements Pages 5 to 6 of 22

Preamble: NGTL will implement the Extension by contracting for standard FT service for one year terms:

• on the Mainline from Empress to SMB; • on Foothills Zone 8 from ABC to Kingsgate; and

November 22, 2011 CAPP Information Requests to TCPL Page 80 • on Foothills Zone 9 from McNeill to Monchy.

The quantity of FT service contracted on each system would be the greater of:

(a) the amount of Alberta System FT-D and FT-DW service contracted on the TBO path; or

(b) the forecast daily average throughput, less any FT service held by other parties, less the applicable Alberta System load retention service contract quantities on the applicable TBO path.

Preamble: CAPP wished to understand the contract arrangements in the Restructuring Proposal for 2012.

Request:

(a) Please provide a breakdown of 2012 forecast quantities as follows: 1. Flows upstream of SMB as between: NGTL TBO FT contracts with TransCanada FT-D1 contracts STFT volumes Other volumes (if any, please identify) Direct FT contracts with TransCanada (if any) Direct IT/STFT contract with TransCanada. 2. Flows downstream of SMB as between: Direct FT contracts with TransCanada Direct IT/STFT contract with TransCanada.

(b) Please confirm that flows downstream of SMB consist of - 830,563 GJ/d of IT/STFT (from Empress to Emerson) -1,366,884 GJ/d of IT from SMB to points downstream -1,224,836 GJ/d of FT from SMB to points downstream. If this cannot be confirmed please explain.

(c) Please confirm that absent the NGTL TBO, the 1,224,836 GJ/d of FT from SMB to points downstream would largely originate at Empress. If this cannot be confirmed please explain.

(d) Please confirm that flows upstream of SMB consist of - 830,563 GJ/d of IT/STFT (from Empress to Emerson) -2,800,000 GJ/d of FT from SMB to points downstream. If this cannot be confirmed please explain.

November 22, 2011 CAPP Information Requests to TCPL Page 81 (e) Please confirm that within the 2,800,000 GJ/d of FT held by NGTL as TBO the flows consist of the following: - approx. 1,600,000 TJ/d of FT-D1 - approx. 1,000,000 TJ/d of STFT If this cannot be confirmed please provide the breakdown of flows within the 2,800,000 GJ/d of FT held by NGTL as TBO.

Question 131:

Reference: 6.0 Alberta System Extension 6.3 Commercial Arrangements Pages 5 to 6 of 22

Preamble: The quantity of FT service contracted on each system would be the greater of:

(a) the amount of Alberta System FT-D and FT-DW service contracted on the TBO path; or

(b) the forecast daily average throughput, less any FT service held by other parties, less the applicable Alberta System load retention service contract quantities on the applicable TBO path.

Request:

(a) Please provide the FT fixed energy determinants under the 2012 Status Quo case and the 2012 Restructuring Proposal. Please discuss the reasons for the difference in energy determinants.

(b) Please confirm that the NGTL TBO on the Mainline effectively transforms all long-haul transactions covered by the TBO that under the Status Quo would have attracted a single fixed energy charge (approx. 6.5 cents/GJ) into two transactions, each of which attracts a fixed energy charge. If this cannot be confirmed, please explain.

(c) Please provide the FT energy-distance determinants under the 2012 Status Quo and the 2012 Restructuring Proposal. Please discuss the reasons for the difference in energy FT energy-distance.

November 22, 2011 CAPP Information Requests to TCPL Page 82 Question 132:

Reference: Appendix C1: Throughput Study 2.6 Equilibrium Model

Preamble: With the lowest tolls, Case 1 has the highest level of Mainline western receipts. Case 2 isolates the throughput response associated solely with the higher Mainline tolls. (Page 8 of 79, underlining added)

Firm transportation contracts with their demand charge obligations are treated as sunk costs. Thus contracted pipeline capacity will tend to be sequenced ahead of uncontracted capacity; (Page 14 of 79)

Request:

(a) Please confirm that the TransCanada model treats contracted capacity (FT service) on the Mainline uniquely as compared to uncontracted capacity (IT and STFT) i.e. the flows under FT can be identified separately from flows under IT. If this cannot be confirmed, please explain.

(b) Please explain how the model will derive unique Western Receipts for different Mainline tolls (e.g. Case 1 vs. Case 2) if firm transportation contracts are treated as sunk costs?

Question 133:

Reference: Appendix C1:Throughput Study ATTACHMENT A Case 1 – TransCanada Eastern Market Flows Parts A to D (Bcf/d) Pages 52 to 55 of 79

Case 2 – TransCanada Eastern Market Flows Parts A to D (Bcf/d) Pages 60 to 64 of 79

Preamble: Firm transportation contracts with their demand charge obligations are treated as sunk costs. Thus contracted pipeline capacity will tend to be sequenced ahead of uncontracted capacity; (Page 14 of 79)

November 22, 2011 CAPP Information Requests to TCPL Page 83 CAPP is interested in the modeling treatment of FT vs. IT volumes.

Request:

(a) Please quantify the split between FT and IT for Mainline Western Receipts for each year from 2012 to 2020 for Case 1.

(b) Please quantify the split between FT and IT for Mainline Western Receipts for each year from 2012 to 2020 for Case 2.

(c) Please provide an estimate of non-discretionary miscellaneous revenue consistent with the throughput in Case 2, for 2012, in the form of Attachment 12.3: Toll Design Tab 2 – 2012 Toll Design Schedule 4 page 2 of 2.

Question 134:

Reference: Appendix C1:Throughput Study ATTACHMENT A Case 1 – TransCanada Eastern Market Flows Parts A to D (Bcf/d) Pages 52 to 55 of 79

Preamble: The purpose of the Throughput Study (Throughput Study or Study) is to assess throughput on TransCanada PipeLines Limited (TransCanada) pipeline systems under differing supply and tolling scenarios. (Page 1 of 79)

CAPP is interested in the variation of throughput versus toll levels.

Request:

(a) Please provide an assessment of throughput from 2012 to 2020 (providing schedules similar to parts A to D in Attachment A) based on the Restructuring Proposal (Case 1) except assume all IT and STFT pricing at the proposed price floor (if this was not the assumption in Case 1 -the filed Restructuring Proposal).

(b) Please quantify the split between FT and IT for Mainline Western Receipts for each year from 2012 to 2020 for the case described in (a).

(c) Please provide an estimate of non-discretionary miscellaneous revenue consistent with the throughput in (a), for 2012, in the form of Attachment 12.3: Toll Design Tab 2 – 2012 Toll Design Schedule 4 page 2 of 2.

November 22, 2011 CAPP Information Requests to TCPL Page 84 (d) Please provide an assessment of throughput from 2012 to 2020 (providing schedules similar to parts A to D in Attachment A) based on the Restructuring Proposal (Case 1) except assume all IT and STFT pricing at the proposed price ceiling.

(e) Please quantify the split between FT and IT for Mainline Western Receipts for each year from 2012 to 2020 for the case described in (d).

(f) Please provide an estimate of non-discretionary miscellaneous revenue consistent with the throughput in (c), for 2012, in the form of Attachment 12.3: Toll Design Tab 2 – 2012 Toll Design Schedule 4 page 2 of 2.

Question 135:

Reference: Appendix C1:Throughput Study ATTACHMENT A Case 1 – TransCanada Eastern Market Flows Parts A to D (Bcf/d) Pages 52 to 55 of 79

The purpose of the Throughput Study (Throughput Study or Study) is to assess throughput on TransCanada PipeLines Limited (TransCanada) pipeline systems under differing supply and tolling scenarios. (Page 1 of 79)

Preamble: CAPP is interested in the variation of throughput versus toll levels.

Request:

(a) Please provide an assessment of throughput (providing schedules similar to parts A to D in Attachment A) based on Mainline tolls that equate to $1.00/GJ for FT from Empress to Dawn under the Status Quo methodology. If modeling of additional tolls is necessary to undertake this analysis please assume an across the board reduction in revenue requirement to achieve the $1.00/GJ toll.

(b) From the analysis in (a), please quantify the split between FT and IT for Mainline Western Receipts for each year.

(c) Please provide an assessment of throughput (providing schedules similar to parts A to D in Attachment A) based on Mainline tolls that equate to $3.00/GJ for FT from Empress to Dawn under the Status Quo methodology. If modeling of additional tolls is necessary to

November 22, 2011 CAPP Information Requests to TCPL Page 85 undertake this analysis please assume an across the board increase in revenue requirement to achieve the $3.00/GJ toll.

(d) From the analysis in (c), please quantify the split between FT and IT for Mainline Western Receipts for each year.

Question 136:

Reference: Application, Appendix C4: Direct Evidence of John J. Reed (Concentric Energy Advisors Inc.) (revised), Q/A 10, Q/A 16, and Q/A 17.

Preamble: Q/A 10 sets out a list of factors causing changes throughout Canada and the United States that affect the Mainline and WCSB. Q/A 16 and 17 describe Marcellus shale gas production.

Request:

(a) For each factor listed in Q/A 10, please fully describe how it will be materially changed due to the Application being approved;

(b) With respect to Q/A 16, please fully explain the impact approval of the Application will have on development of Marcellus shale gas.

(c) With respect to Figure 1 in Q/A 17, please provide a full description of the future of Mainline exports at Niagara with and without the restructuring applied for in the Application. In providing this description, please explain whether in your opinion exports will continue at Niagara, and, if not, please fully describe the volume of imports with and without restructuring.

Question 137:

Reference:

(a) Application, Appendix C4: Direct Evidence of John J. Reed (Concentric Energy Advisors Inc.) (revised), Q/A 21, starting at page 16

(b) Application, Section 9.0: Impacts of the Restructuring Proposal, page 3 and Attachment 9.1, line 17, revised October 31, 2011

November 22, 2011 CAPP Information Requests to TCPL Page 86 Preamble: Reference (a) describes the impact of increased gas supply in eastern North America and refers to the NIT-Dawn basis differential. References in (b) show the NIT to Union SWDA (via SMB) for 2012 is $1.39 per GJ with restructuring.

Request:

(a) As shown in Table 2, Q/A 21, please confirm that since 2007 tolls in the order of $1.39 per GJ, in combination with basis differentials less than the tolls, have not prevented the erosion of the Mainline’s throughput.

(b) Please confirm that the historical trend in NIT-Dawn basis differentials as shown in Table 2 is downward. Is Mr. Reed aware of future NIT- Dawn basis differentials? If so, please provide them.

(c) Is there any reason to believe that the reduction in basis differentials between major gas trading points, as described on page 17 in Q/A 21, will be materially reversed? If so, please fully explain your response and quantify the extent of reversal.

Question 138:

Reference:

(a) Application, Appendix C4: Direct Evidence of John J. Reed (Concentric Energy Advisors Inc.) (revised), Q/A 58, starting at page 48

(b) Application, Appendix C4: Direct Evidence of John J. Reed (Concentric Energy Advisors Inc.) (revised), Q/A 59, page 53

Preamble: Reference (a) states that, with Restructuring, the cost of NGTL’s FT-R service, including fuel, will rise about $0.04 per GJ while the NIT price will rise by $0.13 to $0.14 per GJ, for a net gain of about $0.10 per GJ. Reference (b) states that producer netbacks will be improved with restructuring and this will “…incent incremental production.”

Request:

(a) Please fully describe the means by which an FT-R shipper/producer would know that its netback price is higher by about $0.10 per GJ after restructuring, and

November 22, 2011 CAPP Information Requests to TCPL Page 87 (b) Is it Mr. Reed’s experience that a possible $0.10 per GJ increase in netback is material to incent a producer to increase production through drilling, completion and tie-in costs? If yes, please fully explain your response, and in so doing please provide evidence of such behaviour in other regions, such as Marcellus or the U.S. Gulf Coast.

Question 139:

Reference:

(a) Application, Section 6.0, Alberta System Extension

(b) Application, Section 9.0, Impacts of Restructuring

Preamble: Reference (a) describes the Alberta System Extension. Reference (b) describes the impacts of restructuring and illustrates those impacts through a series of tables set out in Attachments 9.1, 9.2 and 9.3.

Request:

(a) Please provide revised tables in Attachments 9.1, 9.2 and 9.3 showing the impacts when the Alberta System Extension is removed from the restructuring proposal under the following two cases:

i. With the TransCanada Contribution of $25 million remaining as part of the restructuring, and ii. With the TransCanada Contribution of $25 million not remaining as part of the restructuring.

(b) Using i) the tolls that result from (a), ii) the applied-for toll design for the Mainline, and iii) the TransCanada and Wood Mackenzie models of gas flows, please provide estimates of the price impact at NIT and at Dawn by year and on average through 2017.

Question 140:

Reference:

(a) Application, Section 6.0, Alberta System Extension

November 22, 2011 CAPP Information Requests to TCPL Page 88 (b) Application, Section 5.0, Depreciation

Preamble: Reference (a) describes the Alberta System Extension. It does not describe extension of other systems. Union Gas Limited (“Union”), for example, has extensive service territory along the NOL, with the Union WDA and Union NDA regions.

Reference (b) describes the allocation of accumulated depreciation among segments of the Mainline and shows that the NOL segment will have much less future use than in the past (page 20).

Request:

(a) For 2012 and 2013, please provide an estimate of the annual revenue requirement of NOL before and after the applied-for transfer of accumulated depreciation. In providing this response, please show the derivation of the estimates.

(b) Considering the optimal economic choice of transporting on GLGT or NOL, what capacity would TransCanada require on NOL in each year through 2020 to provide firm service for the sole purpose of satisfying demand for markets downstream of North Bay?

(c) Recognizing Union’s position in the area transited by NOL, has TransCanada sought to sell the NOL segment to Union and subsequently contract service for the capacity describe in b)? If not, why not? If so, please fully describe what studies and actions TransCanada has taken to examine this alternative.

Question 141:

Reference: Section 1.0 Executive Summary Schedule 2.0 Average Rate Base (2010 to 2013) Pdf page 26 of 77

Section 12 Revenue Requirement

Schedule 5.1 Average Rate Base - 2010 Schedule 5.1.1 Segmented Gas Plant in Service - 2010 Schedule 5.2 Average Rate Base – 2011 Schedule 5.2.1 Segmented Gas Plant in Service - 2011 Schedule 5.3 Average Rate Base – 2012 Schedule 5.3.1 Segmented Gas Plant in Service - 2012

November 22, 2011 CAPP Information Requests to TCPL Page 89 Schedule 5.4 Average Rate Base - 2013 Schedule 5.4.1 Segmented Gas Plant in Service - 2013

Request:

(a) Please provide a forecast of annual average gross plant for the period 2012 to 2020.

(b) Please provide a forecast of annual average segmented gross plant in service for the period 2012 to 2020.

Question 142:

Reference: Tab 3 - 2012 Toll Design Schedule 4 (Pdf page 498 of 565) Tab 3 - 2013 Toll Design Schedule 4 (Pdf page 539 of 565)

Preamble: IT/STFT Premium quoted as $20 million

Request:

(a) Please confirm that this entry would reflect the revenue derived from IT/STFT above the proposed floor and ceiling for IT/STFT services. If this cannot be confirmed, please explain.

(b) Please confirm that IT/STFT revenues are forecast at roughly $400 million, therefore the forecast premium is equivalent to 5%, on average (i.e. IT is priced at 105% of FT). If this cannot be confirmed, please explain.

(c) Please explain why the forecast premium, at 5%, is less than the present 10% notwithstanding the requested discretion to price up to 160% of FT.

Question 143:

Reference: Section 12.0 Alberta System Extension (Revised) Attachment 12.3 Toll Design

Tab 2 - 2012 Toll Design Schedule 1 (pdf page 484 of 565) Tab 2 - 2012 Toll Design Schedule 2 (pdf page 486 of 565) Tab 2 - 2012 Toll Design Schedule 4 (pdf page 497-98 of 565)

November 22, 2011 CAPP Information Requests to TCPL Page 90 Preamble: CAPP is interested in the net impact of the ASE proposal on Mainline Tariffs.

Request:

(a) Please confirm that the following adjustments would remove the first order effects of the Alberta System Extension from the Toll Calculation (fully recognizing that any changes to determinants that alter the toll level may impact the throughput assumed): - remove the energy and energy-distance determinants on line 5 of Schedule 2 - modify the distance of haul for each SMB to “X” path to add the distance from Empress to SMB.

(b) Please confirm that with the adjustments described in (a), the toll levels and revenues must be recalculated because the energy determinants will have decreased by 2,800,000 GJ/d. If this cannot be confirmed, please explain.

(c) Please confirm that with the adjustments described in (a), the energy- demand determinants do not change. If this cannot be confirmed, please explain.

(d) Please confirm that the adjustments described in (a) impact the toll levels for both FT services and IT services. If this cannot be confirmed, please explain.

(e) Please describe any other adjustments to the toll calculations required to remove the effects of the Alberta System Extension.

(f) Does TransCanada agree that if the Alberta System Extension was rejected, the energy charge would have to increase to recover the proposed percentage of energy-related costs? If not, please explain.

(g) If the Alberta System Extension was rejected, and the energy charge would have to be increased beyond the $0.0647/GJ/d in the Restructuring Proposal, would TransCanada still propose the 16.5%/83.5% energy/energy-distance functionalizaton? If not, please explain and discuss the level that would be proposed.

(h) Please provide Schedules 1, 2 and 4 excluding the impacts of the Alberta System Extension assuming that throughput is not altered due to the change in tolls with the exception of Saskatchewan receipts and deliveries being served by the Mainline rather than NGTL.

November 22, 2011 CAPP Information Requests to TCPL Page 91 (i) Please provide Schedules 1, 2 and 4 excluding the impacts of the Alberta System Extension with changes to throughput that TransCanada would expect due to the change in tolls. Please fully describe the change to throughput expected relative to the change in throughput from the Restructuring Proposal and the Status Quo case and explain why such change in throughput would be expected.

Question 144:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 2 of 79 states “TransCanada did not prepare a high WCSB supply case throughput forecast because a high case was not essential to assess either the impact of the Restructuring Proposal or the Mainline’s business risk”.

Request: Please confirm that under a high WCSB supply case, the Restructuring Proposal is not required. If not, please explain.

Question 145:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Pages 3 and 4 of 79 states “TransCanada has used a long-term gas price of $6.30Cdn/GJ by 2015 in generating its Base Case supply forecast for Cases 1-3. TransCanada has included both conventional and unconventional (coal bed methane, Montney gas and Horn River and Cordova shales) supply in its forecast.”

Request:

(a) Please provide a table with the numbers that underlie Figure 2.2 on page 11 of 79.

(b) Please provide a second table populated with numbers reflecting the throughput for cases 1 though 5 assuming that gas were $2.30Cdn/GJ lower than TransCanada’s assumed gas price forecast (i.e. $4.00Cdn/GJ by 2015).

November 22, 2011 CAPP Information Requests to TCPL Page 92 Question 146:

Reference: (i) Appendix C1, Mainline Throughput Study.

(ii) Section 11: Fair Return for 2012-2013..

Preamble: Reference (i), page 4 of 79 states “The quantity of gas delivered by the Mainline will also be influenced by the volume of gas sourced at Dawn and the level of Utica production in Quebec. Throughput on the Mainline sourced at Dawn arrives mainly via the Great Lakes Gas Transmission (GLGT) and Vector Pipeline L.P. (Vector) pipelines. In Case 1, total Michigan to Ontario imports on these routes are expected to decline from their 2010 level of approximately 2.8 Bcf/d to about 2.2 Bcf/d by 2020.”

The text describes gas sourced at Dawn, but the numbers are reported in a manner inconsistent with the breakdown of gas sourced at Dawn provided in Case 1 – TransCanada Eastern Market Flows Attachment A (page 55 of 79).

Reference (ii), page 30 of 60 states “The proposed Union Dawn Gateway project is shown in Figure 11-10. The project would provide an additional capacity of 400 Mmcfd from Michigan into Dawn, providing new US gas supplies access to eastern Canadian and US Northeast markets. This project would compete directly with the Mainline long-haul system.”

Request:

(a) Please provide tables similar to “TransCanada Eastern Market Flows” in Attachment A (page 55 of 79), but separate the volumes represented by the columns “TC Flow into Ontario” and “Non-TC Flow into Ontario” into NOL, TC TBO on GLGT, Other from GLGT, Vector, and Other, for Cases 1, 2, 4 and 5.

(b) Please explain how Reference (ii) is accounted for in Reference (i). Please identify in the response to (a) the volumes attributable to the Union Dawn Gateway project.

(c) Can TCPL please explain in detail how the Union project will affect the long-haul flows and which specific long-haul paths will be affected?

(d) Please comment on the current capacity from Parkway to Maple and identify the firm contracts along this path, that is either Dawn to any downstream point to or past Maple or from Parkway to any downstream point to or past Maple.

November 22, 2011 CAPP Information Requests to TCPL Page 93 (e) Does TCPL believe that the s. 58 Application filed on November 8, 2011 to expand the Parkway to Maple corridor will affect the long- haul contracts or flows? Please explain in detail which contracts or flows will be affected.

(f) Can TCPL please explain how current contracts are met downstream of Dawn, that cannot currently use the Union pipeline? In other words, does gas currently go from Dawn back through GLGT (through displacement) and over the NOL line to meet TCPL contractual obligations from Dawn to further downstream points? If so, who bears the cost of this operationally?

Question 147:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 4 of 79 states “Increases in Ontario and Quebec gas demand, other things equal, will generally tend to increase the level of throughput on the Mainline system. Gas demand in Ontario and Quebec is forecast to grow from 3.1 Bcf/d in 2010 to 3.7 Bcf/d in 2020. … In Case 1, total Michigan to Ontario imports on these routes are expected to decline from their 2010 level of approximately 2.8 Bcf/d to about 2.2 Bcf/d by 2020. … In the Base Case, Utica Shale is expected to grow to only 0.15 Bcf/d by 2020.”

Page 5 of 79 states “The Marcellus production basin is expected to grow from approximately 1 Bcf/d in 2010 to over 8 Bcf/d by 2020. Within a few years Marcellus production growth is expected to result in reversed flow at Niagara and Chippawa delivery points. Flows at these points are expected to reverse from exporting about 0.4 Bcf/d in 2010 (combined) to importing about 0.3 – 0.4 Bcf/d in 2020. … Exports at Waddington are forecast to fall from the 2010 level of about 0.6 Bcf/d to about 0.4 Bcf/d by 2020.”

CAPP requires a reconciliation of these statements.

Request:

(a) Please confirm that the demand increase in Ontario and Quebec between 2010 and 2020 is 0.6 Bcf/d. If not, please explain.

(b) Please confirm that the Utica Shale production will reduce the demand for gas supplies from Empress and/or Dawn by 0.15 Bcf/d. If not, please explain.

November 22, 2011 CAPP Information Requests to TCPL Page 94 (c) Please confirm that the impact of Marcellus at Niagara and Chippawa between 2010 and 2020 is a net reduction of gas demand from Empress and/or Dawn of 0.7 - 0.8 Bcf/d. If not, please explain.

(d) Please confirm that the reduction in exports at Waddington between 2010 and 2020 is a reduction of gas demand from Empress and/or Dawn of 0.2 Bcf/d. If not, please explain.

(e) Please confirm that TransCanada is forecasting a net reduction of gas demand from Empress and/or Dawn of 1 – 1.1 Bcf/d due to Utica Shale and the reduced deliveries to the Niagara, Chippawa and Iroquois export points. If not, please explain.

(f) Is the implied reduction of gas demand from Dawn is 0.6 Bcf/d between 2010 and 2020? If not, please explain and provide the number.

(g) Given an implied reduction of 0.6 Bcf/d from Dawn, please confirm that there is a net reduction of gas demand from Empress of 0.4 – 0.5 Bcf/d between 2010 and 2020. If not, please explain and provide the number.

(h) Please confirm that additional facilities will be required to accommodate the reversed flows from Niagara and Chippawa. If not confirmed, please explain how the reversed flows can be accomplished using existing facilities.

Question 148:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 6 of 79 states “Case 1: This case evaluates throughput on TransCanada’s pipeline systems using the tolls and rate design of the Restructuring Proposal. North American supply, demand and infrastructure assumptions for this case are the same as those used in TransCanada’s 2011 Annual Corporate Forecast base case. The Annual Corporate Forecast is developed by TransCanada and is used for overall corporate and planning purposes.”

Request: Please provide a copy of all presentations or reports describing or outlining the results of the 2011 Annual Corporate Forecast that have been provided to customers, customer groups, committees, conferences, securities analysts, bond rating agencies or regulators.

November 22, 2011 CAPP Information Requests to TCPL Page 95 Question 149:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Pages 6 and of 79 state “With its lower tolls, Case 1 results in the highest level of Mainline throughput, which averages 4.3 Bcf/d for the 2012 to 2020 period.

The Case 2 Mainline throughput averages 3.9 Bcf/d for the 2012 to 2020 period.

The Mainline throughput is 0.3 Bcf/d lower on average in Case 3 relative to Case 2 and 0.7 Bcf/d lower on average in Case 3 relative to Case 1.”

Request:

(a) Please provide the Mainline throughput for Cases 1, 2 and 3, by year, for each year from 2012 to 2020.

(b) Please provide NOL throughput for Cases 1, 2 and 3, by year, for each year from 2012 to 2020.

(d) Please confirm that Mainline throughput is synonymous with WCSB receipts. If this cannot be confirmed, please clarify the meaning of “throughput”.

Question 150:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 9 of 79 states “For the 2012-2017 period NIT prices are forecast to increase by, on average, 0.13 $/GJ. Alberta System netback prices are forecast to rise by an average of 0.08 $/GJ, a somewhat smaller increase as compared to NIT due to the increase in NGTL receipt costs in the Restructuring Proposal.”

Request:

(a) Please explain why the time period of 2012-2017 was chosen as the period to present the results.

November 22, 2011 CAPP Information Requests to TCPL Page 96 (b) Please provide a breakdown of the forecast increase in NIT prices for each year of the period 2012-2017.

(d) Please provide the forecast NIT prices for Case 1 and Case 2 for each year from 2012 to 2017.

(e) Please provide the forecast Dawn prices for Case 1 and Case 2 for each year from 2012 to 2017.

Question 151:

Reference:

a) Application, Section 7.0: Toll Design, page 2, Cost Allocation. b) Application, Appendix C1: Throughput Study, page 9, Price Impacts. c) Application, Appendix C1: Throughput Study, page 14, Equilibrium Model. d) Application, Appendix C5: Evidence of Robert W. Fleck (Wood Mackenzie Inc.), page 3.

Preamble: Reference a) states that the commodity component of the tolls will be eliminated. References b), c) and d) address the impact on the NIT price of the restructuring proposals.

Request:

(a) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models, please fully explain the role played by the following charges in determining the gas flow patterns and prices:

i. Pipeline demand tolls, ii. Pipeline commodity tolls, and iii. Fuel.

(b) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models, please specify hardwired or minimum flows, if any, on pipelines or pipeline sections, such as NOL, transporting WCSB gas and on pipelines that provide other gas supply that competes in principal markets served by WCSB gas (“competing pipelines”), and fully explain the reasons for such flows.

November 22, 2011 CAPP Information Requests to TCPL Page 97 (c) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models, at the margin, is the flow of gas among pipelines determined solely by variable costs, including commodity tolls and fuel, or short- term tolls, including interruptible tolls? Please fully explain your response and, in particular, provide a detailed explanation of the tolls used at the margin to estimate flows on pipelines transporting WCSB gas and on competing pipelines.

(d) TransCanada proposes to eliminate the commodity toll in its restructured toll design. Using each of TransCanada’s equilibrium model and Wood Mackenzie’s models, please provide the price impact at NIT and Dawn comparing Cases 1 and 2 and assuming that TransCanada’s commodity toll is not eliminated and is consistent with the present toll design. Please fully explain your respective responses.

(e) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models, the NIT price impact is explained as an average through 2017. Please provide the annual NIT price impact for each model through 2017.

Question 152:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 10 of 79 states “The expert evidence of Wood Mackenzie Inc. on the impact of the Restructuring Proposal on NIT prices and netbacks is presented in Appendix C5.”

Request:

(a) Are the Wood Mackenzie results based on their own models or do they rely on or utilize TransCanada’s models?

(b) Are the Wood Mackenzie assumptions and data input that drive the models their own assumptions and data or was that provided by TransCanada?

(c) Please provide a comparison of the data and assumptions used in Wood Mackenzie’s analysis and those used in TransCanada’s analysis.

(d) Please provide either the software and or documentation of the model used by TransCanada to estimate the impact of each of the cases 1, 2 and 3 on the NIT prices.

November 22, 2011 CAPP Information Requests to TCPL Page 98 Question 153:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 10 of 79 states “Case 5 incorporates the higher tolls associated with the status quo toll methodology relative to the Restructuring Proposal tolls in Case 4.”

Request:

(a) Please provide an estimate of the NIT to Dawn toll under each of Case 4 and Case 5 for 2012 and 2013.

(b) Please provide an estimate of the TBO costs associated with the Alberta System Extension (similar to Table 6-1) in Case 4 for 2012 and 2013.

(d) Please provide the forecast Dawn prices for Case 4 and Case 5 for each year from 2012 to 2017.

(e) Please provide the Mainline throughput for Cases 4 and 5, by year, for each year from 2012 to 2020.

(f) Please provide NOL throughput for Cases 4 and 5, by year, for each year from 2012 to 2020.

(g) Please provide GLGT throughput for Cases 4 and 5, by year, for each year from 2012 to 2020.

Question 154:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 11 of 79 states “TransCanada uses an integrated approach in developing forecasts of flows on its pipeline infrastructure and used this method to determine pipeline throughputs for throughput cases 1, 2, 4 and 5 presented in this Study. The approach accounts for the integrated nature of the North American natural gas pipeline network, as well as numerous supply and demand regions across that network.”

Request: Beyond the fact that the approach used “accounts for the integrated nature of the North American natural gas pipeline network, as well as numerous

November 22, 2011 CAPP Information Requests to TCPL Page 99 supply and demand regions across that network,” please describe in further detail how prices are determined in the modeling approach.

Question 155:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Pages 11 to 13 of 79 state “Key factors within this integrated approach that drive the throughput on the Alberta System, Foothills System and the Mainline are described below. … Competing supply in the Mainline’s traditional eastern Canadian markets: Dawn Area Supply : … Niagara /Chippawa supply: … Utica Shale: … USNE Market Demand; Volumes of gas available from the growing Marcellus production area; Pipeline throughput on existing and new pipeline infrastructure that transports Marcellus volumes to various markets and to the Mainline’s traditional export points; Volumes on existing and new pipeline infrastructure that transports gas from other US basins in the USNE; and Canaport and other LNG projects that deliver into the New England market and their impact on flows at East Hereford.”

The Throughput Study refers to the significance of end market demand and to supply competition. While some information on Western Canadian demand and WCSB supply is provided, little data and no analysis or study of the other key factors is provided.

Request:

(a) Please provide all analyses, data, and studies of end markets and supply competition in markets served by the Mainline, Foothills (Sask.), and Foothills (S. B.C.) that TransCanada has conducted.

(b) If not provided in response to the above, please provide:

i. TransCanada’s base, high, and low forecasts for 2010 to 2030 of natural gas demand in Ontario, Quebec, and the U.S. N.E. by state.

ii. TransCanada’s base, high, and low forecasts for 2010 to 2030 of the capacities of the pipelines serving Ontario, Quebec, and the U.S. N.E. and the average daily flows into these regions.

iii. TransCanada’s base, high, and low forecasts for 2010 to 2030 of the supply from basins that compete with the WCSB and that are capable of serving Ontario, Quebec, and the U.S. N.E.

November 22, 2011 CAPP Information Requests to TCPL Page 100 iv. TransCanda’s base, high, and low forecasts of Mainline Western Receipts that correspond with the above base, high, and low demand, pipeline capacity, and competing supply forecasts.

(c) For the various competing supplies (e.g. Marcellus, Gulf, Midcontinent, Rockies, WCSB) available to the U.S. N.E. from 2010 to 2030, what is TransCanada’s view of the supply stack? In this context, “supply stack” means a ranking where the most competitive supply source is at the bottom of the stack and progressively less competitive supplies are added to the stack. Please provide an explanation of TransCanada’s view.

(d) What is TransCanada’s view of the competitiveness of WCSB supplies relative to Marcellus in the U.S. N.E.? In Ontario and Quebec? Please explain with numerical illustrations showing the comparison.

(e) Please provide TransCanada’s analysis or forecast of the disposition of Marcellus production including the paths such production may take to market.

(f) Please provide any analysis or forecast of the disposition of Marcellus production including the paths such production may take to market prepared at the request of TransCanada by any external consultant including Concentric and Brattle.

(g) Please provide a table with the high, medium and low forecasts for each of the key factors that TransCanada mentions at pages 11 to 13 for the forecast period covering 2010 through 2020.

(h) Please document the sources for the forecast of each key factor.

(i) Did TransCanada run sensitivities on any of the Mainline throughput estimates using the high, medium and low variations of any of the key factors? If not, why not?

(j) If TransCanada ran sensitivities, please provide the documentation and results.

Question 156:

Reference:

a) Application, Appendix C1: Throughput Study, page 14, Equilibrium Model.

November 22, 2011 CAPP Information Requests to TCPL Page 101 b) Application, Appendix C5: Evidence of Robert W. Fleck (Wood Mackenzie Inc.), pages 6 and 7.

Preamble: Reference (b) states that restructuring will increase “…the number of days WCSB sourced supplies can economically compete with other supplies in eastern market regions…”.

The following information requests relate to Cases 1 and 2.

Request:

(a) Please fully define what “economically compete” means. For example, what pipeline costs are included – fixed? variable? fuel?

(b) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models, please quantify the number of days and associated Mainline volume that WCSB sourced supplies would economically compete with other supplies in eastern market regions.

(c) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models, what portion of the estimated NIT price impact from restructuring is due to an increase in the number of days WCSB supply can economically compete?

(d) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models, what portion of the estimated Dawn price impact from restructuring is due to an increase in the number of days WCSB supply can economically compete?

Question 157:

Reference:

a) Application, Appendix C1: Throughput Study. b) Application, Appendix C5: Evidence of Robert W. Fleck (Wood Mackenzie Inc.).

Preamble: Both references describe the use of models to estimate the impact gas flows and prices with and without restructuring (Cases 1 and 2).

Request:

(a) Please prepare a table that shows the peak day, minimum day and average day flows by month on the Mainline starting with the

November 22, 2011 CAPP Information Requests to TCPL Page 102 historical period from November 1999 (the start of the gas year when Mainline Western Receipt volume peaked)1 to the most recent month when actual data are available for the following locations: Empress, Station 34, Emerson, Stations 45, 112, 119 and 1206.

(b) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models, at the same locations detailed in (a), for Cases 1 and 2 please provide a table showing the forecast peak day, minimum day and average day flows by month from the last month shown in response to (a) until the end of 2017.

(c) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models, please provide the forecast peak day, minimum day and average day flows by month from the last month shown in response to (a) until the end of 2017 for the following locations:

i. Kingsgate and Monchy on the Foothills’ systems, ii. Station 2 and Huntingdon on the Westcoast Pipeline system, and iii. The termini of the Alliance pipeline near Chicago.

(d) For each of TransCanada’s equilibrium model and Wood Mackenzie’s models and for Cases 1 and 2, please provide the monthly estimates of the Henry Hub price and the basis differentials from Henry Hub to the following locations:

i. Dawn, ii. Chicago, iii. Emerson, iv. NIT, v. Malin, vi. Kingsgate, vii. Huntingdon, and viii. Station 2.

(e) For each of the requests above, please provide the results in an Excel spreadsheet with all the cells active. Please also provide the information in US$ per MMBtu and in C$ per GJ.

1 Application, Appendix C1: Throughput Study, page 53, Attachment A, Case 1 – WCSB Exports

November 22, 2011 CAPP Information Requests to TCPL Page 103 Question 158:

Reference:

a) Application, Appendix C1: Throughput Study, page 12, Footnote 4. b) Application, Section 9.0: Impacts of the Restructuring Proposal, page 13.

Preamble: Reference a) notes that Case 3 incorporates the potential impact of competing infrastructure, such as western LNG export projects. Reference b) shows the volume impact on Mainline throughput (western receipt) for Case 3.

Request:

(a) Please provide TransCanada’s complete understanding of the basis or reference for prices of LNG sold in Asian markets; for example, links between LNG prices and crude oil prices.

(b) Please provide TransCanada’s complete understanding of the estimated unit cost of a world-scale LNG vaporization plant and associated terminal facilities in Asia, utilizing a 100% load factor and including the size of the plant and the source(s) and date of the cost estimate.

(c) Please provide TransCanada’s complete understanding of the estimated unit cost of LNG transportation using world-scale LNG tankers and a distance of 8,500 kilometres.

(d) Please provide TransCanada’s complete understanding of estimated unit cost of a world-scale LNG liquefaction plant on the North American west coast, utilizing a 100% load factor and including the size of the plant and the source(s) and date of the cost estimate.

(e) If in responding to (a) through (d), a range of values is available, please provide that range.

(f) Using energy prices consistent with TransCanada’s forecast of Henry Hub prices, please provide TransCanada’s complete understanding and estimate of the netback price of natural gas at Station 2 from a sale of LNG to Asian markets through a western LNG project.

(g) If TransCanada cannot provide a response to (f), please fully describe the basis for including western LNG projects as prospective infrastructure competition.

November 22, 2011 CAPP Information Requests to TCPL Page 104 Question 159:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 14 of 79 states “Firm transportation contracts with their demand charge obligations are treated as sunk costs. Thus contracted pipeline capacity will tend to be sequenced ahead of uncontracted capacity”.

Request:

(a) Is it correct to interpret the referenced paragraph to suggest that the Mainline is modeled as two stages – one with zero cost (reflecting firm transportation contracts) and a second stage, reflecting short term service and priced according to IT/STFT tariffs? If this is not correct, please explain how the “sunk cost” view of firm transportation is treated within the model.

(b) If the view in (a) is correct, will the model assume any non-firm contracted volumes will flow if the basis differential is less than the IT/STFT toll? If so, please explain the logic of this treatment in the model.

(c) Does the model have any role in estimating the level of expected long term firm contracts, given a specific demand charge obligation implied by each of the proposed toll levels?

(d) If the model does not estimate Long Term Firm Contract volumes given a specific toll, how did TransCanada estimate the contract demand obligations under each of the cases analyzed?

Question 160:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 34 of 79 provides TransCanada’s base, low and high case forecasts for WCSB supply. In RH-4-2001, TCPL provided its North American supply and demand forecast with annual data in response to ADOE 1.39. In RH-2- 2004, TCPL provided regional seasonal and total seasonal North American supply and demand forecasts in response to CAPP 1(e).

Request:

(a) Please provide the North American supply and demand forecasts that correspond with the base, low, and high WCSB supply cases, showing the annual forecasts and the seasonal forecasts by region and in total.

November 22, 2011 CAPP Information Requests to TCPL Page 105 (b) Please provide a chart or figure showing the base case WCSB supply forecasts in RH-4-2001, RH-2-2004, RH-1-2008 and the present base case forecast.

(c) Please provide a chart or figure showing the low case WCSB supply forecasts in RH-4-2001, RH-2-2004, RH-1-2008, and the present low case forecast.

(d) Please provide a chart or figure showing the base case WCSB exports forecasts in RH-4-2001, RH-2-2004, RH-1-2008 and the present base case WCSB exports forecast.

(e) Please provide a chart or figure showing the low case WCSB exports forecasts in RH-4-2001, RH-2-2004, RH-1-2008 and the present low case WCSB exports forecast.

(f) Please provide a chart or figure showing the base case Mainline throughput forecast in RH-4-2001, RH-2-2004, RH-1-2008 and the present base case forecasts.

(g) Please provide a chart or figure showing the low case Mainline throughput forecast in RH-4-2001, RH-2-2004, RH-1-2008 and the present low case forecasts.

(h) Provide a chart or figure showing all the cases for WCSB supply and Mainline throughput presented in RH-1-2002 together with underlying data.

(i) Please provide the data used to generate the above responses in an Excel spreadsheet.

Question 161:

Reference: (i) Appendix C1, Mainline Throughput Study, page 36 of 79. (ii) Section 3: Business Environment, page 9 of 30.

Preamble: Reference (i) states “The Vector throughput shown in Figure 4.0 is forecast to drop in 2012 and beyond due in part to the changes at Niagara and Chippawa which are transitioning from being export points to becoming import points, and due in part to the growing Mainline receipts in both Cases 1 and 2.”

November 22, 2011 CAPP Information Requests to TCPL Page 106

Reference (ii) states “The Mainline experienced its highest level of Western receipts at 201 106m3/d (7.1 Bcf/d) in 1999, and has not again reached this level of utilization since the Alliance pipeline went into service in December, 2000. Post Alliance, pipeline capacity out of the WCSB has exceeded WCSB exports, and as WCSB exports declined over the 2000 - 2010 period, a significant share of the decline has been borne by the Mainline.”

Request:

(a) Please provide the data used to generate Figure 4.0 in an Excel spreadsheet.

(b) Please explain the relative pricing of flow on the Mainline and Vector in the supply model and explain how such pricing results in Vector shipments dropping and Mainline shipments increasing.

(d) Please provide the contract profile of shippers on the Vector system, including contract term and volume.

(e) Please provide a delivered cost analysis between supplies transported through Alliance/Vector and NGTL/Mainline.

November 22, 2011 CAPP Information Requests to TCPL Page 107 (f) Please provide a breakdown of the GLGT volume in Figure 4.0 between TC TBO on GLGT and other for the year 2000 to 2020.

(g) Please explain what “Other” in Figure 4.0 consists of and why it increased in 2009, 2010 and 2011.

Question 162:

Reference: Appendix C1: Mainline Throughput Study.

Preamble: Page 36 of 79 shows the forecast of Michigan to Ontario flows – Dawn. Page 42 of 79 provides the Ontario and Quebec demand. Attachment A, Part D for the various cases provides the Ontario and Quebec demands served by TC and by Non-TC. The TransCanada Eastern Triangle receives gas from multiple sources.

Request:

(a) Please describe the facilities that comprise the Eastern Triangle.

(b) Please provide the historic and forecast Eastern Triangle throughput (excluding fuel) from 2000 to 2030 for each of Cases 1 though 5, as well as the case or cases corresponding to the TransCanada WCSB High Case, showing: (i) the physical flow-in from TC at North Bay, from TC via GLGT, from Non-TC, and from each export point forecast to reverse flow over the forecast period; (ii) physical deliveries by province (Ontario and Quebec); and (iii) physical flow out at each export point (if any).

(c) Please provide the current capacities for each pipeline that crosses the international border into or out of Ontario and Quebec. Please also provide the forecast to 2030, or however long TransCanada has a forecast, of the capacities of each pipeline that crosses or is forecast to cross into or out of Ontario and Quebec and the forecast flow on each such pipeline into or out of Quebec. If the forecast is sensitive to the five cases in the Throughput Study or the TransCanada High Case WCSB forecast then please provide the sensitivity cases as well.

(d) Please provide the current capacity of the Union Dawn/Trafalgar Line and TransCanada’s forecast to 2030 of the expansion of that line.

(e) Please provide a table showing the current Union TBO capacities, under each service/contract type, held by TransCanada and the forecast to 2030.

November 22, 2011 CAPP Information Requests to TCPL Page 108 (f) For TransCanada’s Parkway to Maple Line, please provide the current winter and summer capacities (i) from Parkway to Maple and (ii) from Maple to Parkway; and TransCanada’s forecast to 2030 including potential expansion of that line.

(g) Please provide a table showing the current GLGT TBO capacities, under each service/contract type, held by TransCanada and the forecast to 2030.

(h) Please provide, with and without Northern Ontario Line (NOL) Line 2 out of service, the current capacities of (i) the NOL at Station 41 and at the junction of the Barrie Line and the North Bay Short Cut; (ii) the North Bay Shortcut (NBSC) at the junction of the NOL; and (iii) the Barrie Line at the junction of the NOL and at Maple. Please also provide the forecast to 2030, or however long TransCanada has a forecast, of the capacities of each of these pipeline segments (with and without NOL Line 2 out of service). If the forecast is sensitive to the five cases in the Throughput Study or the TransCanada High Case WCSB forecast then please provide the sensitivity cases as well.

Question 163:

Reference: Appendix C1: Mainline Throughput Study.

Preamble: Page 37 and 38 of 79 show the forecast of Marcellus shale supply. Page 42 of 79 provides the Ontario and Quebec demand. Attachment A, Part D for the various cases provides the Ontario and Quebec demands served by TC and by Non-TC.

Request:

(a) TransCanada has applied under s.58 to reverse the flow at Niagara and also reverse the flow on the Barrie Line. Please provide the system flow schematics and capabilities vs. requirements tables for the Eastern Triangle without this expansion and with the expansion as filed with the NEB under peak day (both with and without loss of unit) and average day conditions.

(b) In regard to this s.58 application that would reverse the flow at Niagara and the Barrie Line, how far north on the Barrie Line could gas flow if the expansion were constructed as applied for? Could it reach North Bay and beyond North Bay either west or east?

November 22, 2011 CAPP Information Requests to TCPL Page 109 (c) Does TransCanada forecast that gas flowing north on the Barrie Line would flow west onto the NOL or east onto the NBSC? Please provide the forecast. If TransCanada does not have such a forecast, please describe the supply or demand conditions under which gas would flow north on the Barrie Line and then flow west onto the NOL or east onto the NBSC.

(d) Has TransCanada received requests for additional service at Niagara or Chippewa, over and above the service that was applied for in the above-mentioned s.58 application, to bring U.S. gas into Canada? Please describe the nature of the requests and identify the volumes.

(e) Has TransCanada received requests for additional service to bring U.S. gas into Canada at any other point on the Mainline other than Niagara or Chippewa? Please describe the nature of any such requests and provide the volumes.

(f) What makes entry into Canada at Niagara and Chippawa attractive for U.S. gas supplies? Please provide a delivered cost analysis for the years 2010 to 2030 between supplies from WCSB and from the U.S. at Niagara and Chippawa.

(g) For Marcellus gas what are the barriers that must be overcome to access eastern Canadian and U.S. N.E. markets? What is TransCanada’s assessment of the relative economic attractiveness of Marcellus gas moving into Canada versus moving to other markets in the U.S.?

(h) Has TransCanada done a study of the relative competitiveness of supplies delivered long haul from the WCSB via the Mainline and Marcellus supplies? If so, please provide it. If not, please explain why not.

(i) Union Gas has stated that TransCanada needs to expand the Parkway to Maple line by 1 Bcf/d. Please discuss how such an expansion would affect the use of the Mainline for long haul. Please provide system flow schematics and capabilities vs. requirements tables for the Eastern Triangle under peak day (both with and without loss of unit) and average day conditions for an expansion of the Parkway to Maple line of 1.0 Bcfd.

November 22, 2011 CAPP Information Requests to TCPL Page 110 Question 164:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: On page 42 of 79, Figure 8.0 provides the Ontario and Quebec demand forecast by sector graphically. On page 43 of 79, Figure 9.0 provides the USNE gas demand forecast by sector graphically.

Request:

(a) Please provide the data underpinning Figures 8 and 9 in tabular form in an Excel spreadsheet.

(b) Please provide the annual gas demand forecast for Ontario for the years 2000 and 2020 for each of residential, commercial, industrial and electric generation in tabular form.

(c) Please provide the annual gas demand forecast for Quebec for the years 2000 and 2020 for each of residential, commercial, industrial and electric generation in tabular form.

(d) Please provide a table showing the firm contracted quantities, contract start year, contract end year, receipt point, delivery area for Centra Ontario, Union, Enbridge and GMi under the following conditions:

i. GH-2-87 Application (before and after the expansion);

ii. GH-3-98 Application (before and after the expansion);

iii. Release Application submitted by TransCanada to the NEB seeking release of the facilities approved in the GH-3-98 proceeding;

iv. As at November 1, 2011.

(e) Please provide TransCanada’s estimate of the volume of gas demand served by WCSB supplies delivered through the Mainline in Figure 8.

(f) Please provide TransCanada’s estimate of the volume of gas demand served by WCSB supplies delivered through the Mainline in Figure 9.

November 22, 2011 CAPP Information Requests to TCPL Page 111 Question 165:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: On pages 42 and 43 of 79, TransCanada provides the Ontario and Quebec and U.S. Northeast demand. TransCanada as operator of TQM provided information on New England historic and forecast natural gas demand in RH-1-2008 in response to CAPP IR 42(e), (f), (g), and (k). CAPP wishes TransCanada to update that information and to provide similar information for Northeast U.S. natural gas markets as well as major Canadian markets.

Request:

(a) What is the historical annual demand for natural gas in the U.S. Northeast and in each Northeast state in 1980, in 1990, and from 1994 to 2010 (or the last year for which data is available) in total and by end use – industrial, electric generation, commercial, institutional, and residential?

(b) What is the forecast annual demand for natural gas in the U.S. Northeast and in each Northeast state from 2010 (or the last year for which historical data is available) to 2030 in total and by end use – industrial, electric generation, commercial, institutional, and residential?

(c) What is the historical rate of gas use in the U.S. Northeast and in each Northeast state relative to total energy demand in 1980, 1990, and from 1994 to 2010?

(d) What has been the historic average annual rate of gas growth in the U.S. Northeast since 1995? What is the forecast average annual rate of gas growth in the U.S. Northeast to 2030?

(e) Please provide the same information as in (a), (b), (c), and (d) for Quebec.

(f) Please provide the same information as in (a), (b), (c), and (d) for Ontario.

(g) For the most recent year for which historic data is available, what is the split of gas demand between Northern Ontario and the rest of Ontario? Please provide the same split for the forecast of Ontario demand to 2030.

November 22, 2011 CAPP Information Requests to TCPL Page 112 Question 166:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: On pages 45 and 46 of 79, “Figure 10.1 shows the disposition of WCSB production to satisfy Western Canada demand as well as the allocation among the five key export pipeline routes for Case 1. Case 2 has the same WCSB production and Western Canada demand levels as Case 1, however the distribution of export volumes among the 5 export pipelines routes is different. The Mainline takes a somewhat larger share of these export volumes in Case 1 relative to Case 2.” (underlining added)

Request: Please provide the numerical volumes for each of the export pipelines for 2012 to 2020 for Case 1, Case 2, and Case 3.

Question 167:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 52 of 79 shows Western Canada flow balance for Case 1 and page 60 of 79 shows Western Canada flow balance for Case 2.

November 22, 2011 CAPP Information Requests to TCPL Page 113 Request:

(a) Please confirm the Restructuring proposal has a negative impact on western Canadian demand. If not, please explain.

(b) Please provide the Western Canada flow balance for Case 3.

Question 168:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: WCSB Exports for Case 1, Case 2, Case 4 and Case 5 are shown on page 53, 61, 66 and 70, respectively. In previous hearings, such as RH-4-2001 and RH-2-2004, TransCanada provided netback analyses to compare the relative competitiveness of the Mainline to other paths to market.

Request:

(a) Please identify the major markets served by each of Northern Border, GTN, Alliance, NWP and Mainline.

(b) Please provide TransCanada analysis of historic and forecast netbacks for all paths that TransCanada has analyzed. Please compare the markets in (a) and the paths in this response.

(c) Please provide the netback analyses for the following paths from 2010 to 2020 (with and without the restructuring): NIT to Dawn via NGTL and Mainline; NIT to Dawn via NGTL, Mainline, GLGT; NIT to Dawn via NGTL, Foothills, Northern Border, Vector; Alliance to Dawn via Vector; NIT to Chicago via NGTL, Foothills, Northern Border; Bison to Chicago via Northern Border; NIT to Malin; Ruby to Malin; ANR to Dawn via GLGT; ANR to Dawn via Vector; ANR to Dawn via Mich Con; Marcellus to Dawn via Tennessee and National Fuel.

(d) Please also provide the data in (b) and (c) in an Excel spreadsheet.

(e) Please confirm the increase in Western Canadian exports between 2010 and 2020 is 1.2 Bcf/d in both Case 1 and Case 2. If not, please explain.

(f) Please provide the WCSB Exports for Case 3.

November 22, 2011 CAPP Information Requests to TCPL Page 114 (g) Please confirm the increase in Mainline Western Receipt Flows between 2010 and 2020 is 1.4 Bcf/d in Case 1 and 1.0 Bcf/d in Case 2. If not, please explain.

(h) Please confirm the increase in Mainline Western Receipt Flows between 2010 and 2020 is 0.7 Bcf/d for Case 3. If not, please explain.

(i) Please explain why flows through Northern Border between 2010 and 2020 are forecast to drop in both Case 1 and Case 2.

(j) Please confirm that flows to Alliance are the same for Cases 1, 2 and 3. If not, please explain.

Question 169:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: TransCanada Alberta and Foothills System Balance for Case 1, Case 2, Case 4 and Case 5 are shown on page 54, 62, 67 and 71, respectively. Deliveries to McNeill Border declined from 2.2 Bcf/d in 1999/00 to 1.8 Bcf/d in 2010/11.

Request:

(a) How much WCSB gas is currently being displaced by Rockies gas entering Northern Border on Bison Pipeline?

(b) Please confirm that TransCanada owns Bison.

(c) What is the current capacity of Bison Pipeline at its junction with Northern Border? What is the forecast capacity of Bison at its junction with Northern Border to 2030?

(d) Does Bison have expressions of interest or requests for service? If so please provide information on the volumes.

(e) What is the capacity of Northern Border at the Canada/U.S. border? What is the capacity immediately downstream of the interconnection with Bison? Are any capacity expansions of Northern Border forecast to 2030? If so, please provide information on where and how much capacity will be added.

(f) What is the capacity, by zone, of Foothills from Caroline to Monchy? What has been the historic utilization, annual, peak, and low, since 2006 by zone? What is the forecast utilization, annual, peak, and low,

November 22, 2011 CAPP Information Requests to TCPL Page 115 to 2020 by zone? For Zone 6 (Caroline to Empress/McNeill) please provide the corresponding capacity and historic and forecast utilization numbers for the NGTL facilities along this route.

(g) Case 2 indicates increased flows on Foothills (Sask.) at the McNeill Border compared to Case 1 for the period 2011/2012 to 2019/20. Does this assume WCSB gas in Case 2 backs out Rockies gas relative to Case 1? Please explain and provide the analysis that supports this.

(h) How much WCSB gas is currently being displaced by Rockies gas entering GTN on Ruby Pipeline?

(i) What is the current capacity of Ruby Pipeline at its junction with GTN? What is the forecast capacity of Ruby at its junction with GTN to 2030?

(j) What is the capacity of GTN at the Canada/U.S. border? What is the capacity of PG&E immediately downstream of the interconnection with Ruby? Are any capacity expansions of GTN forecast to 2030? If so, please provide information on where and how much capacity will be added.

(k) What is the capacity, by zone, of Foothills from Caroline to Kingsgate? What has been the historic utilization, annual, peak, and low, since 2006 by zone? What is the forecast utilization, annual, peak, and low, to 2020 by zone? For Zone 7 (Caroline to ABC) please provide the corresponding capacity and historic and forecast utilization numbers for the NGTL facilities along this route.

(l) What is the delivery capacity of the Alberta System at each of Empress, McNeill and the A/BC Border? What is the take-away capacity of the downstream pipelines at each of these points? If it is different from the delivery capacity of the Alberta System, please explain why that is the case.

(m) Case 2 indicates increased flows on Foothills (S. B.C.) at the A/BC Border compared to Case 1 for the period 2011/12 to 2019/20. Does this assume WCSB gas in Case 2 backs out Rockies gas relative to Case 1? Please explain and provide the analysis that supports this.

(n) What is the capacity of the Prairies Line and what is the actual 2010, 2011 to date, and forecast 2012 and 2013 throughput and percentage utilization of the Prairies line? Please provide the daily utilization from 2006 to date of the Prairies line.

November 22, 2011 CAPP Information Requests to TCPL Page 116 Question 170:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: TransCanada Eastern Market Flows for Case 1, Case 2, Case 4 and Case 5 are shown on page 55, 63, 68 and 72, respectively. Page 38 of 79 shows the base, low and high forecasts for Marcellus supplies.

Request:

(a) Please confirm that the Throughput Study assumes all Ontario and Quebec demand growth, except that served by the Utica supply, will be transported through the Mainline whether the gas supplies are from WCSB or the U.S. If confirmed, please provide the rationale for this assumption. If not confirmed, please explain why not.

(b) For the Ontario Demand served by TC column, please provide a breakdown between supplies from WCSB, Dawn, Chippawa, Niagara and Waddington.

(c) For the Quebec Demand served by TC column, please provide a breakdown between supplies from WCSB, Dawn, Chippawa, Niagara and Waddington.

(d) Please confirm that TC Exports/Imports @ Waddington is the same for all 5 cases. If not confirmed, please explain why the tables show the same values. If confirmed, please explain why there is no change.

(e) Please confirm that Ontario Demand served by Non-TC is the same for all 5 cases. If not confirmed, please explain why the tables show the same values. If confirmed, please explain why there is no change.

(f) Please confirm that Quebec Demand served by Non-TC is the same for all 5 cases. If not confirmed, please explain why the tables show the same values.

(g) Please confirm that the Ontario and Quebec Demand is the same for all 5 cases. If not confirmed, please explain. Please provide the Ontario Demand and Quebec Demand for the period 2000 to 2030 for Case 1, 2, 3, 4 and 5 in an Excel spreadsheet.

(h) The TC export/import numbers at Chippawa and Niagara vary somewhat from one case to the next but not to the same extent as the changes in Mainline Western receipts. Please explain why that is.

November 22, 2011 CAPP Information Requests to TCPL Page 117 (i) Given the variations in Mainline Western receipts across the various cases, from what pipelines does the Non-TC Flow come to balance the assumed market demands reflected in these cases? Please provide tables by year and for each of the cases to 2030 showing the flows from the pipelines entering Ontario and Quebec that are providing the balancing flows.

(j) Please confirm that ANR is owned by TransCanada.

(k) Please provide information on all open seasons, or other means to determine eastern market interest, by which ANR has explored the possibility of expansions of its own system or in conjunction with other pipelines to bring U.S. gas across the Ontario border.

(l) What amount of gas that currently comes into Ontario has been transported at some point in its journey to market by ANR? Please provide TransCanada’s forecast to 2030 of gas that enters Ontario that has been transported at some point in its journey on ANR.

(m) Since 2007 has ANR increased its deliveries to GLGT, Vector, or other pipelines that connect into Ontario? If so, please provide details on the volumes. What is TransCanada’s forecast of such volumes to 2030?

(n) Is it correct that the various cases do not assume reversal of PNGTS during the forecast period? If this is not correct, where is this shown in the Part D’s? Please separately identify the flow from PNGTS into Quebec.

(o) Does the Non-TC in Quebec come from gas resources located in Quebec? Please explain.

(p) Do Cases 1, 2, 3, 4, and 5 assume any growth in U.S. N.E. markets over the forecast period? Please explain.

(q) Does the rate of growth assumed in Cases 1, 2, 3, 4, and 5 correspond with TransCanada’s expectations for growth in gas demand in the U.S.N.E.? If not, please restate Attachment A to reflect that growth.

(r) Which of the Base, High, and Low Marcellus forecasts is used in the five cases? Please show the results for all five cases that correspond to the Base, High, and Low Marcellus forecasts.

November 22, 2011 CAPP Information Requests to TCPL Page 118 Question 171:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: TransCanada Eastern Market Flows for Case 1, Case 2, Case 4 and Case 5 are shown on page 55, 63, 68 and 72, respectively. TransCanada shows increased Mainline Western Receipts from 2011 for Cases 1 and 2.

Request:

(a) Please provide the analysis of market demand and competing supplies that supports the forecasts of increasing Mainline Western receipts in Cases 1 and 2.

(b) Case 1 seems to forecast that increasing Mainline Western receipts back out “Non-TC Flow Into Ontario” from 2011 levels.

i. Is this the correct interpretation of Case 1? Please explain why TransCanada believes this will occur and provide the analysis on which this is based.

ii. Case 2 also seems to make the same assumption. Is this correct? Please explain the factors that cause this to happen.

iii. Does Case 3 make the same assumption? Please explain the factors that cause this to happen. If not, please explain why not.

(c) Please provide any study, evaluation, or analysis that TransCanada has of the elasticity of demand for gas via the Mainline based on toll levels.

(d) The various cases in Part D show the Mainline Western Receipts but do not show a detailed disposition of those receipts. Please show, for each case, the disposition of Mainline Western Receipts by deliveries to Saskatchewan, Manitoba, NOL, Viking, GLGT TBO, GLGT to Ontario, GLGT to other markets.

(e) Please breakdown the Mainline Western receipts in each of the cases by NGTL, Suffield, and Saskatchewan.

November 22, 2011 CAPP Information Requests to TCPL Page 119 Question 172:

Reference: (i) Appendix C1, Mainline Throughput Study.

(ii) Section 12: 2012-2013 Revenue Requirement.

Preamble: Page 55 of 79 in Reference (i) shows TransCanada Eastern Market Flows for Case 1 and page 63 of 79 in Reference (i) shows TransCanada Eastern Market Flows for Case 2.

Request:

(a) For the TC Flow into Ontario column for Case 1 and 2, please provide the breakdown between NOL and TBO on Great Lakes.

(b) Please provide the same data as (a) for Case 3.

(c) Please confirm that Ontario and Quebec demands served by TC are the same for Case 1 and Case 2. If not, please explain.

(d) For the Ontario demand served by TC column, please provide a breakdown between firm and discretionary deliveries, i.e. FT, STS, STFT, IT.

(e) For the Quebec demand service by TC column, please provide a breakdown between firm and discretional deliveries, i.e. FT, STS, STFT, IT.

(f) Please provide the Ontario demand and Quebec demand served by TC for Case 3.

(g) Please provide the capacity for NOL and the TBOs on GLGT and on Union assumed in the Study.

(h) For the years 2010 to 2013 inclusive, please reconcile the flows shown on pages 55 in Reference (i) and the deliveries used in Reference (ii).

(i) Please highlight which flows reflected in TransCanada Eastern Market Flows for (page 55 in Reference (i)) are related to proposals for significant capital additions in the Eastern market area?

November 22, 2011 CAPP Information Requests to TCPL Page 120 Question 173:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 55 of 79 shows TC Flow into Ontario (NOL & TC TBO on GLGT) for Case 1.

Request:

(a) What is the total distance of the NOL?

(b) How many pipelines make up the NOL and what are their pipe sizes?

(d) How many valve sections comprise Line 2?

(e) How many valve sections of Line 2 are currently (i) de-rated and (ii) not in-service? Where are these sections? Please provide a map showing the valve sections that are de-rated or not in-service.

(f) What is TransCanada’s planned pipeline integrity expenditures for Line 2 for the period 2011 – 2015?

(g) What are TransCanada’s planned pipeline integrity expenditures for the other lines that comprise the NOL for the period 2011-2015?

(h) Please break down the costs of the planned pipeline integrity expenditures into their various components, ie. SCC digs, corrosion digs, SCC EMAT etc.

(i) How much will it cost to fully isolate and decommission Line 2? Please provide the cost breakdown and timing.

(j) For the summer and winter periods during the period 2010 to 2015, please provide and compare TransCanada’s actual and forecast flows across NOL, TransCanada’s forecast capacity of NOL with full isolation program for Line 2 in effect and TransCanada’s capacity of NOL with all lines fully operational.

(k) What is the historical daily NOL flow, capacity and contract requirements for the period November 2010 to October 2011? Also, please include firm capacity, FT and STFT, demands, capacity with all units available, and the actual NOL flow.

November 22, 2011 CAPP Information Requests to TCPL Page 121 (l) Please confirm that TransCanada is not responsible for fuel costs on the TransCanada Mainline.

(m) Please provide the capacity of the NOL, under winter peak day, summer peak day, winter season and summer season conditions, assuming the following:

i. All pipeline sections are operational;

ii. The current configuration where certain pipeline sections are de- rated or non-operational;

iii. The entire Line 2 is not operational with the existing tie in between Lines 1 and 3.

iv. The entire Line 2 is not operational and Lines 1 and 3 are tied-in at all necessary points.

Question 174:

Reference: (i) Section 5.0: Depreciation.

(ii) Appendix C1: Mainline Throughput Study.

Preamble: Figure 5-2 on page 19 of 21 in Reference (i) shows the annual throughput on the NOL for the period 1957 to 2030. Page 55 of 79 in Reference (ii) shows the TC Flow into Ontario (NOL & TC TBO on GLGT) for the period 2000 to 2020.

Request:

(a) Please confirm that the forecast throughput is extracted from Case 1 in the Mainline Throughput Study. If not, please explain.

(b) Please reconcile the NOL throughput in Reference (i) with the NOL throughput in Reference (ii) for the period 2000 to 2020 inclusive.

(c) For Line 2 in the NOL, please provide the Original book cost at December 31, 2011, accumulated depreciation at December 31, 2011 without re-allocation of accumulated depreciation, and accumulated depreciation with the proposed re-allocation of accumulated depreciation.

November 22, 2011 CAPP Information Requests to TCPL Page 122 Question 175:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Page 79 of 79 shows Figure A-2: 2011 NYMEX Price and Figure A-3: 2011 Alberta Plant Gate Price for TransCanada’s base, low and high cases.

Request:

(a) Please extend the forecasts to 2030 and reproduce Figures A-2 and A- 3.

(b) Please provide TransCanada’s forecast of real NIT prices to 2030 similar to Figure A-3.

(d) Please provide TransCanada’s forecast of real U.S. northeast gas prices to 2030 similar to Figure A-3.

(e) Does TransCanada consider that prices in demand regions affect Mainline throughput from the WCSB? Please explain.

(f) Please provide the data used to generate the figures above in an Excel spreadsheet.

Question 176:

Reference: Appendix C1: Mainline Throughput Study, Attachment A.

Preamble:

(a) The Throughput Study, page 24 of 79 refers to TransCanada’s base, high, low WCSB supply forecasts to 2030. Data in Attachment A goes only to 2020.

(b) Numbers in Attachment A also include fuel. Fuel is shipper provided. TransCanada Mainline charges tolls based on a quantity of gas that is net of shipper provided fuel.

(d) Exports in Part D of the various cases appears to be a net figure of exports/imports.

November 22, 2011 CAPP Information Requests to TCPL Page 123 Request:

(a) Please restate Attachment A to exclude fuel in all cases, to extend the data in all the cases to 2030, and to separate exports from imports in the Part D’s of Cases 1, 2, 3, 4 and 5 so that exports and imports are shown separately.

(b) It appears from the discussion at pages 74 to 79 that the Base, High and Low WCSB supply cases were generated prior to consideration of the effects of the Restructuring Proposal. (i) Is this a correct interpretation? Please explain. (ii) If this is the correct interpretation does TransCanada have Base, High and Low WCSB supply cases with restructuring factored in and, if so, please provide them.

(d) Please provide the Attachment A, Parts A, B, C, and D for the cases to 2030 that correspond with the TransCanada High Case WCSB forecast with and without the Restructuring Proposal.

(e) Please provide the gas demand forecasts (extended to 2030) that correspond with each of the five cases provided in Attachment A as well as the additional cases for the High WCSB forecast requested above. For any of the cases where there is not a market forecast that corresponds with the case, please provide a detailed explanation of the methodology used to account for market factors and to adjust the market forecast in light of the factors that underlie the case and also please provide all the data of these adjustments.

Question 177:

Reference: Appendix C1, Mainline Throughput Study.

Preamble: Various cases are shown.

Request:

(a) How much confidence does TransCanada have in each case? Please explain.

(b) If a probability distribution were used, where on the distribution would each of the WCSB Base, High, and Low cases sit? Please explain.

November 22, 2011 CAPP Information Requests to TCPL Page 124 (c) If a probability distribution were used, where on the distribution would each of the Marcellus Base, High, and Low cases sit? Please explain.

(d) If a probability distribution were used, where on the distribution would each of Cases 1, 2, 3, 4, and 5 shown in Attachment A sit? Please explain.

(e) What are the major uncertainty factors affecting TransCanada’s ability to forecast? Please explain.

Question 178:

Reference: Appendix C1: Mainline Throughput Study.

Preamble: Various figures are provided in the Throughput Study.

Request: Please provide the data by year underlying Figures 2.0, 2.2, 3.0, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 4.0, 5.0, 6.0, 7.0, 7.1, 8.0, 9.0, 10.0, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, A-1, A-2, and A-3. Please provide the data in an Excel spreadsheet.

Question 179:

Reference: Section 3.1, Business Environment, Introduction.

Preamble: Page 2 of 30 states “The dramatic turnaround in supply expectations over the past few years and the moderated expectations for demand growth has resulted in a fundamentally different picture of North American supply and demand balances. This different picture is presented in Figure 3-2, which reflects TransCanada’s 2011 forecast of North American supply and demand.

November 22, 2011 CAPP Information Requests to TCPL Page 125

Source: TransCanada 2011 Annual Corporate Forecast Base Case.

Request:

(a) In light of the above figure and its description, will North America likely see rising supply of natural gas from WCSB?

(b) Will the rising supply from WCSB tend to suppress natural gas market prices?

(c) If there is WCSB supply abundance and suppressed market prices, will the increase in the tolls for Alberta System users reduce the net prices received by producers in Alberta?

Question 180:

Reference: Section 3.3.2.6, Business Environment, Impact of Competing Supply.

Preamble: Page 15 of 30 states “As competing sources of supply have grown, Mainline exports to the US Northeast have declined.” Exports do not have appeared to decline at all Mainline export points.

November 22, 2011 CAPP Information Requests to TCPL Page 126 Request:

(a) Please provide a table showing exports from the Mainline at Emerson for the period 2000 to 2030.

(b) Please describe how exports from Emerson have not been impacted by the factors discussed in Section 3.

Question 181:

Reference: Section 3.6.1, Business Environment, Contracts and Throughput.

Preamble: Page 21 of 30 states “Overall, Mainline Western Receipts dropped from 201 106m3/d (7.1 Bcf/d) in 1999, to 170 106m3/d (6.0 Bcf/d) in 2007 and to 96 106m3/d (3.4 Bcf/d) in 2010, as shown in Figure 3-10.”

Request:

(a) Please confirm that the Western Receipts shown in Figure 3-10 include both firm and interruptible volumes. If this cannot be confirmed, please provide a version of Figure 3-10 including both firm and interruptible volumes.

(b) Please provide the annual values for firm and interruptible western receipts.

(c) Can TransCanada confirm that Alliance shippers have 4 years remaining on their initial terms (expiring Nov. 30, 2015)? If this cannot be confirmed, please explain.

November 22, 2011 CAPP Information Requests to TCPL Page 127 (d) Can TransCanada confirm that in 2010, 92% of Alliance’s shippers by volume elected to not extend their contracts beyond 2015? If this cannot be confirmed, please explain.

Question 182:

Reference: Section 3.0: Business Environment

Preamble: Page 22 of 30 states “Over the past five years, the level of annual firm contracts on the Mainline has decreased dramatically. Effective November 1, 2007, the Mainline had a total of 102 106m3/d (3.6 Bcf/d) of long haul contracts. Currently, there are 37 106m3/d (1.3 Bcf/d) of long-haul contracts for November 1, 2011.

Page 24 of 30 states “on the NOL, annual firm contract requirements as of January 2011 equaled 42 106m3/d (1.5 Bcf/d)”.

Request:

(a) Please provide incremental deliveries and capacities provided by the Eastern Mainline expansions in 2006 and 2007.

(b) Please show by way of a numerical example how TransCanada determines the annual firm contract requirements on the NOL as of January 2011, including the TBO contract levels on GLGT and Union.

(c) Based on the determination of requirements described in (b), please provide NOL annual firm contract requirements as of November 1, 2011 or January 1, 2012 whichever is appropriate.

Question 183:

Reference: Section 3.6.1, Business Environment, Contracts and Throughput.

Preamble: Pages 22 and 23 of 30 state “The contractual profile has also evolved to one largely composed of short-haul contracts. Figure 3-11 shows the trend toward less long-haul contract demand, and more short-haul contract demand.

November 22, 2011 CAPP Information Requests to TCPL Page 128

Decontracting is evident in the increase in deliveries and revenue from services other than long-term firm services, as shown below in Figure 3-12. This figure shows that shippers who choose to transport on the Mainline are increasingly relying on services such as IT and STFT because they can meet their requirements with these services on an essentially firm basis without making a long-term contractual commitment.”

Request:

(a) Please discuss the business risks of shippers inherent in purchasing long term capacity (FT) and short term capacity (STFT and IT).

(b) Given the rise of services other than long-term firm, has TCPL evaluated the shipping volume and revenue impacts of changing the minimum bids for tolls for Mainline services such as the IT and STFT?

Question 184:

Reference: Section 3.6.1, Business Environment, Contracts and Throughput.

Preamble: Page 24 of 30 states “As Figure 3-13 below demonstrates, despite lower average system flows and lower annual firm contract levels, the Mainline sometimes flows at or near capacity, with discretionary services being used

November 22, 2011 CAPP Information Requests to TCPL Page 129 to meet this peak demand. The available system capacity allows shippers to contract STFT when expected gas market conditions (i.e. weather) increase the expected value of transportation, and to use IT to the extent it is available for any further transportation requirements. By using short term services, shippers are able to meet their transportation needs without contracting long term.”

Request:

(a) Please provide TransCanada’s definition of “value of transportation” as used in the referenced paragraph.

(b) Does TransCanada expect that market uncertainty and the frequency at which market conditions change would be a factor shippers would examine in determining whether to contract for long term versus short term service? If not, please explain why not.

Question 185:

Reference: Section 3.6.1, Business Environment, Contracts and Throughput.

Preamble: Pages 24 and 25 of 30 state “For instance, on the NOL, annual firm contract requirements as of January 2011 were equal to 42 106m3/d (1.5 Bcf/d); however over January 29-31, 2011 the NOL reached capacity as an additional 40 106m3/d (1.4 Bcf/d) was contracted as STFT during that term to meet market demand.

November 22, 2011 CAPP Information Requests to TCPL Page 130 Request:

(a) Please explain what is meant by NOL annual firm contract requirements.

(b) Please explain how annual firm contract requirements are determined for the NOL path, as distinct from west to east flows on NOL and/or GLGT.

Question 186:

Reference: Section 3.6.1, Business Environment, Contracts and Throughput.

Preamble: Page 26 of 30 shows Figure 3-14: Billed Monthly Energy Mainline Demand.

Request:

(a) Please describe the paths that represent Western shorthaul. Does Western shorthaul include Empress to Emerson?

(b) Please provide TransCanada’s view as to why Western shorthaul contracting levels have remained relatively stable.

November 22, 2011 CAPP Information Requests to TCPL Page 131 Question 187:

Reference: Section 12.0: 2012-2013 Revenue Requirement, Attachment 12.1, Tab 2 – Transportation by Others.

Preamble: Page 7 of 32 states “Beginning in 2009, TransCanada also began contracting for firm capacity on the GLGT system from St. Clair to Emerson to facilitate transportation out of the Dawn area to meet contract demand in the Eastern Triangle. Shifting Mainline flows resulted in a requirement to change how existing firm contractual requirements on the Mainline were met. The use of firm St. Clair to Emerson capacity was implemented as an alternative to the construction of new facilities.”

Page 16 of 32 states “Given the amount of Union Parkway to Dawn service TBO capacity contracted at the time the negotiations were taking place, TransCanada estimated the minimum level of GLGT capacity from Emerson to St. Clair that provided a reasonable opportunity of meeting the Mainline Open Season revenue goals. … the short-term contractual commitment associated with the GLGT contracts provides TransCanada the ability to adjust its TBO capacity as requirements change.”

Page 21 of 32 states “One factor impacting Union TBO renewal decisions is the difference in renewal provisions in the Union and Mainline Tariffs.”

Pages 27 and of 32 states that part of TransCanada’s contract demand on Union effective November 1, 2012 and November 1, 2013 is required to facilitate new Niagara Falls to Enbridge to CDA contracts.

Request:

(a) Please provide a detailed explanation how Mainline flows shifted, including from and to where.

(b) Does the transportation out of the Dawn area represent incremental deliveries on the Mainline. If not, please explain.

(c) Please provide the numeric economic justification demonstrating the benefit of serving the transportation out of the Dawn area. The cases should include, at a minimum, use of firm St. Clair to Emerson capacity, construction of new facilities, and do nothing.

(d) Please provide the status of the referenced Mainline Open Season. Please provide the adjustments, if any, made to the TBO capacity, given the current status of the Mainline Open Season. If no adjustments were made, please explain.

November 22, 2011 CAPP Information Requests to TCPL Page 132 (e) Please confirm that TransCanada is not seeking to change its renewal policy to match that of Union in this proceeding. Please explain why not.

(f) Please provide a table identifying all the contracts held by Enbridge as of November 1, 2009, November 1, 2010, November 1, 2011, November 1, 2012 and November 1, 2013, showing the following:

i. Type of contract;

ii. Contract start date;

iii. Contract term;

iv. Receipt point; and

v. Delivery area.

(g) Are the Niagara Falls to Enbridge CDA transportation services incremental Mainline deliveries. If not, please explain.

(h) Please provide the economic justification showing the benefit of serving Enbridge’s Niagara Falls to CDA transportation requests.

(i) Please provide the new firm transportation requests from Enbridge in each of these proceedings: GH-2-87, GH-4-88, GH-1-89, GH-4-89, GH-4-91, GH-4-92, GH-2-93, GH-2-94, GH-3-95, GH-3-96, GH-2-97 and GH-3-98.

Question 188:

Reference: Section 12: 2012-2013 Revenue Requirement, Attachment 12.3.

Preamble: Schedule 4 in Tabs 2 and 3 shows the forecast discretionary revenue from IT and STFT for the test years 2012 and 2013.

Request:

(a) Please provide a breakdown between IT and STFT for each of 2012 and 2013.

(b) Please fully explain the rationale behind the discretionary volume assumptions, having regard to the Mainline Throughput Study.

November 22, 2011 CAPP Information Requests to TCPL Page 133 (c) For the period November 1, 1996 to October 31, 2011, please provide graphs showing the following:

i. Daily western Mainline receipts in total and broken down by FT, IT, STFT;

ii. Daily western Mainline capacity (estimate if actual is not available);

iii. Daily NOL flows;

iv. Daily NOL capacity (estimate if actual is not available);

v. Daily GLGT flows; and

vi. GLGT contract demand.

(d) For the response in (c), please provide the data in an excel spreadsheet.

Question 189:

Reference: (i) Appendix C1: Throughput Study.

(ii) Section 12, Part E, Attachment 12.3: Toll Design, Tab 2 - 2012 Toll Design Schedule 2 (PDF page 486 of 565).

(iii) Section 12, Part E, Attachment 12.3: Toll Design, Tab 2 - 2012 Toll Design Schedule 4 (PDF page 498 of 565).

Preamble: Reference (i), page 55 of 79, TransCanada Eastern Market Flows for Case 1, shows Mainline Western Receipts of 3.4 Bcf/d in 2012.

Reference (ii), sum of Lines 6 through 27 totals 1,224,389 GJ/d. Reference (iii), sum of Lines 1, 2, 4 to 12 and 14 to 16 totals 2,173,879 GJ/d. Sum of these two sums totals 3,398,268 GJ/d.

CAPP wishes to examine the linkage between the Throughput study and the revenue forecast.

Request:

(a) Please confirm the sums are calculated correctly. If not, please correct the values.

November 22, 2011 CAPP Information Requests to TCPL Page 134 (b) Please confirm that adding the quantities in Schedule 2 and Schedule 4 should equal Mainline Western Receipts less fuel. If this cannot be confirmed, please explain.

(c) Please confirm that the 3.398 TJ/d (adjusted for the roughly 5% conversion factor) calculated from References (ii) and (iii) does not equate to the 3.4 Bcf/d from Reference (i). If this cannot be confirmed, please explain.

(d) Please confirm that the amounts in Reference (ii) are contract levels i.e. maximum daily flow levels under contract. If this cannot be confirmed, please explain.

(e) Please confirm that the amounts in Reference (iii) are forecast annual volumes expressed in daily average levels. If this cannot be confirmed, please explain.

(f) Please explain how maximum FT flow (contract) levels in Reference (ii) plus average IT/STFT flow levels in Reference (iii) can equal average flow levels in Reference (i). What load factor is assumed for the FT flows?

(g) Please reconcile the Western Mainline Receipts in Reference (i) with the billing determinants for FT in Reference (ii) and forecast IT/STFT in Reference (iii).

Question 190:

Reference: (i) Appendix C1: Throughput Study.

(ii) Section 12, Part E, Attachment 12.3: Toll Design, Tab 3 - 2013 Toll Design Schedule 2 (PDF page 526 of 565).

(iii) Section 12, Part E, Attachment 12.3: Toll Design, Tab 3 - 2013 Toll Design Schedule 4 (PDF page 539 of 565).

Preamble: Reference (i), page 55 of 79, TransCanada Eastern Market Flows for Case 1, shows Mainline Western Receipts of 3.8 Bcf/d in 2013.

Reference (ii), sum of Lines 6 through 27 totals 1,256,445 GJ/d. Reference (iii), sum of Lines 1, 2 to 4 and 6 to 15 totals 2,446,536 GJ/d. Sum of these two sums totals 3,702,981 GJ/d.

CAPP wishes to examine the linkage between the Throughput study and the revenue forecast.

November 22, 2011 CAPP Information Requests to TCPL Page 135 Request:

(a) Please confirm the sums are calculated correctly. If not, please correct the values.

(b) Please confirm that adding the quantities in Schedule 2 and Schedule 4 should equal Mainline Western Receipts less fuel. If this cannot be confirmed, please explain.

(c) Please confirm that the 3.703 TJ/d (adjusted for the roughly 5% conversion factor) calculated from References (ii) and (iii) does not equate to the 3.8 Bcf/d from Reference (i). If this cannot be confirmed, please explain.

(d) Please confirm that the amounts in Reference (ii) are contract levels i.e. maximum daily flow levels under contract. If this cannot be confirmed, please explain.

(e) Please confirm that the amounts in Reference (iii) are forecast annual volumes expressed in daily average levels. If this cannot be confirmed, please explain.

(g) Please reconcile the Western Mainline Receipts in Reference (i) with the billing determinants for FT in Reference (ii) and forecast IT/STFT in Reference (iii).

Question 191:

Reference: Appendix C1: Throughput Study Attachment A Case 1 – TransCanada Eastern Market Flows Part D (Bcf/d) Page 55 of 79 (Revised October 31, 2011)

Preamble: CAPP wishes to examine the linkage between the Throughput study and the revenue forecast.

Request:

(a) For each column in the Reference, please describe the measurement points or meter locations on the Mainline that are included. For

November 22, 2011 CAPP Information Requests to TCPL Page 136 example, what measurement points or meter locations on the Mainline are added to derive the fourth column, “Ontario Demand Served by TC”.

(b) Is it possible to roughly estimate billing determinants from the flow data provided in Case 1? Please discuss how an approximation of billing determinants can be derived from the data provided in Case 1. If it cannot be done, please explain why not.

(d) Is it possible to roughly estimate billing determinants from the flow data provided in Case 2? Please discuss how an approximation of billing determinants can be derived from the data provided in Case 2. If it cannot be done, please explain why not.

(e) Please provide an estimate of billing determinants for the year 2020 based on Case 2.

Question 192:

Reference: TransCanada Application, Section 12.0: 2012-2013 Revenue Requirement Tab 5 - Rate Base, page 8 of 10, line 3-8.

TransCanada 2012 Eastern Mainline Expansion S. 58 Application to NEB November 8, 2011. Application pages 4-5. Section 3.0 pages 7-10

Preamble: TransCanada identifies $129.5 million in capacity capital in 2012 and $46 million in capacity capital in 2013.

Request: Are the capacity capital expenditures identified for 2012 and 2013 for the 2012 Eastern Mainline Expansion as proposed in the s.58 application? If so, please fully identify the costs related to this expansion project and explain any differences to the $130.4 million identified in the s.58 application. Please provide a description of any other capacity additions included in the $129.5 million and $46 million amounts.

November 22, 2011 CAPP Information Requests to TCPL Page 137 Question 193:

Reference: TransCanada Application, Section 12.0: 2012-2013 Revenue Requirement

TransCanada 2012 Eastern Mainline Expansion S. 58 Application to NEB November 8, 2011. Application pages 4-5. Section 3.0 pages 7-10

Preamble: In the s.58 application, Table 3-1 outlines firm service contracts totaling 446,373 GJ/d and Table 3-2 provides the toll impacts calculated using the parameters from the 2011 final tolls application. CAPP is interested in understanding the impacts of the expansion on tolls.

Request: Please provide a table that provides the tolls with out the expansion; with the expansion, assuming no western receipts are displaced, assuming half the western receipts are displaced (western receipts reduced by 223,187 GJ/d), and assuming full displacement (western receipts reduced by 446,373 GJ/d); assuming the expansion is not rolled-in but incrementally tolled. Please calculate the tolls for each of these scenarios using the 2011 Final Tolls parameters, using 2012-13 Status Quo parameters, and 2012-13 Restructuring Proposal parameters. Please provide the system average unit costs in each of the scenarios. Table is attached to be completed.

2011 Final Tolls

Toll with No Roll-in Toll without Toll with No Toll with Half Toll with Full Incrementally Expansion Displacement Displacement Displacement Tolled

Empress to Enbridge CDA

Empress to Enbridge EDA

Empress to Union SWDA

Empress to Union Dawn

Union Dawn to Enbridge CDA

Union Dawn to Enbridge EDA

Parkway to Schomberg CDA

Niagara to Kirkwall

Niagra to Enbrige CDA

November 22, 2011 CAPP Information Requests to TCPL Page 138

System Average Unit Costs

2012-13 Tolls Status Quo

Empress to Enbridge CDA

Empress to Enbridge EDA

Empress to Union SWDA

Empress to Union Dawn

Union Dawn to Enbridge CDA

Union Dawn to Enbridge EDA

Parkway to Schomberg CDA

Niagara to Kirkwall

Niagra to Enbrige CDA

System Average Unit Costs

2012-13 Restructuring Proposal

Empress to Enbridge CDA

Empress to Enbridge EDA

Empress to Union SWDA

Empress to Union Dawn

Union Dawn to Enbridge CDA

Union Dawn to Enbridge EDA

Parkway to Schomberg CDA

Niagara to Kirkwall

November 22, 2011 CAPP Information Requests to TCPL Page 139 Niagra to Enbrige CDA

System Average Unit Costs

Question 194:

Reference: Section 11.0 Fair Return for 2012-2013

Preamble: At page 6 TransCanada states that its use of ROE figures at 40% or 50% equivalence to ATWACC does not indicate the company’s view of the level of Mainline business risk.

Request:

(a) Assuming a traditional approach to assessing business risk and adjusting capital structure to account for increased business risk, what is TransCanada’s view of the level of business risk and corresponding capital structure? What is the view of its cost of capital external witnesses in this regard? Please explain.

(b) Dr. Kolbe in his evidence at page 4 refers to situations where downside risk leads to an asset having junk bond status. Does TransCanada consider that the risks of the Mainline are such that on a stand alone and status quo basis it has junk bond status? Please explain.

Question 195:

Reference: Section 11.0 Fair Return for 2012-2013

Preamble: TransCanada has referred to the application as a comprehensive proposal.

Request:

(a) Given that the application involves NGTL and Foothills, why are the cost of capital including business risks of NGTL and Foothills not addressed?

November 22, 2011 CAPP Information Requests to TCPL Page 140 (b) Does TransCanada consider that the business risks of NGTL and Foothills are the same under the restructuring proposal as under the status quo? What is the view of its external cost of capital witnesses in this regard? Please explain.

Question 196:

Reference: Section 11.0 Fair Return for 2012-2013

Request:

(a) Please provide copies of all security analyst reports, rating agency reports and material change forms filed with securities regulators that discuss the Mainline in some detail since 2004.

(b) Please provide copies of all presentations that have been provided to rating agencies or security analysts discussing the Mainline since January 2010, including presentations discussing the company’s financial results.

Question 197:

Reference: Section 11.0 Fair Return for 2012-2013

Request:

(a) Please provide the allowed and earned ROE each year for the Mainline, Alberta System (NGTL), Foothills (plus ANG) since 1990.

(b) Please provide the allowed common equity ratio, debt ratio and preferred share ratio for each of the three segments in a) above since 1990.

(c) Please indicate when the preferred shares allocated to the Mainline and the junior subordinated debentures were retired and what securities replaced them since 1990.

(d) Please provide the allowed composite depreciation rate for the Mainline, Alberta System, and Foothills for each fiscal year since 1990.

November 22, 2011 CAPP Information Requests to TCPL Page 141 (e) Please provide the gross and net plant in service and annual capital expenditures for the Mainline at the end of each fiscal year since 1990.

(f) Please provide the book value of equity at the end of each fiscal year since 1990 for the Mainline.

(g) Please provide the net income of the Mainline at the end of each fiscal year since 1990.

Question 198:

Reference: Section 11.0 Fair Return for 2012-2013

Request:

(a) TransCanada indicates that it is the operator and owner of each of the Alberta System (NGTL), the Mainline and Foothills, please indicate the chief executive officer (CEO) of each pipeline, whether they have a separate boards of directors, the extent of common directors if formally there are separate boards, and issue debt to the public markets under their own names.

(b) Please indicate whether expanding the Alberta System by including part of TransCanada’s tolls as transportation by others by the Alberta System has been reviewed and approved by a Board of Directors of NGTL that is separate from that of TCPL.

(c) Please indicate whether TransCanada has reviewed the impact of the TBO arrangement on the risk of NGTL’s bond holders.

Question 199:

Reference: Section 11.0 Fair Return for 2012-2013

Preamble: In the Gannett Fleming depreciation study the three Mainline segments have estimated service lives (truncation dates) ranging from 2025-2050 (I- 8) whereas the throughput study (Appendix C1) has a Mainline throughput forecast only to 2020.

Request:

(a) Please indicate what Mainline throughput forecasts were provided to justify the truncation dates ranging from 2025-2050.

November 22, 2011 CAPP Information Requests to TCPL Page 142 (b) Please provide Mainline throughput forecasts to match the two tolling scenarios offered by TransCanada to 2035.

Question 200:

Reference: Section 11.0 Fair Return for 2012-2013

Preamble: To assess the implications for cost of capital of the two scenarios – restructuring and status quo - and the ability of the Mainline to recover its costs including cost of capital, with restructuring and without restructuring, the long range financial forecast under each scenario is required.

Request:

(a) Does TransCanada have a long range financial forecast under each scenario? If so please provide it. If not, please explain why not.

(b) Was a long range financial forecast under each scenario provided to any of TransCanada’s external consultants or witnesses in this case? Please provide the long term forecast information that was provided to the external consultants or experts.

(c) Please provide the financial forecast to 2035 in a usable Excel model that clearly shows the equation linkages in the model so that the structure of the model can be tested.

(d) Does TransCanada forecast any year to 2035 under either scenario where it fails to earn its cost of capital? If so, please explain.

(e) If not included in the long range financial forecast provided in response to the above, please provide to 2035: the rate base each year showing gross plant in service, accumulated depreciation, regulatory assets (deferred charges) and other assets; forecast net plant additions, depreciation and other items to reconcile the change in rate base from year to year; the average rate base for rate making purposes each year; the financing of the average rate base and assumed financing costs each year (debt and equity); the forecast expenses going into the cost of service each year (operations and maintenance expenses, depreciation for rate making purposes; return on equity; interest; income and other taxes for rate making purposes); total cost of service; throughput forecast; cost charged to NGTL in respect of the Alberta System Extension; resulting benchmark tolls (long haul toll to Dawn, short haul toll to Toronto).

November 22, 2011 CAPP Information Requests to TCPL Page 143 Question 201:

Reference: Section 11.0 Fair Return for 2012-2013

Preamble: TransCanada Pipelines sponsors a defined benefit pension plan (note 22 to its 2010 Annual Report). The long term rate of return on plan assets was assumed to be 6.9% in 2007 and 6.95% in both 2008 and 2009. The note states the following:

“The overall expected long-term rate of return on plan assets is based on historical and projected rates of return for the portfolio in aggregate and for each asset class in the portfolio. Assumed projected rates of return are selected after analyzing historical experience and estimating future levels and volatility of returns. Asset class benchmark returns, asset mix and anticipated benefit payments from plan assets are also considered in determining the overall expected rate of return. The discount rate is based on market interest rates of high quality bonds that match the timing and benefits expected to be paid under each plan.”

Request:

(a) Please provide the long run rate of return used by the company’s actuary in 2010 and that forecast for 2011.

(b) Please provide the historic rate of return used by the Actuary for each asset class for 2007, 2008, 2009, 2010 and projected for 2011 and the portfolio weights used to arrive at the overall expected long term rate of return on plan assets.

(c) Please indicate whether the plan actuary has a target real rate of return and whether this has changed significantly over the last four years.

Question 202:

Reference: Section 11.0 Fair Return for 2012-2013

Preamble: The throughput forecast and the evidence of Dr. Carpenter refers to natural gas from Northern BC flowing west to Kitimat to be converted into LNG and sold into Asian markets.

Request: What is the Company’s view, and that of Dr. Carpenter, of plans to export U.S. gas as LNG from facilities in the Gulf of Mexico? What is the view of the Company, and that of Dr. Carpenter, of the effect of such LNG exports on the North American supply/demand balance and natural gas prices.

November 22, 2011 CAPP Information Requests to TCPL Page 144 Question 203:

Reference: Appendix D-1, Evidence of Dr. Carpenter

Preamble: Dr. Carpenter’s overall risk assessment of the Mainline, pages 2-4

Request:

(a) Dr. Carpenter refers to the significant increase in risk since 2004 for the Mainline. Will he confirm that the NEB increased the Mainline’s depreciation rate for 2003 and its common equity ratio in both 2001 and 2004 due to concerns about long run cost recovery.

(b) Would Dr. Carpenter further confirm that, while Union Gas, for whom Dr. Carpenter has provided business risk testimony in the past, had 6% more common equity than the Mainline in 2000, it now has less. Would Dr. Carpenter agree that one way of adjusting for higher business risk is to lower the financial risk faced by the shareholder?

(c) Would Dr. Carpenter agree that the Regie de L’Energie regards GMI, for whom Dr. Carpenter has provided recent business risk testimony, as a riskier than average gas LDC?

(d) Would Dr. Carpenter confirm that Union Gas is allowed 36% common equity and GMi 38.5%?

(e) On page 4 Dr. Carpenter refers to “other gas transmission pipelines” which pipelines is he referring to? Please provide the names of the pipelines that form the basis for this comparison.

(f) Dr. Carpenter notes that the Mainline has less short run risk than US pipelines (page 5), what weight would he place on short versus long run risks and how does this compare to his Mainline testimony in 2004?

(g) Dr. Carpenter indicates that investors place greater weight on long term risk (page 9). Please explain why investors react to short term earnings announcements.

Question 204:

Reference: Appendix D-1, Evidence of Dr. Carpenter

Preamble: Natural gas prices and supply, pages 20 to 31

November 22, 2011 CAPP Information Requests to TCPL Page 145 Request:

(a) Please provide the underlying data in machine readable Excel format for Figures 1 and 2 on pages 20 & 21.

(b) What is the average utilization (MMBtu/d and % of send out capacity) of the Canaport LNG facility (Figure 10). Is this higher, lower or equal to the expectations of Repsol when it built the plant?

(c) How has the send out from the Canaport LNG facility been affected by U.S. gas demand? By growth in U.S. gas supply? Please explain.

Question 205:

Reference: Appendix D-1, Evidence of Dr. Carpenter

Preamble: Unsubscribed capacity, page 52

Request:

(a) Dr. Carpenter references the unsubscribed capacity on the Mainline relative to Dr Vilbert’s US pipeline sample. He also notes the substantial increase in US pipeline capacity on page 24. For each of the US pipelines in Dr. Vilbert’s sample please provide for each of the most recent three years for which data is available the average daily load factor (average day volume transported relative to capacity) and the percentage of gross plant in service that is depreciated and compare the average to the TransCanada Mainline.

(b) Has Dr. Carpenter considered the impact of decontracting on Alliance throughput and the possibility of the Mainline gaining some volumes from that decontracting? Please explain.

(d) Please provide the current tolls for shipping on Alliance to Chicago and then to Dawn on connecting pipelines?

Question 206:

Reference: Appendix D-1, Evidence of Dr. Carpenter

Preamble: Risk and Earned Return variability for US pipelines, page 62

November 22, 2011 CAPP Information Requests to TCPL Page 146 Request:

(a) Dr. Carpenter refers to the fact that he has seen industry publications of earned return volatility for US pipelines, please identify these and provide a copy of these publications.

(b) For each of the companies in Dr. Vilbert’s samples, when was the last time each had a litigated ROE hearing and what was the decision.

(c) Please provide the data underlying Figure 26, page 75. Please also provide the total number of rate cases in Figure 26. Please provide for the 2010 and 2011 cases shown in Figure 26, the company, regulator, date, allowed ROE, equity ratio, and estimation technique relied on and any special factors in the case that affected the equity return decision.

(d) Please also identify which rate cases in Figure 26, if any, set the cost of capital by the use of an ATWACC methodology similar to that proposed in this hearing and identify the case and company.

(e) Figure 27 shows return on an ATWACC basis. Please provide the data underlying Figure 27 including the rate case, the ROE, debt cost, tax rate, ratio of debt, ratio of equity. Please also provide the bond ratings of the companies or if that is not available the range of bond ratings.

(f) Is Dr. Carpenter aware of any rate cases before the FERC for U.S. gas or oil pipelines where ATWACC testimony has been entered and the decision of FERC with respect to that testimony, that is, whether it was adopted or not? Please provide the citations for all such cases.

(g) Has Moody’s or S&P offered any judgment as to the supportiveness of state regulation of US electric and gas LDCs versus FERC regulation of pipelines? Please provide details of any such judgment.

(h) Dr. Carpenter downplays short term income variability of U.S. pipelines and gas LDCs, is he aware of any reports by Moody’s or S&P that support this judgment? Please provide any such reports.

(i) Dr. Carpenter mentions that the Mainline has “partial deferral” accounts that somewhat reduces the variability of its earnings” (page 83). Please provide the Mainline’s allowed and actual ROE since 1990 and explain the source of any under earning greater than 20 basis points.

November 22, 2011 CAPP Information Requests to TCPL Page 147 Question 207:

Reference: Appendix D-2 Evidence of Mr. Engen

Preamble: Mr. Engen’s testimony page 6

Request:

(a) Would Mr. Engen or TransCanada please provide the following details on all TransCanada’s equity offerings since 2004: amount raised, average price per share for the 20 days prior to the offering, price of the offering, book value per share as of the last quarter, take up in terms of residency (Canada vs non-Canadian).

(b) Would Mr. Engen or TransCanada please provide the following details on all TransCanada’s debt offerings since 2004: amount of issue, coupon, maturity, all-in yield, yield on similar maturity Canada bond, yield on Bloomberg utility index of similar maturity.

Question 208:

Reference: Appendix D-2 Evidence of Mr. Engen

Preamble: Mr. Engen’s comments on equity markets, pages 12 and following

Request:

(a) Please confirm that the price earnings ratio is the inverse of the earnings yield (page 12).

(b) Please confirm that equities are at least a partial hedge against inflation in that corporate profits have averaged a similar percentage of GDP and over long periods of time grow at the average GDP growth rate.

(c) Please confirm that as a result of a) and b) there is an average PE ratio (sometimes called the Shiller PE ratio) over the business cycle.

(d) Please confirm that the nominal bond yield reflects expected inflation since it is fixed in nominal terms with the result that the expected yield tends to increase with an expected increase in inflation.

(e) Please confirm that current long term Canada bond yields are about 3%.

November 22, 2011 CAPP Information Requests to TCPL Page 148 (f) Please confirm that the earnings yield minus the yield on the long term Canada bond reflects the drop in inflationary expectations and its impact on the long Canada bond yield and may say nothing about a “valuation bar for equities.”

Question 209:

Reference: Appendix D-2 Evidence of Mr. Engen

Preamble: Investor views of regulated returns page 14

Request:

(a) Please provide quantitative support for the notion that Mr. Engen states that investors view there to be a need to increase allowed returns. What objective evidence does Mr. Engen have to support this statement in terms of a drop in relative share prices of Canadian utilities, a decline in transaction multiples for the sale of utility assets, higher yields on Canadian income trust or LP utility assets etc.? Please provide all such quantitative evidence.

(b) Please provide the transaction prices for all energy infrastructure assets acquired since 2004 including, for example, Fortis’ purchase of Terasen Gas. The information required is the total value paid for the acquired common equity, the book value of the acquired equity, the date of the transaction and any closing adjustments.

Question 210:

Reference: Appendix D-2 Evidence of Mr. Engen

Preamble: Mr. Engen discusses Canada’s supportive regulatory environment on page 16.

Request:

(a) This discussion seems to be new for Mr. Engen. Please indicate and provide extracts where in his prior testimony before the NEB he has stressed the supportive nature of Canada’s regulatory environment.

(b) Please indicate whether Mr. Engen agrees with Moody’s that the regulatory environment in Canada is more supportive than that in the

November 22, 2011 CAPP Information Requests to TCPL Page 149 United States. Please also indicate where in his prior NEB testimony he has brought this to the attention of the Board.

(c) Please indicate where in his prior testimony to the NEB he has produced extracts from equity research reports such as those on pages 17-18 stressing the advantages of regulatory protection in Canada.

(d) In citing intervener final argument on page 19 is Mr. Engen now agreeing that the interveners in that case were correct and TransCanada and its witnesses were wrong?

(e) Please provide the actual yield data underlying Figure 1, page 21, along with the sources of the data and the Bloomberg long term utility index yield data for comparison purposes.

Question 211:

Reference: Appendix D-2 Evidence of Mr. Engen

Preamble: Mr. Engen’s comments on TransCanada’s bond spreads and financial access pages 25-29

Request:

(a) Please confirm that it is the required yield on TransCanada’s debt that determines its market value and not its spread over long Canada bond yields, that is, if the spread increases but the LTC yield falls then the value of the bonds may still increase.

(b) Please indicate all outstanding TransCanada bonds at the current time and their current status as selling at a premium to their par value versus a discount.

(c) Please redo Figure 4, page 28, and add the average yield on the long Canada bond for that year to that on the Mainline’s allowed ROE. In Mr. Engen’s judgement does this indicate that the allowed risk premium for the Mainline has increased or decreased?

(d) As a declining rate base pipeline would Mr. Engen agree that the Mainline has generated positive cash flow due to the lack of reinvestment of its depreciation expense? If not why not.

(e) Please confirm that it is the free cash flow derived from the Mainline that has in part allowed TransCanada to purchase other assets and

November 22, 2011 CAPP Information Requests to TCPL Page 150 diversify. If not please explain what has happened to this free cash flow.

(f) Please provide a figure for the same period to those of Figures 2-7 of the Mainline’s annual operating cash flow defined conventionally as net income plus depreciation and change in non-cash working capital.

(g) Mr. Engen states that the Mainline would not be able to attract capital on reasonable terms if the Board does not approve the restructuring proposal (page 31). Is Mr. Engen saying that the Mainline would not be able to raise capital at all under the status quo? If Mr. Engen is referring instead to the terms under which capital could be raised, what are the differences between the terms expected under the restructuring proposal and the status quo? Please explain. Is Mr. Engen assuming in this instance that the Board would also not approve the higher status quo cost of capital that TransCanada has said it requires under the status quo? Please explain.

(h) Has the Mainline experienced any difficulty raising capital? Please explain.

(i) Please provide a free cash flow forecast for the Mainline for 2012- 2016 indicating the need to raise capital and the associated credit metrics (interest coverage, debt ratio, free cash flow to debt etc) for a status quo Mainline.

Question 212:

Reference: Appendix D-2 Evidence of Mr. Engen

Preamble: Mr. Engen’s comments about regulated Canadian utility assets, page 34. Mr. Engen refers to Canadian regulated assets as being viewed as “largely homogeneous” with some exceptions.

Request:

(a) Please explain what “homogenous” means in this context including the attributes of regulated assets and elements of risk that cause investors in Mr. Engen’s opinion to hold this view.

(b) Please also identify the regulated assets or utilities that are viewed by investors as exceptions.

November 22, 2011 CAPP Information Requests to TCPL Page 151 Question 213:

Reference: Appendix D-2 Evidence of Mr. Engen

Preamble: Expected returns, page 35

Request:

(a) Does Mr. Engen agree with Dr. Vilbert’s analysis that with a forecast long term Canada yield of 4.05% and a market risk premium of 5.75- 6.25% that the overall market’s expected return is between 9.80% and 10.30%. If not where would he disagree with Dr. Vilbert’s analysis?

(b) Please provide any BMO strategy reports that indicate a long run expected return on the overall market substantially different from that of Dr. Vilbert.

(c) If Mr. Engen views private investors as looking for returns on utility type infrastructure assets of 15-20% is it his view that they view these assets as riskier than the market as a whole or is it because they finance their purchase of these assets with greater leverage? Please discuss in detail and provide an example transaction to illustrate their 15-20% “target.”

(d) Can Mr. Engen confirm that most pension funds in Canada have real return targets of about 4.0%.If he cannot do so please provide extracts from the CPP, OTPP, HOOPs or any other major pension fund that has a substantially different target.

(e) For each of the infrastructure assets purchased that he lists in Table 1, please confirm that the listed purchase price is for the common equity, if not please provide it. Also please provide the last book value for the common equity (and the associated market to book price paid) and the allowed return on equity if available, if not the ROE in the last annual report.

Question 214:

Reference: Appendix D-2 Evidence of Mr. Engen

Preamble: Foreign Investments, page 38-39

November 22, 2011 CAPP Information Requests to TCPL Page 152 Request:

(a) Does Mr. Engen agree that to compare nominal rates of return in different countries with different currencies an adjustment for foreign exchange is necessary? If not, please explain.

(b) Please confirm that BMO routinely borrows money in U.S. dollars using the swap rate to hedge the U.S. dollar exposure and compares this to its C$ borrowing rate (normally the BA rate). If not confirmed, please explain.

Question 215:

Reference: Appendix D-2 Evidence of Mr. Engen

Preamble: Indexes and graphs, pages 42 to 75

Request:

(a) Please confirm that the State Street index shown in Figure 9 is not an index of Canadian confidence. If not confirmed, please explain.

(b) Please provide an equivalent graph to Figure 10 for the TSX utility index.

(c) Please confirm that the VIXC in Figure 11 is derived from at the money options on the TSX60 and provide an equivalent implied volatility estimate for at the money options on TransCanada Corporation over the same time period. Please also explain why the VIXC is not comparable to the former MVIX.

(d) For Figure 14 please provide a figure with the long Canada bond yield overlaid on the spreads shown in Figure 14 since 1980.

(e) Please start Figure 15 in 1980. Please also overlay the long Canada bond yield from 1980 over the values shown in Figure 15.

(f) Figure 15 indicates a source as Foster Associates. What data and from whom at Foster or from what Foster publication was the Foster data obtained?

(g) Please provide the data underlying Figures 16 and 17 in machine readable Excel format so the graphs can be replicated and also please provide the source of the data.

November 22, 2011 CAPP Information Requests to TCPL Page 153 (h) With regard to the spreads shown on Figure 17, is it Mr. Engen’s professional judgment that the liquidity of the corporate bonds shown is equivalent to that of the benchmark long Canada bonds? Please explain. Liquidity in this sense means the ability of a large institution to easily trade at fair market value a large amount of bonds without significantly affecting the market price.

(i) Please indicate the terms of TransCanada’s current bank lines of credit and compare them with the generic discussion on page 58.

(j) Mr. Engen reports that BMO is forecasting the ten year bond yield to be 4.05% in 2012 (page 67) whereas Dr. Vilbert is using 4.05% as the forecast long term (30 year) bond yield. Please reconcile the difference. Does the low Canada bond yield forecast indicate that BMO’s macroeconomic forecast is more pessimistic than would be suggested by higher Canada bond yield forecasts? Please explain.

(k) Mr. Engen reports that before tax corporate profits grew at a compound rate of 3.2% since 2001 (page 68) is this NIA profits or GAAP profits? Please also provide the nominal GDP growth rate for the same period.

Question 216:

Reference: Appendix D-3 Evidence of Dr. Kolbe

Preamble:

Request: Please provide a list of all rate cases in Canada and the U.S. where Dr. Kolbe and/or Dr. Vilbert have presented ATWACC evidence and identify, with citations, those cases where the decision adopted the ATWACC approach and those cases where the decision rejected the ATWACC approach.

Question 217:

Reference: Appendix D-3 Evidence of Dr. Kolbe

Preamble: Dr. Kolbe discusses asymmetric risk on page 4

November 22, 2011 CAPP Information Requests to TCPL Page 154 Request:

(a) Where investors perceive downside risks to be greater than upside risks, can this be observed in financial market performance?

(b) Please provide the yield to maturity on a representative TransCanada long term debt issue, along with that on a similar maturity government of Canada bond and the similar maturity Bloomberg utility index since 2002.

Question 218:

Reference: Appendix D-3 Evidence of Dr. Kolbe

Preamble: Overall recommendations pages 7-8 of 12.05 ROE at 40% common equity under restructuring and 13.62% ROE at 40% common equity under status quo.

Request:

(a) Please confirm that Dr. Vilbert’s expected return on the overall market is 9.80-10.30% (being the sum of his forecast yield on long Canada debt is 4.05% and his market risk premium estimate is 5.75% to which he has added 0.50% to reflect what he regards as continuing market uncertainty)?

(b) Do the ROE recommendations of 12.05% and 13.62% at 40% equity indicate that Dr. Kolbe regards an equity investment in the Mainline as riskier than the overall market? Please explain.

(c) Does Dr. Kolbe view the Mainline as riskier than the over all market under the restructuring proposal? Under the status quo? Please explain.

(d) Assuming an over all market return of 10.30%, what are the implied betas of a 12.05% ROE and 13.62% ROE at 40% equity? Using 50% as the equity thickness and the recommended ATWACCs, what are the equivalent ROEs and the implied betas relative to an overall market return of 10.30%?

November 22, 2011 CAPP Information Requests to TCPL Page 155 Question 219:

Reference: Appendix D-3 Evidence of Dr. Kolbe

Preamble: Dr. Kolbe’s references to “take- or pay” and electricity industry losses page 11

Request:

(a) Please provide the magnitude of the take or pay losses. Please also indicate the companies that went bankrupt.

(b) Did any companies that went bankrupt recover? Or, in the case of companies that did not recover, were their regulated assets absorbed by another company? Please explain. Please also describe the factors that enabled any of these distressed regulated assets to continue to provide useful service.

Question 220:

Reference: Appendix D-3 Evidence of Dr. Kolbe

Preamble: Dr. Kolbe references the promised yield on default risky bonds on page 12

Request: Does Dr. Kolbe agree that the yield also reflects a liquidity premium since corporate bonds are not as liquid as Government of Canada benchmark bonds? If not please explain why not.

Question 221:

Reference: Appendix D-3 Evidence of Dr. Kolbe

Preamble:

Request: Please provide copies of all referenced published articles and the cited pages for unpublished material.

November 22, 2011 CAPP Information Requests to TCPL Page 156 Question 222:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Dr. Vilbert’s overall ATWACC estimates on page 4

Request:

(a) Please restate the “best point” estimates in traditional terms of the before tax debt cost, after tax equity cost and the weights.

(b) Table 1 shows point estimates that range from an ATWACC of 6% for the Canadian Utilities Sample, 6.5% for the U.S. Gas LDC Sample, 7% for the All Pipelines Sample and Gas Pipelines Sample, and 6.75% and 7.25% for the Gas Pipelines Subsample and Oil Pipelines Sample respectively. Does Dr. Vilbert consider that risk differences or structural differences between the Canadian and U.S. markets could be factors in the different ATWACC estimates?

(c) Please confirm that in his RH-4-2001 Additional Written Evidence, November 2001, for TransCanada Dr. Vilbert’s Canadian sample yielded a point estimate of 6.5%, his U.S. gas LDC sample 7.0%, and his U.S. gas pipeline sample 7.5%. Please provide the actual estimates from that hearing and contrast them with his estimates in this hearing. Please also explain why the current ATWACC estimates are uniformly lower by 0.50% given that long Canada bond yields have fallen 1.80% from his 5.85% forecast then to the current 4.05%.

(d) Please confirm that in that 2001 TransCanada hearing Dr. Kolbe (June 2001 testimony) upwardly adjusted Dr. Vilbert’s ATWACC estimates due to “the extent that competitive pressures are increasing for TransCanada...”.

Question 223:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: The comment is made on page 6 that Dr. Kolbe that provides the estimate of the cost of capital based on the ATWACC estimates and Dr. Carpenter’s evidence.

November 22, 2011 CAPP Information Requests to TCPL Page 157 Request:

(a) Did Dr. Vilbert consider the Mainline’s business risk in the preparation of his evidence? Please explain and identify where in the evidence Mainline business risk is considered

(b) Would Dr. Vilbert’s evidence have been different if he had been asked to provide testimony in for example, a Gaz Metropolitain, Union Gas or TransAlta hearing and, if so, in what respects? Please explain.

Question 224:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Dr. Vilbert’s discussion of the cost of capital as an expected rate of return on page 8:

Request:

(a) Does Dr. Vilbert agree that the cost of capital is an investor’s required rate of return? If not, please explain.

(b) Does Dr. Vilbert agree that if an investor’s required rate of return is higher than the expected return they do not buy the shares? If not, please explain.

(c) Does Dr. Vilbert agree with the notion that the cost of capital is only equal to the expected rate of return in capital market equilibrium? If not please explain.

(d) Does Dr. Vilbert agree that the effect of investors not buying the shares when the required rate of return is higher than the expected return causes the price to drop until the expected rate of return on the lower market value equals the required rate of return? If not please explain.

(e) Dr. Vilbert states that rate levels that give an investor a fair opportunity to earn their cost of capital (page 9) are the lowest levels that compensate for risk. Does Dr. Vilbert agree that this is the same for any costs faced by a competitive firm, that is under competitive conditions they are paid the lowest level consistent with the service provided.

November 22, 2011 CAPP Information Requests to TCPL Page 158 Question 225:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: The ATWACC discussion on page 11

Request:

(a) Dr. Vilbert states that you can solve for either the “return on equity” or the equity weight in the capital structure once you estimate the ATWACC from a sample of firms. Please confirm that this explicitly assumes that the ATWACC is fixed in these calculations. If not, please explain.

(b) Assuming an ATWACC of 6%, an after tax market cost of debt of 3% (5% before tax), and a 40/60 equity/debt structure, please provide the market cost of equity. Please show the calculations.

(c) Assuming an ATWACC of 6%, an after tax market cost of debt of 3% (5% before tax), and an 8% market cost of equity, please provide the equity ratio. Please show the calculations.

(d) Assuming an ATWACC of 6%, an after tax market cost of debt of 3% (5% before tax), and a 6% market cost of equity, please provide the equity ratio. Please show the calculations.

(e) Assuming an ATWACC of 6%, an after tax market cost of debt of 3% (5% before tax), and a 28/72 equity/debt structure, please provide the market cost of equity. Please show the calculations.

(f) Assuming an ATWACC of 7%, an after tax market cost of debt of 3% (5% before tax), and a 40/60 equity/debt structure, please provide the market cost of equity. Please show the calculations.

(g) Assuming an ATWACC of 7%, an after tax market cost of debt of 3% (5% before tax), and an 8% market cost of equity, please provide the equity ratio. Please show the calculations.

(h) Assuming an ATWACC of 7%, an after tax market cost of debt of 3% (5% before tax), and a 6% market cost of equity, please provide the equity ratio. Please show the calculations.

(i) Assuming an ATWACC of 7%, an after tax market cost of debt of 3% (5% before tax), and a 28/72 equity/debt structure, please provide the market cost of equity. Please show the calculations.

November 22, 2011 CAPP Information Requests to TCPL Page 159 (j) Assuming an ATWACC of 7%, an after tax market cost of debt of 4.5% (7.5% before tax), and a 40/60 equity/debt structure, please provide the market cost of equity. Please show the calculations.

(k) Assuming an ATWACC of 7%, an after tax market cost of debt of 2.5% (5% before tax), and a 40/60 equity/debt structure, please provide the market cost of equity. Please show the calculations.

(l) Assuming an ATWACC of 7%, an after tax market cost of debt of 3.75% (5% before tax), and a 40/60 equity/debt structure, please provide the market cost of equity. Please show the calculations.

(m) Does Dr. Vilbert agree that the financial risk to the company is the pre- tax cost of debt that the company must pay to its investors? If not, please explain. Please also explain why the investor’s required return on equity would vary with the tax rate.

(n) If Dr. Vilbert believes that the constant ATWACC assumption shown in his calculations is only correct over an approximate range please indicate where in his calculations this assumption is explicit and how such an adjustment would be made.

(o) What are the equity ratios allowed for rate making purposes of the utilities and pipelines included in Dr. Vilbert’s samples?

Question 226:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: On pages 16-22 Dr. Vilbert discusses the state of financial markets and the market risk premium.

Request:

(a) Dr. Vilbert provides a volatility index in Figure 2 for the previous two years. Please provide the VIX and MVIX for the period of the Long Term Capital crisis, the Russian debt crisis, the Internet Bubble, the ABCP crisis in Canada and the Adjustment to the Free Trade Agreement recession.

(b) Please provide equivalent data to Figure 2 for utilities in the U.S. and separately for utilities in Canada.

(c) Please provide a graph of TransCanada’s stock price since 1998 and discuss whether in Dr. Vilbert’s judgment the price pattern indicates

November 22, 2011 CAPP Information Requests to TCPL Page 160 that investors have sold TransCanada’s shares in the face of increased risk aversion to generate a higher expected rate of return.

(d) Does Dr. Vilbert agree that when a regulator increases the allowed equity return of a utility when prices of other securities fall, then this makes the utility a “counter-cyclical” stock? Does Dr. Vilbert also agree that this lowers the utility’s risk? If not please explain.

Question 227:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: On pages 21-22 Dr. Vilbert discusses the current cost of capital and market risk premium

Request:

(a) Please indicate how much of the change in yield spreads that Dr. Vilbert documents on page 21 is due to changes in liquidity, how much is due to changes in expected default losses as discussed by Dr. Kolbe on page 12 and how much is due to increased risk aversion and thus the risk premium.

(b) Dr. Vilbert states that his current market risk premium estimate is a substantial reduction from the 150 bps increase he used at the height of the crisis. Please indicate what testimony he is referring to and the forecast long term government bond yield he used at that time.

Question 228:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Dr. Vilbert’s estimation procedures for the cost of debt on page 29

Request:

(a) Which bond rating did Dr. Vilbert use; the company’s issuer rating or a debt rating for a particular issue? How does Dr. Vilbert adjust for multiple debt ratings for different types of debt issues?

November 22, 2011 CAPP Information Requests to TCPL Page 161 (b) Why does Dr. Vilbert use a marginal tax rate of 25.864% rather than the average tax rate that would be used to set rates?

(d) Please confirm that using the ATWACC approach employed by Dr. Vilbert, a higher tax rate lowers the after tax debt cost so that with a constant ATWACC and a given capital structure, the return on equity goes up.

Question 229:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: The ECAPM discussion on page 44

Request: Please provide the full citations for the ECAPM estimates and the time periods for the estimated coefficients of 1.0-7.0% along with the standard errors of these coefficients. Please also identify whether the tests of CAPM referred to use actual unadjusted betas and not adjusted betas.

Question 230:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Pages 46 and folowing Dr. Vilbert discusses the DCF model

Request:

(a) Please confirm that equation (6) was first developed by the late Professor Myron Gordon of the University of Toronto and is normally referred to as the Gordon model.

(b) Please provide all theoretical justification for assuming that the utility sector’s long term growth rate will approximate the growth rate in GDP, given that they are generally mature industries (page 48).

(c) Please provide all justification for using a short run earnings growth rate in the DCF model given that dividends are not as volatile as earnings and firms generally smooth their dividends, that is, even if earnings are say 10% in the short run it is highly unlikely that dividends will increase in the same proportion.

November 22, 2011 CAPP Information Requests to TCPL Page 162 (d) On page 48 Dr. Vilbert indicates that the DCF model is a “useful check” whereas on page 50 he indicates the DCF models should be given more weight, please explain how much more than a check he would judge the DCF results to warrant.

Question 231:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Page 51 Dr. Vilbert discusses the risk of his samples

Request:

(a) Did Dr. Vilbert consider Canadian income trusts and limited partnerships that have pipeline and other regulated assets? For example were Valener and Verasen considered? Please explain why such firms were not included in the samples.

(b) Please indicate which of the companies on page 53 are inter-listed in the U.S., the proportion of stock ownership by non-Canadians as of the latest available date in 2011 and the proportion of trading in Canada versus elsewhere during 2011.

(c) Please provide the DBRS bond rating for the Canadian companies on page 53 and which of the Canadian firms are in the TSX60.

(d) Please confirm that the U.S. gas LDCs are generally smaller than the Canadian sample of firms and whether in Dr. Vilbert’s judgment size is a risk factor as he discusses with respect to the Fama-French model.

(e) Please indicate which of the U.S. gas LDCs are included in the S&P500 index.

(f) For each of the betas shown in Tables 4, 5, 6 for the various samples, please provide the calculations and where the beta is derived from Bloomberg. Please also explain more clearly if the betas for the U.S. pipeline sample are Bloomberg adjusted betas as of June 30, 2011 as indicated in note 4 or unadjusted betas calculated from Bloomberg data as stated in the subsequent text and if the latter why does Workpaper #1 to Table MJV-25 look like Workpaper #1 to Table MJV-10 and does not look like Workpaper #1 to Table MJV-20?

(g) Please provide the unadjusted Canadian utility sample betas.

November 22, 2011 CAPP Information Requests to TCPL Page 163 Question 232:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Dr. Vilbert’s sample estimates on page 59

Request:

(a) Please provide the underlying rate of return data used to create the graphs on pages 63 and 64 in machine readable Excel format so that they can be replicated. Please provide the source of the data.

(b) Dr. Vilbert states that he adjusted the Canadian sample betas towards 1.0 as is “standard practice” (page 65). Please explain what standard practice he is referring to. Is this Canadian or U.S. regulatory practice and provide sources if he is referencing Canadian practice.

(c) Please explain in detail why adjusted betas are more appropriate for utilities regulated on an original cost basis (page 67).

(d) Please explain why Dr. Vilbert didn’t run a two factor model including interest rates as a second factor if he felt that interest rates were affecting their direct beta estimates.

Question 233:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: DCF estimates on page 74 and following

Request:

(a) Dr. Vilbert states that dividends and earnings grow at the same rate over the long run and that the long run growth rate in GDP is a good long run estimated growth rate for these utilities. Has Dr. Vilbert conducted any analysis to test this assumption? If so please provide the analysis.

(b) For each firm in his Canadian and U.S. samples please provide the dividend per share (DPS) and earnings per share (EPS) for each year since 1990 along with the annual growth rate in GDP.

(c) With the data in (b) please run a simple ordinary least squares regression of the annual DPS and EPS growth rates for each utility

November 22, 2011 CAPP Information Requests to TCPL Page 164 against that for GDP to test the assumption they grow at the same rate in a long run.

(d) With the data in (b) please run an ordinary least squares regression of the annual DPS growth rate against that for EPS to test the assumption that the EPS growth rate is a good proxy for the DPS growth rate needed in the DCF model.

(e) Dr. Vilbert mentions that the DCF model is not “completely reliable” at the current point in time, for each company that he presents a five year analyst forecasted growth rate, please report the number of analysts included in the average growth rate forecast as well as the total number of analysts following the stock as represented by other analyst data.

(f) Please explain how Dr. Vilbert has taken into account the well known observation that short run analyst growth estimates are generally regarded as suffering from “optimism” bias. In Dr. Vilbert’s judgment would optimism bias account for the fact that the estimated EPS growth rate generally exceeds the historic EPS growth rate? Please explain.

Question 234:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Conclusions on page 78-83

Request: Dr. Vilbert provides a range of ATWACC estimates for each sample, please provide the range of ROEs at 40% equity and at 50% equity for each sample and the low and high ROE for all samples at 40% equity and 50% equity.

Question 235:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Appendix B

November 22, 2011 CAPP Information Requests to TCPL Page 165 Request:

(a) Please explain why Fortis’ acquisition of Terasen Gas, a rate of return regulated Canadian gas utility, would bias its recent beta estimate or its dividend and earnings expected growth rates in the DCF estimate.

(b) Dr. Vilbert indicates that he removed Pacific Northern Gas due to its size and “thin” trading problems, please indicate whether Dr. Vilbert is aware of any statistical techniques available to adjust for thin trading problems in beta estimation and explain whether this is a problem using monthly data.

(c) Please explain why any possible merger of AGL and Nicor would invalidate the use of their historic betas as indicative of U.S. utility risk.

(d) On page B11 Dr. Vilbert indicates that 39 of 73 pipeline companies (over 50%) were removed due to non-investment grade bond ratings, would Dr. Vilbert agree that this indicates that the typical U.S. pipeline has more investment risk than the typical Canadian pipeline? Please explain.

(e) Does the TransCanada Mainline have any mid-stream liquids assets?

Question 236:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Appendix C market risk premium

Request:

(a) Please confirm that the Ibbotson international cost of capital (page C23) adds a country risk premium on the basis that the investor is a U.S. investor. Further that with such an approach there would be little foreign investment, since the domestic investor, by definition, does not add such a country risk premium and therefore uses a lower discount rate and values the asset more highly than a U.S. investor.

(b) Please confirm that Constantinides presidential address would imply a U.S. market risk premium over long term bonds of 6.75%-4.75% given the typical maturity risk premium of at least 1.25% of long term bonds over Treasury bull yields.

November 22, 2011 CAPP Information Requests to TCPL Page 166 (c) Dr. Vilbert cites survey results from Welch. Is Dr. Vilbert aware of the now annual surveys of finance academics, financial analysts and companies by Professor Fernandez of the market risk premium and if so why he does not cite this literature?

(d) In terms of the consumption based asset pricing model (page C29) please indicate whether there are any institutions in this model and whether it recognizes that the bulk of equities are no longer retail, but institutionally owned.

(e) Dr. Vilbert mentions that integration implies a slight increase in the Canadian market risk premium (page C15), does it also imply a slight decrease in the U.S. or world market risk premium?

(f) Please provide copies of all the reports referenced in appendix C.

(g) In terms of the Elton and Gruber result (page C23) please confirm that this was a U.S. result and that the sensitivity to the bond factor is 0.75, or less than that of the long bond and going forward the future risk premium can not be greater than the spread between the long bond and the 91 day Treasury Bill yield. Further please confirm that Elton and Gruber’s value pertains to the past return that resulted from interest rates declining from the +18% high of 1981 to much lower levels that was not expected.

(h) Can Dr. Vilbert confirm that with a 7.32% “alpha” (MJV-C1) and the current forecast long bond yield the resulting intercept is essentially the same as his expected return on the market, resulting in no risk return tradeoff. If not please explain.

Question 237:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Appendix D on DCF estimation

Request:

(a) Dr. Vilbert acknowledges the optimism bias in analyst forecasts (D7) and cites Chan et al. Does Dr. Vilbert consider that Chan et al’s result of a 4% optimism bias for low risk firms is not significant? Please explain.

(b) Does Dr. Vilbert believe that the sole source of the optimism bias is the conflict of interest generated by having compensation levels tied to

November 22, 2011 CAPP Information Requests to TCPL Page 167 investment banking revenues rather than the more common “attachment” bias of individuals who simply get attached to the stocks they follow?

(c) Does Dr. Vilbert believe that the way utilities are regulated in Canada could possibly lead to EPS growth rates varying from 4% to 10.1% for different utilities? In terms of their average retention rate could Dr. Vilbert please estimate what this implies for their future return on equity using the standard sustainable growth model (g=br).

(d) Please provide the number of analysts providing the growth estimates for all companies. Where there is only one or two analyst estimates, how has Dr. Vilbert determined that a sole analyst is representative of all analysts and all investors? Likewise for those estimates based on a couple of analysts.

Question 238:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Appendix E

Request:

(a) Much of this appendix previously appeared in Dr. Kolbe’s testimony. Please indicate who is the primary author for this appendix.

(b) Please provide copies of all the papers referred to in the appendix.

(c) Please confirm that the takeaway from this appendix is Dr. Vilbert’s view that debt does not matter and that the ATWACC is constant in a reasonable range. In a nutshell this also means that financing does not matter and that investment bankers, like Mr. Engen, advising companies provide little value since they do not affect the ATWACC and thus value.

Question 239:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Appendix F

November 22, 2011 CAPP Information Requests to TCPL Page 168 Request:

(a) Please explain in detail how U.S. MLPs differ from Canadian income trusts and limited partnerships?

(b) Please explain why Dr. Vilbert has not used Canadian income trusts and limited partnerships in prior Canadian testimony or this testimony.

Question 240:

Reference: Appendix D-4 Evidence of Dr. Vilbert

Preamble: Tables

Request: Please provide the book capital structure weights for each utility shown in MJV-4.

Question 241:

Reference: General

Preamble: Expert evidence

Request: Please provide access to the prior testimony of the expert witnesses.

November 22, 2011 CAPP Information Requests to TCPL Page 169