Portland, Maine (Platts)--12May2008

Tempe, Arizona-based public power utility Salt River Project said Monday
it has agreed to buy the output from a 575 MW peaking power plant that
TransCanada Corp. plans to build.

Calgary, Alberta-based TransCanada would build the $500 million plant in
Coolidge, Arizona, and bring it online by May 2011. It plans to sell the
output through a 20-year power purchase agreement that gives SRP the option to
extend the PPA by 10 years.

The Coolidge Generating Station will receive natural gas from El Paso
Natural Gas and Transwestern Pipeline and will connect to a new SRP
high-voltage transmission line that is currently being built.

TransCanada needs permission for the plant from state regulators,
including the Arizona Corporation Commission. It plans to ask the ACC this
summer for a permit to build the plant.

TransCanada proposed the plant in response to a request for proposals SRP
issued in 2006.

"The western US, and specifically Arizona, represents an attractive
growth market in North America for additional power generation and
transmission projects," said TransCanada president and CEO Hal Kvisle.
"Arizona's population is expected to grow 50% by 2020 and to double by 2030
and TransCanada wants to help serve this demand," he added.

TransCanada owns or is building about 7,700 MW. The Coolidge plant would
be the company's first in the US Southwest.