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form6kmay12009.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of May 2009

Commission File No. 1-31690

TransCanada Corporation

(Translation of Registrant's Name into English)

450 – 1 Street S.W., Calgary, Alberta, T2P 5H1, Canada

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ¨ Form 40-F þ

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Exhibits 13.1 to 13.3 to this report, furnished on Form 6-K, shall be incorporated by reference into each of the Registration Statements under the Securities Act of 1933, as amended, of the registrant: Form S-8 (File Nos. 333-5916, 333-8470, 333-9130 and 333-151736), Form F-3 (File Nos. 33-13564 and 333-6132) and Form F-10 (File No. 333-151781).

Exhibit 99.1 to this report, furnished on Form 6-K, is furnished, not filed, and will not be incorporated by reference into any registration statement filed by the registrant under the Securities Act of 1933, as amended.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 1, 2009

	TRANSCANADA CORPORATION

	By:	/s/ Gregory A. Lohnes
		Gregory A. Lohnes
		Executive Vice-President and
		Chief Financial Officer


	By:	/s/ G. Glenn Menuz
		G. Glenn Menuz
		Vice-President and Controller

EXHIBIT INDEX

13.1	Management’s Discussion and Analysis of Financial Condition and Results of Operations of the registrant as at and for the period ended March 31, 2009.
13.2	Consolidated comparative interim unaudited financial statements of the registrant for the period ended March 31, 2009 (included in the registrant's First Quarter 2009 Quarterly Report to Shareholders).
13.3	U.S. GAAP reconciliation of the consolidated comparative interim unaudited financial statements of the registrant contained in the registrant's First Quarter 2009 Quarterly Report to Shareholders.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer regarding Periodic Report containing Financial Statements.
32.2	Certification of Chief Financial Officer regarding Periodic Report containing Financial Statements.
99.1	A copy of the registrant’s news release of May 1, 2009.

exhibit131may12009.htm

Exhibit 13.1

TRANSCANADA CORPORATION – FIRST QUARTER 2009

Quarterly Report to Shareholders

Management's Discussion and Analysis

Management's Discussion and Analysis (MD&A) dated April 30, 2009 should be read in conjunction with the accompanying unaudited Consolidated Financial Statements of TransCanada Corporation (TransCanada or the Company) for the three months ended March 31, 2009. It should also be read in conjunction with the audited Consolidated Financial Statements and notes thereto, and the MD&A contained in TransCanada's 2008 Annual Report for the year ended December 31, 2008. Additional information relating to TransCanada, including the Company's Annual Information Form and other continuous disclosure documents, is available on SEDAR at www.sedar.com under TransCanada Corporation. Unless otherwise indicated, "TransCanada" or "the Company" includes TransCanada Corporation and its subsidiaries. Amounts are stated in Canadian dollars unless otherwise indicated. Capitalized and abbreviated terms that are used but not otherwise defined herein are identified in the Glossary of Terms contained in TransCanada’s 2008 Annual Report.

Forward-Looking Information

This MD&A may contain certain information that is forward looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "believe", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward-looking information. Forward-looking statements in this document are intended to provide TransCanada shareholders and potential investors with information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s and its subsidiaries’ future financial and operational plans and outlook. Forward-looking statements in this document may include, among others, statements regarding the anticipated business prospects and financial performance of TransCanada and its subsidiaries, expectations or projections about the future, strategies and goals for growth and expansion, expected and future cash flows, costs, schedules, operating and financial results and expected impact of future commitments and contingent liabilities. All forward-looking statements reflect TransCanada’s beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among others, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Company’s pipeline and energy assets, the availability and price of energy commodities, capacity payments, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and the current economic conditions in North America. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause TransCanada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission (SEC). Readers are cautioned to not place undue reliance on this forward-looking information, which is given as of the date it is expressed in this quarterly report or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

TRANSCANADA [2

FIRST QUARTER REPORT 2009

Non-GAAP Measures

TransCanada uses the measures "comparable earnings", "comparable earnings per share", "earnings before interest, taxes, depreciation and amortization" (EBITDA), "comparable EBITDA", "earnings before interest and taxes" (EBIT), "comparable EBIT" and "funds generated from operations" in this MD&A. These measures do not have any standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP). They are, therefore, considered to be non-GAAP measures and are unlikely to be comparable to similar measures presented by other entities. Management of TransCanada uses these non-GAAP measures to improve its ability to compare financial results among reporting periods and to enhance its understanding of operating performance, liquidity and ability to generate funds to finance operations. These non-GAAP measures are also provided to readers as additional information on TransCanada’s operating performance, liquidity and ability to generate funds to finance operations.

Management uses the measures of comparable earnings, EBITDA and EBIT to better evaluate trends in the Company’s underlying operations. Comparable earnings, comparable EBITDA and comparable EBIT comprise net income, EBITDA and EBIT, respectively, adjusted for specific items that are significant, but are not reflective of the Company’s underlying operations in the period. Specific items are subjective, however, management uses its judgement and informed decision-making when identifying items to be excluded in calculating comparable earnings, comparable EBITDA and comparable EBIT, some of which may recur. Specific items may include but are not limited to certain income tax refunds and adjustments, gains or losses on sales of assets, legal and bankruptcy settlements, and certain fair value adjustments. The table in the Consolidated Results of Operations section of this MD&A presents a reconciliation of comparable earnings, comparable EBITDA, comparable EBIT and EBIT to Net Income. Comparable earnings per share is calculated by dividing comparable earnings by the weighted average number of shares outstanding for the period.

EBITDA is an approximate measure of the Company’s operating cash flow. EBITDA comprises earnings before deducting interest and other financial charges, income taxes, depreciation and amortization, and non-controlling interests. EBIT is a measure of the Company’s earnings from ongoing operations. EBIT comprises earnings before deducting interest and other financial charges, income taxes and non-controlling interests.

Funds generated from operations comprises net cash provided by operations before changes in operating working capital. A reconciliation of funds generated from operations to net cash provided by operations is presented in the "Liquidity and Capital Resources" section of this MD&A.

Financial Information Presentation

Effective January 1, 2009, TransCanada revised the information presented in the tables of this MD&A to better reflect the operating and financing structure of the Company. The Pipelines and Energy results summaries are presented geographically by separating the Canadian and U.S. portions of each segment. The Company believes this new format more clearly describes the financial performance of its business units. The new format presents EBITDA and EBIT as the Company believes these measures provide increased transparency and more useful information with respect to the performance of the Company’s individual assets. To conform with this new presentation:

TRANSCANADA [3

FIRST QUARTER REPORT 2009

•	certain income and expense amounts pertaining to operations that were previously classified on the Consolidated Statement of Income as Other Expenses/(Income) are now included in Operating and Other Expenses/(Income);

•	depreciation expense has been redefined as Depreciation and Amortization expense, and includes amortization for power purchase arrangements (PPA) of $14 million in first quarter 2009 (2008 - $14 million), which was previously included in Commodity Purchases Resold;

•	certain support services costs previously allocated to Pipelines and Energy of $31 million in first quarter 2009 (2008 - $26 million) will now be included in Corporate; and

•	amounts related to interest and other financial charges, income taxes, interest and other income, and non-controlling interests will no longer be reported on a segmented basis.

Segmented information has been retroactively reclassified to reflect these changes. These changes had no impact on reported consolidated Net Income.

TRANSCANADA [4

FIRST QUARTER REPORT 2009

Consolidated Results of Operations

Reconciliation of Comparable Earnings, Comparable EBITDA, Comparable EBIT and EBIT to Net Income

For the three months ended March 31
(unaudited) (millions of dollars except per	Pipelines						Energy						Corporate						Total
share amounts)	2009			2008			2009			2008			2009			2008			2009			2008

Comparable EBITDA(1)		871			802			290			287			(30	)		(22	)		1,131			1,067
Depreciation and amortization		(260	)		(254	)		(86	)		(56	)		-			-			(346	)		(310	)
Comparable EBIT(1)		611			548			204			231			(30	)		(22	)		785			757
Specific items:
Fair value adjustment of natural gas storage inventory and forward contracts		-			-			(13	)		(17	)		-			-			(13	)		(17	)
Calpine bankruptcy settlements		-			279			-			-			-			-			-			279
GTN lawsuit settlement		-			17			-			-			-			-			-			17
Writedown of Broadwater LNG project costs		-			-			-			(41	)		-			-			-			(41	)
EBIT(1)		611			844			191			173			(30	)		(22	)		772			995
Interest expense																				(295	)		(218	)
Financial charges of joint ventures																				(14	)		(16	)
Interest income and other																				22			11
Income taxes																				(116	)		(252	)
Non-controlling interests																				(35	)		(71	)
Net Income																				334			449

Specific items (net of tax):
Fair value adjustment of natural gas storage inventory and forward contracts																				9			12
Calpine bankruptcy settlements																				-			(152	)
GTN lawsuit settlement																				-			(10	)
Writedown of Broadwater LNG project costs																				-			27
Comparable Earnings(1)																				343			326

Net Income Per Share(2)
Basic and Diluted																			$	0.54		$	0.83

(1)	Refer to the Non-GAAP Measures section in this MD&A for further discussion of comparable EBITDA, comparable EBIT, EBIT, comparable earnings and comparable earnings per share.

		For the three months ended March 31
(2)		2009		2008

	Net Income Per Share	$	0.54	$	0.83
	Specific items (net of tax):
	Fair value adjustment of natural gas storage inventory and forward contracts		0.01		0.02
	Calpine bankruptcy settlements		-		(0.28	)
	GTN lawsuit settlement		-		(0.02	)
	Writedown of Broadwater LNG project costs		-		0.05
	Comparable Earnings Per Share(2)	$	0.55	$	0.60

TransCanada’s net income in first quarter 2009 was $334 million or $0.54 per share compared to $449 million or $0.83 per share in first quarter 2008. Net income decreased $115 million primarily due to:

•

decreased contribution from Pipelines due to $152 million of after-tax gains ($279 million pre-tax) on shares received by GTN and Portland for Calpine bankruptcy settlements and proceeds from a GTN lawsuit settlement of $10 million after tax ($17 million pre-tax) received in first quarter 2008. The impact of these items on the Pipelines segment was partially offset by the positive impact of a stronger U.S. dollar on Pipelines’ U.S. operations.

TRANSCANADA [5

FIRST QUARTER REPORT 2009

•

increased contribution from Energy due to the positive impact of a $27 million after-tax ($41 million pre-tax) writedown of costs capitalized for the Broadwater liquefied natural gas (LNG) project in first quarter 2008 and increased contribution from Bruce Power and Eastern Power. These positive impacts in Energy were offset by decreased contributions from Natural Gas Storage and U.S. Power.

•	decreased contribution from Corporate due to higher support services costs; and

•	increased interest expense due to debt issuances throughout 2008 and first quarter 2009 offset by decreased income tax expense due to a reduced pre-tax income as noted above.

Earnings per share in first quarter 2009 was further reduced due to an increased number of shares outstanding following the Company’s share issuances in second and fourth quarter 2008.

Comparable earnings in first quarter 2009 were $343 million or $0.55 per share compared to $326 million or $0.60 per share for the same period in 2008. Comparable earnings in first quarter 2009 and 2008 excluded $9 million after tax ($13 million pre-tax) and $12 million after tax ($17 million pre-tax), respectively, of net unrealized losses resulting from changes in the fair value of proprietary natural gas storage inventory and natural gas forward purchase and sale contracts. In addition, comparable earnings in first quarter 2008 excluded the $152 million of Calpine bankruptcy settlements, the $10 million GTN lawsuit settlement and the $27 million writedown of Broadwater LNG project costs.

Comparable EBIT was $785 million in first quarter 2009 compared to $757 million in first quarter 2008. The increase in comparable EBIT of $28 million was primarily due to an increase in Pipelines, partially offset by decreases in Energy and Corporate. Results from each of the segments for the three months ended March 31, 2009 are discussed further in the Pipelines, Energy and Corporate sections of this MD&A.

Pipelines

The Pipelines business generated comparable EBIT of $611 million in first quarter 2009 compared to $548 million in first quarter 2008. Comparable EBIT for first quarter 2008 excluded $279 million of gains received by GTN and Portland for the Calpine bankruptcy settlements and $17 million of proceeds received by GTN from a lawsuit settlement with a software supplier.

TRANSCANADA [6

FIRST QUARTER REPORT 2009

Pipelines Results

(unaudited)	Three months ended March 31
(millions of dollars)	2009		2008

Canadian Pipelines
Canadian Mainline	284		290
Alberta System	168		179
Foothills	34		35
Other (TQM, Ventures LP)	19		13
Canadian Pipelines Comparable EBITDA(1)	505		517

U.S. Pipelines
ANR	133		102
GTN	61		52
Great Lakes	44		36
PipeLines LP(2)	24		19
Iroquois	23		15
Portland(2)	14		12
International (Tamazunchale, TransGas, INNERGY/Gas Pacifico)	13		10
General, administrative and support costs(3)	(3	)	(5	)
Non-controlling interests(2)	65		54
U.S. Pipelines Comparable EBITDA(1)	374		295

Business Development Comparable EBITDA(1)	(8	)	(10	)

Pipelines Comparable EBITDA(1)	871		802
Depreciation and amortization	(260	)	(254	)
Pipelines Comparable EBIT(1)	611		548
Specific items:
Calpine bankruptcy settlements(4)	-		279
GTN lawsuit settlement	-		17
Pipelines EBIT(1)	611		844

(1)	Refer to the Non-GAAP Measures section in this MD&A for further discussion of comparable EBITDA, comparable EBIT and EBIT.

(2)	PipeLines LP and Portland results reflect TransCanada’s 32.1 per cent and 61.7 per cent ownership interests, respectively. The non-controlling interests reflect amounts not owned by TransCanada.

(3)	Represents costs associated with the Company’s Canadian and foreign non-wholly owned pipelines.

(4)	GTN and Portland received shares of Calpine with an initial value of $154 million and $103 million, respectively, from the bankruptcy settlements with Calpine. These shares were subsequently sold for an additional gain of $22 million.

Net Income for Wholly Owned Canadian Pipelines

(unaudited)	Three months ended March 31
(millions of dollars)	2009	2008

Canadian Mainline	66	68
Alberta System	39	32
Foothills	6	7

Canadian Pipelines

Canadian Mainline’s first quarter 2009 net income of $66 million decreased $2 million compared to $68 million in first quarter 2008 primarily as a result of a lower average investment base and a lower rate of return on common equity (ROE) as determined by the National Energy Board (NEB), of 8.57 per cent in 2009 compared to 8.71 per cent in 2008. First quarter 2009 EBITDA of $284 million decreased $6 million compared to $290 million in first quarter 2008 due to lower revenues as a result of recovery of a lower overall return on rate base in 2009. Decreases in net income and EBITDA were partially offset by lower operations, maintenance and administrative (OM&A) costs.

TRANSCANADA [7

FIRST QUARTER REPORT 2009

The Alberta System's net income was $39 million in first quarter 2009 compared to $32 million in the same quarter of 2008 and reflects the impact of a 2008-2009 settlement approved by the Alberta Utilities Commission (AUC) in December 2008. The Alberta System’s EBITDA was $168 million in first quarter 2009 compared to $179 million in the same quarter of 2008. The decrease was primarily due to lower revenues as a result of lower depreciation approved in the settlement, partially offset by the impact of increased earnings due to the settlement.

TransCanada’s proportionate share of EBITDA from Other Canadian Pipelines was $19 million for the three months ended March 31, 2009 compared to $13 million for the same period in 2008. The increase was primarily due to a March 2009 NEB decision to increase TQM’s allowed rate of return on capital for the years 2007 and 2008.

U.S. Pipelines

ANR’s EBITDA in first quarter 2009 was $133 million compared to $102 million in first quarter 2008. The increase of $31 million was primarily due to a stronger U.S. dollar. In addition, ANR’s higher revenues from new growth projects were partially offset by higher OM&A costs.

GTN’s EBITDA for first quarter 2009 of $61 million increased $9 million compared to $52 million from the same period in 2008 primarily due to a stronger U.S. dollar and lower OM&A expenses in first quarter 2009.

EBITDA for the remainder of the U.S. pipelines was $180 million for the three months ended March 31, 2009 compared to $141 million for the same period in 2008. The increase was primarily due to a stronger U.S. dollar in 2009.

Operating Statistics

Three months ended March 31	Canadian Mainline(1)				Alberta System(2)				Foothills				ANR(3)				GTN System(3)
(unaudited)	2009		2008		2009		2008		2009		2008		2009		2008		2009		2008

Average investment base ($millions)		6,590		7,176		4,586		4,224		725		765		n/a		n/a		n/a		n/a
Delivery volumes (Bcf)
Total		1,004		928		1,018		1,065		323		388		491		472		195		213
Average per day		11.2		10.2		11.3		11.7		3.6		4.3		5.5		5.2		2.2		2.3

(1)	Canadian Mainline’s physical receipts originating at the Alberta border and in Saskatchewan for the three months ended March 31, 2009 were 472 billion cubic feet (Bcf) (2008 – 493 Bcf); average per day was 5.2 Bcf (2008 – 5.4 Bcf).

(2)	Field receipt volumes for the Alberta System for the three months ended March 31, 2009 were 909 Bcf (2008 – 947 Bcf); average per day was 10.1 Bcf (2008 – 10.4 Bcf).

(3)	ANR’s and the GTN System’s results are not impacted by average investment base as these systems operate under fixed rate models approved by the FERC.

Capitalized Project Costs

At March 31, 2009, Other Assets included $122 million and $49 million of capitalized costs related to the Keystone pipeline system expansion to the U.S. Gulf Coast and the Bison pipeline project, respectively.

As at March 31, 2009, TransCanada had advanced $141 million to the Aboriginal Pipeline Group (APG) with respect to the Mackenzie Gas Pipeline Project (MGP). TransCanada and the other co-venture companies involved in the MGP continue to pursue approval of the proposed project, focusing on obtaining regulatory approval and the Canadian government’s support of an acceptable fiscal framework. Discussions with the Canadian government are continuing, but project timing remains uncertain. In the event the co-venture group is unable to reach an agreement with the government on an acceptable fiscal framework, the parties will need to determine the appropriate next steps for the project. For TransCanada, this may result in a reassessment of the carrying amount of the APG advances.

TRANSCANADA [8

FIRST QUARTER REPORT 2009

Energy

Energy’s comparable EBIT was $204 million in first quarter 2009 compared to $231 million in first quarter 2008. Comparable EBIT excluded net unrealized losses of $13 million and $17 million in first quarter 2009 and 2008, respectively, resulting from changes in the fair value of proprietary natural gas storage inventory and natural gas forward purchase and sale contracts. In addition, comparable EBIT in first quarter 2008 excluded the $41 million writedown of costs previously capitalized for the Broadwater LNG project.

Energy Results

(unaudited)	Three months ended March 31
(millions of dollars)		2009			2008

Canadian Power
Western Power			93			99
Eastern Power			52			35
Bruce Power			99			54
General, administrative and support costs			(8	)		(7	)
Canadian Power Comparable EBITDA(1)			236			181

U.S. Power(2)
Northeast Power			42			64
General, administrative and support costs			(12	)		(9	)
U.S. Power Comparable EBITDA(1)			30			55

Natural Gas Storage
Alberta Storage			39			69
General, administrative and support costs			(3	)		(2	)
Natural Gas Storage Comparable EBITDA(1)			36			67

Business Development Comparable EBITDA(1)			(12	)		(16	)

Energy Comparable EBITDA(1)			290			287
Depreciation and amortization			(86	)		(56	)
Energy Comparable EBIT(1)			204			231
Specific items:
Fair value adjustments of natural gas storage inventory and forward contracts			(13	)		(17	)
Writedown of Broadwater LNG project costs			-			(41	)
Energy EBIT(1)			191			173

(1)	Refer to the Non-GAAP Measures section in this MD&A for further discussion of comparable EBITDA, comparable EBIT and EBIT.

(2)	Includes Ravenswood effective August 2008.

TRANSCANADA [9

FIRST QUARTER REPORT 2009

Western and Eastern Canadian Power Comparable EBITDA(1)(2)

(unaudited)	Three months ended March 31
(millions of dollars)		2009			2008

Revenues
Western power			215			295
Eastern power			69			52
Other(3)			49			17
			333			364
Commodity Purchases Resold
Western power			(98	)		(156	)
Eastern power			-			(2	)
Other(4)			(46	)		(13	)
			(144	)		(171	)

Plant operating costs and other			(44	)		(59	)
General, administrative and support costs			(8	)		(7	)
Comparable EBITDA(2)			137			127

(1)	Includes Carleton effective November 2008.

(2)	Refer to the Non-GAAP Measures section in this MD&A for further discussion of comparable EBITDA.

(3)	Other revenue includes sales of natural gas and thermal carbon black.

(4)	Other commodity purchases resold includes the cost of natural gas sold.

Western and Eastern Canadian Power Operating Statistics(1)

	Three months ended March 31
(unaudited)	2009	2008

Sales Volumes (GWh)
Supply
Generation
Western Power	605	629
Eastern Power	355	286
Purchased
Sundance A & B and Sheerness PPAs	2,440	3,359
Other purchases	185	315
	3,585	4,589
Sales
Contracted
Western Power	2,053	3,074
Eastern Power	391	332
Spot
Western Power	1,141	1,183
	3,585	4,589
Plant Availablity
Western Power(2)	91%	92%
Eastern Power	97%	98%

(1)	Includes Carleton effective November 2008.

(2)	Excludes facilities that provide power to TransCanada under PPAs.

Western Power’s EBITDA of $93 million in first quarter 2009 decreased $6 million compared to $99 million in first quarter 2008. The decrease was primarily due to lower contracted and uncontracted volumes of power sold in Alberta resulting from lower plant availability under the PPAs, partially offset by lower PPA costs per megawatt hour (MWh).

TRANSCANADA [10

FIRST QUARTER REPORT 2009

Eastern Power’s EBITDA of $52 million increased $17 million compared to $35 million in first quarter 2008 due to increased revenue from Bécancour and the Carleton wind farm at Cartier Wind, which went into service in November 2008.

In first quarter 2009, Other Revenue and Other Commodity Purchases Resold of $49 million and $46 million, respectively, increased compared to first quarter 2008 as a result of an increase in the quantity of natural gas being resold in Eastern Power.

Plant Operating Costs and Other of $44 million, which includes fuel gas consumed in generation, decreased in first quarter 2009 from the same period in 2008 primarily due to lower natural gas prices in Western Power.

Western Power manages the sale of its supply volumes on a portfolio basis. A portion of its supply is held for sale in the spot market for operational reasons and the amount of supply volumes eventually sold into the spot market is dependent upon the ability to transact in forward sales markets at acceptable contract terms. This approach to portfolio management assists in minimizing costs in situations where Western Power would otherwise have to purchase electricity in the open market to fulfill its contractual sales obligations. Approximately 64 per cent of Western Power sales volumes were sold under contract in first quarter 2009, compared to 72 per cent in first quarter 2008. To reduce its exposure to spot market prices on uncontracted volumes, as at March 31, 2009, Western Power had entered into fixed-price power sales contracts to sell approximately 6,500 gigawatt hours (GWh) for the remainder of 2009 and 5,500 GWh for 2010.

Eastern Power is focused on selling power under long-term contracts. As a result, in first quarter 2009 and 2008, 100 per cent of Eastern Power sales volumes were sold under contract and will continue to be fully sold under contract for 2009 and 2010.

TRANSCANADA [11

FIRST QUARTER REPORT 2009

Bruce Power Results

(TransCanada’s proportionate share) (unaudited)	Three months ended March 31
(millions of dollars unless otherwise indicated)	2009		2008

Revenues(1)(2)	221		185

Operating Expenses(2)	(122	)	(131	)

Comparable EBITDA(3)	99		54

Bruce A Comparable EBITDA(3)	41		35
Bruce B Comparable EBITDA(3)	58		19
Comparable EBITDA(3)	99		54

Bruce Power – Other Information
Plant availability
Bruce A	97	%	93	%
Bruce B	96	%	72	%
Combined Bruce Power	96	%	79	%
Planned outage days
Bruce A	-		7
Bruce B	-		50
Unplanned outage days
Bruce A	5		1
Bruce B	8		33
Sales volumes (GWh)
Bruce A	1,495		1,496
Bruce B	2,139		1,624
	3,634		3,120
Results per MWh
Bruce A power revenues	$63		$60
Bruce B power revenues	$52		$56
Combined Bruce Power revenues	$57		$57
Combined Bruce Power operating expenses(4)	$30		$41
Percentage of Bruce B output sold to spot market	25	%	28	%

(1)	Revenue includes Bruce A’s fuel cost recoveries of $10 million for the three months ended March 31, 2009 (2008 - $6 million). Also includes gains of $2 million as a result of changes in fair value of held-for-trading derivatives for the three months ended March 31, 2009 (2008 - $3 million loss).

(2)	Includes adjustments to eliminate the effects of inter-partnership transactions between Bruce A and Bruce B.

(3)	Refer to the Non-GAAP Measures section in this MD&A for further discussion of comparable EBITDA.

(4)	Net of fuel cost recoveries and excluding depreciation.

TransCanada’s proportionate share of Bruce Power’s comparable EBITDA increased $45 million in first quarter 2009 compared to first quarter 2008 primarily due to increased revenues resulting from higher output and lower operating costs, both as a result of fewer outage days.

TransCanada’s proportionate share of Bruce A’s comparable EBITDA increased $6 million in first quarter 2009 compared to first quarter 2008 as a result of higher contract prices.

TransCanada’s proportionate share of Bruce B’s comparable EBITDA increased $39 million in first quarter 2009 compared to first quarter 2008 due to increased output and lower operating costs, partially offset by lower realized prices. The increase in output was due to a decrease in the number of outage days in first quarter 2009 compared to first quarter 2008.

TRANSCANADA [12

FIRST QUARTER REPORT 2009

TransCanada’s share of Bruce Power’s generation in first quarter 2009 increased to 3,634 GWh compared to 3,120 GWh in first quarter 2008. The Bruce Power units ran at a combined average availability of 96 per cent in first quarter 2009, compared to 79 per cent in first quarter 2008.

In mid-April 2009, an approximate six week outage of Bruce B Unit 8 commenced. An approximate six week maintenance outage of Bruce A Unit 4 and an approximate one month outage of Bruce A Unit 3 have been rescheduled from March 2009 to September 2009.

Pursuant to the terms of a contract with the Ontario Power Authority (OPA), all of the output from Bruce A in first quarter 2009 was sold at a fixed price of $63.00 per MWh (before recovery of fuel costs from the OPA) compared to $59.69 per MWh in first quarter 2008. Sales from the Bruce B Units 5 to 8 were subject to a floor price of $47.66 per MWh in first quarter 2009 and $46.82 per MWh in first quarter 2008. Both the Bruce A and Bruce B reference prices are adjusted annually for inflation on April 1. Effective April 1, 2009, the fixed price for output from Bruce A increased by $1.45 per MWh, subject to inflation adjustments from October 31, 2005, resulting in a Bruce A price of $64.45 per MWh and the Bruce B floor price increased to $48.76 per MWh. Payments received pursuant to the Bruce B floor price mechanism are subject to a recapture payment dependent on annual spot prices over the term of the contract. Bruce B EBITDA has not included any amounts received under this floor price mechanism to date. To reduce its exposure to spot market prices, as at March 31, 2009, Bruce B had entered into fixed price sales contracts to sell forward approximately 8,350 GWh for the remainder of 2009 and 7,560 GWh for 2010.

As at March 31, 2009, Bruce A had incurred $2.7 billion in costs to date for the refurbishment and restart of Units 1 and 2, and approximately $0.2 billion for the refurbishment of Units 3 and 4.

U.S. Power Comparable EBITDA(1)(2)

(unaudited)	Three months ended March 31
(millions of dollars)		2009			2008

Revenues
Power			340			226
Other(3)(4)			172			82
			512			308
Commodity Purchases Resold
Power			(155	)		(134	)
Other(5)			(148	)		(66	)
			(303	)		(200	)
Plant operating costs and other(4)			(167	)		(44	)
General, administrative and support costs			(12	)		(9	)
Comparable EBITDA(2)			30			55

(1)	Includes Ravenswood effective August 2008.

(2)	Refer to the Non-GAAP Measures section in this MD&A for further discussion of comparable EBITDA.

(3)	Other revenue includes sales of natural gas.

(4)	Includes activity at Ravenswood related to a third-party owned steam production facility operated by TransCanada on behalf of the plant owner.

(5)	Other commodity purchases resold includes the cost of natural gas sold.

TRANSCANADA [13

FIRST QUARTER REPORT 2009

U.S. Power Sales Operating Statistics(1)

	Three months ended March 31
(unaudited)	2009	2008

Sales Volumes (GWh)
Supply
Generation	1,168	800
Purchased	1,259	1,478
	2,427	2,278
Sales
Contracted	1,786	2,180
Spot	641	98
	2,427	2,278

Plant Availability	58%	93%

(1)	Includes Ravenswood effective August 2008.

U.S. Power’s EBITDA of $30 million in first quarter 2009 decreased $25 million compared to $55 million in first quarter 2008 primarily due to decreased water flows at TC Hydro and an expected loss at Ravenswood. These decreases were partially offset by higher realized prices on sales to commercial and industrial customers in New England and the positive impact of a stronger U.S. dollar in first quarter 2009. The expected loss at Ravenswood is the result of seasonally lower capacity payments relative to total expected capacity payments for the year, as well as the impact of a forced outage affecting Unit 30. The unit is currently undergoing repair and is expected back in service in second quarter 2009.

U.S. Power’s power revenues of $340 million in first quarter 2009 increased $114 million compared to first quarter 2008 due to the incremental impact from Ravenswood and the positive impact of the stronger U.S. dollar.

Power Commodity Purchases Resold of $155 million in first quarter 2009 increased $21 million compared to the same period in 2008 primarily due to the impact of the stronger U.S. dollar in first quarter 2009 and a higher overall cost per GWh on purchased power volumes. These increases were partially offset by lower purchased power volumes as a result of decreased demand by commercial and industrial customers.

Other Revenue and Other Commodity Purchases Resold of $172 million and $148 million, respectively, increased in first quarter 2009 compared to first quarter 2008 as a result of an increase in the quantity of natural gas being resold and the impact of a stronger U.S. dollar. In addition, other revenues increased as a result of incremental revenues earned related to a steam generating facility at Ravenswood.

Plant Operating Costs and Other of $167 million, which includes fuel gas consumed in generation, increased $123 million in first quarter 2009 compared to the same period in 2008 due to the incremental costs from Ravenswood.

In first quarter 2009, 26 per cent of power sales volumes were sold into the spot market, compared to four per cent in first quarter 2008, as there were no power sales contracts in place for Ravenswood extending beyond 2008 at the time of acquisition. U.S. Power is focused on selling the majority of its power under contract to wholesale, commercial and industrial customers, while managing a portfolio of power supplies sourced from its own generation and wholesale power purchases. To reduce its exposure to spot market prices on uncontracted volumes, as at March 31, 2009, U.S. Power had entered into fixed-price power sales contracts to sell approximately 5,000 GWh for the remainder of 2009 and 4,100 GWh for 2010, although certain contracted volumes are dependent on customer usage levels. Actual amounts contracted in future periods will depend on market liquidity and other factors.

TRANSCANADA [14

FIRST QUARTER REPORT 2009

Natural Gas Storage

Natural Gas Storage’s comparable EBITDA of $36 million in first quarter 2009 decreased $31 million compared to $67 million in first quarter 2008. The decrease was due to lower withdrawal activity and reduced sales of proprietary natural gas at the Edson facility compared to the same period in 2008.

Comparable EBITDA excluded net unrealized losses of $13 million and $17 million in first quarter 2009 and 2008, respectively, resulting from changes in the fair value of proprietary natural gas inventory in storage and natural gas forward purchase and sale contracts. TransCanada manages its natural gas storage earnings by simultaneously entering into a forward purchase of natural gas for injection into storage and an offsetting forward sale of natural gas for withdrawal at a later period, thereby locking in future positive margins and effectively eliminating exposure to price movements of natural gas. Fair value adjustments recorded each period on proprietary natural gas held in storage inventory and these forward contracts are not representative of the amounts that will be realized on settlement.

Depreciation and Amortization

Depreciation and Amortization in first quarter 2009 increased $30 million compared to first quarter 2008 primarily due to the acquisition of Ravenswood in August 2008.

Corporate

Corporate’s EBIT for the three months ended March 31, 2009 was a loss of $30 million compared to a loss of $22 million for the same period in 2008. The increase in Corporate’s EBIT loss was primarily due to higher support services costs in 2009, reflecting a growing asset base and inflation, as well as a third party reimbursement of certain costs in first quarter 2008.

Other Income Statement Items

Interest Expense

(unaudited)	Three months ended March 31
(million of dollars)		2009			2008

Interest on long-term debt(1)			335			248
Other interest and amortization			14			(3	)
Capitalized interest			(54	)		(27	)
			295			218

(1)	Includes interest for Junior Subordinated Notes.

TransCanada’s Interest Expense of $295 million in first quarter 2009 increased $77 million compared to $218 million in first quarter 2008. The increase was primarily due to new debt issues of US$1.5 billion and $500 million in August 2008 and US$2 billion and $700 million in January and February 2009, respectively. In addition, U.S. dollar-denominated interest expense increased due to the impact of a stronger U.S. dollar. These increases were partially offset by increased capitalization of interest to finance the Company’s larger capital spending program in 2009.

TRANSCANADA [15

FIRST QUARTER REPORT 2009

On a consolidated basis, the positive impact of a stronger U.S. dollar on U.S. Pipelines and Energy results is almost fully offset by the net negative impact on U.S. interest expense and other non-operational expenses, thereby effectively reducing the Company’s exposure to changes in foreign exchange.

Interest Income and Other was $22 million for first quarter 2009 compared to $11 million for the same period in 2008. The increase of $11 million was primarily due to higher gains from changes in the fair value of derivatives used to manage the Company’s exposure to foreign exchange rate fluctuations.

Income Taxes were $116 million for first quarter 2009 compared to $252 million for the same period in 2008. The decrease in income taxes was primarily due to the first quarter 2008 Calpine bankruptcy settlements, as well as higher tax rate differentials and other positive tax adjustments in 2009.

Non-Controlling Interests of $35 million in first quarter 2009 decreased $36 million compared to $71 million in the same period of 2008 primarily due to the non-controlling interests’ portion of Portland’s Calpine bankruptcy settlement in first quarter 2008.

Liquidity and Capital Resources

Global Market Conditions

Despite uncertainty in global financial markets, TransCanada’s financial position remains sound and consistent with recent years as does its ability to generate cash in the short and long term to provide liquidity, maintain financial capacity and flexibility, as well as provide for planned growth. TransCanada’s liquidity position remains solid, underpinned by highly predictable cash flow from operations, significant cash balances on hand from recent debt issues, as well as committed revolving bank lines of US$1.0 billion, $2.0 billion and US$300 million, maturing in November 2010, December 2012 and February 2013, respectively. To date, no draws have been made on these facilities as TransCanada has maintained continuous access to the Canadian commercial paper market on competitive terms. An additional $50 million and US$324 million of capacity remains available on committed bank facilities at TransCanada-operated affiliates with maturity dates from 2010 through 2012. In addition, common shares are expected to be issued under the Company’s Dividend Reinvestment and Share Purchase Plan (DRP) in lieu of making cash dividend payments.

At March 31, 2009, the Company held cash and cash equivalents of $2.2 billion compared to $1.3 billion at December 31, 2008. The increase in cash and cash equivalents was primarily due to proceeds from the issuance of long-term debt in first quarter 2009.

Operating Activities

Funds Generated from Operations(1)

(unaudited)	Three months ended March 31
(millions of dollars)	2009	2008

Cash Flows
Funds generated from operations(1)	766	922
Decrease in operating working capital	78	6
Net cash provided by operations	844	928

(1)	Refer to the Non-GAAP Measures section in this MD&A for further discussion of funds generated from operations.

TRANSCANADA [16

FIRST QUARTER REPORT 2009

Net Cash Provided by Operations decreased $84 million in first quarter 2009 compared to the same period in 2008. Excluding the $152 million of after-tax proceeds received from the Calpine bankruptcy settlements in first quarter 2008, Funds Generated From Operations in first quarter 2009 were consistent with first quarter 2008.

Investing Activities

Acquisitions, net of cash acquired of $8 million, were $134 million in first quarter 2009 (2008 - $2 million). In accordance with TransCanada’s agreement to increase its ownership interest in Keystone to 79.99 per cent from 50 per cent, TransCanada has funded 100 per cent of the $459 million of the Keystone project cash calls since December 31, 2008. This has resulted in an acquisition of an incremental nine per cent ownership for a total cost of $142 million, bringing TransCanada’s interest to 71 per cent at March 31, 2009 from 62 per cent at December 31, 2008.

TransCanada remains committed to executing its previously announced $19 billion capital expenditure program over the next four years. For the three months ended March 31, 2009, capital expenditures totalled $1.1 billion (2008 - $460 million), primarily related to the Keystone pipeline system, expansion of the Alberta System, refurbishment and restart of Bruce A Units 1 and 2, and construction of Kibby Wind, Halton Hills, Coolidge and Portlands Energy.

Financing Activities

In the three months ended March 31, 2009, TransCanada issued $3.1 billion (2008 - $112 million) and retired $482 million (2008 - $394 million) of long-term debt while notes payable decreased $917 million (2008 – decreased $30 million).

On April 23, 2009, TCPL filed a $2.0 billion Canadian Medium-Term Notes shelf prospectus to replace a March 2007 $1.5 billion Canadian Medium-Term Notes shelf prospectus, which expired in April 2009.

On February 17, 2009, TCPL issued Medium-Term Notes of $300 million and $400 million maturing in February 2014 and February 2039, respectively, and bearing interest at 5.05 per cent and 8.05 per cent, respectively. These notes were issued under the $1.5 billion debt shelf prospectus filed in March 2007.

On January 9, 2009, TCPL issued Senior Unsecured Notes of US$750 million and US$1.25 billion maturing in January 2019 and January 2039, respectively, and bearing interest at 7.125 per cent and 7.625 per cent, respectively. These notes were issued under a US$3.0 billion debt shelf prospectus filed in January 2009, which now has capacity of US$1.0 billion remaining.

Dividends

On April 30, 2009, TransCanada's Board of Directors declared a quarterly dividend of $0.38 per share for the quarter ending June 30, 2009 on the Company’s outstanding common shares. It is payable on July 31, 2009 to shareholders of record at the close of business on June 30, 2009.

TransCanada’s Board of Directors also approved the issuance of common shares from treasury at a three per cent discount under TransCanada’s DRP for the dividends payable on July 31, 2009. The Company reserves the right to alter the discount or return to purchasing shares on the open market at any time. In the three months ended March 31, 2009, TransCanada issued 2.1 million common shares under its DRP, in lieu of making cash dividend payments of $67 million.

TRANSCANADA [17

FIRST QUARTER REPORT 2009

Significant Accounting Policies and Critical Accounting Estimates

To prepare financial statements that conform with Canadian GAAP, TransCanada is required to make estimates and assumptions that affect both the amount and timing of recording assets, liabilities, revenues and expenses since the determination of these items may be dependent on future events. The Company uses the most current information available and exercises careful judgement in making these estimates and assumptions.

TransCanada's significant accounting policies and critical accounting estimates have remained unchanged since December 31, 2008. For further information on the Company’s accounting policies and estimates refer to the MD&A in TransCanada's 2008 Annual Report.

Changes in Accounting Policies

The Company’s accounting policies have not changed materially from those described in TransCanada’s 2008 Annual Report except as follows:

2009 Accounting Changes

Rate-Regulated Operations

Effective January 1, 2009, the temporary exemption was withdrawn from the Canadian Institute of Chartered Accountants (CICA) Handbook Section 1100 “Generally Accepted Accounting Principles”, which permitted the recognition and measurement of assets and liabilities arising from rate regulation. In addition, Section 3465 “Income Taxes” was amended to require the recognition of future income tax assets and liabilities for rate-regulated entities. The Company chose to adopt accounting policies consistent with the U.S. Financial Accounting Standards Board’s Financial Accounting Standard (FAS) 71 “Accounting for the Effects of Certain Types of Regulation”. As a result, TransCanada retained its current method of accounting for its rate-regulated operations, except that TransCanada will be required to recognize future income tax assets and liabilities, instead of using the taxes payable method, and will record an offsetting adjustment to regulatory assets and liabilities. As a result of adopting this accounting change, additional future income tax liabilities and a regulatory asset in the amount of $1.4 billion were recorded in each of Future Income Taxes and Other Assets, respectively.

Adjustments to the first quarter 2009 financial statements have been made in accordance with the transitional provisions for Section 3465, which required a cumulative adjustment in the current period to future income taxes and a regulatory asset. Restatement of prior periods’ financial statements was not permitted under Section 3465.

Intangible Assets

Effective January 1, 2009, the Company adopted CICA Handbook Section 3064 “Goodwill and Intangible Assets”, which replaced Section 3062 “Goodwill and Other Intangible Assets”. Section 3064 gives guidance on the recognition of intangible assets as well as the recognition and measurement of internally developed intangible assets. In addition, Section 3450 “Research and Development Costs” was withdrawn from the Handbook. Adopting this accounting change did not have a material effect on the Company’s financial statements.

Credit Risk and the Fair Value of Financial Assets and Financial Liabilities

Effective January 1, 2009, the Company adopted the accounting provisions of Emerging Issues Committee (EIC) Abstract EIC 173, “Credit Risk and the Fair Value of Financial Assets and Financial Liabilities”. Under EIC 173 an entity’s own credit risk and the credit risk of its counterparties is taken into account in determining the fair value of financial assets and financial liabilities, including derivative instruments. Adopting this accounting change did not have a material effect on the Company’s financial statements.

TRANSCANADA [18

FIRST QUARTER REPORT 2009

Future Accounting Changes

International Financial Reporting Standards

The CICA’s Accounting Standards Board announced that Canadian publicly accountable enterprises are required to adopt International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), effective January 1, 2011. TransCanada is currently considering the impact a conversion to IFRS or U.S. GAAP would have on its accounting systems and financial statements. TransCanada’s conversion project includes an analysis of project structure and governance, resources and training, analysis of key GAAP differences and a phased approach to the assessment of current accounting policies and conversion implementation. TransCanada continues to progress its conversion project by scheduling training sessions and IFRS updates for employees, and continuing to assess the impact that significant GAAP or IFRS differences may have on TransCanada.

Under existing Canadian GAAP, TransCanada follows specific accounting policies unique to a rate-regulated business. TransCanada is actively monitoring developments regarding potential future guidance on the applicability of certain aspects of rate-regulated accounting under IFRS. Developments in this area could have a significant effect on the scope of the project and on TransCanada’s financial results. The IASB is currently expected to issue an exposure draft on rate-regulated accounting in July 2009.

At the current stage of the project, TransCanada cannot reasonably determine the full impact that adopting IFRS would have on its financial position and future results.

Contractual Obligations

Other than commitments for future debt and interest payments relating to debt issuances and redemptions discussed in the "Financing Activities" section of this MD&A, there have been no other material changes to TransCanada’s contractual obligations from December 31, 2008 to March 31, 2009, including payments due for the next five years and thereafter. For further information on these contractual obligations, refer to the MD&A in TransCanada’s 2008 Annual Report.

Financial Instruments and Risk Management

TransCanada continues to manage and monitor its exposure to market, counterparty credit and liquidity risk.

Counterparty Credit and Liquidity Risk

TransCanada’s maximum counterparty credit exposure with respect to financial instruments at the balance sheet date, without taking into account security held, consisted primarily of the carrying amount, which approximates fair value, of non-derivative financial assets, such as accounts receivable, as well as the fair value of derivative financial assets. Letters of credit and cash are the primary types of security relating to these amounts. The Company does not have significant concentrations of counterparty credit risk with any individual counterparties and the majority of counterparty credit exposure is with counterparties who are investment grade. At March 31, 2009, there were no significant amounts past due or impaired.

TRANSCANADA [19

FIRST QUARTER REPORT 2009

TransCanada has significant exposures to financial institutions as they provide committed credit lines as well as critical liquidity in the foreign exchange and interest rate derivative and energy wholesale markets, and letters of credit to mitigate TransCanada’s exposures to non-creditworthy counterparties.

As the uncertainty in the global financial markets persists, TransCanada has continued to closely monitor and reassess the creditworthiness of its counterparties, including financial institutions. This has resulted in TransCanada reducing or mitigating its exposure to certain counterparties where it is deemed warranted and permitted under contractual terms. As part of its ongoing operations, TransCanada must balance its market and counterparty credit risks when making business decisions.

The Company continues to manage its liquidity risk by ensuring sufficient cash and credit facilities are available to meet its operating and capital expenditure obligations when due, under both normal and stressed economic conditions. Further discussion of the Company’s ability to manage its cash and credit facilities is provided in the “Liquidity and Capital Resources” section in this MD&A.

Natural Gas Inventory

At March 31, 2009, the fair value of proprietary natural gas inventory held in storage as measured by the one-month forward price for natural gas less selling costs was $38 million (December 31, 2008 - $76 million). These amounts are included in Inventories. The change in fair value of proprietary natural gas inventory in the three months ended March 31, 2009 resulted in a net unrealized loss of $23 million, which was recorded as a decrease to Revenues and Inventories (2008 - gain of $59 million). The net change in fair value of natural gas forward purchase and sales contracts in the three months ended March 31, 2009 resulted in a net unrealized gain of $10 million (2008 - loss of $76 million), which was included in Revenues.

Net Investment in Self-Sustaining Foreign Operations

The Company hedges its net investment in self-sustaining foreign operations with U.S. dollar-denominated debt, cross-currency swaps, forward foreign exchange contracts and options. At March 31, 2009, the Company had designated as a net investment hedge U.S. dollar-denominated debt with a carrying value of $9.6 billion (US$7.6 billion) and a fair value of $8.5 billion (US$6.7 billion). At March 31, 2009, Deferred Amounts included $277 million for the fair value of derivatives used to hedge the Company’s net U.S. dollar investment in foreign operations.

TRANSCANADA [20

FIRST QUARTER REPORT 2009

Information for the derivatives used to hedge the Company’s net investment in its foreign operations is as follows:

Derivatives Hedging Net Investment in Foreign Operations

	March 31, 2009					December 31, 2008
Asset/(Liability) (unaudited) (millions of dollars)	Fair Value(1)			Notional or Principal Amount		Fair Value(1)			Notional or Principal Amount

U.S. dollar cross-currency swaps
(maturing 2009 to 2014)(2)		(280	)	U.S. 1,550			(218	)	U.S. 1,650
U.S. dollar forward foreign exchange contracts
(maturing 2009)(2)		3		U.S. 210			(42	)	U.S. 2,152
U.S. dollar options
(matured 2009)		-			-		6		U.S. 300

		(277	)	U.S. 1,760			(254	)	U.S. 4,102

(1)	Fair values are equal to carrying values.

(2)	As at March 31, 2009.

Non-Derivative Financial Instruments Summary

The carrying and fair values of non-derivative financial instruments were as follows:

	March 31, 2009				December 31, 2008
(unaudited) (millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value

Financial Assets(1)
Cash and cash equivalents		2,232		2,232		1,308		1,308
Accounts receivable and other assets(2)(3)		1,207		1,207		1,404		1,404
Available-for-sale assets(2)		28		28		27		27
		3,467		3,467		2,739		2,739

Financial Liabilities(1)(3)
Notes payable		800		800		1,702		1,702
Accounts payable and deferred amounts(4)		1,334		1,334		1,372		1,372
Accrued interest		403		403		359		359
Long-term debt and junior subordinated notes		20,379		19,871		17,367		16,152
Long-term debt of joint ventures		1,086		1,065		1,076		1,052
		24,002		23,473		21,876		20,637

(1)	Consolidated Net Income in 2009 and 2008 included unrealized gains or losses of nil for the fair value adjustments to each of these financial instruments.

(2)	At March 31, 2009, the Consolidated Balance Sheet included financial assets of $1,070 million (December 31, 2008 – $1,257 million) in Accounts Receivable and $165 million (December 31, 2008 - $174 million) in Other Assets.

(3)	Recorded at amortized cost.

(4)	At March 31, 2009, the Consolidated Balance Sheet included financial liabilities of $1,313 million (December 31, 2008 – $1,350 million) in Accounts Payable and $21 million (December 31, 2008 - $22 million) in Deferred Amounts.

TRANSCANADA [21

FIRST QUARTER REPORT 2009

Derivative Financial Instruments Summary

Information for the Company’s derivative financial instruments, excluding hedges of the Company’s net investment in foreign operations, is as follows:

March 31, 2009
(unaudited) (all amounts in millions unless otherwise indicated)	Power			Natural Gas			Oil Products			Foreign Exchange			Interest

Derivative Financial Instruments Held for Trading(1)
Fair Values(2)
Assets	$	202		$	223		$	8		$	28		$	53
Liabilities	$	(127	)	$	(270	)		-		$	(41	)	$	(115	)
Notional Values
Volumes(3)
Purchases		5,313			230			180			-			-
Sales		7,165			184			324			-			-
Canadian dollars		-			-			-			-			1,016
U.S. dollars		-			-			-		U.S. 459			U.S. 1,575
Japanese yen (in billions)		-			-			-		JPY 2.9				-
Cross-currency		-			-			-		227/U.S. 157				-

Net unrealized gains/(losses) in the three months ended March 31, 2009(4)	$	21		$	(35	)	$	7		$	1			-

Net realized gains/(losses) in the three months ended March 31, 2009(4)	$	10		$	26		$	(3	)	$	6		$	(4	)

Maturity dates		2009-2014			2009-2013			2009-2010			2009-2012			2009-2018

Derivative Financial Instruments in Hedging Relationships(5)(6)
Fair Values(2)
Assets	$	200		$	1			-		$	2		$	8
Liabilities	$	(203	)	$	(34	)		-		$	(21	)	$	(80	)
Notional Values
Volumes(3)
Purchases		10,470			13			-			-			-
Sales		11,463			-			-			-			-
Canadian dollars		-			-			-			-			-
U.S. dollars		-			-			-		U.S. 10			U.S. 1,225
Cross-currency		-			-			-		136/U.S. 100				-

Net realized gains/(losses) in the three months ended March 31, 2009(4)	$	26		$	(10	)		-			-		$	(7	)

Maturity dates		2009-2014			2009-2012			n/a			2009-2013			2009-2013

(1)

All derivative financial instruments in the held-for-trading classification have been entered into for risk management and risk reduction purposes and are subject to the Company’s risk management strategies, policies and limits. These include derivatives that have not been designated as hedges or do not qualify for hedge accounting treatment but have been entered into as economic hedges to manage the Company’s exposures to market risk, including purchases and sales of natural gas related to the Company’s natural gas storage business.

(2)

Fair values are equal to carrying values.

(3)	Volumes for power, natural gas and oil products derivatives are in GWh, Bcf and thousands of barrels, respectively.

(4)

Realized and unrealized gains and losses on power, natural gas and oil products derivative financial instruments held for trading are included in Revenues. Realized and unrealized gains and losses on interest rate and foreign exchange derivative financial instruments held for trading are included in Interest Expense and Interest Income and Other, respectively. The effective portion of unrealized gains and losses on derivative financial instruments in hedging relationships are initially recognized in Other Comprehensive Income, and are reclassified to Revenues, Interest Expense and Interest Income and Other, as appropriate, as the original hedged item settles.

(5)

All hedging relationships are designated as cash flow hedges except for interest-rate derivative financial instruments designated as fair value hedges with a fair value of $8 million and a notional amount of US$50 million. Net realized gains on fair value hedges for the three months ended March 31, 2009 were $1 million and were included in Interest Expense. In first quarter 2009, the Company did not record any amounts in Net Income related to ineffectiveness for fair value hedges.

(6)

Net Income for the three months ended March 31, 2009 included gains of $5 million for the changes in fair value of power and natural gas cash flow hedges that were ineffective in offsetting the change in fair value of their related underlying positions. There were no gains or losses included in Net Income for the three months ended March 31, 2009 for discontinued cash flow hedges. No amounts have been excluded from the assessment of hedge effectiveness.

TRANSCANADA [22

FIRST QUARTER REPORT 2009

2008
(unaudited) (all amounts in millions unless otherwise indicated)	Power			Natural Gas			Oil Products			Foreign Exchange			Interest

Derivative Financial Instruments Held for Trading
Fair Values(1)(4)
Assets	$	132		$	144		$	10		$	41		$	57
Liabilities	$	(82	)	$	(150	)	$	(10	)	$	(55	)	$	(117	)
Notional Values(4)
Volumes(2)
Purchases		4,035			172			410			-			-
Sales		5,491			162			252			-			-
Canadian dollars		-			-			-			-			1,016
U.S. dollars		-			-			-		U.S. 479			U.S. 1,575
Japanese yen (in billions)		-			-			-		JPY 4.3				-
Cross-currency		-			-			-		227/U.S. 157				-

Net unrealized gains/(losses) in the three months ended March 31, 2008(3)	$	(3	)	$	(18	)		-		$	(9	)	$	(4	)

Net realized gains/(losses) in the three months ended March 31, 2008(3)	$	1		$	26			-		$	5		$	3

Maturity dates(4)		2009-2014			2009-2011		2009				2009-2012			2009-2018

Derivative Financial Instruments in Hedging Relationships(5)(6)
Fair Values(1)(4)
Assets	$	115			-			-		$	2		$	8
Liabilities	$	(160	)	$	(18	)		-		$	(24	)	$	(122	)
Notional Values (4)
Volumes(2)
Purchases		8,926			9			-			-			-
Sales		13,113			-			-			-			-
Canadian dollars		-			-			-			-			50
U.S. dollars		-			-			-		U.S. 15			U.S. 1,475
Cross-currency		-			-			-		136/U.S. 100				-

Net realized gains/(losses) in the three months ended March 31, 2008(3)	$	(1	)	$	8			-			-		$	1

Maturity dates(4)		2009-2014			2009-2011			n/a			2009-2013			2009-2019

(1)	Fair values are equal to carrying values.

(2)	Volumes for power, natural gas and oil products derivatives are in GWh, Bcf and thousands of barrels, respectively.

(3)

(4)	As at December 31, 2008.

(5)

All hedging relationships are designated as cash flow hedges except for interest-rate derivative financial instruments designated as fair value hedges with a fair value of $8 million and notional amounts of $50 million and US$50 million at December 31, 2008. There were no net realized gains or losses on fair value hedges for the three months ended March 31, 2008. In first quarter 2008, the Company did not record any amounts in Net Income related to ineffectiveness for fair value hedges.

(6)

Net Income for the three months ended March 31, 2008 included gains of $2 million for the changes in fair value of power and natural gas cash flow hedges that were ineffective in offsetting the change in fair value of their related underlying positions. There were no gains or losses included in Net Income for the three months ended March 31, 2008 for discontinued cash flow hedges. No amounts have been excluded from the assessment of hedge effectiveness.

TRANSCANADA [23

FIRST QUARTER REPORT 2009

Balance Sheet Presentation of Derivative Financial Instruments

The fair value of the derivative financial instruments in the Company’s Balance Sheet was as follows:

(unaudited)
(millions of dollars)	March 31, 2009			December 31, 2008

Current
Other current assets		503			318
Accounts payable		(532	)		(298	)

Long-term
Other assets		222			191
Deferred amounts		(636	)		(694	)

Other Risks

Additional risks faced by the Company are discussed in the MD&A in TransCanada’s 2008 Annual Report. These risks remain substantially unchanged since December 31, 2008.

Controls and Procedures

As of March 31, 2009, an evaluation was carried out under the supervision of, and with the participation of management, including the President and Chief Executive Officer and the Chief Financial Officer, of the effectiveness of TransCanada’s disclosure controls and procedures as defined under the rules adopted by the Canadian securities regulatory authorities and by the SEC. Based on this evaluation, the President and Chief Executive Officer and the Chief Financial Officer concluded that the design and operation of TransCanada’s disclosure controls and procedures were effective as at March 31, 2009.

During the recent fiscal quarter, there have been no changes in TransCanada’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, TransCanada’s internal control over financial reporting.

Outlook

The recent economic turmoil and deterioration of financial markets in North America is having a slowing effect on certain aspects of the North American economy. TransCanada does not expect this to have a material effect on the Company’s financial position, access to capital markets, committed projects or corporate strategy.

TRANSCANADA [24

FIRST QUARTER REPORT 2009

Since the disclosure in TransCanada’s 2008 Annual Report, the Company's earnings outlook for 2009 has declined due to the negative impact of reduced market prices for power on Energy’s results. With respect to the Pipelines segment, although the global economic downturn has an impact on throughput on certain pipelines and on some drilling activities, the short-term financial outlook for the Company’s Pipelines segment is not expected to be materially impacted as the pipeline assets are generally underpinned by contracts or earn a regulated rate of return.

TransCanada completed the issuance of $3.1 billion of long-term debt in first quarter 2009 and $1.1 billion of common shares at the end of 2008. While these offerings will impact future net income and earnings per share through carrying costs and dilution, when combined with $0.8 billion of operating cash flow in first quarter 2009, they have contributed to a cash balance of $2.2 billion at March 31, 2009 and are expected to provide much of the necessary financing for the Company’s 2009 capital expenditure program. This strategy of strengthening TransCanada’s liquidity and financial position through its ability to successfully access capital markets in very volatile and uncertain economic times has reduced the Company’s future financing risk around its committed growth program, however, it is also expected to result in a reduction to the Company’s net income in 2009 as the cash is held in secure temporary investments prior to its ultimate utilization. For further information on outlook, refer to the MD&A in TransCanada’s 2008 Annual Report.

Since December 31, 2008, there have been no changes to TransCanada’s credit ratings. TransCanada’s issuer rating assigned by Moody’s Investors Service (Moody’s) is Baa1 with a stable outlook. TransCanada PipeLines Limited’s senior unsecured debt is rated A with a stable outlook by DBRS, A3 with a stable outlook by Moody’s and A- with a stable outlook by Standard and Poor’s.

Recent Developments

Pipelines

Canadian Mainline

On April 9, 2009, the NEB approved TransCanada’s application for 2009 final tolls on the Canadian Mainline, effective May 1, 2009. The tolls reflect the terms of a five-year settlement with the NEB effective from 2007 to 2011 which incorporates the NEB’s ROE formula of 8.57 per cent on deemed common equity of 40 per cent.

Alberta System

On February 26, 2009, the NEB determined that the Alberta System is within federal jurisdiction and is subject to regulation by the NEB under the National Energy Board Act (Canada), effective April 29, 2009. As a result of changing from AUC to NEB jurisdiction, TransCanada withdrew from the AUC’s 2009 Generic Cost of Capital proceeding.

The Alberta System is currently operating under interim tolls approved by the AUC effective January 1, 2009. TransCanada will work with stakeholders to migrate the 2008 - 2009 Revenue Requirement Settlement to NEB jurisdiction. Following these discussions, TransCanada will apply to the NEB for approval of final 2009 tolls for the Alberta System.

In May 2009, the first section of the North Central Corridor expansion is expected to be completed at a total capital cost of approximately $400 million. Construction of the remaining sections and associated facilities will continue throughout 2009 with final completion of the North Central Corridor expansion anticipated in April 2010.

TRANSCANADA [25

FIRST QUARTER REPORT 2009

On February 26, 2009, TransCanada announced the successful completion of a binding open season, securing support for firm transportation contracts for a pipeline to connect new shale gas supply in the Horn River basin north of Fort Nelson, B.C. to the Alberta System. The contracts are expected to commence in 2011 and increase to 378 million cubic feet per day (mmcf/d) by second quarter 2013. Combined with the Montney volumes of 1.1 billion cubic feet per day (Bcf/d) by 2014, this represents a total of 1.5 Bcf/d of new transportation capacity out of this region.

TQM

On March 19, 2009, TQM received the NEB’s decision on its cost of capital application for the years 2007 and 2008, which requested the approval of an 11 per cent return on 40 per cent deemed common equity. In its decision, the NEB granted TQM’s request to vary from the Multi-pipeline Cost of Capital Decision (RH-2-94) based on changes in financial markets and economic conditions and set a 6.4 per cent after-tax weighted average cost of capital (ATWACC) for each of the two years. The decision granted TQM an aggregate return on capital, leaving it to TQM to choose its optimal capital structure. This decision equates to a 9.85 per cent return on 40 per cent deemed common equity in 2007 and a 9.75 per cent return on 40 per cent deemed common equity in 2008. Prior to the decision, TQM was subject to the NEB ROE formula of 8.46 and 8.71 for 2007 and 2008, respectively, on deemed common equity of 30 per cent established in the RH-2-94 decision.

In April 2009, TQM filed an application with the NEB for final tolls for 2007 and 2008, and expects to recover the variance between interim and final tolls for 2007 and 2008 in 2009.

On March 23, 2009, the NEB issued a letter requesting comment on whether it should initiate a multi-pipeline review of the RH-2-94 decision pursuant to the National Energy Board Act (Canada). The RH-2-94 decision established an ROE formula, tied to 10 year and 30 year Government of Canada bond rates, that has formed the basis of determining tolls for pipelines under NEB jurisdiction since January 1, 1995. Comments are due May 25, 2009 and subsequent initiatives by the NEB are expected to be based on the comments submitted.

Keystone Pipeline System

TransCanada has agreed to increase its equity ownership in the Keystone partnerships to 79.99 per cent with ConocoPhillips’ equity ownership being reduced concurrently to 20.01 per cent. In accordance with this agreement, TransCanada is funding 100 per cent of the construction expenditures until the participants’ project capital contributions are aligned with the revised ownership interests. At March 31, 2009 and December 31, 2008, TransCanada’s equity ownership in the Keystone partnerships was approximately 71 per cent and 62 per cent, respectively.

Certain parties that have volume commitments for the Keystone expansion had options to acquire up to a combined 15 per cent ownership interest in the Keystone partnerships. If these options were not exercised, ConocoPhillips had an option to increase its ownership interest up to 32.51 per cent. None of these options were exercised and the target ownership between TransCanada and ConocoPhillips remains at 79.99 per cent and 20.01 per cent, respectively.

On February 27, 2009, TransCanada filed an application with the NEB to construct and operate the Canadian portion of the Keystone expansion to the U.S. Gulf Coast. A public hearing is anticipated to occur in September 2009 and a decision from the NEB is expected in early 2010.

A Presidential permit, an Environmental Impact Statement and several state permits are required to construct and operate the U.S. portion of the Keystone extension to the U.S. Gulf Coast. Permit applications have been filed with the respective jurisdictions and approvals are expected in second quarter 2010.

TRANSCANADA [26

FIRST QUARTER REPORT 2009

Bison

The Bison pipeline project filed an application with the FERC on April 20, 2009 for the right to construct, own and operate the pipeline. The project is expected to have a capital cost of US$610 million and will consist of approximately 486 kilometres (302 miles) of natural gas pipeline designed to transport natural gas from the Powder River Basin in Wyoming to the Midwest U.S. market with a contracted capacity of 407 mmcf/d with potential expandability of up to approximately 1 Bcf/d.

Energy

Portlands Energy

Portlands Energy was fully commissioned on April 22, 2009 under budget. The power plant, which is 50 per cent owned by TransCanada, is able to provide 550 MW of electricity under a 20-year Accelerated Clean Air Supply contract with the Ontario Power Authority.

Broadwater

In April 2009, the U.S. Department of Commerce issued a decision upholding New York State’s objection to the proposed construction and operation of the Broadwater LNG project, a joint venture between TransCanada and Shell US Gas and Power. The Broadwater Energy partnership is currently assessing the ruling and considering its options with respect to this project.

Share Information

As at March 31, 2009, TransCanada had 619 million issued and outstanding common shares. In addition, there were 9 million outstanding options to purchase common shares, of which 7 million were exercisable as at March 31, 2009.

Selected Quarterly Consolidated Financial Data(1)

(unaudited)	2009		2008								2007
(millions of dollars except per share amounts)	First		Fourth		Third		Second		First		Fourth		Third		Second

Revenues		2,380		2,332		2,137		2,017		2,133		2,189		2,187		2,208
Net Income		334		277		390		324		449		377		324		257

Share Statistics
Net income per share – Basic	$	0.54	$	0.47	$	0.67	$	0.58	$	0.83	$	0.70	$	0.60	$	0.48
Net income per share – Diluted	$	0.54	$	0.46	$	0.67	$	0.58	$	0.83	$	0.70	$	0.60	$	0.48

Dividend declared per common share	$	0.38	$	0.36	$	0.36	$	0.36	$	0.36	$	0.34	$	0.34	$	0.34

(1)	The selected quarterly consolidated financial data has been prepared in accordance with Canadian GAAP. Certain comparative figures have been reclassified to conform with the current year’s presentation.

Factors Impacting Quarterly Financial Information

In Pipelines, which consists primarily of the Company's investments in regulated pipelines and regulated natural gas storage facilities, annual revenues and net income fluctuate over the long term based on regulators' decisions and negotiated settlements with shippers. Generally, quarter-over-quarter revenues and net income during any particular fiscal year remain relatively stable with fluctuations resulting from adjustments being recorded due to regulatory decisions and negotiated settlements with shippers, seasonal fluctuations in short-term throughput volumes on U.S. pipelines, acquisitions and divestitures, and developments outside of the normal course of operations.

TRANSCANADA [27

FIRST QUARTER REPORT 2009

In Energy, which consists primarily of the Company’s investments in electrical power generation plants and non-regulated natural gas storage facilities, quarter-over-quarter revenues and net income are affected by seasonal weather conditions, customer demand, market prices, planned and unplanned plant outages, acquisitions and divestitures, and developments outside of the normal course of operations.

Significant developments that impacted the last eight quarters' EBIT and Net Income are as follows:

·	First quarter 2009, Energy’s EBIT included net unrealized losses of $13 million pre-tax ($9 million after tax) due to changes in the fair value of proprietary natural gas storage inventory and natural gas forward purchase and sale contracts.

Fourth quarter 2008, Energy’s EBIT included net unrealized gains of $7 million pre-tax ($6 million after tax) due to changes in the fair value of proprietary natural gas storage inventory and natural gas forward purchase and sale contracts. Corporate’s EBIT included net unrealized losses of $57 million pre-tax ($39 million after tax) for changes in the fair value of derivatives, which are used to manage the Company’s exposure to rising interest rates but do not qualify as hedges for accounting purposes.

·	Third quarter 2008, Energy’s EBIT included contributions from the August 26, 2008 acquisition of Ravenswood. Net Income included favourable income tax adjustments of $26 million from an internal restructuring and realization of losses.

Second quarter 2008, Energy’s EBIT included net unrealized gains of $12 million pre-tax ($8 million after tax) due to changes in the fair value of proprietary natural gas storage inventory and natural gas forward purchase and sale contracts. In addition, Western Power’s revenues and EBIT increased due to higher overall realized prices and market heat rates in Alberta.

First quarter 2008, Pipelines’ EBIT included $279 million pre-tax ($152 million after tax) from the Calpine bankruptcy settlements received by GTN and Portland, and proceeds of $17 million pre-tax ($10 million after tax) from a lawsuit settlement. Energy’s EBIT included a writedown of $41 million pre-tax ($27 million after tax) of costs related to the Broadwater LNG project and net unrealized losses of $17 million pre-tax ($12 million after tax) due to changes in the fair value of proprietary natural gas storage inventory and natural gas forward purchase and sale contracts.

Fourth quarter 2007, Net Income included $56 million of favourable income tax adjustments resulting from reductions in Canadian federal income tax rates and other legislative changes. Energy’s EBIT increased due to a $16 million pre-tax ($14 million after-tax) gain on sale of land previously held for development. Pipelines’ EBIT increased as a result of recording incremental earnings related to a rate case settlement reached for the GTN System, effective January 1, 2007. Energy’s EBIT included net unrealized gains of $15 million pre-tax ($10 million after tax) due to changes in the fair value of proprietary natural gas storage inventory and natural gas forward purchase and sale contracts.

·	Third quarter 2007, Net Income included $15 million of favourable income tax reassessments and associated interest income relating to prior years.

·	Second quarter 2007, Net Income included $16 million related to favourable income tax adjustments resulting from reductions in Canadian federal income tax rates. Pipelines’ EBIT increased as a result of a settlement reached on the Canadian Mainline, which was approved by the NEB in May 2007.

exhibit132may12009.htm

Exhibit 13.2

Consolidated Income

(unaudited)	Three months ended March 31
(millions of dollars)		2009			2008

Revenues			2,380			2,133

Operating and Other Expenses/(Income)
Plant operating costs and other			820			698
Commodity purchases resold			447			396
Other income			(5	)		(28	)
Calpine bankruptcy settlements			-			(279	)
Writedown of Broadwater LNG project costs			-			41
			1,262			828
			1,118			1,305

Depreciation and amortization			346			310
			772			995

Financial Charges/(Income)
Interest expense			295			218
Financial charges of joint ventures			14			16
Interest income and other			(22	)		(11	)
			287			223

Income before Income Taxes and Non-Controlling Interests			485			772

Income Taxes
Current			54			247
Future			62			5
			116			252
Non-Controlling Interests
Preferred share dividends of subsidiary			6			6
Non-controlling interest in PipeLines LP			24			21
Non-controlling interest in Portland			5			44
			35			71
Net Income			334			449

Net Income Per Share
Basic and Diluted			$0.54			$0.83

Average Shares Outstanding – Basic (millions)			618			541
Average Shares Outstanding – Diluted (millions)			619			543

See accompanying notes to the consolidated financial statements.

TRANSCANADA [29

FIRST QUARTER REPORT 2009

Consolidated Cash Flows

(unaudited)	Three months ended March 31
(millions of dollars)		2009		2008

Cash Generated From Operations
Net income		334		449
Depreciation and amortization		346		310
Future income taxes		62		5
Non-controlling interests		35		71
Employee future benefits funding (in excess of)/ lower than expense		(34	)	20
Writedown of Broadwater LNG project costs		-		41
Other		23		26
		766		922
Decrease in operating working capital		78		6
Net cash provided by operations		844		928

Investing Activities
Capital expenditures		(1,123	)	(460	)
Acquisitions, net of cash acquired		(134	)	(2	)
Deferred amounts and other		(199	)	112
Net cash used in investing activities		(1,456	)	(350	)

Financing Activities
Dividends on common shares		(156	)	(130	)
Distributions paid to non-controlling interests		(27	)	(21	)
Notes payable repaid, net		(917	)	(30	)
Long-term debt issued, net of issue costs		3,085		112
Reduction of long-term debt		(482	)	(394	)
Long-term debt of joint ventures issued		16		17
Reduction of long-term debt of joint ventures		(20	)	(29	)
Common shares issued		11		9
Net cash provided by/(used in) financing activities		1,510		(466	)

Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents		26		23

Increase in Cash and Cash Equivalents		924		135

Cash and Cash Equivalents
Beginning of period		1,308		504

Cash and Cash Equivalents
End of period		2,232		639

Supplementary Cash Flow Information
Income taxes paid		57		167
Interest paid		263		204

See accompanying notes to the consolidated financial statements.

TRANSCANADA [30

FIRST QUARTER REPORT 2009

Consolidated Balance Sheet

(unaudited)	March 31,		December 31,
(millions of dollars)	2009		2008

ASSETS
Current Assets
Cash and cash equivalents		2,232		1,308
Accounts receivable		1,070		1,280
Inventories		481		489
Other		809		523
		4,592		3,600
Plant, Property and Equipment		30,412		29,189
Goodwill		4,520		4,397
Regulatory Assets		1,596		201
Other Assets		2,231		2,027
		43,351		39,414

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Notes payable		800		1,702
Accounts payable		2,063		1,876
Accrued interest		403		359
Current portion of long-term debt		474		786
Current portion of long-term debt of joint ventures		211		207
		3,951		4,930
Regulatory Liabilities		507		551
Deferred Amounts		1,119		1,168
Future Income Taxes		2,702		1,223
Long-Term Debt		18,656		15,368
Long-Term Debt of Joint Ventures		875		869
Junior Subordinated Notes		1,249		1,213
		29,059		25,322
Non-Controlling Interests
Non-controlling interest in PipeLines LP		743		721
Preferred shares of subsidiary		389		389
Non-controlling interest in Portland		93		84
		1,225		1,194
Shareholders’ Equity		13,067		12,898
		43,351		39,414

See accompanying notes to the consolidated financial statements.

TRANSCANADA [31

FIRST QUARTER REPORT 2009

Consolidated Comprehensive Income

(unaudited)	Three months ended March 31
(millions of dollars)	2009		2008

Net Income	334		449
Other Comprehensive Income/(Loss), Net of Income Taxes
Change in foreign currency translation gains and losses on investments in foreign operations(1)	(38	)	53
Change in gains and losses on hedges of investments in foreign operations(2)	-		(41	)
Change in gains and losses on derivative instruments designated as cash flow hedges(3)	27		4
Reclassification to net income of gains and losses on derivative instruments designated as cash flow hedges pertaining to prior periods (4)	4		(19	)
Other Comprehensive Income/(Loss)	(7	)	(3	)
Comprehensive Income	327		446

(1)	Net of income tax recovery of $6 million for the three months ended March 31, 2009 (2008 - $25 million recovery).

(2)	Net of income tax expense of $4 million for the three months ended March 31, 2009 (2008 - $22 million recovery).

(3)	Net of income tax recovery of $3 million for the three months ended March 31, 2009 (2008 - $12 million expense).

(4)	Net of income tax expense of $1 million for the three months ended March 31, 2009 (2008 - $9 million recovery).

See accompanying notes to the consolidated financial statements.

TRANSCANADA [32

FIRST QUARTER REPORT 2009

Consolidated Accumulated Other Comprehensive Income

	Currency			Cash Flow
(unaudited)	Translation			Hedges and
(millions of dollars)	Adjustments			Other			Total

Balance at December 31, 2008		(379	)		(93	)		(472	)
Change in foreign currency translation gains and losses on investments in foreign operations(1)		(38	)		-			(38	)
Change in gains and losses on hedges of investments in foreign operations(2)		-			-			-
Changes in gains and losses on derivative instruments designated as cash flow hedges(3)		-			27			27
Reclassification to net income of gains and losses on derivative instruments designated as cash flow hedges pertaining to prior periods(4)(5)		-			4			4
Balance at March 31, 2009		(417	)		(62	)		(479	)




Balance at December 31, 2007		(361	)		(12	)		(373	)
Change in foreign currency translation gains and losses on investments in foreign operations(1)		53			-			53
Change in gains and losses on hedges of investments in foreign operations(2)		(41	)		-			(41	)
Changes in gains and losses on derivative instruments designated as cash flow hedges(3)		-			4			4
Reclassification to net income of gains and losses on derivative instruments designated as cash flow hedges pertaining to prior periods(4)		-			(19	)		(19	)
Balance at March 31, 2008		(349	)		(27	)		(376	)

(1)	Net of income tax recovery of $6 million for the three months ended March 31, 2009 (2008 - $25 million recovery).

(2)	Net of income tax expense of $4 million for the three months ended March 31, 2009 (2008 - $22 million recovery).

(3)	Net of income tax recovery of $3 million for the three months ended March 31, 2009 (2008 - $12 million expense).

(4)	Net of income tax expense of $1 million for the three months ended March 31, 2009 (2008 - $9 million recovery).

(5)

The amount of gains related to cash flow hedges reported in accumulated other comprehensive income that is expected to be reclassified to net income in the next 12 months is estimated to be $50 million ($46 million, net of tax). These estimates assume constant commodity prices, interest rates and foreign exchange rates over time, however, the amounts reclassified will vary based on the actual value of these factors at the date of settlement.

See accompanying notes to the consolidated financial statements.

TRANSCANADA [33

FIRST QUARTER REPORT 2009

Consolidated Shareholders’ Equity

(unaudited)	Three months ended March 31
(millions of dollars)	2009		2008

Common Shares
Balance at beginning of period	9,264		6,662
Shares issued under dividend reinvestment plan	67		54
Proceeds from shares issued on exercise of stock options	11		9
Balance at end of period	9,342		6,725

Contributed Surplus
Balance at beginning of period	279		276
Issuance of stock options	-		1
Balance at end of period	279		277

Retained Earnings
Balance at beginning of period	3,827		3,220
Net income	334		449
Common share dividends	(236	)	(195	)
Balance at end of period	3,925		3,474

Accumulated Other Comprehensive Income
Balance at beginning of period	(472	)	(373	)
Other comprehensive income	(7	)	(3	)
Balance at end of period	(479	)	(376	)
	3,446		3,098

Total Shareholders’ Equity	13,067		10,100

See accompanying notes to the consolidated financial statements.

TRANSCANADA [34

FIRST QUARTER REPORT 2009

Notes to Consolidated Financial Statements

(Unaudited)

1.	Significant Accounting Policies

The consolidated financial statements of TransCanada Corporation (TransCanada or the Company) have been prepared in accordance with Canadian generally accepted accounting principles (GAAP). The accounting policies applied are consistent with those outlined in TransCanada's annual audited Consolidated Financial Statements for the year ended December 31, 2008. These Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary to present fairly the financial position and results of operations for the respective periods. These Consolidated Financial Statements do not include all disclosures required in the annual financial statements and should be read in conjunction with the 2008 audited Consolidated Financial Statements included in TransCanada’s 2008 Annual Report. Unless otherwise indicated, “TransCanada“ or “the Company“ includes TransCanada Corporation and its subsidiaries. Amounts are stated in Canadian dollars unless otherwise indicated.

In preparing these financial statements, TransCanada is required to make estimates and assumptions that affect both the amount and timing of recording assets, liabilities, revenues and expenses as the determination of these items may be dependent on future events. The Company uses the most current information available and exercises careful judgement in making these estimates and assumptions. In the opinion of management, these consolidated financial statements have been properly prepared within reasonable limits of materiality and within the framework of the Company’s significant accounting policies.

TRANSCANADA [35

FIRST QUARTER REPORT 2009

2.	Changes in Accounting Policies

The Company’s accounting policies have not changed materially from those described in TransCanada’s 2008 Annual Report except as follows:

2009 Accounting Changes

Rate-Regulated Operations

Intangible Assets

Effective January 1, 2009, the Company adopted CICA Handbook Section 3064 “Goodwill and Intangible Assets“, which replaced Section 3062 “Goodwill and Other Intangible Assets”. Section 3064 gives guidance on the recognition of intangible assets as well as the recognition and measurement of internally developed intangible assets. In addition, Section 3450 “Research and Development Costs” was withdrawn from the Handbook. Adopting this accounting change did not have a material effect on the Company’s financial statements.

Credit Risk and the Fair Value of Financial Assets and Financial Liabilities

Future Accounting Changes

International Financial Reporting Standards

At the current stage of the project, TransCanada cannot reasonably determine the full impact that adopting IFRS would have on its financial position and future results.

TRANSCANADA [36

FIRST QUARTER REPORT 2009

3.	Segmented Information

Effective January 1, 2009, TransCanada revised its presentation of certain income and expense items in the Consolidated Statement of Income to better reflect the operating and financing structure of the Company. To conform with the new presentation, certain of the income and expense amounts pertaining to operations that were previously classified as Other Expenses/(Income) are now included in Operating and Other Expenses/(Income). Depreciation expense has been redefined as Depreciation and Amortization expense and includes amortization of $14 million in first quarter 2009 (2008 - $14 million) for power purchase arrangements, which was previously included in Commodity Purchases Resold. Support services costs previously allocated to Pipelines and Energy of $31 million in first quarter 2009 (2008 - $26 million) will now be included in Corporate. In addition, amounts related to interest and other financial charges, income taxes, interest and other income, and non-controlling interests will no longer be reported on a segmented basis. Segmented information has been retroactively reclassified to reflect all changes. These changes had no impact on Consolidated Net Income.

Three months ended March 31	Pipelines						Energy						Corporate						Total
(unaudited)(millions of dollars)	2009			2008			2009			2008			2009			2008			2009			2008

Revenues		1,264			1,176			1,116			957			-			-			2,380			2,133
Plant operating costs and other		(397	)		(380	)		(392	)		(291	)		(31	)		(27	)		(820	)		(698	)
Commodity purchases resold		-			-			(447	)		(396	)		-			-			(447	)		(396	)
Other income		4			23			-			-			1			5			5			28
Calpine bankruptcy settlements		-			279			-			-			-			-			-			279
Writedown of Broadwater LNG project costs		-			-			-			(41	)		-			-			-			(41	)
		871			1,098			277			229			(30	)		(22	)		1,118			1,305
Depreciation and amortization		(260	)		(254	)		(86	)		(56	)		-			-			(346	)		(310	)
		611			844			191			173			(30	)		(22	)		772			995
Interest expense																				(295	)		(218	)
Financial charges of joint ventures																				(14	)		(16	)
Interest income and other																				22			11
Income taxes																				(116	)		(252	)
Non-controlling interests																				(35	)		(71	)
Net Income																				334			449

TRANSCANADA [37

FIRST QUARTER REPORT 2009

For the years ended December 31, 2008 and 2007, segmented information has been retroactively reclassified to reflect all changes.

For the year ended December 31
(unaudited)	Pipelines						Energy						Corporate						Total
(millions of dollars)	2008			2007			2008			2007			2008			2007			2008			2007

Revenues		4,650			4,712			3,969			4,116			-			-			8,619			8,828
Plant operating costs and other		(1,645	)		(1,590	)		(1,307	)		(1,336	)		(110	)		(104	)		(3,062	)		(3,030	)
Commodity purchases resold		-			(72	)		(1,453	)		(1,829	)		-			-			(1,453	)		(1,901	)
Calpine bankruptcy settlements		279			-			-			16			-			-			279			16
Writedown of Broadwater LNG project costs		-			-			(41	)		-			-			-			(41	)		-
Other income		31			27			1			3			6			2			38			32
		3,315			3,077			1,169			970			(104	)		(102	)		4,380			3,945
Depreciation and amortization		(989	)		(1,021	)		(258	)		(216	)		-			-			(1,247	)		(1,237	)
		2,326			2,056			911			754			(104	)		(102	)		3,133			2,708
Interest expense																				(943	)		(943	)
Financial charges of joint ventures																				(72	)		(75	)
Interest income and other																				54			120
Income taxes																				(602	)		(490	)
Non-controlling interests																				(130	)		(97	)
Net Income																				1,440			1,223

Total Assets

(unaudited) (millions of dollars)	March 31, 2009		December 31, 2008

Pipelines		27,870		25,020
Energy		12,539		12,006
Corporate		2,942		2,388
		43,351		39,414

4.	Long-Term Debt

On April 23, 2009, TCPL filed a $2.0 billion Canadian Medium-Term Notes shelf prospectus to replace a March 2007 $1.5 billion Canadian Medium-Term Notes shelf prospectus, which expired in April 2009.

In the three months ended March 31, 2009, the Company capitalized interest related to capital projects of $54 million (2008 - $27 million).

TRANSCANADA [38

FIRST QUARTER REPORT 2009

5.	Share Capital

In the three months ended March 31, 2009, TransCanada issued 2.1 million (2008 – 1.4 million) common shares, under its Dividend Reinvestment and Share Purchase Plan (DRP), in lieu of making cash dividend payments totalling $67 million (2008 - $54 million). The dividends were paid with common shares issued from treasury.

6.	Financial Instruments and Risk Management

TransCanada continues to manage and monitor its exposure to market, counterparty credit and liquidity risk.

Counterparty Credit and Liquidity Risk

Natural Gas Inventory

TRANSCANADA [39

FIRST QUARTER REPORT 2009

Net Investment in Self-Sustaining Foreign Operations

Information for the derivatives used to hedge the Company’s net investment in its foreign operations is as follows:

Derivatives Hedging Net Investment in Foreign Operations

	March 31, 2009					December 31, 2008
Asset/(Liability) (unaudited) (millions of dollars)	Fair Value(1)			Notional or Principal Amount		Fair Value(1)			Notional or Principal Amount

U.S. dollar cross-currency swaps
(maturing 2009 to 2014)(2)		(280	)	U.S. 1,550			(218	)	U.S. 1,650
U.S. dollar forward foreign exchange contracts
(maturing 2009)(2)		3		U.S. 210			(42	)	U.S. 2,152
U.S. dollar options
(matured 2009)		-			-		6		U.S. 300

		(277	)	U.S. 1,760			(254	)	U.S. 4,102

(1)	Fair values are equal to carrying values.

(2)	As at March 31, 2009.

Non-Derivative Financial Instruments Summary

The carrying and fair values of non-derivative financial instruments were as follows:

	March 31, 2009				December 31, 2008
(unaudited) (millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value

Financial Assets(1)
Cash and cash equivalents		2,232		2,232		1,308		1,308
Accounts receivable and other assets(2)(3)		1,207		1,207		1,404		1,404
Available-for-sale assets(2)		28		28		27		27
		3,467		3,467		2,739		2,739

Financial Liabilities(1)(3)
Notes payable		800		800		1,702		1,702
Accounts payable and deferred amounts(4)		1,334		1,334		1,372		1,372
Accrued interest		403		403		359		359
Long-term debt and junior subordinated notes		20,379		19,871		17,367		16,152
Long-term debt of joint ventures		1,086		1,065		1,076		1,052
		24,002		23,473		21,876		20,637

(1)	Consolidated Net Income in 2009 and 2008 included unrealized gains or losses of nil for the fair value adjustments to each of these financial instruments.

(2)	At March 31, 2009, the Consolidated Balance Sheet included financial assets of $1,070 million (December 31, 2008 – $1,257 million) in Accounts Receivable and $165 million (December 31, 2008 - $174 million) in Other Assets.

(3)	Recorded at amortized cost.

(4)	At March 31, 2009, the Consolidated Balance Sheet included financial liabilities of $1,313 million (December 31, 2008 – $1,350 million) in Accounts Payable and $21 million (December 31, 2008 - $22 million) in Deferred Amounts.

TRANSCANADA [40

FIRST QUARTER REPORT 2009

Derivative Financial Instruments Summary

Information for the Company’s derivative financial instruments, excluding hedges of the Company’s net investment in foreign operations, is as follows:

March 31, 2009
(unaudited) (all amounts in millions unless otherwise indicated)	Power			Natural Gas			Oil Products			Foreign Exchange			Interest

Derivative Financial Instruments Held for Trading(1)
Fair Values(2)
Assets	$	202		$	223		$	8		$	28		$	53
Liabilities	$	(127	)	$	(270	)		-		$	(41	)	$	(115	)
Notional Values
Volumes(3)
Purchases		5,313			230			180			-			-
Sales		7,165			184			324			-			-
Canadian dollars		-			-			-			-			1,016
U.S. dollars		-			-			-		U.S. 459			U.S. 1,575
Japanese yen (in billions)		-			-			-		JPY 2.9				-
Cross-currency		-			-			-		227/U.S. 157				-

Net unrealized gains/(losses) in the three months ended March 31, 2009(4)	$	21		$	(35	)	$	7		$	1			-

Net realized gains/(losses) in the three months ended March 31, 2009(4)	$	10		$	26		$	(3	)	$	6		$	(4	)

Maturity dates		2009-2014			2009-2013			2009-2010			2009-2012			2009-2018

Derivative Financial Instruments in Hedging Relationships(5)(6)
Fair Values(2)
Assets	$	200		$	1			-		$	2		$	8
Liabilities	$	(203	)	$	(34	)		-		$	(21	)	$	(80	)
Notional Values
Volumes(3)
Purchases		10,470			13			-			-			-
Sales		11,463			-			-			-			-
Canadian dollars		-			-			-			-			-
U.S. dollars		-			-			-		U.S. 10			U.S. 1,225
Cross-currency		-			-			-		136/U.S. 100				-

Net realized gains/(losses) in the three months ended March 31, 2009(4)	$	26		$	(10	)		-			-		$	(7	)

Maturity dates		2009-2014			2009-2012			n/a			2009-2013			2009-2013

(1)

(2)	Fair values are equal to carrying values.

(3)	Volumes for power, natural gas and oil products derivatives are in gigawatt hours (GWh), billion cubic feet (Bcf) and thousands of barrels, respectively.

(4)

(5)

(6)

TRANSCANADA [41

FIRST QUARTER REPORT 2009

2008
(unaudited) (all amounts in millions unless otherwise indicated)	Power			Natural Gas			Oil Products			Foreign Exchange			Interest

Derivative Financial Instruments Held for Trading
Fair Values(1) (4)
Assets	$	132		$	144		$	10		$	41		$	57
Liabilities	$	(82	)	$	(150	)	$	(10	)	$	(55	)	$	(117	)
Notional Values(4)
Volumes(2)
Purchases		4,035			172			410			-			-
Sales		5,491			162			252			-			-
Canadian dollars		-			-			-			-			1,016
U.S. dollars		-			-			-		U.S. 479			U.S. 1,575
Japanese yen (in billions)		-			-			-		JPY 4.3				-
Cross-currency		-			-			-		227/U.S. 157				-

Net unrealized gains/(losses) in the three months ended March 31, 2008(3)	$	(3	)	$	(18	)		-		$	(9	)	$	(4	)

Net realized gains/(losses) in the three months ended March 31, 2008(3)	$	1		$	26			-		$	5		$	3

Maturity dates(4)		2009-2014			2009-2011		2009				2009-2012			2009-2018

Derivative Financial Instruments in Hedging Relationships(5)(6)
Fair Values(1) (4)
Assets	$	115			-			-		$	2		$	8
Liabilities	$	(160	)	$	(18	)		-		$	(24	)	$	(122	)
Notional Values (4)
Volumes(2)
Purchases		8,926			9			-			-			-
Sales		13,113			-			-			-			-
Canadian dollars		-			-			-			-			50
U.S. dollars		-			-			-		U.S. 15			U.S. 1,475
Cross-currency		-			-			-		136/U.S. 100				-

Net realized gains/(losses) in the three months ended March 31, 2008(3)	$	(1	)	$	8			-			-		$	1

Maturity dates(4)		2009-2014			2009-2011			n/a			2009-2013			2009-2019

(1)	Fair values are equal to carrying values.

(2)	Volumes for power, natural gas and oil products derivatives are in GWh, Bcf and thousands of barrels, respectively.

(3)

(4)	As at December 31, 2008.

(5)

All hedging relationships are designated as cash flow hedges except for interest-rate derivative financial instruments designated as fair value hedges with a fair value of $8 million and notional amounts of $50 million and US$50 million at December 31, 2008. There were no net realized gains or losses on fair value hedges for the three months ended March 31, 2008. In first quarter 2008, the Company did not record any amounts in Net Income related to ineffectiveness for fair value hedges.

TRANSCANADA [42

FIRST QUARTER REPORT 2009

(6)

Balance Sheet Presentation of Derivative Financial Instruments

The fair value of the derivative financial instruments in the Company’s Balance Sheet was as follows:

(unaudited)
(millions of dollars)	March 31, 2009			December 31, 2008

Current
Other current assets		503			318
Accounts payable		(532	)		(298	)

Long-term
Other assets		222			191
Deferred amounts		(636	)		(694	)

7.	Employee Future Benefits

The net benefit plan expense for the Company’s defined benefit pension plans and other post-employment benefit plans is as follows:

Three months ended March 31
(unaudited)	Pension Benefit Plans				Other Benefit Plans
(millions of dollars)	2009		2008		2009	2008

Current service cost	11		13		-	-
Interest cost	23		19		2	2
Expected return on plan assets	(25	)	(23	)	-	-
Amortization of net actuarial loss	1		4		-	-
Amortization of past service costs	1		1		-	-
Net benefit cost recognized	11		14		2	2

TransCanada welcomes questions from shareholders and potential investors. Please telephone:

Investor Relations, at (800) 361-6522 (Canada and U.S. Mainland) or direct dial David Moneta/Myles Dougan/Terry Hook at (403) 920-7911. The investor fax line is (403) 920-2457. Media Relations: Cecily Dobson/Terry Cunha (403) 920-7859 or (800) 608-7859.

Visit the TransCanada website at: http://www.transcanada.com.

exhibit133may12009.htm

Exhibit 13.3

TRANSCANADA CORPORATION

RECONCILIATION TO UNITED STATES GAAP

March 31, 2009

TRANSCANADA CORPORATION

RECONCILIATION TO UNITED STATES GAAP

The unaudited consolidated financial statements of TransCanada Corporation (TransCanada or the Company) for the three months ended March 31, 2009 have been prepared in accordance with Canadian generally accepted accounting principles (GAAP), which in some respects, differ from United States (U.S.) GAAP.

The effects of significant differences between Canadian and U.S. GAAP on the Company’s consolidated financial statements for the three months ended March 31, 2009 are described below and should be read in conjunction with TransCanada’s 2008 audited consolidated financial statements and U.S. GAAP reconciliation for the year ended December 31, 2008 and unaudited consolidated financial statements for the three months ended March 31, 2009 prepared in accordance with Canadian GAAP.

Reconciliation of Net Income and Comprehensive Income

(unaudited)	Three months ended March 31
(millions of dollars, except per share amounts)	2009			2008
Net Income in Accordance with Canadian GAAP		334			449
U.S. GAAP adjustments:
Net income attributable to non-controlling interests		35			71
Unrealized loss on natural gas inventory held in storage, net of tax(1)		16			(23	)
Tax recovery due to a change in tax legislation substantively enacted in Canada(2)		(1	)		-
Net Income in Accordance with U.S. GAAP		384			497
Less: net income attributable to non-controlling interests		(35	)		(71	)
Ne Net Income Attributable to Common Shareholders in Accordance with U.S. GAAP		349			426

Other Comprehensive Income (Loss) in Accordance with Canadian GAAP		(7	)		(3	)
U.S. GAAP adjustments:
Change in funded status of postretirement plan liability, net of tax(3)		1			1
Change in equity investment funded status of postretirement plan liability,net of tax(3)		1			2
Comprehensive Income in Accordance with U.S. GAAP		344			426

Net Earnings Per Share in Accordance with U.S. GAAP, Basic and Diluted	$	0.56		$	0.79

Page 2

Condensed Balance Sheet in Accordance with U.S. GAAP


(unaudited) (millions of dollars)	March 31, 2009			December 31, 2008
Current assets(1)		3,821			3,399
Long-term investments(3)(4)(5)		6,100			5,221
Plant, property and equipment		23,347			22,901
Goodwill		4,376			4,258
Regulatory Assets(6)		1,750			376
Other assets(7)		1,846			3,042
		41,240			39,197

Current liabilities(2)		2,626			4,264
Deferred amounts(3)(5)		1,839			1,789
Deferred income taxes(1)(3)(4)(6)		2,654			2,602
Long-term debt and junior subordinated notes(7)		20,026			16,664
		27,145			25,319
Shareholders’ equity:
Common shares		9,342			9,265
Non-controlling interests		1,225			1,194
Contributed surplus		279			279
Retained earnings(1)(2)(4)		3,923			3,809
Accumulated other comprehensive income(3)(8)		(674	)		(669	)
		14,095			13,878
		41,240			39,197

(1)	In accordance with Canadian GAAP, natural gas inventory held in storage is recorded at its fair value. Under U.S. GAAP, inventory is recorded at lower of cost or market.

(2)	In accordance with Canadian GAAP, the Company recorded current income tax benefits resulting from substantively enacted Canadian federal income tax legislation. Under U.S. GAAP, the legislation must be fully enacted for income tax adjustments to be recorded.

(3)

Represents the amortization of net loss and prior service cost amounts recorded in accumulated other comprehensive income under Statement of Financial Accounting Standards No.158 “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” for the Company’s defined benefit pension and other postretirement plans.

(4)

Under Canadian GAAP, pre-development costs incurred during the commissioning phase of a new project are deferred until commercial production levels are achieved. After such time, those costs are amortized over the estimated life of the project. Under U.S. GAAP, such costs are expensed as incurred. Certain development costs incurred by Bruce Power L.P. (Bruce), an equity investment, were expensed under U.S. GAAP.

(5)

Under Canadian GAAP, the company accounts for certain investments using the proportionate consolidation basis whereby the Company’s proportionate share of the assets, liabilities, revenues, expenses and cash flows are included in the Company’s financial statements. U.S. GAAP does not allow the use of proportionate consolidation and requires that such investments be recorded on an equity accounting basis. Information on the balances that have been proportionately consolidated is located in Note 8 to the Company’s audited consolidated annual financial statements for the year ended December 31, 2008. As a consequence of using equity accounting for U.S. GAAP, the Company is required to reflect an additional liability of $181 million at March 31, 2009 (December 31, 2008 - $51 million) for the estimated fair value of certain guarantees related to debt and other performance commitments of the joint venture operations that were not required to be recorded when the underlying liability was reflected on the balance sheet under the proportionate consolidation method of accounting.

(6)

Under U.S. GAAP SFAS 71 “Accounting for the Effects of Certain Types of Regulation”, the Company is required to record a deferred income tax liability for its cost-of-service regulated businesses and a corresponding regulatory asset. Effective January 1, 2009, the Company chose to adopt accounting policies consistent with SFAS 71 for its Canadian GAAP financial statements. Therefore, this U.S. GAAP difference has been eliminated.

(7)	In accordance with U.S. GAAP, debt issue costs are recorded as a deferred asset rather than being included in long-term debt as required by Canadian GAAP.

(8)	At March 31, 2009, Accumulated Other Comprehensive Income in accordance with U.S. GAAP is $195 million higher than under Canadian GAAP. The difference relates to the accounting treatment for defined benefit pension and other postretirement plans.

Page 3

Fair Value Measurements

The Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements” (SFAS No. 157) for its financial assets and liabilities measured at fair value on a recurring basis effective January 1, 2008. Effective January 1, 2009, the Company adopted the provisions of SFAS No. 157 for all non-financial assets and liabilities that are measured at fair value on a non-recurring basis. These non-financial items include assets and liabilities such as non-financial assets and liabilities assumed in a business combination, reporting units measured at fair value in a goodwill impairment test and asset retirement obligations initially measured at fair value.

SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Under SFAS No. 157, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the ‘exit price’) in an orderly transaction between market participants at the measurement date.

The Company’s financial assets and liabilities that are recorded at fair value on a recurring basis have been categorized into one of three categories based upon a fair value hierarchy in accordance with SFAS No. 157. Fair values of assets and liabilities included in Level I are determined by reference to quoted prices in active markets for identical assets and liabilities. Assets and liabilities in Level II include valuations using inputs other than quoted prices for which all significant outputs are observable, either directly or indirectly. Level III valuations are based on inputs that are unobservable and significant to the overall fair value measurement. There is no current period disclosure required under SFAS No. 157 for items measured at fair value on a non-recurring basis.

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2009 are categorized in accordance with SFAS No. 157 as follows:

(unaudited) (millions of dollars)	Quoted prices in active markets (Level I)			Significant other observable inputs (Level II)			Significant unobservable inputs (Level III)		Total
Derivative Financial Instruments Held for Trading:
Assets		135			379			-		514
Liabilities		(180	)		(567	)		-		(747	)
Derivative Financial Instruments in Hedging Relationships:
Assets		5			215			-		220
Liabilities		(34	)		(590	)		-		(624	)
Non-Derivative Financial Instruments Available for Sale:
Assets		28			-			-		28
Liabilities		-			-			-		-
Total		(46	)		(563	)		-		(609	)

Long-term debt fair value disclosures are based on quoted market prices for same or similar debt instruments, or, when not available, by discounting future payments of interest and principal at estimated interest rates. These fair values fall under Level II in the SFAS No. 157 hierarchy.

Page 4

Disclosures about Hedging Instruments and Hedging Activities

The Company adopted the provisions of SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” effective January 1, 2009. The statement is intended to enhance the current disclosure requirements to provide more information about how derivatives and hedging activities affect an entity’s financial position, financial performance and cash flows. Many of these disclosures are provided in the Company’s consolidated financial statements prepared under Canadian GAAP. Additional information required by SFAS No. 161 is provided below.

Derivatives in Net Investment Hedging Relationships

Three months ended March 31, 2009

(unaudited)

(millions of dollars, pre-tax)

Derivatives in Statement 133 Net Investment Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivatives	Location of Gain (Loss) Reclassified from AOCI into income	Amount of Gain or (Loss) Reclassified from AOCI into Income	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
Foreign exchange contracts	4	Gain or (loss) on sale of subsidiary	Nil	Other income/(expense)	Nil

Derivatives in Cash Flow Hedging Relationships

Three months ended March 31, 2009 (unaudited) (millions of dollars, pre-tax)	Power	Natural Gas		Foreign Exchange	Interest
Amount of gain or loss recognized in OCI on derivative (effective portion)	39	(13	)	4	(5	)
Amount of gain or loss reclassified from AOCI into income (effective portion)	2	(7	)	-	9
Amount of gain or loss recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)	4	1		-	-

Derivative contracts entered into to manage market risk often contain financial assurances provisions that allow parties to the contracts to manage credit risk. These provisions may require collateral to be provided if a credit-risk-related contingent event occurs, such as a downgrade in the Company’s credit rating to non-investment grade. Based on contracts in place and market prices at March 31, 2009, the aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position is $174 million for which the Company has provided collateral of $13 million in the normal course of business. If the credit-risk-related contingent features in these agreements were triggered on March 31, 2009, the Company may be required to provide additional collateral of $161 million to its counterparties. The Company has sufficient liquidity in the form of cash and undrawn committed revolving bank lines to meet its contingent obligations should they arise. The Company does not anticipate that these contingent obligations will arise in the foreseeable future.

Income Taxes

TransCanada adopted FASB, Financial Interpretation 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), January 1, 2007. At March 31, 2009, the total unrecognized tax benefit is approximately $77 million (December 31, 2008 - $80 million).

TransCanada’s continuing practice is to recognize interest and penalties related to income tax uncertainties in income tax expense. Included in net tax expense for the three month period ended March 31, 2009 is $2 million of interest income and nil for penalties (March 31, 2008 - $4 million for interest expense and nil for penalties). At March 31, 2009, the Company had $23 million accrued for interest and nil accrued for penalties (December 31, 2008 - $24 million accrued for interest and nil accrued for penalties).

Page 5

TransCanada expects the enactment of certain Canadian Federal tax legislation in the next twelve months. This legislation will result in a favourable income tax adjustment of approximately $12 million. Otherwise, subject to the results of audit examinations by taxing authorities and other legislative amendments, TransCanada does not anticipate further adjustments to the unrecognized tax benefits during the next twelve months that would have a material impact on its financial statements.

Changes in Accounting Policies

2009 Accounting Changes

In December 2007, FASB issued SFAS No. 160 “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51” and SFAS No. 141(R) “Business Combinations” both of which are effective for annual and interim periods beginning after December 15, 2008. SFAS No. 160 requires that third party ownership interests in subsidiaries be presented separately in the equity section of the balance sheet. Consolidated net income will include both the shareholders’ and the non-controlling interests’ share of net income. In addition, consolidated net income attributable to the shareholders and non-controlling interests will be separately disclosed. The requirements of SFAS No. 160 have been applied retrospectively. SFAS No. 141(R) requires that most identifiable assets, liabilities (including obligations for contingent consideration), non-controlling interests and goodwill be recorded at “full fair value”. Also, for step acquisitions, the acquirer will be required to re-measure its non-controlling equity investment in the acquiree at fair value as of the date control is obtained and recognize any gain or loss in income. The Company adopted these standards on January 1, 2009 resulting in a reclassification of non-controlling interests on the income statement and balance sheet.

In April 2009, FASB issued Staff Position No. 141(R)-1 “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies” which amends and clarifies SFAS No. 141(R). Any asset or liability assumed in a business combination that arises from a contingency will be recognized at the fair value at the acquisition date if that fair value can be determined. If the acquisition-date fair value cannot be determined, then the asset or liability will only be recognized if it is probable that the asset existed or the liability had been incurred at the acquisition date and the amount can be reasonable estimated. This Staff Position is effective for acquisitions after December 15, 2008. The Company will apply this standard on future business combinations.

In April 2009, FASB issued Staff Position No. 107-1 and APB 28-1 “Interim Disclosures about Fair Value of Financial Instruments” which amends SFAS No. 107 “Disclosures about Fair Value of Financial Instruments” to require fair value disclosure for interim reporting periods in addition to annual financial statements. This Staff Position will be effective for interim reporting periods after June 15, 2009. The Company will adopt these standards for its second-quarter 2009 report by expanding its financial instrument disclosure.

In April 2009, FASB issued Staff Position No. 115-2 and SFAS No. 124-2 “Recognition and Presentation of Other-Than-Temporary Impairments” which amends the guidance related to other-then-temporary impairments specifically for debt securities. Other-then-temporary impairments must be recognized if the entity has the intention of selling the debt security or if it is more likely than not that the entity will be required to sell the debt security before its anticipated recovery. This Staff Position will be effective for interim reporting periods after June 15, 2009. The Company will adopt these standards for its second-quarter 2009 report and does not expect a material impact to its financial statements.

Future Accounting Changes

In December 2008, FASB issued Staff Position No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets”, which requires more detailed disclosures regarding the employers’ plan assets, concentrations of risk within plan assets and valuation techniques used to measure the fair value of plan assets. This Staff Position will be effective for fiscal years ending after December 15, 2009. The Company will adopt these standards for its 2009 year-end reporting by expanding its pension disclosure.

Page 6

exhibit311may12009.htm

Exhibit 31.1

Certifications

I, Harold N. Kvisle, certify that:

1. I have reviewed this quarterly report on Form 6-K of TransCanada Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	May 1, 2009	/s/ Harold N. Kvisle
		Harold N. Kvisle
		President and Chief Executive Officer

exhibit312may12009.htm

Exhibit 31.2

Certifications

I, Gregory A. Lohnes, certify that:

1.	I have reviewed this quarterly report on Form 6-K of TransCanada Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated:		May 1, 2009	/s/ Gregory A. Lohnes
			Gregory A. Lohnes
			Executive Vice-President and Chief Financial Officer

exhibit321may12009.htm

Exhibit 32.1

TRANSCANADA CORPORATION

450 – 1st Street S.W.

Calgary, Alberta, Canada

T2P 5H1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

REGARDING PERIODIC REPORT CONTAINING

FINANCIAL STATEMENTS

I, Harold N. Kvisle, the Chief Executive Officer of TransCanada Corporation (the “Company”), in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify, in connection with the Company’s Quarterly Report as filed on Form 6-K for the period ended March 31, 2009 with the Securities and Exchange Commission (the “Report”), that:

1.	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Harold N. Kvisle
	Harold N. Kvisle
	Chief Executive Officer
	May 1, 2009

exhibit3122may12009.htm

Exhibit 32.2

TRANSCANADA CORPORATION

450 – 1st Street S.W.

Calgary, Alberta, Canada

T2P 5H1

CERTIFICATION OF CHIEF FINANCIAL OFFICER

REGARDING PERIODIC REPORT CONTAINING

FINANCIAL STATEMENTS

I, Gregory A. Lohnes, the Chief Financial Officer of TransCanada Corporation (the “Company”), in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify, in connection with the Company’s Quarterly Report as filed on Form 6-K for the period ended March 31, 2009 with the Securities and Exchange Commission (the “Report”), that:

1.	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Gregory A. Lohnes
	Gregory A. Lohnes
	Chief Financial Officer
	May 1, 2009

exhibit991may12009.htm

Exhibit 99.1

TRANSCANADA CORPORATION – FIRST QUARTER 2009

Quarterly Report to Shareholders

Media Inquiries:	Cecily Dobson	(403) 920-7859 (800) 608-7859
Analyst Inquiries:	David Moneta/Myles Dougan/Terry Hook	(403) 920-7911 (800) 361-6522

TransCanada Reports First Quarter Net Income of $334 Million or $0.54 Per Share

Funds Generated from Operations of $766 million

CALGARY, Alberta – May 1, 2009 – TransCanada Corporation (TSX, NYSE: TRP) (TransCanada or the Company) today announced net income for first quarter 2009 of $334 million or $0.54 per share. TransCanada’s Board of Directors also declared a quarterly dividend of $0.38 per common share.

“TransCanada’s solid first quarter financial performance demonstrates our ability to generate significant earnings and cash flow from our large portfolio of energy infrastructure assets,” said Hal Kvisle, TransCanada’s president and chief executive officer. “Looking forward, we are well positioned to fund our large 2009 capital program as a result of our strong internally generated cash flow and our prudent decisions to maintain TransCanada’s strong financial position and liquidity during these uncertain economic times. To that end, TransCanada successfully issued $3.1 billion of long-term debt in the first quarter and $1.1 billion of common shares at the end of 2008. Although the carrying costs and dilution associated with these financings will have an impact on our 2009 results, we remain well positioned to generate strong, long-term returns for our shareholders. Today we are in the midst of constructing $19 billion of commercially secured, low-risk projects such as the Keystone oil pipeline, the North Central Corridor expansion, the Bruce Power refurbishment, and three large-scale, gas-fired power plants that will be completed and placed into service over the next four years. Each is expected to generate significant long-term earnings and cash flow for our shareholders.”

First Quarter Highlights

(All financial figures are unaudited and in Canadian dollars unless noted otherwise)

§	Net income for first quarter 2009 of $334 million or $0.54 per share

§	Comparable earnings for first quarter 2009 of $343 million or $0.55 per share

§	Comparable earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.1 billion for first quarter 2009

§	Funds generated from operations for first quarter 2009 of $766 million

§	Dividend of $0.38 per common share declared by the Board of Directors

§	Issued $3.1 billion of long-term debt to fund 2009 capital program

§	Commissioned the 550 megawatt (MW) Portlands Energy Centre under budget

TransCanada reported net income for first quarter 2009 of $334 million ($0.54 per share) compared to $449 million ($0.83 per share) for first quarter 2008.

Comparable earnings were $343 million in first quarter 2009 compared to $326 million for the same period in 2008. The increase in comparable earnings was primarily due to higher earnings from U.S. Pipelines, Eastern Power and Bruce Power, partially offset by decreases in the U.S. Power and Natural Gas Storage businesses and higher financing costs. Comparable earnings of $0.55 per share in first quarter 2009 decreased from $0.60 per share for the same period in 2008 due to an increased number of shares outstanding following the Company’s common share issuances in the second and fourth quarters of 2008. Comparable earnings in first quarter 2009 and 2008 excluded $9 million after tax, and $12 million after tax, respectively, of net unrealized losses resulting from changes in the fair value of proprietary natural gas storage inventory and natural gas forward purchase and sale contracts. In addition, comparable earnings in first quarter 2008 excluded the $152 million after tax Calpine bankruptcy settlements, the $10 million after tax GTN lawsuit settlement and the $27 million after tax write-down of Broadwater LNG project costs.

Comparable EBITDA was $1,131 million in first quarter 2009 compared to $1,067 million in first quarter 2008.

Funds generated from operations in first quarter 2009 of $766 million decreased $156 million primarily due to the $152 million of after tax proceeds received in first quarter 2008 from the Calpine bankruptcy settlements.

Notable recent developments in Pipelines, Energy and Corporate include:

Pipelines:

In October 2008, TransCanada agreed to increase its equity ownership in the Keystone partnerships to 79.99 per cent with ConocoPhillips’ equity ownership being reduced concurrently to 20.01 per cent. In accordance with this agreement, TransCanada is funding 100 per cent of the construction expenditures until the participants’ project capital contributions are aligned with the revised ownership interests. At March 31, 2009 and December 31, 2008, TransCanada’s equity ownership in the Keystone partnerships was approximately 71 per cent and 62 per cent, respectively.

Certain parties that have volume commitments for the Keystone expansion had options to acquire up to a combined 15 per cent ownership interest in the Keystone partnerships. None of these options were exercised and the target ownership between TransCanada and ConocoPhillips remains at 79.99 per cent and 20.01 per cent, respectively.

On February 27, 2009 TransCanada filed an application with the National Energy Board (NEB) to construct and operate the Canadian portion of the Keystone expansion to the U.S. Gulf Coast. A public hearing is anticipated to occur in September 2009 and a decision from the NEB is expected in early 2010.

A Presidential permit, an Environmental Impact Statement and several state permits are required to construct and operate the U.S. portion of the Keystone expansion to the U.S. Gulf Coast. Permit applications have been filed with the respective jurisdictions and approvals are expected in second quarter 2010.

On February 26, 2009, the NEB determined that the Alberta System is within federal jurisdiction and is subject to regulation by the NEB under the National Energy Board Act (Canada), effective April 29, 2009. Under federal regulation, TransCanada will be able to apply to the NEB for approval to extend the Alberta system across provincial borders, allowing the Company to provide attractive service options and rates to producers in British Columbia and the North.

On March 19, 2009, Trans Québec & Maritimes Pipeline Inc. (TQM) received the NEB’s decision on its cost of capital application for the years 2007 and 2008, which requested the approval of an 11 per cent return on 40 per cent deemed common equity. In its decision, the NEB granted TQM’s request to vary from the Multi-pipeline Cost of Capital Decision (RH-2-94), based on changes in financial markets and economic conditions, and set a 6.4 per cent after-tax weighted average cost of capital (ATWACC) for each of the two years.

The decision granted TQM an aggregate return on capital, leaving it to TQM to choose its optimal capital structure. This decision equates to a 9.85 per cent return on 40 per cent deemed common equity in 2007 and a 9.75 per cent return on 40 per cent deemed common equity in 2008. Prior to the decision, TQM was subject to the NEB return on equity formula of 8.46 and 8.71 for 2007 and 2008, respectively, on deemed common equity of 30 per cent established in the RH-2-94 decision.

§	TransCanada’s Bison pipeline project filed an application April 20, 2009 with the Federal Energy Regulatory Commission (FERC) for the right to construct, own and operate the pipeline.

The Project is expected to have a capital cost of US$610 million and will consist of approximately 486 kilometres (302 miles) of 30-inch diameter natural gas pipeline designed to transport gas from the Powder River Basin in Wyoming to the Midwest U.S. market with a contracted capacity of approximately 407 mmcf/d with potential expandability of up to approximately 1 Bcf/d.

Energy:

§	The 550 MW Portlands Energy Centre was fully commissioned on April 22, 2009 under budget. The power plant, which is 50 per cent owned by TransCanada, will provide electricity to central Toronto under a 20-year Accelerated Clean Air Supply contract with the Ontario Power Authority.

In other Energy developments, refurbishment work continues on Bruce Power Units 1 and 2 and the units are expected to return to commercial service in 2010. TransCanada also advanced construction work on the 132 MW Kibby Wind Power Project, with commissioning of the first phase expected to begin in fourth quarter 2009. Construction of the 683 MW Halton Hills generating station also continued and it is anticipated to be in service in the third quarter of 2010.

Corporate:

§	The Company and its subsidiaries held cash and cash equivalents of $2.2 billion at March 31, 2009.

§	In first quarter 2009, TransCanada issued $3.1 billion and retired $482 million of long-term debt and reduced notes payable by $917 million.

On January 9, 2009, a subsidiary of the Company issued Senior Unsecured Notes of US$750 million and US$1.25 billion maturing in January 2019 and January 2039, respectively, and bearing interest at 7.125 per cent and 7.625 per cent, respectively. These notes were issued under a US$3.0 billion debt shelf prospectus filed in January 2009 which now has capacity of US$1.0 billion remaining.

On February 17, 2009, a subsidiary of the Company issued Medium-Term Notes of $300 million and $400 million maturing in February 2014 and February 2039, respectively, and bearing interest at 5.05 per cent and 8.05 per cent, respectively. These notes were issued under the $1.5 billion Canadian Medium-Term Notes shelf prospectus in March 2007.

§	On April 23, 2009, TransCanada PipeLines Limited filed a new $2.0 billion Canadian Medium-Term Notes shelf prospectus to replace the $1.5 billion Canadian Medium-Term Notes shelf prospectus, which expired in April 2009.

TransCanada’s liquidity position remains solid, underpinned by highly predictable cash flow from operations, significant cash balances on hand from recent debt issues, as well as committed revolving bank lines of US$1.0 billion, $2.0 billion and US$300 million, maturing in November 2010, December 2012 and February 2013, respectively. To date, no draws have been made on these facilities as TransCanada has maintained continuous access to the Canadian commercial paper market on competitive terms.

Teleconference – Audio and Slide Presentation

TransCanada will hold a teleconference today at 1 p.m. (Mountain) / 3 p.m. (Eastern) to discuss the first quarter 2009 financial results and general developments and issues concerning the Company.

Analysts, members of the media and other interested parties wanting to participate should phone 866-225-6564 or 416-641-6136 (Toronto area) at least 10 minutes prior to the start of the teleconference. No passcode is required. A live audio and slide presentation webcast of the teleconference will also be available on TransCanada's website at www.transcanada.com.

The conference will begin with a short address by members of TransCanada's executive management, followed by a question and answer period for investment analysts. A question and answer period for members of the media will immediately follow.

A replay of the teleconference will be available two hours after the conclusion of the call until midnight (Eastern) May 8, 2009. Please call 800- 408-3053 or 416-695-5800 (Toronto area) and enter pass code 7161763#. The webcast will be archived and available for replay on www.transcanada.com.

With more than 50 years’ experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas pipelines, power generation, gas storage facilities, and projects related to oil pipelines and LNG facilities. TransCanada’s network of wholly owned pipelines extends more than 59,000 kilometres (36,500 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services with approximately 370 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, over 10,900 megawatts of power generation in Canada and the United States. TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP.

FORWARD-LOOKING INFORMATION

This news release may contain certain information that is forward looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "believe", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward-looking information. Forward-looking statements in this document are intended to provide TransCanada shareholders and potential investors with information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s and its subsidiaries’ future financial and operational plans and outlook. Forward-looking statements in this document may include, among others, statements regarding the anticipated business prospects and financial performance of TransCanada and its subsidiaries, expectations or projections about the future, and strategies and goals for growth and expansion. All forward-looking statements reflect TransCanada’s beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among others, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of TransCanada’s pipeline and energy assets, the availability and price of energy commodities, capacity payments, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and the current economic conditions in North America. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause TransCanada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission. Readers are cautioned to not place undue reliance on this forward-looking information, which is given as of the date it is expressed in this news release or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Measures

TransCanada uses the measures "comparable earnings", "comparable earnings per share", "earnings before interest, taxes, depreciation and amortization" (EBITDA), "comparable EBITDA", "earnings before interest and taxes" (EBIT), "comparable EBIT" and “funds generated from operations” in this news release. These measures do not have any standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP). They are, therefore, considered to be non-GAAP measures and are unlikely to be comparable to similar measures presented by other entities. Management of TransCanada uses these non-GAAP measures to improve its ability to compare financial results among reporting periods and to enhance its understanding of operating performance, liquidity and ability to generate funds to finance operations. These non-GAAP measures are also provided to readers as additional information on TransCanada’s operating performance, liquidity and ability to generate funds to finance operations.

Management uses the measures of comparable earnings, EBITDA and EBIT to better evaluate trends in the Company’s underlying operations. Comparable earnings, comparable EBITDA and comparable EBIT comprise net income, EBITDA and EBIT, respectively, adjusted for specific items that are significant, but are not reflective of the Company’s underlying operations in the period. Specific items are subjective, however, management uses its judgment and informed decision-making when identifying items to be excluded in calculating comparable earnings, comparable EBITDA and comparable EBIT some of which may recur. Specific items may include but are not limited to certain income tax refunds and adjustments, gains or losses on sales of assets, legal and bankruptcy settlements, and certain fair value adjustments. The Consolidated Results of Operations section in the Management’s Discussion and Analysis presents a reconciliation of comparable earnings, comparable EBITDA, comparable EBIT and EBIT to Net Income. Comparable earnings per share is calculated by dividing comparable earnings by the weighted average number of shares outstanding for the period.

Funds generated from operations comprises net cash provided by operations before changes in operating working capital. A reconciliation of funds generated from operations to net cash provided by operations is presented in the First Quarter 2009 Financial Highlights table in this news release.

First Quarter 2009 Financial Highlights

Operating Results

(unaudited)	Three months ended March 31
(millions of dollars)	2009	2008

Revenues	2,380	2,133

Comparable EBITDA(1)	1,131	1,067

Comparable EBIT(1)	785	757

EBIT(1)	772	995

Net Income	334	449

Comparable Earnings(1)	343	326

Cash Flows
Funds generated from operations(1)	766	922
Decrease in operating working capital	78	6
Net cash provided by operations	844	928

Capital Expenditures	1,123	460
Acquisitions, Net of Cash Acquired	134	2

Common Share Statistics

	Three months ended March 31
(unaudited)	2009	2008

Net Income Per Share - Basic	$0.54	$0.83

Comparable Earnings Per Share(1)	$0.55	$0.60

Dividends Declared Per Share	$0.38	$0.36

Basic Common Shares Outstanding (millions)
Average for the period	618	541
End of period	619	542

(1)	Refer to the Non-GAAP Measures section in this News Release for further discussion of comparable EBITDA, comparable EBIT, EBIT, comparable earnings, comparable earnings per share and funds generated from operations.