NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ENERGY PRICE RISK MANAGEMENT FOREIGN EXCHANGE AND INTEREST RATE MANAGEMENT ACTIVITY U.S. DOLLAR TRANSACTION HEDGES HEDGING ACTIVITIES OF JOINT VENTURES 2001 ANNUAL REPORT  57 The Company’s power marketing operations offer integrated price risk management services to the power energy sector. The Company executes energy trading contracts related to these commodities for overall management of its contractual portfolio. The Company’s portfolio of power energy trading contracts is primarily comprised of forward, swap and option contracts for periods of up to 19 years, with fixed and floating price commitments. The net pre-tax unrealized (loss)/gain on power energy trading contracts included in revenues for 2001 was $(26) million (2000 – $37 million). The fair value of power energy trading contracts as at December 31, 2001 and 2000 is shown in the table below. Notional volumes are 6,013 gigawatt hours (GWh) (2000 - 2,795 GWh) for power swaps. Volumes are 149,516 GWh (2000 – 105,800 GWh) for power forward contracts, including volumes which are held through a joint venture. To reduce risk and protect margins when purchase and sale contracts are denominated in different currencies, the Company enters into for- ward foreign exchange contracts, cross-currency swaps, and foreign exchange options which establish the foreign exchange rate for the cash flows from the related purchase and sale transactions. The Company manages the foreign exchange risk of U.S. dollar debt of the Alberta System and U.S. dollar expenses and the interest rate expo- sures of the Alberta System and the Canadian Mainline through the use of foreign currency and interest rate derivatives. Certain of the realized gains and losses on these derivatives are shared with shippers on predetermined terms. The principal amounts of cross-currency swaps are US$407 million (2000 – US$425 million). Notional principal amounts for interest rate swaps are $780 million (2000 – $780 million) and US$125 million (2000 – US$125 million). The Company manages the foreign exchange risk of its other U.S. dollar debt through the use of interest rate derivatives. The carrying amount and fair value of U.S. dollar interest rate swaps at December 31, 2001 is $2 million (2000 – nil) and $30 million (2000 – $(4) million), respectively. Notional principal amounts are US$200 million (2000 – US$200 million). Certain of the Company’s joint ventures use interest rate derivatives to manage interest rate exposures. The Company’s proportionate share of the fair value of the outstanding derivatives is $(2) million and there is no related credit exposure at December 31, 2001. OTHER FAIR VALUES  These fair values are provided solely for information purposes and are not recorded in the Consolidated Balance Sheet. 2001 2000 Carrying Fair Carrying Fair Amount Value Amount Value Long-Term Debt Alberta System 3,129 3,611 3,228 3,616 Canadian Mainline 5,563 6,245 5,823 6,445 Other 1,797 1,837 1,993 2,035 Non-Recourse Debt of Joint Ventures 1,339 1,408 1,325 1,349 Junior Subordinated Debentures 274 276 265 266 2001 2000 Carrying Fair Carrying Fair Amount Value Amount Value Foreign Exchange Risk Cross-currency swaps 88 88 65 65 Interest Rate Risk Interest rate swaps Canadian dollars 4 26 2 12 U.S. dollars – (3) (1) (3) Year ended December 31  (millions of dollars) 2001 2000 Assets 517 961 Liabilities 184 712 Asset/(Liability) at December 31  (millions of dollars) December 31  (millions of dollars)