ATCO Ltd. | 2013 | Annual Report CONTENTS

Financial Highlights...... 2 Letter to Share Owners...... 3 “With a renewed vigor for sustainable growth and Return on Investment...... 6 Innovation and Improvement as innovation, your company’s purpose is to be the most Drivers for 2014...... 7 reliable, most trusted, cost-effective, value-added STRUCTURES & LOGISTICS...... 9  ATCO Structures & Logistics...... 11 provider in all of our industries.” Helping Albertans Build ...... 19 UTILITIES...... 21 Nancy C. Southern Chair, President & Chief Executive Officer  ATCO Electric...... 23

 ATCO in the North...... 29

 ATCO Gas ...... 31

 2013 Alberta Floods: ATCO Responds. . 37

 ATCO Pipelines...... 41 ENERGY ...... 45

 ATCO Power...... 47

 ATCO Energy Solutions...... 51 TECHNOLOGIES...... 54

 ATCO I-Tek ...... 54 atco Australia Well Positioned for Changing Landscape...... 55 AUSTRALIA...... 57

 ATCO AUSTRALIA ...... 59 Aboriginal Partnerships ...... 65

 ATCO Sustainable Communities. . . . 69 Making a Difference in our Communities. . 71 Financial Excellence 2013...... 75 Consolidated Annual Results...... 77 Consolidated Operating Summary . . . . .78 ATCO Ltd. Directors ...... 79 ATCO Ltd. Officers ...... 80 COVER: Bow Lake, , ATCO’s Beautiful Alberta Heritage. . . . . 81 Alberta, in May featuring the Crowfoot mountain and glacier beneath the Milky Way. General Information ...... 82 ATCO LTD. FINANCIAL HIGHLIGHTS

This data (other than funds generated by operations) has been extracted from financial statements prepared Consolidated Annual Results YEAR ENDED DECEMBER 31 in accordance with International (Millions of Canadian dollars Financial Reporting Standards (IFRS) except per share data) 2013 2012 (1) ATCO Group is a diversified, and the reporting currency is the STRUCTURES & LOGISTICS . Canadian-based, international FINANCIAL ATCO STRUCTURES & LOGISTICS group of companies focused For further information, please see Revenues 4,359 4,012 on profitable sustainable ATCO SUSTAINABLE COMMUNITIES ATCO Ltd. Consolidated Financial Statements and Management’s growth and achievement with Earnings attributable to UTILITIES Discussion and Analysis - Class I & Class II shares 418 370 approximately $16 billion in www.sedar.com. ATCO GAS assets and more than 9,800 Adjusted earnings 390 370 ATCO ELECTRIC people actively engaged ATCO PIPELINES Total assets 16,010 14,055 in Structures & Logistics Class I & Class II ENERGY 2,860 2,370 (manufacturing, logistics and share owners’ equity noise abatement), Utilities ATCO POWER Funds generated by operations 1,869 1,636 (pipelines, natural gas and ATCO ENERGY SOLUTIONS FORWARD-LOOKING INFORMATION: electricity transmission Capital expenditures 2,518 2,487 Certain statements contained in this and distribution), Energy AUSTRALIA Annual Report constitute forward-looking information. Forward-looking information (power generation, natural ATCO GAS AUSTRALIA is often, but not always, identified by the use of words such as “anticipate”, gas gathering, processing, ATCO POWER AUSTRALIA “plan”, “estimate”, “expect”, “may”, “will”, “intend”, “should”, and similar expressions. CLASS I NON-VOTING & storage and liquids extraction), ATCO I-TEK AUSTRALIA Forward-looking information involves CLASS II VOTING known and unknown risks, uncertainties SHARE DATA and Technologies (business and other factors that may cause actual TECHNOLOGIES results or events to differ materially from systems solutions). those anticipated in such forward-looking Earnings per share 3 .64 3.21 information. The Company believes that the ATCO I-TEK expectations reflected in the forward-looking information are reasonable, but no assurance Diluted earnings per share 3 .62 3.20 can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied Dividends paid per share 0 .75 0.66 upon. Shares outstanding (thousands) 115,124 115,017

Weighted average shares (1) Financial results for the year ended December 31, 2012 have been restated to reflect changes due to the adoption outstanding (thousands) 114,801 115,023 of IFRS 11 Joint Arrangements and amended IAS 19 Employee Benefits.

1 2013 ANNUAL REPORT FINANCIAL HIGHLIGHTS 2 0.75 LETTER TO 0.66 0.57 SHARE OWNERS 0.50 0.53

Dear Share Owners of ATCO, company first and foremost who were and are the reason for our sustainable growth and achievements. 2009 2010 2011 2012 2013 I am extremely proud of our company’s record From all walks of life and so many global cultures, the people DIVIDENDS PER SHARE ($) (†) achievements this past year and the tremendous effort of ATCO are our differentiating advantage. This is true of applied to the implementation of our strategies. the factory workers on the floor in our ATCO Structures & Logistics plants, our high and low voltage power linemen in As I reflect on our growth in 2013 and all that ATCO 3.64* ATCO Electric, the backhoe operators laying pipe in ATCO represents today, thoughts of the events, circumstances 3.21* Gas and ATCO Pipelines, our engineers, project managers, 2.83* and the people of the past rush before me as historical HR and IT specialists, our finance and risk departments, our 2.45 2.42* turning points on our way to becoming who we are. managers and executives. Our experiences and lessons learned from the past have shaped the diverse yet complementary nature Within our company, this is known as the ‘ATCO Heart and of our businesses and our response to the various Mind’, which has formed the fundamental tenets of how we economic cycles. operate today and how we evaluate our future opportunities and decisions: Our strategies, as agreed and confirmed by our Board 2009 2010 2011 2012 2013 - We are a principally controlled organization with a of Directors in 2010, are well under way: EARNINGS PER SHARE ($)* (†) responsibility to all our employees and Share Owners to - Geographic expansion to meet the global needs of our ensure ATCO Group continues through the generations customers — “Anywhere, Anytime” - Striving for the highest standards in all that we do, knowing - Development of significant, value creating Greenfield 16.0* our customers and anticipating their needs with innovative, projects 14.1* competitively priced products and world renowned service, 12.5* - Identification and monetization of NON-CORE assets on time and on budget 10.0 10.1* - Commitment to continuous improvement and - Our people and the communities where we work and live, innovation by dedicating people and capital to MUST be and remain safe research and development - A strong balance sheet must be maintained in order to I believe you will find our Senior Officers’ comments weather severe and unexpected economic downturns regarding our progress particularly insightful. 2009 2010 2011 2012 2013 - Leadership is situational and everyone in the company has a Their leadership sets the tone and framework for ASSETS ($ BILLIONS)* leadership role to play our expansion in each of our Principal Operating Subsidiaries. Collectively and individually the ‘ATCO Heart and Mind’ is * Earnings per share and assets have been While no one can predict the future, I remain concerned reflected in our definition of excellence: prepared in accordance with International about our ongoing prospects due to the uncertainty . . . . Excellence . . . . Financial Reporting Standards (IFRS), except for the year ended December 31, 2009 which created by geopolitical stress and an ever-changing “Going Far Beyond The Call Of Duty. has been prepared in accordance with regulatory environment occurring in each geography Doing More Than Others Expect. Canadian Generally Accepted Accounting and business that ATCO participates in. This Is What Excellence Is All About. Principles (GAAP) in effect prior to the If—and I suspect we are—headed into a period of adoption of IFRS. It Comes From Striving, Maintaining slower global growth, then it will be crucial for ATCO 2012 financial information has been restated The Highest Standards, Looking After The to reflect changes to IFRS standards adopted Group to significantly widen the gap between ourselves Smallest Detail And Going The Extra Mile. in 2013. and our competitors as the “go to” supplier of choice. Excellence Means Caring. It Means In order to do this, I will bring even greater attention Nancy C. Southern Making A Special Effort To Do More.” (†) Restated to reflect the two-for-one share Chair, President & Chief Executive Officer to our people processes, for it is the people of this split completed on June 14, 2013.

3 2013 ANNUAL REPORT LETTER TO SHARE OWNERS 4 While it is not for me to say, I believe representing over $1 billion of asset – past, present and future. Our $ the record of ATCO’s performance investment and revenue per annum in Board’s integrity and their abilities to FIVE-YEAR TOTAL RETURN ON 100 INVESTMENT speaks for itself; and from these relationships. exercise sound, seasoned and well “We are what we repeatedly do. Since 1968, ATCO has been a leader considered judgment for the long- $300 Excellence, then, is not an act but a in good governance practices long term benefit of your company is a habit.” – Aristotle before the emergence of ‘good matter of record and is reflected in the total Share Owner return graphs. I know that I will be perceived to have governance’ institutions. Smooth courses are promised to no $ a significant bias, but I am convinced ATCO was the first in Compound Cumulative 271 $266 that my father, and my grandfather to introduce Designated Audit one, but I am confident and I commit $250 Growth Rate Return to you, that your company will remain before him, were years ahead of Directors (DAD) who have individual Class I Non-Voting (ACO.X) 22.0% $271 their time on so many fronts and in responsibility to review financial diligent and disciplined in the face of adversity, maintain our fierce desire initiating so many ground-breaking statements, risk assessments, Class II Voting (ACO.Y) % $ to succeed, and persevere through 21.6 266 improvements and innovation to our meet with independent auditors $ the tumultuous uncertainties of the 200 businesses. Two such enterprise- and internal audit for each Principal S&P/TSX Composite % $ future. 11.9 176 changing approaches (strategies), Operating Subsidiary and report on $176 were the initiation in 1987 of the their findings to the Audit Committee I wish to close by recognizing the first equity partnership with the of the Board. clarity of vision and tremendous $150 Dene Nation in Northland Utilities Over the decades, the composition courage of our past Chairman and and second, was the introduction of our Boards has reflected the skills Co-Founder, my father Ron (R.D.) of ‘independent’ board members and experience required to address Southern, and by offering each of to the ATCO Board when there was the issues and business environment you, the owners of ATCO shares, my no regulation or guideline to do of the times. deepest appreciation for your trust $100 so. These revolutionary and bold and belief in our company. Our Board of Directors provides initiatives were implemented because With deep respect, they were the RIGHT thing to do in independent thinking and counsel order to expand the horizons of the as it pertains to long-term strategy, future for your company. succession and governance for our $50 company. Today, ATCO Group has more than 50 partnerships, joint ventures, On behalf of all our Share Owners, Nancy C. Southern services agreements and other I wish to sincerely thank and Chair, President & Chief Executive Officer forms of relationships with First compliment the proactive, wise and 2008 2009 2010 2011 2012 2013 Nations, , Metis and Aboriginal knowledgeable contributions of the ATCO Group Board of Directors people across Canada and Alaska This graph compares the cumulative share owner return over the last five years of the Class I Non-Voting and Class II Voting shares of the Company (assuming reinvestment of dividends) with the cumulative total return of the S&P/TSX composite index. TOTAL RETURN FROM 1968-2013 ON $100 INVESTMENT $40,000 ATCO SHARE OWNERSHIP Class I Non-Voting (ACO.X) FOR PRESENT & $30,000 It is important for prospective owners of S&P/TSX Composite PROSPECTIVE OWNERS ATCO shares to understand that ATCO $20,000 is a diversified group of companies principally controlled by Sentgraf, a Southern family holding company. It is $10,000 also important for present and prospective share owners to understand that the ATCO share registry has both non-voting and voting common shares. 1968 70 75 80 85 90 95 2000 05 10 2013

5 2013 ANNUAL REPORT RETURN ON INVESTMENT 6 Canada’s LNG network on the west sector, which poses significant can take place quicker and further INNOVATION AND coast is frequently in the spotlight, challenges for defense departments improve efficiency and effectiveness. with energy companies trying to raise to maximize asset availability without ATCO’s operations and facilities IMPROVEMENT AS almost $50 billion for the projects increasing costs. As militaries maintenance business line relies to proceed. ATCO’s solution for this around the world strive to do more on decades of global experience DRIVERS FOR 2014 industry includes the construction without increasing their spending, delivering projects for clients such and management of a workforce outsourcing of facilities maintenance as NATO, the UN and Canadian and housing facility, coupled with facilities and operations work is on the rise. U.S. defense departments. In 2013, global economic growth was in low gear, operations and maintenance. ATCO’s support of the defense sector ATCO Structures & Logistics will despite a cautiously optimistic outlook. Economic This ‘bundled’ offering provides from the operational side allows continue to provide the best possible development agencies around the world noted that significant cost benefits and allows our customers to reduce costs, solutions for our customers and the advanced economies grew again, while continuing our customers to focus on their main and arguably improve the quality develop new products and services financial sector repair and recognizing the volatility in business operations. New features of asset maintenance. The private for identified opportunities. As the the emerging markets. and innovative entertainment options sector offers significant advantages help with the challenge of attracting world continues on its journey of Ahead in 2014, a more stable economic climate is in this regard, by reducing the time and retaining qualified workers for steady progress, ATCO will create expected to bolster the economies in North America required for military personnel to these projects to build and operate. value for current and prospective and the outlook for the global economy is also more attend to civilian tasks, employing customers worldwide and lead with positive. A three-year stretch of very slow progress 2013 has also seen significant budget new technology and streamlining integrity and excellence. could be broken in 2014. The world is keenly following reductions in the global defense operations. Additionally, innovation the U.S. shale gas industry and the changing face of energy supply. The global liquefied natural gas (LNG) industry is also growing and expanding into new geographies. Headlines in the media suggest that, in the long term, the U.S. is set to become one of the world’s largest oil and natural gas producers and is on its way to energy self-reliance. In Canada, Australia and in parts of Africa, large LNG projects are approaching or receiving their final investment decisions. Global demand for LNG has doubled since 2000 and is predicted to double again by 2025, as consuming nations such as China increase their imports of the clean-burning fuel. However, these large projects are costly and often face technical and commercial challenges. For ATCO Structures & Logistics, this modestly encouraging outlook means that the profitability of our four main business lines should remain stable in 2014. However, it is through improvement and innovation that Harry G. Wilmot we can remain at the forefront of our industry and help Chief Operating Officer, Energy & Industrials, our customers achieve their business goals. ATCO Group & President, ATCO Structures & Logistics The cornerstone of our business in this economic climate is to improve our current suite of services and innovate to meet the growing expectations of our clients. This will allow us to remain ahead of our competitors and form stronger partnerships with our customers. The combination of new products, improved accommodations and integrated site services that solve ATCO Fold-A-Way metal buildings store and protect equipment for the operations at Vale’s Voisey’s Bay Nickel Mine in unique geographical challenges are ATCO’s advantage. Newfoundland and Labrador. Work for this contract is carried out by Torngait Services Inc., a joint-venture partnership between ATCO Structures & Logistics and the Labrador Inuit Development Corporation.

7 2013 ANNUAL REPORT INNOVATION AND IMPROVEMENT AS DRIVERS FOR 2014. 8 STRUCTURES & LOGISTICS ATCO Structures & Logistics provides complete infrastructure solutions to customers worldwide, including workforce housing, innovative modular facilities, construction, site support services, logistics, operations management and noise & emission reduction solutions.

ATCO’s new manufacturing facility opened in October in Kwinana, near Perth in Western Australia.

9 2013 ANNUAL REPORT STRUCTURES & LOGISTICS 10 ATCO Structures & Logistics offers modular buildings, site and camp services and industrial noise and emissions control solutions worldwide. With manufacturing facilities in North America and Australia, a global supply chain, and operations on five continents, the company has the expertise to rapidly deliver a turnkey solution anywhere it is needed.

TCO Structures & Logistics catering, housekeeping, retail, and services in Western Australia, experienced a successful maintenance and utility services. In which resulted in securing a major Ayear in 2013 with continued addition to large scale workforce modular construction project as well success in sales and profitability in its housing complexes, ATCO provides as opening a new manufacturing four core business lines worldwide: modular fleet rental and sales. facility in Western Australia. Modular Structures, Lodging & Camp Australia In May 2013, ATCO Structures & Services, Logistics and Facilities The Australian economy has seen Logistics was awarded a contract Operations & Maintenance, and strong growth in the last decade, estimated at AUD$100 million to ATCO Emissions Management. largely due to the strong performance design, manufacture, transport MODULAR STRUCTURES AND of the resource sector industries. and install 357 modular units for LODGING & CAMP SERVICES The demand for workforce housing the Chevron-operated Wheatstone The Modular Structures business line to support those industries has Project, one of Australia’s largest comprises the design, manufacture continued in 2013, despite a more resource projects. The contract and installation of workforce housing challenging year for the country’s was awarded by Bechtel, Chevron’s facilities. The Lodging & Camp mining sector. In particular, ATCO has engineering, procurement, Services business line includes seen steady demand for its products construction and commissioning

ABOVE: Nancy Southern, Chair, President & CEO, ATCO Group, and Hon. Michael Mischin MLC, Attorney General and Minister for Commerce, Western Australia, cut the ceremonial ribbon to open ATCO’s new manufacturing facility in Kwinana, Western Australia. LEFT: 2013 marks 15 years since the beginning of ATCO’s operation and facilities maintenance of the NATO Flight Training Centre in Moose Jaw, SK. This military training site is home to Canada’s iconic Snowbirds flight demonstration team.

11 2013 ANNUAL REPORT STRUCTURES & LOGISTICS 12 contractor. The units supplied ATCO was awarded a contract Woodland First Nation. This will be used to form a variety to provide 800-person modular partnership will be supporting of office complexes and free- accommodations for the initial stage camp services, which include ATCO STRUCTURES & LOGISTICS standing modular buildings on site of the Manus Island Procession camp management, catering, at Ashburton North, 12 km west facility. This project is expected to be housekeeping, janitorial and WORLDWIDE OPERATIONS of Onslow in Western Australia, completed by May 2014. maintenance. including training centres, IT North America This year also saw the completion of buildings, guardhouses and medical ATCO Structures & Logistics’ a 330-person lodge for Pengrowth centres. business in North America Energy, located near , AB. The Pengrowth Lindbergh This is ATCO’s fourth major contract experienced strong performance Lodge houses workers supporting award supporting LNG projects in in 2013 with continued demand for Hungary full service modular infrastructure the Lindbergh Project, a thermal oil Bosnia & Australia. Between 2011 and 2013, Herzegovina Afghanistan development. Madeira ATCO delivered three large workforce solutions. ATCO’s bundled service housing projects for LNG facilities on offering provides the design, As with all full service Curtis Island, Queensland, providing manufacture and operation of a accommodations solutions, ATCO is more than 6,000 beds for workers facility, including site services, such operating the Pengrowth Lindbergh constructing LNG terminals. as fire response and wastewater Lodge, which includes catering, South Africa treatment. janitorial and maintenance services. To meet the increased demand in In October 2013, ATCO was In order to help build capacity in the manufacturing, ATCO opened a communities where ATCO operates, awarded a contract to manufacture, new 150,000 sq. ft. (~14,000 sq. the company reached out to the install and operate a 1,200-person m.) facility in October, located in the Kehewin Cree Nation to create a workforce housing facility for the city of Kwinana, near Perth. ATCO local, Aboriginally-owned business Shell Carmon Creek Project near anticipates that the facility will create that would provide services to Peace River in . The approximately 100 new jobs in the Lindbergh Lodge. This resulted in modular units for this project will be Kwinana area within the first three the establishment of a commercial AUSTRALIA manufactured at ATCO’s facilities years of operation. grade laundry facility on the Kehewin NORTH AMERICA in , AB, and in Pocatello, Cree reserve. In addition to providing This new facility will supply Idaho. Manufacturing work began laundry services to the lodge, the approximately 60 per cent of the in the fourth quarter of 2013 and business owners will have the ability required units for the Wheatstone completion is scheduled for the to expand and take on new clients. Project. With the addition of this second quarter of 2015. facility, ATCO now operates six Also in the oilsands region, ATCO manufacturing plants in Australia — The Shell Carmon Creek Lodge will completed its retrofit of Barge the other five are in Brisbane — and feature single occupancy bedrooms Landing Lodge near Fort McKay, AB. has an expanded manufacturing with ensuite bathrooms, a stand- The upgraded complex now features capability to help meet demand for alone gymnasium with racquetball more management-style rooms and ATCO’s products and services. and squash courts, a running track Arctic corridors for more comfortable and separate weight training areas. movement around the facility during With sales offices around the In 2013, ATCO Structures & Operation of the lodge, including inclement weather. The lodge, which world, and operations on five Logistics diversified its business in continents, ATCO Structures & food service, will be managed was built as a joint venture between Australia with a contract to design Logistics has the expertise to by ATCO. The company will also ATCO Structures & Logistics and the and supply modular offshore rapidly deliver turnkey solutions construct a 200-person open plan Fort McKay First Nation, received anywhere they are needed. processing facilities for the Australian office complex as part of the bundled ISO 9001:2008 certification, an Department of Immigration and solution, and to service the site, international standard for quality Head office Citizenship. ATCO was appointed ATCO will build and maintain a management. ATCO’s Creeburn Manufacturing facilities as the supply contractor for a 1,500-person wastewater treatment Lake and Barge Landing lodges are Other locations major component of the Nauru plant. the only ones in North America to Processing Facility, providing client achieve this standard. and staff accommodation and To help deliver components of In addition to supporting companies major central facilities. In late 2013, this project, ATCO established a joint-venture partnership with the working in the oilsands region, ATCO

13 2013 ANNUAL REPORT STRUCTURES & LOGISTICS 14 has been actively pursuing business at Jansen Lodge. Positions for evaluate business opportunities. ranges, providing roads and grounds fire and ambulance, at Kandahar seven additional auxiliary buildings in Western Canada’s rapidly growing hire included receptionists, cooks, This early stage work is expected to maintenance, building safety, Airfield for NATO troops assisting the to the Hess Newark Energy Center LNG industry. In 2013, ATCO installed camp attendants, and maintenance continue in 2014. equipment maintenance, document Government of Afghanistan’s nation in Newark, New Jersey. ATCO also a 600-person early works facility for personnel. LOGISTICS AND FACILITIES management, environmental rebuilding efforts. continued its work with the Calgary the Chevron/Apache-owned Kitimat South America OPERATIONS & MAINTENANCE management, capital planning and ATCO is also supporting NATO and Airport Authority in Alberta, to LNG project. ATCO is partnered with In 2013, ATCO Structures & Logistics Logistics and Facilities Operations & range and training area control. European Forces Headquarters provide acoustic buildings for the the local Haisla First Nation for this sold its 50 per cent ownership Maintenance is a core business line Also in 2013, ATCO was awarded a in Sarajevo, Bosnia, providing airport’s expansion. project. interest in Tecno Fast ATCO to its that provides a variety of services to two-year extension for the current communications and information The gas turbine products business In August 2013, ATCO completed joint-venture partner, Tecno Fast, private and public sectors worldwide, facilities maintenance contract services to approximately 2,500 line supplied filter house systems the first phase of the 2,586-person headquartered in Santiago, Chile. including defense operations. with the National Research Council troops. for Xcel Energy’s Quay County Jansen Lodge, a housing complex The joint venture between ATCO North America (NRC) Canada. ATCO’s mandate ATCO EMISSIONS Generating Station in New Mexico, to support the construction of the and Tecno Fast was established In February 2013, ATCO Structures is to provide building systems MANAGEMENT USA. ATCO was also awarded world’s largest potash mine. Located in 1996 to supply the mining and & Logistics was awarded a facilities servicing and annual certifications, ATCO Emissions Management, contracts to provide inlet systems north of Regina, SK, the first phase resource sector with workforce and operations management contract repairs and project capital work at a division of ATCO Structures to the SaskPower QE Station of the facility included the turnover accommodation. with Defence Construction Canada five different campuses, comprising & Logistics, provides noise expansion in , SK, and of 500 rooms and the beginning of ATCO sold its interest for (DCC), which provides construction 109 buildings. The NRC is Canada’s and air emissions control and selective catalytic reduction systems lodge rooms operations. approximately CAD $124 million, contract management and related premier organization for research waste heat recovery systems for to General Electric’s Basin Electric To support Indigenous employment which includes all operational infrastructure services to the and development with 39 different power generation, oil and gas, Pioneer and Lonesome Creek Plants for this project, ATCO partnered assets consisting of space rental Department of National Defence institute laboratories. petrochemical and other industrial in Williston and Watford City, North with Tourism’s and workforce housing fleet assets, (DND). ATCO will provide site In Canada’s North, ATCO Structures sites worldwide. Dakota, USA. In Ghana, Africa, ATCO services to 45 DND sites located in was contracted to provide the bypass Ready to Work training program that manufacturing facilities and offices in & Logistics continues to manage On the industrial noise solution side, southwestern and northern Ontario, stack/diverter damper systems for helps under-represented groups Chile, Peru, Colombia and Brazil. recently acquired assets in Resolute ATCO Emissions Management was as well as the Greater Area. Zakhem International’s Volta River transition from unemployment to Africa Bay, Nunavut. In 2013, ATCO awarded a contract for the supply of The five-year contract began in April Authority Kpone power plant. the possession of a successful Africa is a new business market supported a Canadian Forces Arctic an acoustic powerhouse building and 2013 with an option to be extended career. Members of local Aboriginal for ATCO Structures & Logistics survival training exercise that was for an additional five years. communities completed the ATCO/ and presents many opportunities completed near Resolute Bay near a Saskatchewan Tourism employment to support the resource sector. In ATCO will manage DND facilities site locally known as ‘Crystal City’. training program and were all 2013, ATCO established a presence such as armouries, vehicle Also in Nunavut, the Nasittuq offered employment opportunities in Johannesburg, South Africa, to maintenance facilities and rifle Corporation, a joint venture between ATCO Structures & Logistics and the Pan Arctic Inuit Logistics Corporation, is providing site support services at CFS Alert for the DND. In Iqaluit, UQSUQ Corporation, a joint venture owned by the Nunavut Petroleum Corporation and ATCO, continues to lease and operate a 79 million litre bulk fuel storage facility and pipeline distribution system. Middle East/Asia ATCO Structures & Logistics, through its wholly owned subsidiary company, ATCO Frontec Europe, continues to support the North Atlantic Treaty Organization (NATO) and its International Security UQSUQ Corporation, a joint venture between Nunavut Petroleum Corporation (representing the Nunasi Corporation and Qikiqtaaluk Corporation) and ATCO Assistance Force in Afghanistan. Structures & Logistics, operates the 79 million litre bulk fuel storage facility in Barge Landing Lodge, constructed and operated in a joint-venture partnership with the Fort McKay First Nation, was retrofitted Specifically, ATCO is providing Iqaluit. The facility meets the refueling needs of Iqaluit airport and supplies the in 2013 to respond to evolving customer needs. The 1,500-person lodge features upgraded rooms and Arctic corridors. first responder services, including City of Iqaluit with fuel.

15 2013 ANNUAL REPORT STRUCTURES & LOGISTICS 16 3 4

ATCO IN THE CANADIAN HIGH ARCTIC 1 A focus on Resolute Bay and Alert

1 ATCO employees in Resolute Bay refuel the CC-130J military aircraft, commonly known as the ‘Hercules’. The photo is dated October 10, 2013, with visibility of less than 500 metres and ground temperature of -28Cº. 2 Crystal City: ATCO supported the recent Canadian Forces Arctic Survival training exercise. Knowledge of igloo construction can help prolong life in extreme conditions. 3 The 345 cubic metre/day water treatment plant in Resolute Bay is operated and maintained by ATCO. Located on a hill, low visibility and drifting snow present accessibility challenges. 4 ATCO Structures & Logistics maintains the Resolute Incoherent Scatter Alert Radar in Resolute Bay. It is used by SRI International for basic research Resolute in solar wind and observations of polar cap phenomena. Bay 5 Resolute Bay, with a population of 200, is the second most Northern 5 community in Canada. The Inuit name for the town is Qausuittuq, 2 meaning “the place with no dawn”.

TCO has been present in In 2013, ATCO continued to operate aircraft including fuel supply and sunlight in the summer, add extreme Further north still, the Nasittuq provided by Nasittuq include facilities the High Arctic since 1989 three hotels in Resolute Bay and run cargo loading. challenges to facilities operations and Corporation, a joint venture between maintenance, airfield operations, maintenance work. ATCO Structures & Logistics and food services, transport, logistical Awith the acquisition of the a fleet of construction vehicles. The Twenty-two full-time employees the Pan Arctic Inuit Logistics and administrative support. Narwhal Inn in Resolute Bay. This company maintains the 345 cubic from across Canada rotate on a In 2013, ATCO supported the field Corporation, continues to provide site small hamlet, home to 200 people, is metre/day water treatment plant, the schedule of eight weeks on and portion of the Canadian Forces With activities in the Arctic on the support services at CFS Alert for the the second most northern community Resolute Incoherent Scatter Radar, four off. These men and women Arctic Survival training exercise that rise, so is the demand for remote ’s Department in the world. It is the starting point and operates the 30-million-litre fuel was completed near Resolute Bay site services. ATCO’s nearly 25 years work in an environment that can be of National Defence. Alert is a for any journey to the North Pole storage facility that supports the at a training site known as “Crystal of experience in this unique region imagined by very few. Average winter Canadian Forces Base and is the and a necessary stop for all travel needs of the community, including City”. The training included building highlights the company’s ability to temperatures of -35°C (-72°C with world’s most northern permanently to the Eureka research base and the the airport. ATCO also provides shelters such as snow caves and deliver its best work well north of the wind chill), and 24-hour darkness inhabited community, only 817 km Canadian Forces Station Alert. ground services to Canadian Forces igloos, location signaling, and first aid Arctic Circle. in the winter, replaced by 24-hour from the North Pole. The services in extreme weather conditions.

17 2013 ANNUAL REPORT ATCO IN THE CANADIAN HIGH ARCTIC 18 HELPING ALBERTANS BUILD ALBERTA

Given the scope and scale of our replace and relocate our high- a solid relationship and attempt to utility infrastructure investments, we pressure natural gas pipelines, co-ordinate where possible with have applied the strictest discipline located in densely populated areas city utilities. However, insufficient to obtain competitively bid supply of Calgary and , into authorized capital investment by n 2013, Alberta’s population grew by 3.5 per cent contracts and select the best “value Transportation Utility Corridors regulators has, at times, resulted (the highest growth rate since 1981) and its total for money” suppliers. This effort surrounding both cities. in city utilities tearing up streets for population is now more than four million. The Alberta I has paid off with savings on our Over time, development has waterworks at one time and ATCO economy created an additional 71,900 jobs last year, largest transmission project in 2013, leapfrogged over the existing high- doing work at the same location representing more than two-thirds of the jobs created in the Hanna Region Transmission pressure gas network. Now, Alberta’s shortly thereafter. This is inefficient, Canada. Development project, completed in two largest cities will be served by a adds costs and causes unnecessary Assured access to a robust electrical transmission grid July, on time, and $60 million (almost new pipeline system located away disruption. Adequate funding must is essential if Alberta is to continue its Canada-leading 10 per cent) under budget. from people and equipped with inline be authorized for co-ordinated replacement in order to minimize economic growth. In 2013, Alberta set a record for peak The project reinforced the reliability inspection capabilities that were not disruption, maximize efficiency, and demand at 10,677 MW and significant annual increases of east ’s electrical available when the existing networks reduce costs for our customers. are predicted every year for the next 20 years. Updated system and increased the system’s were built. figures released in January 2014 by the Alberta Electric capacity for load growth, allowing It is important to note that public In a fast-paced economy, timeliness System Operator project peak load to grow by 2.4 per for the addition of power generation input was a critical component of of decisions is also critical. We have cent annually through 2032. projects, including wind power. As the project’s approval. ATCO has a exhaustive regulatory processes This growing demand, and the retirement of coal- well, this project was the winner of strong track record for engaging with which require an extensive amount fired generating plants, will require 11,000 MW of new two prestigious environmental and communities and customers. Our of time to connect large industrial generation to be built in the next 15 years. New and archeological stewardship awards, approach to community consultation customers to the electrical grid. cleaner forms of generation needed in Alberta will only reflecting our focus on cost efficiency has allowed our projects to proceed These delays will slow, if not stall, be built if investors are confident that transmission while maintaining the highest of with the best interests of all those Alberta’s economy and investment exists to deliver their electricity to market. standards. involved taken into consideration. if companies believe they will be unable to power up operations at the There is a large, complex and interconnected system Within our Utilities, we constantly While much is being accomplished planned time. that delivers the energy that Alberta businesses and strive for innovation and in terms of new infrastructure in the families rely on every day. Safe and reliable delivery improvements, assemble the province, there is still more work to Alberta is in an enviable position. of these critical services requires long-term planning, best expertise for every project, do. Moving forward, as a province, How we tackle infrastructure issues, careful budgeting, as well as detailed engineering, and reorganize our teams to we must carefully examine our both with new growth and replacing construction, and commissioning in advance of actual provide better focus on serving approach to utility oversight and aging systems, is critically important need. our customers. You will find more regulation to make sure we are to the province’s future prosperity. about ATCO Electric’s initiatives in We must not only do things right, Investment in Alberta’s critical infrastructure has achieving outcomes that benefit the narratives by our Utilities in this we must ensure that we do the right begun, but there is a significant amount of work ahead Albertans, support our growing annual report. things—everything from planning to ensure that we have a reliable system to support province in a well-managed way, and and approvals, to design and Alberta’s economic growth for future generations. The challenges of growth do not deliver the best value to customers. construction—to ensure the safe, diminish our obligation to safely Alberta has enjoyed good regulatory Over the past three years, ATCO has invested a reliable and cost-effective delivery serve all of our existing customers. oversight but we must continue to record $5.6 billion in new utility infrastructure in the of energy to our customers. We have aging systems and they improve in order to reduce costs and province. The ATCO Utilities businesses, that build, need attention to ensure reliability process times. own and operate natural gas pipelines and electricity and safety. A prime example is the Siegfried W. Kiefer infrastructure, undertook capital expenditures of $2.2 For example, our Utilities should be Alberta Utilities Commission’s recent Chief Operating Officer, billion in 2013 and $2.1 billion in 2012 to ensure Alberta permitted to simultaneously carry approval of our Urban Pipeline Power & Utilities, ATCO Group is ready to meet the energy demands of this province’s out projects with city utilities in order Replacement Project, which will growing economy. to minimize disruptions. We have

19 2013 ANNUAL REPORT HELPING ALBERTANS BUILD ALBERTA 20 UTILITIES The Utilities business segment includes ATCO Electric, ATCO Gas and ATCO Pipelines. These companies are focused on the safe, reliable and efficient transportation and distribution of natural gas and electricity.

Ryan Zaichkowsky, Apprentice Power Line Technician, and Brad Gerbrandt, Journeyman Power Line Technician, gear up to install a gang switch on a distribution line near , AB.

21 2013 ANNUAL REPORT UTILITIES 22 ATCO Electric builds, owns and operates electrical transmission and distribution facilities in east- central and northern Alberta. It delivers safe, reliable electricity to nearly 220,000 farm, business and residential customers in 245 communities. By supplying power to large industrial and oilfield customers, ATCO Electric supports development of Alberta’s energy-rich industrial sector.

TCO’s electrical system affected Albertans. The division 144 kV lines, six new substations and includes approximately is focused on the timely and cost upgrades to 14 existing substations. A11,000 km of transmission effective construction, maintenance (For more on HRTD, see page 27.) lines and 68,000 km of distribution and operation of transmission The $600 million North East lines. ATCO Electric also maintains facilities while adhering to socially Transmission Development project nearly 5,000 km of distribution lines and environmentally responsible was also completed in 2013, on behalf of farmer-owned Rural practices. providing necessary reinforcement Electrification Associations. The Transmission Division created to the electrical grid in Alberta’s In 2013, ATCO Electric formed an in-house construction crew northeast region. Work included the distinct Transmission and Distribution specialized in building transmission installation of one of Alberta’s first divisions to better align with industry facilities. The crew includes 73 Phase Shifting Transformers (PST) at and the regulatory environment. The employees working at three key Livock, near Fort McMurray. The PST Transmission Division constructs, locations: Bonnyville, Hanna and relieves constraints on the existing operates and maintains transmission Conklin/Fort McMurray. transmission system and ensures facilities, such as large towers, power Work continues on the $1.8-billion a secure and reliable supply of lines, transformers and substations, Eastern Alberta Transmission Line electricity. that transport high voltage (EATL) project, a 485 km, 500-kilovolt In 2010, the Alberta government power from generation plants to (kV) direct current line, with two mandated the Alberta Electric substations. The Distribution Division converter stations, between the System Operator to develop a constructs, operates and maintains Gibbons-Redwater area and Brooks. Competitive Process for Critical the lower-voltage distribution lines EATL, the largest project in ATCO Transmission Infrastructure and facilities that deliver power from history, will reinforce the backbone projects that was approved by the substations to customers’ homes, of Alberta’s electricity grid and is on Alberta Utilities Commission in farms and businesses. schedule for completion in late 2014. February 2013. This new initiative ATCO ELECTRIC By the end of 2013, more than 55 means that in addition to direct- per cent of the project’s nearly 1,400 assigned transmission projects, TRANSMISSION DIVISION towers were assembled and more the Transmission Division now also In 2013, the Transmission Division than 277 were erected. competes with other companies for invested $1.4 billion in new facilities new critical transmission projects and upgrades to meet Alberta’s 2013’s largest completed project across Alberta. The Fort McMurray growing demand for electricity was the Hanna Region Transmission West 500 kV Transmission Line is the and replace aging infrastructure. Development (HRTD) project, a $650 first project under the competitive The investment required not only million reinforcement of the electrical process. adherence to stringent procurement grid in southeast Alberta. Coming in and cost monitoring practices but on time in July 2013, and $60 million Separating the Transmission Division unprecedented consultation with under budget, HRTD comprises from the Distribution Division better landowners, and other more than 335 km of 240 kV and positioned the company for the

Powerline Technician Team Lead, Keith Garbitt, works on constructing a line for an oilfield customer near Spirit River, AB.

23 2013 ANNUAL REPORT ATCO ELECTRIC 24 competitive bidding process to spread of club root and other soil- Meeting the needs of municipalities The Alberta Utilities Commission and build, own and operate large-scale borne diseases. was also a key focus. In 2013, the Rural Utility Division approved transmission infrastructure projects. ATCO ELECTRIC the Distribution Division renewed all three sales in the fall of 2013. The franchise agreements with 28 sale of the West REA was ATCO ELECTRIC SERVICE AREA To further prepare the company to DISTRIBUTION DIVISION communities, securing ATCO Electric approved in early 2014, following a effectively compete for transmission The Distribution Division continued its as the electricity distributor for the vote in favour by its members in June projects, the Transmission Division focus on reinforcing system reliability next 10 years. 2013. also initiated an Asset Management and meeting customer demand. In program to build efficiencies, 2013, the division invested $386 In Stettler and Grande Prairie, the 2013 marked the first year the improve processes and streamline million in new infrastructure and Distribution Division opened new Distribution Division began offering operations for the life cycle of all of upgrades to meet the growing energy-efficient service centres. light-emitting diode (LED) streetlights ATCO Electric serves the area broadly identified on this map, the Transmission Division’s assets. demand for safe, reliable electricity. The buildings reduce energy and as an option for new residential and water consumption by 55 and 30 stand-alone streetlight installations. with the exception of a small The Transmission Division continued A large portion of the increase number of farm customers served per cent, respectively. They include its focus on health and safety in in demand occurred in Alberta’s As part of its commitment to by one self-operating Rural design features such as a green roof 2013 with the introduction of a new northeast, where oil and gas continue environmental stewardship, the Electrification Association. and rain-water collection systems. Health, Safety and Environment to drive the economy. Regional Municipality of Wood The Grande Prairie facility replaces Buffalo made LEDs the new standard (HSE) management system to better The Distribution Division also three other buildings that housed for streetlights in Fort McMurray in manage HSE incidents. The system established a number of sustainable employees, creating efficiencies for Fort 2013. The municipality opted for McMurray gives every Transmission Division operational efficiencies aimed at staff and streamlining service for employee the ability to record HSE a full-scale conversion of existing further meeting customer needs customers. high-pressure sodium streetlights. In incidents and view reports, giving and streamlining work processes The Distribution Division welcomed June, the Distribution Division began everyone in the company more for employees. One efficiency 4,100 new farm customers after work on the conversion project—the accountability and visibility to the project involved improving response the purchase of the Manning, Elk first of its kind for the company. division’s safety record. to underground locate requests. Point and Peace Country Rural Five months later, more than 4,200 Grande Prairie The Transmission Division enhanced The operation was centralized in Electrification Associations (REA) streetlights were converted to LED. 2012 and, in 2013, new screening its Crop Protection Plan practices were finalized. Members of the An additional 280 decorative and Bonnyville and added six new mobile cleaning measures reduced the number of Manning and Elk Point REAs voted in specialty streetlights are scheduled stations to its fleet to be used in the trucks dispatched, saving time for favour of selling their assets to ATCO for replacement in late 2014. St. Paul field to wash and sterilize vehicles customers and employees. Electric in 2012. The Peace Country Each new dark sky-certified LED Edmonton and equipment to help curb the REA vote was held in January 2013. streetlight provides safe street lighting with less wasted light. Jasper They use 55 per cent less energy compared to traditional high-pressure Stettler Red Deer sodium lights, reducing carbon dioxide emissions by more than 350 Hanna pounds per fixture per year. MAJOR ELECTRIC TRANSMISSION As always, public safety is critically PROJECTS important to ATCO Electric. The North East Transmission Development Calgary Distribution Division continued its Central East Transmission Brooks support of the Joint Utility Safety Development Team, a consortium of electricity Eastern Alberta distributors that share the goal of Transmission Line raising awareness of power line Hanna Region Transmission Development safety. The Distribution Division also targeted farm customers with the annual farm safety campaign and reached out to school children in ATCO Electric Distribution service area 31 communities with ATCO Energy Theatre’s educational live theatre Transmission Division President, Sett Policicchio, and Quyen Nguyen, Vice President, HVDC Projects, survey a performances. portion of the Hanna Region Transmission Development project.

25 2013 ANNUAL REPORT ATCO ELECTRIC 26 HANNA REGION TRANSMISSION DEVELOPMENT 1 PROJECT Completed On Schedule and Under Budget 4 5 1 ATCO Electric constructed six new substations 2 for the Hanna Region Transmission Development (HRTD) project including the Oakland substation near Hanna, AB. 2 With the aid of a helicopter, crews string transmission wires along 240kV steel lattice towers near Hanna. 3 A 240kV steel lattice tower is erected on the Anderson-Oakland section of the HRTD project. 4 Crews install an artificial nesting platform for ferruginous hawks in the Bullpound Pasture near Hanna. 5 Reels of wire on the site for stringing at the Anderson-Oakland section of the HRTD project. 6 The camp in Hanna that housed the project’s workers is now being used for the Eastern Alberta Transmission Line project.  3 6

he $650 million Hanna Region monopole structures), built six new instance, a significant percentage Alberta’s ferruginous hawk for the region. The Historical and November 2013. Of the three work Transmission Development substations and upgraded 14 existing of construction was scheduled to population. Archeological Resources Protection camps built to house construction T (HRTD) project, required substations. Public consultation for occur while the ground was frozen And through the implementation Plan was recognized with two crews in , Consort and Hanna, to reinforce the electrical grid in HRTD included 11 open houses and to reduce soil degradation and soil of the Historical and Archeological awards in 2013 for increasing the Oyen and Consort camps have the region and allow for future about 2,300 individual consultations. structure damage and to avoid Resources Protection Plan, 145 public awareness and implementing been removed and the power and growth, was completed on time Sixty per cent of the HRTD project disturbing select wildlife species. historical resources were discovered best practices in preserving utility hookups donated to those in July 2013 and $60 million was constructed in environmentally Field teams used a mobile app that and reported to Alberta Culture, Alberta’s historical resources: the communities. The Hanna camp under budget. To complete the sensitive areas such as protected provided customized information including building foundations, Archeological Society’s Richard G. remains open to house crews project, the Transmission Division pasture, native grasses and about environmental regulations ceremonial relics, stone tools, Forbis award and the Association of working on the Eastern Alberta constructed and strung 335 km of wetlands. The HRTD Environmental for specific land parcels. The farm sites and fossils. Prior to Professional Planners Institute Award Transmission Line project, but the 240 kV and 144 kV transmission Protection Plan ensured every Transmission Division constructed the construction of the HRTD of Merit. power and utility hookups will also be lines (consisting of 676 steel lattice phase of construction avoided or dozens of artificial nesting platforms project, Alberta Culture had only Reclamation and cleanup of the donated to the community once the towers, 266 H-Frames and 330 reduced environmental impacts. For to assist in the recovery of southern five historical resources on record right-of-ways were completed in project is complete.

27 2013 ANNUAL REPORT HANNA REGION TRANSMISSION DEVELOPMENT PROJECT 28 ATCO UTILITIES IN THE NORTH ATCO IN THE NORTH ATCO Structures & ATCO, through its northern companies Northland Utilities and Yukon Electrical, builds, owns Logistics Operations and operates generation, transmission and distribution facilities in the and Yukon. Combined, these companies provide safe, reliable electricity to 28,000 customers in Nasittuq Sites 28 communities, from south of the Yukon border to north of the Arctic Circle. Alaska Radar System Sites Cambridge Inuvik Bay Uqsuq Site Iqaluit NORTHLAND UTILITIES their surplus electricity back to the the city of Whitehorse is the largest Anchorage Northland Utilities is a full-service distribution grid in exchange for residential land development project electrical company providing retail, energy credits. in the area. After investing $5 million Whitehorse distribution, transmission and to build a new substation to serve the Yellowknife The proposal is based on the results generation services to customers of a three-year pilot program that area, Yukon Electrical also partnered since 1951. Its ownership is shared concluded in 2013 and is currently with the City of Whitehorse to explore between Denendeh Investments before the PUB awaiting approval. a solar thermal energy storage (14 per cent) and ATCO Electric. system. The system would use solar YUKON ELECTRICAL There are two operating divisions: collectors to heat water which is then Yukon Electrical has been providing Northland Utilities (NWT) Limited pumped deep underground where it electrical service for more than and Northland Utilities (Yellowknife) is stored for use in the winter. Major Communites Served a century. The company began Limited serving more than 11,000 by Yukon Electrical operations in 1901 when it started Yukon Electrical completed a customers in nine communities. 1 Old Crow 1 generating electricity for the residents feasibility study for the project late Inuvik 2 Beaver Creek In 2012, Northland Utilities of Whitehorse using a wood-fired, in the year and has presented the 3 Stewart Crossing (Yellowknife) completed the first horizontal piston steam engine. The findings to the City of Whitehorse. 4 Keno stage of a light-emitting diode (LED) company serves more than 17,000 In May 2013, Yukon Electrical filed 5 Pelly Crossing streetlight conversion project. The customers in 19 communities from a general rate application to the 6 Destruction Bay/ first project of its kind for a major south of the Yukon border to north Yukon Utilities Board. Hearings Burwash Landing YUKON city in northern Canada, the LED of the Arctic Circle. The main office regarding the application were held in 7 Carmacks technology provides increased 8 Ross River and service centre are located in November and the application awaits 4 energy efficiency and will reduce the 9 Haines Junction Whitehorse. a decision. costs associated with equipment 10 Whitehorse 3 The Whistle Bend subdivision in 2 20 replacement and maintenance for 11 Carcross/Tagish 5 the city. 12 Teslin NORTHWEST TERRITORIES 7 13 Swift River 6 8 Based on the success of the first 14 Watson Lake 10 19 stage of the project, the City of 9 Yellowknife 15 Lower Post, B.C. Whitehorse Yellowknife has requested that 138 kV 13 18 the project be accelerated with Transmission Lines 11 14 12 16 17 more than 1,500 street lights to be Other Distribution 23 2122 converted by 2016. Lines 15 Both Northland Utilities companies Major Communities Served have filed a proposal to the by Northland Utilites Northwest Territories Public Utility 16 Trout Lake 21 Kakisa Board (PUB) to continue offering 17 Dory Point 22 Enterprise net metering to its customers. 18 Fort Providence 23 Hay River Net metering allows customers 19 Yellowknife who generate their own electricity A Northland Utilities Powerline Technician inspects a recently installed LED 20 Wekweeti from renewable sources to export streetlight in Yellowknife, NWT.

29 2013 ANNUAL REPORT ATCO IN THE NORTH 30 ATCO Gas has been heating homes and warming communities across Alberta for more than a century. Today, ATCO Gas delivers safe, reliable and cost-effective natural gas to more than 1.1 million customers in nearly 300 Alberta communities.

s Alberta’s largest natural by introducing a program to assist gas emissions over the 15-year life of gas distribution company, commercial and institutional the project. A ATCO Gas builds, operates customers interested in implementing ATCO Gas is using this technology and maintains nearly 40,000 km of the use of combined heat and power in its new energy-efficient operations natural gas distribution pipelines. (CHP) technology. CHP uses natural centre in . Opened in ATCO Gas provides 24-hour gas as a primary fuel source to September 2013, the centre is one of response to natural gas emergencies generate both heat and electricity the first commercial buildings of its in its service territory. Through the simultaneously. This increases energy size in Alberta to feature the small- ATCO Blue Flame Kitchen and efficiency, lowers facility operating scale use of CHP technology. The ATCO EnergySense, ATCO Gas also costs and reduces greenhouse gas natural gas-fuelled heat and power provides safety and energy efficiency emissions. The program is being generation system will generate 25 programs and services. partially funded by the Climate kilowatts of electricity as well as COMBINED HEAT AND POWER Change Emissions Management deliver exhaust heat to the building’s In 2013, ATCO Gas enhanced its Corporation and is expected to boiler heating system. commitment to the environment reduce 60,000 tonnes of greenhouse

COMBINED HEAT & POWER (CHP) UNIT

OVERALL NATURAL EXHAUST ENERGY EFFICIENCY GAS IN GAS HEAT EXCHANGER ELECTRICITY OUT: provides power to the building 85% 55% electricity ENGINE CHP CONVENTIONAL ELECTRICITY (combined heat (separate GENERATOR heat & power) heat & power) COLD WATER IN HOT WATER OUT heats building and heat recovery provides hot water

ABOVE: ATCO Gas is helping commercial and institutional customers implement CHP technology, which uses natural gas as a primary fuel source to generate heat and electricity simultaneously, increasing energy efficiency. LEFT: Chris Blunt, ATCO Gas Engineer, tours ATCO Gas’s new energy-efficient operations centre in Okotoks, AB, one of the first commercial buildings of its size in Alberta to feature the small-scale use of Combined Heat and Power (CHP) technology.

31 2013 ANNUAL REPORT ATCO GAS 32 OPERATIONS AND GROWTH Utilities Commission, came into effect In June, severe flooding swept to support safe digging practices, In 2013, ATCO Gas completed on Jan. 1, 2013. The new regulatory through , causing an 11 per cent increase from the its first year of operations under environment creates incentives for the worst natural disaster in the previous year. ATCO Gas led the Performance Based Regulation. This ATCO Gas and all distribution utilities province’s history. ATCO Gas Alberta Common Ground Alliance’s ATCO GAS SERVICE AREA new rate regulation for distribution to continue working hard to identify employees mobilized quickly to assist live excavation demonstration for utilities, implemented by the Alberta long-term sustainable efficiencies. people in affected communities and local media at the Southern Alberta minimize damage to its distribution Institute of Technology in support of system. (See page 37 for more Safe Digging Month. on ATCO Gas’s emergency and ATCO Gas also began promoting operational response efforts.) natural gas as a safe and cost ATCO Gas experienced another year effective alternative for construction of strong growth, adding almost heat. 23,000 new customer connections. ATCO Energy Theatre continued Significant progress was made on its to teach young students important capital infrastructure program, which safety lessons about natural gas and is focused on improving system electricity. It performed to more than integrity, maintaining service reliability 18,000 students in 2013 and has and ensuring public safety. Fort reached more than 97,000 students McMurray INVESTING IN CAPITAL since it began in 2007. In 2013, ATCO INFRASTRUCTURE Energy Theatre launched interactive In 2013, ATCO Gas’s automated games, an online resource that helps meter reading project was virtually expand its safety education in both completed. Since 2011, ATCO Gas classrooms and homes. Grande Prairie has replaced or retrofitted more IN THE COMMUNITY than 1.1 million natural gas meters ATCO Gas works with first with encoder receiver transmitter responders in emergency situations devices, which wirelessly transmit involving natural gas to ensure usage data to mobile collectors. This our communities stay safe. ATCO allows ATCO Gas to read gas meters Lloydminster Gas and ATCO Electric are strong Edmonton without entering customers’ homes, supporters of firefighters and fire yards or businesses, improving departments across Alberta. In 2013, billing accuracy, employee safety and this included sponsorship of Fire customer convenience. Safety Week, Disaster Forum and Jasper Red Deer Work also continued on steel and the Alberta Fire Chiefs’ Association plastic mains replacement programs. Conference, investments in local In 2013, ATCO Gas invested almost volunteer fire departments and $53 million in the replacement of development of new community In the area broadly Calgary aging natural gas mains and services emergency preparedness guides for identified on this map, to ensure the safety and reliability of homes. ATCO Gas serves more than 1.1 million its pipeline network. RECOGNIZED FOR EXCELLENCE customers in almost FOCUSED ON NATURAL GAS The Drake Landing Solar Community 300 communities. SAFETY in Okotoks received the prestigious ATCO Gas carried on its commitment 2013 International Energy Agency’s to public safety through its annual Solar Heating and Cooling carbon monoxide awareness Programme Solar Award, which campaign and promotion of safe recognizes significant achievements ATCO Gas digging practices around natural in solar thermal market development service area In support of Safe Digging Month, ATCO Gas led the Alberta Common Ground Alliance’s live excavation demonstration at the Southern Alberta gas pipelines. In 2013, ATCO Gas and reductions in market barriers. Institute of Technology. provided more than 282,000 locates ATCO Gas was involved in the

33 2013 ANNUAL REPORT ATCO GAS 34 development of Drake Landing in award—for its commemorative wisely. Since its inception in 2010, 2007 and has acted as managing centennial publication. the ATCO Energy Education Mobile ATCO BLUE FLAME KITCHEN EXPANDS REACH has visited 170 Alberta communities partner and facility operator since ATCO ENERGYSENSE TCO Blue Flame build customer engagement, In 2013, the Calgary Learning We are and engaged more than 59,000 that time. ATCO EnergySense offers energy Kitchen, a service and a new text-based live chat Centre began a partnership connecting: participants. ATCO Gas received six assessments for ATCO Gas and Aof ATCO Gas, has service is connecting visitors with Soup Sisters and Made communications awards from ATCO Electric business customers as ATCO EnergySense continued to provided Albertans with natural to the website with the Answer by Momma to provide chef-led 23,000 Answer Line the International Association of well as energy efficiency advice for offer commercial and municipal gas safety information, energy Line’s home economists. A expertise in their charitable inquiries Business Communicators and the residential customers. energy assessments to help efficiency tips and household new ATCO Blue Flame Kitchen work, helping to feed families customers improve their bottom advice related to food, app for iPhone and iPad allows and those in need in the Canadian Public Relations Society The ATCO Energy Education Mobile, lines and reduce their impacts on cooking, recipes, stain removal users to look up and save Calgary region. 14,000 for its centennial celebration, an interactive classroom on wheels, Monthly the environment, as well as educate and other household problems recipes, generate shopping including the IABC Gold Quill Award continued to teach students and The professional home newsletter Alberta homeowners about the for more than 80 years. The lists and chat live with the subscribers of Excellence in Communications the public about Alberta’s energy economists continued their benefits of energy efficiency via its service has been expanded Answer Line team. Skills, Publications—an international community outreach in resources and how to use them website and print publications. to include cooking classes Two new cookbooks were Edmonton and surrounding 17,000 Cookbooks sold and educational programs for released in 2013 – Everyday areas through numerous participants of all ages. Delicious and Holiday speaking engagements to a 31,385 In 2013, ATCO Blue Flame Collection – both of which wide range of audiences – ATCO Blue Kitchen focused on bringing were bestsellers. To keep pace including university students Flame Kitchen technology into the kitchen, with consumer expectations, and military families – and led YouTube video meeting today’s families in the nutritional information and even cooking classes through Metro views digital world, where they look more photos have been added Continuing Education. up recipes online and search to the cookbooks, which have 792 New ventures in 2013 included Media for kitchen tips and how-to a strong history with Alberta a partnership with Alberta appearances videos on YouTube. families. Health Services to launch in Alberta ATCO Blue Flame Kitchen Community engagement a new location for cooking launched a YouTube channel, remains a core value at ATCO classes at Calgary’s South 6,485 producing how-to videos on Blue Flame Kitchen, as seen in Health Campus, as well as Visitors to Calgary Learning a wide range of topics, from the continued success of the opening a brand new ATCO Centre how to peel a kiwi with a spoon award-winning Kids Can Cook Blue Flame Kitchen Café to how to carve the holiday school program in Calgary, in in Calgary’s ATCO Centre 996,933 turkey. Pinterest and which more than 1,700 Grade building. Website page accounts are being used to 5 and 6 students participated. views

ATCO Gas Distribution Operators – Field, Evan Kostiuk (left) and Dave Swan, undertake a plastic mains replacement project east of , AB.

35 2013 ANNUAL REPORT ATCO BLUE FLAME KITCHEN 36 2013 ALBERTA FLOODS ATCO RESPONDS

The flooding caused major damage to Tom McNeill, Distribution Operator, Field infrastructure in including this - Okotoks, (left) and A.J. Molloy, Junior completely destroyed roadway. Distribution Operator - Field, Okotoks, evacuated a number of residents, including these young people, to higher and safer ground.

37 2013 ANNUAL REPORT 2 3

1 Debbie Allard, Distribution Operator - Field, (left) and Andy Korns, Distribution Operator - Field, checked for potential gas leaks caused by the floods in Canmore, AB. 2 ATCO Gas employees inspect a gas main exposed along a roadway in Dead Man’s Flats, near Canmore.  3 Many homes in High River, AB, were swallowed by flood water. More than 150 people were rescued from rooftops. 4 ATCO Power’s asset optimization team relocated to its emergency back up location during the floods to ensure continued management of the power output from ATCO’s power generating stations. 5 John Ell, President, ATCO Power and Anders Renborg, Chairman of 1 ATCO Powers’ Crisis Management Committee, met daily to ensure ongoing 4 5 regular daily operations of generating assets in Southern Alberta.

n late June of 2013, southern of the Rocky Mountains to Calgary homes and businesses safely and ATCO Gas employees were on with other emergency personnel, damage relating to the rising flood Alberta was hit by the worst and High River and eventually to the reliably; the scene in some of the most inspecting every single natural gas waters. Iflooding in the province’s history. South that runs • as a company with experience devastated communities to monitor appliance in tens of thousands of Behind the scenes, the ATCO ATCO’s distribution pipelines and homes and businesses, searching After heavy rainfall earlier in the through in southern rapidly deploying critical I-Tek team worked to ensure that facilities and to shut down delivery for leaks and ensuring it was safe month had left the ground saturated, Alberta. It touches 34 municipalities infrastructure and services to some while clients were dealing with the to homes and businesses, if needed, for people to return. At the same a giant low pressure weather system and three First Nations, making it the of the worst natural disaster zones effects of the floods, they would to ensure that natural gas appliances time, the team was mobilizing to filled with moisture moved in over the most populous river basin in Alberta. around the world; have reliable and ongoing access damaged by the floods didn’t pose repair damage to the low-pressure Rocky Mountains from the Pacific By the time the flood waters to their business critical technology • as an employer with a family of a risk. In locations where lines had natural gas pipelines and arrange for coast and stalled over the foothills in subsided, they had engulfed more applications and infrastructure to employees across the province been damaged, employees set up temporary service while the repairs the southern part of the province. It than 55,000 sq. km of land—almost maintain their operations. either directly affected by the temporary emergency facilities to were taking place to get people back dumped more than a month’s worth twice the size of Vancouver Island. flooding or ready to step up to help continue delivering natural gas when into their homes as soon as possible. ATCO Structures & Logistics has of precipitation in just 48 hours – 250 Thirty-three communities had their coworkers; and, it was safe to do so. experience around the world mm in some areas. declared states of emergency, 28 Throughout the crisis, ATCO Gas delivering critical infrastructure and • as a member of these communities, emergency operations centres At the request of the RCMP, ATCO employees were on the phones, services in the wake of some of With the ground already saturated some for more than 100 years, were put into action, and more than Gas employees assisted with online or in homes answering the worst natural disasters. Most and this massive amount of rain committed to helping them get 100,000 people were forced to leave evacuating residents and with questions and assisting people with recently, the company provided living adding to the snow melt that was back on their feet. search and rescue efforts. They also safely relighting their natural gas coming down from the mountains, their homes. accommodation, offices, kitchens, The ATCO teams were on the ground attended local Emergency Operations appliances. the water had no place to go. Water With many of ATCO’s customers, medical facilities and related services from the beginning, working with Centre meetings to ensure that all during disasters in Haiti and Chile. levels began to rise rapidly and communities and employees under Meanwhile, ATCO Pipelines Control local and provincial authorities to aspects of the company’s response Centre employees closely monitored So, when there was a crisis in its own overflowed the banks of the many water, the company mobilized to ensure that the delivery of natural were as effective as possible. the company’s high-pressure natural backyard, the company jumped into streams and rivers, including the respond in a number of ways: gas and electricity to affected As the waters started to recede, gas lines and facilities in the region action. Bow and Oldman rivers, comprising • as a utility provider charged with communities was being managed ATCO Gas employees were among while operations staff worked around One of the worst hit areas was the Valley Basin. The basin delivering essential services to safely and was aligned with all the first back into these communities the clock to protect facilities from Siksika First Nation just south stretches from Canmore at the foot aspects of the emergency response. 6 ATCO Structures & Logistics constructed, installed and continues to operate temporary relief shelters for the Siksika First Nation. 7 ATCO employees volunteered their time to sort donations and distribute supplies for 7 the Siksika First Nation. 8 Dean Seiz, ATCO Sustainable Communities, delivered thousands of bottles of water to the . ATCO’S FIREFIGHTERS IN ACTION

As the flood waters swept through to see if he could round up ATCO central and southern Alberta, employees who were also volunteer emergency personnel were the first firefighters and who would be willing on the scene and stayed throughout to spend a week supporting the the crisis helping to evacuate people, firefighters at Fire protect property and ensure that Station. people could return as quickly and He received the request for support safely as possible. the evening of Monday, June 24 and 6 8 In the Municipal District of Foothills, by Wednesday afternoon eight ATCO which encompasses High River, employees had travelled from across firefighters were doing double and the province to the Heritage Pointe triple shifts, some working for 48 Fire Station just outside of Calgary to of Calgary. Many of the residents the emergency preparedness response. When the flood forced The program also initiated a hard hours straight, to ensure the safety be briefed on their duties by Deputy watched as their homes were literally and business continuity plan was the closure of the ATCO Blue Flame goods drive that delivered more than of the public. Many were from areas Chief Schaalje. washed away in the flood waters. initiated. This was vital in directing Kitchen Calgary office, the team 28 large gift baskets to families and such as High River and Okotoks and Working for the Government of both staff and external parties to worked out of the Edmonton office more than two large pallets of surplus The ATCO employees gave up they had not had a chance to check Alberta, ATCO Structures & Logistics quickly manage the situation and be to produce important information for goods to a local charity. ATCO vacation plans and time with their on the flood’s impact on their homes. constructed, installed and continues able to provide power again within a flood victims looking to safely clean used the program to coordinate its families over the Canada Day long to operate temporary relief shelters few days. their homes and deal with associated volunteer outreach across the Group Deputy Chief Greg Schaalje weekend to help out their fellow of Companies – with employees described the situation facing the firefighters. for the entire Siksika community. As people returned to their homes food safety issues. dedicating more than 1,200 hours in men and women at the Heritage The temporary community includes and businesses, the true extent of From the start, ATCO and its While at the fire station, the ATCO Calgary, High River, and Pointe Fire Station (within the three lodges built in six weeks which, the damage and devastation became employees rallied around their employees were busy answering the Morley, Siksika and Eden Valley municipal district) to a friend and together, provide almost 300 beds clear. Many would find several feet of neighbours, family and colleagues emergency calls including everything First Nation communities. that conversation soon found its way from reports of fire to vehicle and living accommodations for the water, silt and raw sewage covering providing shelter, supplies and through the ranks at ATCO, and our collisions to medical assists. Their Nation. everything they owned. The concern support. ATCO established its ATCO ATCO Gas donated some of its large help was requested. presence allowed the regular The company also constructed now was that as tens of thousands of Families Flood Relief Program that equipment, such as dump trucks and firefighters to not only get some a new modular town centre for residents began the daunting process enabled employees to support their front end loaders, to assist with clean There are many ATCO employees much-needed rest but to also start the community of High River and of reclaiming their lives, they could colleagues in a number of meaningful up, as well as its large community across Alberta who dedicate taking care of their own homes and three temporary fire halls for the be exposed to the toxic mould and ways. Employees were able to BBQs to cook food for residents and their time away from the job to families. municipality of Foothills. bacteria that had started growing in donate funds to help affected families volunteers in some of the affected volunteering as firefighters in their neighbourhoods. communities. Jerrold Lemko, who Jerrold Lemko was named Canada’s ATCO Power’s Oldman hydro the stagnating water. with every dollar donated matched by serves as the volunteer Fire Chief Volunteer Fire Chief of the Year by the generation facility in southern Alberta With more than 80 years of the company. The effort raised nearly The ATCO Sustainable Communities for the Vegreville Fire Department Canadian Association of Fire Chiefs was also impacted by the floods with experience providing household $175,000 to help flood-affected team delivered more than 17,000 when he’s not performing his duties thanks, in part, to the role he played the surge of water from the Oldman advice and support to Albertans, ATCO employees with the costs of bottles of water and other supplies to as a Health, Safety & Environment coordinating the team of ATCO River. Although the facility only the ATCO Blue Flame Kitchen team clean up and re-building. First Nation communities affected by Coordinator for ATCO Electric, volunteer firefighters to assist with experienced some minor leakage, became an integral part of the ATCO the flooding. Transmission Division, was asked the flood relief.

39 2013 ANNUAL REPORT 2013 ALBERTA FLOODS 40 ATCO Pipelines owns and operates key natural gas transmission facilities throughout Alberta to transport clean, efficient energy from producers and other pipelines to utilities, power generators and major industries.

ith peak delivery of concern with regards to public safety, With the approval in place, ATCO 3.8 billion cubic feet construction standards and future Pipelines will continue to consult Wof natural gas per day demand. and inform communities, residents and approximately 8,500 km of As a result, in late 2012, the company and government representatives pipelines, ATCO Pipelines serves initiated an extensive consultation as it begins the process of Alberta customers through nearly process that included community constructing the individual segments 4,000 receipt and delivery points. associations, local and provincial that comprise the project. The The company is located in Calgary government, as well as tens of southeast Calgary, east Calgary, and Edmonton with facilities across thousands of Calgary and Edmonton northeast Calgary, and southwest Alberta. residents living near either the Edmonton connectors are planned The priorities in 2013 were the Urban existing high-pressure pipelines or to be the first segments constructed Pipeline Replacement (UPR) Project, the proposed new locations. with the entire project to be completed over the next five years. pipeline expansion and upgrades, After the completion of the PIPELINE EXPANSION AND pipeline integrity initiatives, a General consultation process, ATCO Pipelines UPGRADE PROJECTS Rate Application and a continued submitted the application for the In 2013, ATCO Pipelines continued focus on safety. project to the Alberta Utilities with its preventive inspection ATCO Pipelines also participated in Commission (AUC) in March 2013. and maintenance program to the crisis response and remediation In early 2014, ATCO Pipelines ensure pipeline reliability and efforts after southern Alberta’s floods received AUC approval of its integrity. Relocations and pipeline in June (see page 37) as several proposal to relocate the high- replacements took place throughout pipeline water crossings were pressure pipelines into the the province. exposed as a result. transportation utility corridors (TUCs) Within the Town of Canmore, a THE URBAN PIPELINE that surround the two cities, which segment of the Banff Transmission REPLACEMENT PROJECT were designated by the Government Pipeline was relocated away from The Urban Pipeline Replacement of Alberta to accommodate utility the highly developed central area of (UPR) Project is an ATCO Pipelines infrastructure and ring roads. the town along the Bow Valley Trail. initiative to proactively replace and Building new, modern pipelines in The pipeline is the primary supply relocate its high-pressure natural the TUCs will dramatically improve of sweet natural gas into Canmore, gas pipelines that currently run public safety by reducing the risk of Banff and the surrounding region. through densely populated areas of an incident and providing a buffer The existing pipeline was constructed Edmonton and Calgary. As urban from other construction activities. It in 1951 and was replaced as it development has overgrown the will also help to ensure that ATCO neared the end of its useful life. This existing network of high-pressure Pipelines can meet the demand for replacement ensures continued pipelines that were originally built natural gas as the cities continue to safe and reliable gas service to the on the outskirts of the two cities, grow. this has created three areas of communities.

ATCO Pipelines construction crews replace pipe assembly near Canmore, AB, to ensure continued safe and reliable gas service to the community.

41 2013 ANNUAL REPORT ATCO PIPELINES 42 The 41 km Norma transmission adequate depth of cover where 2013, ATCO Pipelines achieved its pipeline was constructed to increase its pipelines intersect rivers and eleventh consecutive year without a capacity and maintain security of streams. Throughout the province lost-time incident. URBAN PIPELINE REPLACEMENT PROJECT supply to the Fort Saskatchewan in 2013, integrity-related projects ATCO Pipelines works together with and Edmonton areas as the demand accounted for nearly one third of employees, contractors, business for natural gas in those regions the company’s $147 million capital partners and regulatory agencies to continues to increase. program. continually improve Health, Safety EDMONTON PIPELINE INTEGRITY GENERAL RATE APPLICATION and Environment performance. INITIATIVES After nearly 10 years of negotiated Safety is ingrained in all company Proposed High Pressure ATCO Pipelines continued its annual settlements with customers, ATCO policies, practices and procedures to Natural Gas Pipelines integrity program in 2013, which Pipelines completed its first full minimize impacts and risks. Natural Gas Pipelines involves leak detection, cathodic General Rate Application and to be Removed from The company has a goal of zero protection and aerial surveys of proceeding with the AUC in 2013. It High Pressure Service personal injuries and vehicle the company’s entire pipeline required contributions from across collisions. To encourage safe Existing High Pressure system. Pipeline improvements and the organization and the decision for practices and reward safety Natural Gas Pipelines upgrades were also undertaken to the 2013-2014 revenue requirement excellence, internal safety programs accommodate in-line inspection tools was received in December. Transportation Utility are in place for both field and Corridor Boundary in existing facilities and integrity digs SAFETY office-based staff. Target Zero is or replacements were completed Safety is a core value at ATCO a challenge to employees to work where required. The company also Pipelines. Throughout the injury, incident and collision free, completes assessments of critical organization there is a strong safety every day. watercourse crossings to ensure culture and as such, in September

Edmonton

Calgary

CALGARY

ATCO Pipelines continues to own, operate and maintain its pipeline network which now forms part of the Alberta natural gas transmission system.

Construction crews installed 41 km of 508 mm (20 inch) pipeline in Norma, AB, to ensure sufficient supply of natural gas to meet growing demand in the Fort Saskatchewan and Edmonton regions.

43 2013 ANNUAL REPORT ATCO PIPELINES 44 ENERGY The Energy business segment includes ATCO Power and ATCO Energy Solutions. These companies are engaged in power generation and natural gas gathering, processing, storage and liquids extraction.

ATCO Power’s natural gas-fired 580 MW Brighton Beach generating station, located in Windsor, ON, operates with low emissions and high overall efficiency.

45 2013 ANNUAL REPORT ENERGY 46 ATCO Power is an experienced builder, owner and operator of independent power generation plants. ATCO Power has a solid reputation of providing industry leading, reliable, responsible and cost- effective solutions for our customers and partners around the world.

TCO Power has an generating stations during the year to pursue new power generation ownership position in 14 to ensure the long-term embedded opportunities in Western Canada. power generation plants in A knowledge of safe operations is The company also established a Canada and the United Kingdom transferred from experienced people commercial and industrial wholesale with a combined capacity of 4,591 to those new to the workforce. electricity sales group to market megawatts (MW) and total ownership Strong health and safety performance capacity available to sell in the interest in 2,541 MW. The company was supported by several continuous Alberta open market. Significant has expertise in developing, constructing and operating gas-fired improvement activities put into project development work was done cogeneration, combined-cycle, hydro effect during the year including: new on the proposed 400 MW Heartland and reliable, economic coal-fired Contractor Prequalification Process, generating station in the Strathcona generation. Job Hazard and Risk Assessment region near Edmonton, AB. ATCO Standardization, Alcohol & Drug Power has engaged in public FINANCIAL PERFORMANCE program, and Training Content consultation, including a community ATCO Power has benefited from Standardization with several ongoing open house, as well as filed several strong pricing in the Alberta programs to be implemented in 2014. regulatory applications in conjunction electricity market for the past three with the development of this gas- years with relatively low gas prices, Even though power prices remained robust plant performance including low in the United Kingdom, the fired, combined-cycle generating strong availability, all of which Barking Power Station continued to station. This particular area of Alberta has resulted in a positive financial provide support to the UK electricity provides a prime opportunity to fill a performance. market through the provision of market need in light of the expected retirement of coal-fired plants in the ATCO Power’s performance metrics ancillary services. In anticipation future, and support the company’s include an excellent availability rate of possible shortages in reliable strategic direction to maintain and of 94 per cent through 2013 including power generation capacity in the grow ATCO Power’s market share in several major planned maintenance coming years, the UK government the province. outages across the company’s is proposing a new mechanism to generation fleet during the year. contract with power generators to New-build power generation ATCO Power continues to focus on provide the required reserve capacity. opportunities are being investigated operational excellence through the The Barking Power Station is well in conjunction with LNG (liquefied safe, reliable operation of existing positioned to participate in this natural gas) development in north assets and is continually improving opportunity when the process is eastern British Columbia and on its safety and environmental introduced in the winter of 2014-15. the West Coast where new LNG programs to ensure the ability to GROWTH refining facilities are being planned demonstrate responsible and safe ATCO Power continued to expand to export gas to Asia. Through its operations. its business development, and strategic alliances with major oil and A Young and New Workers program engineering and construction teams gas companies, ATCO is positioned was implemented at several of the to capture opportunities for several

The 260 MW Cory cogeneration station provides steam and electricity from the same natural gas energy source. The steam goes to Potash Corporation and the electricity goes to SaskPower.

47 2013 ANNUAL REPORT ATCO POWER 48 ATCO companies that can provide provide safe reliable power for the workforce to support these initiatives. the needed infrastructure and growth and development of Alberta The company is well positioned services to facilitate natural resource anticipated over the next several to implement its growth strategy, ATCO POWER’S GENERATION FACILITIES development. years. having increased the number of ATCO Power is revisiting the During 2013, ATCO Power’s new positions by 12 per cent over development of hydro generation generating assets had a very good the year, and has maintained its facilities in Alberta on the Slave and availability rate of 94 per cent. Safety attention on employee development Athabasca Rivers in the North in and environmental performance and workforce planning to further 2 order to provide long-term reliable continues to be a key focus at all enhance the solid knowledge and 1 base load green power to replace the generation assets and through skill base in the company. the eventual retirement of coal-fired the efforts of all its employees and INDUSTRY CHALLENGES AND generating facilities in the province. contractors, the company achieved OPPORTUNITIES Because of the long development significant health and safety The federal Greenhouse Gas time line for large hydro facilities, milestones in 2013. The 780 MW Regulation, which was introduced ATCO is currently investigating Sheerness power station, located in September 2012, means that a the scenarios which could lead to near Hanna, AB, achieved more than ‘clean as natural gas’ performance partnerships with Aboriginal groups, one million worker hours of safe standard will be applied to coal- government and industry. operation with no lost-time incidents fired generators. Units that have reached the end of their useful life OPERATIONS by staff and contractors. ATCO (50 years in most cases) will be The contract for the purchase of Power’s gas turbine fleet in Alberta NATURAL GAS required to operate at emission the power generated from Battle celebrated more than 10 years with Facility Generating levels below the gas-fired standard Capacity (MW) River units 3 & 4 expired at the end no employee lost-time injuries. or shut down. The last units at ATCO 1 Brighton Beach 580 of 2013, and ATCO Power intends PEOPLE Power’s Battle River and Sheerness 2 Barking 1,000 to market a portion of this capacity With the new business development generating plants will reach the end 3 Rainbow Lake 4 & 5 90 directly to end-use large commercial initiatives and power marketing of their useful life in 2029 and 2040, 4 Muskeg River 170 and industrial customers. Because programs being implemented in respectively. Other air emissions 5 McMahon 120 the units have been well run and ATCO Power, the company continues 3 regulations relating to coal and 4 6 Poplar Hill 45 maintained, they will continue to to focus on the importance of its gas-fired generation are also under BRITISH ALBERTA 7 Valleyview 1 & 2 90 review in 2014. ATCO continues to COLUMBIA 8 Primrose 85 5 work with the provincial and federal 8 9 Scotford 170 governments to ensure alignment 6 7 10 Joffre 480 between regulations in order to 11 Cory 260 9 SASKATCHEWAN plan continuing operations at these 12 COAL FIRED facilities. Edmonton 11 10 12 Battle River 3, 4 & 5 689 ASHCOR TECHNOLOGIES 13 Sheerness 1 & 2 780 Combustion by-products produced 13 at coal-fired power stations operated RUN-OF-RIVER HYDRO Calgary by ATCO Power are marketed by 14 32 ASHCOR Technologies primarily 14 to the oil well servicing sector, Total Generating Capacity readymixed concrete producers and 4,591 MW producers of other cement-related Total Generating Capacity Owned products. By collecting the fly ash 2,541 MW and using it in cementing materials, ASHCOR is able to create value and See page 64 for Australia power generation facilities reduce carbon dioxide in a product ATCO Power’s proposed 400 MW Heartland generating station will be located in that would be treated as waste and Fort Saskatchewan, AB, near large industrial customers and major construction disposed of in a reclamation site. activities.

49 2013 ANNUAL REPORT ATCO POWER 50 ATCO Energy Solutions builds, owns and operates non-regulated energy and water- related infrastructure. The company focuses on offering industrial water infrastructure solutions; natural gas gathering, processing and storage and natural gas liquids extraction, transportation and services to the energy industry.

TCO Energy Solutions System which, in anticipation of Construction on the expanded owns or has interests in six potential opportunities, underwent system will begin in 2014 and is A natural gas gathering and environmentally sensitive water anticipated to be complete by mid- processing facilities and four natural infrastructure upgrades, including 2015. gas extraction facilities which, improvements to an existing river ATCO Energy Solutions is also combined, have a total processing intake on the North Saskatchewan proposing to develop the Heartland capacity of more than 1.6 billion River, in 2011 and 2012. Additionally, Energy Storage and Logistics Centre cubic feet per day. a new pump house and water to be located approximately 12 km 2013 was a year of intense focus on pipeline under the river is scheduled west of , AB. An open building infrastructure capacity and for completion in 2014. house for the community was held signing new agreements in Alberta’s The expansion resulted in a second in October as part of the regulatory Industrial Heartland, Canada’s largest contract announced in December. approval process. hydrocarbon processing region with ATCO Energy Solutions signed The initial phase of development more than 40 companies involved in an agreement with Air Products includes four salt caverns for the chemical, petrochemical, and oil Canada Ltd. to provide industrial hydrocarbon storage and associated and gas sectors. water services to the company’s new above-ground hydrocarbon handling Two projects were announced and hydrogen facility to be built adjacent facilities. The caverns will contain progress was made on a third in the to the Shell Scotford Refinery site propane, butane, ethylene, and 582 sq. km region located in close in , also in the natural gas condensate. proximity to Edmonton. Industrial Heartland. Construction of the cavern project is In April, the company signed an To supply the Air Products facility, expected to commence in early 2014 agreement with the North West the company will further expand its with full cavern operations targeted Redwater Partnership to provide water system with additional pipeline, for mid-year 2016. essential water transportation pumping, and storage facilities. services to the . The project, currently under construction to be the world’s first bitumen refinery, will combine the already proven processes of gasification technology with an integrated carbon capture and storage solution. The refinery, located 45 km northeast of Edmonton, will be serviced though ATCO Energy Solutions’ expanded ATCO Heartland Industrial Water

ABOVE: The Empress Gas Liquids Straddle Plant processes up to 1.1 billion cubic feet/day. LEFT: ATCO Energy Solutions Instrumentation Technologist, Evan Taylor, reviews meter valves at the Fort Saskatchewan Ethane Extraction Plant.

51 2013 ANNUAL REPORT ATCO ENERGY SOLUTIONS 52 ATCO ENERGY SOLUTIONS FACILITIES

Facility . . . . Licensed Capacity 2 ATCO I-Tek is an end-to-end service provider that specializes in application services, (mmcf/day) Inuvik managed services, and customer care and billing. With a team of more than 720 GAS GATHERING & professionals, three world-class data centres and expertise in more than 750 business PROCESSING FACILITIES applications, ATCO I-Tek supports clients across the world from one of the largest 1 Carbondale Gas Plant...... 56 technology environments in Western Canada. 2 Ikhil Gas Plant...... 8 3 Kinsella Gathering & Compression Facility...... 20 n 2013, ATCO I-Tek continued ATCO I-Tek’s billing services follows ATCO I-Tek also experienced 4 Kisbey Gas Plant...... 5 to demonstrate excellence in Canada Post standards and uses more than quadruple growth in 5 Nottingham/Wolstitmor Iits large-scale Alberta-based advanced sorting and other process its Enterprise Asset Management Gas Gathering System . . . . . 18 NORTHWEST billing capabilities, took steps to optimizations to minimize both solutions sales to new clients. Client 6 Puskwaskau Gas Plant. . . . . 21 TERRITORIES better safeguard data storage and mailing costs and the costs to clients. growth was most prominent in the NATURAL GAS LIQUIDS system security for its clients, and In 2012, ATCO I-Tek made the utilities, manufacturing, and oil and EXTRACTION FACILITIES significantly grew the number of strategic decision to enter into gas markets spread across North 7 Edmonton Ethane clients with its Enterprise Asset a long-term agreement to lease America. Clients from Ontario to Extraction Plant...... 390 Management and other technology leading-edge data centre space for British Columbia and California to 8 Empress Gas Liquids solutions. its Edmonton-based information Trinidad in the Caribbean depended technology infrastructure. The on ATCO I-Tek’s expertise to learn Straddle Plant...... 1,100 The company’s billing capabilities, decision enabled ATCO I-Tek to how to better manage their assets 9 Fort Saskatchewan Ethane from start to finish, were once again ALBERTA significantly increase the reliability and get more out of their applications Extraction Plant...... 37 a significant part of the business. 15 of the application and infrastructure and processes. 10 Villeneuve Ethane ATCO I-Tek printed more than 11.7 Fort McMurray services provided to its clients. Extraction Plant...... 40 6 12 million client statements, processed While ATCO I-Tek continued to Early in 2013, the company began upwards of 10.3 million payments deliver excellence in Managed IT Working Gas Capacity (bcf) moving the majority of its computing and collected approximately Services to its existing client base, NATURAL GAS STORAGE infrastructure and client applications Edmonton $3.1 billion for its clients in 2013. work commenced to roll out these FACILITIES 3 to the newly leased facility. After Supporting the company’s billing services to the broader marketplace. 11 Carbon Natural Gas 11 nine months of detailed planning, Storage Facility...... 40 SASKATCHEWAN and collection services was ATCO testing and moving, the data This opportunity will grow the I-Tek’s call centre, which answered business and enable new clients to PIPELINE centre migration was successfully 8 more than 1.6 million customer calls completed on Sept. 22, 2013. It was benefit from ATCO I-Tek’s knowledge, 12 Muskeg River Pipeline Calgary Regina to ensure an overall of the largest data migration project in experience, industry best practices WATER 4 customer service. company history. and advanced technologies. 5 13 Alberta Industrial Heartland River Water System

ELECTRICAL TRANSMISSION/ 1 13 SUBSTATION FACILITIES Alberta’s 14 Industrial 14 Scotford Transmission/Substation 10 9 Heartland 15 Muskeg River Transmission/Substation Region

Edmonton

7

ATCO I-Tek provides large-scale utility billing and customer care for retail, distribution and integrated utility clients.

53 2013 ANNUAL REPORT ATCO I-TEK 54 ATCO AUSTRALIA WELL POSITIONED FOR CHANGING LANDSCAPE

peak electricity loads. Other market focus on risk management, hazard Gas availability and price is shifting and providing submissions to As Australia continues on its journey offerings being explored include identification, emergency planning the focus to renewable technologies, government white papers as its input of regulatory reform, securing its natural gas-fired backup generation, and business continuity contingency particularly solar and wind. to future policy. energy future and driving energy compressed natural gas vehicles planning. The cornerstone of our Development of both are heavily In Western Australia, there is productivity, ATCO Australia is in and distributed generation. Through power business is to improve the subsidized by government in the increasing pressure for the a very good position to build on this type of innovation, we can lead efficiency of our operations and industrial and consumer markets government to move forward on its first three years of operation to the industry and help business innovate to assist customers to creating competitive challenges to energy market reform. Following offer bundled, innovative energy customers achieve benefits ranging meet the challenges facing their gas as an energy source. the 2013 election, the state credit solutions, create value for customers from lower operational costs to businesses. Policies, renewable energy targets rating shifted downward. As a and make a difference to the lives of Australians in the communities where improved environmental ratings. Australia’s economic fundamentals and government funding are now result, government will look to we operate. ATCO Gas Australia is also working are strong and the outlook remains being reviewed by a newly-elected bring selected energy infrastructure with residential land developers and positive, with solid growth, moderate government, and ATCO Australia asset sales or privatization to the housing development builders to unemployment and contained is contributing to industry bodies, forefront, as well as to reduce capital ensure natural gas is an available inflation. participating in government forums expenditures. and preferred option for home There are three areas that, going appliances. forward, ATCO will be watching Steven J. Landry In 2013, ATCO Gas Australia’s Safety closely: the carbon tax repeal; global Managing Director & Chief Operating Officer, ATCO Australia Case submission to the safety demand for gas and the impact regulator, outlining processes and this will likely have on the domestic uring its first three years of plans for operating the network, was market; and, the energy market operation, ATCO Australia has accepted, which is testimony to the reform process, particularly Dexperienced significant and company’s approach to operating a in Western Australia. strategic growth in the face of many safe, reliable network. Although the carbon tax does not challenges. Based on business growth over the directly impact ATCO’s operations, Since the acquisition of Western past three years, ATCO Gas Australia it does impact our customers’ Australia’s largest gas reticulation reinforced its strong market position businesses. The federal government network, ATCO Gas Australia, there by negotiating new financing terms intends to repeal the carbon tax have been year-over-year increases on existing debt. The company also and replace it with an initiative in connections and in kilometres of received a two level investment called Direct Action. Because there pipework laid. Capital expenditures upgrade from Standard and Poor’s is little detail about this initiative, more than doubled over the three from “BBB” (Positive) to “A-” it is causing uncertainty for our years while a strong safety record (Stable). This upgrade is the result of customers. was maintained. a concerted and successful effort to Similarly, as demand for liquefied With the expansion of the ATCO apply the principles of ATCO Group’s natural gas (LNG) increases, Gas Australia network, the company balance sheet management. particularly from the Asian is introducing new and innovative ATCO Power Australia has economies, the rush to export LNG uses for natural gas, such as natural maintained a solid track record to China is creating market distortion. gas-fuelled air conditioning units with commercial availability across It is becoming more worthwhile for for the industrial sector, which the three power stations averaging big suppliers to export LNG than to has the potential to transform the 97 per cent over the past three sell it locally, creating potential gas energy market by greatly reducing years. There has been an increased availability issues. The home of ATCO’s 86 MW Karratha Power Station in the resource-rich Pilbara in northwest, Western Australia continues to be a focus for ATCO Australia.

55 2013 ANNUAL REPORT ATCO AUSTRALIA WELL POSITIONED FOR CHANGING LANDSCAPE 56 AUSTRALIA ATCO Australia includes ATCO Power Australia, ATCO Gas Australia and ATCO I-Tek Australia. These companies provide a full range of energy infrastructure services.

Scott Strickland, Gas Distribution Officer, ATCO Gas Australia, uses the company’s new Field Mobility System with his tablet to access safety documents.

57 2013 ANNUAL REPORT AUSTRALIA 58 ATCO Australia Pty Ltd, based in the Western Australian capital, Perth, operates a range of energy infrastructure assets, supporting the resource-focused industries in its home state as well as Queensland and South Australia.

TCO Australia has ownership therefore, be a focus going forward In South Australia, as in Queensland, in, and operates three for the company. gas pricing and availability are A power generation facilities in ATCO POWER AUSTRALIA becoming significant issues facing Australia with a combined capacity of ATCO Power Australia’s three the wider energy sector and have 299 MW. ATCO Australia also owns power stations are located in particular relevance to ATCO’s gas- and maintains the vast majority of Queensland, South Australia, and fired power stations. There is no Western Australia’s gas reticulation Western Australia. The Bulwer Island domestic gas reservation policy in network, via ATCO Australia covering Cogeneration Facility in Queensland South Australia or the eastern states the Geraldton, Bunbury, Busselton, is a 33 MW electrical and 55 MW of Australia, hence, gas availability Harvey, Pinjarra, Brunswick Junction, thermal equivalent cogeneration is becoming more of an issue due Capel and Perth greater metropolitan facility that provides 100 per cent of to volume being sent to offshore area; and two separate non-regulated the electrical load, process steam markets. Western Australia does have gas distribution networks, one a domestic gas reservation policy serving Kalgoorlie and the other, a and the demineralized water needs in place and so the issue isn’t as liquefied petroleum gas storage-fed of BP’s Bulwer Island refinery in prevalent. ATCO is addressing these gas distribution network, serving Queensland. The 180 MW Osborne challenges through discussions with Albany. Cogeneration Facility, located near Adelaide in South Australia, is one joint venture partners and is confident The Pilbara region in northern of Australia’s largest cogeneration of continuing to successfully Western Australia continues to facilities and the 86 MW Karratha negotiate positive outcomes. provide opportunity for growth in the Power Station is the most efficient power generation segment. Similarly, In July, ATCO Power Australia and environmentally friendly power gas transmission and distribution renegotiated its existing Energy opportunities continue to be explored generation facility connected to the Services Agreement with South in the south and west of Western North West Interconnected System Australian soda ash producer Penrice Australia and in the eastern states of in the Pilbara region, in Western Holdings. This was in response Australia. Australia. to Penrice’s decision to cease production of bi-carbonate soda, The warmest winter on record had ATCO Power Australia enjoyed a an impact on gas throughput for the strong year, marked primarily by resulting in a reduction in the amount distribution network and, to counter the ongoing, efficient and profitable of steam provided by ATCO Power this, ATCO has been exploring other operation of its three power stations. Australia’s Osborne facility. uses for natural gas. Technologies The business has continued to In 2013, the wider focus of ATCO such as fuel cells, distributed experience steady growth, while Power Australia has been to improve generation and gas-fired air working through the operational the energy efficiency of all its conditioning provide opportunity for challenges that exist in the Australian facilities. As a result, at the Bulwer increasing gas throughput and will, energy sector. Island facility, solar panels have been

Sharma Sewell, Administration Assistant, at ATCO Power Australia’s Karratha Power Station. It is the most efficient and environmentally friendly power generation facility, connected to the North West Interconnected System, in the Pilbara region in Western Australia.

59 2013 ANNUAL REPORT ATCO AUSTRALIA 60 installed, which will also allow the upgrade from Standard & Poor’s from around Perth, amongst which was a high-pressure regulator set and accessible, provides improved excellence. ATCO Gas Australia was station to reduce its operating costs. “BBB” (Positive) to “A-” (Stable). the gas connection to Perth’s $1.4 polyethylene gas main. access to data when performing recognized for outstanding response ATCO GAS AUSTRALIA In 2013, ATCO Gas Australia took billion Fiona Stanley Hospital. As The redevelopment of ATCO maintenance activities and improves time, quality of service, staff ATCO Gas Australia serves the strategically significant step part of the development, ATCO Gas Australia’s Jandakot facility the efficiency and accuracy of satisfaction, innovation and reporting. approximately 683,000 customers of focusing on promoting gas- Gas Australia completed significant progressed significantly in 2013 data collection relating to asset across regional and metropolitan powered air conditioning. Despite network reinforcement to deliver and remains on track for an official performance and health. Cost ATCO I-TEK AUSTRALIA Western Australia. Through its enjoying widespread uptake in a reliable long-term gas supply opening in early 2014. In keeping efficiency benefits from the Field Along with developing and delivering 13,500 km of natural gas pipelines, countries like Japan, gas-powered at an estimated 173 Terajoules with the company’s commitment Mobility initiative include operational the Field Mobility System for ATCO ATCO Gas Australia is able to meet cooling remains a comparatively per year. This consisted of 3 km to environmental sustainability, the savings through improved scheduling Gas Australia, ATCO I-Tek Australia, the demands of one of the fastest new technology in Australia despite of high-pressure steel gas mains Jandakot site includes state-of-the- and response times, utilization in 2013, completed the full integration growing population bases in the the extreme temperatures reached reinforcement and 2.7 km of art gas-powered air conditioning and capacity and the enhanced ability to of core business systems enabling all developed world. during the summer months. Early polyethylene gas mains, servicing the other features designed to improve absorb activity growth. ATCO Australia businesses to easily on-site power station and other gas- adapt to new technologies and share In 2013, the business set about indications suggest that there is a energy efficiency. In keeping with an ongoing focus powered appliances. information across the companies, reinforcing its strong market position strong appetite for this technology To enhance safety and efficiency of on customer satisfaction, ATCO thereby driving process excellence, by negotiating new financing terms and that gas-powered technologies ATCO Gas Australia was also office and field-based personnel, Gas Australia’s customer service efficiency and improved safety of on existing debt. ATCO Gas Australia harbour the potential to transform the responsible for the reticulation of ATCO Gas Australia, in conjunction division was acknowledged at the operations. ATCO I-Tek Australia finalized this agreement in November, energy market in Australia by greatly gas to the Perth Airport as part of with ATCO I-Tek Australia, developed 2013 National Customer Service also continued to focus on putting effectively extending the agreement’s reducing peak electricity loading. its ongoing redevelopment. To help an electronic paperless system Excellence Awards. The call the foundations in place that are maturity until 2018. Towards the During the year, ATCO Gas Australia meet the airport’s estimated annual known as Field Mobility. Using centre was selected as a finalist necessary for future growth of the end of 2013, ATCO Gas Australia contributed to the development of consumption of 324 Terajoules, tablets, the Field Mobility innovation by the Customer Service Council business. also received a two level investment several major infrastructure projects ATCO Gas Australia constructed makes safety documentation easily and received a silver medal for

Solar panels installed at the Bulwer Island facility are part of a focus of ATCO Power Australia to improve the energy ATCO Gas Australia’s President, Alan Dixon, and Business Development Manager, Nathan Lude, inspect the natural gas-fired efficiency at all of its facilities. air conditioning system recently installed at the company’s Jandakot building.

61 2013 ANNUAL REPORT ATCO AUSTRALIA 62 IN THE COMMUNITY In 2013, ATCO sponsored the operating in Perth, to supply gas In 2013, ATCO Australia continued CinéfestOZ event, a film festival appliances for use in Nulsen’s and expanded its community held in the South West region Disability Support Homes. Not only ATCO OPERATIONS IN AUSTRALIA engagement program. Through of Western Australia. Through do these appliances help enhance the successful partnership ATCO’s sponsorship, the festival the lives of residents and their with the University of Western has been able to expand and grow caregivers, they provide significant Australia’s prestigious Business the festival’s Cinesnaps Schools financial savings through the use of School, ATCO hosted a number of Programme, which benefits hundreds cost-competitive natural gas. significant leadership events, further of regional school children by strengthening ties and relationships In 2013, ATCO Australia launched the providing a platform for them to with the Western Australian business ATCO EPIC (Employees Participating attend screenings and workshops, community. in Communities) program and was learn about filmmaking and partake awarded the inaugural ‘Workplace ATCO also extended its relationship in a short-film competition, alongside NORTHERN 10 with Nomad Two Worlds by Supporter of the Year’ for its work national and international artists. (For TERRITORY 6 supporting the 2013 Art Series, which supporting Kids are Kids!, a non-for- 12 more about CinéfestOZ, see page 73.) was marked with two successful profit, community-based provider of Karratha As part of ATCO Gas Australia’s specialist therapy services to children exhibitions in Perth celebrating the QUEENSLAND diversity of Indigenous art and culture community commitment, the with a developmental disabilities. 5 from Australia, North America and company has partnered with WESTERN AUSTRALIA Haiti. Nulsen, a disability services provider 11 Brisbane SOUTH AUSTRALIA 1 4

NEW SOUTH 2 WALES Perth 8 Sydney Adelaide 9 13 ATCO Australia headquarters VICTORIA - ATCO I-Tek Australia Melbourne - ATCO Gas Australia 7 ATCO Gas Australia Gas Service Area

ATCO Structures & Logistics TASMANIA Manufacturing Facilities 1 Brisbane (5 factories) 2 Kwinana (near Perth)

ATCO Structures & Logistics Other Locations ATCO Power Australia Generating Plant Sites 4 Brisbane 5 Gladstone Facility Net Generating Fuel Type 6 Mackay Capacity 7 Melbourne 11 Bulwer Island 33 MW Natural Gas 8 Newcastle 12 Karratha 86 MW Natural Gas 9 Sydney 13 Osborne 180 MW Natural Gas 10 Townsville Pat During, Gas Distribution Officer, ATCO Gas Australia, is conducting a meter read using the Field Mobility System developed in conjunction with ATCO I-Tek Australia.

63 2013 ANNUAL REPORT ATCO AUSTRALIA 64 ABORIGINAL PARTNERSHIPS

Building and sustaining Aboriginal relationships helps to form the foundation of how ATCO does business and this is reflected through both ATCO’s longstanding relationships with Aboriginal communities and how the company engages with these communities every day.

artnerships that stand the the town of Peace River in northern to a pipeline replacement project to test of time involve respect, Alberta. ATCO established a upgrade critical infrastructure for the Ptrust, understanding and joint-venture partnership with the area. transparency. Each party commits to Woodland Cree in 2010 with the goal PROMOTING EDUCATION AND bringing value to the partnership and of helping to build an active business EMPLOYMENT continues to negotiate in good faith community that can serve the Peace Canada’s Aboriginal youth population as the relationship evolves over time. River region and create local jobs. is growing at three times the national ATCO conducts all of its business The partnership is structured in a average. Engaging the potential in this spirit, striving to maintain way that will involve the Woodland of these youth is key to economic positive relationships that contribute Cree First Nation in all facets of the growth as Canada’s workers are to sustainable economic and social construction and operation of the aging and retiring. Many of ATCO’s development in the communities new facility, including supporting operations touch Aboriginal where ATCO does business. camp management, catering, communities and the success of housekeeping and janitorial services. these operations is due, in part, to Some of ATCO’s first Aboriginal engaged Aboriginal partners and In May, ATCO Structures & partnerships have endured for more employees. than 25 years (see map, page 68). Logistics signed a Memorandum of Understanding with the Denesoline Access to training and certification BUILDING STRONGER Corporation, the economic programs is a critical step to open RELATIONSHIPS development arm of the Lutsel K’e doors for entry level employment, In 2013, ATCO continued to Dene First Nation, located on the which is a big part of many of ATCO’s strengthen its relationships with south shore of Great , infrastructure projects. A prime Aboriginal communities across NWT. The agreement is to jointly example was the workforce housing Canada through new developments pursue commercial and industrial contract awarded to ATCO Structures with the Woodland Cree First Nation projects, including infrastructure & Logistics in 2012 to design, build joint-venture partnership as well as and operate a 2,586-person lodge to construction within the Lutsel K’e new agreements with the Denesoline support BHP Billiton’s Jansen Potash Dene traditional territory. and Qikiqtaaluk Corporations, Project, 100 km north of Regina. Samson Cree Nation and the ATCO Pipelines signed an agreement In support of this agreement, ATCO . with the Samson and Ermineskin continues to work with Aboriginal Cree Nations, two of the four nations In October, ATCO Structures & groups in the Touchwood Hills centred around (formerly Logistics announced that it was area of Saskatchewan, including Hobbema) in central Alberta. The awarded a contract to manufacture, George Gordon First Nation, Day agreement involves several long- install and operate a 1,200 person Star First Nation and Kawacatoose term benefits to these communities, workforce housing facility for the First Nation. Working with the including exploring employment Shell Carmon Creek Project near Saskatchewan Tourism Education and training opportunities related

Chief Craig Mackinaw from the Ermineskin Cree Nation and Brendan Dolan, former President, ATCO Pipelines, currently Senior Vice President, Calgary and District Operations, ATCO Gas, celebrated the execution of a cooperative agreement to govern future dealings between the two parties on a pipeline replacement project in the Maskwacis community.

65 2013 ANNUAL REPORT ABORIGINAL PARTNERSHIPS 66 Council (STEC), ATCO conducted program in the East Prairie Métis skills inventories in the communities settlement in 2013. The program to assess education, interest and helps local youth develop their Joint Ventures, MOUs and Strategic Alliances ATCO’S ABORIGINAL PARTNERSHIPS potential barriers to employment. leadership skills and self-confidence Twenty-two members of the through learning to provide sport, 1 World Technical Services Inc. communities participated in the recreation and art programs to the Alaska Radar System (1994) training program with 17 graduates 3 community. These future leaders 27 Woodland Cree First offered employment opportunities. 2 NASCo NorthwesTel (1998) provide positive role models and help Nation (2013) 1 improve the quality of life for all local 3 Inuvialuit Development Corporation Future plans include establishing 28 Saddle Lake First 4 residents. (2004) & Inuvialuit Petroleum a training and cultural awareness Corporation (2008) Nation (2013) 2 centre on George Gordon First SUPPORTING EVENTS FOR 4 Pan Arctic Inuit Logistics 29 Samson Cree 11 Nation traditional territory. The skills POSITIVE CHANGE North Warning System (1994) Nation (2013) 10 inventory approach has also proven ATCO supports a number of events 30 Ermineskin Cree to be an effective way to begin 5 Sakku Investments Corporation throughout the year that bring (2012) Nation (2013) 5 bridging the employment gap for Aboriginal communities in Canada 12 6 Peguis First Nation (2013) 31 Piikani Oldman major ATCO projects. together to celebrate and learn from Hydro Limited These project-driven efforts each other. One example is the Truth 7  Keewatinowi Okimakanak Partnership (2007) 13 and Reconciliation Commission (2013) supplement and add to ATCO’s 32 Onion Lake First 8 ongoing education programs. events over the past few years, 8 Webequie First Nation (2011) Nation (2013) which promote a healing journey for 6 For example, ATCO Electric has 9 Moose Cree Business Consortium 33 Clarence Campeau maintained an Aboriginal summer Aboriginal families who were involved (2010) Development Fund 9 student program since 2008, in the Residential Schools, while (2011) 10 UQSUQ Corporate Iqaluit Fuel 7 whereby students have been educating Canadians on the impact Supply (1996) 34 Pinehouse Business provided summer positions within of this time in Canada’s history. North (2011) 11 Qikiqtaaluk Corporation (2013) various ATCO Electric offices. ATCO Proceedings such as these add to 35 George Gordon First Pipelines maintains an Aboriginal ATCO’s ongoing support for events 12 Makivik Corporation (2013) Nation (2010) Educational Awards Program that such as the National Assembly of 13 Torngait Services Inc. 36 Infinity Development NORTHWEST started in 2011. Since beginning this First Nations and National Aboriginal Voisey’s Bay Nickel Co. (1995) Corporation (2012) TERRITORIES program, 47 students have been Day ceremonies throughout Canada, 14 Naha Dehé Dene Band (Nahanni provided bursaries and scholarships. which celebrate and promote Butte) (2012) 14 Aboriginal culture and heritage. Yellowknife16 17 ATCO also began a three-year 15 Denendeh Investments (1987) BRITISH commitment to the Future Leaders 15 16 Tli Cho Lantran & Denedeh COLUMBIA Development Corporation (1993) 18 17 Denesoline Corporation (2013) 25 18 Bear Dog Enterprises (2011) 19 19 Gitanyow (2011) 26 20 21 27 20 Haisla First Nation (2010) 21 Lhoosk’uz Dene Nation (2011) ALBERTA 28 22 Simpcw First Nation (2014) Edmonton 34 23 Ahousaht First Nation (2010) 22 32 23 29 30 24 St. Mary’s Band (2011) Vancouver SASKATCHEWAN 25 Tallcree First Nation (2013) Calgary 24 33 31 36 26 Fort McKay First Nation, 35 Creeburn Lake Lodge (2007), Barge Landing Lodge (2008) Graduates of the 2013 ATCO/Saskatchewan Tourism Education Council (STEC) “Ready to Work” training program.

67 2013 ANNUAL REPORT ABORIGINAL PARTNERSHIPS 68 ATCO Sustainable Communities provides a full range of pre-fabricated, culturally sensitive building solutions for indigenous and other remote communities.

rom ATCO’s deep history facility will be a gathering place and Near Slave Lake, AB, ATCO of developing Aboriginal features an Elder’s room, library, youth Sustainable Communities was Fpartnerships, and its design centre, fitness room and gymnasium. contracted by the Swan River First and construction expertise working in It will also serve as a community Nation to build a 6,600 sq. ft. multi- remote locations, ATCO Sustainable emergency shelter upon completion in purpose gymnasium and community Communities has inherited the November 2014. centre. The facility will connect to capabilities to design and build lasting When a flood destroyed an office the existing school so it can be used communities for Aboriginal and other building and storage facility in for physical education purposes remotely located people. Facilities when it is completed in June 2014. can range from offices, schools, Nova Scotia, ATCO Sustainable Wapsewsipi Enterprises Ltd., the First gymnasiums and day care centres Communities was contracted by the to residential housing, Elders lodges, Millbrook First Nation to design and Nation’s construction company, was hockey arenas and gas stations. build new facilities within 51 days contracted to prepare the area for as they were essential to the First construction. ATCO Sustainable Communities uses Nation’s commercial fishing operation. The company won contracts for its Holistic Engagement Process, To complete the project on time for a number of other projects in which involves building relationships March 2013, it was constructed in two to understand a community so a 2013. A child and family services pre-fabricated modules in a climate facility’s design reflects both its administration facility for the Tsuu controlled factory and then shipped to cultural and physical needs. The T’ina Nation near Calgary was the site for quick assembly. process also takes into account completed in September 2013. the challenges of living in remote The Kainai Board of Education, an Scheduled for completion in 2014, locations, and training is offered organization of the Blood Tribe of are a fire station for the Peerless Trout to ensure that qualified resources Treaty 7 in Alberta, turned to the First Nation near Slave Lake, AB; a exist within a community to manage company to build a new addition gas station for the Dene Tha First and maintain the community’s to the Saipoyi Community School Nation in Meander River, AB; and, infrastructure over the long term. located in Standoff. The addition, following the completion of a Daycare to be built using modular building In only its second year of operation, and Headstart Centre in 2012, the technology, will connect directly to the company achieved geographic company is constructing a retail store the existing building, matching its expansion across Canada and for the George Gordon First Nation in architectural appearance, and will add successfully undertook a variety of Saskatchewan. projects ranging from fire halls and four new classrooms upon completion gas stations to community centres in early 2014. In 2013, ATCO Sustainable and schools. Many projects were In June 2013, the Halalt First Nation Communities also established a new undertaken with local labour support opened its new custom-designed partnership with the largest First as ATCO Sustainable Communities multi-purpose recreation centre at Nation in Manitoba to pursue new tackled remote environments and time Chemainus on Vancouver Island, BC. business. The Relationship Agreement constraints. Local labour was used for the project with Chief Peguis Investment Corp., In Nain, the northernmost town in and ATCO provided post-construction the economic development arm Labrador, which is represented by operations and management training of the Peguis First Nation, has the the Nunatsiavut Government, the so the community could run and two working together to provide company began construction of a new maintain the facility. infrastructure solutions throughout community centre. The 15,000 sq. ft. the province.

This Child and Family Services office was built for the Tsuu T’ina First Nation, located southwest of Calgary, AB.

69 2013 ANNUAL REPORT ATCO SUSTAINABLE COMMUNITIES 70 ATCO IN THE COMMUNITY

ATCO and its people are committed to helping create healthy, vibrant communities by developing meaningful partnerships with various organizations and by providing time, expertise and financial support.

TCO has many long-term They are role models within their further enhances its contribution community investments squadrons, demonstrating exemplary by matching charitable donations A and legacy sponsorships commitment, leadership skills and made to human health and wellness that have allowed the company to community service. organizations. truly make a lasting impact on the Matching generosity: ATCO EPIC This year, ATCO Australia launched communities where ATCO and its reaches $4.2 million the ATCO EPIC program and was people work, serve and live. The ATCO and its people pledged a awarded the inaugural ‘Workplace company’s approach to community record $4.2 million to more than Supporter of the Year’ for the investment has also become more 500 charitable organizations in company’s work supporting Kids Are global as ATCO begins to build a 2013 through the company’s annual Kids!, a not-for-profit, community- significant business presence in ATCO Employees Participating in based provider of specialist therapy countries such as Australia. Communities (EPIC) fundraising and services to children with development 2013 HIGHLIGHTS ATCO EPIC Time disabilities. Honouring Canada’s to Give programs. military at Spruce Beyond supporting the annual ATCO The ATCO Meadows EPIC fundraising campaigns, ATCO EPIC program EPIC Time to Give was created to ATCO’s annual Military combines recognize the contributions of ATCO Family Day at the Spruce employee-led employees who volunteer their time Meadows North American fundraising and talents to organizations that equestrian tournament in 2013 $4.2M events, auctions, make their communities a better July allows the company friendly team 2012 $3.8M place to work and live. In 2013, to honour the significant competitions ATCO employees volunteered more community service 2011 $3.4M and pledges to than 26,000 hours with charitable provided by the Canadian 2010 $3.1M support charitable organizations. Forces. Every year, military organizations 2009 $2.97M Longstanding support: Junior personnel from ranks across Canada. across Alberta are selected 2008 $2.75M Achievement and Alberta Games Employees and by their commanding ATCO expanded its partnership with 2007 $2.3M pensioners direct officers to participate in this Junior Achievement (JA) to include 2006 $ M their pledges to event. 1.49 programs in Edmonton in addition the charity of to Calgary this year. The company Selected participants their choice and has been involved with Junior come from Air, Navy ATCO absorbs Achievement for more than 50 years. and Armed Forces and the administrative many have had tours EPIC DONATIONS costs of the of duty in Afghanistan. ($ MILLIONS) program. ATCO

Canadian Forces Corporal, Justin Jefferies, and his daughters, Lauren and Riley, visit with a member of the Strathcona Mounted Troop during the ATCO Military Family Day.

71 2013 ANNUAL REPORT ATCO IN THE COMMUNITY 72 Between these two organizations, Building new cultural employing local Aboriginal residents JA helped nearly 40,000 students partnerships: CinéfestOZ in who are interested in the utility sector. PROTECTING THE AVIAN HABITAT develop an entrepreneurial attitude, Australia The program provides entry-level a solid and practical understanding ATCO Australia began sponsoring and apprenticeship opportunities to ATCO maintains an Avian and continue to monitor and maintain Yukon Territory, creating a community of business and finance and a CinéfestOZ in 2013 — an annual, candidates in the communities where Protection Program that benefits the nest when necessary. among strangers. The company commitment to community. By five-day Australian and French Film they live and offers a comprehensive the Ferruginous Hawk, osprey, swans In 2012, the Whitehorse office has received numerous inquiries developing a link between education Festival held in the southwest region northern benefit package, as well and Bald Eagles. Initiatives within the installed a web camera to give the and expressions of gratitude from program include diverting birds from as far away as Singapore, Australia, and the world of work, and by giving of Western Australia. The event as professional development and community a bird’s eye view of the electrical equipment, carefully moving Mexico, England, The Czech youth the confidence and knowledge recognizes the historical significance mentorship. eagles in the nest. Live viewing they need to define personal of French explorers in the region and nest sites and creating appropriate began in May 2013 after a pair of Republic, Switzerland, Germany, Jacey Firth-Hagen is a good example success, JA enhances students’ showcases the best films of Australia nest habitats. eagles moved into the nest earlier in Denmark, and almost every province, of the program’s success. She was workforce readiness and encourages and France to a diverse audience of In 2006, heavy rains and winds the year. territory and state across Canada hired through the program as an them to pursue their dreams. local and international film lovers. collapsed an eagle’s nest on the and the United States. Engineering Assistant for Northland Viewers of the web cam were able to This year, ATCO also celebrated ATCO’s three-year sponsorship of Millennium Trail near Whitehorse. witness the hatching of three eaglets Yukon Electrical has been distributing Utilities in Yellowknife. Working with The two eaglets in the nest were not a DVD version of the recorded its 25-year commitment to the this event gives the company the and watch them grow into fledglings Northland Utilities has also allowed ready to fly and were stranded on the season and is preparing an Alberta Games and the Alberta 55 opportunity to contribute to the ready to take their first flights. The Jacey to pursue her other ambitions. ground until local officials spotted educational activity book for schools Plus Games, the province’s premier cultural vibrancy of the region, while web cam received more than one them. Yukon Electrical crews helped and groups with an interest in eagles. multi-sport events. These events increasing familiarity of the ATCO By night, Jacey is the host of Feel million views from around the world. Real Radio on a local radio station rescue the eaglets and eventually bring many benefits to both the host brand with the community and local Like the web cam viewers, The Yukon Electrical team activated in Yellowknife. Feel Real Radio is no donated a utility pole and assisted in community and to thousands of business leaders. employees at Yukon Electrical have the web cam in February 2014 to ordinary radio talk show. Through the construction of a new permanent Albertans who participate at local Building Capacity Aboriginal grown attached to the birds and capture a new nesting season. interviews and local music, the show base for a nest. and provincial levels. Employment Program: Northland appreciate how the live feed has celebrates Northwest Territories Since then, Yukon Electrical crews Since 1988, ATCO Gas has delivered Utilities provided a glimpse into life in the youth who make healthy lifestyle have unofficially adopted the nest its torch relay program and For the past two years, the Northland choices. It’s all part of “My Voice, sponsored the opening ceremonies Utilities’ Building Capacity Aboriginal My Choice,” the Government of at 43 games in more than 50 Alberta Employment Program has been Northwest Territories’ youth drug and communities. focused on developing and alcohol prevention campaign.

In 2013, ATCO Gas celebrated its 25th year of supporting the summer and winter Alberta Games.

73 2013 ANNUAL REPORT PROTECTING THE AVIAN HABITAT 74 FINANCIAL EXCELLENCE 2013

Electric System Operator (AESO) Earnings growth in 2013 was also FINANCIAL STRENGTH DIVIDENDS MOVING FORWARD direct-assigned projects. The Hanna driven by the Company’s power Total assets grew from $14 billion at The Board of Directors increased A further $5.5 billion of capital Regional Transmission Development generation business in Canada, the beginning of 2013 to $16 billion the quarterly dividends paid per expenditures is planned in the project was completed in July mainly as a result of higher realized at year end. That growth occurred Class I and Class II Share for the four Utilities in the three-year period from 2013 at a total cost of $650 million, power prices and plant availability mainly in the Utilities segment quarters of 2013 from 16.375 cents 2014 to 2016. ATCO Electric alone approximately $196 million of which in ATCO Power compared to the because of the significant capital per share to 18.75 cents per share, is planning to spend $4 billion. Of was incurred in 2013. The project prior year. Adjusted earnings for the investment. an increase of 15% over 2012. this amount, $2.3 billion is related was completed on time and $60 Energy segment were $80 million in to projects directly assigned from We financed this asset expansion On January 9, 2014, the Board of million under budget. Construction 2013, $8 million, or 11%, more than the AESO to meet the needs it has with cash flow from operations, Directors declared a first-quarter continues on the Eastern Alberta 2012. identified to reinforce and expand Canadian Utilities’ dividend Transmission Line. The total cost of dividend of 21.5 cents per share. Alberta’s electricity transmission CAPITAL REDEPLOYMENT reinvestment plan and prudent the project is $1.8 billion, of which That amount represents a 15% system to meet future demand. ATCO has a portfolio of diverse $938 million had been spent to the access to the debt and preferred increase over the quarterly businesses. We continuously share capital markets. We capitalized end of 2013. The project is scheduled dividends per share paid in ~2 ~2 review our holdings to evaluate ATCO Pipelines for completion at the end of 2014. on the current low interest rate 2013. opportunities to monetize non- environment and the capital markets’ Several other large transmission The Board of Directors has ATCO Gas ~1.5 core assets. The viability of such demand for our public debt offerings infrastructure projects are either approved an increase in ATCO’s opportunities depends on the outlook by issuing $600 million of 30-year ATCO Electric Brian R. Bale underway or in the planning stages. common share dividends each of each business as well as general debt, $225 million of 40-year debt Distribution Senior Vice President & This investment is translating year since 1993 — a track Chief Financial Officer market conditions. This ongoing and $75 million of 50-year debt, into significant growth in Utilities’ record we are very proud of. focus supports the optimal allocation at attractive interest rates ranging ATCO Electric earnings. Adjusted earnings of $179 of capital across the ATCO Group. from 4.558% to 4.855%. In addition, Transmission TCO achieved record million were $31 million, or 21%, adjusted earnings of $390 higher than the $148 million achieved The sale of the ATCO Structures & during the first half of 2013, Canadian 0.75 Amillion in 2013, an increase of in 2012. Logistics’ South American operations Utilities Limited issued $400 million $20 million, or 5%, over the previous in 2013 is the most recent example of equity preferred shares with a high of $370 million in 2012. The of this capital redeployment strategy. preferred dividend rate of 4.50% to 2014 2015 2016 We took the opportunity to monetize 0.47 growth in adjusted earnings was finance capital expenditures. Utilities Capital Expenditures this asset at a time when activity in the result of two main drivers: utility ATCO maintained its strong ($ billions) South America, particularly for the 0.32 investments, and higher realized $390 million investment grade credit ratings, Our financial strategy is based on mining sector in Chile and Peru, power prices and plant availability. 2013 Adjusted which allow access to capital delivering long-term shareowner Earnings began to slow. In September 2013, 0.17 markets at competitive rates. In value and generating reliable The Utilities segment continued ATCO Structures & Logistics sold 2013, Standard and Poor’s Ratings 0.06 earnings and cash flows with the to make significant investment in its 50% interest in Tecno Fast ATCO Services and DBRS Limited re- opportunity for premium returns. infrastructure in Alberta. Capital S.A. to its joint venture partner for affirmed their ratings of the Company 1993 1998 2003 2008 2013 expenditures of $2.2 billion in 2013 cash proceeds of $124 million. Going forward, we remain committed as “A” with a stable outlook and “A” were marginally higher than the $2.1 ATCO is redeploying that capital by Annual Dividends 1993-2013 to maintaining our strong investment (low) with a stable trend, respectively. billion spent in 2012. Over the last Structures & Logistics re-investing in Canadian Utilities’ ($ per share) grade credit ratings, which are $96 million (25%) In addition, Standard and Poor’s three years, capital expenditures in dividend reinvestment plan. This supported by our conservative upgraded its rating from “BBB” the Utilities totaled $5.6 billion. Utilities $179 million (46%) dividend re-investment further financial policies and prudent capital (Positive) to “A-” (Stable) for ATCO The majority of the Utilities’ Energy $80 million (21%) supports funding of the significant management. Gas Australia. expenditure was in the transmission capital growth program underway in ATCO Australia $24 million (6%) operations of ATCO Electric and the Utilities and our non-regulated * Adjusted earnings are earnings attributable to Class I and Class II shares after adjusting for the timing of revenues and expenses associated with rate Corporate $11 million (2%) regulated activities. Adjusted earnings also exclude one-time gains and losses, significant impairments and items that are not in the normal course of was predominantly for Alberta business. business or day-to-day operations. Descriptions of the adjustments are provided in the Segmented Information note of the 2013 Financial Statements.

75 2013 ANNUAL REPORT FINANCIAL EXCELLENCE 2013 76 CONSOLIDATED ANNUAL RESULTS CONSOLIDATED OPERATING SUMMARY

(1) (2) IFRS GAAP (Millions of Canadian dollars, except as indicated) 2013 2012 2011 2010 2009 (Millions of Canadian dollars, except as indicated) 2013 2012 (3) 2011 2010 2009 Structures & Logistics EARNINGS STATEMENT Capital expenditures (1) (2) 116 199 132 98 41 Revenues 4,359 4,012 3,991 3,486 3,109 Workforce housing lease fleet (units in thousands)(2) 3 3 3 3 2 Earnings attributable to Class I and Class II shares 418 370 327 281 283 Workforce housing lease fleet utilization (%)(2) 83 86 87 78 74 Adjusted earnings (4) Space rental lease fleet (units in thousands)(2) 13 13 19 16 13 - Structures & Logistics 96 114 89 74 61 Space rental lease fleet utilization (%)(2) 77 81 80 78 73 - Utilities 179 148 124 126 102 Utilities - Energy 80 72 86 76 105 Natural gas distribution operations - ATCO Australia 24 23 10 9 5 Capital expenditures(1) 268 323 288 197 190 - Corporate & Other and eliminations 11 13 21 11 5 Pipelines (thousands of kilometres) 40 39 38 38 38 (4) Adjusted earnings 390 370 330 296 278 Maximum daily demand (terajoules) 2,064 2,128 2,069 2,169 2,184 BALANCE SHEET Natural gas distributed (petajoules) 249 248 247 237 250 Cash(5) 741 470 755 645 1,020 Average annual use per residential customer (gigajoules) 117 121 121 120 121 Total assets 16,010 14,055 12,453 10,084 9,955 Customers at year-end (thousands) 1,119 1,096 1,074 1,057 1,037 Capitalization Electricity distribution and transmission operations (1) - Bank indebtedness 2 - - - - Capital expenditures 1,763 1,732 916 507 498 - Long-term debt 6,230 5,352 4,389 3,090 3,158 Power lines (thousands of kilometres) 81 76 74 73 72 - Non-recourse long-term debt 165 186 378 422 497 Electricity distributed (millions of kilowatt hours) 11,283 10,974 10,596 10,532 10,431 - Preferred shares - - - - 150 Average annual use per residential customer (kWh) 7,743 7,604 7,747 7,555 7,671 Customers at year-end (thousands) 248 244 240 237 233 - Non-controlling interests 3,153 2,551 2,500 2,202 2,230 Natural gas transmission operations - Share owners’ equity 2,860 2,370 2,163 1,978 2,010 Capital expenditures(1) 147 87 112 84 88 Capitalization 12,410 10,459 9,430 7,692 8,045 Pipelines (thousands of kilometres) 9 9 9 8 8 CASH FLOW STATEMENT Energy Funds generated by operations (6) 1,869 1,636 1,514 1,234 935 Capital expenditures(1) 68 42 33 26 81 Capital expenditures (7) Generating capacity (megawatts) 4,591 4,590 4,590 4,658 4,672 - Structures & Logistics 116 199 132 98 41 Generating capacity owned (megawatts) 2,541 2,550 2,550 2,618 2,625 - Utilities 2,178 2,142 1,316 788 776 Availability (%) 94 90 91 93 95 - Energy 68 42 33 26 81 Natural gas processed (mmcf/day) 376 398 393 401 401 - ATCO Australia 89 74 23 27 70 - Natural gas liquids extraction (mmcf/day) 340 350 342 337 329 - Corporate & Other & eliminations 67 30 24 13 19 - Natural gas gathering and processing (mmcf/day) 36 48 51 64 72 Capital expenditures 2,518 2,487 1,528 952 987 Natural gas gathering lines (kilometres) 1,122 1,097 1,171 1,075 1,000 PER SHARE DATA ATCO Australia Earnings per share ($) (8) 3.64 3.21 2.83 2.42 2.45 Natural gas distribution operations(3) Dividends paid per share ($) (8) 0.75 0.66 0.57 0.53 0.50 Capital expenditures(1) 88 72 18 - - Equity per share ($) (8) 24.84 20.61 18.74 17.08 17.26 Pipelines (thousands of kilometres) 14 13 13 - - Class I Non-Voting closing share price ($) (8) 46.66 40.36 30.12 29.58 23.09 Maximum daily demand (terajoules) 118 125 106 - - Class II Voting closing share price ($) (8) 46.35 40.25 29.66 29.60 22.92 Natural gas distributed (petajoules) 26 27 12 - - Average annual use per residential customer (gigajoules) 15 15 15 - - Full disclosure of all financial information is available on the SEDAR website - www.sedar.com. Customers at year-end (thousands) 683 667 653 - - (1) Financial results for the years ended December 31, 2010, 2011, 2012 and 2013 2011, 2012 and 2013 are provided in the Segmented Information note of the Power generation and other operations have been prepared in accordance with International Financial Reporting 2011, 2012 and 2013 Financial Statements and for 2009 are provided in the Standards (IFRS). Significant Non-Operating Financial Items section of the 2009 Management’s Capital expenditures(1) 1 2 5 27 70 (2) Financial results for the year ended December 31, 2009 have been prepared in Discussion & Analysis. These documents are available on SEDAR. Generating capacity (megawatts) accordance with Canadian Generally Accepted Accounting Principles (GAAP) in (5) Cash is defined as cash and cash equivalents less current bank indebtedness. 299 299 299 299 213 effect prior to the adoption of IFRS. (6) Funds generated by operations is defined as cash generated from operations Generating capacity owned (megawatts) 193 193 193 193 107 (3) Financial results for the year ended December 31, 2012 have been restated before changes in non-cash working capital. This measure is not defined by to reflect changes due to the adoption of IFRS 11 Joint Arrangements and IFRS and GAAP and may not be comparable to similar measures used by other Availability (%) 95 98 98 90 97 amended IAS 19 Employee Benefits. companies. (1) Includes purchases of property, plant and equipment and intangibles, including (2) Capital expenditures, lease fleet and utilization for the year ended (4) Adjusted earnings are earnings attributable to Class I and Class II Shares (7) Includes purchases of property, plant and equipment and intangibles, including capitalized interest. Amounts for the years ended December 31, 2010, 2011, December 31, 2012 have been restated to reflect changes due to the after adjusting for the timing of revenues and expenses associated with rate- capitalized interest. 2012 and 2013 have been prepared in accordance with International Financial adoption of IFRS 11 Joint Arrangements. regulated activities. Adjusted earnings also exclude one-time gains and losses, (8) Per share data for the years ended December 31, 2009, 2010, 2011 and 2012 have Reporting Standards (IFRS). Amounts for the year ended December 31, 2009 (3) 2011 amounts are for the 5 months of operation since the acquisition significant impairments and items that are not in the normal course of business been restated to reflect the two-for-one share split completed on June 14, 2013. have been prepared in accordance with Canadian Generally Accepted of ATCO Gas Australia on July 29, 2011. or a result of day-to-day operations. Descriptions of the adjustments for 2010, Accounting Principles in effect prior to the adoption of IFRS.

77 2013 ANNUAL REPORT CONSOLIDATED OPERATING SUMMARY 78 DIRECTORS OFFICERS

OFFICE OF THE CHAIR

Ronald D. Southern Siegfried W. Kiefer Henry G. (Harry) Wilmot Founder, ATCO Group Chief Operating Officer, Chief Operating Officer, Power & Utilities Energy & Industrials Nancy C. Southern Chair, President & Brian R. Bale Susan R. Werth Chief Executive Officer Senior Vice President & Senior Vice President & Chief Financial Officer Chief Administration Officer

Robert T. Booth, Q.C. Bertrand P. Collomb David A. Dodge Linda A. Heathcott Partner, Bennett Jones, LLP Honorary Chairman, O.C., LL.D., F.R.S.C. President & Chief Executive Lafarge S.A. Senior Advisor, Officer, Spruce Meadows Ltd. Bennett Jones LLP CORPORATE OFFICE

Erhard M. Kiefer Kevin P. Hunt Richard D. Stone Senior Vice President, Vice President, Internal Audit Vice President, Legal & Corporate Human Resources & Corporate Services & Risk Management Secretarial

Pamela G. Moellmann Brian G. Milne Tracey L. Wallace Group Vice President, Vice President, Vice President, Human Resources Special Projects Risk Management Clinton G. (Clint) Warkentin Carson J. Ackroyd Robert C. (Rob) Neumann Vice President & Treasurer Vice President, Marketing Vice President, Controller & Communications Carol Gear Alan M. Skiffington Corporate Secretary Chad L. Gareau Vice President & Vice President, Finance & Treasury Chief Information Officer Helmut M. Neldner Michael R.P. Rayfield Robert J. Routs Nancy C. Southern Corporate Director Corporate Director Chairman of the Supervisory Chair, President & Chief Boards of AEGON N.V. and Executive Officer, ATCO Ltd. Royal DSM N.V. PRESIDENTS AND SENIOR EXECUTIVES OF PRINCIPAL OPERATING SUBSIDIARIES

J.D. Patrick Creaghan Roberta L. (Bobbi) Lambright Boris I. Rassin President, ATCO Energy Solutions President, Distribution Division, President, ATCO Electric ATCO Sustainable Communities John W. Ell President, ATCO Power Steven J. Landry Joseph J. (Joe) Schnitzer Managing Director & Chief President, ASHCOR Technologies Scott J. Garvey Operating Officer, ATCO Australia President, ATCO I-Tek William C. (Bill) Stephens Settimio F. (Sett) Policicchio President, ATCO Gas Brian R. Hahn President, Transmission Division, President, ATCO Pipelines ATCO Electric Henry G. (Harry) Wilmot President, ATCO Structures & Logistics

Ronald D. Southern Charles W. WIlson C.C., C.B.E., LL.D. Lead Director, ATCO Ltd. Founder, ATCO Group

79 2013 ANNUAL REPORT OFFICERS 80 ATCO’S BEAUTIFUL ALBERTA HERITAGE GENERAL INFORMATION

ATCO Group has featured scenes of Alberta in annual reports since 1990, in recognition of its beautiful Alberta Heritage. Incorporation Registrar & Transfer Agent ATCO Ltd. was incorporated under the laws of the Class I Non-Voting and Class II Voting Shares Province of Alberta on August 31, 1962. CST Trust Company Calgary/Montreal/Toronto/Vancouver

Telephone: Annual Meeting 8:30 a.m. to 6:30 p.m. ET The Annual Meeting of Share Owners Monday - Friday will be held at 10:00 am on Wednesday, May 14, 2014, 2013 2012 2011 2010 Toll free in North America: 1-800-387-0825 at The , 133 - 9th Avenue SW, Outside of North America: (416) 682-3860 Calgary, AB. Fax in North America: 1-888-249-6189 Fax outside of North America: 1-514-985-8846 www.canstockta.com Auditors Mailing Address: PricewaterhouseCoopers LLP 2009 2008 2007 2006 CST Trust Company Calgary, AB P.O. Box 700 Station B

LEGAL Counsel Montreal, QC Canada H3B 3K3 Bennett Jones LLP Calgary, AB 2005 2004 2003 2002

Stock Exchange Listings Class I Non-Voting Shares - Symbol ACO.X Class II Voting Shares - Symbol ACO.Y Listing: The Toronto Stock Exchange 2001 2000 1999 1998

Investor Relations ​Email: [email protected] Telephone: (403) 292-7500 Fax: (403) 292-7532 1997 1996 1995 1994 Mailing Address: c/o ATCO Group Investor Relations 1500, 909 - 11th Avenue SW Calgary, AB Canada T2R 1N6

1993 1992 1991 1990

81 2013 ANNUAL REPORT GENERAL INFORMATION 82 700, 909-11th Avenue SW, Calgary, Alberta T2R 1N6 Telephone (403) 292-7500 Fax (403) 292-7623

www.atco.com

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