EPCOR Corporate Responsibility Report

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PRESIDENT'S MESSAGE

A SUSTAINABLE PATH Mission & Vision A SUSTAINABLE PATH FORWARD

The evidence of EPCOR’s commitment to sustainability and corporate social responsibility is widespread: from helping with the biological renewal of Howe Sound in British Columbia to protecting the North Saskatchewan River Watershed.

EPCOR Utilities Inc. (EPCOR) is a leader in water-reuse for industry, helping to protect fragile ecosystems. We are committed to protecting public health through the production and delivery of high quality drinking water and the responsible management of wastewater.

We know that a sustainable water and wastewater utility is not only financially sound and operationally excellent; it also assumes responsibility for the environment in which it operates and is accountable to its customers and the greater community.

On the electricity side, our crews keep the distribution and transmission system in Edmonton running, keeping the lights on for homes and businesses, safely and reliably. We have a “smart grid” road map in place, a technological transformation that will deliver a two-way flow of information between the company and the customer and across the electrical power grid. It will also position us for the future and new environmentally friendly technologies such as plug-in electric vehicles.

Our company and our employees support the communities where we live and operate. Our community support ranges from the individual initiatives of employees who donate their time after work hours to worthy organizations with EPCOR’s support, to Sports and Youth Excellence Awards in communities where we operate. Our community engagement culminated with our support of the Vancouver 2010 Olympic and Paralympic Winter Games, and for top amateur athletes through Gold Medal Plates fund-raising dinners.

Providing more

This is all in line with the theme you can see next to the EPCOR logo at the top of this page and throughout this report: “Providing more.”

“Providing more” is a good two-word summary of EPCOR’s enduring culture. Our employees live it every day — that’s what we’re all about. It means not just meeting regulatory standards for water and wastewater but exceeding them whenever we can. It means not just taking our water from the closest source but doing everything we can to protect and enhance the entire watershed.

We provide more in customer service. We listen to our customers and understand that they want different options for their transactions with us.

The theme also reflects our commitment to safety, to ensuring that we make no compromise affecting the safety of our employees or the public. “Providing more” is reflected in all sections of this report from our innovative governance model to the dedication of distribution and transmission and water services employees who responded in 2009 to extraordinary weather events that knocked down power lines and disrupted water mains. The theme represents a culture that goes beyond just getting the job done to a culture that’s all about excellence.

Key business decision

Those same values were reflected in a key business decision taken in 2009, a decision that’s critical to our long-term sustainable financial performance, the foundation for corporate responsibility.

In July 2009, we fundamentally restructured our business. This involved selling our power generation assets to create Capital Power Corporation.

Details of this important transaction are provided elsewhere in this report but I would point out that it will enable us to fund our future growth, maintain the value we have created and provide a more stable, predictable investment for our Shareholder — the City of Edmonton.

We have now turned our full attention to our water and wires businesses, and intend to grow at a more measured pace than in the past. We will proceed on this responsible and sustainable course based on four strategic growth platforms that greatly benefit the environment and society as a whole:

Investments in regulated water and wires (electricity distribution and transmission) primarily in Alberta’s Capital Region.

An expanded presence in the water treatment sector in the Alberta oil sands and resource sectors.

Selective development or acquisition of water /wastewater and electricity transmission infrastructure in Western Canada and the United States.

Selective development of commercial investments in municipal regulated water /wastewater systems outside Edmonton, primarily in Alberta and British Columbia with consideration of Ontario investments, subject to market conditions.

Each of the four platforms is underscored by EPCOR’s commitment to the environment and the well-being of our employees and communities.

We believe that setting forth publicly what we intend to accomplish and how we intend to minimize our impact on the environment makes good business sense. Holding ourselves accountable and reporting on our progress is one way EPCOR demonstrates that we mean what we say for about caring for our customers, our Shareholder, the communities we serve, our people and the environment.

Ultimately, we hold ourselves to high standards of conduct and performance and with this report, we are pleased to demonstrate accountability for our actions. Don Lowry, President and CEO

PRESIDENT'S MESSAGE

A SUSTAINABLE PATH Mission & Vision MISSION & VISION

Our Mission

We make life better in our communities by providing clean water and safe, reliable electricity.

Our Vision

Our vision is to be a premier North American essential services company, providing great tasting drinking water, clean wastewater and safe, reliable electricity; a company whose employees go home to their families safe each night.

To achieve our vision, we will focus on:

People and safety: Be a place where people choose to work, known for our zero-injury culture and focus on continuous improvement. Operational excellence: Be recognized as an expert in our business by adopting best available technology and solutions that enhance water and power quality, system reliability, and our efficiency and cost-effectiveness. Environment: Make the environment a priority in everything we do. Growth: Deliver increasing value to our shareholder.

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS THE BIOLOGIST IN HIP WADERS North Saskatchewan Responsibility for Watersheds Watershed Bow River Watershed Stephanie Neufeld has a passion for rivers. Port Hardy “We know intuitively that Watershed protecting our watershed She was raised on a farm near the stony, twisting McLeod River west of Edmonton and spent long summer days floating is the first step in RESPONSIBILITY FOR on it and exploring its banks, collecting and studying dragonfly larvae and other creatures. This passion led to an WATER protecting public health undergraduate degree in Environmental Biology at the University of Alberta. In summer, she trekked through pristine through quality tap RESPONSIBILITY FOR northern wetlands, sampling vegetation, monitoring duck populations, collecting aquatic insects, and analyzing sediment water; but on the WASTEWATER and water quality, all while trying to understand the complexity of these systems. ground, watershed protection is RESPONSIBILITY FOR POWER The natural systems functioned beautifully on complicated.” DISTRIBUTION & their own but increasingly, human disturbances TRANSMISSION - Stephanie Neufeld, affected the processes. Close to home, forests Watershed Specialist and wetlands were being converted to agricultural land, industrial footprints were increasing and suburban expansion was growing. Stephanie wanted to know how all these actions impacted the rivers and ecosystems she loves. She undertook a Masters of Science degree and became an aquatic biologist.

When Stephanie joined EPCOR as a Watershed Specialist, it was a natural fit. EPCOR needed to ensure that the source of the drinking water it supplies to some one million people in the Edmonton area and to communities across Alberta and British Columbia is as clean as possible upstream and downstream. EPCOR recognized that a watershed approach is vital to achieving this. “I love this job and all the complexities of managing a shared resource affected by a multitude of stakeholders,” she says. “We know intuitively that protecting our watershed is the first step in protecting public health through quality tap water; but on the ground, watershed protection is complicated.”

The North Saskatchewan River, largely fed by glaciers and melting snowpack, flows out of the Rocky Mountains through the foothills and boreal forest. As it winds its way towards Edmonton, many major tributaries enter and may bring contaminants along with them. Nutrients, pathogens, sediment and pesticide levels increase as a result of watershed activities such as timber harvesting, agriculture, ranching, resource extraction, industrial activity and municipal discharges.

“These are big challenges and fortunately, I’m far from alone in addressing them,” says Stephanie. “Watershed management is a shared responsibility and EPCOR works with all stakeholders in the watershed to achieve healthy aquatic ecosystems and high quality water.

“Education of the public is a big part of this and as I know from my own experience, a good place to start is with young people. That’s why EPCOR is a sponsor of RiverWatch, for example. We take students down the river by raft and stop along the shores. They conduct their own water quality tests and evaluate aquatic insect communities so they can see the difference as they move through a large urban centre.”

“I see myself in those same gumboots, not that many years ago.”

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS North Saskatchewan EPCOR'S OPERATIONS IN THE NORTH Watershed Bow River SASKATCHEWAN RIVER BASIN Watershed Port Hardy EPCOR withdraws water from the North Saskatchewan River at Edmonton Watershed from its two water treatment plants — Rossdale and E.L. Smith. They supply drinking water to 61 communities and counties in the greater Edmonton RESPONSIBILITY FOR WATER region. This represents an annual average of about 3% of the river’s total flow. However, the majority of the water withdrawn is returned to the river via RESPONSIBILITY FOR EPCOR’s Gold Bar Wastewater Treatment Plant, plus the Capital Region WASTEWATER Wastewater Treatment Plant, which is operated through a regional commission with representation from 13 member communities. RESPONSIBILITY FOR POWER DISTRIBUTION & TRANSMISSION North Saskatchewan watershed issues

What effect will climate change have on the flows in North Saskatchewan River? How will population growth and increased forestry, farming, ranching EPCOR not only conducts watershed protection research but also helps and industrial use affect the river? How is water quality impacted by young people learn about river systems by conducting their own science contaminants such as pharmaceuticals, endocrine disrupting compounds, studies. pesticides, sediment, nutrients, and metals? And how do we work collaboratively to manage a watershed so that it continues to produce clean and abundant water to meet our needs now and in the future?

These are big, complex and often interrelated questions. There are no quick or easy answers. But EPCOR is taking these issues very seriously.

In 2008, EPCOR developed a Source Water Protection plan as part of its commitment to protect the communities it serves via the North Saskatchewan River. The plan is designed to help EPCOR, communities, stakeholders, and the public mitigate potential risks to source water supplies by understanding the pressures on the resource at the watershed scale.

This work is also linked to the development of a multi-stakeholder Integrated Watershed Management Plan for the North Saskatchewan River Basin by the North Saskatchewan Watershed Alliance. A key part of the plan was the development of proposed water quality objectives for specific reaches of the river. The underlying principle is that no further degradation of water quality should occur and improvements should be made where degradation has occurred. These objectives will be reviewed by stakeholders throughout 2010 at a series of planning forums. Highlights

EPCOR Water Services prepared two discussion papers on water quality and water quantity in the North Saskatchewan for the City of Edmonton’s “Way We Green” initiative. These papers support an on-going public consultation process around sustainability in Edmonton.

EPCOR partners with upstream stewardship groups such as Clearwater Landcare to support best management practices on the land.

Research is a focus for EPCOR. Key research projects have largely been facilitated through Percentage of North Saskatchewan River flow the North Saskatchewan Watershed Alliance. They include reports on water supply, withdrawn to supply drinking water to Edmonton and 60 assessment of climate change effects on water quantity, current and future water use, other regional communities. Most of this water is groundwater assessment, and water quality modelling. returned to the river as treated wastewater.

A project sponsored by EPCOR and undertaken by the Prairie Adaptation Research Collaborative on climate change has been completed. This research suggests there could be greater frequency of both drought and flooding on the North Saskatchewan.

Monitoring of water quality in the basin continues through EPCOR initiatives as well as through partnerships. These include upstream tributary monitoring as well as monitoring pharmaceuticals and personal care products in raw water. As well, EPCOR continues to partner with the City of Edmonton’s Drainage Branch to complete outfall, combined sewer outfall, tributary, wastewater treatment plant sampling and intake sampling at EPCOR’s water treatment plants.

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS North Saskatchewan EPCOR'S OPERATIONS IN THE BOW RIVER Watershed Bow River BASIN Watershed Port Hardy EPCOR has five operations in the Bow River Basin: Banff—wastewater treatment, Canmore, Watershed Okotoks, Strathmore—drinking water production and wastewater treatment, Chestermere— water distribution and wastewater collection. All these communities, along with EPCOR, are RESPONSIBILITY FOR WATER members and supporters of the Bow River Basin Council.

RESPONSIBILITY FOR WASTEWATER Bow River watershed issues

RESPONSIBILITY FOR POWER A report on the state of the Bow River Basin doesn’t mince words: “In dry years, any new DISTRIBUTION & allocations will have a significant risk of not receiving water.” That 2005 report by the Bow River TRANSMISSION Basin Council noted the rapidly increasing population in the basin. It determined that by the time the Bow reaches its confluence with the Oldman River, 68% of its average annual flow has been accounted for by water licenses issued to municipalities, irrigation districts and other users. Actual consumption is currently lower. Of the allocated water, 76% is licensed for irrigation.

All of these factors make watershed planning vital — and EPCOR has taken an active role as well as contributing funding and support services.

Highlights

In September 2009, EPCOR sponsored a Council forum on watershed planning. The Council completed Phase One of the basin’s Watershed Management Plan. It outlines specific water quality objectives for specific reaches of the river. The next step will be the development of an updated state-of-the- watershed report and Phase Two of the management plan, looking at land use. EPCOR is working with partners in the basin to develop and coordinate water quality sampling programs and reporting. EPCOR worked with the community of Okotoks in 2009 to develop a source water protection plan to be finalized in 2010. EPCOR worked with the town of Canmore and other partners to install watershed protection interpretative signs along the Bow River in Canmore in 2010. Send to Friend

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS North Saskatchewan EPCOR'S OPERATIONS IN PORT HARDY Watershed Bow River Watershed EPCOR has a 20-year guaranteed performance contract to operate Port Hardy’s water and Port Hardy wastewater system on Vancouver Island. Watershed

RESPONSIBILITY FOR WATER Highlights

RESPONSIBILITY FOR The source of water for the Port Hardy, B.C. water treatment plant, operated by EPCOR, is WASTEWATER the Tsulquate River, which runs through a coastal Western Hemlock biogeoclimatic zone with large areas of organic terrain. This gives the raw water a distinctive tea-like colour. RESPONSIBILITY FOR POWER DISTRIBUTION & Although the watershed, situated in the north part of Vancouver Island, is so far mostly TRANSMISSION undeveloped, there are potential human sources of contaminants including transportation, recreation and forestry activities.

EPCOR participates in the Tsulquate River Watershed Working Group and is currently drafting a Strategic Watershed Management Plan for the Tsulquate watershed, with input from watershed stakeholders.

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ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS CO-EXISTING WITH THE FISH Responsibility for Water RESPONSIBILITY FOR WATER Pilot Plants Test New Ideas On the surface, EPCOR’s effort to protect the fish in the North Saskatchewan River just looks like your garden-variety steel How EPCOR Meets pipe. But thanks to months of planning and testing, it’s part of the most successful fish return system of its kind. To the Vision for water Performance Standards small mountain whitefish that inhabit the river, it was well worth the effort. Compliance With We are committed to Guidelines protecting public health Environmental In the past, engineers simply used a series of Protection in the crude screens to keep fish from getting caught through the production Oilsands in water intake pipes. The results were mixed. and delivery of high Cleaning Up Howe quality drinking water. A Sound So when EPCOR expanded its E.L Smith sustainable water utility Water Treatment plant, there was a perfect is not only financially RESPONSIBILITY FOR opportunity to try something new. In WASTEWATER sound and operationally partnership with Fisheries and Oceans Canada excellent, it also RESPONSIBILITY FOR and a local engineering firm, EPCOR created a assumes responsibility POWER series of models that mimicked the plant’s for the environment in DISTRIBUTION & processing. TRANSMISSION which it operates and is accountable to its “Unfortunately, you can’t ask a fish how the customers and the larger community. process should work,” jokes Karen Crews, Project Management Coordinator at the plant. Instead, Karen’s team played with velocity rates, used colourful dyes, and tweaked the design of screens numerous times to keep the water – and the fish – moving.

The result is a system of gentle pumps and perfectly angled pipes that allow fish as small as 25 mm to safely bypass the plant and be deposited further downstream. It’s even sensitive enough to handle fish eggs.

“Everyone who touched this project really cared about it,” says Karen. “We did more modeling than was required, but we’re very Fish this small (less than 1 inch) can safely bypass the proud of the end result. It was a real testament to having a E.L. Smith Water Treatment Plant thanks to an shared sense of responsibility.” innovative system.

More than this, it’s also a testament of how a city of almost a million people can co-exist with a variety of fish species, from the northern pike to pickerel to the tiny mountain whitefish. In her 22-year career with EPCOR, Karen learned the most working on this 18-month project. But for an occasional angler, she’s knows it’s an investment in something more important.

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS PILOT PLANT TESTS NEW IDEAS RESPONSIBILITY FOR WATER Pilot Plants Test Imagine a miniature version of your home sitting directly beside your real New Ideas one. This scale model works exactly the same way as your house; it has How EPCOR Meets Performance running water, electricity, and a family living in it. But whenever someone in Standards your house thinks up a new way of doing things, you can test it first. Like Compliance With whether or not that new puppy is a good idea. Guidelines Environmental That’s the beauty of EPCOR’s pilot plant. It sits next to Edmonton’s E.L. Protection in the Oilsands Smith water treatment plant and mimics the larger plant in every respect. In Cleaning Up Howe essence, it allows engineers like Wendell James to test new ideas for water Sound treatment, without compromising public safety. It’s one of the few water treatment facilities in Canada with permanent on-site piloting – a huge RESPONSIBILITY FOR advantage for city residents. WASTEWATER “You can’t play around with the quality of someone’s water,” says Wendell, RESPONSIBILITY FOR Manager of the Process Development Team, part of EPCOR’s Quality POWER DISTRIBUTION & Assurance Department. “We’re extremely fortunate to have a place where TRANSMISSION we can test new ideas and technologies to keep ahead of ever-changing water quality requirements. It really lets us reach a new level of quality.” “Pilot facilities really allow us to respond to issues quickly and be Over the years, the pilot facilities have been used for testing dozens of proactive,” says Wendell James, Manager of the Process Development proposed treatment changes. Some of them have been adopted; others have Team. been found to be technically or economically unfeasible.

One current project for Wendell’s team is a new application of direct filtration that greatly reduces the requirement for alum – a key substance added to clarify water – in the winter months.

Pilot tests have shown that in the winter, when incoming river water is cleaner, only a small amount of alum may be necessary. This discovery would reduce the amount of alum solids discharged back into the river, and keep EPCOR ahead of the regulatory curve. A decision to proceed with a full-scale demonstration of direct filtration at the water plants wouldn’t have been made without the positive results from the pilot study.

“Pilot facilities really allow us to respond to issues quickly and to be proactive,” says Wendell.

He envisions a time when pilot studies will be needed to find cost-effective ways to treat municipal wastewater for a variety of local industrial re-use applications.. “We’re also able to solve minor operational challenges quickly,” he adds with a smile. “Our managers love that.”

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS HOW EPCOR MEETS PERFORMANCE RESPONSIBILITY FOR WATER STANDARDS Pilot Plants Test New Ideas How EPCOR Meets EPCOR is required to meet performance standards for system reliability, Performance Standards customer service, environment, safety and water quality. This is part of Compliance With EPCOR’s Performance Based Regulation contract with the City of Edmonton. Guidelines EPCOR has met its total audited performance targets for all eight consecutive Environmental years (2001–2009) since the contract was started. Protection in the Oilsands Cleaning Up Howe Sound Due to diligent monitoring and preventive maintenance programs, EPCOR’s system water losses were below the North American utility industry average RESPONSIBILITY FOR of 10%. WASTEWATER Activities to promote and practice the wise use of water include public RESPONSIBILITY FOR education and water utility “best practices” activities such as leak detection, POWER DISTRIBUTION & water loss control and unidirectional flushing of water mains. TRANSMISSION Drinking water guidelines are determined by Health Canada. Alberta Environment sets additional standards and issues water treatment operating licences for provincial communities. In addition, EPCOR sets its own internal quality standards, which are typically more stringent than those set by government.

We monitor the physical, chemical and microbiological characteristics of the drinking water we produce. In Edmonton, our water was regularly checked for 353 different substances to meet provincial standards and national guidelines.

Over 99,000 water quality tests were carried out internally by EPCOR’s accredited laboratory, and an additional 5,500 tests were sent to external laboratories for analysis. Plant operators perform additional water quality tests for plant process control. Water quality data are also supplied by 150 electronic online analyzers that run 24 hours a day.

Meeting standards across Alberta EPCOR’s accredited laboratory carried out more than 99,000 water quality tests. Okotoks, Alberta: EPCOR responded to changes in the Sheep River with important upgrades to the water treatment plant serving one of Canada’s fastest-growing communities. The raw water supply has changed significantly with periods of high turbidity (suspended particles in raw water) associated with a spring runoff that has grown longer and more severe. The upgrades are complete.

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS COMPLIANCE WITH GUIDELINES RESPONSIBILITY FOR WATER Pilot Plants Test EPCOR’s Water Quality Index for 2009 was 99.7%, almost unchanged from 99.8% in 2008. The New Ideas index refers to how well we comply with our own water quality standards, which are generally How EPCOR Meets Performance more stringent than regulatory standards. Standards Compliance With Guidelines Environmental In 2009, water quality guidelines for the Edmonton distribution system were breached 41 Protection in the times (24 for high turbidity levels, 3 for low chlorine levels and 14 for positive total coliform Oilsands bacteria). All issues were in a localized area and remedied within 48 hours. Cleaning Up Howe Sound Turbidity of water in the distribution system is mainly an aesthetic measure rather than RESPONSIBILITY FOR health-related. The positive bacterial results were mainly due to contamination at household WASTEWATER taps from which the water samples were collected. All follow-up samples were negative for coliform bacteria. None of the bacterial samples collected in the distribution system during RESPONSIBILITY FOR 2009 contained E. coli. POWER DISTRIBUTION & TRANSMISSION Send to Friend

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS ENVIRONMENTAL PROTECTION IN THE RESPONSIBILITY FOR OIL SANDS WATER Pilot Plants Test New Ideas EPCOR understands that managing water use for industry can be a significant How EPCOR Meets Performance environmental and economic challenge. EPCOR’s water and wastewater Standards experts focus on analyzing total water management processes, and consider Compliance With Guidelines ways to mitigate risks and maximize ongoing operational efficiency, including Environmental water reuse opportunities. Protection in the Oilsands EPCOR is capable of providing potable water and domestic wastewater Cleaning Up Howe services to more than 6,000 Suncor Energy oil sands workers. In 2009, EPCOR Sound acquired the water and wastewater facilities under a sale lease-back agreement. A dedicated Fort McMurray team monitors and safeguards RESPONSIBILITY FOR operations at Suncor’s Steepbank, Firebag, Borealis and Voyageur sites, along WASTEWATER with some operations at the base camp.

RESPONSIBILITY FOR Along with other innovations, the agreement includes a multiple-barrier POWER DISTRIBUTION & approach to water management, designed to enhance overall environmental protection and improve operational standards. Over the long-term, the vision is TRANSMISSION to build a total water management solution for Suncor that focuses on maximizing water reuse and recycling through the integration of new technologies and waste minimization.

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS CLEANING UP HOWE SOUND RESPONSIBILITY FOR WATER Pilot Plants Test In a partnership between EPCOR and the Government of British Columbia, New Ideas EPCOR designed, built and now operates a water treatment facility at the How EPCOR Meets Performance abandoned Britannia Mine near the community of Britannia Beach on Howe Standards Sound north of Vancouver. Compliance With Guidelines The mine began full production back in the early 1900s. Over the year, the Environmental mine developed a reputation as one of the largest heavy metal pollution Protection in the Oilsands sources in North America. Metal ores from the mine combined with water to Cleaning Up Howe create acid rock drainage, which seeped into Howe Sound. The mine, which Sound closed in 1974, had burdened the people of Britannia Beach with a legacy of pollution. RESPONSIBILITY FOR WASTEWATER EPCOR’s process turns the heavy metals into a stable, non-toxic lime-metal sludge that can be safely managed. The treated water flows into Howe RESPONSIBILITY FOR Sound. POWER DISTRIBUTION & TRANSMISSION Each year the Britannia Mine Water Treatment Facility removes more than Despite the large-scale nature of the problem from decades of mining in 300,000 kilograms of heavy metals that would otherwise pollute Howe the region, the facility has created what are believed to be some of the Sound on the B.C. coast. best environmental conditions in Howe Sound’s intertidal region in over 100 years.

The Prospectors & Developers Association of Canada recognized the Britannia Mine remediation project with its highest honour, the Special Achievement Award, "for exceptional accomplishments in the mineral industry." The citation makes special mention of EPCOR's role in the treatment of the contaminated mine water and protection of Howe Sound's marine environment, and of the Museum of Mining in Britannia Beach. EPCOR opened the plant in 2006 and operates it in partnership with the B.C. government.

Each year the Britannia Mine Water Treatment Facility removes more than 300,000 kilograms of heavy metals that would otherwise pollute Howe Sound.

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ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS A MODEL FOR WATER REUSE Responsibility for Wastewater RESPONSIBILITY FOR WATER “Turns out that oil and water can mix,” jokes Vince Corkery of EPCOR’s Gold Bar Wastewater Treatment Plant in RESPONSIBILITY FOR WASTEWATER Edmonton. Vision for From Waste to Reusable Energy wastewater The Wastewater No, EPCOR isn’t defying the laws of physics. Instead, it is management Challenge collaborating with Suncor Energy to address an important Wastewater Briefs challenge: meeting industry demands for large volumes of We are committed to clean water while still protecting the watershed. The silver bullet RESPONSIBILITY FOR protecting the public POWER came in the form of an advanced membrane filter with millions health through DISTRIBUTION & of pore openings one thousandth the diameter of a human hair responsible TRANSMISSION that “polishes” treated municipal wastewater from EPCOR’s management of Gold Bar plant, making it clean enough to be used for industrial wastewater. A processes. sustainable wastewater utility is not only financially sound and Each day up to 15 million litres of this clean water now travels operationally excellent, it along a 5.5 km pipeline direct to the Suncor Refinery where it is also assumes used in the production of steam and hydrogen, and in the responsibility for the facility’s cooling towers. environment in which it operates and is accountable to its Most drinking water around the world doesn’t come out as customers and the larger clean as what we’re producing,” says Vince, Director of the community. Gold Bar plant. “It is a stellar example of how we can put wastewater to work by reusing it. This reduces the demand on the river.”

The water Suncor purchases from EPCOR is free of sediment and particulates that could hamper operations. Fluctuating river quality and the status of water licenses are no longer an issue. In short, it’s a win-win for both industry and the environment. The award-winning project made national headlines when it was conceived in 2002. Through the combined efforts of both companies. the country’s largest membrane-based water reuse project is now a notable success. It required thoughtful design, a masterful application of the concept, and out-of-the box thinking.

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS FROM WASTE TO REUSABLE ENERGY RESPONSIBILITY FOR WATER Every day, the digesters treating sludge and surface scum at the Gold Bar RESPONSIBILITY FOR Wastewater Treatment Plant in Edmonton produce 65 million litres of biogas. WASTEWATER This biogas is 65 – 70% methane, a potent greenhouse gas. The rest is mostly From Waste to Reusable Energy carbon dioxide. The Wastewater Challenge Instead of simply flaring all this gas, Gold Bar converts most of it into usable Wastewater Briefs energy by fuelling on-site boilers that produce hot water to heat the plant site and provide some power for equipment. It was one of the first wastewater RESPONSIBILITY FOR plants in Canada to do so. POWER DISTRIBUTION & In 2009, Gold Bar was able to use 70% of the biogas as fuel. That resulted in TRANSMISSION about $1.3 million in fuel savings for the year. The eventual target is to use 100% of the biogas produced.

In compressed form, this biogas is also used for digester mixing. The heat produced allows the digester tanks to maintain an internal temperature of 37 degrees Celsius — an ideal climate for the bacteria to break down solids and eradicate disease-causing organisms.

Biosolids from the process are also reused. The Nutri-Gold Program (a City of Edmonton program) turns biosolids into a substance specifically designed to enrich and condition farmland. An excellent source of nitrogen and micronutrients, treated biosolids are delivered to qualifying farms near the Clover Bar Biosolids Recycling Facility and spread on fields, free of charge. Since the program’s inception, 328,439 dry tonnes of biosolids, covering 15,560 hectares of farmland, have been distributed to over 360 local farmers.

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS THE WASTEWATER CHALLENGE: AN RESPONSIBILITY FOR WATER INTERVIEW WITH VINCE CORKERY

RESPONSIBILITY FOR WASTEWATER Vince Corkery is the Director, Gold Bar Wastewater Treatment Plant From Waste to Reusable Energy The Wastewater How big is Gold Bar? Challenge Wastewater Briefs It’s one of Canada’s largest advanced wastewater treatment plants. It’s designated a Class IV wastewater facility. We have a design capacity of 310 RESPONSIBILITY FOR million litres a day, which would be equal to filling about 135 Olympic-size POWER swimming pools. We serve about 820,000 people in the Edmonton area. The DISTRIBUTION & TRANSMISSION plant site is 19.5 hectares.

How long does it take for water to move through the plant until it’s discharged into the river?

When we were a secondary treatment facility, the time was about 12 hours. Now we have full tertiary treatment that includes ultraviolet disinfection of the final effluent and and Biological Nutrient Removal processes. The liquid stream moved though grit tanks and screens, primary clarifiers, bioreactors, secondary clarifiers and ultraviolet (UV) disinfection channels. The solids that are removed move through the fermenters, sludge blend tanks, thickeners and digesters. Those additional processes have extended the treatment time to an average of 18 hours.

How would you describe the quality of this water that the plant discharges into the North Saskatchewan River?

It’s classified as high-quality effluent, which means that it minimizes effects on the water quality of the North Saskatchewan River and the river habitat. Solid, organic and chemical waste is separated from wastewater so the water can be safely re-introduced into the river through the extensive primary, secondary and tertiary processes. Our treated effluent regularly surpasses its approval limits.

What are your major challenges?

Our ultimate target is zero discharge: recycling all wastewater, and using anything considered waste — such as biosolids or biogas — and turning it all into marketable product. Another challenge is to reclaim even more water for non-potable uses.

What happens during heavy rain? Another challenge we’re addressing like many municipalities across North America is eliminating or mitigating the effects of combined sewer systems. During heavy rains, these combined systems, which include both runoff from the streets and wastewater from homes and businesses, often capture more water than they can handle, resulting in wastewater overflows to the river. Without such overflows, there would be no way of preventing untreated wastewater from backing up into household basements.

It’s important to know that Edmonton’s sewer system is now mostly separated into storm water and sanitary sewer systems. Some older neighbourhoods still have combined systems, amounting to about 15% of the overall service area. But this percentage is steadily being reduced as the systems in these neighbourhoods are rehabilitated.

With recent changes at Gold Bar, the amount of untreated overflow entering the river is greatly diminished. The overflows are directed to the Enhanced Primary Treatment Clarifiers, which allow the plant to take in and treat more peak seasonal flows.

More information

Edmonton’s water and wastewater treatment experts were reunited in 2009 when the City transferred the Gold Bar Wastewater Treatment Plant to EPCOR.

An inside look at state-of-the-art wastewater treatment

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS WASTEWATER BRIEFS RESPONSIBILITY FOR WATER Spill into Bow River RESPONSIBILITY FOR WASTEWATER From Waste to About 1,900 cubic metres of partially treated sewage spilled into the Bow River in Banff National Park in June 2009 after a mechanical failure at Banff’s Reusable Energy wastewater treatment plant. The wastewater was about 70% through the treatment process when it was discharged. The incident was investigated by The Wastewater Challenge Environment Canada. In addition, a formal Notice of Investigation was received from Alberta Environment following the incident and plant personnel were Wastewater Briefs interviewed. Currently the investigation is open. EPCOR took over as operator of the plant in March 2009 and was in the process of compiling its recommendations for plant upgrades to prevent such RESPONSIBILITY FOR POWER incidents. A Plant Deficiencies Report and an Incident Investigation Report were completed. Both reports made recommendations to prevent a reoccurrence DISTRIBUTION & of the incident and the recommended changes have been made. Work on additional recommendations not related to the spill is nearly complete. TRANSMISSION Protecting Port Hardy area shellfish

Aging septic systems at Storey Beach near Port Hardy, B.C., were polluting the ocean nearby and affecting shellfish. EPCOR worked with the community and with archaeologists and extended the sewer system to serve the area. The expanded collection system will allow existing homes and new developments to hook up to the sewer system. In addition, EPCOR installed a backup generator at the water treatment plant to ensure service in the event of a power outage.

Taber gets state-of-art technology

EPCOR upgraded the Taber, Alberta wastewater treatment plant to ensure that the town of 7,800 meets new Alberta Environment regulations. The upgrades include ultraviolet disinfection, biological nutrient removal and remote monitoring. The upgrades also meet Taber’s growth needs.

Strathmore meets growing needs

Construction started on upgrades to the community’s wastewater treatment plant to meet growing needs and address new Alberta Environment regulations. Scheduled for completion in October 2010, the additions include a new sludge-processing facility, grit removal and screening, clarifiers, a biological nutrient reactor tank and an ultraviolet disinfection facility. Send to Friend

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS POWER POLES: THEY'RE FOR THE BIRDS Responsibility for Power Distribution & Transmission RESPONSIBILITY FOR WATER Harvey Grabill is for the birds. RESPONSIBILITY FOR WASTEWATER Mission As Environment Manager for EPCOR Distribution and Transmission (D&T) Harvey has been working for six years to protect RESPONSIBILITY FOR Our mission is to deliver POWER migratory birds from high-voltage power lines — and at the same time protect customers from extended power outages. DISTRIBUTION & power to our customers TRANSMISSION in a safe, Working Towards “Migratory birds, especially raptors such as Zero Net Waste environmentally ospreys, love power lines and power poles,” he Smart Grid Looks responsible, reliable and to Future says. “The lines and poles are high enough so competitively priced they can spot their prey and dive down for it. manner and to provide The poles give them roosting and nesting best-in-class customer platforms.” service while building enduring customer relationships. This can be a tragic mistake for birds — and a

big challenge for utilities like EPCOR. The wingspans of larger birds like ospreys may bridge the gaps between wires or between wires, insulators and poles. The birds are electrocuted and customers may lose power. Birds can also drop nesting materials that bridge wires and cause more outages. Accumulation of bird droppings can contaminate insulators and cause flashovers.

Harvey and his team are taking action as part of EPCOR’s ongoing commitment to continuous improvement in environmental stewardship and in support of D&T’s ISO 14001 certification, an internationally recognized standard for environmental management. They have put up separate tall poles in key locations, just for the birds. These poles have no wires and are 10 feet higher than the adjacent power lines. "The birds are attracted to the extra height and the dedicated platform on which they can build their nest,” Harvey says. “The system works. It’s safe for birds and we’ve had many ospreys and other birds build their nests on the dedicated poles rather than the poles with the live wires. We educate contractors who trim any trees nearby so they don’t disturb the birds.”

EPCOR also puts wildlife protectors on its power poles to keep climbing animals from reaching the live wires.

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS WORKING TOWARDS ZERO NET WASTE RESPONSIBILITY FOR WATER EPCOR Distribution and Transmission (D&T) is working to create zero net waste by 2015 in 15 identified waste streams. D&T is certified under ISO 14001.

RESPONSIBILITY FOR WASTEWATER In 2009, D&T recycled 90% of the material in the 15 waste streams. For example, it recycles almost all of its wooden utility poles. It also recycles its RESPONSIBILITY FOR transformers and the mineral oil in them. POWER DISTRIBUTION & D&T recycles all of its "e-waste," including electronics and electrical equipment not containing PCBs. TRANSMISSION Working Towards Zero Net Waste A total of 432,860 kilograms of solid waste and 87,295 litres of liquid waste was recycled in 2009. More than 33 tonnes of clean soil was taken to a Smart Grid Looks landfill for reuse. to Future

D&T’s environmental statement ensures that all impacts on the environment and wildlife, such as migratory birds, are considered prior to any construction.

EPCOR minimizes the environmental impact of its transmission corridors by simply cutting the grass and leaving the remains as mulch. No chemicals are used. A herbicide is used to kill weeds within substations but these are secured with two-metre fences that keep out wildlife.

Environmental policy

EPCOR’s Environmental Policy recognizes that the environment is “common to all stakeholders and requires thoughtful stewardship and accountability by all users to sustain its quality and preserve it for future generations.”

It says we will conduct business “in a responsible and open manner that is environmentally, socially and economically sustainable. We will engage and dialogue with our stakeholders and report on our emissions. We audit our operations and monitor our environmental performance to ensure that our objectives, targets and commitments are being achieved.” Send to Friend

ENVIRONMENTAL RESPONSIBILITY

RESPONSIBILITY FOR WATERSHEDS SMART GRID LOOKS TO FUTURE RESPONSIBILITY FOR WATER EPCOR is working on a technological transformation that will deliver a constant two-way flow of information from the customer, to the customer, RESPONSIBILITY FOR and across the electrical power grid and its scores of individual components. WASTEWATER It’s known as the Smart Grid initiative — and the implications are huge. RESPONSIBILITY FOR POWER Big storms, like the one that blasted through Edmonton in July 2009, can DISTRIBUTION & TRANSMISSION quickly knock out dozens of circuits, affecting thousands of customers for Working Towards hours. Zero Net Waste Smart Grid Looks The Smart Grid, on the other hand, tends to be self-healing. It uses a to Future system called Distribution Automation (DA) to minimize outages and lead to quicker identification of faulted areas — and faster repairs. In the event of a failure in the grid, DA can identify and isolate the failure, restoring power to most customers within a minute. This permits crews to work at locations where there may be actual damages, such as downed wires or a blown transformer that suffered a lightning strike. Doreen Cole, Senior Vice President, Electricity Services, holds a traditional power meter (on left) and a smart meter (on right) that is capable of two- Three DA circuits were installed in 2009 and 10 more are planned for 2010- way communication between EPCOR and the residence. (Edmonton 2011. EPCOR has a total of 280 circuits but many of them may not be Journal photo — used with permission.) suitable for DA, such as underground circuits not subject to lightning strikes or falling trees.

Smart grid technology is also designed to position EPCOR for the future and for new environmentally friendly technologies such as plug-in electric vehicles.

In addition to making the grid itself more responsive, the Smart Grid initiative includes projects that can make customers more responsive to their own power usage.

The Advanced Metering Infrastructure (AMI) component will place smart meters in homes, replacing traditional power meters. Smart meters can provide customers with hourly data about their power usage, which can help them to make better choices about energy consumption.

Studies throughout Europe, the United States and Canada have shown that when customers have access to updated energy usage data, they use 5% to 20% less power. If Edmonton’s residential customers were to reduce consumption by just 5%, they would reduce carbon dioxide emissions by 57,000 tonnes per year. Send to Friend

SOCIAL RESPONSIBILITY

RESPONSIBILITY FOR COMMUNITIES A STORY OF VALUES How We Support Communities Responsibility for Communities Our Road to the Olympic Winter Games Call it community karma. Community Support in Action Helping Hands Hometown EPCOR employee Lana Burnstad believes that by dedicating time to helping others in the community, her community Grant Program becomes stronger. She gives well over 50 hours a year to different causes, and because of her commitment, EPCOR Community Consultation grants her $200 to donate to a community organization that’s important to her. It’s part of an innovative program called The Helping Hands Helping Hands. Grant recognizes RESPONSIBILITY FOR employees who donate CUSTOMERS their time, skills and “Helping Hands is one of the reasons I love knowledge through RESPONSIBILITY FOR working for EPCOR,” says Lana, a Senior ETHICS AND volunteering. Employee GOVERNANCE Manager in Human Resources. “Its values align volunteers can apply to with my own.” have EPCOR make a RESPONSIBILITY FOR $200 contribution to a FINANCIAL PERFORMANCE As a youth, Lana started volunteering as a charitable or community lifeguard at a local pool. She had her first taste service organization that they recommend. In RESPONSIBILITY FOR of looking out for others — and turned it into a OUR PEOPLE 2009, a total of 175 lifelong pursuit. She started volunteering for the grants were given to 152 RESPONSIBILITY FOR St. Albert BMX Club when her daughters, at organizations. SAFETY age nine and seven, began competing in the sport. She knows that sports give kids the chance to succeed, and by volunteering, she shows them that pitching in is a valuable part of life.

“It also gives you access to leadership opportunities that teach you things like responsibility and confidence,” says the mother of three.

Lana spends most of her volunteer time with a non-profit organization called the Mediation and Restorative Justice Centre. The organization can help settle minor disputes between citizens involving simple bylaws and neighbourly disagreements. Lana trained to become a mediator with assistance from EPCOR After Hours Personal Development Program. What began as a desire to be more effective at work in her labour relations role turned into a skill to apply in meaningful volunteer community work.

Lana suggests that the best ways to settle a dispute is through dialogue: “It’s amazing what happens when you put different people in a room and have a civilized conversation. Nine times out of ten it’s simply a matter of different expectations.”

SOCIAL RESPONSIBILITY

RESPONSIBILITY FOR COMMUNITIES How We Support HOW WE SUPPORT COMMUNITIES Communities Our Road to the Olympic Winter Community support begins with initiatives such as hot lunches and blood Games donations. Community Support in Action Hometown Program An EPCOR Water Services work crew came up with the idea of serving a Community hot lunch for some 190 inner city children at Edmonton’s McCauley school. Consultation EPCOR employees are leaders among Edmonton organizations in blood donations as part of the Corporate Challenge competitions. RESPONSIBILITY FOR CUSTOMERS Or with individual efforts and donations in communities.

RESPONSIBILITY FOR ETHICS AND Employee volunteers donate their time after hours to volunteer as GOVERNANCE firefighters, search and rescue workers, Scout leaders, helpers in nursing homes, coaches, mediators and many other roles, all with EPCOR’s RESPONSIBILITY FOR FINANCIAL support. EPCOR encourages employees to volunteer in their communities: PERFORMANCE employees who do so can recommend that an EPCOR Helping Hands Grants go to a charitable non-profit organization of their choice. Employees also support their communities through the United Way and donated a record $421,826 in 20092 in a joint campaign with Capital Power, RESPONSIBILITY FOR OUR PEOPLE including a corporate contribution of $125,000.

RESPONSIBILITY FOR Wider support SAFETY

It extends wider through company support of communities where EPCOR operates.

One example is EPCOR’s support of the Edmonton International Street Performers Comedy Cares program that brings the gift of laughter to residents of long-term care facilities across Alberta and British Columbia. In 2009, Comedy Cares, in its 10th year of sponsorship, visited Canmore, Fort McMurray, Okotoks and Strathmore in Alberta; and Sooke and White Rock in B.C. Another example is EPCOR’s Sports Excellence and Youth Excellence awards programs. For example, 14-year-old Emily Munro of Canmore, Alberta, received $2,500 to attend the 2009 National Circus School’s Summer Camp in Montreal. That school is famous for training the celebrated performers of the Cirque de Soleil. EPCOR’s help has allowed sports organizations to purchase specialized equipment, train with Olympic champions and more. The Sooke, B.C. Minor Fastball Association, for example, used its grant not only for equipment but also for professional development for its coaches, youth umpiring development and travel for out-of-town competition. EPCOR’s support extends to wider Hometown programs in Edmonton. At the national level is EPCOR’s support of the Vancouver 2010 Olympic and Paralympic Winter Games and for top amateur athletes in training through Gold Medal Plates fund-raising dinners.

1Data of a financial nature such as community support are consistent with EPCOR's financial reporting principles and include support that may be associated with previously owned power generation activities.

2Includes power generation employees.

Vision for community investment

“EPCOR is committed to community investment as a key element of corporate social responsibility. As a responsible corporate citizen, we engage stakeholders, promote sustainability in the broadest sense and meet the needs of the community. EPCOR’s community investment and community involvement strategy is based on EPCOR's long-term business objectives."

Choosing priorities

EPCOR is currently planning its future community support activities and levels. Our review includes feedback from employees, communities and other stakeholders, including organizations currently receiving contributions. An ongoing challenge is to measure the impact of our community support activities, choose priorities based on our values and business and determine appropriate levels of contribution. Send to Friend

SOCIAL RESPONSIBILITY

RESPONSIBILITY FOR COMMUNITIES How We Support EPCOR’S ROAD TO THE OLYMPIC GAMES Communities Our Road to the Olympic Winter What was an Edmonton-based utility doing as an Official Supplier to the Vancouver 2010 Games Olympic and Paralympic Winter Games? Community Support in Action It wasn’t officially supplying electricity or related services, or even water and wastewater Hometown services, although, under a separate contract, it did build and operate the water supply and Program wastewater facilities for the Whistler Olympic/Paralympic Park during the Games. Community Consultation In fact, EPCOR was supplying support to that world event and to Canadian elite athletes in training for it. The return for EPCOR was to demonstrate leadership and its commitment to being RESPONSIBILITY FOR a responsible corporate citizen. The sponsorship also helped to solidify EPCOR’s national CUSTOMERS positioning and provided opportunities to build relationships in communities across Canada. RESPONSIBILITY FOR Internally, EPCOR’s involvement with the Olympic Games was designed to reach into the hearts ETHICS AND of employees and inspire exceptional performance. GOVERNANCE This was an extension of the commitment EPCOR made to the country’s elite and aspiring RESPONSIBILITY FOR athletes, through its Sports Excellence Awards and support of Gold Medal Plates years before FINANCIAL the Games. For employees, it was an extension of an internal commitment to strive for PERFORMANCE continuous improvement, just like an athlete, and achieve higher levels of performance in all RESPONSIBILITY FOR that they do. OUR PEOPLE

RESPONSIBILITY FOR EPCOR’s Olympic sponsorship was not paid for by local ratepayers. Electricity rates are set SAFETY through a public regulatory filing process, which includes input from consumers. Water rates are set through a performance-based regulation system.

EPCOR believes its involvement with the Olympics will lead to business opportunities, such as the one that allowed it to build and temporarily operate the Whistler Olympic/Paralympic water and wastewater facilities.

Employee participation Olympic champions, such as Gold Medal winner Kevin Martin, attended EPCOR events and helped inspire employees to reach for excellence. A “Wellness Challenge” related to the goals of Olympic athletes in training got EPCOR employees off and running. A “We Know Winter” contest got them creating sculptures that represented an Olympic Winter Games sport. The “PEAK challenge” got them to form cross-company teams to compete weekly around topics such as the environment, workplace safety and the Olympics.

Employees met with and listened to Olympic medalists such as triathlete Simon Whitfield who spoke about the teamwork and the detailed, disciplined process needed to achieve excellence.

Related community programs

Gold Medal Plates: At the national level, GE and EPCOR are the presenting sponsors of Gold Medal Plates, which highlights Canada's top medal- winning athletes through interactive dinner events. Funds raised from Gold Medal Plates are evenly divided between the Canadian Olympic Foundation's two initiatives to support athletes: Own the Podium 2010 and Road to Excellence, supporting winter and summer athletes. Since 2004, Gold Medal Plates has raised $4 million.

Youth Excellence Arts and Culture Award: This award is directed to youth in selected communities where EPCOR operates. Grants of up to $2,500 to young people are designed to encourage their pursuit of excellence in a variety of areas. Between 2006 and 2009, 30 individuals have received over $64,000 in EPCOR Youth Excellence Awards. For example, young violinist Jordan Vermes of Sooke, B.C., received funding to attend a summer program at the Victoria Conservatory of Music. Steffi Holland of Canmore was able to attend the summer program at the Royal Winnipeg Ballet School.

Sports Excellence Award: A contribution (up to $5,000) directed towards organizations to help with unique opportunities in the development of sports excellence. Recipient organizations offer programs in athlete development for any summer or winter Olympic Games sport. Between 2006 and 2009, EPCOR contributed over $135,000 to 30 youth sports organizations. For example, the Strathmore, Alberta Silver Sharks Swim Team was able to purchase an electronic starter system and the French Creek, B.C. Track and Field Club restored the surface of its running track.

SOCIAL RESPONSIBILITY

RESPONSIBILITY FOR COMMUNITIES How We Support COMMUNITY SUPPORT IN ACTION Communities Our Road to the Olympic Winter EPCOR’s education initiatives aim to inspire students to make positive choices in their daily lives and question their attitudes and values with respect to Games water, energy use and the environment. EPCOR’s goal is to help students grow into critical thinkers, problem solvers, team players and the leaders of Community tomorrow. Support in Action Hometown Program Community The Learning Zone: Provides water and electrical safety education resources for students and teachers. The online program includes electricity Consultation basics and home and outside smarts.

RESPONSIBILITY FOR WaterQuest: Developed by EPCOR and Alberta Agriculture and Rural Development, WaterQuest enhances the Alberta Learning Grade 8 science CUSTOMERS curriculum. RESPONSIBILITY FOR ETHICS AND The Britannia Water Treatment Discovery Centre: An interactive centre developed in partnership with the B.C. Museum of Mining to create GOVERNANCE an interactive centre that explores environmental stewardship. It looks at how EPCOR resolved environmental issues relating to heavy metal runoff that had been contaminating Howe Sound for decades. In 2009, 2,440 visitors from elementary, secondary, post secondary and adult learning groups toured RESPONSIBILITY FOR FINANCIAL the centre. PERFORMANCE Alberta’s Promise: EPCOR is an Alberta’s Promise ‘Promise Builder’. This government program promotes partnerships to maximize the value of RESPONSIBILITY FOR child and youth programs. OUR PEOPLE

Alberta River Watch: EPCOR partners with Alberta River Watch to provide Science 9 and Biology 20 students in central and southern Alberta with RESPONSIBILITY FOR SAFETY a chance to participate in this national award winning science resource program. Classes explore a 10 km section of their local river during a raft float trip. Along the way, students make shoreline stops to conduct water chemistry and biology tests. Back at school, students use the data they collect to answer the question: “How healthy is our river?”

Waterlution: EPCOR partners with Waterlution in the delivery of the Future of Water Workshop Series. Waterlution’s goals are to engage individuals, organizations and communities in exploring issues facing the local and global water supply and to explore solutions that respect water resources and ecosystems.

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SOCIAL RESPONSIBILITY

RESPONSIBILITY FOR COMMUNITIES How We Support OUR ‘HOMETOWN PROGRAM’ Communities Our Road to the Olympic Winter Our “Hometown program” reflects the fact that we are headquartered in Games Edmonton and our sole shareholder is the City of Edmonton. This program Community contributes to Edmontonians’ quality of life and helps us attract and retain Support in Action employees. Hometown Program Organizations and events we supported in 2009 included: Community Consultation

RESPONSIBILITY FOR Cultural Support: Citadel Theatre, The Works International Visual Arts CUSTOMERS Society, Theatre Network, Nextfest, Northern Light Theatre, Ice on Whyte Festival. RESPONSIBILITY FOR ETHICS AND GOVERNANCE Professional Sports: Edmonton Oilers Hockey Club, Edmonton Eskimos Football Club. RESPONSIBILITY FOR FINANCIAL Economic Support: Canadian Finals Rodeo, Rexall Edmonton Indy, Canadian Curling Association: Tim Horton’s Roar of The Rings, Downtown PERFORMANCE Business Association, Capital Ex. RESPONSIBILITY FOR OUR PEOPLE Education Support: Junior Achievement of Northern Alberta, University of Alberta School of Business, Cappies of Greater Edmonton, Daytrippers Children’s Charity, Edmonton Science Outreach Network, Grant MacEwan University, Northern Alberta Institute of Technology (NAIT), Telus World of RESPONSIBILITY FOR Science. SAFETY

Social Support: United Way, Comedy Cares (Edmonton International Street Performers Festival), Boyle Street Community Services, Donate-a-Ride, Edmonton Timeraiser.

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RESPONSIBILITY FOR COMMUNITIES How We Support COMMUNITY CONSULTATION ACROSS ALBERTA AND B.C. Communities Our Road to the Olympic Winter Water Services Community Advisory Panel (Edmonton): EPCOR places a high priority on obtaining public input and opinion into all aspects Games Community of water service delivery. The pane/l acts as a community sounding board to advise EPCOR and provide feedback on policies and programs that have Support in Action an impact on customers and the community in general. The panel provides public, customer and stakeholder input on emerging issues, including water Hometown efficiency, legislative and technological changes, pricing, customer care and watershed management. Program

Community Consultation Water Quality Advisory Panel (Edmonton): This panel includes representatives from EPCOR, local and provincial health boards, Alberta Environment (the water regulator), the University of Alberta, the City of Edmonton, and regional municipalities supplied by the EPCOR drinking water RESPONSIBILITY FOR system. The panel shares information, researches water quality/treatment issues, reviews water quality standards and guidelines, and develops joint risk CUSTOMERS management protocols. Its scope includes drinking water, watershed issues, home water treatment devices, bottled water and related health care issues. RESPONSIBILITY FOR ETHICS AND GOVERNANCE White Rock, B.C Community Advisory Panel: This panel meets to discuss water service delivery. EPCOR also participated in the White Rock community through sponsorship and involvement with community events including the Chamber of Commerce Business Excellence Awards, the 20th RESPONSIBILITY FOR Annual Partners in Caring Gala and the Waterfront Music Series. FINANCIAL PERFORMANCE French Creek, B.C. Community Advisory Panel: This panel was established with representation from local government, the French Creek RESPONSIBILITY FOR Residents' Association, environmental groups and other interested local residents and customers. It provided feedback on EPCOR’s application to OUR PEOPLE update water rates to support the cost of providing water services to residents, and maintaining and upgrading the system.

RESPONSIBILITY FOR Sooke, B.C. public education campaign: EPCOR conducted a public education campaign called “Store It, Don’t Pour It” in partnership with the SAFETY District of Sooke. The campaign, which included a toxic roundup, was designed to increase public awareness to reduce the amount of fats, oils and grease entering the wastewater collection system.

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RESPONSIBILITY FOR COMMUNITIES AN EYE FOR TROUBLE Responsibility to Customers RESPONSIBILITY FOR CUSTOMERS A Storm 'Like a Nightmare' When Jim Kennedy drives to work, he always has one eye on the weather. For most of us, a cloud or two is no big deal. Who Are Our But for Jim, it could mean a dramatic change in how his workday unfolds. He is a Trouble Driver for EPCOR, and no two “I wouldn’t have believed Customers? shifts are ever the same. Mother Nature had that The Taste of Water much strength.” How Customers - Jim Kennedy, Trouble Use Water In a 33-year career with EPCOR, Jim has seen it all. He’s Driver Distribution and Transmission and worked in some of the worst blizzards imaginable, in Our Customers temperatures many of us can’t fathom. He was one of the first Energy Services and Our Customers to respond in 1987 to the Black Friday tornado, an infamous Tools for afternoon that kicked off a series of long, exhausting days for Customers our employees with huge outages in parts of Edmonton. Code of Conduct

RESPONSIBILITY FOR “I wouldn’t have believed Mother Nature had that much ETHICS AND strength,” he says of the ordeal. The weather certainly makes GOVERNANCE his job unpredictable, but when asked to pinpoint his favourite RESPONSIBILITY FOR part of the job he says without hesitation: “The variety. No FINANCIAL question.” PERFORMANCE

RESPONSIBILITY FOR And while the big events are the ones that get covered in the OUR PEOPLE newspaper, it’s the little ones he often remembers most. Like RESPONSIBILITY FOR responding to calls of kites tangled in power lines, cats chased SAFETY up power poles and the gratitude of people he’s helped.

“Birthday cake,” he says, has been his favourite reward so far in what’s often a thankless job.

Some nights Jim and his partner can put 150 – 175 kilometres on the Trouble Truck, criss-crossing the city hooking up meters, checking streetlights and responding to minor outages. Needless to say, customers are often frustrated when he arrives, but Jim’s easy-going personality, his ability to listen and his decades of experience are well-suited to the job. “When the power went out during the Edmonton Oilers’ playoff run in ’06, we had to make friends — fast.”

And although he loves his job at EPCOR, Jim can’t help but feel anxious when the clouds roll in.

SOCIAL RESPONSIBILITY

RESPONSIBILITY FOR COMMUNITIES A STORM ‘LIKE A NIGHTMARE’ RESPONSIBILITY FOR CUSTOMERS July 18, 2009 was one of Edmonton’s few truly warm days of the summer. By evening, the sky began to turn ominous shades of purple and greenish-grey. A Storm 'Like a Nightmare' A few drops of rain fell; scattered wind gusts swayed the trees — and suddenly CRASH! A gust front sent winds howling at 110 km/h through the city. Hail Who Are Our Customers? battered the streets. Trees snapped in half, knocking down power lines or becoming entangled in them. Power poles caught fire and transformers failed, The Taste of Water plunging parts of the city into darkness. How Customers Use Water This weather event was one of the largest power outages in the Edmonton area’s history and the single most difficult weather-related challenge faced by Distribution and EPCOR’s Distribution and Transmission crews since the devastating 1987 tornado. Transmission and Our Customers EPCOR sent out all available crews who were qualified to assist. Trevor Valckx, Power Lineman 3, and his fellow crew members were among those on the Energy Services scene. Their first job was to assess and deal with anything that posed a danger to the public, such as energized lines on the ground. “Power is a dangerous and Our Customers thing,” Trevor said. “It needs to be treated with respect.” Tools for Customers Code of Conduct A major obstacle RESPONSIBILITY FOR ETHICS AND Another major obstacle was clearing away the trees tangled with power lines: “It GOVERNANCE was like a nightmare,” said Jack Lutz, Senior Manager, Aerial and Trouble. “We’d repair a circuit, leave to work on another, and find out a short time later RESPONSIBILITY FOR FINANCIAL the first circuit had been tripped by another tree falling on the primary line. PERFORMANCE The storm resulted in approximately 311,000 customer hours of interruption, RESPONSIBILITY FOR which is about what would normally be experienced in a typical full year. OUR PEOPLE Crews worked long shifts, rested, and came out for another long shift. Power RESPONSIBILITY FOR was restored across the entire city in 2½ days. There were no injuries to SAFETY employees, contractors or the public.

The earth moves

The July windstorm wasn’t the only dramatic weather event of 2009 in Edmonton. An October cold snap caused the ground to shift, putting stress on pipes. That led to 55 water main breaks over six days, including 20 alone in a 24-hour period. Service to thousands of customers was disrupted. Those six days accounted for about 10% of all the breaks expected in an average year. EPCOR called in extra crews to work in the challenging conditions. Staff provided constant updates as well as water deliveries to affected residents. The event highlighted the value of a revised emergency response protocol, which allowed for a smooth addition of extra resources and helped the core team to focus on water restoration.

Business continuity

Business continuity plans were executed over the year to protect employees and the company from the effects of the H1N1 virus, and seek to ensure that the essential services of water and power would be provided reliably to customers in the event of a pandemic. EPCOR worked to educate employees about ways to prevent the spread of germs that cause respiratory illnesses such as influenza.

EPCOR’s priority is to ensure the safe and reliable delivery of power and water to customers. We have comprehensive incident report response and business continuity plans in place for each of our facilities and for our power and water operations.

SOCIAL RESPONSIBILITY

RESPONSIBILITY FOR COMMUNITIES WHO ARE OUR CUSTOMERS? RESPONSIBILITY FOR CUSTOMERS A Storm 'Like a More than one million people in over 75 communities, counties and large Nightmare' industries across Western Canada who receive our water and wastewater Who Are Our Customers? services. The Taste of Water How Customers Edmonton residents and businesses, which are provided power over Use Water transmission and distribution lines that we install and maintain. In 2009, Distribution and EPCOR distributed approximately 14% of Alberta energy consumption to Transmission and Our Customers approximately 300,700 residential and 34,300 commercial customers in Energy Services Edmonton. and Our Customers Tools for Customers Residential and small commercial customers within the City of Edmonton, Code of Conduct several Rural Electrification Association service areas and the FortisAlberta service area who receive Regulated Rate Option electricity service. Default RESPONSIBILITY FOR supply electricity services are provided to large customers in these areas. ETHICS AND GOVERNANCE Residential and business customers who receive contact centre and billing services for electricity and water. These services are also provided on behalf of the City of Edmonton Waste Management Branch and Drainage Services Branch divisions and Capital Power Corporation. In 2009, we produced an RESPONSIBILITY FOR FINANCIAL average of 684,323 bills a month1 compared with 663,772 in 2008. PERFORMANCE

RESPONSIBILITY FOR 1Some customers have multiple sites and receive more than one bill. OUR PEOPLE

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RESPONSIBILITY FOR COMMUNITIES THE TASTE OF WATER RESPONSIBILITY FOR CUSTOMERS A story in the Edmonton Journal said that one of the best aspects of living in A Storm 'Like a Nightmare' Edmonton is the taste of the city’s tap water. The article, part of a series called Who Are Our “52 reasons to love Edmonton,” quoted people who have tasted tap water Customers? around the world. The conclusion, according to the newspaper: “In Edmonton, The Taste of Water our tap water is delicious, safe and among the best in the world.” How Customers Use Water One of the employees ensuring water quality is Stephen Craik, Senior Manager Distribution and of the water laboratory in EPCOR’s Quality Assurance Department. He says Transmission and Our Customers EPCOR tests water quality to ensure that drinking water is produced above and Energy Services beyond minimum requirements set by Health Canada. EPCOR also has a home and Our Customers sniffer program, which surveys the public annually on aesthetics such as the Tools for Customers water’s smell and taste. Code of Conduct “I’m not aware of any other municipalities that have a similar type of program,” Stephen says. RESPONSIBILITY FOR ETHICS AND GOVERNANCE

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RESPONSIBILITY FOR COMMUNITIES HOW CUSTOMERS USE WATER RESPONSIBILITY FOR CUSTOMERS Edmonton has historically used less water than the Canadian average due to a city-wide metering program, rate setting methods and relatively short A Storm 'Like a Nightmare' summers. For example, in 2009 the average Edmonton family used about 223 litres per person per day compared with the Canadian average of 263 litres a Who Are Our day for other large metered communities. Customers? The Taste of Water How Customers Rain barrel program Use Water Distribution and Transmission and EPCOR encourages the use of rain barrels as a method of increasing customer awareness of their outdoor water use. Collected rain water is an Our Customers environmentally friendly choice for lawn and garden maintenance. Under the program, EPCOR pre-sold some 1,600 rain barrels that hold 200 litres and are Energy Services and Our Customers made of recycled Alberta plastic. They were distributed at an Eco-Yard event in Edmonton. Tools for Customers Code of Conduct

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RESPONSIBILITY FOR COMMUNITIES DISTRIBUTION AND TRANSMISSION RESPONSIBILITY FOR AND OUR CUSTOMERS CUSTOMERS A Storm 'Like a Nightmare' Power distribution volumes in 2009 totalled 7.202 million megawatt hours Who Are Our Customers? (MWh), almost unchanged from 7.215 million the previous year. Line losses The Taste of Water totalled 181,000 MWh compared with 179,000 MWh the previous year. How Customers Use Water The overall Customer Service Index for EPCOR was 84.5% in 2009 compared Distribution and to 86.8% the previous year. This is based on a survey of customers who pay Transmission and the regulated rate and contacted Distribution and Transmission over the year. Our Customers The target is a minimum of 75%. Energy Services and Our Customers Tools for Customers Reliability indicators Code of Conduct The number of power outages and their average duration are common reliability RESPONSIBILITY FOR indicators among utilities. For EPCOR, these indicators were higher in 2009 because of a summer storm that affected 120,000 customers. EPCOR ETHICS AND GOVERNANCE calculated that without the storm, its power outage rate per customer would have been 0.87 instead of the actual 1.20. The System Average Interruption Frequency Index (SAIFI) represents the average number of interruptions that a customer would experience, calculated by dividing the total number of RESPONSIBILITY FOR customer interruptions over the course of a year by the number of customers served. FINANCIAL PERFORMANCE

RESPONSIBILITY FOR Average number of power outages per customer OUR PEOPLE EPCOR customers 2009 1.20 RESPONSIBILITY FOR SAFETY EPCOR customers 2008 1.18 EPCOR customers 2007 1.19

Canadian urban average 2004-2009 1.29

The Customer Average Interruption Duration Index (CAIDI) gives the average outage duration that any given customer would experience. CAIDI can also be viewed as the average restoration time. Average length of power outages minutes: seconds

EPCOR customers 2009 83:58

EPCOR customers 2008 48:36

EPCOR customers 2007 57:36

Canadian urban average 2004-2008 67.80

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RESPONSIBILITY FOR COMMUNITIES ENERGY SERVICES AND OUR RESPONSIBILITY FOR CUSTOMERS CUSTOMERS A Storm 'Like a Nightmare' EPCOR Energy Alberta Inc. (EEAI) provides regulated rate option (RRO) Who Are Our Customers? electricity and customer service to residential, farm and small commercial The Taste of Water business consumers. How Customers Use Water Each year, two surveys are carried out by a third-party firm and reported to the Distribution and Alberta Utilities Commission. These are an overall survey based on a random Transmission and sample of all our regulated customers and a transactional survey, based on a Our Customers random sample of customers who had recently contacted EPCOR. Energy Services and Our Customers

Tools for Customers Survey results for 2009 Code of Conduct Overall satisfaction: EEAI exceeded the Alberta Utilities Commission RESPONSIBILITY FOR minimum performance standard (75% customers satisfied overall) with more than 89% of customers satisfied overall. This compares with 88% satisfied ETHICS AND GOVERNANCE overall in 2008. Cost was the most frequently cited reason among those dissatisfied.

RESPONSIBILITY FOR Transactional survey: EEAI exceeded the Alberta Utilities Commission minimum performance standard (75% customers satisfied overall) with more FINANCIAL than 87% of customers satisfied. This compares with 80% satisfied in 2008. Cost was the most frequently cited reason among those dissatisfied. PERFORMANCE

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RESPONSIBILITY FOR SAFETY Send to Friend

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RESPONSIBILITY FOR COMMUNITIES TOOLS FOR CUSTOMERS RESPONSIBILITY FOR We want our customers to understand their water consumption and energy use and find ways to reduce it. CUSTOMERS A Storm 'Like a Our website – offers water efficiency and energy guides, plus tips, calculators and tools to help customers save Nightmare' energy and water around their homes or small businesses. It includes a tool that provides a detailed online audit of Who Are Our Customers? a customer’s home with personalized analysis and recommendations, as well as an extensive library of resources. The Taste of Water The annual summer conservation program advises residents on wise outdoor water use. How Customers Use Water We recognize the importance of being energy efficient from an early age. Our online, interactive Energy Efficiency Distribution and World teaches students that you're never too young to do your part to support environmental sustainability. Transmission and Our Customers Energy Services and Our Customers Tools for Customers Code of Conduct Web self-service

RESPONSIBILITY FOR EPCOR’s new Web Self-Service application, introduced in 2009, allows customers to perform seven common transactions online. Customers can view ETHICS AND their account summary, request new service, transfer service, stop service, update their account information, authorize payment withdrawals and make GOVERNANCE payment arrangements. RESPONSIBILITY FOR FINANCIAL After four months, customers had completed more than 10,000 transactions online. The goal for 2010 is to have 7% of residential transactions and 27% PERFORMANCE of commercial transactions completed through the Web Self-Service application.

RESPONSIBILITY FOR OUR PEOPLE EPCOR also launched an interactive bill on its website to help power and water customers understand all the information on the bill. The site helps customers learn about rates, fees or distribution charges, among other information. RESPONSIBILITY FOR SAFETY Electronic billing

We encourage our retail customers to save paper and postage by using an online bill delivery system operated by Canada Post. Epost allows EPCOR’s 600,000 regulated rate customers to view and pay their utility bills online, reducing the amount of paper involved in mailing bills to customers every month. Using Epost reduces the costs associated with producing bills by about 29% per bill. By the end of 2009, we had signed up 28,841 customers, representing a savings of 57,682 sheets of paper per month.

Customers with special needs Customers can contact EPCOR in various ways: phone, fax, e-mail, web self-serve online services and TTY operator (text telephone) for the deaf, hearing-impaired and those who cannot speak. EPCOR’s Contact Centre has a list of translators who can assist customers in 14 languages from Arabic to Urdu.

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RESPONSIBILITY FOR COMMUNITIES HOW THE CODE OF CONDUCT PROTECTS CUSTOMERS RESPONSIBILITY FOR CUSTOMERS Our electric utility employees must make a personal commitment to understand and follow codes that protect our electricity customers. A Storm 'Like a Nightmare' We operate under the Alberta Code of Conduct Regulation, which is aimed at promoting fair and orderly development of the electricity market in Alberta. Who Are Our Customers? The regulation is designed to ensure fairness to customers and retailers, protect customer information and ensure proper business practices are followed. The Taste of Water In the same way, the EPCOR Inter-Affiliate Code of Conduct provides standards and conditions for interaction between EPCOR’s “utility” (regulated) and How Customers Use Water “non-utility” (non-regulated) affiliates. It is designed to prevent cross-subsidization between utilities and utility affiliates, protect confidential customer Distribution and information collected in the course of providing utility service and ensure that non-utility affiliates and their customers do not have preferential access to Transmission and utility services. Our Customers Energy Services and Our Customers Tools for Meeting the Code Customers Code of Conduct Our compliance plan, approved by the Alberta government’s Market Surveillance Administrator, sets out systems, policies and procedures to ensure that EPCOR, its employees, officers, agents and contractors meet Code requirements. All our Alberta employees are required to take refresher training every RESPONSIBILITY FOR three years to ensure they understand and follow Code requirements. Employees in other jurisdictions are responsible for being familiar with the concepts ETHICS AND GOVERNANCE and the requirements of the Code. All new employees are made aware of the Code requirements and the Compliance Plan when they join EPCOR. In addition, all utility employees must be RESPONSIBILITY FOR FINANCIAL provided with compliance awareness materials and sign an acknowledgement that they agree to abide by these requirements. PERFORMANCE Each quarter, senior management in the areas affected must complete a management certificate indicating whether EPCOR has conducted its business in RESPONSIBILITY FOR a manner that complies with the Code. The Compliance Officer prepares a report each quarter for the Market Surveillance Administrator indicating any OUR PEOPLE identified non-compliance or complaints and the action taken.

RESPONSIBILITY FOR SAFETY Fair competition statement

Under the Code, regulated customers must be told that they are free to choose a retailer and be aware of the Fair Competition Statement:

“Electricity products and services are competitive. You are free to choose a retailer. Regulated wires services are not dependent upon the retailer you choose. You can find a listing of licensed Alberta retailers on the Utilities Consumer Advocate (UCA) website, or call 310-4-UCA (Toll free in Alberta).”

In a formal quality assurance process, we reviewed a select number of calls made or received by our more than 150 customer service agents in Alberta. Each agent makes or receives approximately 8,000 calls a year for a total of 1.2 million calls. In 2009, we reviewed 9,899 calls. Of these, five were non-compliant because agents failed to provide customers with the Fair Competition Statement.

There were no incidents of non-compliance with the Fair Competition Statement for labelling (customer materials, marketing materials, and advertising). There were also no complaints about non-compliance with the Advertising Standards Council.

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RESPONSIBILITY FOR COMMUNITIES RESPONDING WITH INTEGRITY Responsibility for Ethics and Governance RESPONSIBILITY FOR CUSTOMERS EPCOR employees were challenged during 2009 to determine the “ethical thing” to do based on potential fictional RESPONSIBILITY FOR ETHICS AND scenarios. A confidential 24-hour GOVERNANCE Integrity Hotline is one of Expectations for a the ways ethics Responsible These scenarios dealt with issues such as the Business complaints and inquiries possibility that an employee might fear Ethics Complaints can be raised by and Resolution retaliation if he or she reports an ethical employees. They can Responsibility for concern or makes a good faith complaint. Or if Governance also call an external it would be all right for an employee to access EPCOR's ethics lawyer at a Governance Model customer information to find the phone number national law firm. of somebody he or she met at a party. RESPONSIBILITY FOR FINANCIAL PERFORMANCE Called “Integrity Minutes,” these were a series of articles in EPCOR’s weekly internal on-line RESPONSIBILITY FOR OUR PEOPLE newsletter for employees. The articles looked at ethical issues facing employees and how RESPONSIBILITY FOR EPCOR’s policies address them. The scenario SAFETY approach was used to get employees thinking about ethical issues they might encounter — and how to respond to them under the company’s policies.

Employees posted their thoughts on line — and at the end of the week the Ethics Officer or Compliance Officer offered a response and tied the issue to EPCOR’s Compliance and Ethics Policy, and other policies.

Employees were reminded, for example, that the Compliance and Ethics Policy makes it clear that EPCOR will not allow or pursue retaliation of any kind against any employee who reports a violation or ethics concern or makes a good faith complaint. Similarly, the Privacy Policy for Customer Information prohibits employees from accessing customer information for personal reasons. Customer information is strictly confidential. A confidential 24-hour Integrity Hotline is one of the ways ethics complaints and inquiries can be raised by employees. They can also call an external ethics lawyer at a national law firm.

Complaints concerning senior management, fraud, accounting or financial reporting impropriety, or matters that would reasonably result in a significant corporate risk are addressed under the oversight of the Ethics Committee, which includes the Senior Vice-President, Legal & External Relations , the Senior-Vice President and Chief Financial Officer and the Senior Vice-President, Human Resources. If a complaint involves the CEO, the CFO or the Compliance Officer, it must be reported to the Chairman of the Board and the Chair of the Audit Committee who will oversee the investigation with the assistance of external ethics legal counsel.

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RESPONSIBILITY FOR COMMUNITIES RULES AND EXPECTATIONS FOR A RESPONSIBLE BUSINESS RESPONSIBILITY FOR CUSTOMERS A sustainable business is built on high ethical standards and corporate integrity. This is an essential part of the foundation from which the company will grow in the years ahead. RESPONSIBILITY FOR ETHICS AND EPCOR’s Ethics Policy reinforces this principle by setting out rules and expectations intended to ensure that our business is conducted lawfully, with GOVERNANCE Expectations for a integrity and in an honest, fair, and responsible manner. The policy applies to all employees and Board members. It’s a condition of employment or Responsible appointment. Contractors are required to adhere to ethical standards and practices consistent with this policy. Business Ethics Complaints The policy sets out rules for compliance, in regards to conflict of interest, confidentiality of information, fraud, theft, respectful workplace requirements and and Resolution timely, fair and accurate financial disclosure. Responsibility for Governance All active employees must take ethics training and certify compliance with the Ethics Policy every two years. In 2009 , 336 employees1 equal to 16% of all EPCOR's Governance Model employees, received training. In 2010, all employees must take training and certify compliance.

RESPONSIBILITY FOR FINANCIAL Rules for health and safety PERFORMANCE The Environment, Health and Safety section says: “All EPCOR operations are to be conducted in a manner that seeks to protect the health and safety of RESPONSIBILITY FOR OUR PEOPLE employees and the communities in which EPCOR operates. All EPCOR employees are responsible for supporting EPCOR’s commitment to environmental responsibility.” RESPONSIBILITY FOR SAFETY Corporate Integrity

We conduct an annual fraud risk assessment that includes various potential fraud scenarios. Fifty-five scenarios were examined in 2009. This exercise involves input from across the company and considers all areas of our business. If we identify any gaps in our control structures during that exercise, we develop an action plan to remediate.

EPCOR is fully compliant with legislation requiring greater corporate financial accountability. The legislation requires public issuers to follow a set of reporting and disclosure regulations: National Instrument 52-109, established by the Canadian Securities Administrators.

Federal policy discussions

In accordance with the Federal Accountability Act, all contact with “senior public office holders” with respect to the awarding of any grant, contribution or other financial benefit by or on behalf of the federal government is reported on a monthly basis. Some individuals within EPCOR are registered as lobbyists. The federal lobbyist registry came into effect July 2, 2008. In 2009, EPCOR meetings with the federal government in March and May were focused on the development of federal emissions targets for greenhouse gases. Those meetings are beyond the scope of this report, which excludes 2009 power generation activities because of EPCOR’s fundamental restructuring in July. No other meetings were scheduled with the federal government in 2009.

Provincial and municipal policy discussions

EPCOR meetings with the Alberta government since the creation of Capital Power were primarily focused on electrical transmission policy, the Water for Life policy and the development of a land use policy framework for Alberta. EPCOR government interaction in British Columbia after the restructuring in July 2009 was primarily at the municipal level, concerning existing water and wastewater operations in the province.

Disclosure policy

Our Disclosure and Insider Trading Policy helps ensure that we maintain a high level of corporate accountability and transparency. The policy has three goals:

To provide the market with full, true and plain disclosure of information regarding EPCOR and its subsidiary companies to allow investors to make informed investment decisions.

To prevent insiders of EPCOR and its subsidiary companies from unfairly benefiting from inside information.

To avoid even the appearance of improper conduct on the part of anyone employed or associated with EPCOR with respect to such matters.

As part of this policy, all material prepared for investors or the public is reviewed for accuracy under the direction of Disclosure Committee, which includes the CEO, Chief Legal Officer, and Chief Financial Officer.

1Includes all employees for 2009

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RESPONSIBILITY FOR COMMUNITIES ETHICS COMPLAINTS AND RESPONSIBILITY FOR RESOLUTIONS CUSTOMERS

RESPONSIBILITY FOR EPCOR’s credibility and reputation for integrity and ‘doing the right thing’ is built ETHICS AND on a foundation of operational excellence, strong corporate values, high ethical GOVERNANCE Expectations for a standards, lawful conduct and corporate responsibility,” the Ethics Policy says. Responsible Business It specifies that “any EPCOR employee found to have engaged in unethical Ethics Complaints behaviour will be subject to discipline, up to and including suspension without and Resolution pay, immediate termination and/or prosecution.” Responsibility for Governance EPCOR's Governance Model

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RESPONSIBILITY FOR COMMUNITIES RESPONSIBILITY FOR GOVERNANCE RESPONSIBILITY FOR CUSTOMERS EPCOR’s Board of Directors is charged with the responsibility to take all reasonable steps “to direct management to ensure the corporation operates at all times within applicable laws and regulations and to the highest ethical and moral standards.” RESPONSIBILITY FOR ETHICS AND That’s part of the Board’s Charter of Expectations. The Charter sets out the Board’s various roles, such as ensuring appropriate conduct of the organization GOVERNANCE Expectations for a by oversight of financial controls and mitigation of business risks. Responsible Business If EPCOR’s performance is not on target, then the Board directs management to take appropriate action. Conversely, it will also take issue if targets are set Ethics Complaints too low, preventing us from reaching our full potential. and Resolution Responsibility for The Board is made up of 12 business leaders from British Columbia, Alberta and Ontario, appointed by our sole Shareholder, the City of Edmonton. There Governance are no EPCOR employees, City employees or elected representatives on the Board. EPCOR's Governance Model

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RESPONSIBILITY FOR COMMUNITIES EPCOR’S GOVERNANCE MODEL RESPONSIBILITY FOR CUSTOMERS EPCOR’s governance model allows the company to operate as a commercial entity, grow and bring increasing value to its shareholder — the City of Edmonton. RESPONSIBILITY FOR ETHICS AND EPCOR’s position as a competitive company and a revenue generator is solidified by a unique agreement, established under a City bylaw when EPCOR GOVERNANCE Expectations for a was created in 1996. This “Unanimous Shareholder Agreement” delegates governance to an arm’s length Board appointed by the City. Responsible Business The Board does not include any members of City Council or political appointees. The agreement gives the Board the authority to manage the business and Ethics Complaints the affairs of EPCOR. It sets the tone and boundaries of the Board’s relationship with the Shareholder — one based on integrity and trust. The Shareholder and Resolution is kept up-to-date on EPCOR's financial standing, progress and operations through quarterly meetings with the EPCOR Board and senior management. On Responsibility for Governance a more formal level, the roles of the Board and Shareholder are well delineated. For more information, see the Charter of Expectations for the Board of EPCOR's Directors in the AIF, pages 46-50. Governance Model EPCOR has an open culture and management regularly gathers employee input, which helps formulate recommendations to the Board. The CEO regularly visits EPCOR sites to discuss the company's priorities, progress and initiatives, and to hear direct feedback from employees. EPCOR has a 24-hour RESPONSIBILITY FOR FINANCIAL Integrity Hotline for employees to raise complaints and inquiries. The resolution process is described under Responsibility for Ethics and Governance. If a PERFORMANCE complaint involves the CEO, the CFO or the Compliance Officer, it must be reported to the Chairman of the Board and the Chair of the Audit Committee.

RESPONSIBILITY FOR OUR PEOPLE More Information RESPONSIBILITY FOR SAFETY For additional information on EPCOR’s governance practices, please consult EPCOR’s Annual Information Form (AIF), a copy of which can be obtained from the Corporate Secretary on request or from EPCOR’s profile on SEDAR.

Third Party Disclaimer

EPCOR's website may provide listing of and/or links to third party websites as a convenient information service only. EPCOR accepts no responsibility or liability for the privacy practices, content, opinions, accuracy, and administration of such other websites, nor do we monitor or endorse these websites. Send to Friend

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RESPONSIBILITY FOR RESPONSIBILITY FOR FINANCIAL COMMUNITIES PERFORMANCE RESPONSIBILITY FOR CUSTOMERS Long-term sustainable financial performance is the foundation for our corporate responsibility. It RESPONSIBILITY FOR enables us to address the challenges described throughout this report, and take advantage of ETHICS AND opportunities to improve our environmental and social performance. GOVERNANCE This report addresses significant events that are reflected in EPCOR’s 2009 results. These RESPONSIBILITY FOR include: FINANCIAL PERFORMANCE Sale of our power generation business and the creation of Capital Power Corporation Selected Financial Information (Consolidated) Transfer of Gold Bar Wastewater Treatment Plant to EPCOR

RESPONSIBILITY FOR Acquisition of potable water and wastewater facilities from Suncor OUR PEOPLE

RESPONSIBILITY FOR “EPCOR took a one-time charge on the Capital Power transaction, but for the most part our SAFETY results were consistent with plan,” said President and CEO Don Lowry. “We have reduced EPCOR’s investment risk profile and, going forward, are poised for growth in our regulated and contracted water / wastewater and electricity distribution/transmission businesses.” Send to Friend

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RESPONSIBILITY FOR HIGHLIGHTS OF EPCOR’S FINANCIAL PERFORMANCE IN 2009 COMMUNITIES

RESPONSIBILITY FOR CUSTOMERS Net income was $125 million on total revenues of $2.4 billion for the year ended December 31, 2009 compared with net income of $175 million on revenues of $3.4 billion for the previous year. RESPONSIBILITY FOR ETHICS AND Cash flow from operating activities for the year ended December 31, 2009 was $302 million compared with $403 million for the previous year. GOVERNANCE

RESPONSIBILITY FOR Investment in capital projects and business acquisitions for the year ended December 31, 2009 was $517 million compared with $747 million for the FINANCIAL previous year. PERFORMANCE Selected Financial Information Other comprehensive income was $31 million for the year ended December 31, 2009 compared with other comprehensive income of $16 million for the (Consolidated) previous year.

RESPONSIBILITY FOR The common dividend increased to $134 million for the year ended December 31, 2009 from $130 million in the previous year. OUR PEOPLE

RESPONSIBILITY FOR SAFETY More information

For complete 2009 results, see the Management’s Discussion and Analysis and Consolidated Financial Statements.

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RESPONSIBILITY FOR COMMUNITIES DOUBLE GOLD IN BEST WORKPLACES AWARD Responsibility for our People RESPONSIBILITY FOR CUSTOMERS EPCOR is Alberta’s best workplace for training and development and for environmentally conscious employees, according RESPONSIBILITY FOR ETHICS AND to Alberta Venture magazine, which handed EPCOR two awards based on a 2009 review of organizations. “Seeing our own GOVERNANCE company leaders focusing on the RESPONSIBILITY FOR “You can’t live in Edmonton most of your life and not be aware environment and talking FINANCIAL of EPCOR Utilities Inc. and its green initiatives in North with us causes us to feel PERFORMANCE America,” the magazine wrote. empowered and comfortable to take a RESPONSIBILITY FOR OUR PEOPLE leadership role and look Reporting on The Best Workplace for the Environmentally Conscious award at green initiatives.” People Practices recognized EPCOR because “employees make regular Collective contributions in the design and implementation of green - Chantel Rompfer, Agreements and Pensions initiatives in water, wastewater and power usage in North EPCOR Technical Gender Diversity America.” Writing Advisor and Pay Equity

RESPONSIBILITY FOR Chantel Rompfer, EPCOR Technical Writing Advisor, explained SAFETY in the Venture write-up how EPCOR shares her environmental consciousness. Chantel has been involved in creating training and development material for employees, including energy efficiency tips for conserving water and power.

“If you educate your own employees on energy efficiency, then of course it’s something they’ll talk about to their friends and family,” she said. “Seeing our own company leaders focusing on the environment and talking with us causes us to feel empowered and comfortable to take a leadership role and look at green initiatives.”

The Best Workplace for Training and Development nod recognized EPCOR’s “best practices,” including offering “no- cost skills development and management courses, two leadership development programs and four orientation programs.”

“If you step up and say, ‘I want to develop into this role and want to learn more about this,’ EPCOR is very supportive of that and very keen on growing its own people,” said Chantel, who has taken Essential Leadership training through the EPCOR School of Business.

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RESPONSIBILITY FOR COMMUNITIES REPORTING ON OUR PEOPLE PRACTICES RESPONSIBILITY FOR CUSTOMERS Our ability to grow successfully and sustainably depends on how well we attract and retain the right people, operate existing assets and maintain credibility with stakeholders. It begins with people. We want employees who share in our vision and values — and leaders who set an example. RESPONSIBILITY FOR ETHICS AND We encourage our more than 2,300 active employees across Canada to excel and make a difference. In return, we offer them an organization designated GOVERNANCE as one of Alberta’s Top 50 employers, an award by Mediacorp recognizing companies that “lead their industries in offering exceptional places to work.” RESPONSIBILITY FOR FINANCIAL PERFORMANCE Benefits benchmarked

RESPONSIBILITY FOR Our employees receive benefits that are benchmarked against our industry OUR PEOPLE Reporting on peers to maintain EPCOR’s competitive position in attracting and retaining People Practices employees. The program provides flexible benefits (health and dental plan), Collective company-paid disability coverage and an EPCOR savings plan. Although Agreements and Pensions temporary employees are not eligible for these specific benefits, they receive Gender Diversity employee orientation and safety training, and may be eligible to take company- and Pay Equity funded career development training to enhance their skills and prospects of advancing to permanent status. RESPONSIBILITY FOR SAFETY

EPCOR’s School of Business is designed to support succession of employees into increasingly senior roles.

In 2009, a new base pay system was applied across all non-union and management employees to ensure internal consistency and appropriate external salary benchmarking.

The Organizational Design initiative started in 2009 strives to ensure that all positions in the company are challenging and rewarding and includes a diligent matching process to align compatible people to positions.

EPCOR also provides our people with tools to help them bring balance to their lives including personal leave days, compressed work schedules, a scheduled days off program, access to a wellness account and an employee and family assistance program.

EPCOR does not by policy have a preference for local hiring . We look for the most qualified people best able to do the job and grow with the company. However, the majority of people we hire are from the local community where the job posting is situated. EPCOR’s Recruitment and Sourcing team works to develop creative and targeted approaches to find the best talent with the best company fit.

People challenges

Large numbers of our employees are expected to retire over the next few years. In addition, competition for skilled labour, especially in Alberta and British Columbia, remains high. To mitigate this risk, EPCOR has focused considerable attention on attracting and retaining people. Through a redesign process we’ve set up systems that will enable us to do better workforce planning to anticipate current and future labour requirements. In addition, we are focused on continually improving our safety and environmental performance, which is a key to attracting and retaining people.

Respect

We strive to ensure a supportive and respectful work environment for all. Employees must be treated fairly and have equal opportunity to thrive and achieve their potential. All employees are covered by the EPCOR Compliance and Ethics Policy.

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RESPONSIBILITY FOR COMMUNITIES COLLECTIVE AGREEMENTS AND PENSIONS RESPONSIBILITY FOR CUSTOMERS EPCOR enjoys strong working relations with its six labour unions and has not experienced labour disruption since 1978. Collective agreements cover RESPONSIBILITY FOR 76.6% of employees. Bargaining has been completed with one of the Edmonton-based bargaining units resulting in a collective agreement that will ETHICS AND expire in December 2012. GOVERNANCE

RESPONSIBILITY FOR Collective agreements with the five other unions, including two based in Edmonton, two located elsewhere in Alberta and one based in British Columbia FINANCIAL are in force with expiry dates in December 2010. PERFORMANCE EPCOR employees are either members of the Local Authorities Pension Plan (LAPP) or other defined contribution or defined benefit plans. RESPONSIBILITY FOR OUR PEOPLE Reporting on Over 90% of our employees are members of the LAPP, an Alberta-based, multi-employer defined benefits plan. The amount of contributions made by People Practices employers and employees is determined by the LAPP, which is independently governed. Since LAPP is a multi-employer plan, it is accounted for as a Collective Agreements and defined contribution plan. Accordingly, EPCOR does not recognize its share of any surplus or deficit. Pensions Gender Diversity EPCOR maintains additional defined contribution and defined benefit pension plans to provide pension benefits to those employees (comprising less and Pay Equity than 10% of total employees) who are not otherwise served by LAPP, including employees of new or acquired operations.

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RESPONSIBILITY FOR COMMUNITIES GENDER DIVERSITY AND PAY EQUITY RESPONSIBILITY FOR CUSTOMERS EPCOR has 1,604 male employees and 734 female employees. Historically, EPCOR has not tracked or managed employee pay from a gender equity perspective. RESPONSIBILITY FOR ETHICS AND Compensation for unionized employees is set out in collective agreements. Employees with satisfactory job performance receive increasing wages based on GOVERNANCE the duration of their employment. As a result, we believe the collective agreements provide for equitable treatment for unionized employees within the same job classification, regardless of gender. RESPONSIBILITY FOR FINANCIAL PERFORMANCE Entry level management: 79 men and 47 women, with female employees earning an average of $87 for every $100 earned by male employees. RESPONSIBILITY FOR OUR PEOPLE Reporting on Middle management: 80 men and 38 women, with female employees earning an average of $95 for every $100 earned by male employees. People Practices Collective Senior management: 24 men and 12 women, with female employees earning an average of $102 for every $100 earned by male employees. Agreements and Pensions Gender Diversity and Pay Equity

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RESPONSIBILITY FOR COMMUNITIES A SHOCKING STORY Responsibility for Safety RESPONSIBILITY FOR CUSTOMERS John Connors zaps hot dogs for a living. RESPONSIBILITY FOR ETHICS AND “Our prime focus at GOVERNANCE EPCOR will always be He’s not the guy you’ll find on a downtown street selling hot sending people home at RESPONSIBILITY FOR dogs out of a portable steam cart. In fact, you really wouldn’t the end of the day, safe FINANCIAL want to eat one of John’s hot dogs. and sound — no PERFORMANCE excuses.”

RESPONSIBILITY FOR They have been zapped — some might say exploded — with OUR PEOPLE - Doreen Cole, Senior 4,000 lethal volts of electricity. The results are shocking! Vice President, RESPONSIBILITY FOR Electricity Services SAFETY Building a Zero- John does this feat before audiences of firefighters and other Injury Culture emergency responders, contractors, EPCOR employees, and Safety at public events. He talks about the need to always know where Achievements Safety Record power lines are when working or playing near them, safe distances from power lines, downed power lines, and keeping children safe. As a finale, John spears a wiener on the end of a long, insulated pole and touches it to a live wire atop a mobile rig specially designed for the demonstration.

A flash, a sizzle — and goodbye hot dog.

“This shows you exactly what can happen when you make contact with live electrical wires or equipment,” says John, Health and Safety Advisor with EPCOR Distribution and Transmission. “Our goal is to educate people about the hidden dangers of electricity and audiences tell me they learn a lot from these presentations.

“It’s part of our commitment to safety for all.” Send to Friend

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RESPONSIBILITY FOR COMMUNITIES WHAT IT TAKES TO BUILD A ZERO-INJURY CULTURE RESPONSIBILITY FOR CUSTOMERS When you’re in the business of providing essential services such as power and water, one single misstep can be fatal.

RESPONSIBILITY FOR Distribution and Transmission employees work with live wires — maintaining ETHICS AND electrical service to the public — when most repairs and upgrades are made. GOVERNANCE Water Service employees deal with hazardous chemicals, unstable trenches, confined spaces, and many other potential dangers. RESPONSIBILITY FOR FINANCIAL PERFORMANCE All employees face the hazards of trips, slips, strains from trying to lift heavy objects, and repetitive stress injuries. RESPONSIBILITY FOR OUR PEOPLE “Safety must be foremost in our minds at all times,” Doreen Cole, Senior Vice President, Electricity Services, said in an address to the Conference Board of RESPONSIBILITY FOR Canada’s National Leaders Forum on Health and Safety. SAFETY Building a Zero- “In many ways, it’s a matter of trust between employers and the people they Injury Culture employ or contract. By truly valuing our employees, companies can make the Safety Achievements most effective use of peoples’ talents and earn a reputation as an excellent and Safety Record safe employer. Safe sites attract workers and companies that pursue an integrated safety culture across all their sites will reap the benefit of a competitive advantage.”

Doreen stressed that improving safety requires positive changes in the attitudes, practices, skills and knowledge of employees and leaders.

“It requires a long-term commitment from leadership, along with the resources and ethical fortitude to back it up. I will do anything I can to make it happen.”

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RESPONSIBILITY FOR SAFETY ACHIEVEMENTS COMMUNITIES

RESPONSIBILITY FOR EPCOR recognized the safety achievements of employees in areas across the company in 2009: CUSTOMERS

RESPONSIBILITY FOR ETHICS AND The Rossdale and E.L. Smith Water Treatment Plants marked four years without a lost-time incident (LTI). GOVERNANCE Transportation Services marked one year without a lost-time incident. RESPONSIBILITY FOR FINANCIAL PERFORMANCE Energy Services celebrated one million employee hours worked without a lost-time incident.

RESPONSIBILITY FOR By December 31, 2009, meter readers, who are exposed to the hazards of slippery walks, aggressive dogs, and extreme heat and cold, had gone for OUR PEOPLE 2½ years without a lost-time incident.

RESPONSIBILITY FOR SAFETY EPCOR’s southern Alberta employees, who operate water and wastewater treatment plants, gained a new perspective on workplace injuries thanks to a Building a Zero- Injury Culture Safety Heroes program that originated in EPCOR’s British Columbia locations. At the heart of the events in seven communities were presentations by Safety Kathleen Higgins, whose son experienced a life-altering spinal cord injury 10 years ago as a result of unsafe work practices with another organization. Achievements Safety Record The E.L. Smith plant’s sodium hypochlorite generation system, which eliminates the need for transporting hazardous chlorine to the site was recognized for the reducing the risk to the public and for environmental safety. The Consulting Engineers of Alberta cited the project’s use of “leading-edge technology to provide a safe working environment . . . and eliminate the risks associated with gaseous chlorine to the neighbouring residents.”

SOCIAL RESPONSIBILITY

RESPONSIBILITY FOR SAFETY RECORD COMMUNITIES

RESPONSIBILITY FOR Comparisons with previous years are included for the record. However, 2009 data excludes power generation employees and one-third of the corporate CUSTOMERS services employees. They moved to Capital Power as a result of the sale of the power generation business in July 2009.

RESPONSIBILITY FOR ETHICS AND GOVERNANCE EPCOR 2009 2008 2007 Total Recordable Injury Frequency (TRIF) 3.09 2.34 3.63 RESPONSIBILITY FOR FINANCIAL Lost Time Injury Frequency (LTIF) 0.45 0.19 0.94 PERFORMANCE Lost Time Injury Severity (LTIS) 8.77 1.82 8.13 RESPONSIBILITY FOR OUR PEOPLE Restricted Work Severity (RWS) 53.10 34.16 78.91

RESPONSIBILITY FOR SAFETY Building a Zero- Canadian Electricity Association (CEA) Group II (301-2,300 Injury Culture 2009 2008 2007 emp.) Safety Achievements Total Recordable Injury Frequency (TRIF) 2.03 2.36 3.63 Safety Record Lost Time Injury Frequency (LTIF) 0.47 0.52 0.55

Lost Time Injury Severity (LTIS) 9.87 15.23 9.55

Restricted Work Severity (RWS) 11.06 18.11 19.90

Frequency rates are calculated by multiplying the number of incidents by 200,000 hours. 200,000 hours is an industry standard and equals 100 employees working 40 hours per week for 50 weeks per year. The result is then divided by the hours worked (exposure hours).

EPCOR’s 2009 health and safety performance record declined overall in 2009 from the previous year. The number of lost-time injuries, for example, increased to nine compared with five in 2008.

The previous year, 2008, had been one of the best on record for safety — and EPCOR has put plans into action to raise safety performance to that level, and higher.

EPCOR believes that no injury is acceptable. EPCOR’s first concern must always be on sending employees home at the end of the day safe and sound — no excuses — and protecting the public. That means no compromise on safety, even if it means taking longer to get a project completed. Actions to improve performance

The safety focus brought in new programs in all areas of the company. In Distribution and Transmission, for example, the GEM ("going the extra mile") program recognizes employees for their extraordinary work to create and maintain a safe work environment. A program called “SHARP” (safety and health achievement recognition program) recognizes and celebrates employees’ achievement of specific safety targets.

In 2009, EPCOR merged the Health and Safety and the Environment departments to increase synergies between the two areas. EPCOR is planning to implement an integrated health, safety and environment management system to align with the OHSAS 18001 and ISO 14001 systems.

EPCOR also initiated a major push towards a safer office environment, looking at the potential for trips and slips and repetitive stress injuries, among other factors. The focus was on making employees more aware of workplace dangers and taking corrective actions where necessary. There was a similar focus on outdoor work in winter with instruction on how to avoid injuries in snowy or icy conditions.

Company policy, programs, and procedures cover topics such as maximum hours of work and required safety training. We supply employees with required personal safety equipment, or subsidize them for their purchases. Ongoing safety training is mandatory for employees in most field or operating positions. Crews may hold daily safety planning meetings, depending on the nature and risk of their work. Various joint manager-worker safety committees function in these operational areas. The percentage of the total workforce represented in management-employee health and safety committees is not tracked.

All contractors and sub-contractors working on EPCOR sites must meet our safety standards. We believe in working with contractors that demonstrate strong health and safety work practices.

Litigation update

On March 20, 2009, EPCOR was charged under Alberta’s Occupational Health and Safety Act and Occupational Safety Code in relation to the 2007 fatality of a power lineman employee who came in contact with energized equipment at a job site in south Edmonton.

The charge under the Act relates to failure to ensure, as far as it was reasonably practicable to do so, the health and safety of the employee. The three charges under the Code relate to safe work plan provisions, Alberta Electric Utility Code rules and work process safeguards with respect to energized electrical cables. We have entered not guilty pleas on all charges. The matter has been set down for trial for May 25, 2011 – June 7, 2011. Each charge could attract a fine of up to $500,000 upon conviction.

REPORT OVERVIEW

REPORT OVERVIEW Scope of Report REPORT OVERVIEW EPCOR's Restructuring Forward Looking This is EPCOR’s second Corporate Responsibility Report. It is issued in Information accordance with Global Reporting Initiative (GRI) guidelines. We believe we Independent Assurance Report have achieved an “A+” level of reporting under the guidelines. Glossary Affiliations Objective

Our objective is to report openly on the impacts our business has on the environment and on customers, suppliers, employees, shareholders, communities and other stakeholders. This report represents the continuation of our search for methods of improving our non-financial reporting to meet changing expectations of corporate accountability, responsibility and sustainability. It results from an extensive process that started in 2007 when a corporate responsibility team reviewed reporting guidelines and best practices. The team identified potential measures, consulted with stakeholders respecting their priorities and recommended the specific measures and content of this report.

Public disclosure

EPCOR has a long tradition of public disclosure of its environmental impacts and a commitment to transparency. For example, our water plants that operate under the Performance Based Regulation (PBR) rate structure issue detailed reports to the public every year that include water quality reports, any substances detected in tap water, water use and system reliability. Additional information is contained in EPCOR’s Annual Information Form.

Third Party Disclaimer

REPORT OVERVIEW

REPORT OVERVIEW Scope of Report SCOPE OF REPORT EPCOR's Restructuring Forward Looking Information This report provides a snapshot of information on EPCOR Utilities Inc. (EPCOR), its operating companies, strategies, plans and environmental, social and Independent financial impacts as of December 31, 2009. Cumulative data, unless otherwise noted, reflects the 12-month period ending December 31, 2009. Assurance Report Glossary EPCOR operates at both owned facilities and contract-operated facilities. In 2009, EPCOR operated in Alberta and British Columbia in Canada. Full Affiliations reporting data are not available for contract-operated facilities or leased facilities because the terms of the contract or lease. In addition, this report does not cover outsourced work or suppliers, except as noted.

Except as indicated, this report does not include information on production, greenhouse gas emissions, reclamation, biodiversity and other matters related to our previously owned power generation activities, or power generation employees. In early July 2009, EPCOR sold substantially all of its power generation assets and related operations to Capital Power Corporation. See EPCOR’s fundamental restructuring for more information on this transaction.

The restructuring impacted the overall size and scope of EPCOR, although our operating areas — Water Services, Distribution and Transmission and Energy Services — were largely unaffected. Readers should be aware that this restructuring impacted some year-to-year comparative numbers, such as employee statistics.

In this report, use of the present and future tenses, except as otherwise noted, refers to EPCOR, its operations, strategies and plans as they existed on December 31, 2009.

In this report, the use of “EPCOR” includes EPCOR Utilities Inc. and its subsidiaries.

EPCOR's primary operating subsidiaries

EPCOR Water Services Inc. (EWSI): EWSI provides water and wastewater services to the greater Edmonton region and to communities and industry across Western Canada.

EPCOR Distribution & Transmission Inc. (EDTI): EDTI operates electric power transmission systems, controls the transmission of electricity (i.e. regulating voltages) and distributes it to consumers.

EPCOR Energy Alberta Inc. (EEAI): EEAI provides regulated rate electricity service to residential, farm and small commercial business consumers within the City of Edmonton, the FortisAlberta service area, and 12 Rural Electrification Associations. EEAI provides customer care (including call centre and billing services) for EPCOR companies (including water, natural gas, and electricity). EEAI also provides default supply electricity service to consumers in the City of Edmonton and in the FortisAlberta service area.

Third-party assurance

For third-party assurance concerning aspects of this report, we engaged PricewaterhouseCoopers LLP (PwC). PwC reviewed the methodologies, data collection and analysis processes used in compiling certain data for this report. See PwC’s Independent Assurance Report, which identifies the specific performance indicators they reviewed and their conclusion, along with a brief description of their review process.

Reporting cycle

EPCOR plans to report on its corporate responsibility perspectives on an annual basis. The 2009 report is exclusively online.

Comments and questions

We welcome your comments and questions. Please email us or write to:

EPCOR Corporate Relations 10065 Jasper Avenue Edmonton, Alberta T5J 3B1

Third Party Disclaimer

REPORT OVERVIEW

REPORT OVERVIEW Scope of Report EPCOR'S FUNDAMENTAL RESTRUCTURING EPCOR's Restructuring Forward Looking On July 9, 2009 , EPCOR sold substantially all of its power generation assets and related operations, including its Information 30.6% interest in Capital Power Income L.P. (formerly EPCOR Power L.P) to Capital Power Corporation. Independent Assurance Report The transaction followed the completion of an Initial Public Offering of common shares of Capital Power. Following Glossary the transaction, EPCOR held a 72% economic interest in Capital Power L.P. EPCOR plans to eventually sell all or Affiliations a substantial portion of its ownership interest, subject to market conditions, its requirements for capital and other circumstances that may arise in the future.

Capital Power and its subsidiaries are now responsible for EPCOR’s former portfolio of approximately 3,500 megawatts (MW) of owned and/or operated power generation capacity at 31 facilities in Canada and the United States.

EPCOR continues to provide regulated electricity transmission and distribution, and water and wastewater services to more than one million people in Western Canada.

Benefits from the restructuring

EPCOR has access to capital to finance sustained growth through the gradual sell-down of its interest in Capital Power.

EPCOR receives Capital Power cash distributions.

Capital Power has access to equity capital to finance sustained growth.

As EPCOR’s interest in Capital Power is divested over time, EPCOR’s risk portfolio will be shifted to more stable regulated and contracted businesses, helping to maintain Shareholder returns.

EPCOR can focus exclusively on water /wastewater and electricity distribution and transmission. Capital Power can focus exclusively on power generation and related services.

Both companies have head offices in Edmonton. The City of Edmonton and EPCOR have a veto over Capital Power ever moving. Send to Friend

REPORT OVERVIEW

REPORT OVERVIEW Scope of Report FORWARD LOOKING INFORMATION EPCOR's Restructuring Forward Looking Certain information in this Corporate Responsibility Report is forward-looking within the meaning of Canadian securities laws as it is related to anticipated Information financial performance, events or strategies. When used in this context, words such as “will,” “anticipate,” “believe,” “plan,” “intend,” “target,” and “expect” or Independent Assurance Report similar words suggest future outcomes. Glossary The primary forward-looking information in this report comprises: (i) expectations regarding future company growth, investment in smart grid technologies Affiliations and operating plans and (ii) the company plans to eventually sell all or a substantial portion of its ownership interest in Capital Power, subject to market conditions, its requirements for capital and other circumstances that may arise.

These statements are based on certain assumptions and analysis made by EPCOR in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions underlying this forward- looking information include, but are not limited to: (i) the operation of EPCOR’s facilities; (ii) EPCOR’s assessment of commodity and power markets; (iii) EPCOR’s assessment of the markets and regulatory environments in which it operates; (iv) availability and cost of labour and management resources; (v) performance of contractors and suppliers; (vi) availability and cost of financing; (vii) proposed environmental regulations will be implemented; and (viii) ability to implement strategic initiatives which will yield the expected benefits.

Whether actual results, performance or achievements will conform to EPCOR’s expectations and predictions is subject to a number of known and unknown risks and uncertainties, which could cause actual results and experience to differ materially from EPCOR’s expectations. Such risks and uncertainties include, but are not limited to, risks relating to: (i) operation of EPCOR’s facilities; (ii) unanticipated maintenance and other expenditures; (iii) availability and price of energy commodities; (iv) regulatory and government decisions including changes to environmental legislation; (v) economic conditions; (vi) competitive pressures; (vii) construction; (viii) availability and cost of financing; (ix) availability of labour and management resources; and (x) performance of counterparties, partners, contractors and suppliers in fulfilling their obligations to EPCOR.

Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Except as required by law, EPCOR disclaims any intention and assumes no obligation to update any forward-looking statement.

REPORT OVERVIEW

REPORT OVERVIEW Scope of Report INDEPENDENT ASSURANCE REPORT EPCOR's Restructuring Forward Looking To the Board of Directors and Management of EPCOR Utilities Inc. (“EPCOR”) Information Independent We have reviewed selected quantitative performance indicators (the “Subject Matter”) presented in EPCOR’s Corporate Responsibility Report (the “Report”) Assurance Report for the year ended December 31, 2009. We did not review all information included in the Report. Glossary Affiliations View this document as a PDF.

Subject Matter

We reviewed the following consolidated 2009 quantitative performance indicators as set out in the Report, and Attachment A, which comprise the Subject Matter:

Total community support Carbon footprint Reportable environmental releases Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations. Employee injury frequency rates: Total recordable injury frequency (TRIF) Lost time injury frequency (LTIF) Employee statistics

We also reviewed EPCOR’s self-declaration of the level of reporting achieved under the Global Reporting Initiative guidelines.

The indicators comprising the Subject Matter were chosen by EPCOR primarily on the basis of perceived external stakeholder interest. We did not review the narrative sections of the Report, except where they incorporated the Subject Matter.

Responsibilities

EPCOR management is responsible for collection and presentation of the Subject Matter. Our responsibility is to express a conclusion, based on our assurance procedures, as to whether anything has come to our attention to suggest that the Subject Matter is not presented fairly in accordance with the relevant criteria. Methodology & Assurance Procedures

We conducted our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000, “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, issued by the International Federation of Accountants. As such, we planned and performed our work in order to provide limited assurance with respect to the Subject Matter.

We obtained and evaluated evidence using a variety of procedures including:

Interviewing relevant EPCOR management and staff responsible for data collection and reporting Obtaining an understanding of the management systems, processes, and controls used to generate, aggregate and report the data Reviewing relevant documents and records on a sample basis Testing and re-calculating quantitative information related to the selected performance indicators on a sample basis Assessing the information collected for completeness, accuracy, validity and consistency

Our evidence-gathering procedures were more limited than required for a reasonable assurance engagement and, consequently, we do not express an audit opinion on the Subject Matter.

We carried out our work on the selected performance indicators at EPCOR’s head office in Edmonton, Alberta.

Our assurance criteria comprised the Global Reporting Initiative Sustainability Reporting Guidelines (2006), industry standards, and EPCOR’s internal management definitions as disclosed in the Report, informed by relevant regulations in the areas of operation.

Our assurance team included individuals with backgrounds and experience in providing assurance on environment, health and safety, social and economic information.

Conclusion

Based on our work as described in this report, nothing has come to our attention that causes us to believe that the Subject Matter is not, in all material respects, reported in accordance with the relevant criteria.

PricewaterhouseCoopers LLP Edmonton, Canada October 1, 2010

Attachment A: EPCOR 2009 Corporate Responsibility Report

All figures for the year ending December 31, 2009

GRI Reference Performance Indicator 2009 Value Notes

Includes programs, activities and sponsorships.

EC1 Total community support $2.6 million The indicator is reported in a manner consistent with EPCOR’s financial reporting principles and includes support that may be associated with previously owned power generation activities.

Includes direct (Scope 1) and indirect (Scope 2) emissions. Data is for operations owned by EPCOR. Exceptions include oil 183,898 tonnes EN 16 Carbon footprint sands operations acquired by EPCOR in late 2009, several CO2 equivalent contract-operated facilities, and 16% of company fleet for which fuel information was not available.

Includes only releases that meet or exceed the criteria for reporting as set out in the applicable provincial and federal Reportable environmental regulations. EN23 31 releases 2009 reportable environmental releases included 9 releases to air, 16 releases to land, 6 releases to water.

Monetary value of significant fines and total number of non- EN28 monetary sanctions for non- Zero compliance with environmental laws and regulations

Full time permanent employees 2,164 Part time permanent employees 93 Full time temporary employees 63 LA1 Part time temporary employees 3 As at December 31, 2009 Full time provisional employees 7 Casual employees 8 Total employees 2,338

Frequency rates are calculated by multiplying the number of incidents by 200,000 hours. 200,000 hours is an industry standard base and equals 100 employees working 40 hours per Lost Time Injury Frequency week for 50 weeks per year. The result is then divided by the LA7 0.45 (LTIF) hours worked (exposure hours). Data excludes power generation employees and one-third of the corporate services employees who were moved to Capital Power as a result of the sale of the power generation business in July 2009.

Frequency rates are calculated by multiplying the number of incidents by 200,000 hours. 200,000 hours is an industry standard base and equals 100 employees working 40 hours per Total Recordable Injury week for 50 weeks per year. The result is then divided by the LA7 3.09 Frequency (TRIF) hours worked (exposure hours). Data excludes power generation employees and one-third of the corporate services employees who were moved to Capital Power as a result of the sale of the power generation business in July 2009. Send to Friend

REPORT OVERVIEW

REPORT OVERVIEW Scope of Report GLOSSARY, UNITS OF MEASUREMENT AND ABBREVIATIONS EPCOR's Restructuring Forward Looking Some terms are defined in the context of EPCOR’s operations and are commonly used and accepted by industry. Other terms are defined terms in Information accordance with Global Reporting Initiative (GRI) documentation or by regulations. Independent Assurance Report Glossary Carbon dioxide Affiliations Abbreviated as CO2. In the atmosphere, a greenhouse gas that affects the Earth’s temperature.

Carbon dioxide equivalent (also CO2e or CO2 equivalent)

Used to compare emissions from various greenhouse gases based on their global warming potential (GWP). The CO2 equivalent for a gas is derived by multiplying the tonnes of the gas by the associated GWP.

Cubic meter (m3)

Metric unit of volume or capacity equal to 1,000 litres.

Direct energy consumption

Consumption of primary energy sources such as coal, gasoline, diesel by the reporting organization for its own use. (Indicators Protocol Set: Environment; Global Reporting Initiative, 2009)

Indirect energy consumption

Consumption of energy such as electricity purchased from sources external to the reporting organization. (Indicators Protocol Set: Environment; Global Reporting Initiative, 2009)

Lost-time injury

Recorded when a worker misses work beyond the date of injury as a direct result of an occupational injury/illness incident.

Recordable injury

Any occupational injury/illness that results in: a fatality; a lost-time injury; an injury/illness requiring medical treatment; or other injury that involves a significant occupational injury/illness, one that results in restricted/modified work or loss of consciousness.

Restricted/modified work

Work in a modified or restricted capacity due to a work-related injury/illness. Recorded when the employee is medically determined to be unable to perform one or more of his or her routine functions, or is unable to work the same amount of time as before their injury or illness. Routine functions are the work activities that the employee regularly performs at least once a week.

Lost-time injury frequency

The number of lost-time injuries experienced by an employer in a specified time period. The frequency is calculated by multiplying the number of lost-time injuries by 200,000 hours (a widely-accepted industry standard base and equals 100 employees working 40 hours per week for 50 weeks per year) and then dividing that number by the hours worked (exposure hours).

Lost-time injury severity

The number of calendar days that the employee is unable to work beyond the day of injury/illness. Lost time ends when the employee is deemed fit to work full-time by a physician or health care professional or goes on restricted work, or after 180 calendar days.

Megalitres (ML)

One million litres.

Megawatt (MW)

A unit of power equal to 1 million watts.

Megawatt hour (MWh)

One megawatt-hour represents one hour of electricity production (or consumption) at a constant rate of 1 MW.

Watt

A measure of power. For example, a 40-watt light bulb uses 40 watts of electricity.

Stakeholder

Stakeholders are defined broadly as those groups or individuals: (a) that can reasonably be expected to be significantly affected by the organization’s activities, products, and/or services; or (b) whose actions can reasonably be expected to affect the ability of the organization to successfully implement its strategies and achieve its objectives. (GRI Sustainability Reporting Guidelines & Electric Utility Sector Supplement.)

Total recordable injury frequency

The number of recordable injuries experienced by an employer in a specified time period. The frequency is calculated by multiplying the number of recordable injuries by 200,000 hours (200,000 hours is a widely-accepted industry standard base and equals 100 employees working 40 hours per week for 50 weeks per year) and then dividing that number by the hours worked (exposure hours). Send to Friend

REPORT OVERVIEW

REPORT OVERVIEW Scope of Report AFFILIATIONS EPCOR's Restructuring Forward Looking Organizations that EPCOR is affiliated with include: Information Independent Alberta Electric Utility Safety Association Assurance Report Alberta Industrial Heartland Association Glossary Alberta Power Industry Consortium Affiliations Alberta Roadbuilders and Heavy Construction Association Alberta Urban Municipalities Association Alberta Water Council American Water Works Association Boston College Center for Corporate Citizenship Bow River Basin Council Calgary Chamber of Commerce Canada West Foundation Canadian Association of Petroleum Producers (associate member) Canadian Chamber of Commerce, as well as local and provincial Chambers of Commerce Canadian Electricity Association Canadian Council for Public-Private Partnerships Canadian Water and Wastewater Association Clearwater Landcare Conference Board of Canada Construction Owners Association of Alberta Council of Industrial Boiler Owners Edmonton Chamber of Commerce Edmonton Downtown Business Association Edmonton Waste Management Centre of Excellence Environmental Services Association of Alberta International Association of Public Participation Joint Utility Safety Team North Saskatchewan Watershed Alliance Oil Sands Developers Group Partnerships in Injury Reduction Partners in Road Construction Safety Prairie Adaptation Research Collaborative Petroleum Technology Alliance Canada Recycling Council of Alberta Strathcona Industrial Association Tsulquate River Watershed Working Group (Port Hardy) Volunteer Canada Water Reuse Association Waterlution Western Canada Water Western Canada Utilities Waste Management Consortium Western Canadian Auditing Roundtable

MEASURING OUR PERFORMANCE

MEASURING PERFORMANCE Environmental GLOBAL REPORTING INITIATIVE INDEX Indicators Social and Economic GRI is a network-based organization that developed the world’s most widely used sustainability reporting framework. The reporting framework is developed Indicators through a consensus-seeking process with participants drawn globally from business, civil society, labour, and professional institutions. EPCOR has applied the GRI framework to report on its environmental, economic, and social performance.

The following tables show the location of EPCOR’s responses to the GRI performance indicators. Most responses are contained within EPCOR 2009 Corporate Responsibility Report. Other responses are found within existing EPCOR data on its website, in the annual report and in its Annual Information Form. Links in the right-hand column will take you to the appropriate location.

VISION AND STRATEGY

GRI # Disclosure Location

Statement from the most senior decision-maker about the relevance of 1.1 President's Message sustainability to the organization and its strategy

President's Message, 1.2 Description of key impacts, risks, and opportunities AIF (pp. 5-17)

ORGANIZATIONAL PROFILE

GRI # Disclosure Location

EPCOR Utilities Inc. 2.1 Name of the organization (EPCOR)

Annual Report, AIF (pp. 2.2 Primary brands, products, and/or services 6-11)

Operational structure of the organization, including main divisions, operating Annual Report, AIF (pp. 2.3 companies, subsidiaries, and joint ventures 5-11)

10065 Jasper Avenue 2.4 Location of organization’s headquarters Edmonton, Alberta T5J 3B1 Number of countries where the organization operates, and names of countries 2.5 with either major operations or that are specifically relevant to the sustainability Canada issues covered in the report

2.6 Nature of ownership and legal form Annual Report, AIF (p. 5)

Annual Report, AIF (pp. Markets served (including geographic breakdown, sectors served, and types of 2.7 5-11), Customer customers/beneficiaries) Responsibility

People, Social Data, Scale of the reporting organization, including: number of employees; net sales; Environment Data, 2.8 and total capitalization broken down in terms of debt and equity, and quantity of Annual Report, AIF (p. products or services provided 11)

Significant changes during the reporting period regarding size, structure or President's 2.9 ownership, including: the location of, or changes in operations, including facility Message, Overview openings, closings, and expansions; and changes in the share capital structure

2.10 Awards received in the reporting period People, Annual Report

REPORT PARAMETERS

GRI # Disclosure Location

January 1-December 31, 3.1 Reporting period for information provided 2009, unless otherwise noted

3.2 Date of most recent previous report 2008

3.3 Reporting cycle Annual

10065 Jasper Avenue Edmonton, Alberta 3.4 Contact point for questions about the report or its contents. T5J 3B1 [email protected]

Process for defining report content, including: determining materiality; prioritizing 3.5 topics within the report; and identifying stakeholders the organization expects to Overview use the report.

Report Scope and Boundary

Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, 3.6 Overview joint ventures, suppliers).

3.7 Any specific limitations on the scope or boundary of the report. Overview

Scale of the reporting organization, including: number of employees; net sales; 3.8 and total capitalization broken down in terms of debt and equity, and quantity of Overview products or services provided

Data measurement techniques and the bases of calculations, including Glossary, Environment 3.9 assumptions and techniques underlying estimations applied to the compilation of Data Notes the Indicators and other information in the report

Overview Explanation of the effect of any re-statements of information provided in earlier Restated Data: 3.10 reports, and the reasons for such re-statement (e.g., mergers/acquisitions, IUCN Red List Species, change of base years/periods, nature of business, measurement methods) 2008 Disconnections, Political Contributions

Significant changes from previous reporting periods in the scope, boundary, or 3.11 Overview measurement methods applied in the report.

3.12 Table identifying the location of the Standard Disclosures in the report. Current Table

Policy and current practice with regard to seeking external assurance for the Overview, Independent 3.13 report. Assurance Report

GOVERNANCE, COMMITMENTS AND ENGAGEMENT

GRI # Disclosure Location

Governance structure of the organization, including committees under the highest Ethics and Governance, 4.1 governance body responsible for specific tasks, such as setting strategy or Social Data, AIF (pp. 19- organizational oversight. 26)

Indicate whether the Chair of the highest governance body is also an executive The Chairman is not an 4.2 officer executive officer.

For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non- 4.3 Social Data, AIF (p. 24) executive members. State how the organization defines independent and non- executive.

Ethics and Mechanisms for shareholders and employees to provide recommendations or 4.4 Governance, AIF (pp. 46- direction to the highest governance body (e.g., shareholder resolutions). 50)

Linkage between compensation for members of the highest governance body, 4.5 AIF (pp. 26-40) senior managers and executives and the organizations performance

Processes in place for the highest governance body to ensure conflicts of interest 4.6 AIF (pp. 24-26) are avoided.

Process for determining the qualifications and expertise of the members of the 4.7 highest governance body for guiding the organization’s strategy on economic, AIF (pp. 24-26) environmental and social topics

President's Message, Water, Wastewater, Internally developed statements of mission or values, codes of conduct, and Distribution and 4.8 principles relevant to economic, environmental, and social performance and the Transmission, People, status of their implementation. Safety, Safety 2, Communities, Ethics

Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social 4.9 AIF (pp. 41-50) performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, etc.

Process for evaluating the highest governance body's own performance, 4.10 AIF (pp. 41-50) particularly with respect to economic, environmental, and social performance.

Explanation of whether and how the precautionary approach or principle is 4.11 Social Data addressed by the organization. Distribution and Externally developed economic, environmental, and social charters, principles, or 4.12 Transmission, other initiatives to which the organization subscribes or endorses. Customers, Communities

4.13 Memberships in associations and/or national/international advocacy organizations. Overview

4.14 List of stakeholder groups engaged by the organization. Customers, Communities

4.15 Basis for identification and selection of stakeholders with whom to engage. Overview, Communities

4.16 Approaches to stakeholder engagement Overview,Communities

Key topics and concerns that have been raised through stakeholder engagement, 4.17 Communities and how the organization has responded to those key topics and concerns.

DISCLOSURES ON MANAGEMENT APPROACH

GRI # Disclosure Location

President’s message and in each section Overviews of management approach to economic performance, environmental 5 throughout aspects, labour practices, society, human rights and product responsibility. report, AIF (pp. 5-17), Annual Report

ELECTRIC UTILITY INDICATORS (EU)

GRI # Disclosure Location

Not applicable. EPCOR is EU1 Installed capacity: amount of power in MW an entity can produce. not a power generator.

Not applicable. EPCOR is EU2 Net energy output of power generation. not a power generator.

EU3 Number of residential, industrial and commercial customer accounts. Customers, Social Data

EU4 Length of above and underground transmission and distribution lines. Environment Data

Not applicable. EPCOR is EU5 Allocation of CO2e emissions allowances. not a power generator.

Management approach to ensure short- and long-term electricity reliability and Distribution and EU6 availability. Transmission

Distribution and EU7 Demand side management programs. Transmission

R&D activity and expenditure aimed at providing reliable electricity and promoting EU8 Social Data sustainable development.

Not applicable. EPCOR is EU9 Provisions for decommissioning nuclear power plants. not a power generator.

Not applicable. EPCOR is EU10 Planned capacity against projected electricity demand over the long term. not a power generator. Not applicable. EPCOR is EU11 Capacity of thermal generating plants. not a power generator.

EU12 Distribution and Transmission losses as % of total energy. Environment Data

Not applicable. EPCOR EU13 Biodiversity of offset habitats compared to the biodiversity of the affected areas. does not use offset habitats.

EU14 Programs and processes to ensure the availability of a skilled workforce. People

Percentage of employees eligible to retire in 10 years broken down by job EU15 Social Data category.

Policies and requirements regarding health and safety of employees and EU16 Safety employees of contractors and subcontractors.

Days worked by contractor and subcontractor employees involved in construction, EU17 Social Data operation and maintenance activities.

Not available. All contractors and subcontractors working Percentage of contractor and subcontractor employees who have undergone EU18 on our sites must have relevant health and safety training. safely policies and practices consistent with EPCOR’s.

Stakeholder participation in the decision-making process related to energy EU19 Communities planning and infrastructure development

EU20 Approach to managing the impacts of displacement. Social Data

Contingency planning measures disaster/emergency management plan and EU21 Customers training programs, and recovery/restoration plans.

Number of people physically or economically displaced and compensation, broken EU22 Social Data down by type of project.

Programs, including those in partnership with government, to improve or maintain EU23 Customers access to electricity and customer support services.

Practices to address language, cultural, low literacy and disability-related barriers EU24 Customers to accessing and safely using electricity and customers support services.

EU25 Number of injuries and fatalities to the public involving company assets. Social Data

Not available. EPCOR has no knowledge of the population percentage EU26 Percentage of population unserved in licensed distribution areas. unserved in its service or distribution area — and no way of gathering this information.

EU27 Number of disconnections for non-payment, and duration of disconnection. Social Data

EU28 Power outage frequency. Customers

EU29 Average power outage duration. Customers

Not applicable. This is a EU30 Average plant availability factor by energy source and country or regulatory regime power generation plant measure.

ECONOMIC PERFORMANCE INDICATORS (EC)

GRI # Disclosure Location

Direct economic value generated and distributed, including revenues, operating Annual Report, EC1 costs, employee compensation, donations and other community investments, Community retained earnings, and payments to capital providers and governments.

Financial implications and other risks and opportunities for the organization’s EC2 Watersheds activities due to climate change.

People, Consolidated EC3 Coverage of the organization's defined benefit plan obligations. Financial Statements (pp. 93-94)

EC4 Significant financial assistance received from government. Social Data

Market presence

EC5 Ratios of entry level wages compared to local minimum wage. Social Data

Policy, practices, and proportion of spending on locally-based suppliers at EC6 Social Data significant locations of operation.

Procedures for local hiring and proportion of senior management hired from the EC7 People local community at locations of significant operation.

Indirect economic impacts

Development and impact of infrastructure investments and service provided EC8 Community primarily for public benefit through commercial, in-kind or pro bono engagement

Understanding and describing significant indirect economic impacts, including the EC9 Community extent of impacts.

ENVIRONMENTAL INDICATORS (EN)

GRI # Disclosure Location

Environment Data, EN1 Materials used by weight and volume. Environment Data 2

Environment EN2 Percentage of materials that are recycled input materials Data, Environment Data 2

EN3 Direct energy consumption by primary energy source. Environment Data

Environment Data, EN4 Indirect energy consumption by primary source. Environment Data 2

EN5 Energy saved due to conservation and efficiency improvements. Wastewater

Initiatives to provide energy-efficient or renewable energy based products and Distribution and EN6 services, and reductions in energy requirements as a result of these initiatives. Transmission

EN7 Initiatives to reduce indirect energy consumption and reductions achieved. Not Tracked EN8 Total water withdrawal by source. Environment Data

Watersheds, EN9 Water sources significantly affected by withdrawal of water. Wastewater, Environment Data

EN10 Percentage and total volume of water recycled and discharged. Environment Data

Location and size of land owned, leased, managed in, or adjacent to, protected EN11 Environment Data areas and areas of high biodiversity value outside protected areas.

Description of significant impacts of activities, products, and services on EN12 biodiversity in protected areas and areas of high biodiversity value outside Wastewater, Watersheds protected areas.

Distribution and EN13 Habitats protected or restored. Transmission, Wastewater

Distribution and EN14 Strategies, current actions, and future plans for managing impacts on biodiversity. Transmission, Watersheds

Number of IUCN Red List species and national conservation list species with EN15 Environment Data habitats in areas affected by operations.

EN16 Total direct and indirect greenhouse gas emissions by weight. Environment Data

EN17 Other relevant indirect greenhouse gas emissions Environment Data

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. Wastewater

EN19 Emissions of ozone-depleting substances by weight. Environment Data

EN20 NOx, SOx, and other significant air emissions by type and weight. Environment Data

EN21 Total water discharge by quality and destination. Environment Data

Distribution and EN22 Total weight of waste by type and disposal method. Transmission

Environment Data, EN23 Total number and volume of significant spills. Wastewater

Weight of transported, imported or treated waste deemed hazardous under Basel EN24 Environment Data Convention.

Identity, size, protected status, and biodiversity value of water bodies and related EN25 habitats significantly affected by the reporting organization's discharges of water Watersheds, Wastewater and runoff.

Customers, Wastewater, EN26 Initiatives to mitigate environmental impacts of products and services. Distribution and Transmission

Not applicable. No Percentage of products sold and their packaging materials that are reclaimed by packaging material is EN27 category. associated with our products.

Monetary value of significant fines and total number of non-monetary sanctions for EN28 Environment Data non-compliance with environmental laws and regulations.

Significant environmental impacts of transporting products and other goods and Not material. No EN29 materials used for the organization’s operations, and transporting members of the significant impacts. workforce.

Not available. We have included narratives about the Fish Return Project and other environmental initiatives. However, EN30 Total environmental protection expenditures and investments by type. environmental protection expenditures are not categorized and reportable in EPCOR’s financial system.

LABOUR PRACTICES AND DECENT WORK (LA)

GRI # Disclosure Location

LA1 Total workforce by employment type, employment contract, and region. Social Data

LA2 Total number and rate of employee turnover Social Data

Benefits provided to full-time employee that are not provided to temporary or part- LA3 People, People 2 time employees

LA4 Percentage of employees covered by collective bargaining agreements Social Data, People

Minimum notice period(s) regarding significant operational changes, including LA5 Social Data whether it is specified in collective agreements.

Percentage of total workforce represented in formal joint management-worker LA6 Safety health and safety committees.

Rates of injury, occupational diseases, lost days and absenteeism and work- LA7 Safety related fatalities.

Education, training, counselling, prevention and risk-control programs to assist LA8 workforce members, their families, or community members regarding serious People diseases.

LA9 Health and safety topics covered in formal agreements with trade unions. Safety

LA10 Average hours of training per year per employee. Social Data

LA11 Programs for skills management and lifelong learning. Social Data

Percentage of employees receiving regular performance and career development Social Data, Social Data LA12 reviews. 2

Composition of governance bodies and breakdown of employees per category LA13 according to gender, age group, minority group membership, and other indicators AIF (pp. 19-25), People of diversity.

LA14 Ratio of basic salary of men to women by employee category People

HUMAN RIGHTS (HR)

GRI # Disclosure Location Significant investment agreements that include human rights clauses and have HR1 Social Data undergone human rights screening.

Significant suppliers and contractors that have undergone screening on human HR2 Social Data rights.

Total hours of employee training on policies and procedures concerning aspects HR3 of human rights that are relevant to operations, including the percentage of Ethics employees trained.

HR4 Total number of incidents of discrimination and actions taken. Social Data

Operations in which the right to freedom of association and collective bargaining HR5 Social Data may be at significant risk.

HR6 Operations identified as having significant risk for incidents of child labour. Social Data

HR7 Operations having significant risk for incidents of forced or compulsory labour. Social Data

Percentage of security personnel trained in the organization policies or procedures HR8 Social Data concerning aspects of human rights that are relevant to operations

Total number of incidents of violations involving rights of indigenous people and HR9 Social Data actions taken.

SOCIETY (SO)

GRI # Disclosure Location

Nature, scope, and effectiveness of programs and practices that assess and SO1 Communities, Social Data manage the impacts of operations on communities.

Percentage and total number of business units analyzed for risks related to SO2 Ethics corruption.

Percentage of employees trained in organization’s anti-corruption policies and SO3 Ethics procedures.

SO4 Actions taken in response to incidents of corruption. Ethics

SO5 Public policy positions and participation in public policy development and lobbying. Ethics

SO6 Total value of financial and in-kind contribution to political parties and politicians. Social Data

Total number of legal actions for anti-competitive behaviour, anti-trust, and SO7 Social Data monopoly practices and their outcomes.

Monetary value of significant fines and total number of non-monetary sanctions for SO8 Social Data non-compliance with laws and regulations.

PRODUCT RESPONSIBILITY (PR)

GRI # Disclosure Location

Life cycles in which health and safety impacts of products and services are PR1 Water, Wastewater assessed for improvement.

Total number of incidents of non-compliance with regulations and voluntary codes Water, PR2 concerning health and safety impacts of products and services. Wastewater Type of product and service information required by procedures and percentage PR3 Customers of significant products and services subject to such information requirements.

Incidents of non-compliance with regulations and voluntary codes concerning PR4 Customers product and service information and labelling.

Practices related to customer satisfaction, including results of surveys measuring PR5 Water, Customers customer satisfaction.

Programs for adherence to laws, standards and voluntary codes related to PR6 Customers marketing communications, including advertising, promotion and sponsorship.

Incidents of non-compliance with regulations and voluntary codes concerning PR7 Social Data marketing communications.

Total number of substantiated complaints regarding breaches of customer privacy PR8 Social Data and losses of customer data.

Monetary value of significant fines for non-compliance with laws and regulations PR9 Social Data concerning the provision and use of products and services.

Third Party Disclaimer

MEASURING OUR PERFORMANCE

MEASURING PERFORMANCE Environmental ENVIRONMENT/TECHNICAL INFORMATION & DATA Indicators Social and Economic Indicators GRI ENVIRONMENT INDICATORS GRI numbers refer to the Global Reporting Initiative disclosure. Data and information related to power generation are not provided because of the sale of power generation assets in July 2009. AIF refers to EPCOR’s 2009 Annual Information Form. Annual Report refers to EPCOR’s 2009 Annual Report. NCD - No comparable data Other references are to sections of this report or sections of EPCOR’s website.

GRI # Description 2009 2008

2 - 49 ppm in 84,696 litres recycled 2 - 49 ppm in 68,414 litres recycled In-use inventory of PCBs in equipment EN1 mineral oil >50 ppm in 6,158 litres mineral oil >50 ppm in 1,015 litres (known concentrations) mineral oil mineral oil)

PCB material disposed/recycled in EN1 60,912 kg 64,206 kg equipment (known concentrations)

Not material. EPCOR’s primary inputs are water and electricity. We use paper with at least 30% post-consumer content for most internal printing and Percentage of materials used that are EN2 paper that has up to 100% post- Same recycled input materials consumer content for commercially printed documents. Amounts are not quantified. Employees programs are under way to reduce paper use.

Electricity consumed in Edmonton water EN4 93,330,942 kWh 87,475,474 KWh treatment and distribution

Total water produced for Edmonton EN4 133,503 ML 136,249 ML region

Electricity consumed per unit of water - EN4 699 kWh/ML 642 KWh/ML Edmonton

Gold Bar produced and delivered 1,347,130 cubic metres (before Gold EN10 Volume of water recycled 3,356,525 cubic metres of reclaimed Bar operation) water to customers

Location and size of land owned, leased, managed in, or adjacent to, EN11 protected areas and areas of high Banff National Park, Alberta None biodiversity value outside protected areas

Number of IUCN Red List species and The 2008 published response of “zero” national conservation list species with was incorrect. The 2008 response EN15 See response below habitats in areas affected by operations, should have been the same as our by level of extinction risk. 2009 response.

Not material. Indirect emissions include employee commuting and business travel. These cannot be easily quantified in terms of resulting emissions and they would not be Other relevant indirect greenhouse gas significant when compared to other EN17 Same emissions by weight. activities generating direct or indirect emissions. EPCOR’s major work sites and offices are accessible by public transit. EPCOR is increasingly using teleconferences and video conferences in place of business travel.

Emissions of ozone-depleting EN19 Zero 1 substances by weight 41 kg

(For 2008 emissions related to power NOx, SOx, and other significant air EN20 Not material. No significant emissions generation, see the 2008 Corporate emissions by type and weight Responsibility Report)

31 (9 releases to air, 16 releases to EN23 2 3 Reportable environmental releases land, 6 releases to water) 129

Weight of transported, imported or EN24 treated waste deemed hazardous under Zero Zero Basel Convention

Monetary value of significant fines and total number of non-monetary sanctions 1 fine, 1 violation, 2 notices of violation EN28 Zero for non-compliance with environmental Monetary value: $23,000 laws and regulations

Edmonton - 5,324 km primary 5,069 km primary distribution up to 60 Length of above ground and distribution up to 60 kV kV underground transmission and Edmonton - 203 km transmission lines EU4 195 km transmission lines over 60 kV distribution lines, by regulatory regime over 60 kV (Regulated by Alberta Utilities (km) (Regulated by Alberta Utilities Commission) Commission)

EU12 Distribution and transmission line losses 180.91 MWh (2.63% of total load) 179.76 MWh (2.49%) EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.

EPCOR operates facilities in Alberta and B.C. where nine of the IUCN (International Union for Conservation of Nature) red listed species may exist.

The Vancouver Island Marmot is a critically endangered species whose range overlaps with Sooke and French Creek operations. As well, there are a several Pacific coast species on the list and could be considered to be in the vicinity of B.C. operations such as Port Hardy, Sooke and Britannia Mine. These include the Thresher Shark, Liver-Oil Shark, Bluntnose Sixgill Shark, Shortfin Mako Shark, Blue Whale and Northern Abalone. The White Bark Pine tree, which grows along the coastal range in British Columbia and in the Rocky Mountains in Alberta, is listed as vulnerable and would occur in the headwaters of Alberta operations, primarily the Okotoks, Banff, and Canmore facilities. The shrub Canadian Yew is listed as near threatened. It can be found throughout Vancouver Island, the B.C. coast, and in the Rocky Mountain ranges. This would indicate that all B.C. operations on Vancouver Island and possibly Banff and Canmore would be near this species range. It should be noted, however, that EPCOR operations are not “extractive” like mining, forestry or commercial fisheries and as such do not have a direct impact on the habitats of these species. In addition, EPCOR’s Watershed Protection Program supports habitat and watershed protection through a number of initiatives including source water protection planning, watershed initiatives, water quality and quantity analysis and education and awareness.

EN1, EN3, EN4, EN16 EPCOR carbon footprint 2009 - Direct emissions (Scope 1) 4

C02e produced Mobile fleet operations Fuel consumed (litres) (tonnes)

Gasoline consumed by Edmonton fleet 861,574 2,027

Diesel consumed by Edmonton fleet 1,270, 681 3,419

Emissions from mobile fleet operations 5,446

CO2e produced Natural Gas Consumption - owned buildings and sites Fuel consumed (GJ) (tonnes)

Edmonton water and distribution and transmission sites and facilities 177,997 9,205

B.C. sites and facilities 9,191 475

Emissions from natural gas consumption 9,680

CO2e produced Gold Bar Wastewater Treatment Plant emissions Fuel consumed (Gj) (tonnes)

Natural Gas 35,193 1,790

Biogas 5 27,511

Biological nutrient removal (BNR) 6 process 14,904

Gold Bar emissions 44,206

7 CO2e produced SF6 releases from distribution and transmission SF6 released (kg) transformers and other electrical equipment (tonnes)

SF6 21.36 511

Total direct emissions 59,842

4 Indirect emissions (Scope 2)

Electricity usage - owned buildings and sites Kilowatt hours (kWh) Indirect C02e (tonnes)

Edmonton water, wastewater and distribution and transmission sites 139,845,918 124,020 and facilities

B.C. sites and facilities 2,395,272 36

Total indirect emissions 124,056

Total direct and indirect emissions 183,898

PLANT INFORMATION (EN 8, 9, 21) EPCOR-owned facilities

WTP=Water Treatment Plant WWTP=Wastewater Treatment Plant ML=Million litres

Treated Water Annual Treated Water Intake Water Destination of Treated Location Production Diversion (ML) Effluent (ML) Source Wastewater - Source (ML)

North Rossdale WTP 70,019 65,045 N/A Saskatchewan N/A Edmonton, Alberta River

North E.L. Smith WTP 80,697 74,485 N/A Saskatchewan N/A Edmonton, Alberta River

Gold Bar WWTP - 3,361 ML of total treated was N/A N/A 98,887 N/A North Saskatchewan River recycled to industrial customers

French Creek WTP - 603 N/A Wells N/A French Creek, B.C.

White Rock WTP White Rock, B.C. - Wells and French no treatment - 2,360 N/A N/A Creek occurs at White Rock

Northern Alberta - Fort McMurray - 339 485 - - sites (aggregate) Contract Operated Plants - Southern Alberta

Treated Water Annual Treated Water Intake Water Destination of Treated Location Production Diversion (ML) Effluent (ML) Source Wastewater - Source (ML)

Banff WWTP - took over operation N/A N/A 119 N/A Bow River March 24, 2009

Wells/Rundle Canmore WTP 2,607 2,481 N/A N/A Forebay

Canmore WWTP N/A N/A 2,900 N/A Bow River

Chestermere - no water produced N/A 1,414 N/A N/A n/A (water distribution only)

Chestermere - not treated N/A N/A 1,108 N/A N/A (wastewater collection only)

Okotoks WTP - 2,680 N/A Wells-Sheep River -

Okotoks WWTP - no treated water N/A N/A 1,853 N/A Sheep River used for irrigation in 2009

Strathmore WTP - 1,282 - N/A Irrigation canal and storage

Strathmore WWTP N/A N/A 1,220 N/A Bow River/Irrigation Pivots

Taber WTP - 1,653 N/A - -

Taber WWTP N/A N/A 1,774 N/A -

Taber WTP - 1,653 N/A - -

Red Deer County - 502 - - Varies (Aggregate)

Contract Operated Plants - British Columbia

Treated Water Annual Treated Water Intake Water Destination of Treated Location Production Diversion (ML) Effluent (ML) Source Wastewater - Source (ML)

Port Hardy WTP - 1,620 N/A Tsulquate River N/A

Port Hardy WWTP N/A N/A 913 N/A Ocean (Port Hardy Harbour) (Tsulquate)

Port Hardy WWTP N/A N/A 913 N/A Ocean (Port Hardy Harbour) (Airport)

Sooke WWTP N/A N/A 615 N/A Ocean (Sooke Harbour) Whistler WTP - 12 N/A - Ocean (Sooke Harbour)

Whistler WWTP - N/A 6 - N/A

Britannia Mine N/A 3,371 N/A N/A Mine Treated Water

1 Related to power generation.

2 "Reportable" means as required under respective provincial and federal regulatory release reporting guidelines.

3Includes environmental-related incidents in addition to releases, such as those of an administrative nature.

4 Data is for operations owned by EPCOR. Data is not consistently available for contract operated facilities. Does not include oil sands operations since EPCOR took this over in late 2009. Edmonton gasoline and diesel use represents 84% of total fleet operations. Emission factor sources used in calculating carbon footprint are taken from:

National Inventory Report 1990 - 2008: Greenhouse Gas Sources and Sinks in Canada, Environment Canada, April, 2010 Climate Change 1995, The Science of Climate Change: Summary for Policymakers and Technical Summary of the Working Group I Report, IPCC, 1995.

5 Includes emissions from biogas flaring, and both unplanned and controlled biogas releases

6 The BNR process is a method of secondary wastewater treatment that removes large quantities of nitrogen and phosphorus from the wastewater. During this biological process, ammonia nitrogen is converted to nitrogen gas and emitted to the atmosphere. A small amount of N20, a greenhouse gas, is also emitted during this process.

7 Sulphur hexafluoride (SF6) is a gas (transported as a compressed liquefied gas) used in electrical components such as circuit breakers, transformers and switchgear, often replacing oil-filled circuit breakers that can contain harmful PCBs. According to the Intergovernmental Panel on Climate Change, SF6 has a global warming potential of 23,900 times that of CO2 when compared over a 100-year period. EPCOR measures the SF6 used each year to top up levels in electrical components.

MEASURING OUR PERFORMANCE

MEASURING PERFORMANCE Environmental SOCIAL/ECONOMIC INFORMATION & DATA Indicators Social and Economic Indicators 4.1, 4.3 - GOVERNANCE, INDEPENDENCE AND DIVERSITY EPCOR’s Board of Directors approves the goals of the corporation’s business and evaluates management’s performance. The Board has 12 members, 11 of them independent as defined in the Canadian Securities Administrators’ National Instrument 58-101 – Disclosure of Corporate Governance Practices (NI 58-101).

Douglas H. Mitchell is a partner in a law firm providing legal services to EPCOR and may not be an independent director as defined under NI 58-101. He is a member of the Environmental, Health and Safety Committee and the Human Resources and Compensation Committee.

All members of the Board are outside Directors because they are not members of management. The Board includes two women, Sheila Weatherill, who serves as Vice Chair, and Helen Sinclair, who is a member of the Human Resources and Compensation Committee. All Board members are more than 50 years old. None are visible minorities.

4.4 - USE OF THE PRECAUTIONARY PRINCIPLE EPCOR has not adopted the “precautionary principle,” which says that when an activity raises threats to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically. We defer this issue to our regulators and make sure we are compliant with all laws and regulations.

EU20 - APPROACH TO MANAGING THE IMPACTS OF DISPLACEMENT Determining the placement of electric utility infrastructure is the responsibility of the Alberta Utilities Commission (AUC). EPCOR follows the AUC process to ensure that potential displacements are minimized and in the public interest. The AUC also sets out processes for public consultation to be undertaken by the utility for new facilities. A good example is EPCOR’s extensive consultation process for the Heartland Transmission Project.

EPCOR’s policy is to offer fair market value for land we acquire for essential electric and water transmission and distribution infrastructure and related operations and to offer other forms of compensation such as replacement costs for buildings and relocation costs. Most of our infrastructure for water and electric transmission and distribution is located within public right of ways (roads and streets). Where we do cross private lands, we obtain the necessary access rights. EPCOR has no power of expropriation if agreement cannot be reached. Any expropriation process would be carried out by the appropriate regulatory or municipal authority. LA10, LA11, LA12 - TRAINING, SKILLS MANAGEMENT, PERFORMANCE REVIEWS Average hours of training per year per employee by employee category

Management - 25 hours Technical + 51 hours Development = Average of 76 hours/manager/year In Scope (Union) - 40 hours Technical + 4 hours Development = Average of 44 hours/union employee/year Out of Scope - 25 hours Technical + 8 hours Development = Average of 33 hours/out of scope employee/year

This accounts only for training programs run by EPCOR. At present, we do not have a means of tracking external training hours that are funded by EPCOR.

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

1. Continued Employability Skills

Front-line and mid-level Leadership Development Programs Management Boot Camp Advanced Presentation Skills Communicating for Clarity Fundamentals of Business Writing Presenting with Power and Finesse Report & Proposal Writing Working Smart with Microsoft Outlook Recruiting and Selecting Finance for the Non-Financial Manager Understanding Personality Types

2. Managing Career Endings Skills

Pre-Retirement Workshop

EC6 - PURCHASING EPCOR is covered by the Trade, Investment and Labour Mobility Agreement (TILMA), a partnership between the governments of British Columbia and Alberta. TILMA requires that government and public entities remove impediments across all economic sectors. Under TILMA, all purchases for goods and services over $75,000 and for construction exceeding $200,000 are now publicly posted to the Alberta Purchasing Connection, unless there is a specific exception covering that purchase. This ensures that our purchasing practices are fair and open to all potential vendors and there is no preferential treatment or perceived notions of advantage.

Most of our purchases are from local vendors in the communities where we operate. This saves on travel and freight costs and supports the local community. Specialized utility equipment and supplies must usually be purchased from national or international suppliers.

In the 12 months ending April 1, 20101, we spent $267 million for supplier goods and services. This included $174 million for local spending2. Totals exclude spending by EPCOR’s power generation area during this period. Capital Power purchased EPCOR’s power generation assets in July 2009.

GRI SOCIAL/ECONOMIC INDICATORS GRI numbers refer to the Global Reporting Initiative disclosure. Data and information related to power generation are not provided because of the sale of power generation assets in July 2009. AIF refers to EPCOR’s 2009 Annual Information Form. Annual Report refers to EPCOR’s 2009 Annual Report. NCD - No comparable data Other references are to sections of this report or sections of EPCOR’s website.

GRI # Description 2009 2008

Residential electricity accounts 503,533 501,221 Commercial and industrial electricity Number of residential, industrial, institutional EU3 accounts 1,414 1,264 and commercial customer accounts Water residential, commercial and industrial accounts 250,042 102,328

As a regulated utility, EPCOR does not conduct any substantial R&D activity aimed at promoting reliable electricity and sustainable development in distribution and transmission of R&D activity and expenditure aimed at electricity. EPCOR purchases existing EU8 providing reliable electricity and promoting technologies, such as Smart Grid equipment, Same sustainable development to increase the reliability and sustainability of its electrical power grid. In 2009, EPCOR contributed $30,000 into a fund for reliability- related R&D by the University of Alberta as part of a five-year commitment.

Management employees eligible to retire in 10 EU15 22.6% 23.6% years

Out of scope employees eligible to retire in 10 EU15 7.8% 5.3% years

Professional employees eligible to retire in 10 EU15 9.9% 10.8% years

EU15 Union employees eligible to retire in 10 years 27.1% 28.5%

We were not able to report this data for 2009 because our Major Projects Group, which had Days worked by contractor and subcontractor responsibility for this information, was EU17 employees involved in construction, operation 1.9 million hours discontinued due to EPCOR’s restructuring. and maintenance activities We will report this data in future, starting with 2010.

Number of people physically or economically EU22 displaced and compensation, broken down by Zero Zero type of project

Number of injuries and fatalities to the public EU25 Zero 1 involving company assets.

13,899 Number of disconnections for non-payment, EU27 Average duration of disconnections is not 15,640 and duration of disconnection tracked.

ECONOMIC PERFORMANCE INDICATORS

GRI # Description 2009 2008

EC4 Significant financial assistance received from government. Zero $6 million Ratio of standard entry level wage compared to local minimum wage: 0 0 -Percentage workforce paid minimum wage EC5 -Difference between lowest starting wage and local minimum wage $17.85/$8.80 $17.60/$8.80 (Alberta) 0 7 -Employees earning lowest starting wage

LABOUR PRACTICES AND DECENT WORK EMPLOYEE BREAKDOWN BY REGION

Other Edmonton B.C. Ontario Total Alberta

Full time permanent 2,018 107 38 1 2,164

Part time permanent 89 3 1 0 93

Full time temporary 61 1 1 0 63

Casual 2 4 2 0 8

Part time temporary 1 1 1 0 3

Full time provisional 7 0 0 0 7

Total 2,178 116 43 1 2.338

GRI # Description 2009 2008

Permanent full time employees 2,164 2,836 Permanent part time employees 93 104 Temporary/provisional full time 70 76 Temporary/provisional part time 3 9 LA1 Casual (not included in above employees) 8 53 Long term disability (not included in above) 47 26 Contingent workforce (not included in above 334 86 Contractor hours on major projects (millions) NCD 1.9 Contractor hours on major projects (FTE equivalent) NCD 1,063

Turnover numbers3 51 210 Voluntary 43 90 Involuntary 6.2% 12% Turnover rate: union 15.3% 10.9% Turnover rate: non-union 7.9% 10.5% Turnover rate: male 9.3% 14.2% Turnover rate: female 9.9% 19% Turnover rate: under 35 LA2 5.8% 9% Turnover rate: 35-49 10.2% 13.4% Turnover rate: 50+ 0.1% 0.4% Turnover reason: dismissal 0% 0.1% Turnover reason: shortage of work 0.3% 0.6% Turnover reason: unsuccessful probation 4.5% 8.1% Turnover: resignation 1.5% 1.4% Turnover reason: retirement 0.9% 1.2% Turnover reason: other

Percentage of employees covered by collective bargaining 76.6% 68.5% LA4 agreements # days lost to strike Zero Zero

Minimum notice period for operational changes varies among the collective agreements. EPCOR consults with Minimum notice period for employees regarding significant unions prior to LA5 Unchanged operational changes implementing significant operational changes and regularly exceeds collective agreement requirements for providing notice.

LA12 Percentage of employees receiving regular performance reviews 42% NCD

HUMAN RIGHTS

GRI # Description 2009 2008

Significant investment agreements that include human rights HR1 Zero Zero clauses and have undergone human rights screening

HR2 Contracts that include screening or criteria on human rights Zero Zero

Total number of incidents of discrimination and actions taken HR4 Zero 3 See also Complaints and Resolutions under EPCOR’s Ethics Policy.

Operations in which the right to freedom of association and HR5 Zero (self assessment) Zero collective bargaining may be at significant risk

Operations identified as having significant risk for incidents of child Zero (EPCOR does not HR6 Zero labour use child labour)

Zero (EPCOR does not Operations having significant risk for incidents of forced or HR7 engage in forced or Zero compulsory labour compulsory labour)

Percentage of security personnel trained in the organization policies HR8 or procedures concerning aspects of human rights that are relevant 100% 100% to operations

HR9 Violations involving the rights of indigenous people Zero Zero SOCIETY

GRI # Description 2009 2008

EPCOR constantly monitors its impacts on the communities where it operates. This is accomplished though 24-hour monitoring of the Nature, scope and quality of drinking water produced and wastewater discharged and effectiveness of any 24-hour monitoring of the electricity distribution and transmission programs and practices system. Community advisory groups provide input on the longer- that assess and manage term impact of EPCOR’s operations. EPCOR also has SO1 the impacts of operations comprehensive incident response plans in place for each of its Same on communities, including facilities and for its power distribution and water operations. It has a entering, operating and home sniffer program, which surveys the public annually on exiting aesthetics such as the water’s smell and taste. EPCOR is responsible to its customers and conducts annual surveys about customer satisfaction.

Total value of financial and in-kind contribution to SO6 Zero ($2,200 — restated ) political parties and politicians

Total number of legal actions for anti- competitive behaviour, SO7 Zero Zero anti-trust, and monopoly practices and their outcomes.

Monetary value of significant fines and total number of non-monetary SO8 Zero $2,000 sanctions for non- compliance with laws and regulations.

PRODUCT RESPONSIBILITY

GRI # Description 2009 2008

Incidents of non-compliance with regulations and voluntary codes PR7 Zero Zero concerning marketing communications

Total number of substantiated complaints regarding breaches of Zero complaints, 1 breach PR8 5 complaints customer privacy and losses of customer data. of customer information.

Monetary value of significant fines for non-compliance with laws and PR9 regulations concerning the provision and use of products and Zero Zero services.

1We have traditionally reported purchasing data based on a 12-month period ending April 1, 2010. Starting with the 2010 report, we will in future report based on a December 31 year-end to be consistent with other data in the document.

2Local spending is defined as occurring when the shipping destination and the supplier site are in the same province. 3All of EPCOR for 2009 but not including the July movement of some employees from EPCOR to Capital Power

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Trademark and Copyright Notices

This website and the contents hereof are protected by copyright, trademark or other proprietary rights of EPCOR or third parties and is protected under the copyright laws of Canada and other countries. Any unauthorized downloading, re-transmission, or other copying or modification of trade-marks and/or the contents of this website may be a violation of any federal or other law that may apply to trade-marks and/or copyrights and could subject the copier to legal action. Unless otherwise specified, no one has permission to copy, redistribute, reproduce, republish, store in any medium, re-transmit, modify or make public or commercial use of, in any form, the information on this website.

Subject to the preceding paragraph, EPCOR hereby grants to you a limited license to print and copy information contained in this website for your own personal, non-commercial use. Such license is revocable at EPCOR’s sole option. If any such use of this information is made, you shall ensure that all copyright, trademark and other proprietary notices are retained and you must explicitly acknowledge EPCOR as the sole owner of such information.

Access to Password Protected and Secure Areas

Access to and use of password protected and / or secure areas of this website are restricted to authorized visitors only. Unauthorized visitors attempting to access these areas of the website may be subject to legal action.

Acceptable Use of Secured EPCOR Sites

The user further acknowledges that any misuse that disrupts the normal use of the system, portals, or secured websites accessible through EPCOR websites is strictly prohibited. Such abuse may lead to termination of accounts that access online services. Examples of system abuse include, but are not limited to:

using the system in a manner not intended by the Terms; impersonating another user or otherwise falsifying one's user name; any attempts to penetrate EPCOR or third party provider security; any attempts to access another party's account or files; transmitting any material in violation of applicable federal, provincial or state law, including, but not limited to, copyrighted material, unauthorized transmission of material protected by a trade secret, spam, etc.

In addition to the foregoing, the user of online services available through the EPCOR secured sites, including the B2B Customer Web portal also agrees to the following:

the user indemnifies service suppliers, third party providers, and / or licensors for its misuse of services. Third party beneficiaries include, but are not limited to, Itron.

If EPCOR becomes aware of or suspects any unlawful use or violation of the Terms, EPCOR shall use commercially reasonable efforts to notify the customer and provide reasonable detail of such violation, while reserving the right to immediately suspend or terminate the customer's online services provided through EPCOR when reasonably necessary to protect EPCOR's, its service suppliers', and its customers' interests. EPCOR will immediately report to service suppliers, third party providers, and / or licensors any suspected breach of these Terms, and promptly initiate all reasonable steps to compel the customer to cure such breach. EPCOR will fully cooperate with service suppliers, third party providers, and / or licensors in any investigations and other actions taken for suspected or known violations of the Terms. Third Party Website Links

EPCOR’s website may provide listing of and/or links to third party websites as a convenient information service only. EPCOR accepts no responsibility or liability for the privacy practices, content, opinions, accuracy, and administration of such other websites, nor do we monitor or endorse these websites. We encourage our customers and visitors to this website to be aware of the privacy policies of every website that collects personal information.

Jurisdiction

EPCOR is based in Alberta, Canada. Any dispute arising out of the use of this website shall be governed by the Laws of the Province of Alberta, Canada and shall be brought exclusively in the courts of Alberta. EPCOR makes no representation that this website or the contents hereof is appropriate or legal in all jurisdictions. If you are accessing this website from outside of Canada, you do so at your own risk and you are responsible for ensuring that all applicable laws are complied with.

Subsidiaries

All references to EPCOR shall be deemed to include its subsidiaries.

This Privacy Policy is a demonstration of EPCOR’s commitment to privacy protection.

It has always been EPCOR’s priority to safeguard any information provided by our customers. We are committed to meeting, and where possible, exceeding, the requirements of all applicable privacy legislation that relates to EPCOR’s businesses (the “privacy legislation”). This Policy will apply to EPCOR Utilities Inc. and all of its subsidiaries.

At EPCOR, customer information is maintained as strictly confidential. Unless you authorize us to release it, or release is required or permitted by law, we will not disclose information about you to any third parties. However, in order to efficiently provide you with our services, we will share information with other EPCOR businesses or suppliers who perform services on our behalf and with whom contracts have been signed that obligate that third party to adhere to EPCOR’s privacy policies. We never sell, lease or trade information about you or your accounts to other parties, unless you authorize us to do so, or unless required or permitted by privacy legislation.

This document provides information about EPCOR's Privacy Policy for Customer Information and includes all of the information on the EPCOR Privacy website.

To the Board of Directors and Management of As such, we planned and performed our work in order EPCOR Utilities Inc. (“EPCOR”) to provide limited assurance with respect to the Subject Matter. We obtained and evaluated evidence using a variety We have reviewed selected quantitative performance of procedures including: indicators (the “Subject Matter”) presented in EPCOR’s Corporate Responsibility Report (the  Interviewing relevant EPCOR management and “Report”) for the year ended December 31, 2009. We staff responsible for data collection and reporting did not review all information included in the Report.  Obtaining an understanding of the management Subject Matter systems, processes, and controls used to generate, aggregate and report the data We reviewed the following consolidated 2009 quantitative performance indicators as set out in the  Reviewing relevant documents and records on a Report, and Attachment A, which comprise the sample basis Subject Matter:  Testing and re-calculating quantitative  Total community support information related to the selected performance indicators on a sample basis  Carbon footprint  Assessing the information collected for  Reportable environmental releases completeness, accuracy, validity and consistency  Monetary value of significant fines and total Our evidence-gathering procedures were more limited number of non-monetary sanctions for non- than required for a reasonable assurance compliance with environmental laws and engagement and, consequently, we do not express regulations. an audit opinion on the Subject Matter.  Employee injury frequency rates: We carried out our work on the selected performance o Total recordable injury frequency (TRIF) indicators at EPCOR’s head office in Edmonton, Alberta. o Lost time injury frequency (LTIF) Our assurance criteria comprised the Global  Employee statistics Reporting Initiative Sustainability Reporting We also reviewed EPCOR’s self-declaration of the Guidelines (2006), industry standards, and EPCOR’s level of reporting achieved under the Global Reporting internal management definitions as disclosed in the Initiative guidelines. Report, informed by relevant regulations in the areas of operation. The indicators comprising the Subject Matter were chosen by EPCOR primarily on the basis of perceived Our assurance team included individuals with external stakeholder interest. We did not review the backgrounds and experience in providing assurance narrative sections of the Report, except where they on environment, health and safety, social and incorporated the Subject Matter. economic information. Responsibilities Conclusion EPCOR management is responsible for collection and Based on our work as described in this report, nothing presentation of the Subject Matter. Our responsibility has come to our attention that causes us to believe is to express a conclusion, based on our assurance that the Subject Matter is not, in all material respects, procedures, as to whether anything has come to our reported in accordance with the relevant criteria. attention to suggest that the Subject Matter is not presented fairly in accordance with the relevant criteria. Methodology & Assurance Procedures We conducted our work in accordance with the International Standard on Assurance Engagements PricewaterhouseCoopers LLP (ISAE) 3000, “Assurance Engagements Other than Edmonton, Canada Audits or Reviews of Historical Financial Information”, October 1, 2010 issued by the International Federation of Accountants. Attachment A: EPCOR 2009 Corporate Responsibility Report All figures for the year ending December 31, 2009

GRI Performance Indicator 2009 Value Notes Reference

EC1 Totalcommunitysupport $2.6million Includesprograms,activitiesandsponsorships. The indicator is reported in a manner consistent with EPCOR’s financial reporting principles and includes support that may be associated with previously owned power generation activities.

EN16 Carbon Footprint 183,898 Includes direct (Scope 1) and indirect (Scope 2) emissions. tonnes CO2 equivalent Data is for operations owned by EPCOR. Exceptions include oil sands operations acquired by EPCOR in late 2009, several contract-operated facilities, and 16% of company fleet for which fuel information was not available.

EN23 Reportable environmental 31 Includes only releases thatmeet or exceedthecriteriafor reporting releases as set out in the applicable provincial and federal regulations. 2009 reportable environmental releases included 9 releases to air, 16 releases to land, 6 releases to water.

EN28 Monetary value of significant Zero fines and total number of non- monetary sanctions for non- compliance with environmental laws and regulations

LA1 Fulltimepermanentemployees 2,164 As at December 31, 2009 Part time permanent employees 93 Full time temporary employees 63 Part time temporary employees 3 Full time provisional employees 7 Casual employees 8 Total employees 2,338

LA7 Lost Time Injury Frequency 0.45 Frequency rates are calculated by multiplying the number of (LTIF) incidents by 200,000 hours. 200,000 hours is an industry standard base and equals 100 employees working 40 hours per week for 50 weeks per year. The result is then divided by the hours worked (exposure hours). Data excludes power generation employees and one-third of the corporate services employees who were moved to Capital Power as a result of the sale of the power generation business in July 2009. GRI Performance Indicator 2009 Value Notes Reference

LA7 Total Recordable Injury 3.09 Frequency rates are calculated by multiplying the number of Frequency (TRIF) incidents by 200,000 hours. 200,000 hours is an industry standard base and equals 100 employees working 40 hours per week for 50 weeks per year. The result is then divided by the hours worked (exposure hours). Data excludes power generation employees and one-third of the corporate services employees who were moved to Capital Power as a result of the sale of the power generation business in July 2009.