(5) Keephills 3, Halkirk and Quality Wind include pre-commissioning output until commissioning dates of September 1, 2011, December 1, 2012 and November 6, 2012 respectively. Revenues and expenses related to commissioning activities were capitalized as part of the cost of the facility in property, plant and equipment. (6) Taylor Coulee Chute was disposed of on November 1, 2011. (7) Brown Lake and Miller Creek were disposed of on October 12, 2012. (8) North East U.S. commercial plants include the Bridgeport and the Rumford and Tiverton facilities as of their dates of acquisition of April 28, 2011 and April 29, 2011, respectively. (9) North Carolina U.S. contracted plants include the Roxboro and Southport plants acquired from CPILP as of their date of acquisition of November 5, 2011. Prior to that date, these plants were included in the CPILP plants category. (10) The energy sources for the Roxboro and Southport plants are wood waste, tire-derived fuel and coal. (11) In November 2011, the CPILP plants, excluding Roxboro and Southport, were disposed of as part of the Atlantic Power acquisition of CPILP partnership units. The Alberta commercial plants and acquired Sundance PPA category is a networked hub. The Company’s owned Alberta commercial generation fleet includes two supercritical-coal facilities, two natural gas-fired facilities, one wind facility, and one landfill-gas facility with a total gross generating capacity of 1,889 MW (1,096 MW net ownership interest). In 2012, the Company completed construction of its 150 MW Halkirk wind facility with the commercial operation date being December 1, 2012. In 2011, construction on the Keephills 3 unit, under joint venture with TransAlta, was completed. Commercial production commenced on September 1, 2011 adding 247 MW of generating capacity to the Company’s existing fleet. In November 2011, the Company sold its interest in the 13 MW Taylor Coulee Chute hydro plant. The Alberta commercial plants and acquired Sundance PPA category also includes the Company’s 52% ownership in the acquired Sundance PPA which has a committed capacity for Sundance Units 5 and 6 equal to 710 MW. This PPA was purchased in August 2000 and expires on December 31, 2020. In addition to earning pool receipt revenues and incurring its share of certain variable and fixed costs, the Company can earn penalty payment revenue or incur availability incentive payments which are a function of plant performance and a 30-day rolling average power price. The Genesee 1 and 2 generation facilities are the Company’s Alberta contracted plants. Their capacity and output are sold under a long-term PPA with the Alberta Balancing Pool which expires at the end of 2020. Under the PPA, the Alberta Balancing Pool has the right to dispatch the output from the generation facilities and it pays capacity payments, consisting of fixed operating and maintenance charges, and pays incentive or receives penalty payments based on plant availability. The Company seeks to maximize earnings for contracted plants by achieving high availability and managing costs within the PPA terms. The natural-gas fired Island Generation plant in British Columbia, the Quality Wind facility in British Columbia and the Kingsbridge 1 wind farm in Ontario are the Company’s Ontario and British Columbia contracted plants. In 2012, the Company completed construction of its 142 MW Quality Wind facility with commissioning of operations commencing November 6, 2012. The Brown Lake and Miller Creek hydro facilities were sold effective October 12, 2012. Under the terms of the Company’s PPA with BC Hydro, Island Generation earns revenue based on deemed generation. Deemed generation is based on deemed availability being the availability of the plant for dispatch. The actual dispatch strategy is determined by BC Hydro and does not affect the Company’s revenues. The plant’s maintenance costs are primarily based on equivalent operating hours and are a function of actual generation. The Kingsbridge 1 wind facility operates under the terms of two energy supply contracts with the Ontario Power Authority which expire in 2027 plus it receives wind power production incentive payments from the Government of Canada. The Quality Wind facility earns revenues under a 25-year electricity purchase agreement with B.C. Hydro. North East U.S. commercial plants consist of generation facilities for which the Company has not contracted their power and capacity to third parties. This category is a networked hub and includes the Company’s directly-owned facilities located in New England, U.S. consisting of the Bridgeport, Rumford and Tiverton facilities acquired in April 2011. The output of the plants is sold by the Company to the New England Power Pool (NEPOOL). North Carolina U.S contracted plants include the Roxboro and Southport facilities acquired in November 2011. Revenues from these plants are earned under PPAs with Progress Energy which expire in 2021. Under the PPAs, Progress Energy has the right to dispatch the output from the generation facilities and it pays capacity payments, consisting of fixed operating and maintenance charges, and pays incentive or receives penalty payments based on targeted availability. The Company seeks to maximize earnings for these contracted plants by achieving high availability of the plants and managing costs within the PPA terms. Capital Power Corporation Management’s Discussion and Analysis 2012 27