27. Related party balances and transactions: Nature of transactions Transactions and balances The following transactions took place during the years ended December 31, 2012 and December 31, 2011 between the Company and its related parties: Prior to the acquisition of assets and liabilities by the Company from EPCOR, the assets and operations of the Company were a part of the EPCOR consolidated entity and certain subsidiaries of the Company were subsidiaries of EPCOR. EPCOR holds 28.441 million (December 31, 2011 - 38.216 million) exchangeable limited partnership units of CPLP (exchangeable for common shares of Capital Power on a one-for-one basis) representing approximately 29.3% of CPLP (December 31, 2011 - 39.4%). The Company provides electricity to EPCOR’s residential customers and EPCOR provides distribution and transmission services to the Company along with various other services pursuant to service agreements arranged with EPCOR. Sales to and purchases between the Company and its subsidiaries, or between subsidiaries of the Company, are made at normal market prices. Transactions between the Company and its subsidiaries and transactions between subsidiaries are eliminated on consolidation. As described in note 32, the Company has a number of joint ventures, primarily for the construction and operation of power generation facilities. The joint ventures provide energy to the Company and the Company provides management and operation services to the joint ventures. Transactions with joint ventures are eliminated to the extent of the Company’s interest in the joint venture. 114 2012 2011 Revenues – energy sales: EPCOR and City of Edmonton 1 $ 45 $ 273 Energy purchases and fuel: EPCOR 2 22 23 Other raw materials and operating charges: EPCOR 6 2 Other administrative expenses: EPCOR - 5 Finance expense: EPCOR 3 20 30 1 Energy sales of $9 million (year ended December 31, 2011 - $239 million) to EPCOR and its subsidiaries, and $36 million (year ended December 31, 2011 - $34 million) to the City of Edmonton. 2 Energy purchases and fuel include energy distribution and transmission charges from subsidiaries of EPCOR. 3 Net finance expenses on loans and borrowings owed to EPCOR. CAPITAL POWER CORPORATION Notes to the Consolidated Financial Statements (Tabular amounts in millions of Canadian dollars, except share and per share amounts)