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' Ollus Power & PowerStream

trategic Partnership A presentation by PowerStrearn to the Collus Power Task Team

Sontember 19, 2011

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• Introductions

• Ovetviev1 of PO\verSlream

• Finar.c al Sum1nary •Future of the Industry in Ontario

• Retained P1·esence in ColltngvJOOd •Employees

• Rates •Safety

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•Vision for Future Rationali?.atioo •Governance

· Aspirations

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Vision r- ·-· We will be a .sru:i;i.lly_respol!JiiQle _comp_an\l,-Co_ru mtJJ.C.tU:o

£1i.e.eiiY1ronin)iiji)nd sustainable growth, leading the way Into the future with boldness, Innovation and best in class per for('}ance.

Mission

To !)(> l•illf rvi1.d~ i« 1;uwf'.- and related services safely and efficiently Lo >L•PPv• i Ou1 'l ,.,, ;0 11'H' ' 'm1.1l1I'; n: ;,,.,and to provide value, to our shareholders and the communities \Ve serve :-

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Some Facts About Us

2'''1 largest municipally-owned distribution company in Ontario

Provides service to over 330,000 customers

500 employees

• $1 billion in assets ~'S

• Jointly owned by the municipalities of Barrie, Markham and Vauran ') '• ".(,; 'I' • t 1, "'_'

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Our Service Territory

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807 square kilometres encompassing a populatio

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~r,_.;0·1 .. J • . Recogn ized in 2010 by the Mi.nistry of the Environment l

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as oemg one of Ontano's Envlfonmental Leaders 0, t'- /

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Electricity Distributors Association LDC Performance ~ Excellence Award (2010) f"'I 'it"

1 ·'1 Vaughan Chamber of Commerce Company of the Yeor . t ~,,.,. (2010) i~ . .

• ESRI International Special Award i11 GIS (2010)

• Electricity Distributors Association Environmental Excellence Award (2010)

• Smart Commute Employer of the Year for North Toronto. Vaughan (2009)

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Points of Pride (cont'd) ,. \ ll';i> "

• Premier Dalton McGuinty's announced government funding of elect ric vehicle charging stations at PowerStream's South Operat ion Centre (August 2011)

• Parliamenta ry Assistant to the M inister of Economic Development & Trade, Monte Kw inter. attended an event

/ 0 • at PowerStream's head office celebrating Nissan Canada' s ' ' first Canadian delivery of ari electric Nissa n LEAF vehicle to

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PowerStream (July 201 l)

• Energy M inister Brad Duguid announced the government' s establishment of a Smart Grid Fund at PowerStream's head office (April 2011.i .; •., , .. ·

• Former Minister of the Environment, John Gerretson, welcomed PowerStream as one of Ontario' s Environment Leaders at an Induct ion ceremony held at PowerStream's head offtce (April 2010).

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Points of Pride (cont'd)

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PowerStream - Historical Development In 2001 Hydro Vaughan Distribution Inc. and Markham Hydro Oistr'.bution Inc joint!~· purchase the electricity distribution assets of Richmond Hill Hydro Inc. from the Town of Richmond Hill and contintied to opera te lhe utility O•' a s tand alone basis.

• In June 2004 Hydro Vaugh.ail Distribution Inc .. l"1arkham Hydro Dislr bution Inc. and Rlchn1ond Hill Hvdro inc. merge to crE:ate the third largest municipally 4 ov:ned electricity distribution company in Ontario. The new entity 1s named Powe.Stream h1c. In November 2005 PowerStream Inc. purchases the electricity distribution assets of Aurora H~1dro Conne<.tions Ltd. from the Tov1n o f Aur·::ira.

• In Januari,· 2009, Po\verStre.;im Inc. and Barrie Hydro Distribution Inc. 1ncrgc to create the second largest 1nunicipallv·o\vncd elect·icity distribution company in Ontario, serving more than 330,000 custon~ers in 11 Simcoe Countv and York Region communities. The company, jo'ntly owned by Barrie, Markhan1 and Vaughan. retains the corporate name or Po\verStream Inc.

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Our Leadership Team ~ t .... '1' • Brian Oentz, President & CEO ; l• ,

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- Past Chair, £1ectrlclty Distribution Association. ~ r, -:- V ~· \'rce Ch~lir, Ontario Energy AssociariOr) ~ · · .' . . 1 l - former President & CEO, Hydro Vaughan Distnb~tlon - Former VP. Barrie Hydro Distr ibution

Mark Henderson, EVP Asset Management & COO - Fonner President & CEO, Barrie Ht•dro Distribution

John Glicksman, EVP and COO - Fonner VP, H~rdro Vaughan Distri bution - former VP, Hydro One Networks (Ind Ontano Hydro

Miian Bolkovlc, EVP Renewable Energy & Conservation

f - Former President & CEO, Markham Hydro 1' \

1 Dennis Nolan, C~rporat~ Serv~·ces & Secretary I l\ll">r \ tfl... \fl'-

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Achieving Synergies Through Mergers

• In the past PowerStream has achieved merger savings result s have been in the range o f 10 .. 15% of con-,bined OM&A.

Through economies of scale and achieving synergy savings, the PowerStream - Barrie Hydro merger realized ope<ating savings of approximately $5.S million annually, and approximaiely $1.0 million in annual cap ita l savings.

• PowerStream has been ab le to achieve the merger savings with no forced layoffs.

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Financial Summary Powersiream has approximately SJ.OS in total asse1s. PowerStream maintains a capital strucrure consistent with the OEB's deemed capital structure of 60/40 (debt-to­equity), with the ability to leverage up to 65% debt should Pov:erStream require add it iona l cash; Currently, PowerStream's EDFIN debt is rated "A" by Standard and Poors. The rating reflects S&P's assessment of lne risk profile of the least credilworthy participant. Jn addition, PowerStream is rated "P:' bv Dominion Bond Rating Service. ·

• Since 2005 PowerStream (including the former Barrie ,,- V Hydro) have paid dividends totaling over $100 million to its Shareholders. The opportunity for Callus Power to recapitalize Its debt-to­equity could provide Collus Power with the ability to free up capital.

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Future of the Electricity Industry

We believe that rationalization within the electricity inoust ry is coming.

Rationalization may be forced or v~nteer. ) • LOCs w ill not be able to stand still ana"th'l:l<e who are

first movers will get maximum value.

• Election

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Our Com1nunity Support • Donated $1,000,000 to both Markham Stouffville Hospita l and

the Vaughan hospita l init iative

Committed $750,000 over a five-year period to Georgian College

Since 2004, PowerStream and its employees have donated near y $600,000 to the United Way of York Region and the United Way of Greater Simcoe County.

Over a four-year period, PowerStream employee participation in the Heart /?, Stroke Foundation's " Big Bike" event has ra ised more than $85,000 for the cha rity.

Maior sponsor of Chamber of Commerce Business Achievement Awards in Aurora, Baffie, Markham. Richmond Hill an:f Vaughan.

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Our Com111unity Support (cont'~) Founding business member of the York Region Character

Community in it iative and presenting sponsor of the organizat ion' s annual awards event.

Sponsorship of chi ldren's sports teams /employee

volu·)teerism as part o f "Promot ing Character through Cornmunity lnvolvernent11 initiative

Sponsor of Sama Claus pa rades in Aurora, Barrie, M arkham, Richmond Hill and Vaughan

• Presenting sponsor of the Barrie Earth Hour Music Festival and major sponsor of Woodbridge Earth Hour Lantern Walk

M ajor sponsor o f Children's Aid Foundation of Simcoe County

Sponsor of McLaren Arts Centre, Markham Thea tre, Wootfaridge and M arkham Fairs

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Our Community Su~~ort 1cont'd}

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Our Commitment to Customers

• Committed to delivering reliable power and relat ed services safely and efficiently to support. our customers' quality of life as well as the communities we serve.

• Work continuously to reduce the upward pressure on customer distribution rates

Currently have one of t he lowest customer distribution rat es in Ontario.

Communicate to customers on an ongoing basis through Ol•r wstomer call centre as well as a variety of mass communication channels (advertising, online, news releases, cust omer newslettel email blast s, events).

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Customer-focused Operations

24 by 7 svste11 Control Room mon1torin11 has led to significant

1mprc·1ements in out.age responsi' times and reliability - AM1a'cilHy lnde• now in excess of 99.99'!\

lnte~tccc b..iih from Smdrl Meter AMI to Outage f\"ana~err.,nl Syst em to dllO ... "' for 1ap1d, .. ~mart" outa&e response for customer~

F·rst Ltility in North Am~r1ca to puot t~st FDIR smart grid dpplic.ation ror automated ln!itantaneous fault firding, lsoldlion,

and pov.rer restoration

• Comple-teci construcllon o r new Pnl'i< Place PJ1u11ic-ipal Sub Station (•pprox'matelv $3 million Investment) to service continued ~rowt~ ano e.<oansion in south ean·ie Continued significant cap•tal investments to .support ~rowtr., cxp1lnsiOl"'l1 refurbishment, and mainte1'ance o' the distnbut1on system in Barrie

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Customer-focused Operations (cont'd) Colla borated \•vi th Economic Developrnent office to assist in r, finali zing Offers to Connect for several very laq:~c 1lcv1 crnployers in the Ci:y of earne

Collaborated with Economic Development offices and York Qegion i ·' southern service areas in supporl of significant growth and expansion or YRRT, TTC, and municipal development and intensification plans (Vaughan City Centre, City of Vaughan & Town er Markham streetscape plans)

• Active !<ey Accounts custorner centered progl'a1n ror large usets, sensi11ve loads, and mu•1icipal partners to delive; individualized and t<1ilore-d services to these customers

Establ shed similar key account approach \vithin engineering group

for specific resldentlal and condo developers to facili tate st1ean11ined project 1nanagernet1t for l aq~E:' dttv£-lopments

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Our Commitment to the Environment Construct ed two LEED (Leadership in Energy Efficiency and Environmental Design) gold certified work locations

Established a solar PV generation business invo lving the leasing of commercial building rooftops

• Barrie office roof is used as a laboratory to test solar PV generation products

• Establishect a carpooling program for staff that now has nearly 30 percent of our employees commut ing to work ei ther through van pooling or ca rpooling

Ontario leader in the delivery of conservation programs to customers

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Our Commitment to the Environment

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Engaging Our Employees • Implementing and promoting National Quality

lnstitute's Progressive Excellence Program

Enhancing education and skill levels of all employees through training and professional development programs.

• Espousing corporate va lues of Respect, Teamwork, Performance, Accountability and Initiative

• Bi·annual Emplovee Satisfaction Survey to gauge employee satisfaction levels as well as provide st aff w ith an opportunity for comment and input

• Social events including annual Dinner and Dance, Joint Health and Safety Barbee e, Golf Tournament and Children's Christmas Party

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Engaging Our Employees (cont'd)

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Total Bill Comparison

201f To4oil Aill$Cc:>mparir.on for T yplcal Re9Jde11ttaJ Cuslo.mer (800 kwh}

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Health &. Safety Developed <)nd 1mplernented a Heiilt1i & Safeiy pliln 1n 2011 spe<:ifically aligned to the corporate inhiatlves for the year as v.'EHI as the conlpany's five-vear strategic: plan.

• Specific Heath & Safety targets established for all le11els of staff. wh ich include the monitoring of safety meetings, safety n1eeting attendance and site inspection perforrnance.

• Continued to emphaSlle and celebrate the importance of safety in the workplace by hold mg an annual Joint Hea lth & Safety Committee /JHSC) Barbecue. Wellness Committee created to discu.ss healthy workplace iten1s

Community Health & Safety outreach programs mdudc sponsored visits to local high schools by work;>lace safety advoca te, Rob Ellis, and visits to local elementary schools by Safety and Conservation Group educators.

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Unions

• Given the proposed structure ror the transaction we do not anticipate their being any union issues.

• \Jo ratification vote wou ld be required since the new entity would operate as an affil iate.

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Vision for Future Rationalization

Consolidation and partner~hips provide scale that will enhance operational efficiencies and r~sult in additional benefits for LDC customers and sn~reholders.

• Development of regio11al growth strategy. ,

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Proposed Structure

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Collus Power I PowerStream

City of Collingwood

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Governance Model

The Board of Col lus Power/ PowerStream would be comprised of 7 members

- 4 members elected by PowerStream

- 3 members elected by Collus Power

• PowerStream 4 members would be:

- Brian Bentz, Preside!'lt and CEO of PowerStream

- Mauri7.io Bevi lacqua, Mayor of the City of Vaughan

- Jeff Lehman, IVlayor of the City of Barrie

- Frank Scarpitti, Mayor of the Town of Markham

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{note: tepresentative of rnunicioal O'N11ership)

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Aspirations

• Establishing strategic partnerships that will benefit the LDC, the rate payers, and our Shareholders

Grovvt h - organic and through mergers and

acqu isitions

Potential to establish multi-utility with water, LDC, solar, other assets

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Wh at We Have In Common

• Customer- focused ~

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__ , Actively involved in the communit y

~--- ... Concerned about the environment

Seiving residents and businesses in Simcoe County

.o. suppo•tive employer ji < I·'· ·"' I !

fv1u1icipal own?rship • •'·\ .'1 •

Partner in solar powered attic vent pilot project

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Guarantee of stable rates for three-years with benefits of sy.1ergies accruing to Coll us Pov.1c-t I PO\VCfStream customers.

• Shared services (slate of the art call centre, coiltrol ,·oof·1, sn1art grid if'liliatives, engineering, leveraging Afv11 in•1estn1entsJ. Guar?nteed emp!ovee retention (no involuntart separat ions.)

• Very co tnpelit1ve cash inJection - f A J/. 1.1J /»

Governance rnodel reflecting a true p<1rtneVship.

• Tremendous opportunities for growth (broaden customer base, lncenUves to the Town of Collingwood tor crowth, leader In "'"' rcg1o"al model}.

local presence (commitment to the commu1lily ).

Blending of culture and a smooth transitioo

Municipal own~rsbip

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Presence in Collingwood - -

Collus Power customers

put SolarPOWef'on your

1!'!~4' % !~i · ~·, l'owc'~ with a •olor powered \Qn "'II ;..,,

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www.collus.com/vent

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