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					Annual Meeting
  May 11, 2006
   Calgary, Alberta




                      1
                       Management Team

Gary Reynolds     President and CEO

Gloria Fournier   Chief Financial Officer

Doug Heath        Director, Operations & Aggregator

Kim Verrier       Manager, Finance & Accounting

Jim Pasieka       Corporate Secretary


                                                      2
                                                          1
                      Meeting Agenda

• Overview of key activities

• Review of 2005 financial results

• Activities and outlook for 2006

• Closing remarks and questions


                                     3
                                         2
Overview of Key Activities

   • Clover Bar PPA Termination

   • Sale of Sheerness PPA

   • Financial Position and Consumer
     Allocation

   • Genesee PPA Arbitration
                                       4
                                           3
       Clover Bar PPA Termination
• Conducted economic review of
  the Clover Bar PPA as part of
  assessment for early termination.

• Shortfall of over $50 million per year
  on Clover Bar PPA.

• Unable to negotiate any changes
  that would decrease the costs and
  increase the value of the PPA.           5
                                               4
      Clover Bar PPA Termination
• On October 1, 2005 the Balancing Pool
  terminated the Clover Bar PPA, with a
  termination payment of $83 million.

• PPA Fixed costs avoided:    $262 million
  Termination Payment:        $ (83)million
  Net Savings:                $179 million

• EPCOR subsequently announced plans to
  decommission the plant and application is
  expected in fall of 2006.
                                          6
                                              5
                 Sale of Sheerness PPA
•   During 2005, the Balancing Pool carried out
    a sale process for the Sheerness PPA and
    Strip Contracts for a total of 756 MW’s of
    capacity.

•   Bids were accepted from the marketplace
    for Strip Contracts with 1 to 5, 10 and 15
    year terms as well as the entire PPA.

•   Strong interest was received from Canadian
    and US bidders for all products.         7
                                                  6
                 Sale of Sheerness PPA
•   Bid evaluation process compared the
    best package of Strip bids to the best
    PPA bid.

•   Successful bid was from TransCanada
    for $585 million for the Sheerness PPA.

•   Sale price was $750 million+ above
    reserve price set in original 2000 PPA
    auction.
                                              8
                                                  7
Sale of Sheerness PPA




                   9
                        8
           Financial Position and Consumer Allocation

• Following the sale of Sheerness PPA and the Clover Bar PPA
  termination, the Balancing Pool was in a positive cash position at
  December 31, 2005.




                                                                   10
                                                                        9
         Financial Position and Consumer Allocation

•   In 2001, the Balancing Pool paid out $800 million
    to consumers from internal cash flow.

•   As per the 2003 Electric Utilities Act, the
    Balancing Pool is required to allocate any
    surplus funds on an annual basis.

•   On January 1, 2006, the Balancing Pool began
    allocating $1 per MWh of consumption or
    approximately $60 million per annum of the cash
    surplus to Alberta’s electricity consumers.

•   The allocation is expected to continue for many   11
    years and will be reviewed on an annual basis.         10
             Genesee PPA Arbitration
• In 2005, Balancing Pool disputed the method by which EPCOR
  calculated availability incentive payment (AIP) under the Genesee
  PPA.

• In March 2006, an Arbitration Panel decision was reached with a
  favourable decision for the Balancing Pool.




                                                                 12
                                                                      11
      Review of
2005 Financial Results




                         13
                              3
                                          2005 Metrics
Market Prices:
                                       2005             2004

       Average Pool price:            $70.19           $54.59
       Market Heat rate:                8.3              8.8

PPA Generation Volumes (in GWh):

                                                         Avg Capacity
                              2005             2004          Factor
   Sheerness                  5,886            6,013          89%
   Genesee                    6,073            6,279          91%
   Clover Bar (to Sept. 30)      25              163          0.5%
   Hydro (fixed volume)       1,650            1,650          N/A


                                                                14
                                                                     13
         Statement of Operations – Revenues and Funding

                                        (in millions)

                                    2005           2004
MAP II sales                        $453           $492
Hydro PPA                            106                59
Sale of electricity (Power Pool)      62                     -
PILOT receipts                        61                67
Investment Income                       7                3
Total Revenues and funding          $689           $621

                                                        15
                                                                 14
      Statement of Operations – Expenses

                              (in millions)

                           2005         2004
Cost of sales              $534         $561
Amortization                 59               59
Regulatory expenses           2               14
Other PPA charges             4               11
Other expenses                4                3
SPP contracts                (7)               1
Total Expenses             $596         $649
                                              16
                                                   15
                             Operating Results
                                         (in millions)

                                      2005         2004
Revenues                              $689        $621
Expenses                              (596)       (649)
Operating Income (Loss)                  93        (28)
Other income (expense)                 735          (53)
Gain on Sale of H.R. Milner               -              17
Net surplus (deficit) attributed to
the deferral account                   828          (64)
                                                              17
                                                                   16
            Other Income & Expense
                                      ( in millions )

                                    2005         2004
Gain on Sheerness PPA Sale          $683             -
Gain on Clover Bar Termination        40             -
Genesee Common Facility and Other     24             -
Revaluation SPP contracts              8         ($11)
Revaluation of Hydro PPA               -          (30)
Reclamation & abandonment           (20)           (12)
Other income (expense)               735           (53)
                                                        18
                                                             17
                                      Balance Sheet
( in millions )
Assets                                    2005         2004
Current Assets                            $818         $175
Long-Term Receivable                         7           10
Property Plant & Equipment                 295          920
Deferred Charges                              -           2
Hydro PPA                                  590          620
Balancing Pool – Deferral Account             -         233

Total Assets                              1,711        1,960


Liabilities
Current Liabilities                       $221          225
PPA lease obligations                      838         1,676
Reclamation & Abandonment Provision         27           23
SPP Contracts                               29           36
Balancing Pool – Deferral Account          596             -
                                                  19
Total Liabilities                         1,711        1,960
Operating Income (Loss)




                          20
                               19
                            Credit Rating

•   In October 2005 the Dominion Bond
    Rating Service upgraded the
    Balancing Pool’s Credit Rating from
    AA (low) to AA.

•   The upgrade was mainly due to the
    completion of the two credit facilities
    and the termination of the Clover Bar
    PPA.
                                              21
                                                   20
                      Financial Forecast

•   The Balancing Pool is projecting
    positive cash flow for 2006
        • MAP II contracts maturing
        • Clover Bar termination
        • Investment income

•   Cash flow negatively impacted due to
    a decrease in PILOT receipts.

                                           22
                                                21
Update for 2006
  Genesee Sale Process




                         23
                              22
                   Genesee Sale Process

•   PPA represents 762 MWs of base load
    coal-fired capacity.

•   Genesee station has reliable performance with
    over 94% historical availability factor.

•   Value to existing participants: Opportunity to
    diversify plant risk.

•   Value to new participants: Immediate low risk
    entry into Alberta power market.           24
                                                     23
                 Genesee Sale Process

•   Term: offering varying maturities of 3, 5,10
    and 15 years.

•   Contract Size: offering strip contract sizes of
    25, 81 and 100 MWs.

•   PPA Risk Sharing for change of law re: CASA
    and Kyoto.

•   Also accepting bids for whole PPA.
                                                   25
                                                        24
                Genesee Sale Process
PPA Holding Restrictions revised in 2005:

•  Prior limit of maximum 1,390 MW of PPA
 capacity has been eliminated.
• Continuance of restrictions of PPA
   ownership by:
       •   Crown corporations or subsidiaries.
       •   Plant owner cannot hold PPA for
           their plant
           e.g. EPCOR restricted on Genesee PPA.
                                             26
                                                   25
                 Genesee Sale Process
•   Flexibility in contract size and maturity
    dates will allow participants to bid where
    they see the most value, and optimize the
    value of MAP sale process.

•   It is anticipated that demand for Genesee
    PPA capacity will be very high.

•   Balancing Pool will establish reserve
    prices, and MAP contracts will be sold only
    if market prices exceed reserve prices. 27
                                                  26
                 Genesee Sale Process

• The timing of the Genesee Sale will follow the
  finalization of the DOE’s regulatory process
  and proposed compliance plans.

• The Genesee sale process will resume
  no earlier than Q4 2006.

• The Balancing Pool will endeavour to inform
  participants of the revised timing in June 2006.
                                               28
                                                     27
                                    In Closing
• We remain focused on operating in a
  commercial manner to enhance asset value
  and manage liabilities.

• We will provide regular updates to
  stakeholders on the Genesee Sale process
  and a mid-year report on our six month
  financial results.

• Our thanks go to our stakeholders for your
  continued input and support.

             www.balancingpool.ca              29
                                                    28
Comments and Questions ?




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