Investors 

Frequently Asked Questions

1. Why was EPCOR Power L.P. renamed Capital Power Income L.P.?
On May 8, 2009, EPCOR announced its intention to launch an independent power generation business called Capital Power Corporation (CPC).  EPCOR planned on CPC and its subsidiaries acquiring all the power generation assets and related operations of EPCOR, including its 30.5% interest in EPCOR Power L.P.  On July 9, 2009, Capital Power Corporation successfully completed an initial public offering of common shares.  The company’s common shares trade on the TSX under the symbol CPX.  EPCOR retains a significant non-controlling financial interest (greater than 70%).

EPCOR Power L.P. was re-named as Capital Power Income L.P. in November 2009 to align with its General Partner, Capital Power Corporation.

2. How will the income trust tax changes in 2011 affect Capital Power Income L.P.?
In October 2006, the Government of Canada (Government) announced the "Tax Fairness Plan" which included new tax rules for specified investment flow-through (SIFT) entities, commonly known as income trusts. The new rules, which were enacted in June 2007, tax certain income of a SIFT in substantially the same way it would be taxed if the SIFT were a corporation. Capital Power Income L.P. (the Partnership) is classified as a SIFT under these new rules. In broad terms, these measures, when implemented, would result in the application of a tax to the Partnership similar to that on corporations and would treat a portion of cash distributions received by unitholders similar to taxable dividends for tax purposes.

Trusts and partnerships that meet the SIFT definition and that existed on October 31, 2006 are exempt from this tax until 2011, as long as they do not grow in excess of specific guidelines set out by the Government. During the four-year period prior to 2011, trusts and partnerships would be able to issue equity, subject to annual limits, to finance growth in an amount not to exceed the October 31, 2006 value of its equity market capitalization. The Partnership expects that it can issue up to $1.7 billion of new equity before 2011 without accelerating the date that it becomes subject to the SIFT legislation.

The Partnership has optimized its capital structure to defer impact of cash taxes on income. At the end of 2009, tax losses and undepreciated capital costs, totaling approximately $1.2 billion, are available to the Partnership to deduct against future taxable income. Based on its existing portfolio of assets, the earliest expected cash tax payments on income in Canada and the United States is 2015 or 2016. Any acquisitions or developments may extend the dates out further. In addition, the Partnership generates cash flows from both Canada and the U.S. and only the cash flows generated in Canada would be subject to the SIFT tax. Approximately 54% of the Partnership's 2009 operating margin (excluding fair value changes on foreign exchange and natural gas contracts) are generated from the U.S. and is exempt from the SIFT tax, but subject to current U.S. taxation.

Unlike trusts, partnerships can utilize existing tax rules that would enable the Partnership to convert to a corporation on a tax deferred basis. Furthermore, additional changes were proposed by the Government in July 2008 to facilitate the conversion of income trusts to corporations, which the Partnership should be able to implement as long as it can meet the requirements, including that it must be wound up before 2013. Accordingly, although the Partnership has no compelling reason at this time to convert to a corporation prior to 2013, it continues to evaluate its alternatives and monitor the status of proposed tax laws as they are announced.

3. Are there any tax implications on Capital Power Income L.P.’s distributions after 2010 when the SIFT tax becomes effective?
The Partnership expects that its distributions will be treated as eligible dividends starting in 2011, the year that the Partnership expects to be subject to the SIFT rules. Taxable unitholders may be able to realize higher after-tax proceeds from distributions treated as eligible dividends as opposed to ordinary income until at least such time that cash taxes are payable by the Partnership which is currently expected to be in 2015 or 2016.

4. Who should I notify regarding unitholder changes of address?
To update a change of address, unitholders should contact the brokers of the brokerage firm where their units are beneficially held.

5. When will the T5013 or Releve 15 forms be mailed to unitholders?
Your brokerage firm (not Capital Power Income L.P.) is responsible for sending the T5013 and Releve 15 (Quebec residents) to individual unitholders. Capital Power Income L.P. sends tax-related information to the Canadian Depository for Securities Limited (CDS) by end of February of each year. The brokerage firms then access the tax information from CDS and, according to the Income Tax Act, have until March 31 to mail out the T5013 and Releve 15 (Quebec residents) to individual unitholders. The tax year for Capital Power Income L.P. is a calendar year.

6. What portion of the distributions is considered to be taxable?

*above rounded to the nearest decimal place

7. What portion of the distributions is considered to be return of capital?

*above rounded to the nearest decimal place

8. Can you provide an estimate for the taxable portion of distributions for the current year?
Capital Power Income L.P. does not prepare estimates during the year of the anticipated income for tax purposes.

9. Are the units of Capital Power Income L.P. considered to be foreign content?
Units are considered foreign property for purposes of inclusion in registered retirement savings plans (RRSPs), registered retirement income funds (RRIFs) or deferred profit sharing plans (DPSPs) for all months up to and including December 2004. The foreign property rules with respect to RRSPs, RRIFs or DPSPs are no longer in effect for months ending after December 2004.

10. Does Capital Power Income L.P. have a Distribution Reinvestment Plan (DRIP)?
Yes, the Partnership announced on October 13, 2009 the launch of a DRIP and Premium DRIP programs and the change to monthly distribution payments from quarterly payments effective October, 2009. For further information, see Distribution Reinvestment Program under the Investors section of the website.

11. Can investors, other than Canadian citizens, purchase units of Capital Power Income L.P.?
Units of the Partnership may only be held by residents of Canada. In the event that any units are acquired by a non-resident of Canada, the General Partner has the authority to take any steps necessary to ensure that such units are transferred to a resident of Canada.

12. What are the key dates for the release of quarterly results?
The expected dates for the current year are as follows:

13. Does Capital Power Income L.P. hold an Annual General Meeting?
There are no annual meetings of the limited partners as the incorporation statute under which the Limited Partnership was created strictly prohibits limited partners from taking an active involvement in the day-to-day operations of the Partnership. In order to avoid any liability accruing to the Partnership, this includes not holding annual meetings of the limited partners.