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EPCOR Power L.P. reports fourth quarter and year-end results

EDMONTON, Alberta - March 14, 2007 - EPCOR Power Services Ltd., the general partner of EPCOR Power L.P. ("the Partnership"), today released the Partnership's quarterly results for the period ended December 31, 2006.

"I'm pleased to report that in 2006, the Partnership delivered on a targeted growth strategy, which included the completion of two key U.S. acquisitions that strengthened and diversified our overall power generation asset base," said Brian Vaasjo, President of EPCOR Power Services Ltd. "Together with our ongoing commitment to operational excellence and conservative fiscal management, this led to a solid first full year under EPCOR as the general partner. The Partnership continued its track record of strong operating performance where the power plants' availability was at 95% while generating 3,400 gigawatt hours, a 26% increase from the prior year. Revenues of $350 million in 2006 increased 18% from the prior year while cash flow from operating activities grew by 5%. Our 2006 results included two months of operations from the Primary Energy Ventures acquisition and we look forward to adding full year contributions going forward. Our focus remains on providing unitholders with stable and sustainable cash distributions by capitalizing on further earnings enhancements where possible and through plant expansions and acquisitions of new generating assets in Canada and the U.S."

Highlights of EPCOR Power L.P.'s financial performance included:

Cash provided by operating activities was $37.4 million or $0.75 per unit and $154.4 million or $3.18 per unit respectively for the three and twelve months ended December 31, 2006 compared with $45.5 million or $0.96 per unit and $146.7 million or $3.09 per unit for the same periods in 2005. The fourth quarter decrease in cash provided by operating activities reflects operating working capital changes which increased by $4.7 million in 2006 compared with a decrease of $2.6 million for the same period in 2005. The year over year increase in cash provided by operating activities in total and on a per unit basis was primarily due to an agreement with the Ontario Electricity Financial Corporation ("OEFC") on a replacement for the Direct Customer Rate ("DCR") index that was discontinued in 2002, working capital changes and the third quarter acquisition of Frederickson Power LP which is partly offset by lower enhancement and diversion fees at the Ontario plants.

Net income /(loss) was $(12.9) million or $(0.26) per unit and $62.1 million or $1.28 per unit respectively for the three and twelve months ended December 31, 2006 compared to $21.2 million or $0.45 per unit and $86.5 million or $1.83 per unit for the same periods in 2005. The decrease in net income for the three and twelve months ended December 31, 2006 compared to the same prior year periods was primarily due to unrealized foreign exchange losses on the translation of the Partnership's U.S. dollar denominated debt in 2006 compared with unrealized foreign exchange gains in 2005.

Cash distributions of $31.4 million or $0.63 per unit were declared for the fourth quarter of 2006, compared with $29.9 million and $0.63 per unit for the same period in 2005. The increase in cash distributions reflects the addition of 2,460,000 Limited Partnership units which were issued in respect of the Frederickson Power L.P. acquisition in August 2006.

⁽¹⁾ Cash provided by operating activities per unit is a non-GAAP financial measure that is defined in the annual MD&A.

Click here to view the management's discussion and analysis and consolidated financial statements.

Unitholder & Analyst Inquiries: Randy Mah (780) 412-4297 | Toll Free: (866) 896-4636