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

EDMONTON, Alberta - March 6, 2008 (TSX: EP.UN) - EPCOR Power Services Ltd., the general partner of EPCOR Power L.P. (the Partnership), today released the Partnership's quarterly and year-end results for the period ended December 31, 2007.

"Financial performance for 2007, as measured by cash provided by operating activities, was generally in line with our expectations, excluding the one-time forward contract losses that were realized to hedge the foreign exchange and interest rate risks on the Primary Energy Ventures LLC (Ventures) acquisition", said Brian Vaasjo, President of EPCOR Power Services Ltd. "In the fourth quarter, cash provided by operating activities was slightly behind plan due to lower water flows at our Curtis Palmer facility and lower than forecast natural gas prices which reduced the opportunities to curtail electricity production and re-sell the natural gas at our Ontario facilities."

"While 2007 has been a difficult year for both the Partnership and the power trust sector generally due to the federal government's tax legislation on specified investment flow-through entities and the resulting impact on unit values and consolidation of industry peers, I am satisfied with the steps we have taken to improve our competitive position over the long-term. During the past year, the Partnership completed a number of initiatives to reduce potential risks on future cash flows. This includes positioning the organization to be competitive in a post-2010 tax environment and securing permanent financing for acquisitions made in 2006. The Partnership also removed litigation risk by successfully negotiating settlements with two natural gas suppliers relating to the Tunis power plant. Finally, we completed the integration of Ventures, giving us a platform for growth in the U.S."

"As we enter 2008, there a number of exciting opportunities for both organic earnings growth from existing facilities as well as new project developments that we are continuing to pursue that we believe can provide meaningful financial upside for the Partnership."

The Partnership reported cash provided by operating activities of $39.0 million or $0.72 per unit⁽¹⁾ for the three months ended December 31, 2007 compared with $36.2 million or $0.73 per unit for the same period in 2006. The increase reflects a $7.9 million decrease in working capital requirements primarily due to the seasonal nature of Ventures operations acquired in the fourth quarter last year, partially offset by lower earnings from the Curtis Palmer and Ontario facilities.

Cash provided by operating activities of $132.2 million or $2.53 per unit for the twelve months ended December 31, 2007 was lower than the $153.9 million or $3.17 per unit for the same period in 2006. In addition to reduced cash flow from Curtis Palmer, the decrease reflects net realized losses on foreign exchange and interest rate contracts. These contracts were used to hedge changes in interest rates and foreign exchange rates on the Ventures US dollar bridge acquisition facilities that were replaced by a US private placement in August 2007. The losses were primarily driven by the declining US treasury rates and the strengthening of the Canadian dollar versus the US dollar. However, consistent with the nature of a hedge, this allowed for a reduced fixed term rate on the new long-term debt financing and a larger pay down on the bridge acquisition facilities from the Canadian dollar equity offerings. As a result, the net realized losses will be offset by lower financing charges and debt repayments in future periods.

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

⁽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