slides here - Algonquin Power & Utilities Corp.

Ian Robertson,
CEO

Welcome: AQN Investor Day 2012
Some recurring themes…
• AQN provides its investors stable
exposure to the regulated and nonregulated
utilities sectors
• AQN has proved its ability to
seamlessly execute on identified
growth initiatives
• AQN continues to have line of sight to
significant value creation initiatives
over the coming years
“Still lots of gas in the AQN tank”
3

Uncertain Economic Backdrop
Safe and stable returns in an unstable environment
• Global Economy
• Faltering growth
• Stagnating unemployment
• Recovery timeline uncertain
• Regulated Utilities: Safe Harbour
• Rate-regulated essential services
• Steady and predictable cash-flows
• Significant portion of AQN earnings
• Non-Regulated Utilities: Certainty in Uncertain Environment
• Lack of bold policy support for renewable generation
• Low natural gas prices have made renewable economics challenging
• AQN contracted project pipeline ensures medium term growth 4

Regulated vs. Non-Regulated Utilities
Two sides to the same coin
Similarities
Part of the utility service distribution chain – generation, transmission distribution
Based on investment highly similar long-lived physical assets
Earnings largely driven by balance sheet
Management of on-going CAPEX is key to business success
Expectation to deliver reliable service
5

Regulated vs. Non-Regulated Utilities
Two sides to the same coin
Differences Regulated Utilities Non-Regulated
Utilities
Revenue Cost based Market based / PPA
Operating cost risk Borne by ratepayers Borne by AQN
Interest rate risk Borne by ratepayers Borne by AQN
Impact of CAPEX Earning opportunity Reduces return
Typical equity returns 9-11% 11-14%
6

Management Styles
Different Management Styles for Different Environments
Non-Regulated Utilities
Regulated Utilities
Margin Maximization:
“Maximize returns in the
context of risk”
Risk Minimization:
“Minimize risk in the
context of fixed returns”
Human Resources Entrepreneurial approach Customer-centric, full service
Capital Reinvestment Highly controlled Prudency governed
Risk Management
Risk-return trade-off to be
considered
No incremental risks to be
assumed
7

Strategy Development Objectives
Robust and Flexible Strategies are the Key to Success
AQN objectives in strategy development:
• Faultlessly execute on committed growth initiatives
• Grow the business in the face of the evolving economic,
political and regulatory landscapes
• Manage our human resource strategies to keep pace
• Maintain market and investor confidence
8

Business Management in the Face of Uncertainty
Some Common Consensus Views
Impact on APUC
U.S. economic recovery will continue to be
anemic through 2013.
Stagnant Economy
Robust Recovery
U.S Production Tax Credits will not be
renewed promptly.
Expire Un-renewed
Are Renewed
Interest rates will remain at current levels
for the near term.
Rates Unchanged
Rates Rise
Natural gas pricing will remain low for
foreseeable future.
NG Price Stays Low
NG Price Rises
9

2013 Growth Plans
Non-Regulated Utilities
Regulated Utilities
• Complete the pipeline of existing PPAs
• Take advantage of equipment
procurement opportunities
• Minimize exposure to change in
macro-economic factors
• Continue accretive acquisitions
• Outbound calls to potential sellers
• Maintain discipline approach to value
• Successfully execute closing and
transition of acquisitions
• Exploit core development competency
• Focus on contracted t wind, solar and
small natural gas generating
opportunities
• Enhance focus on organic growth
• Foster entrepreneurial spirit it within our
State organizations
• Drive roll-up opportunities in existing
footprint
10

Success to Date and Go Forward Targets
On target to achieve 2010 stated goal of $2B in assets
and over $200M in EBITDA by 2014
• Re-stated Growth Objectives for 2013
• Continue 15% CAGR Asset and EBITDA growth
• Continue to drive EPS and CFPS by >5% CAGR
• Our “March to a Million” by 2017
• Liberty Utilities: targeting 1,000,000 regulated
utility customers
• APCo: targeting ti 1,000,000 kw of finstalled nonregulated
generating capacity
11

Continuing the Trajectory
• Separate business origination teams with a demonstrated record of success
• Identified growth opportunities providing more than 100% increase in assets
and EBITDA
• Low payout ratio, strong equity relationship with Emera provide accretive
sources of capital to fund growth
Illustrative
EPS/FFOPS Dividend id d Payout Model
2011
2012 2013 2014 2015 2016
Dividend Payout Model
Current Dividends Dividends
12

David Bronicheski,
CFO

Year in Review
NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT
$95 MM - EQUITY
APUC EQUITY ISSUE
$100 MM - DEBT
LIBERTY BANK FACILITY
$60 MM - EQUITY
APUC CONVERSION OF CDs
$60 MM - EQUITY
EMERA SUB RECEIPTS
$155 MM - DEBT
UPSIZE APCo BANK FACILITY
$225 MM - DEBT
US PRIVATE PLACEMENT
$60 MM - EQUITY
EMERA SUB RECEIPTS
• $755 million of financings over the last 12 months
• Access to capital remains strong 14

Credit Positive Developments
• Corporate BBB - credit rating
• Outlook moved to “positive”
• Liberty debt rating BBB (high)
• Contributing factors:
• Firm commitment to an investment
grade credit rating with target of BBB flat
• Corporate level financing platforms
• No near term debt maturities
• Conversion of CDs to equity
• Lengthening PPAs
• Quality of cash flows have improved
• New utility acquisitions in 2013
15

Debt Financing Platforms Established
• Financing platforms appropriate for each subsidiary are established
• Straight forward execution and scalable
• Corporate level investment grade financings
• Canadian Bond Indenture:
• US Bond Indenture:
• senior unsecured
• included in Canadian bond
index
• incurrence based covenants
• senior unsecured
• permits US private placements and
public bonds
• now well established in US private
placement market
16

Capital Structure
December
2011
June
2012
Post Q2
Financings
Long term liabilities $ 332,716 33.0% $ 399,406 35.0% $ 639,406 44.9%
Convertible debentures 122,297 12.1% 62,390 5.5% 62,390 4.4%
Total equity 552,695 54.8% 678,172 59.5% 723,172 50.8%
$ 1,007,708 100.0% $ 1,139,968 100.0% $ 1,424,968 100.0%
• AQN maintains an investment grade capital structure
• Consolidated target 50% debt : 50% equity
• AQN intends to convert final Series 3 CDs to equity in Q1 2013
• Conversion further improves financial flexibility
17

Debt Maturity Ladder
• No near term debt maturities
• Paced maturity ladder enhances liquidity
‘000s
$200,000
$150,000
$100,000 000
$50,000
$‐
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023+
Debt Maturities
Convertible Debenture Maturity
18
18

Access to Equity
• AQN access to equity remains strong
• Large demand for predictable yield stock with a proven growth record
• Multiple l tools available:
Operating Cash
Flow
Conversion of CDs
DRIP
Emera Investment
Preferred Shares
Common Stock
19

Tax Position
Algonquin Power & Utilities Corp.
Non-capital losses $145.0
Algonquin
Power Co.
Liberty
Utilities
• APUC regularly assesses its
consolidated d corporate tax
position
• $691 of tax attributes are
available
• APUC now expects to begin
paying cash taxes in 2022
Non-capital losses $ 67.0 $ 45.0
• APCo – 2020
PP&E tax shelter 281.0 153.0
$ 348.0 $ 198.0
• Liberty Utilities – 2017
• Power development projects
over the next 5 years will add
additional shelter
20
20

The Year Ahead
• Closing on committed acquisitions:
Deal
Debt
Equity
Size
US Wind farms $240 $120 $120
Ak Arkansas Water $27 $15 $12
Georgia Gas $140 $77 $63
$407 $212 $195
21

The Year Ahead
• AQN has proven access to debt capital markets:
Debt Source
Liberty US private placement $ 92
APCo Bond $120
$212
22

The Year Ahead
• AQN has significant and diverse equity availability:
Equity Sources
Conversion of CDs to equity $ 80
DRIP $ 10
Committed Emera sub receipts $ 45
Additional Emera Equity available $ 60
Plus operating cash flows
$195
23

Questions

Mike Snow,
President

Algonquin Power Today
Rene ewable
• 76% of 2011 EBITDA
• >95% of generation in PPAs
• Remaining PPA life of 15.5 years
nt Th hermal
De evelopme
• 24% of 2011 EBITDA
• >95% of generation in PPAs
• Remaining PPA life of 7.0 years
• Greenfield, acquisitions, organic growth
• Origination results: 541MW over 2012 – 2016
• Development pipeline across 5 provinces
26
Note: The figures used in this presentation assume the divestment of
AQN’s New York and New England micro-hydro facilities.

2012 Algonquin Power Successes
25 Year PPA with
SaskPower for
177MW Wind Farm
Sanger transformer
upgrade and generator
replacement
Achieved 365
days without a
lost time injury
Closing of interest in
200MW Minonk, IL
and 150MW Senate,
TX wind farms
Q1 2012 Q2 2012 Q3 2012 Q4 2012

$1.2B Pipeline to Drive Growth
Adding 541MW of Generating Capacity by 2016
76
EBITDA Growth
($MM)
192
• Build $1.2B of contracted pipeline
• 16% annual growth in generation capacity
• Optimize facilities with a focused capital program
• Continue asset rationalization
Project
MW (net)
CAPEX
(net $MM) COD PPA (yrs)
2011 2016
Minonk 118 227 2012 10
Senate 88 163 2012 15
Cornwall Solar 10 45 2013 20
St. Damase 24 65 2014 20
Morse Wind 25 65 2014 20
Amherst Island 75 230 2014 20
Val Eo 24 70 2015 20
Chaplin Wind 177 355 2016 25
TOTAL 541 1,220
Combined annual EBITDA of $124 Million
28

Changing Complexion of Portfolio
Significant Growth in Generation Across Fewer Sites
Number of
Facilities 2012
Number of
Facilities 2016
6
11
0 - 5MW
5 - 10MW
17
14
37 10MW+
7
Average PPA Length (yrs)
Total Facilities 54 38
Av. Facility Size (net) 9.5MW 26.4MW
2016
16.8
Total MW (net) 510 1,000
2012
12.4
0 5 10 15 20
29

Portfolio Management
Wind, Solar Remain Attractive in the Long Term
Objectives:
• Deliver reliable EBITDA with minimal volatility
• Demonstrate sustainability in the business model
• Acquire sufficient assets by fuel type to operate safely and competitively
US Generation Capacity Additions
Portfolio Considerations
Wind
PV
Solar
Natural
Gas
Hydro
• Diversify revenue geographically
• Annual resource variability similar to hydro
• Expand existing sites with proven resource
• Least complex; attractive margins
• Costs declining; efficiencies improving
• Availability of low cost gas
• Focus: non-merchant generation
• Pursuing accretive acquisitions in a
competitive environment
30

Capital Project Management
Reduce Risk Over Project Life Cycle
Title
Stage
Gate
Activity
Needed
Funds
Engineering
Completion
Contingency
Required
Porch
Gat te 0 – Th he Front
Stage 1 Stage 2 Stage 3 Stage 4
Project Options Project
Screening Selection Refinement
Conceptual
Study
Ga ate 1
Feasibility
Study
Ga ate 2
Engineering
Study
Up to 0.1% Up to 0.5% Up to 1.5%
Ga ate 3
Execution
Detailed Eng.
& Construction
100% of
Engineering Value
0-5% 5-20% 30-40% 50-100%
30-50% 15-20% 10-15%
• Risk managed process from business plan to start-up (Stage 1 – Stage 4)
• Approval stage gates across the project life cycle (Gate 0 – Gate 3)
• Owner reviews deliverables at each gate; management can modify / stop project
• Project funding is tightly managed
31

Operations Strategy
Focus on Standardization
Operations Organized for Seamless Growth Integration
Divisional i i Organization
• Wind / Hydro / Thermal
Integrated Safety
Common Tools
Standardization
• Embed Safety into Operations
• Dashboards / CMMS / Document Control
• Plug ‘n Play Growth / Maintenance Strategy
2011 EBITDA ($MM) 2011 Capacity (net MW)
18.6
23.0
Wind
Hydro
182.5
140.3
34.5
Thermal
113.7
32

Mike Griffin,
Senior Director, Asset Management

Portfolio Planning
• Managing growth
• Adding appropriate resources for new assets
• Divesting smaller assets
• Plan for rationalization of micro-hydro assets
• Off contract micro-hydro no longer strategic in AQN’s growing portfolio
• High operating cost vs. larger hydro
• Typically y higher volatility vs. larger hydro
• High volatility due to market pricing
• Six plants sold over last 12 months
• Considering further divestments
34

2012 CAPEX Plan and Progress
Project
• Sanger - Transformer upgraded, new STG installed
• PPA amended to manage carbon risk through 2013
• Preparing capital plan to support PPA negotiations with
PG&E for 16 MW additional capacity
• Windsor Locks - Repowering complete in Q3 2012
• ESA extended through 2027 with Ahlstrom
• Frame 6 & STG successfully bid into ISONE Reserve Market
Expected
Impact
EBITDA increase:
- $500k (2013)
- $500k (2014)
EBITDA:
- $2.5 – $3MM
• Tinker
• G5 repowering underway expected completion Fall 2012
• Increase output & reduce operating costs
−
−
24 GWh/year
of increased
generation
EBITDA
increase:
$750k/year
35

CAPEX Forecast (2013-2017)
• Expected CAPEX for organic growth projects of ~$1MM/year
• Case-by-case examination based on increased EBITDA analysis
• For example: Considering chiller upgrade at Sanger in 2013
• Quebec Dam Act
• All required studies have been completed
• Remedial work required on 8 facilities
• Completed at 2 facilities, work on remaining 6 completed by 2015
CAPEX Spending by Division ($MM)
2013 2014 2015 2016 2017
Renewable 9.3 10.5 6.2 2.6 2.3
Thermal 4.5 3.7 3.9 1.2 3.3
Total 13.7 14.2 10.1 3.8 5.6
36

Achieving Price Certainty
• Average PPA length increases from 2012 to 2016
• For Quebec hydro facilities, AQN has negotiated two contract renewals
with Hydro Quebec
• All contracts contemplate renewal terms
• Long-lived hedges
• Dickson Dam: ~ 75% of output
• US wind: Majority of output
Average PPA Life
(years remaining)
2012 2016
Wind 20.22 19.3
Solar - 18.0
Hydro 10.8 10.3
Thermal 7.0 8.1
Total 12.4 16.8
37

REC Sales Strategies
• REC Sales
• Register/Qualify in multiple
programs
• Forward sales of generation
• RPS requirements will
increase significantly
• Market for longer term sales
not well developed
Expected
REC Volume
(1,000/yr)*
$/REC
2013
$/REC
2017
Sandy Ridge (PA) 95 $1.19 $15.20
Minonk (IL) 400 $2.14 $15.20
Senate (TX) 305 $2.10 $3.39
Windsor Locks(CT) 75 $11.00 $11.91
Totals 875 $2.4MM $9.4MM
*APCo’s Share
RPS Requirements
EY2013 EY2014 EY2015 EY2016 EY2017
PA 4% 4.5% 5% 5.5% 6%
IL 7% 8% 9% 10% 11.5%
CT 11% 12.5% 14% 15.5% 17%
TX 5,880 MW by 2014 10,000 MW by 2025
38

Energy From Waste Update
• EFW is ready to continue operations beyond Nov 1st
• Waste supply outlook
1) Municipal sector
• Limited landfill capacity
• Alternatives ti to landfill significant ifi technology and price risk
2) Industrial/Commercial sector
• Significant market for product destruction, bulky items
• Geographic advantage vs. alternatives
• Equipment/Operational modifications will increase plant flexibility
• EBITDA Forecasts for combined EFW/BCI
• 2013: ~$2-3MM/yr
• 2014/15: ~$5-6MM/yr
39

Jeff Norman,
Vice President, Project Development

Levelized Cost of Energy
Levelized cost of electricity for different generation
technologies, Q1 2012 vs. Q1 2011 ($ per MWh)
41
41

Growth Strategy Focus
Project Type
Interest to
Develop
Solar High High
Interest to
Acquire
Wind High Medium
Hydroelectric High Medium
Natural Gas (150 MW) Low Very Low
Biomass Very Low Very Low
Geothermal Very Low Very Low
• Modality – primary development focus on solar and wind
• Minimum Size – gain economies of scale: solar / hydro 10MW; wind 25 MW
• Geography – focus development in Canada and the United States
42
42

Non-Regulated Electric Generation Pipeline
2013 10 MW SOLAR FACILITY IN ONTARIO ($45 M)
• 20 year PPA at Cornwall
200 MW WIND FACILITY IN ILLINOIS ($400 M)*
• Long term power sales agreements ~10 year average length
150 MW WIND FACILITY IN TEXAS ($300 M)*
• Long term power sales agreements ~15 year average length
2014 75 MW WIND FACILITY IN ONTARIO ($230 M)
• 20 year PPA at Amherst Island
24 MW WIND FACILITY IN QUEBEC ($70 M)
• 20 year PPA in partnership with Town of St. Damase
25 MW WIND FACILITY IN SASKATCHEWAN ($70 M)
• 20 year PPA at Morse
2015 24 MW WIND FACILITY IN QUEBEC ($70 M)
• 20 year PPA in partnership with community cooperative
IN EXCESS OF $1
BILLION IN NEW
INVESTMENT
OVER 5 YEARS
9.9 MW WIND FACILITY IN NEW BRUNSWICK ($25 M)
• 20 year PPA in New Brunswick
2016 177 MW WIND FACILITY IN SASKATCHEWAN ($355 M)
• 25 year PPA at Chaplin
43
* APCO Interest 58.75% of Sponsor Co.

Growth Considerations – 2012 Pipeline
Contracted Wind
Un-contracted Wind
Un-contracted Hydro
Un-contracted Solar
Contracted Solar
44

US Electricity Demand: 1990 - 2035
Electricity Generation by fuel, 1990-2035
(trillion kW-h per year)
Source: U.S. Energy Information Administration |
Annual Energy Outlook 2012
45
45

Recent Turbine Prices
Source: Bolinger, M., & Wiser, R. (2011). Understanding Trends in Wind Turbine
Prices Over The Past Decade. U.S: Lawrence Berkeley National Laboratory.
46

Turbine Technology Unlocks Opportunities
CLASS I-II
113m Rotor Diameter
CLASS II-III
93m Rotor Diameter
Gearbox & Double-
Fed Induction
Generator
Direct-drive (no gear
box), permanent
magnet, full conversion
80 metre
Hub Height
99.5 metre
80m
Hub Hub Height Height
47

PV Module Price Trend
48

Growth of Non-Regulated Business
Executing on power developments
Projects
Amherst
Cornwall Morse Chaplin St-
Val-
Senate Minonk Sandy
NB
St.
Island
Damase Eo
Ridge
Leon
II
Off-Take
Agreement
Interconnection
Capacity
Permitting /
Environmental
Impact
Assessment
YES YES YES YES YES YES YES YES YES YES YES
YES YES YES YES YES YES YES YES YES YES YES
75 % 95% 97% 40% 85% 25% 100% 100% 100% 100 % 100%
Engineering 25% 25% 0% 0% 20% 1% 100% 100% 100% 10% 100%
Construction 0% 0% 0% 0% 0% 0% 95% 95% 100% 0% 100%
Stage Gate 3 3 2 2 3 2-3 4 4 4 2 4
49

Charlie Ashman,
Vice President, Technology

Technology Developments and Cost Trends
• Innovative Technologies
• Impact to existing business
• Opportunities for future development
• Natural Gas
• Supply
• Generation
• CHP
• FERC
• Renewables
• Materials
• Solar
• Wind

Shale Gas Natural Gas Supply
52

Natural Gas Generation Technologies
GE LMS100
• High simple cycle, base
load efficiency (44%)
• Fast start capability
delivers 100 MW in 10
min
Wartsila Duel Fuel
• Stepwise investment, smaller risks
• Excellent plant availability
• Net plant electrical efficiency over 44%
• Full output at high altitude/hot - dry
conditions
• High part-load efficiency
• Fast start-up, 5 min hot standby to full plant
load
F t t t bilit • Minimal water consumption
• Low gas fuel pressure
• Excellent cycling, part
load and hot day
performance
53

Recent U.S. Governmental Action
• Presidential Order CHP August 30, 2012
• Coordinate policies: encourage investment in industrial efficiency
• National goal of deploying 40 GW of new CHP by 2020
• Electricity/Natural Gas Coordination
• Adequacy of gas infrastructure coordination between industries:
• February 2011 gas outages in Southwest lead to blackouts
• Adequacy of gas supply for generation New England winter peak
• Midwest ISO projects $billions of new gas infrastructure needed quickly to
address projected coal-fired generator retirements
• Disconnect between intermittent itt t peak demand d of electric generators
and full subscribed pipelines
• FERC sought industry input and seeks full rule making
• DOE to establish Strategic Materials Hub

Rare Earth Materials for Renewable Technology
• High temperature superconductor
(HTS)
• 10 year horizon
• Significant size and weight reduction
• Demonstration on electric motors for
ship propulsion
• Rare Earth Minerals
• Permanent Magnets (Nd Dy)
• Reduced weight and size
• Direct Drive
• Virtually every technology needs
REM
• Morlycorp reopens Mountain
Pass-Technology innovations
reduce cost w/environmentally
sound mining
• Increased Canadian exploration
• DOE creates Strategic Materials
Hub

PV Highlights 2012
• Module is 50% of PV installed cost
• Module cost reduced to

Innovative Solar Technologies

Wind Industry 2012
Trends
Events
• Wind is credible source of new
generation in U.S.
•
•
GE 10 years in wind industry
Dependency of rare earth materials
• Lack of governmental policy clarity (REM) for magnets
• Turbine manufacturers/supplier
• 2011 nearly all REM supplied by
continue to localize production
unreliable foreign source
• Falling turbine prices push
• Industry experiences price escalation
and limited supplies
installed cost lower
• Molycorp re-opens Mountain Pass,
• With improved capacity factors
CA/other sources
aggressive wind power pricing
i
• US DOE investment in Strategic
• Strong growth 2012 but
Materials Hub
dramatically lower and uncertain • Permanent Magnetic Direct-Drive
2013 (PMDD) eliminates gearbox
• Significant turbine production over
capacity
• PTC set to expire December 31, 2012
58

Wind Turbine Drive Train Evolution
Induction Generator
Permanent Magnet Direct Dive
59

Questions

David Pasieka,
President

A Year of Achievements
Liberty Utilities
$100M Credit Facility
Regulatory Approval
of 100% Calpeco
ownership
Closing of
Mid-States
Gas assets
acquisitions
Pending
Approval of
Calpeco rate
case by CPUC
January April July October
Closing of Granite State
Electric and EnergyNorth
Gas acquisitions
Liberty Utilities
$225M debt facility
Announcement
of Georgia gas
assets
acquisition
Announcement
of Arkansas
water assets
acquisition
62

Flawless Execution
• Disciplined approach to
transitioning our
acquisitions
• Planning starts during the
initial negotiation process
• Day 1 in Mid-States and
New Hampshire without
Customer, Employee or
Regulator incident
63

Expanding our Geographic Footprint
Pine Bluff, Arkansas
• Water distribution tuck in
• Purchase price $28.6M
• Acquisition Premium 1.16x
• 17,280 customers
• 41 Employees
Columbus, Georgia
• Natural gas distribution
• Purchase Price $140.7M
• Acquisition Premium 1.1x1x
• 64,000 customers
• 64 Employees
64

Liberty Utilities - Systems
NEW HAMPSHIRE
IOWA
CALIFORNIA
MISSOURI
ILLINOIS
ARIZONA
Arkansas
Georgia
TEXAS
Liberty Utilities (West)
Water & Electric
Rate Base: $238 M
Customers: 110,000000
Liberty Utilities t (Central)
Gas & Water
Rate Base: $137 M
Customers: 113,000
Liberty Utilities (East)
Electric & Gas
Rate Base: $336M
Customers: 187,000
65

Issues Affecting our Utilities
• Safe, reliable service provided
using reasonable cost
structures
• Customer service expectations
• Increased demands d for
stakeholder communications
66

Organizational Approach
Head Office: Oakville
Strategy, Standards, Consistency
State Presidents
Operations
Customer
Service
Regulatory
& Gov’t
Finance &
Admin
Environment,
Health &
Safety
Human
Resources
67

Success Model
• Local
• Responsive
• Caring
• Employee Engagement
• Better Regulatory Access
• Comparable cost structure
• Improved Customer Experience
• Repeatable Scalable Growth
68

On Being Local
• Customer service best
delivered by opening the
doors to our customers
• Leverage experience of the
existing management team
• Repatriate jobs into the state
• Build strong community
presence home / schools
• Poised to capture local growth
opportunities
69

On Being Responsive
• Focus on maintaining reliable
service
• Build standardized platform
• Empower employees to do the
right thing
• Enhance our stakeholder
communications
70

Caring
• Safety is paramount
• Support of the low income
programs
• Care for the environment
• Annual survey validates our
focus on our customers
71

We are Poised for Success
• Proven scalable local model
• Prudent in our cost
management including
commodity procurement
• Well positioned to capitalize on
both organic and acquisitive
growth prospects
• High touch regulatory focus is
demonstrating benefit
72

Peter Eichler,
Director, Regulatory Strategy

Regulatory Overview
New Hampshire/3
Iowa/3
Illinois/2
California/1
Missouri/2
Arkansas/3
Director of Regulatory
& Government Affairs,
New Hampshire
Arizona/3
Texas/1
Georgia/1
Georgia/1
RRA Ranking
Manager Regulatory &
Government Affairs,
California
Below average
Aerage Average
Above average
Manager Regulatory &
Government Affairs,
Arizona, Texas
Director of Regulatory
& Government Affairs,
Mid-States
74

Utility ROE Trends
• Average authorized returns remain reasonable
• Approximately 9-11% for both gas, electric, and water utilities
• Trend toward increased earnings certainty
• Through regulatory mechanisms
12 US Average Utilty ROEs vs 10 Year US Treasury
10
8
6
4
2
0
2006 2007 2008 2009 2010 2011 2012
US Utility ROE
10 Year Treasury Rates
75

Increased Earnings Certainty
Mechanism AZ CA MO NH AR GA
Commodity
Pass Through
Accelerated
Recovery
Decoupling
Memorandum
Accounts
76

Decoupling Flavours
• Straight Fixed Variable
• Places all non-fuel costs and returns in
monthly fixed charges
• Popular in Missouri; Liberty assets
currently at 75% of costs in fixed charges
• Weather Normalization
• Adjustments to historical weather
patterns on real time basis
• Liberty will adopt this method in Georgia
• Economic Normalization
• Annual adjustments to ensure earnings
can be met
• Liberty has mechanisms that adjust
annually in California and Georgia 77

Case Study: CalPeco 2013 Rate Case
CalPeco rate case
• Filed February 28 th , 2012
• Extensive interaction with CPUC staff
before and during filing
• Filing based on prospective test year
• Non-Revenue requests
• Decoupling
• Continuation of inflation and major plant
addition adjustment mechanism
• Likely January 1, 2013 implementation
78

CalPeco 2013 Rate Case
• Major Drivers
• Plant Investment: $41 million
• Vegetation Management: $3.3 million
• All party settlement t achieved that t will result
in achievement of $19.0 million EBITDA
• Base revenue decoupling mechanism
• New rates will be implemented Jan 1, 2013
• Subject to final approval by CPUC
79

Regulatory Strategy
• Starts with proactive outreach
• Minimum 4 times annually per jurisdiction
• Keeps regulatory agencies aware of issues
and successes
• Use feedback to implement mutually
beneficial programs
• Customer focused programs
• Regulatory programs
• Locally focused
• No surprises during rate cases
80

Upcoming Rate Cases
• Liberty Utilities will file a case for
West
Filing Date
each major system at least once
every 4 years
Rio Rico Q2 2012
LPSCo Q1 2013
• Rate cases will focus on
continually increasing earnings
certainty
East Filing Date
Granite State Q1 2013
EnergyNorth Q1 2014
Central
Filing Date
Missouri Gas Q1 2014
Woodmark Q1 2013
81

In Summary
• Continued increased trend towards
earnings certainty
• Future rate cases to focus on
incremental improvement
• Regulatory Strategy key to successful
rate case outcomes
82

Chico DaFonte,
Director, Energy Procurement

Commodity Procurement Team
• Average of 20 years experience in electric and
natural gas industries
• Commodity supply chain – production/generation,
retail/wholesale sales, purchasing
• Multi-state and federal regulatory experience
84

Business Support
Sales &
Marketing
Customer
Relations
Finance &
Accounting
Government
Relations
Commodity
Procurement
Operations
Rates &
Regulatory
Treasury
Legal
85

Core Obligation
Sales &
Marketing
Customer
Relations
Finance &
Accounting
Government
Relations
To provide safe &
reliable service to all
customers at the
least possible cost
consistent with all
state and federal
regulations, ensuring
full recovery of
commodity costs.
Operations
Rates &
Regulatory
Treasury
Legal
86

Commodity Cost Recovery
• Pass-through cost recovery
• Purchased gas costs
• Electric utility default service – NH
• Electric utility sales service – CA
• Water
• EnergyNorth Natural Gas
• Integrated resource plan filed every 2 years –
capacity cost approval
• Annual hedging plan – Commission approved design
• Semi-annual cost of gas filing – commodity, capacity
and hedging cost pass-through
87

Daily Planning
Forecast
24/7
Market Intelligence
Planning
7:00 AM
Optimization
8:00 AM
3:00 PM
9:00 PM
8:15 AM – 11:00 AM
Procurement
Scheduling
24/7
8:15 AM – 11:00 AM
9:00 AM – 11:30 AM
88

Natural Gas Delivery System
Procurement - Centralized
89

Natural Gas Portfolio
• 17 Interstate Pipelines
• 10 Underground Storage Facilities
• 3 LNG Facilities
• 5 Propane Facilities
• Over 30 Firm Transportation Contracts
90

Natural Gas: The Fuel of Choice
91

Changing Supply Basins
Alaska
Mackenzie
Delta
Western Canada
Oil Sands
Eastern Canada
Rocky
Mountain
Woodford
Shale
Marcellus
Shale
Conventional
Midcontinent/
Texas
Barnett
Shale
Haynesville
Shale
Unconventional
Gulf Coast
92

Pipeline Infrastructure Expansion…
• Northeast Pipeline Projects
• $4.6 billion – completed or under
construction
• $5.5 billion – under review or announced
• 16.3 Bcf per day of capacity
• Pi Primarily il producer di driven
93
* CAPEX estimates were not available for certain of the Announced projects; therefore, the CAPEX estimate reflects the data that is available.
Source: Sussex Economics Advisors , LLC

…Leads to Liberty Growth Opportunity
• Organic Growth
• Residential oil/propane conversions
• Commercial and industrial applications
• New power plants and power plant
conversions
• Compressed natural gas vehicles
94

In Summary
• Team – Experience
• Process – Risk Avoidance
• Natural Gas – Infrastructure and Opportunity
The Future is Bright
95

Gerald Tremblay,
Vice President, Finance

Growing the Business
• Organic Growth
• Leveraging opportunities within existing
assets
• Business Development Growth
• Leveraging opportunities via acquisitions
97

Capital Management
Objective
• Prudently maintain and invest
capital within all our utilities
Strategies
Process Flow
Identification
Efficiency
• Effective and efficient
i deployment of capital
• Consistency in evaluating
capital projects
• Establish accountability
Evaluation
Approval
Implementation
98

Capital Categories
Category
Growth
Program
Mains, services, meters,
system reinforcements
Mandated/Safety
Integrity/Reliability
Corrosion control, meter
change outs, street lights,
new customers
Main replacements,
substation capacity,
pipeline reinforcements
99

Five Year Capital Plan by Region
$ ‘000s
• Average yearly spend of
approximately $69M
• Translates into annual Net
PPE growth of
approximately 3-5%
80,000
70,000
60,000
50,000
40,000
30,000
East
Central
West
20,000
10,000000
-
2013 2014 2015 2016 2017
100

Selected Major Projects
State Project Highlights Dollars Spend
California • Transmission major line re build $50M -7 years
New
Hampshire
• Non discretionary pipe replacement $32.8M-5 years
• Cast iron/bare steel replacement $26.7M-5 years
• New services growth strategy
$18.1M-5 years
• Transformer installation $10.2M-5 Years
Arizona • Palm Valley expansion $5.0M-1 Year
101

Other Organic Growth Opportunities - Gas
• Low commodity prices along EnergyNorth Penetration
with additional gas supply
• Programs in place
• Increase in conversion
Natural
Gas
opportunities
• Increase load volume of
customers
39%
Other
Heating
61%
Approximately 16,000 heating
structures currently on other
heating within 100ft of our mains
102

Acquisition Criteria
• Modest premium to regulatory
book value
• Supportiveness of regulatory
jurisdiction
• Organic growth potential
• Service territory demographics
103

Consistent with our Growth Strategy
• 2012 growth expectations - announce
$150M of rate base assets
• Recent announcements
• Georgia (Gas)
• Arkansas (Water)
• “Saving the Orphans”
• Pipeline
• Water
• Gas
• Electric
104

Consistent with our Growth Strategy
• Continue to build both organic
and acquisition growth
• Over $1.1B in net PP&E by
end of 2013 including
Arkansas and Georgia
• Growing pipeline
$ millions
1,200
1,000
800
600
Net PP&E Organic and Acquisition
Growth
1,108
801
400
200
189
350
0
2010 2011 2012 2013
105

2011 Towards the Million Customers
Organic Growth
Current Activity Growth
106

2012 Towards the Million Customers
Organic Growth
Current Activity Growth
107

2013 Towards the Million Customers
Organic Growth
Areas of Focus
108

In Summary
• Continue to grow our business
organically – approximately
3-5% in annual net PP&E
growth
• Continue to strengthen
pipeline acquisition growth –
over $1.1B in net PP&E by end
of 2013
109

Questions

Thank-you