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EPCOR Utilities Inc. Investor Presentation

June 2015

Guy Bridgeman

Senior Vice President & Chief Financial Officer

Frank Mannarino

Senior Vice President Electricity Operations

Duane Sommerfeld

Treasurer

Gold Bar Wastewater Treatment Plant

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Forward-Looking Information

Certain information in this presentation and in oral answers to questions may contain forward-looking

information statements or forward-looking information together, “forward-looking information”. Forward-

looking information is based on current expectations, estimates and projections that involve a number of

risks which could cause actual results to vary and in some instances to differ materially from those

anticipated by EPCOR. Forward-looking information is based on the estimates and opinions of

management at the time the information is presented. Actual results could differ materially from conclusions,

forecasts or projections in the forward-looking information, and certain material factors or assumptions were

applied in drawing conclusions or making forecasts or projections as reflected in the forward-looking

information. Additional information about the material factors and risks that could cause actual results to

differ materially from the conclusions, forecasts or projections in the forward-looking information and the

material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection

as reflected in the forward-looking information is contained in the most recent interim and annual

Management Discussion and Analysis filed on SEDAR (www.sedar.com) and EPCOR’s website

(www.epcor.com).

Readers are cautioned not to place undue reliance on forward-looking statements as actual results could

differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking

statements. Except as required by law, EPCOR assumes no obligation to update any forward-looking

information, should circumstances or management’s estimates or opinions change, or any other reason.

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Contents

• EPCOR Overview

• Business Highlights

• Financial Overview

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EPCOR Overview

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EPCOR Overview

Headquartered in Edmonton, predecessor company began operating in 1891. As of

December 31, 2014 employed 2,710 employees.

Stand alone corporation as of Jan 1, 1996; sole shareholder is the City of Edmonton.

EPCOR operates at arms length from the Shareholder with a fully independent Board of

Directors.

EPCOR’s mandate is to operate on commercial terms and fund investments independently

without any reliance on its Shareholder for capital.

Ownership stake of 9.1% in Capital Power; reduced from 72% in mid-2009 with intentions

to sell all or substantially all of the remaining interest over time depending on requirements

and market conditions.

Public issuer of debt only. As a result, classified as a Venture Issuer.

Stand alone credit rating is A- (S&P) and A (low) stable (DBRS) – no credit support from

the City.

Further information on SEDAR.

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EPCOR Operations

We build, own and operate electrical transmission and distribution networks, water and

wastewater treatment facilities and infrastructure in Canada and the United States and

provide retail energy products in Alberta.

We serve over 85 communities and industrial sites in Alberta, British Columbia and

Saskatchewan, and 22 communities and 7 counties in Arizona and New Mexico through

EPCOR Water USA.

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Water Services Operations

Municipal Water and Wastewater

City of Edmonton

Municipal Water and Wastewater

Alberta/British Columbia/Saskatchewan/USA

Water Treatment & Distribution

Two large water treatment plants on the North Saskatchewan river –

capacity of 680 million liters/day.

Approximately 265,000 fully metered, Edmonton water customers.

Rates regulated by City of Edmonton under a PBR covering 2012-

2017.

Water also sold to more than 65 surrounding communities under

wholesale rates regulated by the AUC.

Wastewater Treatment

Enhanced Primary treatment – 1,200 million liters/day.

Rates regulated by City of Edmonton under PBR covering 2012-2017.

Alberta

Operating contracts in Canmore, Chestermere, Okotoks, Red Deer

County, Taber.

Completed expansion and upgrade of Evan-Thomas water and

wastewater facility in August 2014.

British Columbia

Regulated water utilities in White Rock and French Creek.

Operating contract in Sooke.

Saskatchewan

Wastewater facility expansion and operating contract in Regina -

assumed operations and commenced construction in 2015.

Arizona and New Mexico

Regulated water utility – Chaparral City Water Company, EPCOR

Water Arizona, EPCOR Water New Mexico.

Provide water and wastewater services to approximately 200,000

customer connections across 22 communities and seven counties.

Industrial Water and Wastewater

Alberta

Own three water treatment and four wastewater treatment facilities at Suncor’s Fort McMurray Oil Sands operations under long-term contracts.

Operate five water treatment and five wastewater treatment facilities at Suncor and Shell Albian Sands oil sands operations in Fort McMurray.

British Columbia

Operate the Britannia Mine wastewater treatment facility.

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Electricity Operations

Electricity Distribution and Transmission Energy Services

Distribute to approximately 370,000 sites within Edmonton with

high reliability.

Approximately 5,400 km of distribution and 260 km of transmission

lines, both aerial and underground.

51,000 poles with 11,500 aerial transformers and more than

19,400 underground transformer.

Own and operate 35 transmission and five distribution substations.

Regulated by the Alberta Utilities Commission (AUC) – Distribution

(PBR) /Transmission (cost of service).

Provide RRO (procurement, billing and customer care) for

approximately 600,000 Edmonton and Fortis Alberta energy

customers, regulated by the AUC.

Provide billing and customer care for approximately 265,000

EPCOR water customers in Edmonton and City of Edmonton

drainage and waste collection services.

Competitive Retail energy provider under Encor by EPCOR.

Provide procurement, billing and customer care services to Alberta

retail electricity customers under competitive contract.

Technologies

Provide design, construction and maintenance services for street lighting, traffic signals and Light Rail Transit systems in Edmonton,

Calgary and other municipalities.

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1. One Company

2. Two Principal Regions

We are open to new geographies

provided that we can establish operating

HUBs that can deliver excellence in

operations.

3. Three Lines of Business

Commercial Services can include Design,

Build, Finance and Operate contracts in

the wires, municipal water / wastewater,

industrial water / wastewater and

transportation sectors.

Strategy

Continue to invest within EPCOR’s Risk Appetite

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Municipal Water AZ

Legend Electricity COE & AB

Industrial Water COE & AB

Municipal Water COE

Municipal Water AB & BC & SK

Strategic Direction

Continue to invest in regulated and contracted utility infrastructure

High quality investments consistent with low risk appetite

Maintain A- (S&P) and A (low) (DBRS) credit ratings

Sell remaining 9.1% investment in Capital Power over time

Continue to build reputation as a trusted developer and operator of utility assets.

Zero Injury Culture

Service Reliability

Environmental Responsibility

Regulatory Effectiveness

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Capital Prioritization

Building out our existing operating hubs through organic growth and through tuck-in

acquisitions remains our first priority.

Entering into new DBFO agreements with municipal and industrial clients continues to be

an area of increasing focus.

We will consider opportunities to acquire new utility operating HUBs on an opportunistic

basis where the opportunity fits within our risk appetite including return expectations.

• Non-Discretionary Capital (sustaining + organic growth)

• Utility Tuck-In Acquisitions

• Design Build Finance Operate / P3 / Concession Projects

• Municipal and Industrial Potable Water and Wastewater Treatment

• Mine Runoff Water Treatment

• Supply of Industrial Process Water / Re-use

• Electrical Transmission and Transportation

• Utility HUB Acquisition

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Business Highlights

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Evan-Thomas Water and Wastewater Facility – P3

Project

Contract with Alberta Infrastructure to design, build,

partially finance and operate.

Construction completed in August 2014.

EPCOR will operate the expanded and upgraded

facility for 10 years.

Expansion and upgrade for total cost of $37.6

million.

Water Canada – P3 Projects

Evan-Thomas plant commissioning

Regina Wastewater Treatment Plant – P3 Project

Wastewater Treatment Plant Expansion and

Upgrade contract by the City of Regina for total cost

of $158 million.

30 year design-build-finance-operate-maintain

contract – long term financing for $79 million.

Construction began in August 2014 - substantial

completion expected by December 2016.

Regina construction in progress

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Water Canada – Selenium Removal

Coal mining industry is under pressure to

manage impact of releasing Selenium into

water resources.

Selenium is an element that is harmful to

fish – contained in water that flows from B.C.

to the U.S. - strong EPA pressure across the

U.S.

EPCOR has experience with removal of

heavy metals from the Britannia mine site.

Opportunity exists for EPCOR in the coal

sector.

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Strong Financial Performance

Rate increases, increased sales in higher rate blocks and improved operational efficiency

contribute to strong financial performance.

Improved regulatory environment that included early approval of wastewater treatment

asset into rate base and improved mechanism to ensure recovery of sustaining capital.

Follow-on tuck-in acquisitions according to longer-term plan

Tuck-in acquisitions in 2013 (North Mohave Valley Corporation in Arizona and Thunder

Mountain Water Company in New Mexico).

Acquisition of customer rights in 7,000-acre area wastewater and recycled water services

project along the Loop 303 Corridor within the City of Glendale, Arizona.

Water USA Highlights

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Strong and Stable Growth

65 km double-circuit 500 kV $535 million transmission line connects the industrial

Heartland region to existing infrastructure in south Edmonton - in service December 2013.

AUC approved the partition of the Heartland Transmission Line between EPCOR

and AltaLink in accordance with their respective service territories.

Advanced Metering Infrastructure project beginning in 2015 with full implementation of

converting approximately 369,000 meters in 2016 & 2017.

Regulatory

Increased comfort with PBR implementation for Distribution.

Generic Cost of Capital decision - reduced equity thickness by 1% and allowed return

from dropped from 8.75% to 8.3%.

Utility Asset Disposition appeal heard by the Alberta Court of Appeal on June 8 and 9,

2015 with a decision expected in second half of 2015.

Distribution & Transmission Highlights

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Energy Services Highlights

Restructuring Approved

February 2014 - AUC approved the corporate reorganization of the Energy Services

business.

Significant cash tax savings through utilization of tax loss carry forwards.

Energy Price Setting Plan Amendment

March 2015 - AUC approved the EPSP for 2014 to April 30, 2018.

May 2015 - EPCOR filed a Review and Variance application for the lack of risk

compensation for procuring load.

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Encor - Competitive Retail

In May 2014 EPCOR re-entered the competitive retail

electricity and natural gas market under the Encor banner.

Re-entry is a defensive strategy that:

Mitigates loss of revenue from customers seeking

competitive contracts elsewhere.

Ensures the retention of customer base, should the

RRO be discontinued in the future.

Re-entry provides a means to enhance revenue and income

by capturing the gas side of the value chain.

EPCOR is procuring all energy for this offering on a full load-

following basis – no commodity risk.

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Financial Overview

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2014 Year-end / 2015 Q1 Financial Results

Very strong 2014 financial results

Net Income from Core Operations (excluding Capital Power equity income, impairment

charges and gain/loss on disposition) was $168 million in 2014, matching the $168

million earned in 2013.

2014 Funds From Operations was $337 million, up from $326 million in 2013.

Continued strong operational performance in 2015

Excellent start in 2015 with Funds From Operations of $101 million in Q1, up 26% from

$80 million in 2014.

Net Income for Q1 up 82% to $69 million compared to the same period last year.

Completed sale of 9,450,000 Capital Power shares on April 2, 2015 with gross proceeds

of $214 million.

21 1 All amounts in millions of CDN dollars, as of December 31, 2014

2014 – Financial Overview

30%

21%

48%

1%

Consolidated Revenue - $1,927 M

55% 29%

9%

8%

Consolidated Operating Income - $285 M

53%

32%

7%

8%

Consolidated EBITDA - $444 M

51%

30%

3%

3% 7% 6%

Consolidated Total Assets - $5,738 M

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The transformation of EPCOR that began in 2009 – by selling the power generation business and re-investing in lower risk wires and water utility infrastructure - is well underway.

Operating income of water and wires businesses up 190% from 2009 to 2014.

Historical Operating Income

$0

$50

$100

$150

$200

$250

$300

$350

2009 2010 2011 2012 2013 2014

Generation

Corporate

Energy Services

Distribution & Transmission

Water Services

Pre-split Level

$ Million

$330

$203

$188

$252

$290 $285

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Sale of Capital Power LP units in 2010, 2011,

2012, 2013 and 2015.

Approximately $1.09 billion in total gross

proceeds.

Dilution in 2011 and 2014 by Capital Power.

Back-to-back debt owed to EPCOR by Capital

Power relates to generation assets transferred

to Capital Power LP in 2009.

Remainder to be repaid in full by June 2018.

Significant re-payments: 2016 - $140

million; 2018 - $174 million.

EPCOR plans to divest all or a significant portion of its interest in Capital Power over time

according to capital requirements and as market conditions permit.

Interest in Capital Power

0%

10%

20%

30%

40%

50%

60%

70%

80%

2009 2010 2011 2012 2013 2014 2015Q1

72%

61%

39%

29%

19% 18%

9.1%

Equity Interest Equity Interest

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

2009 2010 2011 2012 2013 2014

$896

$613

$379 $354 $340 $332 $ M

illio

n

Back-to-Back Debt Back-to-Back Debt (B2B)

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Debt Maturities

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$ M

illio

ns

EUI EUI with B2B EUI USD

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Syndicated bank credit facility of $350 million.

Supporting $350 million commercial paper program.

Current maturity date of December 2019.

Committed letter of credit facility of $200 million to December 2017.

Overall bank credit facilities reduced from prior levels ($500 million syndicate and $400

million letter of credit facility) to reduce cost and better align with liquidity requirements.

Available medium-term note debt capacity of $1 billion under short-term base shelf

prospectus renewed to December 2015.

Market tone is very constructive for additional EPCOR debt issuance.

Remaining 9.4 million shares in Capital Power, trading at $22/share are fully liquid after

June 30 as EPCOR is free to sell at its discretion without need for secondary offering.

Financing and Liquidity

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Liquidity Metrics

0%

10%

20%

30%

40%

50%

2006 2007 2008 2009 2010 2011 2012 2013 2014

38% 40%

45% 44% 41% 42%

47% 47% 47%

Debt to Capitalization

10.6%

13.1%

15.3%

16.7% 15.7%

6%

8%

10%

12%

14%

16%

18%

2010 2011 2012 2013 2014

FFO to Debt

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2010 2011 2012 2013 2014

2.0 2.2

1.1

2.5 2.6

EBIT Interest Coverage1

1 As published on SEDAR.

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Credit Ratings

S&P: A- ; stable outlook – Upgraded September 2014 from BBB+ due to strengthening

business risk profile.

DBRS: A (low); stable outlook.

Strong Business Risk Profile

Continue to reduce earnings volatility and overall business risk by selling down interest in

Capital Power.

Emphasis on growth in rate-regulated businesses.

Geographically diversified and multiple lines of business.

Comprehensive management and governance focused on risk management.

Stable Financial Risk Profile

Stable credit metrics with prudent pacing of capital expenditure program.

Conservative financial management policies, attentive to maintaining adequate liquidity,

access to capital markets and prudent use of leverage in the context of business risk.

Pursuit of growth at a reasonable price.

Improved Performance

Expect to grow net income and cash flow from operations.

Credit Profile

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Target adequate liquidity profile.

Leverage employed to extent that cash flow adequately services debt commitments and is

sufficiently balanced to maintain current investment grade credit rating.

Debt profile will be a blend of shorter and longer terms but maturities are generally aligned

with asset lives financed.

In all cases, debt is sourced at lowest economic cost, considering interest rate refinance

risk, foreign exchange risks and hedge costs.

Policies in place for foreign exchange and interest rate hedging.

U.S. acquisitions / development to be funded from U.S. cash flow and $USD debt to hedge

foreign exchange exposure.

As circumstances dictate, hybrid financing is considered.

Dividend policy stipulates payments of $141 million until a change is recommended by the

Board and approved by the Shareholder.

Financial Strategy and Profile

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Transformation to a lower risk owner / operator of water and wires utility infrastructure

nearing completion.

Investment in Capital Power below 10%.

Credit upgrade by Standard & Poor’s.

EPCOR Water USA acquisition continues to perform very well.

Success on the project development front:

Kananaskis – upgrade completed.

Regina – awarded in May 2014 and construction well underway.

Considerable industrial water and competitive P3 opportunities to place capital.

Solid 2015 YTD Results.

Summary

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Thank you for your time