Update on Status of Negotiated Settlement Agreementfor the H.R. Milner Generating Station

April 3, 2003

The H.R. Milner Generating Station (the "Station") is owned by Alberta Power (2000) Ltd. ("ATCO"), which is part of the ATCO group of companies. Originally, the electricity capacity associated with H.R. Milner was to have been offered as part of the Alberta Government's auction of Power Purchase Arrangements in August of 2000, however H.R. Milner was withdrawn from the auction due to coal supply uncertainties.

In 2001, the Balancing Pool, on behalf of consumers, assumed management of the H.R. Milner PPA and a Negotiated Settlement Agreement ("NSA") was reached between ATCO and the Balancing Pool, which provided for:

• The immediate termination of the H.R. Milner PPA and payment of compensation to ATCO;
  
• The operation of the Station on an interim basis by ATCO pursuant to an Operating Agreement by which the Balancing Pool has control of the plant, receives all revenue and pays the costs associated with operation of the Station;
  
• The potential sale of the Station managed by a Sale Committee consisting of representatives from ATCO, consumer groups and the Balancing Pool and;
  
• Return of the Station to ATCO in the event that the Station is not sold.

The NSA and Operating Agreement expire on September 30, 2003 and if the Station is not sold by then, full ownership and control of the Station will revert to ATCO. In the event a sale is not completed, ATCO Power will decommission the plant and reclaim the site, under agreement with the Balancing Pool. Under the terms of the NSA, the cost of decommissioning (including restoration and environmental cleanup) will be paid by the Balancing Pool if decommissioning is initiated prior to September 30th of 2004.

The Sale Committee reinitiated the H.R. Milner sale process in January of 2003 and has received a number of expressions of interest from prospective buyers. The Sale Committee will continue to evaluate these proposals in respect of concluding a satisfactory sale process before September 30, 2003. Negotiations are in process to finalize a long-term coal supply agreement for the Station.