Assets

Alliance Canada The Saskatchewan System Green Power

Alliance Canada

Enbridge Income Fund owns 50% interest in the Canadian portion of the larger Alliance System which is comprised of two principal assets: the Alliance Canada Pipeline and the Alliance USA Pipeline. The Alliance System consists of an approximately 3,000-kilometre integrated, high-pressure, natural gas mainline pipeline, a series of lateral pipelines located in Canada, and related infrastructure.

For its part, the Alliance Canada Pipeline consists of 1,560 kilometers of the Alliance System’s mainline beginning near Gordondale, Alberta and connecting to the Alliance USA Pipeline at the Canada/US border near Carnduff, Saskatchewan. In addition, the Alliance Canada Pipeline includes the Alliance System’s lateral pipelines which connect the mainline to a number of upstream receipt points, primarily at natural gas processing facilities in northwestern Alberta and northeastern British Columbia, and related infrastructure.

The Alliance System is designed to transport 1.325 billion cubic feet per day of natural gas, on a firm transportation basis, from supply areas in northwestern Alberta and northeastern British Columbia to delivery points near Chicago, Illinois. It connects with two local natural gas distribution systems and five interstate natural gas pipelines in the Chicago area which provides shippers with access to markets in the mid-western and northeastern United States, Eastern Canada and access to the Aux Sable Extraction Facility which extracts natural gas liquids from the natural gas transported by the Alliance System. Shippers can transport in excess of their daily contract demand thereby reducing the per unit fixed transportation charge.

Shippers have executed transportation service agreements (TSAs) with each of Alliance Canada and Alliance US, which have an initial 15-year term expiring in November 2015 and provide for 98.5% of the Alliance System’s available firm transportation capacity. The TSAs are designed to provide Alliance Canada with a steady and predictable cash flow stream through 2015. Additional transportation capacity is available to shippers for no additional cost other than the cost of the associated fuel requirements through Alliance Canada’s AOS.

On December 3, 2010 Alliance confirmed that shippers representing 8% of contracted capacity on the Alliance Pipeline system had elected to extend their existing contracts to at least December 1, 2016. These shippers have also retained the option of continuing to extend their capacity commitments on an annual basis. The pipeline will remain fully contracted under existing firm service tolls through December 1, 2015.

Management believes that with Alliance’s proximity to stable and growing supplies of liquids rich gas, and its unique ability to efficiently deliver high BTU content gas streams this should ensure that the pipeline will continue to be fully utilized for many years beyond the primary term of these contracts, and expect Alliance to continue to deliver solid earnings and cash flow to EIFH.

The recently completed shipper capacity election process will clear the way for Alliance to remarket capacity that has not been extended beyond 2015. Although Alliance’s cost and tariff structure are expected to continue to provide cost-effective transportation to shippers seeking point-to-point service to Chicago, Alliance anticipates being able to further enhance its competitive position and capacity for revenue generation with the introduction of new market-based services.

The Saskatchewan System

Enbridge Saskatchewan owns and operates crude oil and liquids pipeline systems comprised of four principal assets: (i) the Saskatchewan Gathering System; (ii) the Westspur System; (iii) the Weyburn System; and (iv) the Virden System. Collectively, these crude oil and liquids pipeline systems comprise approximately 356 km of trunk line and approximately 1,900 km of crude oil and liquids gathering system pipeline and related terminals and storage facilities. Deliveries from the Saskatchewan Gathering System and Weyburn System are received into the Westspur System and, as such, are subject to any constraints in capacity on the Westspur System. Capacity figures presented below represent capacity to accept and deliver crude oil assuming there are no Westspur System capacity constraints.

The Saskatchewan Gathering System was built in 1955. It is a gathering system located in Southeastern Saskatchewan that transports crude oil from producing fields to the Westspur System. The Saskatchewan Gathering System consists of approximately 1,600 km of gathering lines ranging in diameters from three inches to ten inches. The Saskatchewan Gathering System has nine storage tanks with a combined capacity of 36,000 barrels. The capacity of the Saskatchewan Gathering System is approximately 255,000 bpd.

The Westspur System was also built in 1955. It is a trunkline system located in Southeastern Saskatchewan that transports crude oil received from gathering systems and from truck shipments, and natural gas liquids received from the Steelman gas processing plant. The crude oil and natural gas liquids are transported via the Westspur System to Cromer, Manitoba and from there to Eastern Canada and the United States via connecting pipeline systems. The Westspur System has transported crude oil south to the United States border for subsequent transportation on a system in North Dakota owned by Enbridge Energy Partners, L.P. to Clearbrook, Minnesota and the Minnesota Pipeline. However, this line was idled in 2006 because of prorationing on the North Dakota line due to the increase in production of U.S. domestic crude oil. On a periodic basis, the Westspur System also transports crude oil to the United States’ border for subsequent transportation to the Tesoro Mandan Refinery in North Dakota.

The Westspur System consists of approximately 357 km of 12 and 16-inch trunk line and approximately 100 km of gathering lines ranging in diameters from four inches to eight inches. The Westspur System has four pumping stations near Midale, Steelman, Bryant and Alida, Saskatchewan with a total of 10 storage tanks with a combined capacity of 340,000 barrels. The capacity of the Westspur System is approximately 255,000 bpd.

The Weyburn System was built in 1957. This system is a gathering system located immediately to the west of the Westspur System and delivers crude oil from producing fields to the Westspur Midale pumping station. The Weyburn System consists of approximately 100 km of gathering lines ranging in diameters from three inches to twelve inches and two storage tanks located at Weyburn with a combined capacity of 47,000 barrels. The capacity of the Weyburn System is approximately 47,000 bpd.

The Virden System was built in 1955. It is a gathering system located in Southwestern Manitoba and delivers crude oil from producing fields to Cromer, Manitoba. From there, the crude oil is delivered to Eastern Canada and the United States via connecting pipeline systems. The Virden System consists of approximately 100 km of gathering lines ranging in diameters from three inches to six inches. In addition, the Virden System includes a truck unloading terminal located at Cromer. The terminal has two storage tanks with a combined capacity of 2,000 barrels. The capacity of the Virden System is approximately 37,000 bpd.

System Expansion

As a result of increased throughput and demand for capacity on the Saskatchewan System, ENF has completed two major system expansion since 2006. Phase I Expansion provided increases on both the Westspur and Weyburn pipelines and in December of 2010 ENF completed the Phase II Expansion to effectively increase the crude oil capacity across the Saskatchewan System by an additional 125,000 barrels per day. As well, with increased opportunity from drilling develops in the Bakken and Three Forks formations of North Dakota and Southern Saskatchewan, in August 2010 ENF announced it was entering in to a joint venture with Enbridge Energy Parterners (EEP) to further expand crude oil capacity to accommodate the growing production from these regions. The Bakken Expansion Program will increase takeaway capacity from the Bakken play by 145,000 barrels per day and is anticipated to be in service in the first quarter of 2013.

Green Power

Green Power includes 100% interests in the Sarnia Solar Project, Talbot Wind Farm and Ontario Wind Project, which were acquired by the Fund in October 2011; a 50% interest in the SunBridge Wind Power Project (SunBridge) formed under the Partnership Act (Alberta) on April 1, 2001; and a 33% interest in each of the Magrath and Chin Chute Wind Power Projects, with joint venture agreements effective June 12, 2003 and July 20, 2005, respectively and a 50% interest in NRGreen. These entities produce electricity via renewable and alternative energy sources.

Solar Power Assets

The Sarnia Solar Project is currently the world’s largest operational photovoltaic solar power project. It is situated on the southern shore of Lake Huron, in the City of Sarnia, Ontario on 950 acres of land owned by ON Farms and consists of eight individual 10 MW segments, comprising a total capacity of 80 MW. The Sarnia Solar Project utilizes cadmium telluride thin film PV solar modules manufactured by First Solar, who is considered a leading manufacturer of solar PV modules. There are approximately 1.3 million thin film panels with a surface area of approximately 966,000 m2. Solar resource assessments commissioned by Enbridge from independent experts estimate the solar capacity factor of the Sarnia Solar Project to be 17.1%. Electricity produced by the Sarnia Solar Project is sold under 20 year fixed price Power Purchase Agreements (PPA) with the Ontario Power Authority (OPA).

Wind Power Assets

The Talbot Wind Project is a 98.9 MW wind power project situated on the northern shore of Lake Erie, near Chatham, Ontario. The Talbot Wind Project utilizes 43 Siemens Energy SWT 2.3-101 wind turbines, each with a rated capacity of 2.3 MW. Siemens is among the world’s largest suppliers of wind turbines, with over 7,800 wind turbines deployed worldwide. The Talbot Wind Project is located in an area offering strong wind resources. Wind resource assessment experts retained by Enbridge have estimated the net capacity factor for the Talbot Wind Project to be approximately 35%. Electricity produced by the Talbot Wind Project is sold under a PPA with the OPA until December 2031.

The Ontario Wind Project is the second largest operational wind farm in Canada, situated on two sites comprised of the Kincardine Wind Farm (181.5 MW) and the Cruickshank Wind Farm (8.25 MW), with an aggregate capacity of 189.75 MW and are located near the shores of Lake Huron in Bruce County, Ontario. All of the 115 turbines utilized at the Ontario Wind Project are Vestas V82 turbines, with a rated capacity of 1.65 MW each. The Ontario Wind Project is located in a region with strong wind resources. Wind resource assessment experts retained by Enbridge estimate the long-term net capacity factor for the Ontario Wind Project to be 30%. Vestas provides maintenance, diagnostic and repair services and/or parts for the serviced equipment located at the Ontario Wind Project sites under an operations and maintenance contract which expires in 2018. Power produced from the Ontario Wind Project is sold to the OPA under PPA’s which are in effect until 2028 and 2029 for the Cruikshank and Kincardine projects respectively.

SunBridge is located approximately five km southeast of Gull Lake in southwest Saskatchewan and began commercial operations in 2002. SunBridge utilizes a fleet of 17 turbines with a total capacity of 11 MW. The power from Sunbridge is delivered into the Saskatchewan power grid and is sold to Saskatchewan Power Corporation (SaskPower) under a long term Power Purchase Agreement (PPA) which expires in 2022. Enbridge and its subsidiaries provide operational support to this project.

The Magrath wind power project is located approximately seven km southwest of Magrath in southern Alberta and began commercial operations in 2004. The Magrath wind farm utilizes 20 turbines (1.5 MW each) with a total capacity of 30 MW and is operated by Acciona Wind Energy Canada Inc.

The Chin Chute wind power project began commercial operations on October 31, 2006 and is located approximately 20 km southwest of Taber, Alberta. The Chin Chute wind farm utilizes 20 turbines (1.5 MW each) with a total capacity of 30 MW and is operated by Acciona Wind Energy Canada Inc.

The energy produced at Magrath and Chin Chute is delivered into the Alberta power grid. Enbridge Income Fund Holdings has entered into long-term agreements to substantially fix the price received for its share of production on these projects. The Magrath contract expires on November 30, 2024 while the Chin Chute contract expires on December 31, 2017.

NRGreen

NRGreen operates four non-regulated waste heat recovery facilities located in Saskatchewan, along the Alliance Pipeline. The first facility located at Kerrobert, Saskatchewan has been operating since December 2006. These facilities began operations in May, July and November of 2008, respectively. Electricity is generated by harnessing the waste heat produced by Alliance Canada’s gas turbines at its compressor stations and converting it to electrical energy. With four waste heat recovery facilities in operation, NRGreen’s facilities can generate 20 MW of power.

SaskPower purchases the power generated from all four of the NRGreen facilities. The PPAs expire ten years after the in-service date for each facility. However, each PPA permits two five-year renewal notices at NRGreen’s election. These may be renewed successively to provide an additional ten-year extension to the initial PPA.

In November 2011, NRGreen announced plans to build a fifth waste heat recovery project at the Windfall Compressor Station near Whitecourt, Alberta. This new facility will deliver up to 14 MWH of electricity (enough to power 14,000 Canadian homes) and will be the first to use the ORegenTM system which was developed in partnership with GE. This facility is expected to be in service in late 2013.

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