Letter to Unitholders

Gordon G. Tallman Chair, Board of Trustees	James A. Schultz President, Enbridge Management Services Inc.

2009 Cash Flow Contributions * (*Excluding Corporate charges) The Fund’s three strong businesses — Natural Gas Transmission, Crude Oil and Liquids Transportation and Green Power Generation — all delivered solid value for unitholders in 2009.

Enbridge Income Fund delivered another year of solid performance in 2009 on the strength of its diversified and growing portfolio of strategically located assets, which hold great promise for growth in the years to come.

Recurring cash available for distribution increased as a result of organic expansion projects in each of its three core businesses: Natural Gas Transmission, Crude Oil and Liquids Transportation and Green Power Generation. Total distributions to unitholders increased to $83.7 million following an increase in the monthly distribution of 11.6% in January 2009. Total returns to unitholders for the year ended December 31, 2009
were 41.5%.

Financial Highlights ¹

1. Financial Highlights have been extracted from financial statements prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP)

We believe that this strong performance is a reflection of the Fund's value proposition which emphasizes the generation of reliable cash flow from long-lived energy infrastructure and low-risk organic growth. Importantly, our key assets are located in emerging regions of crude oil and natural gas production — particularly shale plays in northeastern British Columbia and southern Saskatchewan. New pipeline infrastructure is required to move growing production from these regions to market. We have already secured additional investment projects that will serve to grow operating cash flow in the near term, and the Fund's assets are very well positioned to take advantage of future development opportunities in these regions.

Proposed Corporate Restructuring

In late 2009, we announced a proposed restructuring of the Fund to take effect prior to the imposition of the federal government's specified investment flow-through (SIFT) tax on January 1, 2011. Under the proposed restructuring, public unitholders would exchange their trust units, which collectively represent a 28% economic interest in the Fund, for shares of a taxable Canadian corporation to be called Enbridge Income Fund Holdings Inc. (EIFH). After the restructuring, the Fund would cease to be a SIFT and would not be subject to the SIFT tax. Enbridge would also hold a significant interest in EIFH, which would maintain an investor value proposition similar to that of the Fund—providing a safe and dependable high cash payout to its investors.

A committee of the independent directors serving on our Board of Trustees (Special Committee) was formed to review the proposed restructuring with the benefit of input and advice from independent financial and legal advisors. The Special Committee's independent review, their recommendation of the proposal and, ultimately, the approval of unitholders at the 2010 unitholder meeting are key steps in the process to achieve a restructuring that is fair and beneficial to unitholders.

A detailed description of the proposed restructuring is anticipated to be included in the Management Information Circular mailed to all unitholders in advance of the unitholder meeting. We believe that the proposed restructuring should serve to preserve value for unitholders going forward and provide the necessary financial flexibility and access to capital that the Fund will require to grow in the future, whether organically or via acquisition. Financial flexibility and access to capital on the best possible terms will be important for the Fund given its potential for growth. Near-term initiatives and longer-term development opportunities in each business segment are described on the following pages: Alliance Canada, Saskatchewan Systems, Green Power Generation.

Outlook

The Fund’s strategy of pursuing organic growth and expansion opportunities in its existing Natural Gas Transmission, Crude Oil and Liquids Transportation and Green Power Generation businesses is consistent with its objective of providing a predictable flow of distributable cash from stable energy infrastructure.

As noted above, Alliance Canada and the Saskatchewan System are particularly well positioned to benefit from development of some of the highest potential oil and gas plays in North America. Our Green Power Generation business should also benefit from growing demand for environmentally friendly sources of
electric power.

Our three solid businesses offer unitholders an attractive value proposition: strategically positioned energy infrastructure; high-quality, long-lived assets; predictable operating cash flows; and good prospects for organic growth in both the near and longer term. The proposed restructuring, if approved, will further help ensure that the Fund has access to cost-effective capital to successfully execute its strategies and deliver on this value proposition.

With all this, and the sponsorship of and strategic alignment with Enbridge Inc., we are confident that the Fund will continue to provide solid value for unitholders well into the future.

Gordon G. Tallman Chair, Board of Trustees	James A. Schultz President, Enbridge Management Services Inc.

March 19, 2010