During 2006, the Fund amended its existing three-year credit facility to increase its size from $70.0 million to $105.0 million and to reduce the applicable margin on bankers acceptance advances. The credit facility may be used to provide working capital to the Fund, for general Fund purposes or to finance acquisitions. At December 31, 2006, the Fund had $36.0 million in undrawn credit facilities for liquidity requirements. This facility, combined with cash generated by operating activities, is expected to be sufficient to meet the forecast liquidity and capital resource requirements of the Fund. Forecasted liquidity requirements include monthly cash distributions to unitholders, including ordinary and subordinated unitholders of the Fund as well as preferred unitholders of ECT. Anticipated capital resource requirements include the budgeted maintenance and enhancement capital expenditures as described under the Capital Expenditures headings.

The Fund’s current liabilities routinely exceed current assets. This deficit is funded through cash from operations, which is typically greater than double the balance of the deficit in a given year. For example, at the end of 2004, the working capital deficit was $26.7 million. During 2005, operations generated $84.2 million cash, which easily funded the deficit. The Fund expects this trend to continue. The Fund’s cash balance at December 31, 2006 of $17.4 million includes $4.0 million held in trust in Alliance Canada, pursuant to finance agreements within Alliance Canada.

Operating Activities
Cash provided by operating activities is $86.5 million for the year ended December 31, 2006, compared with $84.2 million in the prior year. The increase in cash from operations reflects the increase in earnings from the new Green Power segment and the growth in the Saskatchewan System.

Investing Activities
Cash used for investing activities for the year ended December 31, 2006 was $79.5 million, an increase of $64.4 million from the prior year. The increase in expenditures is due primarily to the Wind Power acquisition, the completion of construction of the Kerrobert facility within NRGreen and the expansion of the Westspur and Weyburn Systems within the Saskatchewan System.

Capital expenditures are classified as either maintenance or enhancement. Maintenance capital expenditures are funded through cash from operations and debt. Enhancement capital expenditures are funded through debt and the issuance of equity as required.

Financing Activities
Financing activities during the year ended December 31, 2006 primarily relate to the draw on the credit facility to fund the Wind Power acquisition as well as semi-annual repayments on non-recourse long-term debt, monthly distributions to ordinary and subordinated unitholders and changes in credit facilities.

On June 28, 2006, Alliance Canada executed a new credit facility arrangement in the amount of $200.0 million with an expansion provision on similar terms subject to lender approvals, to facilitate an increase to $300.0 million, if required. Interest is based upon bankers’ acceptance rates, plus applicable margins and the initial term of the facility is five years with a provision for additional one year terms on each anniversary of the closing. This facility replaces the former $190.0 million facility that expired during the quarter ended June 30, 2006.

Payments due for contractual obligations for each of the next five years and thereafter are as follows: