1. Thermal Energy Systems in British Columbia Pollution Probe Energy Workshop March 17, 2011 Gareth Jones Director, Business Development

2. Forward looking statement By their very nature, forward-looking statements are based on underlying assumptions and are subject to inherent risks and uncertainties surrounding future expectations generally. Such events include, but are not limited to, general economic, market and business conditions, regulatory developments, weather and competition. FortisBC cautions readers that should certain events or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. For additional information with respect to certain of these risks or factors, reference should be made to the Corporations continuous disclosure materials filed from time to time with Canadian securities regulatory authorities. The Corporations disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3. Regulated Utilities Businesses Fortis Generation Fortis Properties Newfoundland Power Maritime Electric FortisOntario Belize Electricity Caribbean Utilities FortisBC FortisAlberta Non-Regulated Turks and Caicos 2.1 million gas and electricity customers $12 billion assets

4. Over one million energy customers 135 communities across BC Assets of $6.4 billion $2.5 billion planned capital spend over the next five years Over 1,800 employees $1.03 billion invested since 2007 Integrated energy solutions portfolio

5. 5 British Columbia Legislated Targets Reducing BCs GHG emissions by at least 33% below 2007 levels by 2020 and at least 80% below by 2050

6. BC Energy Customers Two thirds of British Columbians are interested in incorporating low carbon energy into their home 85% are willing to pay a premium (primarily up to 5%) for low carbon energy options One half of BC residents believe we should offer low carbon energy Strongest support for our low carbon energy offerings coming from residents age 18-34

8. Transforming Thermal Energy Delivery in BC

9. QUEST Vision By 2050 every community in Canada is operating as an integrated energy system, and accordingly, all community development and redevelopment incorporates an integrated energy system.

10. Integrated Energy Utility

11. BC Energy Infrastructure Existing 100 year old system Interconnected Scalable Relatively low average cost

12. Biogas Supply Model FortisBC invests in upgrading plant and interconnection assets FortisBC

13. Biogas vs. Biomethane Biogas is gas generated from organic material Raw biogas – typically 50% - 60% methane Potential Sources: Anaerobic Digester Gas Landfill Gas Biomethane: Methane from a renewable source – Upgraded Gas Raw BiogasBiomethane 40% - 60% CH 4 >96% CH 4 30% - 50% CO 2 <2% CO 2 0% - 2% O 2 <0.4% O 2 0-2000+ ppm H 2 SSulphur free Upgrade

14. Catalyst Project Partner Catalyst Power Inc Digester Project FortisBC Capital ~ $0.7M Total Capital ~ $6.0 M Average 120,000 GJ/year FortisBC owns interconnect equipment only Commissioned Sep 2010

15. Salmon Arm Project Partner CSRD Landfill Gas project FortisBC ~ $2.2 Million Total capital ~ $6.0 Million Average 30,000 GJ/year FortisBC owns upgrade equipment Commissioned June 2010

16. Discrete to District Thermal Energy Systems 16 Discrete = one building District = many buildings

17. Aquattro, Colwood BC Type of Development: 563 residential units total 24 buildings 17 Energy System: Geoexchange loop fields by FortisBC Phased installation as community develops Environmental Benefits Reduced demand on BCs electricity grid Savings of 2 tonnes of GHGs / year for each 2,000 square foot residential unit Geo-Exchange drilling Aquattro Site Geo-Exchange Systems for Multi-Building Residential Development

18. District Energy Systems Need three things: Energy Source Options Efficiency Gain Opportunities Density & Scalability Two types of projects underway: Retrofit – modifying existing buildings to use thermal energy; system developed in a limited number of pre-planned phases Multi-phase New Development – plan the DES in consultation with developer over multiple phases, initial phases have detailed design/cost; subsequent phases are conceptual with several design options and high level costs

19. Illustration – Setting Thermal Energy Customer Rates Cost of Service vs. Competitive Alternative ($/kWh)

20. Dockside Green, Victoria BC 15 acre harbourfront redevelopment 1.2 million sq. ft residential 150,000 sq. ft commercial/retail 20,000 sq. ft. light industrial District Energy for Brownfield Re-development Energy System: 2.5 MW Biomass Gasification Plant 3.4MW natural gas back-up & peaking Also serves buildings outside development Environmental Benefits LEED Platinum Greenhouse Gas Neutral – no net emissions

21. Kelowna District Energy Systems South Pandosy DES WWT Plant New Development Commercial Centre Hospital Downtown Core DES Tolko Multifamily Delta Grand City Hall Library Arena Downtown

22. Generator Engine Quesnel Sawmill Wood-Burner Hospital Arena City Hall Hotels, Provincial Government Office, Medical Building, Apartments, RCMP Building, Dunrovin Lodge, and others. Cogeneration Plant Sawmill & Planer Buildings Community Heat Piping Electricity Quesnel District Energy System Combined Heat and Power Initiative: Proposed Arrangement