1. Investment and innovation in competitive power markets Duncan Hawthorne, President and CEO Duncan Hawthorne, President and CEO

2. Competitive experience n Experience began in the UK with British Energy l Public sector company l Challenged to prepare for privatization l Extensive organizational review completed l Learned to innovate, work smarter l Learned to compete in an open market l Believed model could work elsewhere

3. A platform for growth n Looked for other deregulated markets in which to grow n First invested in under-performing American nuclear plants n Saw potential in Canada l Electricity market was about to open to competition l Operational experience gave us leverage to acquire assets l Had cash and know-how to improve those assets

5. What we found in Ontario n Bruce Power workforce capable, highly-skilled n Supportive community n Sound technology l Eight CANDU reactors in two generating stations l Largest site in North America l Room for improvement and growth n Electricity market in need of supply and investment

6. Ontario’s supply situation

7. Bruce Power’s immediate challenges n Lack of focus due to history in a regulated environment n No meaningful staff recruitment n No university training programs n No apprenticeship program n No significant investment in the assets n Four of eight units laid up

8. Overcoming challenges n Had good building blocks l capable staff l sound technology l competitive market n Had cash, but needed certainty on returns n Proven formula: Operational focus + private sector financing = success

9. Results so far n Approximately $2 billion invested n Improved nuclear and industrial safety n Restarted two laid up units l 1,500 MW for $720 million n Reduced forced outage rate n Aggressive recruitment program n Apprenticeship, university programs launched n Improved capacity factors l 92% last quarter n Improved output

10. Improved Bruce B output 0 5 10 15 20 25 30 35 2001200220032004 Output in TWh

11. Our virtual reactor Improved processes, human performance and operational innovations have led to: n Bruce B output rising from 20.5 TWh in 2001 to 24.5 TWh in 2003 n Equivalent to building an entirely new 600 MW reactor n With two Bruce A units, on track to generate nearly 34 TWh in 2004 n That’s enough to remove 6 million tonnes of CO 2 from our air

12. More to come n Improve output project to add another 400 MW to Bruce B l Turbine rotor replacement l Generator rewinds l Core reordering New fuel design n Feasibility study l Potential restart of Units 1 and 2 l Refurbish Bruce B l Keep new build option open

13. In conclusion n $40 billion need to close Ontario’s supply/demand gap l Will require private sector involvement n Fundamentals for further investment in place for Bruce Power l Already in the market l Comfortable with the technology l Already rebuilt some infrastructure l Looking at further restarts l Need comfort on where market is heading