Capital Power Corporation · TSX:CPX

Capital Power — Investor Day (December 2016)

89 slides from Capital Power's investor day presentation, Dec 15, 2016

1. Slide 1: 2016 Investor Day: Executing for success

   CAPITAL POWER 2016 Investor Day December 15, 2016 Executing for success

2. Slide 2: Forward-looking information

   Forward-looking information Cautionary statement Certain information in today’s presentations and in responses to questions contains forward-looking information. Actual results could differ materially from conclusions, forecasts or projections in the forward-looking information, and certain material

3. Slide 3: Executive leadership team

   Executive leadership team Brian Vaasjo Jacquie Pylypiuk President & Chief VP Human Resources Executive Officer Kate Chisholm Darcy Trufyn SVP Legal & External SVP Operations, Relations Engineering & Construction Bryan DeNeve Mark Zimmerman SVP Finance & Chief SVP Corporate Financial Officer Developm

4. Slide 4: Agenda

   Agenda Time Topic Presenter 9:00 am Introduction Randy Mah Executing on Strategy Brian Vaasjo Executing on Operational Excellence Darcy Trufyn Executing on Growth Mark Zimmerman Break Executing with Financial Strength Bryan DeNeve 2017 Corporate Priorities Brian Vaasjo Q&A session 12 noon Lunch 4 4

5. Slide 5: Executing on Strategy

   Executing on Strategy Brian Vaasjo President & CEO

6. Slide 6: Company overview

   Company overview  Company: growth- Capital Power’s footprint oriented North American IPP  Assets: young and modern fleet of assets  Competencies: proven operating, development, construction & risk management expertise  Balance Sheet: strong contracted cash flow supports asset and dividend growth

7. Slide 7: Execution in 2016

   Execution in 2016 Excellent existing operations  Exceeded operating performance on our plants  Met or beat all cost objectives  Bettered sustaining capex target  Continued efforts on reducing carbon footprint  Excellent realized AB power price Enhanced financial strength  Recent financings  I

8. Slide 8: Execution in 2016

   Execution in 2016 Executing on growth opportunities  Construction of Bloom Wind & tax equity investment with the Goldman Sachs Alternative Energy Group  U.S. wind project  Potential investment in coal mine  Continue to maintain G4/G5 optionality  Strengthened position in AB and the U.S. 8

9. Slide 9: Turning the corner in Alberta

   Turning the corner in Alberta  Coal Phase-Out Agreement  Termination of Sundance C PPA  Transition to a capacity market  Environmental regulations 9

10. Slide 10: Coal phase-out agreement with AB Gov't

    Coal phase-out agreement with AB Gov’t Capital Power will receive  14 annual payments of $52.4M totaling $734M  Annual payments start July 31, 2017 through to July 31, 2030  Based on proposed NBV adjusted for consideration of potential for non-stranded assets Conditions and Obligations  Coal pla

11. Slide 11: Termination of Sundance C PPA

    Termination of Sundance C PPA AB Government has agreed to discontinue its legal action against Capital Power  Capital Power and its syndicate partners to pay the Balancing Pool $39M (Capital Power’s portion is $20M or $15 million after-tax) in Q4/16  Represents a fair settlement given the uncertai

12. Slide 12: Transition to a capacity market

    Transition to a capacity market Alberta Government announced moving to a capacity market from current energy only market  Government committed to ensuring that existing investments would be treated fairly, and the new market framework would continue to promote a level playing field between existing

13. Slide 13: Federal environmental regulations

    Federal environmental regulations Recent proposed federal regulations  Federal government plans to amend regulations requiring all coal-fired generation to meet an emissions limit of 420 tonnes of CO2 per GWh by no later than 2030 matching AB’s CLP  Converted natural gas plants from coal allowed t

14. Slide 14: Executing on proven competencies

    Executing on proven competencies Operational Increasing performance and reducing risk at a excellence lower cost while managing GHG cost and risk Delivering opportunities in the U.S. and Contracted growth positioned to continue Excellent assets & skills in energy only market Alberta market are trans

15. Slide 15: Executing on Operational Excellence

    Executing on Operational Excellence Darcy Trufyn SVP Operations, Engineering & Construction

16. Slide 16: Maximizing asset value

    Maximizing asset value Our journey continues  Year five of reliability program  Asset management plans for all facilities  Result: high fleet availability + lower O&M costs  Continued risk reduction/mitigation  Industry leading Health, Safety, Environment (HSE) performance  Carbon reduction pr

17. Slide 17: Maximizing fleet performance

    Maximizing fleet performance Availability 97.00 96.50 96.00 95.50 % 95.00 94.50 94.00 93.50 93.00 2012 2013 2014 2015 2016F 2017B 2018T 2019T Actual Target Trend Industry-leading performance * Genesee has an extra planned outage on even years. 17

18. Slide 18: Maximizing revenue potential

    Maximizing revenue potential Actual Production vs Targeted MWh Thermal Plant (1)(2) 9,700,000 9,600,000 9,500,000 9,400,000 Production (MWh) 9,300,000 9,200,000 9,100,000 9,000,000 8,900,000 8,800,000 2012 2013 2014 2015 2016F 2017B Fleet Actual Production Fleet Reliability Target Trend Improved rel

19. Slide 19: Solid fuel facilities – North Carolina

    Solid fuel facilities – North Carolina Southport: 84 MW + steam; Roxboro: 48 MW Both plants use tri-fuel blend (wood/tire-derived fuel/coal) North Carolina Production 940 890 840 Production GWH 790 740 690 640 2012 2013 2014 2015 2016F 2017B 2018T 2019T NC Actual Production NC Target Production Budg

20. Slide 20: Renewables facilities

    Renewables facilities Quality: 142 MW PDN: 105 MW K2 (CP Share): 90 MW Halkirk: 150 MW Kingsbridge 1: 40 MW Macho Springs: 50 MW Wind Fleet Availability 98.0 97.5 97.0 (%) 96.5 96.0 95.5 95.0 2012 2013 2014 2015 2016F 2017B Availability Trend Target Improved availability at our wind facilities 20

21. Slide 21: Cost – bending the curve

    Cost – bending the curve O&M Operated Plants 65 Controllable Costs(1)(2) 62.5 60 $/kW 57.5 55 Budget 52.5 50 2012 2013 2014 2015 2016F 2017B Actual Budget Target Committed to spending smarter and proactive maintenance 1) Normalized to 2016 dollars. 2) Controllable costs excludes fuel, insurance and

22. Slide 22: CAPEX – Spending Smarter

    CAPEX – Spending Smarter(1) (2) Sustaining Capital 40 35 30 25 ($M) 20 GPS 15 10 5 0 2012 2013 2014 2015 2016F 2017B Actual GPS Target Over the past five years, plant CAPEX spending has been optimized 1) Normalized to 2016 dollars. 2) Spending on GPS project is shown separately ($12.7M in 2017). 22

23. Slide 23: Genesee mine optimization

    Genesee mine optimization Operations Costs Better quality fuel at a $14 lower cost per tonne $13 $12  22% improvement in dragline productivity $/T $11 $10  Steady reduction in operating $9 costs $8 2011 2012 2013 2014 2015 2016  More MWs generated per tonne of fuel Coal Heat Value  2030 mine pla

24. Slide 24: Health Safety & Environment (HSE) Performance

    Health Safety & Environment (HSE) Performance 1.6 TRIF Reportable Environmental 1.4 50 Incidents Number of Incidents 1.2 1 40 Rates 0.8 30 0.6 20 0.4 0.2 10 0 0 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 YTD YTD TRIF Target  2015 CEA Gold medal recipients  HSE program includes all

25. Slide 25: Genesee Performance Standard (GPS)

    Genesee Performance Standard (GPS) Formal program underway to reduce CO2 Coal Fleet Target Savings 35  Program to reduce 30 CO2 to improve coal plant efficiency 25 implemented in 20 2016 in response to ($M) Alberta’s Climate 15 Leadership Plan 10  Includes both 5 operational and capital changes 0

26. Slide 26: New asset development

    New asset development Proven in-house expertise  Bloom Wind project is our second US greenfield project  Consistent record for developing plants on time/under budget  Seamless development process from inception through to commissioning and operations  Operations, construction and engineering pro

27. Slide 27: Bloom Wind

    Bloom Wind  Construction of the 178MW project commenced Aug/16  54 foundations (100%) complete and backfilled  Tower deliveries commence mid-Dec  Turbine erection Jan/17  COD Jun/17 Bloom Wind 27

28. Slide 28: Coal to gas conversion

    Coal to gas conversion Genesee will continue to be an industry leading generation facility  Unit competitive advantages (age/condition/availability/heat rate/etc.) maintained on gas fuel conversion  Estimated cost for simple gas conversion is $25M-$50M/unit  Converted units start-up similar to co

29. Slide 29: Moving forward

    Moving forward Capital Power will continue to maximize the value of our existing assets  Output – Maintain excellent availability to maximize generation and revenue opportunity  Cost – Seek additional opportunities to spend smarter  Efficiency – Reduce fuel related costs and CO2 emissions  Risk

30. Slide 30: Executing on Growth

    Executing on Growth Mark Zimmerman SVP Corporate Development & Commercial Services

31. Slide 31: Bright future

    Bright future Key takeaways Cash flow North Growth American Alberta Opportunities Positioning Business Environment Resolution Strategic Alberta Footprint 31

32. Slide 32: Key commercial focus areas

    Key commercial focus areas  Optimize existing assets  Capitalize on Alberta  Diversify contracted cash flow outside of Alberta  Play to our competencies • Development construction • Fuel handling • Commercial management • Structural/Partnering approaches to improve competitiveness  Competitive

33. Slide 33: Strategic Alberta footprint

    Strategic Alberta footprint  Plants  Connectivity  Work force  Permitting  Commercial management  Gas opportunities with least cost to system • New gas G4/5 • Conversions • Expansions 33

34. Slide 34: Alberta power market trading

    Alberta power market trading  Portfolio optimization activities focused on managing exposure to commodity risk, reducing volatility and creating incremental value Average realized power prices(1) have exceeded spot power ($/MWh) prices by 13% since company’s inception 7 years ago $125 $100 $75 $50

35. Slide 35: Alberta market forecasts

    Alberta market forecasts (2) 1) Power and gas forecasts represent the average forecasts of three leading 3rd party consulting firms as of Fall 2016. 2) Forwards as of Dec 6, 2016. 35

36. Slide 36: Capacity market

    Capacity market  2019 first round with delivery target for 2020/21 • Eligible for auction likely limited to existing capacity  Existing investments to participate in a capacity market – a level playing field will be maintained “… Power companies in Alberta have my word that the new market framewor

37. Slide 37: Baseload revenue – Alberta vs. PJM

    Baseload revenue – Alberta vs. PJM  Capacity market creates a more stable revenue stream relative to selling into the Alberta market  Revenue under the Alberta energy only market for the period of 2009 through 2021 is $57/MWh for Capital Power’s baseload assets (including trading gains) compared t

38. Slide 38: Coal variable cost assumptions

    Coal variable cost assumptions Components of variable cost for coal units - $30 carbon levy $50 $40 Variable Cost ($/MWh) $30 $20 $10 $- Coal Coal Coal Coal Coal Coal Gas Conversion Gas Conversion Gas Conversion Gas Conversion Gas Conversion Gas Conversion * Subcritical Subcritical Supercritical * S

39. Slide 39: Alberta market

    Alberta market Carbon tax effect on on-peak merit curve (Variable Cost bidding Merit curve w/ $3/GJ NG price) $60 = — Max 2016 Hourly Load = 11450 i] i] = = 15% Reserve Margin r 1 @ Shepard Variable Cost 1 1 HB Genesee 3 Variable Cost $50 i] Merit curve with ( $40 Merit curve with $30/T carbon tax"

40. Slide 40: Alberta renewable situation

    Alberta renewable situation Targeting 30% of AB’s electricity generation from renewables by 2030  5000 MW of renewable energy • Competitive Renewable Electricity Program (REP)  AESO confirmed details • Procurement of 400 MW of renewable capacity • Operational in 2019 • Utilize existing transmissio

41. Slide 41: Setting up Alberta

    Setting up Alberta  Wind Advantage  Development  Permitting  Construction  Commercial management  Halkirk 2  Whitla  Other 41

42. Slide 42: Halkirk 2

    Halkirk 2  Location: Halkirk, Alberta  18,000 acres; 150 installed MW’s: 37% – 39% capacity factor  Available transmission 42

43. Slide 43: Whitla Wind

    Whitla Wind  Location: Near Medicine Hat, Alberta  33,000 acres; 300 installed MW’s: 38% – 41% capacity factor  Available transmission 43

44. Slide 44: North American map

    North American map New Frontier Garrison Butte Nolan Hills Tisch Mills Cardinal Point Black Fort Wind  Competitive environment Bloom Salt Springs Wind  Policy initiatives  Renewables  Gas 44

45. Slide 45: US market overview

    US market overview Market/Region Capacity(MW) Peak (MW) New England 31,000 28,130 New York 39,039 33,956 PJM 183,604 165,492 Southeast 238,000 170,000 MISO 180,711 127,125 SPP 78,953 45,301 ERCOT 78,960 70,014 Northwest 75,964 69,621 Southwest 50,000 42,000 California 60,000 50,000 TOTAL 1,016,231 8

46. Slide 46: C&I contracts accelerating

    C&I contracts accelerating 46

47. Slide 47: State level support for renewables

    State level support for renewables 47

48. Slide 48: Production Tax Credits (PTC) extension 2015

    Production Tax Credits (PTC) extension 2015  PTC extended with phase out beginning in 2017  Projects must be under construction by the end of this year to qualify for full tax credits May 2016 IRS Guidance  Developers have four years from commencing construction to reach COD and be presumed to ha

49. Slide 49: Tisch Mills Wind

    Tisch Mills Wind  Location: Manitowoc County, Wisconsin  12,000 acres; 100 MWs: 7.3 m/s wind speed  Market: MISO  Wisconsin RPS: one of a limited number of Wisconsin development projects 49

50. Slide 50: New Frontier Wind

    New Frontier Wind  Location: McHenry County, North Dakota  11,350 acres; 99 MWs; 8.8 m/s wind speed  Market: MISO  Superior wind resource; MISO network resource  Comp 50

51. Slide 51: Black Fork Wind

    Black Fork Wind  Location: Crawford and Richland Counties  23,900 acres; 100-180 MWs: 6.5 m/s wind speed  Market: PJM  One of a handful of permitted OH projects; AEP Procurement 51

52. Slide 52: Cardinal Point Wind

    Cardinal Point Wind  Location: McDonough and Warren Counties, Illinois  15,000 acres; 150 MWs: 7.7 m/s  Market: MISO  Illinois Nuclear legislation; Illinois RPS 52

53. Slide 53: Other development projects

    Other development projects Project Location Market MW Acres Wind Enabling Driver Speeds Nolin Hills Western PNW 350 47,000 Wind resources is Oregon differentiated from majority of Oregon (Columbia Gorge) projects; single land owner Garrison, Mercer MISO or 200 20,000 8.5m/s Strong wind resource; But

54. Slide 54: Bright Future

    Bright Future Key takeaways Cash flow North Growth American Alberta Opportunities Positioning Business Environment Resolution Strategic Alberta Footprint 54

55. Slide 55: Executing with Financial Strength

    Executing with Financial Strength Bryan DeNeve SVP Finance & CFO

56. Slide 56: Financial strategy

    Financial strategy Maintain investment grade credit rating Maintain ongoing Ensure Ensure access to cost economic Financial stable competitive capital to discipline in Strategy dividend fund sustainable growth growth growth throughout business cycle Manage financing risk 56

57. Slide 57: Capital allocation

    Capital allocation Dividend 1) Maintain growing dividend backed by Growth sufficient contracted cash flow base Capital Growth Allocation Opportunities 2) Fund growth opportunities in the near term with discretionary cash flow Share Buybacks & Debt 3) Consider debt reduction and share Repayment buyba

58. Slide 58: Coal compensation

    Coal compensation Accounting implications  Annual cash compensation payment of $52.4M will be recognized under ‘other income’ and as a component of adjusted EBITDA(1)  Net income and EPS will reflect the difference between the coal compensation received and accelerated depreciation due to shortene

59. Slide 59: Coal compensation

    Coal compensation Minimal risk cash flow  Conditions • Coal plants cease coal-fired emissions on or before Dec 31, 2030 • Spend $1M minimum each calendar year and $70M in total over the 14-year period on electricity business investments in Alberta • Maintain a continual significant business presenc

60. Slide 60: Potential purchase of interest in coal mine assets

    Potential purchase of interest in coal mine assets Acquisition of remaining ownership interest  CPX currently owns a 50% interest in the Genesee Coal Mine equipment • Mine operator is paid a fee to cover their depreciation expense, income taxes, and a variable rate of return reflecting their cost o

61. Slide 61: Bloom Wind modelling guidance

    Bloom Wind Modelling guidance – Project EBITDA vs. cash flow  Bloom Wind accounted for on a 80 consolidated basis with the Tax 70 Equity Investor’s (TEI) investment recorded as debt 60 prior to flip-date and as non- 50 controlling interest after flip-date $ million (CAD) 40 PTCs and Tax  Main diff

62. Slide 62: Corporate expenses

    Corporate expenses Ongoing objectives to realize and maintain efficiencies $125 Base G&A(1) $115 $105 ($M) $95 $85 $75 $65 $55 2012 2013 2014 2015 2016E 2017T Base G&A expenses decreased by 8% while inflation increased by 10% since 2012 1) Base G&A expenses exclude one time restructuring costs incur

63. Slide 63: Updated 2016 FFO guidance

    Updated 2016 FFO(1) guidance Updated guidance based upon Q4 2016 activities  Previous guidance was upper end of annual target range of $380M to $430M  Sundance C PPA termination – payment of $20M  2016 funds from operations (FFO)(1) now expected to be in the lower half of the range 1) Funds from

64. Slide 64: Continued strong cash flow generation

    Continued strong cash flow generation $450 $440  Annual cash flow expected $400 $405 to increase ~10% in 2017 $400 $362  Including coal $350 39% compensation, generating 46% 43% $300 37% ~$170M in discretionary cash flow (DCF)(1) to $ million $250 reinvest in growth $200 35% opportunities $150 36%

65. Slide 65: Cash flow and financing outlook

    Cash flow and financing outlook Generating surplus cash after dividends and sustaining CAPEX Sources of cash flow ($M) 2017E Funds from operations + coal compensation $440 Proceeds from tax-equity debt $235 Uses of cash flow ($M) Dividends (common shares) $(155) Dividends (preferred shares) $(30) De

66. Slide 66: Adjusted funds from operations (AFFO)

    Adjusted funds from operations (AFFO)(1) Purpose of new metric AFFO(1) defined as:  Reflects cash available to Funds from operations (as previously sustain common dividends defined(2)) and to fund future + Coal compensation received investment opportunities annually  Includes coal compensation, -

67. Slide 67: AFFO guidance for 2017

    AFFO guidance for 2017 Cash available for common share dividends and growth $350 $316 $320 $325(1) $300 $265 $250 $200 $ million $150 $100 $50 Gross common dividends $- Discretionary cash flow(1) 2014 2015 2016T 2017T Average 4-year AFFO payout ratio is 46% 1) 2017 AFFO target represents the mid-poi

68. Slide 68: Credit facilities extension

    Credit facilities extension  July 2016: • Extended maturity date of the $1B committed credit facilities through to July 2021 to maintain the $1B of liquidity for a 5-year term • Increase of facility size by $55M through July 2020 • Total extension of $1.055B of existing credit facilities  Accordio

69. Slide 69: Private placement debt financing

    Private placement debt financing $160 million, 10-year unsecured senior note issuance  Note bears interest rate of 3.85%, payable semi-annually • Significantly below yields otherwise achieved in Canadian Bond market • Reduced Capital Power’s overall cost of capital  Completed Sept/16 with a 10-yea

70. Slide 70: Preferred shares issuance

    Preferred shares issuance  In Oct/16, completed the issuance of 8 million cumulative minimum rate reset preference shares  Issued at $25.00 per share on a bought deal basis for gross proceeds of $200M  Pay fixed cumulative dividends of $1.50 per share per annum, yielding 6.00% per annum  Reset d

71. Slide 71: Financing of growth opportunities

    Financing of growth opportunities Existing financial capabilities and potential financing options  Strong balance sheet driven by • Recent financings • Extension of credit facilities  ~52% ($170M) of AFFO is DCF(1) available for allocation to support development and acquisition opportunities in 20

72. Slide 72: Financial strength

    Financial strength Strong balance sheet and investment grade credit rating  Investment grade credit ratings by Agency Ratings Outlook S&P and DBRS S&P BBB- / P-3 Stable  Continued to be well capitalized DBRS BBB / Pfd-3 (low) Negative with capacity for leverage Debt to total capitalization Corpora

73. Slide 73: Credit metrics

    Credit metrics(1) Above DBRS financial criteria for current rating Adj. Cash flow/Adj. Debt(3) EBITDA/Adj. Interest 30% 6.0 25% 5.0 20% 4.0 15% 3.0 10% 2.0 5% 1.0 0% 0.0 2016E 2017T 2016E 2017T Within S&P financial criteria for investment grade rating Adj. FFO/Adj. Debt(2)(3) Adj. Debt/Adj. EBITDA(2

74. Slide 74: Debt maturity schedule

    Debt maturity schedule(1) $1B in committed credit facilities recently renewed with 5-year tenor maturing 2021, of which ~$940M available in 2017 $400 $350 $300 $300 $250 $250 US $230 ($M) $200 US $65 $150 $174 $160 $100 $50 $10 $0 2017 2018 2019 2020 2021 2026 (2) EPCOR Capital Markets CAD Private P

75. Slide 75: Carbon competitiveness regulation

    Carbon competitiveness regulation  Required to comply with Specified Gas Emitters Regulation (SGER) through to the end of 2017. Levy under Carbon Competitiveness Regulation (CCR) effective starting in 2018 2017 2018 2019 2020 Compliance regulation SGER CCR Compliance requirement 20% 55% to 65% (Dow

76. Slide 76: Carbon tax – cost of coal compliance

    Carbon tax – cost of coal compliance Cost of compliance versus tax $25 Cost of Emissions ($/MWh) $20 2015 Investor Day CPC Coal Unhedged Cost $15 2015 Investor Day CPC Coal forecast $10 Hedged Cost Current CPC Coal Hedged Cost $5 $0 2016 2017 2018 2019 2020 Lower compliance costs achieved by offset

77. Slide 77: Improving contracted EBITDA

    Improving contracted EBITDA(1,2,3) $450 $400 $350 Bloom Beaufort $300 Macho Springs K2 Wind ($M) $250 Shepard PD&N $200 Halkirk $150 Quality Wind Island Generation $100 North Carolina Kingsbridge 1 $50 Genesee 1&2 $0 2010 2011 2012 2013 2014 2015 2016E 2017T Substantial expansion in contracted EBITD

78. Slide 78: AB commercial portfolio positions

    AB commercial portfolio positions Alberta Commercial baseload positions As of Nov 30/16 2017 2018 2019 Percentage sold forward 100% 52% 40% Average contracted prices(1) Mid-$40 Low-$50 Low-$50 ($/MWh) Average forward prices $32 $39 $43 ($/MWh)  Potential to capture market upside with peaking and wi

79. Slide 79: Strong financial coverage

    Strong financial coverage Operating margin(1) to financial obligations(2) and dividends(3) 150% Contracted5 + merchant ($60/MWh) 140% 130% Contracted5 + merchant (forwards(4)) Contracted5 + merchant ($40/MWh) 120% 110% Contracted5 margin 100% Minimum Alberta power prices 90% required to cover financ

80. Slide 80: Target annual dividend increase

    Target annual dividend increase  Annual dividend guidance to Annualized dividend 2018 remains unchanged per common share(1,2)  Expect to generate $325M in $1.79 $1.56 $1.67 AFFO in 2017 $1.46 $1.26 $1.36  AFFO payout ratio averages ~51% from 2016 to 2018  Pipeline of opportunities to expand cont

81. Slide 81: Attractive yields relative to peers

    Attractive yields relative to peers Capital Power’s AFFO yield is highest amongst peers 2017E Dividend & AFFO Yield1,2 2017E AFFO Payout Ratio1,2 6.0% 6.2% 98% 3.8% 6.9% 96% 4.7% 7.3% 86% Dividend Yield 6.4% 7.5% AFFO Yield 77% 5.4% 7.5% 72% 5.0% 7.6% 66% 3.8% 8.1% 64% 6.3% 8.2% 54% 8.0% 8.3% 47% 3

82. Slide 82: 2017 Corporate Priorities

    2017 Corporate Priorities Brian Vaasjo President & CEO

83. Slide 83: 2017 Corporate operating priorities

    2017 Corporate operating priorities Deliver strong operational performance from a young, well- maintained generation fleet Operational targets 95% Capacity-weighted plant availability $85M Maintenance capital (plant maintenance capital, sustaining capital expenditures, and Genesee Performance Standa

84. Slide 84: 2017 Corporate growth priorities

    2017 Corporate growth priorities Enhance value for shareholders by delivering accretive growth from new developments Development and construction targets  Complete Bloom Wind on time and on budget  Execute two PPAs for new development  Continue to build development pipeline 84

85. Slide 85: 2017 Corporate financial priorities

    2017 Corporate financial priorities Financial target 2017 versus 2016 changes Adjusted funds from operations(1) ($M)  Annual coal compensation $400 $305 to $345 of $52.4M ~$320 $300  Addition of Bloom Wind (Q2/17) $200  100% of AB Commercial $100 portfolio sold forward at $0 2016T 2017T mid-$40/M

86. Slide 86: Summary

    Summary  2016 is a strong performance year in poor market conditions • Resolution of issues with the Alberta Government are positive  2017 is expected to be similar • Moving forward with carbon management - GPS and credit inventory  In Alberta, we are positioned very well for asset optimization a

87. Slide 87: Non-GAAP financial measures

    Non-GAAP financial measures The Company uses (i) earnings before finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, and gains on disposals (adjusted EBITDA), (ii) funds from operations (FFO), (iii) adjusted FFO, (iv) discretionary cash

88. Slide 88: Forward-looking information

    Forward-looking information Forward-looking information or statements included in this presentation are provided to inform the Company’s shareholders and potential investors about management’s assessment of Capital Power’s future plans and operations. This information may not be appropriate for othe

89. Slide 89: Investor Relations Contact

    Investor Relations Contact Randy Mah 10423 101 Street NW Senior Manager 10th Floor (780) 392-5305 Edmonton, Alberta rmah@capitalpower.com Canada, T5H 0E9 www.capitalpower.com

Capital Power — Investor Day (December 2016) on 6ix