Capital Power Corporation · TSX:CPX

Capital Power — Non-Deal Roadshow (January 2014)

52 slides from Capital Power's roadshow presentation, January 2014

1. Slide 1: Investor Meetings

   CAPITAL POWER Investor Meetings Brian Vaasjo, President & CEO Stuart Lee, SVP Finance & CFO January, 2014

2. Slide 2: Capital Power

   Capital Power  Independent power producer with ownership interest in 13 facilities in Canada and the US totaling more than 2,600 MW(1)  Capital Power builds, owns and operates power plants  Significant contracted cash flow base and merchant investments in Alberta - the most attractive power marke

3. Slide 3: Capital Power strategy

   Capital Power strategy GROWTH ALBERTA POWER MARKET UPSIDE CONTRACTED CASH FLOWS STRONG FINANCIAL BASE OPERATIONAL EXCELLENCE FOUNDATION BaBEST.50. Capital¢S apltale 3

4. Slide 4: Operational excellence

   Operational excellence  Modern fleet  High fleet availability  Favourable cost trend  Alberta power market trading  Construction expertise 4

5. Slide 5: Modern fleet

   Modern fleet Helps keep availability high and reduces risk of unplanned outages  Average weighted facility age of the current fleet is 12.3 years(1)  Shepard Energy Centre expected COD in early 2015 and K2 Wind in 2015 Port Dover & Nanticoke Halkirk Wind Quality Wind Kingsbridge I Facility age Clo

6. Slide 6: High fleet availability

   High fleet availability Operating availability consistently 90%+ since IPO in 2009 Generation (GWh) 96% 90% 92% 91% 93% 95% 18,000 15,000 12,000 9,000 6,000 3,000 - 2009 2010 2011 2012 2013E 2014T Generation Average plant availability 6

7. Slide 7: Favourable cost trend

   Favourable cost trend  In 2013, reduced annual G&A by $22 million  Significant cost improvements made in 2013 without negatively impacting high operating & maintenance (O&M) standards Total non-fuel O&M and CAPEX spending excluding planned outages(1) 100% 80% 60% 40% 20% 0% 2012 2013T 2014T Adjust

8. Slide 8: Alberta power market trading

   Alberta power market trading  Hedging positions based primarily on generation from Genesee 3 and Keephills 3 baseload coal plants and output from the Sundance PPA  Actively trading throughout various time periods to minimize portfolio risks, create incremental value, and reduce volatility CPX’s av

9. Slide 9: Construction expertise

   Construction expertise Solid track record on completing 7 construction projects (supercritical coal, natural gas, wind) totaling 1,669 MW Asset Capacity / fuel On-time On-budget In-Service Genesee 3 516 MW / coal  + 2005 Kingsbridge 1 40 MW / wind   2006 CBEC 200 MW / gas +  2009 Keephills 3 516

10. Slide 10: Strong financial base

    Strong financial base  Strong balance sheet and access to capital  Investment grade credit rating  No near-term financings  Strong cash flow generation 10

11. Slide 11: Financial strength

    Financial strength Strong balance sheet and investment grade credit rating Financial strength  Investment grade credit ratings Agency Ratings Outlook  Debt-to-capital ratio of ~33% at 2014 S&P BBB- / P-3 Stable year-end remains below long-term DBRS BBB / Pfd-3 (low) Stable target of 40% - 50% Debt

12. Slide 12: Credit metrics

    Credit metrics(1) Above DBRS financial criteria for current rating Adj. Cash flow/Adj. Debt EBITDA/Adj. Interest 25% 6.0 20% 5.0 15% 4.0 3.0 10% 2.0 5% 1.0 0% 0.0 2013T 2014T 2013T 2014T Above S&P financial criteria for investment grade rating Adj. FFO/Adj. Debt(2) Corporate Liquidity 25% 3.5 20% 3.

13. Slide 13: Development projects – CAPEX

    Development projects – CAPEX ($M) Prior to 2013 2013T 2014T Project total Port Dover & Nanticoke $68 $230 $17 $315 K2 Wind(1) $3 $26 $31 $291 Shepard Energy Centre(2) $50 $650 $121 $821 $121 $906 $169 $1,427 Continue strong execution of CAPEX program Port Dover & Nanticoke Shepard Energy Centre (1)

14. Slide 14: Cash flow and financing outlook

    Cash flow and financing outlook Sufficient sources of cash flow to meet dividends, development projects and sustaining CAPEX Sources of cash flow ($M) 2013T 2014T Funds from operations(1) ~$400 ~$380 Preferred share offering $200 - Net proceeds from sale of US Northeast assets $556 - Uses of cash fl

15. Slide 15: Continued strong cash flow generation

    Continued strong cash flow generation Funds from operations (FFO) $400  Expect to exceed target of $385M- $415M in FFO in 2013 $350 ~37% ~39%  FFO target for 2014 expected to be $300 34% 35% lower than 2013 due to low Alberta ($M) power prices $250  35%+ of 2011-2014 FFO is $200 28% 31% ~27% ~22%

16. Slide 16: Improving contracted cash flow

    Improving contracted cash flow(1,2) $450 $400 $350 $300 $M $250 $200 $150 $100 $50 $0 2012A 2013T 2014T 2015T 2016T 2017T Genesee 1&2 Kingsbridge 1 North Carolina Island Generation Quality Wind Halkirk PD&N Shepard K2 Wind Substantial expansion of contracted operating margin from ~$225M to $375M fro

17. Slide 17: Dividends

    Dividends  Contracted cash flow base Contracted operating margin to supplemented with hedge position financial obligations(1) and dividends provide downside protection in lower 120% price environment 110%  >90% hedged in 2014. Minimum AB 100% power price of ~$11/MW for free cash flow to meet divid

18. Slide 18: Alberta power market upside

    Alberta power market upside  Strong market demand fundamentals  Attractive pricing outlook  Retirement of coal units  Capital Power’s attractive fleet  Alberta upside 18

19. Slide 19: Alberta market

    Alberta market Alberta Demand and Alberta GDP(1) Real GDP ($M) AIL (GWh) 450,000 AB GDP 400,000 Alberta Demand 120,000 350,000 100,000 300,000 80,000 250,000 200,000 60,000 150,000 40,000 100,000 20,000 50,000 - - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2

20. Slide 20: Alberta Energy Prices

    Alberta market Alberta Energy Prices(1) 125 Power Price 15 NG Price 100 10 75 $/MMBtu $/MWh 50 5 25 0 Historic Forecast 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Alberta market design expected to continue to provide timely pricing signals for the addition of new su

21. Slide 21: Expected coal unit retirements - CST

    Expected coal unit retirements - CST Retirements under the federal Capital Stock Turnover (CST) regulations Alberta coal generation (MW) Generation End of Life 7,000 Capacity (Final Facility (MW) Regulations) Battle River 3 149 2019 6,000 Sundance 1 288 2019 H.R. Milner 144 2019 5,000 Sundance 2 288

22. Slide 22: Best fleet in the fastest growing power market in North America

    Best fleet in the fastest growing power market in North America With investments in Shepard and Genesee 4&5 facilities, Capital Power will own high-quality baseload, mid-merit, renewable and peaking generation in Alberta providing more flexibility than any other power portfolio in the province. 3,00

23. Slide 23: Diverse generation fleet in Alberta

    Diverse generation fleet in Alberta Well positioned to capture value in Alberta’s merchant market Expected AB power generation stack for 2015(1) 100% Other Clover Bar Energy Centre Gas peaking 30% • Most responsive peaking facility in the AB market 90% • Captures peak pricing, backstops position Gas

24. Slide 24: AB commercial portfolio positions

    AB commercial portfolio positions  Alberta portfolio hedged positions for AB baseload plants and acquired Sundance PPA (% sold forward) Oct-Dec, 2013 2014 2015 Percentage sold forward 81% 92% 77% Average contracted Mid-$60 High-$50 Mid-$50 prices(1) ($/MWh) Forward prices ($/MWh) $62 $58 $50 (as of

25. Slide 25: Merchant position in AB provides upside

    Merchant position in AB provides upside Operating margin(1) to financial obligations(2) and dividends 225%  Expansion of contracted 200% cash flows provide strong coverage of 175% financial obligations and 150% dividends as Shepard and K2 begin COD 125%  Increasing open 100% merchant position in 7

26. Slide 26: Growth

    Growth  Existing projects – Shepard Energy Centre, K2 Wind, Genesee 4&5  Developing contracted opportunities in North America  Competitiveness of contracted acquisitions a challenge  Fuel type and financial discipline 26

27. Slide 27: Shepard Energy Centre

    Shepard Energy Centre  Shepard is a natural gas combined cycle facility located on the southeast edge of Calgary, with COD targeted in early 2015  50% joint venture agreement with ENMAX for the 800 MW facility  20-year tolling agreement on 50% of owned capacity with ENMAX  Additional 25% contrac

28. Slide 28: Ontario wind project

    Ontario wind project K2 Wind  20-year PPA with Ontario Power Authority  270 MW (Siemens turbines); located in southern Ontario  Equal one-third partnerships with Samsung and Pattern Renewable Kingsbridge 1 Holdings  REA received July/13; COD targeted for 2015  $291M capex budget (Capital Power’

29. Slide 29: Genesee 4&5

    Genesee 4&5  Capital Power will develop Genesee 4&5 in a 50/50 joint venture with ENMAX  Capital Power to lead construction and will be the operator  Definitive agreements expected in Q1, 2014  Genesee provides significant advantages for the development of a new combined cycle unit given the acc

30. Slide 30: Growth opportunities

    Growth opportunities All contracted opportunities outside Alberta Development Sites Natural Gas Wind Solar 30

31. Slide 31: 2014 Corporate priorities

    2014 Corporate priorities Operational targets Plant availability (reflects planned turnarounds at Genesee 2 & 3) 95% Maintenance capital (plant maintenance capital and other capex) $85M Plant operating and maintenance expense $165M to $185M Financial target Funds from operations(1) $500 $385 to $400

32. Slide 32: 2014 Corporate priorities

    2014 Corporate priorities Development and construction targets On-time, on-budget and • Shepard Energy Centre project (complete safe development of construction with COD in early 2015) committed projects • Genesee 4 & 5 (continue on track for Q1/15 permitting approval) • K2 Wind project (commence co

33. Slide 33: Why invest in Capital Power

    Why invest in Capital Power Excellent assets in good markets Operational Very good operating and trading performance excellence Recent reductions in risk, financial volatility & operating cost base Near term growth funded from internal cash flow & DRIP Strong financial Well-positioned for discipline

34. Slide 34: Alberta power market

    Appendix Alberta power market  Alberta (AB) has a competitive wholesale energy and ancillary services market operated by the Alberta Electric System Operator (AESO); market has an installed generation capacity of ~14,000 MW  No capacity market – power generators must recover all costs through reve

35. Slide 35: Alberta demand outlook

    Appendix Alberta demand outlook Growth in total electricity sales (%) 2012 to 2020(1) “Alberta’s future power 25% demand outlook is also fairly robust, especially compared 20% with that of most other jurisdictions in North 15% America, because of a strong provincial economy; 10% a growing population

36. Slide 36: Alberta generation and load mix

    Appendix Alberta generation and load mix Current installed generation(1) 2012 Demand by end use(1) (MW and % of installed capacity) Wind Biomass/Other Farm 1,088 MW 404 MW 2% Hydro 7% 3% 894 MW 6% Residential 13% Gas-Fired Coal 1,529 MW 6,271 MW Commercial Industrial 11% 43% 20% 46% Cogen 4,363 MW O

37. Slide 37: Alberta load factor

    Appendix Alberta load factor  High load factor enables a higher realized pool price for peaking units  Load factor is about 80% to 85% Average Alberta load (MW)(1) By hours ended (Jan 2012 – Oct 2013) 9400 9200 9000 8800 8600 8400 8200 8000 7800 7600 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

38. Slide 38: Historical Alberta prices

    Appendix Historical Alberta prices Daily average power prices 800 600 ($/MWh) 400 200 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Annual average power prices and AECO 100 89.95 10.00 8.27 80.79 76.22 80 71.29 66.95 8.00 ($/MWh) 62.99 6.19 64.32 ($/GJ) 7.73 60 43.93 70.36 47.81

39. Slide 39: Alberta pool price evolution

    Appendix Alberta pool price evolution  About 10% of hours have prices greater than $100  Market provides favourable pricing for peaking generation Pool price in top 15% of hours by year(1) 1000 900 2009 800 2010 700 2011 600 $/MWh 2012 500 2013 400 300 200 100 0 0% 2% 3% 5% 7% 9% 10% 12% 14% Perce

40. Slide 40: Alberta market design

    Appendix Alberta market design Stable market design has signalled the addition of 6 GW of new generation 1,200 30% 1,000 25% 800 20% Capacity Reserve 600 15% (MW) Margin 400 10% 200 5% 0 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 New capacity AESO's historical reserve margin 40

41. Slide 41: Alberta power market summary

    Appendix Alberta power market summary Alberta’s market design framework  Has attracted continued investment by various parties for different fuel types  Ensures investment risk is borne by investors and not ratepayers/taxpayers  Provides participants with options and choices for managing their co

42. Slide 42: Alberta emissions regulations

    Appendix Alberta emissions regulations  GHG emissions  SO2 emissions  NOx emissions  Mercury  Particulate matter Certainty in air emissions regulations will provide for orderly retirements, development of replacement generation, and improving environmental outcomes 42

43. Slide 43: Proven ability to manage environmental commodity exposure

    Appendix Proven ability to manage environmental commodity exposure  Dedicated team of five focused on transforming environmental commodity risk into an opportunity – success in doing this has created a competitive advantage through lower compliance costs in Alberta  This competitive advantage will

44. Slide 44: Renewables and emissions portfolio

    Appendix Renewables and emissions portfolio Unhedged vs. hedged Capital Power Alberta SGER compliance costs 2013-2017 $50 $45 $40 $35 $30 Compliance Costs ($M) $25 Annual AB SGER cost savings for $20 Capital Power $15 $10 $5 $0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Unhedged Hedged 4

45. Slide 45: Expected coal unit retirements - CASA

    Appendix Expected coal unit retirements - CASA Clean Air Strategic Alliance (CASA) regulations may result in coal units retiring sooner Total coal capacity (MW) CASA Financial Compliance 7,000 2019: Sundance 1&2 Capital Stock Turnover (576 MW); Battle River 3 (149 MW); H.R. Milner 6,000 (144 MW) 5,0

46. Slide 46: Debt maturity schedule

    Appendix Debt maturity schedule(1) Term on credit facilities extended to 5 years $400 $350 $314 $305 $300 $255 $250 US$230 ($M) $200 $179 $144 $150 $100 US$65 $50 $19 $15 $13 $0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2026 EPCOR Debt Capital Markets Debt Bank Debt Well spread-out debt maturitie

47. Slide 47: Summary of assets

    Appendix Summary of assets Clover Bar Energy Clover Bar Genesee 1 Genesee 2 Genesee 3 Keephills 3 Joffre Centre Landfill Halkirk Alberta Contracted Alberta Commercial Capacity 430 MW 430 MW 516 MW 495 MW 480 MW 243 MW 4.8 MW 150 MW % owned / 100 / 100 100 / 100 50 / 100 50 / 0 40 / 0 100 / 100 100 /

48. Slide 48: Summary of assets

    Appendix Summary of assets Port Dover Island Quality & Kingsbridge 1 Generation Wind Nanticoke Roxboro Southport Ontario & British Columbia Contracted Mid-Atlantic Contracted Capacity 40 MW 275 MW 142 MW 105 MW 88 MW 46 MW % owned / 100 / 100 100 / 100 100 / 100 100 / 100 100 / 100 100 / 100 operate

49. Slide 49: Development projects

    Appendix Development projects Shepard Energy Centre Genesee 4 & 5 K2 Wind Ontario Alberta Commercial Ontario Contracted Capacity 800 MW Up to 1,050 MW 270 MW % owned / 50 / 0 50 / 100 33.3% owned operated Location Calgary, Alberta Warburg, Alberta Ashfield-Colborne- Wawanosh, Ontario Fuel & Combined

50. Slide 50: Non-GAAP financial measures

    Non-GAAP financial measures Capital Power uses (i) adjusted EBITDA, (ii) funds from operations, and (iii) discretionary cash flow as financial performance measures. These terms are not defined financial measures according to generally accepted accounting principles (GAAP) and do not have standardize

51. Slide 51: Forward-looking information

    Forward-looking information Certain information in this presentation is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial and operating performance, events or strategies. The forward-looking information or statements are provided to inform the Comp

52. Slide 52: Investor Relations Contact

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

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