About Canadian Utilities

Canadian Utilities Limited and its subsidiaries engage in the electricity, natural gas, and retail energy businesses worldwide. The company is a subsidiary of ATCO Ltd. Segments The company operates through Utilities, Energy Infrastructure, and Corporate & Other segments. Utilities segment This segment’s activities consist of four regulated utilities (Electricity Transmission and Distribution, and Natural Gas Transmission and Distribution) in Alberta, Saskatchewan and northern regions of Canada, which have delivered electricity and cleaner-burning natural gas to customers, a regulated natural gas distribution business in Western Australia, and the newly formed International Electricity Operations business in Puerto Rico, which includes the company’s 50 per cent ownership in LUMA Energy, LLC (LUMA Energy). Strategy The company’s strategy is to invest in regulated electricity and natural gas distribution and transmission assets, capitalize on opportunities to provide long-term contracted electricity and natural gas transmission and distribution services, and consistently deliver reliable, affordable and cleaner energy for its customers. Electricity Distribution and Transmission Electricity Distribution and Transmission transmit and deliver electricity to 240 communities and rural areas in east-central and Northern Alberta. Among those served are the communities of Drumheller, Lloydminster, Grande Prairie, and Fort McMurray, as well as the oil sands areas near Fort McMurray and the heavy oil areas near Cold Lake and Peace River. Electricity utility service is also provided to three communities in Saskatchewan. Electricity Distribution and Transmission is headquartered in Edmonton and has 38 offices throughout its service area. ATCO Electric Yukon (AEY) serves 19 communities in the Yukon, including the capital city of Whitehorse, and one community in British Columbia. Northland Utilities is a partnership between ATCO Ltd. and Denendeh Investments Incorporated, which represents the 27 Dene First Nations of the Northwest Territories. Northland Utilities has two operating divisions, including Northland Utilities (NWT) Limited and Northland Utilities (Yellowknife) Limited (NUY). NUY and NWT serve nine communities in the Northwest Territories, including the capital city of Yellowknife. Approximately 665,000 people live in the principal markets for electric utility service by Electricity Distribution and Transmission and its subsidiaries NUY, NWT and AEY. Service is provided to approximately 260,000 customers. Electricity Distribution and Transmission is assigned approximately 65 per cent of the designated service area within Alberta. Electricity Distribution and Transmission, NUY, NWT and AEY own and operate electricity transmission and distribution systems. The systems consist of approximately 11,000 km of transmission lines and approximately 60,000 km of distribution lines. In addition, Electricity Distribution and Transmission deliver power to and operate approximately 3,500 km of distribution lines owned by Rural Electrification Associations. Electricity Distribution and Transmission, AEY, NUY and NWT distribute electricity to incorporated communities under the authority of franchises or by-laws. In rural areas, electricity is distributed by approvals, permits or orders under applicable statutes. Alberta PowerLine The company is the operator of Alberta PowerLine (APL) under a 35-year contract. APL owns a 500-km, 500-kV electricity transmission line running from Wabamun to Fort McMurray Alberta. APL is 60 per cent owned by TD Asset Management Inc. for and on behalf of TD Greystone Infrastructure Fund (Global Master) L.P., and IST3 Investment Foundation acting on behalf of its investment group IST3 Infrastruktur Global. The other 40 per cent is owned by seven Indigenous communities in Alberta, including Athabasca Chipewyan First Nation, Bigstone Cree Nation, Gunn Metis Local 55, Mikisew Cree First Nation, by way of its business arm, the Mikisew Group of Companies, Paul First Nation, Sawridge First Nation and Sucker Creek First Nation. Electricity Generation Hydroelectric, Diesel and Solar Generation Electricity Distribution and Transmission owns or operates 23 hydroelectric and diesel-generating plants, and 10 solar sites with an aggregate nameplate capacity of 48-MW (megawatt) in Alberta, the Yukon and Northwest Territories. The hydroelectric assets include one facility in Whitehorse and one in Jasper that each generate 1.4-MW of hydroelectric power. The diesel sites are spread throughout the Yukon, Northwest Territories and Alberta and serve remote communities that are not connected to the grid. The solar sites in Alberta include rooftop and ground mounted solar sites, including the Fort Chipewyan Solar Project. Fort Chipewyan Solar Project In 2020, the company completed Canada’s major off-grid solar project, providing the remote Northern Alberta community of Fort Chipewyan with clean energy. In partnership with Three Nations Energy (3NE), which is jointly owned by the Athabasca Chipewyan First Nation, Mikisew Cree First Nation and Fort Chipewyan Métis Association, the company designed and built the two phased project, which includes a 600-kW (kilowatt) solar farm, owned and operated by the company, and a 2,200-kW solar farm owned by 3NE and operated by it. Fort Chipewyan is located approximately 150 kilometers away from the nearest tie-in to Alberta’s electric grid. The solar project would provide approximately 25 per cent of Fort Chipewyan’s electricity needs annually. International Electricity Operations LUMA Energy In June 2020, LUMA Energy, a newly-formed company owned 50 per cent by the company and 50 per cent by Quanta Services, Inc., was selected by the P3A to transform, modernize and operate Puerto Rico’s 30,000-km electricity transmission and distribution system over a term of 15 years after a one-year transition period. The transition period commenced in the second quarter of 2020. Natural Gas Distribution and Transmission Natural Gas Distribution Natural Gas Distribution delivers natural gas throughout Alberta and in the Lloydminster area of Saskatchewan and serves approximately 1.2 million customers in approximately 300 Alberta communities. Natural Gas Distribution's principal markets for distributing natural gas are in Edmonton, Calgary, Airdrie, Fort McMurray, Grande Prairie, Lethbridge, Lloydminster, Red Deer, Spruce Grove, St. Albert and Sherwood Park. These communities have a combined population of approximately 2.9 million. Approximately 76 per cent of Natural Gas Distribution's customers were located in these 11 communities in 2020. Also served are 279 smaller communities, as well as rural areas with a combined population of approximately 770,000. Natural Gas Distribution owns and operates approximately 41,000 km of distribution mains. It also owns service and maintenance facilities in major centers in Alberta. Natural Gas Distribution delivers natural gas in incorporated communities under the authority of franchises or bylaws and in rural areas under approvals, permits or orders issued through applicable statutes. It has 169 franchise agreements with communities throughout Alberta. These franchise agreements detail the rights granted to natural gas distribution and its obligations to deliver natural gas services to consumers in the municipality. All franchises are exclusive to Natural Gas Distribution and are renewable by agreement for additional periods of approximately 20 years. In Edmonton, distribution of natural gas is carried on under the authority of an exclusive franchise. Natural Gas Distribution has a 20-year franchise agreement with Edmonton that would expire in July 2030. The franchises under which service is provided in other incorporated communities in Alberta have been granted for approximately 20 years. In Calgary, the distribution of natural gas operates under a municipal by-law. The rights of natural gas distribution under this by-law, while not exclusive, are unrestricted as to term. The by-law does not confer any right for Calgary to acquire the facilities used in providing the service. Hydrogen Blending Project In July 2020, the company was awarded funding from Emission Reduction Alberta’s Natural Gas Challenge to advance a hydrogen blending project in Fort Saskatchewan, Alberta. The company’s project would use hydrogen derived from domestically-produced natural gas, with the intent to eventually leverage Alberta's existing carbon capture and sequestration infrastructure to store emissions associated with the production process. Natural Gas Transmission Natural Gas Transmission owns and operates natural gas transmission pipelines and facilities in Alberta. The business receives natural gas on its pipeline system from various gas processing plants, as well as from connections with other natural gas transmission systems, and transports the gas to end users within the province, such as local distribution utilities and industrial customers, or to other transmission pipeline systems, primarily for export out of the province. Natural Gas Transmission owns and operates a natural gas transmission system. The system consists of approximately 9,000 km of pipelines, 16 compressor sites, approximately 3,700 receipt and delivery points, and a salt cavern natural gas storage peaking facility near Fort Saskatchewan, Alberta. The system has 180 producer receipt points, one interconnection with Alliance Pipeline, and one interconnection with Many Islands Pipelines. Peak delivery capability of the natural gas transmission system is 4 billion cubic feet per day. Pembina-Keephills In 2020, Natural Gas Transmission completed and placed in-service Pembina-Keephills transmission pipeline. The 59-km high-pressure natural gas pipeline supports coal-to-gas conversion of power producers in the Genesee and surrounding areas of Alberta with the capacity to deliver approximately 550-terajoule per day. Pioneer Pipeline Acquisition In 2020, Natural Gas Transmission entered into an agreement to acquire the Pioneer Pipeline from Tidewater Midstream & Infrastructure Ltd. and its partner TransAlta Corporation. The 131-km natural gas pipeline runs from the Drayton Valley area to the Wabamun area west of Edmonton, Alberta. International Natural Gas Distribution International Natural Gas Distribution provides natural gas distribution services in Western Australia and serves approximately 776,000 customers in 18 communities, including metropolitan Perth and surrounding regions, such as Geraldton, Bunbury, Busselton, Kalgoorlie, Harvey, Pinjarra, Brunswick Junction and Capel. International Natural Gas Distribution owns and operates approximately 14,000 km of natural gas pipelines and associated infrastructure and also distributes liquefied petroleum gas to the community of Albany. Hydrogen Blending In Australia, the company continues to build on its work at the Clean Energy Innovation Hub, a test bed for hybrid energy solutions, integrating natural gas, solar photovoltaic, battery storage and hydrogen production. In 2020, the company was able to test a 10 per cent hydrogen blend injected into the natural gas supply at its major depot at Jandakot in Perth, Western Australia. Energy Infrastructure segment This segment’s non-regulated businesses include hydro, solar and natural gas electricity generation in western Canada, Australia, Mexico, and Chile, as well as non-regulated electricity transmission, natural gas storage and transmission, Natural Gas Liquids (NGL) storage, and industrial water services in Alberta. Electricity Generation Electricity Generation owns 248-MW of non-regulated electricity generation assets in Canada, Mexico, Australia and Chile. Canada The Oldman River Hydro Plant is a 32-MW run-of-river project in southern Alberta, commissioned in 2003. The facility is jointly owned by the company and the Piikani Nation. Power generated at the plant meets the needs of approximately 25,000 households. Mexico The company and its Mexican partner, Grupo Ranman, own 11-MW of distributed generation located in the World Trade Centre industrial park in San Luis Potosí, Mexico. The company owns Electricidad del Golfo, a long-term contracted, 35-MW hydroelectric power station based in the state of Veracruz, Mexico. Australia The company maintains ownership in and operates two generation plants, including Karratha in the Pilbara region of Western Australia, and Osborne in Adelaide, South Australia. These facilities collectively generate 266-MW of power and provide energy for various public sector, domestic, industrial and commercial clients. They have secured off-take arrangements with counterparties for 100 per cent of the capacity. Karratha Power Station The 86-MW Karratha Power Station is an electricity generation facility in the North West Interconnected System in the Pilbara region of Western Australia. The facility generates electricity to supply residential and business consumers under a long-term (20-year) tolling power off-take contract with Horizon Power. The facility consists of two open-cycle, dry low-emissions natural gas turbines. Osborne Osborne is a 50/50 joint venture between ATCO Power Australia and Origin Energy. The 180-MW Osborne facility, operated by ATCO Power Australia, is located near Adelaide, South Australia, and is designed to accommodate operation in both cogeneration and combined cycle modes. Australia Solar The company owns Source Energy Co. (Source), a behind the meter retail company in Western Australia with focus in managing energy needs for high-density apartment buildings, using a mix of rooftop solar panels and energy from the grid, matched with smart metering technology. In 2020, Source generated approximately 1-MW of solar energy capacity. Chile Solar Generation Facility In 2019, the company entered into a partnership with Impulso Capital, a Chilean developer, to build and operate the El Resplandor solar project. This project, located in Cabrero, Chile, would provide solar energy to the Chilean electricity grid. Construction on the first 3-MW of solar generation capacity was completed at the end of the second quarter of 2020 with the next 6-MW expected to be complete in 2021. Electric Vehicle Input Charging Stations In 2020, the company continued to expand its number of electric vehicle (EV) fast charging stations providing end-users an opportunity to replace liquid fuel with a low-carbon emitting energy. As of December 31, 2020, the company had installed a total of 25 public fast EV charging stations, including 20 installed through the Peak to Prairies initiative in Southern Alberta. Non-Regulated Electricity Transmission The company operates 33-km of transmission lines across four non-regulated electricity transmission assets in Alberta, including Scotford transmission line and substation, Muskeg River transmission line and substation, Grand Rapids substation, and Air Products transmission line. Storage & Industrial Water Storage & Industrial Water builds, owns and operates non-regulated industrial water, natural gas storage, NGL storage, and natural gas related infrastructure to serve the midstream and petrochemical sector of western Canada’s energy industry. It operates and owns a one-third interest in a regulated natural gas distribution system in the Northwest Territories. Natural Gas Liquids Storage The ATCO Heartland Energy Centre near Fort Saskatchewan, Alberta includes assets held in a partnership between ATCO Energy Solutions Ltd. (60 per cent ownership share) and Petrogas Energy Corp. (40 per cent ownership share) (the Partnership), focuses on supporting customers through natural gas liquids storage and related infrastructure. The facility consists of four storage caverns under long-term contract, which have a combined storage capacity of 400,000 cubic meters. In 2019, the company announced that the Partnership (ATCO Energy Solutions Ltd. (60 per cent ownership share) and Petrogas Energy Corp. (40 per cent ownership share)) had secured a long-term contract for the construction and operation of a fifth salt cavern at the ATCO Heartland Energy Centre. This cavern would store hydrocarbon products for customers in the Alberta Industrial Heartland. The company also secured a long-term transportation contract for the construction and operation of a regional pipeline to connect the new cavern to existing facilities in the area, further improving the ATCO Heartland Energy Centre as a key storage hub in the major hydrocarbon processing region in Canada. Construction began in the fourth quarter of 2019, with construction on track to be completed by the end of 2021. Natural Gas Storage Storage & Industrial Water owns and operates a natural gas storage facility at Carbon, Alberta. The facility is a natural gas reservoir with a seasonal storage capacity of 52 petajoules. The facility is connected to various transmission pipeline systems. Storage & Industrial Water provides natural gas storage tailored to customers' specific needs. Services range from daily to multi-year terms and are offered to financial institutions, marketing companies, pipeline operators, retail energy providers and producers. Gas Production, Processing and Distribution Facilities Storage & Industrial Water has a non-operating 33.3 per cent ownership interest in one natural gas production, gathering and processing facility, the Ikhil gas plant. Natural Gas Liquids Extraction Storage & Industrial Water had an interest in one natural gas liquids extraction facility as of December 31, 2020. The Empress Gas Liquids Straddle Plant is undergoing reclamation and remediation. Non-regulated Natural Gas Transmission Storage & Industrial Water owns the 116-km Muskeg River non-regulated natural gas pipeline that provides natural gas transportation service under a long-term commercial agreement to meet the needs of the Muskeg River Mine facilities and other facilities in the Fort McMurray area. Industrial Water Storage & Industrial Water's multi-user water system is connected to the North Saskatchewan River through the company’s industrial water system. The company provides integrated water services, including pipeline transportation, storage, water treatment, recycling and disposal to its various industrial customers. This industrial water system also supplies water for the development of salt caverns for its NGL storage facilities in the region. The water infrastructure capacity is 85,200 m3/day. In 2017, Storage & Industrial Water entered into a long-term commercial agreement with Inter Pipeline Ltd. to provide water services to Inter Pipeline's integrated propane dehydrogenation and polypropylene plant to be known as the Heartland Petrochemical Complex. Construction of the pipeline began in 2019 and was completed in the second quarter of 2020. Service for this contract is expected to commence in the second quarter of 2021 in line with Inter Pipeline's facility needs. Corporate & Other segment This segment includes Retail Energy through ATCO Energy Ltd. (ATCOenergy), which provides retail electricity and natural gas services in Alberta. Corporate & Other also includes the global corporate head office in Calgary, Canada, the Australia corporate head office in Perth, Australia and the Mexico corporate head office in Mexico City, Mexico. In addition, this segment includes CU Inc. Retail Energy ATCOenergy sells electricity and natural gas to residential customers through various plans. Blue Flame Kitchen (BFK) The BFK serves Albertans. BFK operates as a comprehensive global resource for adults and kids alike. BFK provides recipes and ‘how-to’ guides, school programs, cooking classes and events hosted at the company’s home-style kitchen in Edmonton and its learning centers in Calgary and Jandakot, Western Australia. BFK offers school programs and cooking classes online in 2020 due to the COVID-19 pandemic. Given the popularity of these programs, BFK would provide online programming on a permanent basis and plans to expand this offering globally in the future. Strategy The company’s long-term strategy focuses on sustainable growth. History Canadian Utilities Limited was founded in 1927. The company was incorporated under the laws of Canada in 1927.