1. OPG and the Opportunities for New Generation in Ontario Emad Elsayed Vice President Hydroelectric Development Ontario Power Generation to the Electricity Distributors Association Thunder Bay, Ontario September 7, 2006

2. OPG Profile Generated 108.5 TWh in 2005
Lambton GS
Pickering B GS
Beck 2 GS
Generated TWh in 2005
53.9 TWh in first 6 months 2006
Produces approx. 70% of Ontario’s electricity generation
Employs approx. 11,000 employees
Operates:
Three nuclear stations (10 operating units, total)
Five fossil-fuelled stations
64 hydroelectric stations

3. Improving Financial Performance
2005
2004
500
450
400
350
300
250
200
150
100 50
Net Income ($millions)
$366
$342
$42
Q1-Q2 2006
In May, 2006 OPG’s Credit rating was upgraded by Standard & Poor’s -- short-term commercial paper debt rating upgraded to “A-1 (low)” from A-2.”

4. OPG Helps Moderate Electricity Prices

5. Ontario Electricity Supply Mix
Ontario Capacity: 30,631 MW
OPG Capacity: 22,173 MW (72%)
Ontario Energy: 156,000 GWh/yr
OPG Energy: 109,000 GWh/yr (70%)
Coal –
21.4%
Source: IESO/OPG, January 2006

6. Station Location Map

7. OPG’s Hydroelectric Assets
Ragged Rapids GS

8. OPG Mandate
Memorandum of Agreement between OPG and Shareholder (Ontario Government), signed August 17, 2005, states in part:
“With respect to investment in new generation capacity, OPG’s priority will be hydro-electric generation capacity.
OPG will seek to expand, develop and/or improve its hydro-electric generation capacity.
This will include expansion and redevelopment on its existing sites as well as the pursuit of new projects where feasible.
These investments will be taken by OPG through partnerships or on its own, as appropriate.”

9. Hydroelectric Development Potential in Ontario
Theoretical potential ~ 12,000 MW
Practical/economic potential ~ 5,000 MW
Most potential sites are in Northern Ontario and are restricted by existing government commitments
Need to address key issues:
First Nations participation
Transmission requirements
Restrictions on Northern & Moose Rivers development
Environmental considerations

10. First Nations Participation
Active involvement by First Nations in hydroelectric developments
includes potential equity participation.
Memoranda of Understanding/Final Settlement Agreements signed with:
Mattagami FN to explore the development of the Mattagami Lake Control Dam
Taykwa Tagamou Nation to explore developments on the Abitibi River
Significant involvement by FN’s in the proposed Lower Mattagami River development.
Goal is to create framework for all future developments in the Northern Rivers and Moose River Basin.
Mattagami First Nation Council and OPG representatives

11. Transmission Requirements
Significant development in northern Ontario will require new transmission lines to southern Ontario.
Interim measure necessary for some projects (e.g. Lower Mattagami development).
Longer term requirements to be addressed as part of OPA’s Integrated Power System Plan (IPSP).

12. Restrictions on Northern & Moose Rivers Development
Site release commitments on Northern and Moose Rivers (4,500 MW):
Commitment restricts developments greater than 25MW in four Northern Rivers (Albany, Attawapiskat, Winisk and Severn)
No new development within Moose River basin north of Highway 11 without co-planning with First Nations (exception, Lower Mattagami Project)
Parks designations in North restricts additional 1,500MW (Bill11)

13. Environmental Considerations
Some flooding required for Northern Rivers/Moose River Basin developments
Need harmonization of Federal and Provincial environmental approval

14. Current Active Hydroelectric Development Projects in Northern Ontario
Lac Seul Development
12.5 MW addition to existing Ear Falls station
Construction started in Jan/06
Expected completion Nov/07
Upper Mattagami River Development
Replacing 3 existing old stations (Wawaitin, Sandy Falls, Lower Sturgeon) with 3 larger stations producing 35 MW
Started pre-qualification process for equipment suppliers and contractors
Construction expected to start in mid 2007
Lac Seul: Rock Drilling at the Intake, March 2006

15. Current Active Hydroelectric Development Projects in Northern Ontario (Con’t)
Hound Chute Redevelopment (near Cobalt)
Replace an existing 95-year old station (Hound Chute) with a new larger (9 MW) station
Started pre-qualification process for equipment suppliers and contractors
Construction expected to start in mid 2007

16. Lower Mattagami River Development
Current Active Hydroelectric Development Projects in Northern Ontario (Con’t)
Lower Mattagami River Development
Replace existing 75-year old Smoky Falls station with a new larger station
add an extra generating unit to each of three existing stations (Little Long, Harmon and Kipling)
Net increase in generating capacity is 450 MW
Construction expected to start in late 2007
Little Long
Smoky Falls
Harmon
Kipling

17. Current Active Hydroelectric Development Projects in Northern Ontario (Con’t)
Other Projects
Mattagami Lake Control Dam (5 MW) with Mattagami First Nation
Abitibi River sites with Taykwa Tagamou Nation
Long Lake Control Dam (5-6 MW)
Little Jackfish River Development (132 MW)
Long Lake Control Dam
Mattagami Lake Control Dam

18. Recap OPG continues to invest in Northern Ontario.
OPG will pursue all economically viable hydroelectric developments in the Province, mostly in Northern Ontario.
OPG will seek involvement and partnerships with First Nations.
OPG will continue to work with the appropriate government agencies and stakeholders to address existing development restrictions, transmission constraints and environmental considerations.

19. Other Supply Initiatives: Niagara Tunnel
Outlet
Intake
Sir Adam Beck Pump Generating Station
Sir Adam Beck GS No.2
Sir Adam Beck GS No.1

20. Other Supply Initiatives: Niagara Tunnel (cont’d)
Diverts additional water to Beck hydroelectric stations
500 cubic metres of water per second
1.6 billion KWh average per year
10.4 km long
Construction work underway
Expected completion: late 2009
90 year life-expectancy
Project is on schedule and within budget
OPG is project manager
Niagara Tunnel Boring Machine, “Big Becky”

21. Other Supply Initiatives: Portlands Energy Centre
IESO reports Toronto needs additional 500 MW by 2010
PEC is a 550 MW high efficiency combined-cycle:
co-generation capable
fuelled by natural gas
Located in Toronto’s Portlands area
OPG and TransCanada Energy Ltd. are partnering to build PEC
Environmental assessment and approvals in place
Site clearing is underway in preparation for construction
First power in 2008; fully operational by 2009
Site Clearing Underway
PEC: Artist’s Conception

22. Nuclear Refurbishment
In June, Ont. Govt. Directed OPG to
Undertake feasibility studies re. refurbishment of units at Pickering B & Darlington sites
Begin Environmental Assessment (EA) on Pickering B refurbishment as part of this process
OPG is now assessing the business case for refurbishing Pickering B
OPG’s Plant Life Extension Project Division created in February 2006
On June 15, OPG submitted letter of intent and project description to CNSC re. potential Pickering B refurbishment
EA for potential Pickering B refurbishment is proceeding as part of business case
Business case study to be reviewed by OPG management and Board in 2008
Solid business case must exist before any decision to refurbish Pickering B (and eventually Darlington) is made
Pickering B

23. New Nuclear In June, Ont. Govt. has also Directed OPG to:
Begin federal approvals process for new nuclear units at an existing facility
Includes an environmental assessment
OPG is developing plan of action to meet this directive
OPG believes Darlington is best site for new build
Experienced workforce
Best-performing multi-unit CANDU station in Canada in 2004 and 2005
Strong community support
Room to build on site
Darlington Nuclear Generating Station
Darlington

24. OPG’s Fossil-Fuelled Stations
Ontario Govt. responded in June to the OPA’s Supply Mix Report (Dec. 2005)
The Govt. has asked OPA to determine how best to replace coal-fired generation in Ontario at the earliest possible time
As a result…OPG’s coal-fired stations to continue operating beyond 2009
OPG to meet all environmental regulations governing the operation of its coal-fired stations
OPG will make additional, prudent investments in environmental equipment and systems to further improve environmental performance of its coal-fired plants
Lambton GS
Nanticoke GS

25. Lakeview Stack Demolition
Lakeview Generating Station in Mississauga:
in service:1961
capacity 1,140 MW
lifetime output: 214 TWh
275 employees
permanently shut down in April 2005
June 12, 2006: stack demolition
Site now being cleared of remaining equipment
Potential for future high-efficiency gas plant at the site

26. The Trust and Confidence of Communities is Essential to our Operations
Pickering Neighbourhood Walk Employee Volunteers
Kakabeka Falls GS, 100th Anniversary Open House
OPG receives Pickering 2005 Local Business Award
Darlington Bird houses

27. OPG: The Big Picture Contributing to Ontario’s Electricity supply
Continuous improvement
Meeting our commitments
Open, transparent and accountable
Reliable
Providing value to our shareholders -- the people of Ontario

28. OPG and the Opportunities for New Generation in Ontario Emad Elsayed Vice President Hydroelectric Development Ontario Power Generation to the Electricity Distributors Association Thunder Bay, Ontario September 7, 2006