strength. stability. growth.

Transcription

1 strength. stability. growth Second Quarter Report

2 the complete package Strength. Fort Chicago is comprised of long-life, high quality, energy infrastructure assets underpinned by a prudent capital structure and investment grade credit ratings. Stability. Long-term contracts provide predictable and consistent financial performance and support a stable distribution being paid to unitholders. Growth. Energy market fundamentals and an experienced management team are fuelling a growing portfolio of greenfield projects, which together with targeted acquisitions, are expected to add diversity and create Unitholder value over time. Fort Chicago owns and operates energy infrastructure assets across North America within three principal business segments pipeline transportation, natural gas liquids and power. Each of these businesses plays an important role in meeting North American energy requirements and is positioned for growth. Greenfield projects currently being developed include LNG and pipeline facilities on the U.S. west coast, Alberta-based ethane and NGL extraction facilities, repowering and expansion opportunities at the California power facilities and a Nova Scotia underground natural gas storage and pipeline project. Fort Chicago Energy Partners is a TSX-listed (FCE.UN) Canadian limited partnership based in Calgary, Alberta. Established in 1997, Fort Chicago has generated consistent and growing distributions per Unit that were increased in November 2007 by $0.07 to $1.00 per year. For more information about Fort Chicago, please visit Strong. Stable. Growing.

3 fort chicago 2008 SECOND quarter report 3 Letter to unitholders As President and Chief Executive Officer, I am pleased to report on the financial and operating results of Fort Chicago Energy Partners L.P. ( Fort Chicago or the Partnership ) for the three and six months ended June 30, Throughout the first half of this year, the Partnership has continued to benefit from exceptional NGL market conditions. Key Strategic Initiatives On July 14, 2008, we announced the acquisition of a 100 percent interest in the Brush II Generation Facility, a nominal 70 megawatt natural gas fired combined cycle power generation facility situated in a 280 MW, multi-unit complex in Brush, Colorado, approximately 150 kilometres northeast of Denver. The aggregate purchase price is approximately US$32 million and will be financed from our existing bank credit facilities. The acquisition is expected to close in August, subject to usual closing conditions, including the approval of the U.S. Federal Energy Regulatory Commission. The Brush II facility is fully contracted under long-term tolling agreements with investment grade off-takers through December 31, 2019 and is operated by an experienced third party contract operator, which also operates the other units in the Brush complex. This acquisition possesses solid investment attributes consistent with those of our existing businesses and represents another step in our strategy of growing our power business in North America. Fort Chicago and our businesses continue to advance other growth initiatives within our existing operations and to pursue opportunities to diversify into new energy infrastructure businesses. Steady progress is being made in the construction of several projects, including Alliance s B.C. Expansion project, Aux Sable s Heartland Off-gas Facility, Fort Chicago Power s London Cogeneration Facility, NRGreen s Estlin and Alameda waste heat facilities and the East Windsor Cogeneration Facility. As well, Alton, Jordan Cove and Alliance continue to pursue commercial arrangements to underpin their respective natural gas storage, LNG terminal and Rockies Alliance Pipeline projects. Further details concerning these, and Fort Chicago s other development initiatives, can be found in Management s Discussion and Analysis contained later in this interim report. Financial and Operating Results Distributable cash for the three and six months ended June 30, 2008 was $41.6 million or $0.313 per Unit and $84.4 million or $0.638 per Unit, respectively, compared to $40.0 million or $0.304 per Unit and $70.6 million or $0.538 per Unit for the same periods in 2007, respectively, reflecting a significant increase in distributable cash from the NGL Business, partially offset by higher current taxes pertaining to Aux Sable, whose earnings are fully taxable as a result of utilizing its remaining prior year loss carry-forwards. Continued strong NGL market conditions in the first half of 2008 resulted in $39.6 million of margin-based lease revenues being generated by Aux Sable, all of which has been recognized in distributable cash and revenues. In comparison, of the $16.1 million margin-based lease revenues generated in the first half of 2007, $12.8 million was recognized by June 30, with the remainder being recognized over the balance of Distributable cash from the Pipeline Business for the six months ended June 30, 2008 included $10.3 million or $0.08 per Unit received in the first quarter from Calpine Energy Services Canada Partnership ( CESCA ) in settlement of the repudiation of its Alliance

4 fort chicago 2008 SECOND quarter report 4 transportation contracts. Distributable cash also reflects higher corporate costs in 2008, due to incremental administration and interest costs related to the Countryside acquisition, increased corporate office and business development activities and the effect of the stronger Canadian dollar. Net income for the three and six months ended June 30, 2008 was $20.1 million or $0.15 per Unit and $52.2 million or $0.39 per Unit, respectively, compared to $22.8 million or $0.17 per Unit and $36.7 million or $0.28 per Unit for the same periods in 2007, respectively, reflecting the same factors that drove the increase in distributable cash. Further, year-to-date earnings included a gain of $4.2 million related to the initial public offering of common shares by Pristine Power Inc., which resulted in Fort Chicago s ownership interest in Pristine being diluted from approximately 20 percent to approximately 11 percent. These increases were offset in the second quarter and partially offset in the first half of the year by higher corporate costs, including increased recognition of foreign exchange losses previously deferred and recorded in the cumulative translation adjustment resulting from the higher year-to-date cash flows distributed by Fort Chicago s U.S. businesses. Increased corporate costs also reflect incremental administration and interest costs related to the Countryside acquisition, increased corporate office and business development activities, higher taxes resulting from increased U.S. earnings and the effect of the stronger Canadian dollar. Cash generated from operating activities during the three and six months ended June 30, 2008 was $39.5 million and $135.1 million, respectively, compared to $33.7 million and $92.2 million for the same periods last year, respectively. These increases primarily reflect higher earnings from Aux Sable and, for the six month period, Alliance s settlement with CESCA. For the three and six months ended June 30, 2008 Fort Chicago paid distributions of $0.25 per Unit and $0.50 cents per Unit, respectively, compared to $ per Unit and $0.465 per Unit for the same periods last year, respectively, reflecting the increase of the Partnership s annualized per Unit distribution from $0.93 to $1.00 in November For the six months ended June 30, 2008, our payout ratio was 78 percent, resulting in the Distribution Account increasing by $11.9 million to $81.7 million due primarily to increased distributable cash being generated by Aux Sable and the CESCA settlement. For the six months ended June 30, 2008 Alliance exceeded its contracted bcf/d of firm-service capacity, with shippers utilizing record levels of the Authorized Overrun Service available on the system. Actual transportation deliveries, including utilized AOS, averaged bcf/d, up from bcf/d in 2007, reflecting the reliability of Alliance s equipment and an aggressive focus on planning and scheduling of maintenance to limit outage times. Aux Sable also continued to operate reliably, with year-to-date volumes of 72.4 thousand barrels per day, up from average volumes of 68.0 thousand barrels per day during the same period last year. In June, Fort Chicago Power completed its major maintenance work at the Ripon Cogeneration Facility, which included a two-week planned outage. The operating performance of Fort Chicago Power s facilities continues to be in line with our expectations. NRGreen s Kerrobert waste heat generation facility operated throughout the second quarter without incident, after experiencing a failure early in the first quarter. NRGreen s Loreburn facility commenced operations at the end of May and generated revenues throughout the month of June.

5 fort chicago 2008 SECOND quarter report 5 Updated 2008 Guidance Over the balance of the year we expect NGL market fundamentals to continue to support strong earnings and cash flows from Aux Sable. The Pipeline Business is expected to continue to generate stable earnings and cash flows, which are underpinned by long-term contracts. Earnings and cash flows from our Power Business are also expected to increase as electrical demand in California is higher in the summer months. Based on our year-to-date performance and our current outlook, 2008 distributable cash is now expected to be in the range of $ 1.15 per Unit to $1.50 per Unit, compared to $1.13 per Unit to $1.70 per Unit, and our payout ratio for the year is expected to be between 67 percent and 87 percent. This narrower range reflects Aux Sable s strong year-to-date and projected margins and higher cash taxes as a result of higher Aux Sable earnings and the recent decision to not implement certain tax planning initiatives designed to utilize additional U.S. loss carry-forwards in 2008 that otherwise would be used in future years. This decision reflects ongoing planning related to the 2007 legislation applicable to specified investment flow-through entities. Fort Chicago s ability to maintain it s existing level of distributions is not affected by this shift of current taxes between fiscal years. Further details concerning our updated 2008 guidance can be found in the Investor Information section of our website at Respectfully, Stephen H. White President and Chief Executive Officer August 7, 2008

6 fort chicago 2008 SECOND quarter report 6 MANAGEMENT S DISCUSSION AND ANALYSIS Three and six months ended June 30, 2008 This Management s Discussion and Analysis ( MD&A ) dated August 7, 2008 provides a review of the significant events and transactions that impacted Fort Chicago s performance during 2008 relative to Certain forward-looking statements and information are provided. Forward-looking statements and information, by their nature, involve risk and uncertainty, which may cause actual results to differ materially from those expressed or implied herein. This MD&A should be read in conjunction with the interim consolidated financial statements of Fort Chicago for the three and six months ended June 30, 2008 and the consolidated financial statements and MD&A included in the 2007 Annual Report. Capitalized terms used herein and not otherwise defined have the same meanings attributed to them in the June 30, 2008 and December 31, 2007 consolidated financial statements. All financial information is in Canadian dollars unless otherwise noted and, as it relates to Fort Chicago s financial results, has been derived from information used to prepare its quarterly unaudited consolidated financial statements, which have been prepared in accordance with Generally Accepted Accounting Principles in Canada ( GAAP ). Financial information pertaining to the jointly held businesses reflect Fort Chicago s proportionate share unless otherwise noted. Additional information concerning the Partnership is available on SEDAR at or on the Partnership s website at FINANCIAL AND OPERATING HIGHLIGHTS Three months ended June 30 Six months ended June 30 ($ Thousands, except where noted) Operating Highlights Average daily volumes (100%) Pipeline Alliance billion cubic feet per day ( bcf/d ) AEGS thousand barrels per day ( mbbls/d ) (1) NGL Aux Sable (mbbls/d) Power Fort Chicago Power (2) megawatt hours ( MWh ) 79, ,701 NRGreen (MWh) 13,310 9,862 21,807 21,058 Financial Results Revenues 178, , , ,152 Net income 20,117 22,809 52,162 36,711 Per Unit ($) - basic and diluted Cash from operating activities 39,512 33, ,111 92,179 Distributable cash (3) 41,565 39,980 84,380 70,646 Per Unit ($) Distributions paid/payable (3) 33,183 30,590 66,124 61,015 Per Unit ($) Distribution account (3) 81,728 32,974 81,728 32,974 Payout ratio (%) (3) Capital expenditures Growth (3) 31,381 18,001 53,805 31,110 Maintenance and sustaining (3) 5, , Continued on next page

7 fort chicago 2008 SECOND quarter report 7 ($Thousands, except, where noted) June 30, 2008 Dec. 31, 2007 As at June 30, Financial Position Cash and short-term investments 49,614 47,191 46,522 Total assets 2,910,664 2,871,364 2,601,670 Long-term senior debt and capital leases 1,647,496 1,652,133 1,429,103 Long-term subordinated convertible debentures 23,836 23,783 23,715 Partners equity 790, , , Units Units outstanding as at period-end (4) 134,110, ,668, ,308,845 Average daily volume (Units) 160, , ,547 Price per Unit close ($) Market capitalization (3) 1,461,809 1,427,282 1,377,430 (1) Average daily volumes in respect of AEGS are based on toll volumes. (2) Assets acquired August 10, (3) This item is not a standard measure under GAAP and may not be comparable to similar measures presented by other entities. See section entitled Non-GAAP Financial Measures contained in the 2007 Annual Report. (4) As at the close of markets on August 1, 2008, Fort Chicago had 134,110,877 Units outstanding. STRATEGY AND BUSINESS OF THE PARTNERSHIP Strategy Fort Chicago is committed to actively managing and growing its existing businesses and to making targeted accretive investments in long-life infrastructure assets that provide additional diversity, increase Unitholder value and contribute toward stable and growing distributions. Existing Businesses Fort Chicago is a limited partnership engaged in three principal business segments including a pipeline transportation business comprised of a 50 percent ownership interest in Alliance Pipeline and a 100 percent ownership interest in AEGS; an NGL extraction business, comprised of a 42.7 percent ownership interest in Aux Sable Liquid Products, a 47.7 percent ownership interest in Aux Sable Canada ( percent), a 50 percent ownership interest in Sable Canada (collectively Aux Sable ), and a 42.7 percent ownership interest in Alliance Canada Marketing (collectively, with Aux Sable, the NGL Business ); and a power business comprised of a 100 percent ownership interest in Fort Chicago Power (the assets of which were acquired from Countryside Power Income Fund or Countryside in August 2007), a 50 percent ownership interest in NRGreen, a 50 percent ownership interest in East Windsor Cogeneration and a 10.9 percent ownership interest in Pristine ( percent). The Pipeline, NGL and Power segments represent approximately 79 percent, 6 percent and 15 percent, respectively, of Fort Chicago s total assets. Each of Fort Chicago s businesses owns and operates high-quality, long-life assets that are uniquely positioned to provide Unitholders with relatively stable cash distributions and potential growth in the future.

8 fort chicago 2008 SECOND quarter report 8 New Business Initiatives On July 14, 2008, Fort Chicago announced that it had entered into purchase agreements with two parties to acquire a 100 percent interest in the Brush II Generation Facility ( Brush II ), a nominal 70 megawatt ( MW ) natural gas fired combined cycle power generation facility. The aggregate purchase price is approximately US$32 million, including working capital at closing, and will be financed from the Partnership s existing bank credit facilities. The acquisition is expected to close in August, subject to usual closing conditions, including the approval of the U.S. Federal Energy Regulatory Commission. The Brush II facility is situated in a 280 MW, multi-unit complex in Brush, Colorado, approximately 150 kilometres northeast of Denver, and is fully contracted under two tolling agreements ( TA ) with investment grade off-takers through December 31, Brush II operates as an exempt wholesale generator and sells its capacity and output presently under a TA that expires on September 30, Commencing on October 1, 2009, the output will be sold under a ten-year and three month TA. The Brush II facility is operated by an experienced third party contract operator, which also operates the other units in the Brush complex. Fort Chicago and its businesses continue to advance other growth initiatives within its existing operations and to pursue opportunities to diversify into new energy infrastructure businesses. Steady progress is being made in the construction of several projects, including Alliance s B.C. Expansion ( BCX ) project, Aux Sable s Heartland Off-gas Facility, Fort Chicago Power s London Cogeneration Facility, NRGreen s Estlin and Alameda waste heat facilities and the East Windsor Cogeneration Facility. As well, Alton, Jordan Cove and Alliance continue to pursue commercial arrangements to underpin their respective natural gas storage, LNG terminal and Rockies Alliance Pipeline ( RAP ) projects. OVERALL PERFORMANCE Distributable cash and net income for the three and six months ended June 30, 2008, by business segment, are highlighted in the tables below. The factors contributing to these results are discussed more fully in the section entitled Results of Operations - By Business Segment. Cash from operating activities is discussed in the section entitled Liquidity and Capital Resources. Distributable Cash Three months ended June 30 Six months ended June 30 ($ Thousands) Pipeline 31,238 32,161 72,678 66,361 NGL 28,607 12,610 38,847 13,740 Power 1, , Fort Chicago - Corporate (19,443) (5,141) (28,173) (10,115) 41,565 39,980 84,380 70,646 Distributable cash for the three and six months ended June 30, 2008 was $41.6 million or $0.313 per Unit and $84.4 million or $0.638 per Unit, respectively, compared to $40.0 million or $0.304 per Unit and $70.6 million or $0.538 per Unit for the same periods in 2007, respectively, reflecting a significant increase in distributable cash from the NGL Business, partially offset by higher current taxes pertaining to Aux Sable, whose earnings are now fully taxable as a result of utilizing its remaining prior year loss carry-forward s. Continued strong NGL market conditions in the first half of 2008 resulted in $39.6 million of

9 fort chicago 2008 SECOND quarter report 9 margin-based lease revenues being generated by Aux Sable, all of which has been recognized in distributable cash and revenues. In comparison, of the $16.1 million margin-based lease revenues generated in the first half of 2007, $12.8 million was recognized by June 30, with the remainder being recognized over the balance of Distributable cash for the Pipeline Business for the six months ended June 30, 2008 includes $10.3 million or $0.08 per Unit received in the first quarter in settlement from Calpine Energy Services Canada Partnership ( CESCA ) in connection with the repudiation of its Alliance transportation contracts. Distributable cash also reflects higher corporate costs in 2008, due primarily to incremental administration and interest costs related to the Countryside acquisition and the effect of the stronger Canadian dollar. Net Income Three months ended June 30 Six months ended June 30 ($ Thousands) Net income before tax Pipeline 25,491 27,516 61,647 54,833 NGL 27,380 10,535 38,087 9,029 Power , Fort Chicago - Corporate (19,794) (8,230) (37,194) (17,746) 33,881 30,210 69,244 46,544 Taxes (13,764) (7,401) (17,082) (9,833) 20,117 22,809 52,162 36,711 Net income for the three and six months ended June 30, 2008 was $20.1 million or $0.15 per Unit and $52.2 million or $0.39 per Unit, respectively, compared to $22.8 million or $0.17 per Unit and $36.7 million or $0.28 per Unit for the same periods in 2007, respectively, reflecting the same factors that drove the increase in distributable cash. Further, year-to-date earnings include a gain of $4.2 million related to the initial public offering of common shares by Pristine Power Inc., resulting in Fort Chicago s ownership interest in Pristine being diluted from approximately 20 percent to approximately 11 percent. The increases were offset in the second quarter and partially offset in the first half of the year by higher corporate costs, including increased recognition of foreign exchange losses previously deferred and recorded in the cumulative translation adjustment resulting from the higher year-to-date cash flows distributed by Fort Chicago s U.S. businesses. Increased corporate costs also reflect incremental administration and interest costs related to the Countryside acquisition, increased corporate office and business development activities, higher taxes resulting from increased U.S. earnings and the effect of the stronger Canadian dollar.

10 fort chicago 2008 SECOND quarter report 10 RESULTS OF OPERATIONS BY BUSINESS SEGMENT Pipeline Business Three months ended June 30 Six months ended June 30 ($ Thousands, except where noted) Net income before tax Alliance Pipeline 24,019 26,040 58,813 52,201 AEGS 1,472 1,476 2,834 2,632 25,491 27,516 61,647 54,833 Volumes Alliance Pipeline (100%) (bcf/d) AEGS (mbbls/d) (1) (1) Average daily volumes for AEGS are based on toll volumes. Alliance Pipeline Transportation revenues for the three and six months ended June 30, 2008 were $91.6 million and $191.4 million, respectively, a $2.3 million and $8.2 million increase, respectively, compared to $89.3 million and $183.1 million for the same periods last year, respectively. These increases reflect higher 2008 tolls, which include increased operating cost recoveries. Effective January 1, 2008, equipment overhaul costs, which were previously capitalized and depreciated, are being expensed. These increases were partially offset by the effect of the stronger Canadian dollar, lower cost of service recoveries in respect of interest expense due to the ongoing amortization of Alliance s long-term debt, and a reduction in the equity return due to the depreciating investment base. Net income before tax for the three months ended June 30, 2008 was $24.0 million, a $2.0 million decrease compared to $26.0 million for the same period last year, reflecting the effect of the stronger Canadian dollar and a reduction in the equity return due to the depreciating investment base. For the six months ended June 30, 2008, net income before tax was $58.8 million, a $6.6 million increase compared to $52.2 million for the same period last year. In the first quarter of 2008, Alliance received $10.3 million in full settlement of its claim in respect of CESCA s 2006 repudiation of Alliance transportation contracts. The increase in year-to-date net income before tax resulting from the settlement was partially offset by the same factors that impacted second quarter 2008 results. Transportation deliveries, including utilized Authorized Overrun Service ( AOS ), averaged bcf/d during the three months ended June 30, 2008 ( bcf/d). For the six months ended June 30, 2008, transportation deliveries averaged bcf/d ( bcf/d), a new AOS record for Alliance during this period. This record throughput reflects the reliability of Alliance s equipment and an aggressive focus on planning and scheduling of the required maintenance actions to limit outage times. In October 2007, Alliance commenced field activities on the BCX project. In the first quarter of 2008, detailed engineering activities and compressor equipment procurement was undertaken. Construction of the project, which is estimated to cost $15.2 million (100 percent - $30.4 million), commenced in April The facility is expected to be placed into service in December On March 25, 2008, Alliance and Questar Overthrust Pipeline Company entered into a joint memorandum of understanding to develop the RAP. If constructed, the proposed 42-inch pipeline, having an initial design capacity of 1.2 bcf/d, will connect Rockies natural gas with markets in the U.S. midwest and central Canada. An

11 fort chicago 2008 SECOND quarter report 11 open season was held from May 15 to June 16, 2008 to gauge shipper interest in the project. The results were sufficiently favourable to warrant additional marketing and regulatory work being undertaken. AEGS AEGS revenues for the three and six months ended June 30, 2008 were $11.2 million and $21.5 million, respectively, a $1.1 million and $2.0 million increase, respectively, compared to $10.1 million and $19.5 million for the same periods last year, respectively, reflecting increased operating and overhead cost recoveries. Net income before tax for the three months and six months ended June 30, 2008 was $1.5 million and $2.8 million, respectively, relatively unchanged from the same periods last year. Toll volumes for the three and six months ended June 30, 2008 decreased slightly as the result of a series of planned outages in May and June 2008 at the straddle plants connected to AEGS. Increased demand for natural gas in Alberta and a decline in Alberta natural gas production also resulted in reduced gas supply to the straddle plants connected to AEGS at Alberta border locations. NGL Business Three months ended June 30 Six months ended June 30 ($ Thousands, except where noted) Net income before tax 27,380 10,535 38,087 9,029 Margin-based fees under NGL Sales Agreement Estimated amount generated during period 18,334 9,026 39,556 16,080 Margin recognized from prior period (unrecognized margin generated in period) 9,848 3,727 (3,327) Amount recognized as revenue 28,182 12,753 39,556 12,753 Average daily NGL sales volumes (100%) (mbbls/d) Ethane - indigenous Propane plus NGL injections Strong worldwide demand for crude and a falling U.S. dollar were the prime drivers behind record crude oil prices. U.S. natural gas prices increased due to strong winter demand, partially offset by increased production arising from new technologies which allow producers to develop new shale formations throughout North America. Average natural gas prices increased 50 percent from US $7.54 per million British thermal units ( mmbtu ) in the second quarter of 2007 to US $11.32 per mmbtu in the second quarter of For the six months ended June 30, average natural gas prices increased 35 percent from US $7.35 per mmbtu in 2007 to US $9.95 per mmbtu in Average crude oil prices rose 91 percent from US $64.90 per barrel in the second quarter of 2007 to US $ per barrel in the second quarter of As a result, the relative value of crude oil to natural gas for the second quarter of 2008 is comparatively higher than the same period last year, with the crude oil to natural gas ratio increasing to 10.9 from 8.6. For the six months ended June 30, average crude oil prices increased 80 percent from US $61.61 per barrel in 2007 to US $ per barrel in 2008, resulting in the year-to-date crude oil to natural gas ratio increasing from 8.4 to 10.9.

12 fort chicago 2008 SECOND quarter report 12 As crude oil prices strongly influence NGL prices, fractionation margins have increased significantly. Ethane fractionation margins averaged US $0.30 per gallon in the second quarter of 2008 compared to US $0.22 per gallon in the second quarter of For the six months ended June 30, average ethane margins increased from US $0.17 per gallon in 2007 to US $0.37 per gallon in Propane plus margins averaged US $0.78 per gallon in the second quarter of 2008 compared to US $0.52 per gallon in the second quarter of For the six months ended June 30, average propane plus margins increased from US $0.44 per gallon in 2007 to US $0.79 per gallon in Mont Belvieu to Edmonton basis differentials for propane for the second quarter of 2008 increased by US $0.02 per gallon to US $0.14 per gallon versus US $0.12 cents per gallon in the same period last year. For the six months ended June 30, propane differentials were US $0.11 cents per gallon in 2008 versus US $0.12 cents per gallon in NGL volumes were 74.3 mbbls per day during the second quarter 2008, up from 65.5 mbbls per day for the same period in Year-to-date NGL volumes were 72.4 mbbls per day in 2008 versus 68.0 mbbls per day for the same period in Ethane volumes were 39.9 mbbls per day for the second quarter of 2008, up from 35.0 mbbls per day in the same period last year, and 39.7 mbbls per day year-to-date, up from 35.7 mbbls per day for the same period last year. Propane plus volumes, including injections, were 34.4 mbbls per day in the second quarter compared to 30.5 mbbls per day in the same period of 2007, while year-to-date 2008 propane plus volumes were 32.7 mbbls per day versus 32.3 mbbls per day for the same period in Increased gas volumes and higher NGL recoveries and inlet composition account for the majority of these increases. For the three and six months ended June 30, 2008, NGL revenues amounted to $58.5 million and $96.3 million, respectively (2007 $37.5 million and $61.7 million, respectively), including $40.8 million and $64.4 million of lease revenues, respectively ( $25.8 million and $37.4 million, respectively). This reflects higher cost recoveries and a significant increase in margin-based lease revenues earned and recognized relative to the same periods last year. Under GAAP, the margin-based component of the lease, which is determined on an annual basis, can only be recognized to the extent its realization is certain. Continued strong NGL market fundamentals supported the recognition of $28.2 million and $39.6 million for the three and six months ended June 30, 2008, respectively, representing all of the margin-based lease revenue generated during the first half of In comparison, Aux Sable recognized $12.8 million of margin-based lease revenues in the second quarter of 2007 (none was recognized in the first quarter of 2007), leaving $3.3 million generated but unrecognized at June 30, Operations and maintenance, natural gas, NGL and transportation costs for the three and six months ended June 30, 2008 were $27.1 million and $50.1 million, respectively (2007 $21.3 million and $41.9 million, respectively), reflecting increased power and fuel costs due to increased prices, partially offset by the effect of the stronger Canadian dollar. Aux Sable is focused on a number of initiatives to ensure the optimal level of rich gas is delivered into the Alliance pipeline for processing at the Channahon Facility. To date, these developments have largely been focused on northwest Alberta and northeast B.C. but with new oil and gas developments in the upper U.S. midwest (primarily North Dakota) and Saskatchewan, new rich gas supply opportunities are being developed by Aux Sable in these areas. Construction of Aux Sable s Heartland Off-gas Facility is progressing on budget and on schedule. The estimated capital cost of the facility remains at $22.3 million, excluding capitalized interest. Commencement of commercial operations with supply from the BA Energy Upgrader has been delayed to coincide with the start up of the upgrader.

13 fort chicago 2008 SECOND quarter report 13 In January 2008, Aux Sable and Dow Chemical entered into an exclusive strategic alliance agreement to jointly pursue new off-gas processing opportunities in Alberta. Under the terms of the agreement, Aux Sable will own and operate new off-gas facilities, while Dow Chemical will be the purchaser of all ethane/ethylene from these facilities. Aux Sable will market the propane/propylene and heavier products. This agreement is expected to enhance Aux Sable s ability to capture future off-gas processing opportunities on its 240-acre property in Fort Saskatchewan. Aux Sable has entered into confidentiality agreements with essentially all Alberta upgraders and is currently developing plans to secure commitments to process the off-gas produced by each of their facilities. Aux Sable continues to evaluate the potential opportunity to extract ethane from the Alliance pipeline in the Fort Saskatchewan area. The project has been impacted by higher capital costs and less favourable treatment under the Alberta government incentive programs, however, the strategic nature and potential value creation of this project to Alberta s petrochemical industry support its continued development. Aux Sable is continuing to develop its logistics infrastructure in the Chicago area through new and converted pipelines in order to more effectively manage NGL product storage and local distribution. Aux Sable is also developing several potential processing arrangements for NGL to be delivered directly to the Channahon Facility by truck, rail or pipeline. Aux Sable is also pursuing several growth initiatives in the upper U.S. midwest. These plans are in the early stages of development and will be further developed over the next few years. These growth initiatives are expected to provide accretive earnings in addition to the cash flow generated from Aux Sable s existing facilities. Power Business Three months ended June 30 Six months ended June 30 ($ Thousands, except where noted) Net income (loss) before tax Fort Chicago Power (1) 1,297 1,954 NRGreen East Windsor Cogeneration (101) (71) 467 (100) Pristine (571) (41) 4,103 (141) , Volumes Fort Chicago Power Electricity (MWh) 79, ,701 Steam thousand pounds ( Mlbs ) 136, ,841 Hot Water (MMBtus) 64, ,357 NRGreen Electricity (MWh) 13,310 9,862 21,807 21,058 (1) Assets acquired August 10, 2007.

14 fort chicago 2008 SECOND quarter report 14 Fort Chicago Power The discussion below compares Fort Chicago Power s results for the three and six months ended June 30, 2008 to approximate results generated during the same periods last year, based on records obtained from Countryside. The U.S. Cogeneration Facilities generated $14.4 million in revenues during the three months ended June 30, 2008, an increase of approximately $1.5 million compared to the same period last year, reflecting a significant increase in fuel costs. This increase was partially offset by the stronger Canadian dollar. For the six months ended June 30, 2008, the U.S. Cogeneration Facilities generated $28.2 million in revenues, a decrease of approximately $0.8 million compared to the same period last year. The effect of a stronger Canadian dollar, coupled with the planned outage at the Ripon Cogeneration Facility, more than offset the effect of the higher fuel costs. The District Energy Systems generated $4.9 million and $12.3 million of revenues during the three and six months ended June 30, 2008, respectively, an increase of approximately $0.6 million and $1.4 million, respectively, compared to the same periods last year. These increases are primarily attributable to higher fuel prices, which generally are used to determine customer pricing. While energy sales volumes for the three months ended June 30, 2008 were slightly lower compared to the same period last year, they were higher on a year-to-date basis. Fuel and consumable costs increased by $1.5 million to $10.6 million for the three months ended June 30, 2008, reflecting a significant increase in fuel prices, partially offset by the effect of the stronger Canadian dollar and a reduction in fuel burned due to lower sales volumes. For the six months ended June 30, 2008, fuel and consumable costs decreased by approximately $0.2 million to $24.0 million. The effect of a stronger Canadian dollar and lower sales volumes more than offset the effect of higher fuel costs. Operations and maintenance expenses amounted to $3.5 million and $7.0 million for the three and six months ended June 30, 2008, respectively, an increase of $0.4 million and $1.2 million compared to the same periods last year, respectively, primarily due to expenses associated with the accelerated major maintenance performed at the Ripon Cogeneration Facility. In the fourth quarter of 2007, Fort Chicago Power discovered damage to the power turbine at the Ripon Cogeneration Facility. In the first half of 2008, Fort Chicago Power accelerated its major maintenance schedule at this facility, which included performing an overhaul of the gas turbine and power turbine, resulting in a planned outage of approximately two weeks in the second quarter of 2008 to install the overhauled gas turbine and portions of the power turbine. Associated with this major maintenance were approximately $5.9 million in capital costs and $1.0 million in repairs and maintenance expenditures. Fort Chicago Power is pursuing insurance claims in respect of certain costs associated with this outage, although no recoveries have been accrued to date. Earnings before interest, taxes, depreciation and amortization ( EBITDA ) of $4.3 million and $7.9 million for the three and six months ended June 30, 2008, respectively, is relatively unchanged from the same periods last year. For the three and six months ended June 30, 2008, electricity volumes decreased by approximately 10 percent and 11 percent, respectively, to 79,782 MWh and 198,701 MWh, respectively, compared to the same periods last year, due primarily to the planned outage at the Ripon Cogeneration Facility and lower economic dispatch. Steam volumes for the three and six months ended June 30, 2008 decreased by approximately 6 percent and 8 percent, respectively, to 136,563 Mlbs and 373,841 Mlbs, respectively, due to the loss of the San Gabriel Cogeneration Facility steam host. District Energy water volumes of 64,884 MMBtus for the second quarter were relatively unchanged from the same period last year, while year-to-date volumes increased approximately

15 fort chicago 2008 SECOND quarter report 15 5 percent to 200,357 MMBtus due mainly to slightly cooler weather in the first quarter of 2008 compared to the same period last year. Construction of the London Cogeneration Facility continues to proceed on schedule to meet its fourth quarter 2008 on-stream date, although capital costs are expected to be slightly higher than budget. As well, Fort Chicago Power is continuing its development efforts for an expansion of the Ripon Cogeneration Facility. NRGreen For the three months ended June 30, 2008, NRGreen revenues of $0.5 million were up slightly compared to the same period last year due, mainly, to revenues generated by the Loreburn facility, which commenced operations at the end of May For the six months ended June 30, 2008, revenues of $0.9 million were relatively unchanged from the same period last year. Incremental revenues from the Loreburn facility were offset by the first quarter 2008 outage experienced at the Kerrobert facility, which resulted in no meaningful earnings from NRGreen in the first quarter of Net income before tax was $0.2 million for the three months ended June 30, 2008, a decrease of $0.3 million from the same period last year. Earnings from the Loreburn facility were offset by incremental borrowing costs related to amounts drawn from NRGreen s credit facilities and by higher general and administrative costs. For the six months ended June 30, 2008, net income before tax was $0.2 million, a decrease of $0.5 million compared to the same period last year, reflecting the impact of the first quarter 2008 outage at Kerrobert and incremental borrowing costs. The Kerrobert unit, which restarted on February 24, 2008, has not encountered any subsequent operational issues. Insurance and warranty claims are being pursued in respect of the losses incurred from this outage, as well as for the outage experienced in the fall of 2007, although no recoveries have been accrued to date. Construction of the two remaining waste heat facilities at Estlin and Alameda, Saskatchewan is nearing completion, with operations expected to commence in July and September 2008, respectively. These projects are expected to be completed on budget. East Windsor Cogeneration East Windsor Cogeneration s net income (loss) before tax for the three and six months ended June 30, 2008 was $(0.1) million and $0.5 million, respectively, and is primarily comprised of unrealized gains and losses related to interest rate and foreign currency hedges. Construction of the East Windsor Cogeneration facility is proceeding on schedule and on budget. Pristine On March 18, 2008, Pristine issued common shares through its initial public offering. Fort Chicago did not participate in the offering, resulting in a decrease of its ownership interest in Pristine from approximately 20 percent to approximately 11 percent and the recognition of a $4.8 million dilution gain in the first quarter of This gain was partially offset by Fort Chicago s share of Pristine s $0.2 million net loss for the period January 1 to March 18, 2008, after which Fort Chicago s reduced ownership no longer supports the recognition of its share of Pristine s net income or loss. In the second quarter of 2008, the dilution gain was adjusted downward by $0.6 million to $4.2 million with an offsetting increase recorded to other comprehensive income.

16 fort chicago 2008 SECOND quarter report 16 Fort Chicago - Corporate Three months ended June 30 Six months ended June 30 ($ Thousands) Net expenses Net expenses before taxes 19,794 8,230 37,194 17,746 Current taxes 11, , Future taxes 2,672 7,326 5,875 9,537 33,557 15,578 54,293 27,389 During the three and six months ended June 30, 2008, Fort Chicago Corporate incurred net expenses of $33.6 million and $54.3 million, respectively, compared to $15.6 million and $27.4 million during the same periods last year, respectively. These increases are primarily due to the recognition of $7.3 million and $14.1 million during the three and six months ended June 30, 2008, respectively, of foreign exchange losses, an increase of $7.6 million and $12.5 million, respectively, compared to the same periods last year, due primarily to increased distributions from the Partnership s U.S. investments. Interest and other finance costs increased by $1.4 million and $3.4 million, respectively, to $4.2 million and $8.9 million, respectively, due primarily to the Partnership funding the Countryside acquisition with its Revolving Credit Facility. General and administrative costs increased by $2.3 million and $3.6 million, respectively, to $4.2 million and $7.3 million, respectively, reflecting incremental administration costs related to Fort Chicago Power, and higher personnel, advisory, and due diligence costs associated with increased corporate office and business development activity. Project development costs decreased by $0.2 million and $0.9 million, respectively, to $3.0 million and $5.1 million, respectively, due primarily to lower spending on the Pacific Connector gas pipeline project. For the three and six months ended June 30, 2008, taxes increased $6.4 million and $7.5 million, respectively, reflecting higher U.S. earnings, and, for the quarter, $2.3 million of future taxes pertaining to prior period timing differences. Current taxes increased by $11.0 million and $11.1 million during the three and six months ended June 30, 2008, respectively, compared to the same periods in These increases relate to U.S. cash taxes in respect of Aux Sable, whose earnings are now fully taxable as a result of utilizing its remaining prior year loss carry-forwards. SELECTED QUARTERLY FINANCIAL INFORMATION ($ Thousands, except where noted) Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Revenues 178, , , , , , , ,165 Net income 20,117 32,045 24,910 24,536 22,809 13,902 10,067 24,001 Net income per Unit ($) Distributable cash 41,565 44,145 56,845 49,948 39,980 30,666 41,915 42,790 Distributable cash per Unit ($) Cash from operating activities 39,512 95,599 50,551 62,122 33,689 58,490 14,320 95,940

17 fort chicago 2008 SECOND quarter report 17 Significant items that impacted quarterly financial results include the following: Second quarter 2008 reflects the recognition of all margin-based lease revenues generated by Aux Sable during the period, as well as amounts generated but not recognized in the first quarter of 2008, partially offset by higher corporate costs, including foreign exchange losses and taxes. Distributable cash was also impacted by increased cash taxes as a result of Aux Sable s earnings now being fully taxable. As is the case each second and fourth quarter, cash from operating activities reflects Alliance s scheduled semi-annual interest payments. First quarter 2008 reflected incremental earnings and cash flows resulting from the CESCA settlement and the recognition of a portion of the record first quarter margin-based lease revenues generated by Aux Sable during the period. Increases to net income also reflected the Pristine dilution gain, partially offset by higher foreign exchange losses related to increased distributions from the Partnership s U.S. investments. Cash from operating activities was also impacted by changes non-cash working capital. Fourth quarter 2007 reflected record earnings and cash flows from Aux Sable, a full quarter s contribution from the August 2007 Countryside acquisition, and the impact of the reduction in federal tax rates, partially offset by higher corporate costs. Third quarter 2007 reflected record earnings and cash flows from Aux Sable and the new contribution from the Countryside acquisition. Second quarter 2007 cash from operating activities reflected working capital changes at Aux Sable. First quarter 2007 reflected no recognition of the margin-based lease revenues generated by Aux Sable during the period, which were deferred and recognized over the balance of the year. Fourth quarter 2006 net income reflected the recognition of foreign exchange losses related to increased distributions from the Partnership s U.S. investments, while cash from operating activities reflected the payment of funds from Aux Sable to BP which had accumulated during transition under the NGL Sales Agreement. Third quarter 2006 cash from operating activities reflected the accumulation of cash at Aux Sable during transition to BP under the NGL Sales Agreement. LIQUIDITY AND CAPITAL RESOURCES Overall, there has not been any significant change in the financial condition or liquidity of Fort Chicago or any of its businesses compared with their position as at December 31, Fort Chicago expects that cash from operations and from available committed credit facilities will be more than sufficient to fund distributions and planned capital expenditures. Cash and short-term investments at June 30, 2008 totalled $49.6 million ( $46.5 million), of which $10.3 million ( $9.0 million) represents funds held in trust accounts pursuant to applicable security and financing agreements. The majority of these trust funds are used by Alliance for current operating and working capital purposes, including scheduled principal and interest payments each June and December. Restricted cash in the amount of $44.9 million represents East Windsor Cogeneration cash which, pursuant to its financing agreement, is restricted to funding certain expenditures related to the construction of the East Windsor Cogeneration Facility and is, therefore, reported separately on the Partnership s Consolidated Statement of Financial Position.

18 fort chicago 2008 SECOND quarter report 18 Operating Activities Cash generated from operating activities during the first six months of 2008 was $135.1 million compared to $92.2 million for the same period last year. This increase primarily reflects higher earnings from Aux Sable and Alliance s settlement with CESCA. Financing Activities For the six months ended June 30, 2008, financing activities included: (i) the issuance of $21.7 million under NRGreen s credit facilities and $1.9 million (net of $8.3 million repayments) related to Alliance s credit facilities; (ii) the repayment of $8.2 million (net of $6.6 million issuances) under the Partnership s revolving credit facility, $2.8 million related to scheduled principal repayments on Fort Chicago senior debt, $1.0 million related to the Partnership s Convertible Debentures, Series A, which were not converted to equity upon their June 30, 2008 maturity date, $30.3 million related to scheduled principal repayments on Alliance senior debt, $1.1 million related to Aux Sable s credit facilities and $0.4 million related to the redemption of Fort Chicago Power s Exchangeable Debentures; and (iii) $66.0 million of cash distributions paid by the Partnership compared with $61.0 million in 2007, reflecting an increase in the number of outstanding Units and an increase in the monthly distribution effective November 2007 from $ per Unit to $ per Unit. For the six months ended June 30, 2007, financing activities included: (i) the issuance of $37.8 million of debt under the Partnership s revolving credit facility and $3.8 million under Aux Sable s U.S. credit facility; (ii) $61.0 million of cash distributions paid by the Partnership; and (iii) the repayment of $33.2 million of debt, of which $2.8 million related to scheduled principal repayments on Fort Chicago senior debt, $28.6 million related to scheduled principal repayments on senior debt by Alliance, and $0.2 million (net of $1.6 million issuances) related to repayments by Alliance on its credit facilities. In March 2008, NRGreen entered into credit facilities comprised of a $26.3 million Construction Facility and a $2.5 million Operating Facility (collectively the NRGreen Credit Facilities ). Upon the earlier of the completion of construction of all of the Loreburn, Estlin and Alameda Facilities or December 31, 2008, the Construction Facility converts to a two-year revolving term facility. After completion of construction, NRGreen may request that all or any part of the Construction Facility be converted into the Operating Facility by increasing the Operating Facility and decreasing the Construction Facility by the same amount. The Operating Facility is an extendible revolving facility with an initial maturity date of August 31, Interest on the NRGreen Credit Facilities is based on floating interest rates, plus applicable margins. A standby fee applies to any undrawn amounts under these facilities. On March 20, 2008, Aux Sable extended the term of its U.S. Revolving Credit Facility such that it now matures on August 16, In August 2008, this facility was amended such that the previously scheduled 20 percent repayment for August 16, 2008 is no longer required. Further, the facility commitment will be reduced by 20 percent from US$25.6 million to US$20.5 million (100 percent from US$60 million to US$48 million) on August 16, 2009 with a further reduction to zero on August 16, On May 2, 2008, the Partnership filed with Canadian securities regulators a short form base shelf prospectus, which allows the Partnership to offer for sale, from time to time, over a 25-month period, up to $1.5 billion of debt and equity, or a combination thereof. Proceeds therefrom are expected to be used to reduce outstanding indebtedness, to finance future growth opportunities (including acquisitions and investments) and/or for general partnership purposes. These securities may be offered for sale separately or together. The specific terms of any offering under this prospectus will be set forth in one or more prospectus supplements.

19 fort chicago 2008 SECOND quarter report 19 On July 17, 2008, the Partnership extended the term of its $300 million committed Revolving Credit Facility such that it now matures on April 1, Investing Activities Investing activities for the six months ended June 30, 2008, reflect capital expenditures of $64.8 million, a $30.8 million drawdown of restricted cash to fund construction costs related to the East Windsor Cogeneration Facility, and Fort Chicago s $11.3 million investment in a private solar power company. The capital expenditures relate primarily to: (i) BCX and enhancement capital in respect of Alliance ($9.8 million); (ii) Aux Sable s Heartland Off-gas Facility ($3.4 million); (iii) Fort Chicago Power s London Cogeneration Facility ($8.1 million) and major maintenance in respect of the Ripon Cogeneration Facility ($5.9 million); (iv) NRGreen s Loreburn, Estlin and Alameda Facilities ($2.0 million); and (v) the East Windsor Cogeneration Facility ($31.2 million). Asset-backed Commercial Paper During the third quarter of 2007, Alliance made an investment in asset-backed commercial paper ( ABCP ) of approximately $6.0 million (100 percent - $12.0 million), issued by a structured investment trust ( Trust ). As a result of the liquidity issues arising in the asset-backed commercial paper market, the Trust was unable to redeem this investment on its initial maturity date of August 31, A restructuring plan designed to re-establish an active market for asset-backed securities was approved by note holders on April 25, Implementation of this plan has been delayed pending a hearing by the Ontario Court of Appeal. During the first quarter of 2008, Alliance accrued an additional $0.8 million unrealized loss in respect of this investment based on its estimate of fair value. No further provision was recognized in the second quarter of Contractual Obligations and Commitments As at June 30, 2008, contractual arrangements having an aggregate value of $36.1 million exist in respect of several construction projects. DISTRIBUTIONS Policy The Partnership pays distributions on a monthly basis to Unitholders of record as at the last business day of each month on the 23rd day of the month following such record date, or if not a business day, then on the preceding business day. The Partnership s general distribution policy is to establish and maintain a sustainable and stable monthly distribution over time, having regard for the accumulated Distribution Account balance, forecast distributable cash and the Partnership s growth capital requirements. Sustainability of Distributions and Productive Capacity The Partnership intends to continue to make cash distributions although such distributions are not guaranteed and do not represent a legal obligation of the Partnership. The sustainability of distributions is a function of several factors including, among other things: the earnings and cash flows generated by the Partnership and

20 fort chicago 2008 SECOND quarter report 20 its businesses, including Alliance Pipeline, a rate-regulated business; the ongoing maintenance of each business physical and economic productive capacity; and the ability to comply with debt covenants and refinance debt as it comes due. For a complete discussion of significant risks and uncertainties affecting the Partnership and each of its businesses, see Risk Factors contained in the Annual Information Form for the year ended December 31, Distributions Paid/Payable Relative to Cash from Operating Activities and Net Income Six months ended June 30 Year ended December 31 ($ Thousands) Cash from operating activities 135,111 92, , ,463 Net income 52,162 36,711 86,157 80,954 Distributions paid/payable 66,124 61, , ,404 Excess of cash from operating activities over distributions paid/payable 68,987 31,164 81, ,059 Shortfall of net income over distributions paid/payable (13,962) (24,304) (37,542) (40,450) The excess of cash from operating activities over distributions paid/payable generally represents the cash used for maintenance capital expenditures, scheduled amortization of any long-term debt, and cash retained to fund growth, including cash held in trust. Distributions paid/payable are generally more than net income because the Partnership s net income includes certain non-cash expenses such as depreciation and future income taxes, which are not reflected in calculating the amount of cash available for distribution. Determination of Distributable Cash The amount of distributable cash earned by the Partnership is comprised of and will vary depending on: (i) distributions received/receivable from its operating businesses, which, in each case, are after providing for scheduled amortization of any long-term debt and any capital expenditures that are not growth-oriented or recoverable; (ii) any operating support payments required by any of the Partnership s businesses; (iii) all cash taxes and financing costs incurred by Fort Chicago, including scheduled principal repayments on long-term debt; (iv) the general and administrative costs of the Partnership; and (v) any cash held in reserve by the Partnership.

21 fort chicago 2008 SECOND quarter report 21 The calculation of distributable cash for the three and six months ended June 30, 2008 and 2007 is set out below. Three months ended June 30 Six months ended June 30 ($ Thousands, except where noted) Cash inflows Alliance distributions, prior to withholdings for capital expenditures and net of debt service 27,186 28,083 64,684 58,522 AEGS distributable cash, after non-recoverable capital expenditures and debt service 4,052 4,078 7,994 7,839 Aux Sable distributions, net of support payments, non-recoverable debt service costs and maintenance capital 28,607 12,610 38,847 13,740 Fort Chicago Power distributable cash, after maintenance capital expenditures and debt service (1) NRGreen distributions, prior to withholding for project development costs Interest income and other Cash outflows 61,052 45, ,923 81,246 General and administrative (4,198) (1,892) (7,264) (3,619) Interest and other finance (3,437) (2,673) (8,491) (5,179) Taxes (11,091) (22) (11,224) (106) Principal repayments on senior debt (761) (814) (1,564) (1,696) Distributable cash (2) 41,565 39,980 84,380 70,646 Distributable cash per Unit ($) (3) Distributions paid/payable 33,183 30,590 66,124 61,015 Distributions paid/payable per Unit ($) (1) Assets acquired August 10, (2) See table below for reconciliation of distributable cash to cash flows from operating activities. (3) The number of Units used to calculate distributable cash per Unit is based on the average number of Units outstanding at each record date. For the three months ended June 30, 2008, the average number of Units outstanding for this calculation was 132,788,996 ( ,226,180) and 136,446,174 ( ,483,012) on a basic and diluted basis, respectively. For the six months ended June 30, 2008, the average number of Units outstanding for this calculation was 132,302,721 ( ,214,237) and 136,464,593 ( ,483,012) on a basic and diluted basis, respectively. The number of Units outstanding would increase by 2,261,621 (2007 5,174,167) Units if the outstanding Convertible Debentures as at June 30, 2008 were converted into Units. For the three and six months ended June 30, 2008, distributable cash increased by $1.6 million and $13.7 million, respectively, to $41.6 million and $84.4 million, respectively, due primarily to record NGL margins for the first half of 2008, partially offset by higher cash taxes pertaining to Aux Sable, whose earnings are now fully taxable as a result of utilizing it s remaining prior year loss carry-forwards. Year-to-date distributable cash also increased due to funds received from the settlement of Alliance s claim against CESCA in the first quarter of Fort Chicago Power generated distributable cash of $0.9 million and $0.5 million, respectively, for the three and six months ended June 30, 2008, reflecting positive EBITDA, partially offset by higher costs associated with the accelerated major maintenance at the Ripon Cogeneration Facility. Distributable cash for the three and six months ended June 30, 2008 also reflects higher Partnership corporate costs due to incremental administration and interest costs related to the Countryside acquisition, and increased corporate office and business development activity, and the effect of the stronger Canadian dollar.

22 fort chicago 2008 SECOND quarter report 22 Reconciliation of Distributable Cash to Cash Flow from Operating Activities Three months ended June 30 Six months ended June 30 ($ Thousands) Consolidated cash flow from operating activities 39,512 33, ,111 92,179 Deduct: Cash flow used by (generated from) operating activities applicable to jointly held businesses (1) 8,236 (3,630) (45,168) (31,905) Cash flow from operating activities applicable to wholly-owned businesses (2) 47,748 30,059 89,943 60,274 Add (deduct) amounts applicable to wholly-owned businesses: Project development costs 3,386 3,250 5,429 5,984 Change in non-cash working capital (6,323) (2,385) (7,446) (2,346) Principal repayments on senior notes (1,357) (1,378) (2,756) (2,824) Maintenance capital expenditures (3,938) (7,450) Distributions earned greater than distributions received (3) 2,049 10,434 6,660 9,558 Distributable cash 41,565 39,980 84,380 70,646 (1) Represents cash flow from operating activities applicable to jointly held businesses which is not under the sole control of the Partnership and, as a consequence, is not included in distributable cash until such time as distributions are declared by the jointly held businesses. (2) Net of support payments made to Alliance Canada Marketing of $0.7 million and $1.7 million for the three and six months ended June 30, 2008, respectively (2007 $0.7 million and $1.5 million, respectively). (3) Represents the difference between distributions declared by jointly held businesses and distributions received. Distribution Account The Partnership s Distribution Account reflects the extent to which distributable cash earned by the Partnership s operating businesses exceeds distributions paid/payable and project development costs, in each case, since inception. Project development costs are funded from the Distribution Account and are excluded from the calculation of distributable cash as they represent discretionary costs, the recoverability of which has not been established, and are incurred to assess the commercial viability of new greenfield business initiatives unrelated to the Partnership s existing operating businesses. The Distribution Account does not represent a cash balance, as cash retained by the Partnership is generally used to reduce debt or fund investments, including acquisitions, expected to generate additional distributable cash and earnings. During the first three and six months of 2008, the Distribution Account increased by $4.7 million and $11.9 million, respectively, to $81.7 million as at June 30, 2008, primarily reflecting strong cash flow generation from Aux Sable and funds received in the first quarter of 2008 in respect of the CESCA settlement, which more than offset higher current taxes, distributions and project development costs of $3.7 million and $6.3 million for the three and six month periods, respectively (2007 $4.4 million and $7.6 million, respectively).

23 fort chicago 2008 SECOND quarter report 23 Three months ended June 30 Six months ended June 30 ($ Thousands) Beginning balance 77,064 27,952 69,799 30,989 Distributable cash in excess of distributions paid/payable 8,382 9,390 18,256 9,631 Project development costs (1) (3,718) (4,368) (6,327) (7,646) Ending balance 81,728 32,974 81,728 32,974 (1) Reflects project development costs funded by the Partnership, the majority of which relate to Jordan Cove and Pacific Connector. RECENT ACCOUNTING PRONOUNCEMENTS In February 2008, the CICA Accounting Standards Board confirmed that all Canadian publicly accountable enterprises will be required to retrospectively adopt International Financial Reporting Standards ( IFRS ) for interim and annual reporting purposes for fiscal years beginning on or after January 1, Fort Chicago is currently assessing the impact of the convergence of Canadian GAAP with IFRS on its results of operations, financial position and disclosures. Project teams have been established to plan and execute this transition to ensure successful implementation within the required timeframe. Disclosure of the key elements of the plan and progress on the project will be provided as the information becomes available during the transition period.

24 fort chicago 2008 SECOND quarter report 24 Consolidated Statement of Financial Position ($ Thousands; unaudited) June 30, 2008 December 31, 2007 Assets Current assets Cash and short-term investments 49,614 47,191 Restricted cash 44,850 75,236 Transportation security deposits and revenue adjustments 1,955 5,991 Receivables 69,201 59,568 Inventory 3,537 2,623 Prepaid expenses and other 5,809 6, , ,930 Long-term receivables 232, ,701 Pipeline, plant and other capital assets 2,355,062 2,326,057 Intangible assets 98,429 98,876 Goodwill 19,901 19,104 Other assets 30,268 11,696 2,910,664 2,871,364 Liabilities Current liabilities Payables 88,893 69,677 Transportation security deposits and revenue adjustments 6,130 5,275 Distribution payable 11,110 10,968 Current portion of long-term senior debt and capital leases 69,709 65,292 Subordinated convertible debentures and exchangeable debentures 23,487 46, , ,995 Long-term senior debt and capital leases 1,647,496 1,652,133 Subordinated convertible debentures 23,836 23,783 Future taxes 210, ,985 Other long-term liabilities 38,767 43,015 2,120,359 2,115,911 Partners Equity Partners capital account 1,013, ,294 Cumulative other comprehensive loss (75,261) (102,092) Cumulative net income 536, ,644 Cumulative distributions (684,518) (618,393) 790, ,453 2,910,664 2,871,364 See accompanying Notes to the Consolidated Financial Statements

25 fort chicago 2008 SECOND quarter report 25 Consolidated Statement of income and cumulative income Three months ended June 30 Six months ended June 30 ($ Thousands, except per unit amounts; unaudited) Revenues Operating revenues 178, , , ,921 Interest and other (118) 1,770 16,330 3, , , , ,152 Expenses Operations and maintenance 60,073 32, ,321 65,940 Depreciation and amortization 30,805 29,866 62,586 61,001 Interest and other finance 26,352 26,766 54,719 54,136 General, administrative and project development 20,100 17,277 36,800 32,766 Foreign exchange and other 7,473 (215) 14,231 1, , , , ,608 Net income before taxes 33,881 30,210 69,244 46,544 Current taxes 11, , Future taxes 2,659 7,370 5,811 9,712 Net income 20,117 22,809 52,162 36,711 Cumulative net income at the beginning of the period 516, , , ,487 Cumulative net income at the end of the period 536, , , ,198 Net income per Unit basic and diluted Consolidated Statement of comprehensive income and other comprehensive income Three months ended June 30 Six months ended June 30 ($ Thousands; unaudited) Net income 20,117 22,809 52,162 36,711 Other comprehensive income (loss), net of taxes Cumulative translation adjustment Unrealized foreign exchange gain (loss) on translation of self-sustaining foreign operations (3,186) (27,997) 9,837 (31,817) Deemed realization of cumulative translation adjustment reclassified to net income 7,054 2,140 15,897 4,324 Gain (loss) on hedge of self-sustaining foreign operation 744 (2,440) Other , ,828 (25,137) 26,831 (26,773) Comprehensive income (loss) 24,945 (2,328) 78,993 9,938 Cumulative other comprehensive loss at the beginning of the period (80,089) (72,528) (102,092) (70,892) Other comprehensive income (loss), net of taxes 4,828 (25,137) 26,831 (26,773) Cumulative other comprehensive loss at the end of the period (75,261) (97,665) (75,261) (97,665) See accompanying Notes to the Consolidated Financial Statements

26 fort chicago 2008 SECOND quarter report 26 Consolidated Statement of cash flows Unaudited Consolidated Financial Statements of FORT CHICAGO ENERGY PARTNERS L.P. For the three and six months ended June 30, 2008 Three months ended June 30 Six months ended June 30 ($ Thousands; unaudited) Operating Net income 20,117 22,809 52,162 36,711 Less: Non-cash transportation revenue (2,760) (3,891) (3,508) (10,094) Add: Depreciation, amortization and other non-cash items 32,319 30,567 56,564 60,057 Unrealized foreign exchange loss (gain) 8,039 (912) 14, Future taxes 2,669 7,370 5,811 9,712 Changes in non-cash working capital (20,872) (22,254) 9,378 (4,821) Financing 39,512 33, ,111 92,179 Long-term debt issued, net of issue costs 6,800 29,465 37,468 43,141 Long-term debt repaid (50,718) (30,570) (58,863) (33,205) Distributions paid (33,062) (30,613) (65,983) (60,993) Other (1,258) (402) Investing (78,238) (31,718) (87,780) (51,057) Pipeline, plant and other capital assets (36,648) (18,412) (64,768) (31,658) Restricted cash 20,189 30,797 Other (11,307) Changes in non-cash investing working capital (5,615) (1,514) (285) (4,557) (22,074) (19,926) (45,563) (36,215) Increase in cash and short-term investments before the effect of foreign exchange rate changes on cash and short-term investments (60,800) (17,955) 1,768 4,907 Effect of foreign exchange rate changes on cash and short-term investments (399) (2,853) 655 (3,103) Cash and short-term investments at the beginning of the period 110,813 67,330 47,191 44,718 Cash and short-term investments at the end of the period 49,614 46,522 49,614 46,522 Cash and short-term investments 39,315 37,529 39,315 37,529 Cash and short-term investments in trust 10,299 8,993 10,299 8,993 49,614 46,522 49,614 46,522 Supplemental disclosure of cash flow information Interest paid 49,171 48,319 56,617 52,932 Taxes paid, net of refunds received , See accompanying Notes to the Consolidated Financial Statements

27 fort chicago 2008 SECOND quarter report 27 notes to consolidated financial statements Three and six months ended June 30, 2008 and 2007 ($ Thousands, except where noted; unaudited) 1. Business and Structure of the Partnership Fort Chicago Energy Partners L.P. (the Partnership ) is a publicly traded limited partnership, which was originally created under the laws of the Province of Alberta on October 9, The Partnership s principal investments are in pipeline, NGL and power businesses. The pipeline business is comprised of Alliance Pipeline Limited Partnership ( Alliance Canada ), Alliance Pipeline L.P. ( Alliance U.S. and, together with Alliance Canada, and each of their managing general partners, collectively referred to as Alliance or Alliance Pipeline ) and Alberta Ethane Gathering System L.P. (together with its general partner, collectively referred to as AEGS ). The NGL business is comprised of Aux Sable Canada L.P. ( Aux Sable Canada ), Sable Canada NGL Limited Partnership ( Sable Canada ), Aux Sable Liquid Products L.P. ( Aux Sable U.S. and together with Aux Sable Canada, Sable Canada, and each of their managing general partners, collectively referred to as Aux Sable ) and Alliance Canada Marketing L.P. (together with its general partner, collectively referred to as Alliance Canada Marketing and, together with Aux Sable, collectively referred to as the NGL Business ). The power business is comprised of Fort Chicago Power (formerly Countryside Power Income Fund ), NRGreen Power Limited Partnership (together with its managing general partner, referred to as NRGreen ), East Windsor Cogeneration LP (together with its managing general partner, referred to as East Windsor Cogeneration ), and Pristine Power Inc. ( Pristine ). During the first six months of 2008, the Partnership made contributions to Aux Sable Canada in the aggregate amount of $4.0 million, thereby increasing its ownership interest in Aux Sable Canada from 46.9 percent to 47.7 percent. 2. Basis of Presentation These interim consolidated financial statements of the Partnership have been prepared by management in accordance with Canadian generally accepted accounting principles ( GAAP ) following the same accounting policies and methods of computation as the consolidated financial statements for the fiscal year ended December 31, These interim consolidated financial statements include the accounts of the Partnership and its intermediary subsidiary partnerships and corporations (collectively Fort Chicago ), AEGS and Fort Chicago Power and the Partnership s proportionate interests in Alliance, Aux Sable, Alliance Canada Marketing, NRGreen and East Windsor Cogeneration, which are jointly controlled businesses and are, therefore, proportionately consolidated. Operating results for the three and six months ended June 30, 2008 and June 30, 2007 are not necessarily indicative of the results for the full year. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the Partnership s annual report for the year ended December 31, New Accounting Policies Effective January 1, 2008, the Partnership adopted the new CICA Handbook Sections 1535 Capital Disclosures, 3862 Financial Instruments Presentation and 3863 Financial Instruments Disclosures (note 5). The adoption of these new standards requires additional disclosures in the following areas:

28 fort chicago 2008 SECOND quarter report 28 (a) Capital Disclosures The new standard establishes qualitative and quantitative disclosures about the Partnership s objectives, policies and processes for managing capital. It also requires disclosure of externally imposed capital requirements. Information related to comparative years has been provided in accordance with the transitional provisions of the new standard. (b) Financial Instruments The new standards replace Handbook Section 3861 Financial Instruments Disclosure and Presentation, revising and enhancing disclosure requirements but carrying forward unchanged presentation requirements. The new requirements expand disclosure about the significance of financial instruments to the Partnership s financial position and performance, the nature and extent of risks arising from financial instruments, and how the Partnership manages these risks. Information related to comparative years has been provided in accordance with the transitional provisions for the new standards. New Accounting Pronouncements Effective January 1, 2009, the Partnership will adopt the new CICA Handbook Section 3064 Goodwill and Intangible Assets. The new standard replaces Handbook Section 3062 Goodwill and Other Intangible Assets, establishing standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets. Adoption of this new standard is not expected to have a material impact on the Partnership. In February 2008, the CICA Accounting Standards Board confirmed that all Canadian publicly accountable enterprises will be required to retrospectively adopt International Financial Reporting Standards ( IFRS ) for interim and annual reporting purposes for fiscal years beginning on or after January 1, Fort Chicago is currently assessing the impact of the convergence of Canadian GAAP with IFRS on its results of operations, financial position and disclosures. 4. Partners Capital (i) Authorized The Partnership is authorized to issue an unlimited number of Class A Units ( Class A Units or Units ) and Class B Units, issuable in series. (ii) Issued Units Number Value Number Value January 1 opening balance 131,668, , ,030, ,595 Convertible Debentures converted into Units, net of $5 ( $16) of issue costs 240,752 2, ,442 1,491 March ,908, , ,197, ,086 Convertible Debentures converted into Units, net of nil ( $9) issue costs 2,202,039 19, , June ,110,877 1,013, ,308, ,077

29 fort chicago 2008 SECOND quarter report 29 The weighted average number of Units outstanding used to determine net income per Unit on a basic and diluted basis for the three months ended June 30, 2008 was 132,134,520 ( ,238,727) and 136,372,498 ( ,483,012), respectively. The weighted average number of Units outstanding used to determine net income per Unit on a basic and diluted basis for the six months ended June 30, 2008 was 131,941,456 ( ,175,735) and 136,372,498 ( ,483,012), respectively. 5. Financial Instruments and Risk Management Financial Instruments The composition of the Partnership s financial instruments by classification and their carrying values are summarized in the table below: June 30, 2008 December 31, 2007 Assets held-for-trading 99, ,302 Measured at fair value. Cash and short-term investments Restricted cash Prepaid assets and other Other assets Includes derivative financial assets measured at fair value. For the three and six months ended June 30, 2008, net income before tax includes a fair value loss of $0.2 million (2007 nil) and a gain of $0.2 million (2007 nil), respectively. Includes investments in debt instruments measured at fair value. For the three and six months ended June 30, 2008, net income before tax includes a fair value loss of nil (2007 nil) and $0.8 million (2007 nil), respectively. Loans and receivables 303, ,260 Measured at amortized cost, which approximates fair value. For the three and six months ended June 30, 2008, no interest revenue Transportation security deposits and revenue was earned in respect of these assets (2007 nil). adjustments Receivables Long-term receivables Assets available-for-sale 23,976 3,933 Measured at fair value. Includes investments in equity instruments Other assets measured at fair value where quoted market prices exist, otherwise at cost. For the three and six months ended June 30, 2008, an after-tax fair value gain of $0.4 million (2007 nil) and $3.9 million (2007 nil), respectively, was recognized in other comprehensive income. Liabilities held-for-trading 23,487 23,920 Measured at fair value. For the three and six months ended June Exchangeable debentures 30, 2008, no fair value adjustment was recognized in net income before tax (2007 nil). Other financial liabilities 1,871,065 1,878,355 Measured at amortized cost. Payables Carrying value approximates fair value. Transportation security deposits Distribution payable Other long-term liabilities, excluding asset retirement obligations Senior debt and capital leases Carrying value of $1.7 billion ( $1.7 billion), compared to fair value of $1.8 billion ( $1.8 billion). For the three and six months ended June 30, 2008, net income before tax includes interest expense of $25.1 million (2007 $25.8 million) and $52.2 million ( $52.1 million), respectively. Subordinated convertible debentures Carrying value of $23.8 million ( $46.6 million), compared to fair value of $25.5 million ( $52.4 million). For the three and six months ended June 30, 2008, net income before tax includes interest expense of $0.9 million (2007 $1.0 million) and $1.8 million ( $2.0 million), respectively.

30 fort chicago 2008 SECOND quarter report 30 Currency Risk At June 30, 2008, approximately 42 percent of Fort Chicago s net assets were denominated in U.S. dollars, exposing the Partnership to fluctuations in the foreign exchange rate between Canadian and U.S. dollars. For the three and six months ended June 30, 2008, the pro forma impact on net income of a one Canadian cent movement in the foreign exchange rate with the U.S. would be $0.2 million and $0.3 million, respectively. The Partnership utilizes U.S. denominated debt to hedge a portion of the net investment in its self-sustaining U.S. operations. To the extent these hedges are deemed to be effective, any such gains or losses are recorded in other comprehensive income. For the three and six months ended June 30, 2008, a $0.7 million gain (2007 nil) and $2.4 million loss (2007 nil), respectively, has been recognized in other comprehensive income (2007 nil). Interest Rate Risk At June 30, 2008, 18 percent of consolidated long-term debt was floating-rate debt ( percent). For the three and six months ended June 30, 2008, the pro forma impact on net income of a 100 basis point movement in interest rates would be $0.8 million and $1.5 million, respectively. Fort Chicago and its businesses periodically enter into interest rate swaps to manage interest rate exposures. No material contracts were in place as at June 30, Credit Risk Fort Chicago and its businesses are exposed to credit risk as their revenues are dependent upon the ability of customers to fulfill their contractual obligations, the failure of which could adversely affect the ability of Fort Chicago and its businesses to recover their operating and financing costs or make distributions. In the case of Alliance, this exposure is reduced, in part, by requiring shippers to provide letters of credit or other suitable security unless they maintain specified credit ratings or a suitable financial position. Commodity Risk Through Fort Chicago s ownership interest in the NGL Business, Fort Chicago is exposed to fluctuations in the prices of NGL and natural gas. This exposure has been significantly reduced with the establishment of the NGL Sales Agreement. Management continues to monitor this exposure, but has not entered into any material hedges to reduce this exposure further. Liquidity Risk Fort Chicago and its businesses manage their liquidity requirements, utilizing cash from operations, excess cash and undrawn committed credit facilities. The Partnership also has the ability to access up to $1.5 billion of public debt and equity, subject to market conditions, under its short form base shelf prospectus, filed with Canadian securities regulators May 2, The Partnership believes these sources of funding are more than sufficient to meet its expected liquidity requirements. All financial liabilities classified as current on the balance sheet are expected to be settled within one year.

31 fort chicago 2008 SECOND quarter report 31 Capital Management The Partnership is committed to maintaining a prudent capital structure comprised primarily of equity and long-term amortizing senior debt, backed with investment grade credit ratings. At June 30, 2008, substantially all of its consolidated debt is long-term and, with the exception of its Convertible Unsecured Subordinated Debentures, Exchangeable Debentures and borrowings under long-term revolving credit facilities, contain amortization periods that are designed to provide for the repayment of all principal over the estimated useful economic life of the applicable underlying assets. This debt is generally issued by the Partnership s subsidiaries and operating businesses, on a non-recourse basis, bearing fixed-rates of interest, insulating the Partnership and its businesses from potentially higher future interest rates and reducing the default risk associated with any one operating entity. Canadian and U.S. denominated debt are used to match the currency of the underlying assets being financed and thereby serve as a partial hedge against any future movements in the Canadian/U.S. dollar exchange rate. The Partnership and its operating businesses also maintain committed credit facilities to fund operating or capital requirements that, from time to time, may be in excess of their available cash balances. Each debt agreement contains covenants customary for such issuances, which are monitored on an ongoing basis. As at June 30, 2008, Fort Chicago and each of its operating businesses are in compliance with their respective debt agreements. This strategy remains unchanged from December 31, The Partnership s components of capital are summarized below: June 30, 2008 December 31, 2007 Senior debt, capital leases and exchangeable debentures 1,740,692 1,741,344 Subordinated convertible debentures 23,836 46,647 Partners equity 790, ,453 Total capital 2,554,833 2,543, Segmented Information Pipeline NGL Power Corporate (1) Total (2) Three months ended June Revenues (3) 102,854 99,465 58,450 37,496 19, , ,945 Operations and maintenance (3) 20,597 12,399 27,088 21,348 14, ,073 32,041 Depreciation and amortization 26,208 27, ,462 2, , ,805 29,866 Interest and other finance 21,696 23, ,240 2,794 26,352 26,766 General, administrative and project development 8,862 8,413 3,104 3, (87) 7,239 5,090 20,100 17,277 Foreign exchange and other (14) ,349 (281) 7,473 (215) Net income (loss) before taxes 25,491 27,516 27,380 10, (19,794) (8,230) 33,881 30,210 Total assets 2,275,902 2,377, , , ,336 39,330 13,161 15,745 2,910,664 2,601,670 Capital expenditures 4,699 4,945 1,716 1,515 30,170 11, ,648 18,412

32 fort chicago 2008 SECOND quarter report 32 Pipeline NGL Power Corporate (1) Total (2) Six months ended June Revenues (3) (4) 212, ,618 96,306 61,742 45, , ,152 Operations and maintenance (3) 36,605 27,645 50,068 41,890 31, ,321 65,940 Depreciation and amortization 53,537 56,086 1,388 2,979 5, ,225 1,747 62,586 61,001 Interest and other finance 44,630 47, ,859 5,440 54,719 54,136 General, administrative and project development 16,461 16,064 6,351 7,040 1, ,348 9,569 36,800 32,766 Foreign exchange and other (15) ,146 1,526 14,231 1,765 Net income (loss) before taxes 61,647 54,833 38,087 9,029 6, (37,194) (17,746) 69,244 46,544 Total assets 2,275,902 2,377, , , ,336 39,330 13,161 15,745 2,910,664 2,601,670 Capital expenditures 9,823 9,181 4,246 6,188 50,283 15, ,768 31,658 (1) Reflects unallocated amounts applicable to Fort Chicago s head office activities. Corporate office general and administrative costs for the three and six months ended June 30, 2008 include project development costs of $3.0 million ( $3.3 million) and $5.1 million (2007 $6.0 million), respectively. (2) After giving effect to intersegment eliminations and allocations to businesses. (3) For the three months ended June 30, 2008, Pipeline revenues include $1.8 million ( $1.7 million) of transportation revenue from the NGL Business that eliminates upon consolidation. For the six months ended June 30, 2008, Pipeline revenues include $3.5 million ( $3.7 million) of transportation revenue from the NGL Business that eliminates upon consolidation. The operations and maintenance costs of the NGL Business include the corresponding cost amount. (4) For the six months ended June 30, 2008, Pipeline revenues include $10.3 million received by Alliance in settlement from Calpine Energy Services Canada Partnership in connection with the repudiation of its Alliance transportation contracts (2007 nil). Also for the six months ended June 30, 2008, Power revenues include a $4.2 million gain (2007 nil) related to the initial public offering of common shares by Pristine, which resulted in Fort Chicago s ownership interest in Pristine being diluted from approximately 20 percent to approximately 11 percent.

33 fort chicago 2008 SECOND quarter report Recent Tax Developments On June 22, 2007, Bill C-52, an Act to implement certain tax legislation relating to the taxation of specified investment flow-through entities, became law. Consequently, a portion of the Partnership s taxable income will be subject to 29.5 percent tax, similar to that of a corporation, commencing in 2011, provided it complies with the related normal growth guidelines. GAAP requires the estimated future tax liability related to this legislation to be recorded commencing in the period such legislation is substantially enacted. As at June 30, 2008, Fort Chicago recognized a future tax asset of $0.4 million on temporary differences applicable to the Partnership. To the extent that temporary differences change in subsequent periods, future tax will be recorded at that time. 8. Commitments As at June 30, 2008, contractual arrangements having an aggregate value of $36.1 million exist in respect of several construction projects. 9. Subsequent Event On July 22, 2008, the Partnership declared its July distribution of $ per Unit, payable on August 22, 2008 to Unitholders of record on July 31, Comparative Figures Certain comparative figures have been reclassified to conform to the presentation adopted in 2008.

34 fort chicago 2008 SECOND quarter report 34 Executive Officers from left to right: Stephen H. White, President & CEO, Kevan S. King, Vice President, General Counsel & Secretary, Hume D. Kyle, Vice President, Finance & CFO, John J. O Rourke, Vice President, Power, Vern A. Wadey, Vice President, Business Development corporate and investor information Officers Verne G. Johnson Chairman Stephen H. White President and Chief Executive Officer Kevan S. King Vice President, General Counsel and Secretary Hume D. Kyle Vice President, Finance and Chief Financial Officer John J. O Rourke Vice President, Power Vern A. Wadey Vice President, Business Development Theresa Jang Controller Board Of Directors David J. Drybrough (1, 2), Winnipeg, Manitoba John E. Feick (2, 3), Calgary, Alberta Robert J. Iverach (1, 2), Calgary, Alberta Verne G. Johnson (2, 3), Calgary, Alberta Rebecca A. McDonald (1, 3), Houston, Texas Stephen W.C. Mulherin (1, 3), Calgary, Alberta Robert T.F. Reid (1, 3), White Rock, British Columbia Bertrand A. Valdman (1, 2), Bellevue, Washington Stephen H. White, Calgary, Alberta Head Office Fort Chicago Energy Partners L.P. 440, 222 3rd Avenue S.W. Calgary, Alberta T2P OB4 Phone: (403) Fax: (403) Unitholder Inquiries If you have inquiries regarding the DRIP, address information, Unit transfers, distributions, or duplicate mailings, please contact our Transfer Agent and Registrar, Computershare Trust Company of Canada. For all other inquiries, please contact Fort Chicago s Investor Relations personnel or visit Fort Chicago s website. Investor Relations Fort Chicago Energy Partners L.P. Phone: (403) investor-relations@fortchicago.com Website: Transfer Agent and Registrar Computershare Trust Company Of Canada 600, 530 8th Avenue S.W. Calgary, Alberta T2P 3S8 Phone: Toll Free Fax: Computershare also has offices in Vancouver, Toronto, Winnipeg, Montreal (1) Member of the Audit Committee (2) Member of the Corporate Governance and Nominating Committee (3) Member of the Compensation Committee