EPCOR Power L.P. announces a 10-year extension to the Power Purchase Arrangement

EPCOR Power L.P. (the Partnership) announced that it has reached a 10-year extension on its power purchase agreement (PPA) as a result of a competitive power acquisition process with Public Service Company of Colorado (PSCo), conducting business in Colorado as Xcel Energy, for the output of the Partnership's Manchief power plant.

Electricity generated from the Manchief power plant is currently sold to Xcel Energy under two power purchase agreements, both of which will expire on April 30, 2012. The 10-year extension, on substantially similar terms and arrangements as the existing PPAs, applies to the entire output of the plant under a tolling arrangement. Under the terms of the PPA extension, the capacity payments starting in May 2012 would be approximately 15% lower than under the existing PPA.

The Partnership and PSCo have also signed an Option Agreement under which PSCo has the right, during the latter part of the PPA extension term, to acquire the Manchief power plant. If PSCo exercises the purchase option, the Partnership would receive a fixed purchase price, as specified in the Option Agreement, which the Partnership believes will maintain the economic value of the 10-year PPA extension and compensate the Partnership for the power plant's expected residual value.

"We are pleased to have reached an agreement to extend the term of the PPA with Xcel Energy for an additional 10 years" said Brian Vaasjo, President, EPCOR Power Services Ltd., the General Partner of the Partnership. "This PPA term extension aligns with the Partnership's goal of providing unitholders with long-term stability and sustainable cash distributions."

The Manchief power plant was acquired by the Partnership in 2004 and is an approximately 300 megawatt, natural gas-fired facility located near Brush, Colorado.