Hydroelectric, Renewables

Ontario Power Generation announces sale of four hydroelectric stations to Brascan


TORONTO, Can., March 8, 2002 — Ontario Power Generation (OPG) has announced the sale of four hydroelectric stations located on the Mississagi River, east of Sault Ste. Marie, to Brascan Corp. for Cdn $340 million.

The four hydroelectric stations have a combined generating capacity of almost 490 megawatts (MW). The Mississagi stations were built between 1950 and 1970. They were identified by OPG in July 2001 as part of the company’s effort to reduce its share of generating capacity in Ontario’s competitive electricity marketplace. OPG’s operating license requires the company to decontrol 4,000 MW of price setting generation within 42 months of market opening.

“Today’s announcement demonstrates OPG’s commitment to meet its Ontario Energy Board license condition and the shareholder’s call for us to decontrol as quickly as possible,” said Ron Osborne, OPG President and CEO. “This sale comes as a result of an open and international auction process that places almost 500 MW of generation in the hands of another competitor. By acquiring these assets, Brascan improves competition in the Ontario electricity marketplace. This sale provides good value for OPG, the shareholder – the Province of Ontario – employees and the community.”

Output from these (peaking) stations is dependent on water availability. Combined, the stations provide an average annual electricity output of about 0.7 terrawatt hours (TWh), enough power to run a city the size of Sudbury for almost one year.

This transaction, which is expected to close around the time of the market opening in early May 2002, includes the following assets:
* Wells Generating Station, a two-unit generating station located about 110 kilometres east of Sault Ste. Marie. It was built between 1968 and 1970 and has an installed capacity of 239 MW.
* Aubrey Falls Generating Station, a two-unit generating station about 110 kilometres northeast of Sault Ste. Marie. It was built by the former Ontario Hydro between 1966 and 1969, and has as installed capacity of 162 MW.
* George W. Rayner Generating Station, a two-unit generating station located about 100 kilometres east of Sault Ste. Marie with an installed capacity of 46 MW. It was built between 1947 and 1950, and was the first station built on the Mississagi River.
* Red Rock Falls Generating Station, a two-unit generation station about 100 kilometres east of Sault Ste. Marie. It was built between 1958 and 1961 with an installed capacity of 41MW.
* Four water storage dams on Rocky Island Lake, built in 1949, which provide storage for all of the hydroelectric facilities located along the Mississagi River. The four dams – Control Dam, Side Dam No. 1, Side Dam No. 2 and Round Lake Dam -facilitates the peaking operation of these power plants.
* The Algoma Service Centre, a facility located near the Rayner and Wells Generating Stations, serves as an office, warehouse and workshop for the Mississagi River facilities.
“With the North American power generation business representing a significant part of Brascan’s growth strategy, this transaction positions Brascan as a key participant in the Ontario deregulated electricity markets. We continue to add hydroelectric power generation capacity and interconnections in order to link the Northeast power grid,” commented Harry Goldgut, Chief Executive Officer of Brascan Power. “The four Mississagi power plants expand our total hydroelectric generating capacity to 1,500 megawatts and our total number of generating stations to 31 across Ontario, Quebec, Maine, British Columbia and Louisiana. The plants are in excellent physical condition, have low operating costs, long-life expectancy and important interconnections through high voltage transmission lines with Hydro One Networks.”

“In addition,” Goldgut stated, “the Mississagi plants have special value to Brascan as they can be operated in conjunction with our twelve other hydroelectric power plants in northern Ontario, in order to improve operating flexibility. They also fit strategically with Brascan’s interconnection being developed between Ontario and Michigan, and our existing interconnection between Ontario and Quebec.”

Ontario Power Generation is an Ontario based company, whose principal business is the generation and sale of electricity to customers in Ontario and to interconnected markets. OPG’s goal is to be a premier North American energy company, while operating in a safe, open and environmentally responsible manner. Our focus is on producing reliable electricity from our competitive generation assets; power trading; and commercial energy sales.

Brascan Corporation owns, manages and builds businesses which generate sustainable cash flows. Current operations are largely in the real estate, financial and power generation sectors. Brascan Power has developed and successfully operated hydroelectric power facilities in North and South America for over 100 years. Brascan is listed on The Toronto Stock Exchange under the symbol BNN.A and the New York Stock Exchange under the symbol BNN.

For more information, please visit the companies’ web sites at www.opg.com or www.brascancorp.com.