ATCO Ltd. Annual Report 2014

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FY2014 Annual Report · ATCO Ltd.

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4 ATCO LTD.
ANNUAL R E PORT

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0
2

CHAPTER TITLE FOR EASY REFERENCE 1

ATCO MEXICO

MEXICO

ATCO GAS
AUSTRALIA

ATCO POWER
AUSTRALIA

ATCO POWER

ATCO ENERGY
SOLUTIONS

ATCO
STRUCTURES
& LOGISTICS

ATCO
SUSTAINABLE
COMMUNITIES

ENERGY

STRUCTURES
& LOGISTICS

AUSTRALIA

ATCO
ELECTRIC

ATCO
GAS

UTILITIES

ATCO
PIPELINES

With more than 9,000 employees and assets of

approximately $18 billion, ATCO is a diversified

global corporation delivering service excellence

and innovative business solutions through leading

companies engaged in Structures & Logistics

(manufacturing, logistics and noise abatement),

Utilities (pipelines, natural gas and electricity

transmission and distribution) and Energy

(power generation and sales, industrial water

infrastructure, natural gas gathering, processing,

storage and liquids extraction).

Table of Contents

Financial Highlights

Return on Investment

Letter to Share Owners

STRUCTURES & LOGISTICS

 ATCO Structures & Logistics

Diversifying Alberta’s Electricity Fuel Sources

UTILITIES

 ATCO Electric

 ATCO in the North

 ATCO Gas

 ATCO Pipelines

MEXICO

ENERGY

 ATCO Power

 ATCO Energy Solutions

AUSTRALIA

 ATCO Australia

Indigenous Partnerships

ATCO Sustainable Communities

ATCO in the Community

FINANCIAL EXCELLENCE 2014

 Consolidated Annual Results

 Consolidated Operating Summary

ATCO Ltd. Directors

ATCO Ltd. Officers

ATCO’s Beautiful Alberta Heritage

General Information

Dawn breaks over a marsh
near Namao, Alberta, 20 km
north of Edmonton.

ATCO’s Global Operations

ATCO Structures & Logistics
Complete infrastructure solutions
to customers worldwide, including
workforce housing, innovative
modular facilities, construction,
site support services, logistics,
operations management, and noise
and emission reduction solutions.

Manufacturing facilities

Offices and/or operations

ATCO Sustainable
Communities Projects

Full range of pre-fabricated,
culturally-sensitive building
solutions for Indigenous and other
remote communities.

Indigenous
Partnerships

Building and sustaining Indigenous
relationships helps form the
foundation for how ATCO does
business and is reflected through
both our longstanding relationships
with Indigenous communities and
how the company engages with
these communities every day.

ATCO Electric

Builds, owns and operates electrical
transmission and distribution
facilities in east-central and northern
Alberta providing safe, reliable
electricity to more than 224,000
customers in 245 communities,
including large industrial and oilfield
customers.

Major transmission projects

Fort McMurray West
proposed routes

ATCO Utilities
in the North
Northland Utilities and ATCO
Electric Yukon build, own and
operate generation, transmission
and distribution facilities in the
Northwest Territories and the Yukon.

ATCO Gas

In the area broadly identified on this
map, ATCO Gas delivers safe, reliable
and cost-effective natural gas to
more than 1.1 million customers in
nearly 300 Alberta communities.

ATCO Pipelines
Owns and operates key natural gas
transmission facilities throughout
Alberta transporting clean, efficient
energy from producers and
other pipelines to utilities, power
generators and major industries.

ATCO Power
Builds, owns and operates
independent power generation plants
providing industry-leading, reliable,
responsible and cost-effective
solutions to customers and partners
with 13 plants in Canada and one in
the United Kingdom.

ATCO Energy Solutions

Builds, owns and operates non-
regulated energy and industrial
water-related infrastructure and
provides natural gas gathering,
processing and storage, and natural
gas liquids extraction services.

ATCO opened an office in Mexico
City in August 2014 to pursue
opportunities in Mexico’s energy
market with a growth plan modelled
after ATCO’s Canadian and Australian
operations.

ATCO Mexico

Focused on building, owning and
operating natural gas infrastructure,
power generation, electricity
transmission and distribution, and
providing workforce accommodation
and site services.

ATCO Australia
Based in Perth, Western Australia,
ATCO Australia develops, builds,
owns and operates energy
infrastructure assets across
the country.

ATCO Gas Australia

Delivers safe, reliable natural gas
to more than 700,000 regional and
metropolitan customers through
Western Australia’s largest gas
distribution network.

ATCO Power Australia
Builds, owns and operates environmentally-
progressive power generation stations,
providing reliable, responsible and cost-
effective solutions to customers and partners
with three plants in Queensland, South
Australia and Western Australia.

Fort
McMurray

Edmonton

Calgary

Alberta PowerLine, a
partnership between
ATCO and Quanta
Services, was selected
to design, build, own
and operate the Fort
McMurray West 500 kV
Transmission Project
valued at $1.4 billion.
pg 19

ATCO Power
begins selling
power directly
to commercial
and industrial
customers in
Alberta.
pg 37

Area
Enlarged

ATCO starts
a new chapter
in its long history
in Canada’s North
as its oldest company,
Yukon Electrical
Company Limited now
serves customers as
ATCO Electric Yukon.
pg 23

ATCO and partner
Grupo Hermes S.A.
de C.V. begin project
development of a
USD$820 million natural
gas cogeneration plant
at the Miguel Hidalgo
refinery near Tula,
Mexico.
pg 34

Current ATCO
operations

ATCO Mexico wins a
USD$50 million contract
to design, build, operate
and maintain a natural gas
pipeline near Tula in the
state of Hidalgo, Mexico.
pg 34

Alberta’s
Industrial
Heartland

Edmonton

ATCO Energy
Solutions
and partner
Petrogas begin
development
of four salt
caverns to
provide a new
alternative for
hydrocarbon
storage.
pg 39

ATCO Structures &
Logistics wins contract to
provide around-the-clock
fire protection services to
the North Atlantic Treaty
Organization (NATO)
troops in Kosovo.
pg 10

Perth

ATCO Gas Australia
opened a state-of-the-art
business and operations
centre in Jandakot,
Western Australia.
pg 44

STRUCTURES & LOGISTICSENERGYUTILITIESMEXICOAUSTRALIA

ATCO Ltd. Financial Highlights

Consolidated Annual Results
YEAR ENDED DECEMBER 31

(Millions of Canadian dollars
except per share data)

2014

2013

FINANCIAL

Revenues

Earnings attributable to
Class I & Class II shares

4,554

4,359

420

418

Adjusted earnings

374

390

Total assets

17,689

16,010

Class I & Class II
share owners’ equity

3,168

2,860

Funds generated by operations

1,786

1,854

Capital expenditures

2,373

2,518

CLASS I NON-VOTING &
CLASS II VOTING
SHARE DATA

Earnings per share

3.66

3.64

Diluted earnings per share

3.64

3.62

Dividends paid per share

0.86

0.75

Shares outstanding (thousands) 115,141 115,124

Weighted average shares
outstanding (thousands)

114,848 114,801

This data (other than funds
generated by operations) has
been extracted from financial
statements which have been
prepared in accordance
with International Financial
Reporting Standards (IFRS)
and the reporting currency is
the Canadian dollar.

For further information,
please see ATCO Ltd.
Consolidated Financial
Statements and
Management’s Discussion
and Analysis -
www.sedar.com.

FORWARD-LOOKING
INFORMATION:

Certain statements contained in this
Annual Report constitute forward-
looking information. Forward-looking
information is often, but not always,
identified by the use of words such
as “anticipate”, “plan”, “estimate”,
“expect”, “may”, “will”, “intend”,
“should”, and similar expressions.
Forward-looking information
involves known and unknown risks,
uncertainties and other factors that
may cause actual results or events to
differ materially from those anticipated
in such forward-looking information.
The Corporation believes that the
expectations reflected in the forward-
looking information are reasonable,
but no assurance can be given that
these expectations will prove to be
correct and such forward-looking
information should not be unduly
relied upon.

Five-Year Total Return on $100 Investment

$226 $228

$144

$250

$200

$150

$100

$50

2009

2010

2011

2012

2013

2014

Compound Cumulative

Growth Rate Return
17.7% $226

17.9% $228

7.5% $144

Class I Non-Voting
(ACO.X)

Class II Voting
(ACO.Y)

S&P/TSX
Composite

This graph compares the
cumulative share owner
return over the last five years
of the Class I Non-Voting
and Class II Voting shares
of the Company (assuming
reinvestment of dividends)
with the cumulative total
return of the S&P/TSX
composite index.

ATCO SHARE
OWNERSHIP
FOR PRESENT
& PROSPECTIVE
OWNERS

It is important for prospective owners of ATCO shares to

understand that ATCO is a diversified group of companies

principally controlled by Sentgraf, a Southern family holding

company. It is also important for present and prospective

share owners to understand that the ATCO share registry

has both non-voting and voting common shares.

1 2014 ATCO ANNUAL REPORT

RETURN ON INVESTMENT 2

 Letter to Share Owners

Nancy C. Southern
Chair, President & Chief Executive Officer

To our Owners,

As I reflect on the events of 2014,
it is clear that the year was one
of challenges and opportunities.
The markets we operate in are
experiencing extreme volatility from
commodity pricing, and complex
regulatory and social policies have
made it increasingly difficult for our
resource customers to pursue their
larger projects in a timely fashion.

The impact of these circumstances
was apparent towards the end
of last year and they will no
doubt be the cause of significant
headwinds in 2015. It is for exactly
these precipitous, volatile and
unpredictable times that your
company has been disciplined in
building our balance sheet.

An unwavering commitment to our
customers’ needs, our ability to
continue to invest without dilution,
and the targeted and surgical
removal of excess costs and
redundant processes, will allow your
company to distinguish itself from
our competitors in these tumultuous
times. The piston effect of your
company’s diverse earning power
continues to be a core strength.

Leading the way, once again in 2014,
were our utility companies that have
consistently achieved premium
growth and continue to have a
strong outlook, both in Canada and
Australia.

It is hard to believe, but since 2000
when I first began as Co-Chair of
your company, our utility asset base
was approximately $3.3 billion. We
ended 2014 with a utility asset base,
including Australia, of $14.5 billion!
The earnings for this group were
$108.4 million in 2000 and $444
million in 2014.

I am very proud of the people in our
Utility group and the top tier growth
they have achieved without adding
costly goodwill through acquisitions.

Sett Policicchio, Bobbi Lambright
and their teams in ATCO Electric
have led the record-breaking capital
investment of more than $6 billion
these past three years.

Bill Stephens, Brian Hahn, Brendan
Dolan, Alan Dixon and their teams
in ATCO Gas, ATCO Pipelines and
ATCO Gas Australia have been
solid contributors to our rate base
growth. They are also breaking
new ground in Mexico, winning
the first competitively bid natural
gas pipeline under Mexico’s new
legislative reform, from Comisión
Federal de Electricidad, the national
electricity company. The combined
effort of these executives and their
expert teams assures us continued
expansion over the next few years
with approximately $5 billion of
planned greenfield investment.

Steven Landry made great strides
in Mexico and established our
headquarters in Mexico City
to manage the infrastructure
development occurring in that
country.

George Opocensky and Pat
Creaghan in our Energy group have
been experiencing tough times in
their respective businesses, ATCO
Power and ATCO Energy Solutions.

There is no doubt the rapidity of
excess supply and slower growth
hit power prices hard and fast in all
of our markets. Having said this, I
believe ATCO Power will emerge
well ahead of its peers who may
not be able to weather the current
suppressed pricing situation. ATCO
Energy Solutions is in a rebuilding
process and construction is well
underway on our new salt cavern
development. As well, they are
developing significant interest and
expansion opportunities for our water
license and pipelines.

George Lidgett and the ATCO
Structures & Logistics leaders
experienced some performance
disappointments in project execution

in 2014, as well as a slowdown in
all their activities and geographies
in the latter part of the year. 2015
will be a significant challenge for our
founding business as we are already
aware of major project delays and
cancellations by our customers.

Wayne Stensby and the ATCO
Australia team achieved all of their
targets in 2014. We now have more
than 700,000 natural gas utility
customers.

All of your operating companies
remain steadfastly committed to
operational excellence, an ATCO
hallmark that our customers count
on: reliable, safe delivery of our
products and services – Always
There. Anywhere.

Our four core strategies were well-
exercised throughout 2014, allowing
us to achieve our solid results. These
include:

1. Geographic expansion;
• Successful entry into Mexico

2. Win competitively bid new

greenfield projects;
• $1.4 billion Fort McMurray West
500 kV Transmission Project in
Alberta

• USD$50 million Tula pipeline

project in Mexico

• AUD$230 million Wheatstone

Project in Australia

3. Monetize non-core assets;
• $200 million sale of ATCO I-Tek

4. Continuous improvement and

innovation;
• 30 per cent reduction in small

substation footprint and cost
through modular construction

• Next generation workforce
housing fleet with ‘ensuite’
accommodation

On behalf of all share owners, I
would like to recognize two of our
executives who greatly contributed
to your company’s success last
year and for the past three decades:
Susan Werth, Senior Vice President
& Chief Administration Officer, and
Harry Wilmot, President & Chief
Operating Officer of ATCO Structures
& Logistics. Susan and Harry both
retired in 2014 but will continue to
provide their incomparable advice
and talent to your company through
new governance roles.

I wish to convey my deepest
appreciation to Susan and Harry for
their commitment to your company.
They are the epitome of the ‘ATCO
Heart and Mind’ and the living
example of our Founder’s definition
of excellence –

“...always striving for the highest
standards and paying attention to
the smallest detail...”

Susan and Harry, thank you!

Siegfried Kiefer, another sterling
leader, has made impressive
strides in managing the impacts of
regulations and legislation, especially
on the environmental front, while
continuing to progress our hydro
generation initiatives. I recommend
Siegfried’s article on page 13 to our
readers.

The challenges that lie ahead will
need the disciplined and determined
approach that has long governed
your company. To support our growth
strategies and enhance expertise,
we have diversified our board
membership. Collectively, our board
brings a wide breadth of experience
to your company. I wish to thank
them for their extraordinary efforts.
Their wisdom and pursuit of premier
performance, combined with the
visionary leadership of my father,
have overseen your company’s stellar
growth.

To you, our owners, thank you for
entrusting your capital with us.
Today, as we face the uncertainties
of the future, I believe you own an
unmatched group of Canadian and
international businesses managed by
a group of outstanding executives.

The diversity of our earnings, our
financial strength and the ‘can-
do’ attitude of our people give me
great confidence, which I convey to
you, that your company and your
investment will continue to create
meaningful value for you and your
families for generations to come.

It is a distinct honour for me to be
working with each of you.

Sincerely,

Nancy Southern

0.86

0.75

0.66

3.21

2.83

2.42

3.64

3.66

0.57

0.53

17.7

16.0

14.1

12.5

10.1

2010

2011

2012

2013

2014

2010

2011

2012 2013

2014

2010

2011

2012

2013

2014

DIVIDENDS PER SHARE ($)

EARNINGS PER SHARE ($)

ASSETS ($ BILLIONS)

3 2014 ATCO ANNUAL REPORT

LETTER TO SHARE OWNERS 4

Structures
& Logistics

ATCO Structures &
Logistics provides
complete infrastructure
solutions to customers
worldwide, including
workforce housing,
innovative modular
facilities, construction, site
support services, logistics,
operations management,
and noise and emission
reduction solutions.

ATCO Structures & Logistics offers modular
buildings, site and lodging services, and industrial noise and emissions control
solutions worldwide. With manufacturing facilities in North America and
Australia, a global supply chain, and operations on five continents, the company
has the expertise to rapidly deliver a turnkey solution anywhere it is needed.

ATCO Structures & Logistics (ATCO)
comprises four core businesses worldwide:
Modular Structures, Lodging & Support
Services, Logistics and Facilities Operations &
Maintenance, and Emissions Management.

MODULAR STRUCTURES /
LODGING & SUPPORT SERVICES
The modular structures business line
comprises the design, manufacturing and
installation of workforce housing facilities,
as well as turnkey lodge services including
catering, housekeeping, retail, maintenance
and utility services. In addition to large-scale
workforce housing complexes, ATCO provides
modular fleet hire and sales.

As anticipated, the mining sector continued
to be relatively soft in 2014, and demand
for modular structures from this market
continued to be weak. This, along with a more
moderate Australian economy relative to
previous years, resulted in reduced revenues
from the company’s operations there. The
Canadian business had a steady year, with
increased revenue coming from operations in
eastern Canada, and continued demand from
the oil and gas sector in western Canada,
particularly for lodge operations. In the United
States, however, the energy sector continued
to harness the benefits from shale oil and gas
developments, resulting in a record year for
ATCO’s U.S. operations.

North America
ATCO Structures & Logistics’ business in
North America experienced another good year
in 2014 with continued demand for full-service
modular solutions. ATCO’s bundled service
offering provides the design, manufacturing
and operation of a facility.

In December, ATCO Structures & Logistics won a five-year contract to
provide around-the-clock fire protection services to the North Atlantic
Treaty Organization (NATO) troops in Kosovo. Above: Firefighter Rick
Herbel at the NATO Flying Training in Canada at 15 Wing Moose Jaw.

This year, ATCO Structures &
Logistics and its partner, the George
Gordon First Nation, completed the
third phase of the 2,586-person BHP
Billiton Jansen Discovery Lodge.

5 2014 ATCO ANNUAL REPORT

ATCO STRUCTURES & LOGISTICS 6

In 2014, demand for lodge operation
services including stand-alone
catering, janitorial and maintenance
contracts, grew. Specifically, the
company won business from K+S
Potash Canada GP to operate a
1,470-person lodge in southern
Saskatchewan. ATCO provides
catering, housekeeping, janitorial and
maintenance services for the facility
that houses workers constructing the
K+S Potash Canada Legacy Project.
The multi-million dollar contract
began in April 2014.

ATCO’s catering service
provides a six-week rotating
menu that features dining
specials such as a full
smorgasbord and summer
barbeques. ATCO also has
responsibility for all cleaning
and minor maintenance work,
as well as operating a lounge
and commissary that provides
convenience items for workers.
ATCO pursued this project with its
local Indigenous partner, the George
Gordon First Nation, as the K+S
Potash Canada Legacy Project is
located on the traditional lands of the
First Nation.

ATCO Structures & Logistics has
partnered with the George Gordon
First Nation on other large projects
in Saskatchewan, including the
2,586-person BHP Billiton Jansen
Discovery Lodge. In 2014, the
third phase of this project was
completed, and the lodge is now
fully operational. Currently, 60 per
cent of the lodge’s total workforce is
Indigenous employees.

In October 2014, another operations
contract was secured with a
major Canadian exploration and
production company to operate
a 1,900-person lodge in Alberta’s
oilsands region. ATCO is providing
catering, housekeeping, janitorial

7 2014 ATCO ANNUAL REPORT

and maintenance services over the
course of the five-year contract that
is valued at an estimated CAD$150
million. The dining room features
action stations alongside the regular
serving lines, with a pizza oven,
deli-style sandwich bar and a stir-
fry station. Regular theme nights
highlight international cuisines such
as Middle Eastern, Mexican, Greek,
Italian and Korean.

“Continued growth in the

production of shale plays in the U.S.
resulted in unprecedented demand

TSI also provides site support and
core drilling service to Vale’s Voisey’s
Bay Nickel-Copper-Cobalt Mine,
including water treatment, road
maintenance, fuel and hazardous
materials management. The majority
of TSI’s employees are Indigenous
members of local communities in
Newfoundland and Labrador.

In December 2014, a bundled service
contract was awarded to ATCO
by TransCanada PipeLines
Limited to design, build and
operate a 150-person workforce
accommodations lodge that will
house workers constructing the
Otter Lake Compressor Station
in the Peace River region of
Alberta.

In the United States, continued
growth in the production of shale
plays resulted in unprecedented
demand for ATCO’s wellsite units.
These spacious, executive living
accommodations feature high-end
contemporary interiors, with a rugged
exterior that can withstand the
most challenging conditions of any
petroleum exploration or mining site.

The year also saw increased demand
for ATCO’s customizable double-end
wellsite unit with a “bump-out” office.
This premium finish product provides
two private living quarters on either
end of a modern workspace.

Australia
Consistent with a moderating
economy in 2014, demand for
workforce housing to support

ongoing resource projects was
steady. To help supplement the
gap in a softer resource sector,
ATCO grew its business with the
Government of Australia, supplying
modular solutions for facilities such
as immigration and medical centres.

ATCO Structures & Logistics
continues to be the major workforce
accommodations provider on Curtis

for ATCO’s wellsite units.”

In addition to providing janitorial
and maintenance services for the
facility, ATCO is operating a licensed
lounge, commissary and coffee shop.
The lodge’s fitness and recreational
facilities are managed by ATCO staff
who organize training sessions and
group classes for residents.

In Atlantic Canada, Torngait Services
Inc. (TSI), an Aboriginally-owned
business and partnership between
the Nunatsiavut Group of Companies
and ATCO Structures & Logistics, has
been awarded a contract by Valard
Construction LP to operate five
workforce accommodations lodges
in Newfoundland and Labrador.
The lodges will house workers
constructing the transmission line in
support of the Muskrat Falls Project
in Newfoundland and Labrador.
The 36-month, occupancy-based
contract is valued at approximately
CAD$40-45 million. TSI will be
providing catering, janitorial and
commercial laundry services to five
100 to 300-person lodges.

The lodge will be constructed

using ATCO’s next-generation
modular fleet that features
contemporary interior upgrades
including a modern colour palette
and ensuite bathrooms (see pages 11
and 12).

The project will also contribute to
local economic growth and capacity
building through ATCO’s joint-venture
partnership with the Woodland Cree
First Nation (WCFN). ATCO and
the WCFN will be working together
to provide camp services for this
project including camp management,
catering, housekeeping and janitorial.
This partnership has been structured
so that the WCFN can participate
in all facets of the construction and
operation of the facility.

ATCO and the WCFN also work
together on the Shell Carmon Creek
Project. In November 2014, phase
1B of the project was completed and
more than half of the rooms for the
1,200-person lodge were turned over
to Shell.

ATCO’s Red Seal chefs use the finest ingredients to provide residents with a wide range of hearty, nutritious meals. Top Left:
ATCO Cook Ram Vennam prepares for dinner at the BHP Billiton Jansen Discovery Lodge in Saskatchewan.

ATCO STRUCTURES & LOGISTICS 8

operation also developed new
modular products to meet the
demands of the modular rental
and sales market. The new
“mobile wagon” product is a self-
contained unit equipped to operate
independently of primary water and
power supplies. These units were
designed for use in road services,
railway and tunnel projects, as
well as for drilling contractors who
require frequent location changes
and equipment moves. The units are
available in a number of models, for
sale or rent.

Also in 2014, ATCO’s Australian
operations introduced a “park cabin”
recreational accommodation unit to
be used at tourist camp sites. This
same product can also be used for
extended family accommodation at
a primary residence – known locally
as a “granny flat”. Featuring one and
two-bedroom designs with toilet
and shower facilities, these modular
cabins come in a variety of external
finishes.

ATCO will be responsible for
the maintenance of the interior
and exterior of buildings, facility
systems such as HVAC, electrical
and plumbing, as well as grounds
keeping and signage maintenance.
All the work will be managed through
a computerized maintenance
management system. ATCO is
collaborating with local Indigenous
communities on this project and
contracted the Chipewyan Prairie
Dene-owned Northern Wolf Ltd.
to provide grounds maintenance
services and certified trades
contractors.

In September 2014, the facilities,
operations and maintenance
division was awarded a 10-year
remote defense contract in Alaska,
secured by ARCTEC Alaska, a
joint-venture partnership between
ATCO Structures & Logistics and
ASRC Federal Primus. The contract,
awarded by the United States
Department of the Air Force, is

Island, Queensland. In 2014, ATCO
delivered an expansion lodge for
the Australia Pacific LNG Project,
as well as a number of smaller
upstream building contracts across
the three projects. A significant
scope expansion resulted in the
delivery of a 400-person rental
accommodations village, located in
the Surat Basin, to house workers
during the construction of upstream
infrastructure for the project.

In December 2014, ATCO completed
the design, manufacture and site
construction of 357 blast resistant
modular buildings for Bechtel on
the Chevron-operated Wheatstone
Project in Western Australia. The
agreement valued at AUD$100
million was delivered within time
and budget requirements. Additional
Wheatstone Project scope for the
design, manufacture and installation
of 435 modular units was awarded to
ATCO by Bechtel. This scope, valued
at an estimated AUD$130 million,
will commence in March 2015 and
is scheduled for completion in
late 2015. The units are being
manufactured at ATCO’s new
Kwinana facility near Perth in
Western Australia.

“The Alaska Radar System

contract awarded by the United
States Air Force is valued at more

Responding to the infrastructure
needs of the Government of
Australia, ATCO was contracted
by Government Health to design
and manufacture modular medical
centres and immigration facilities in
Papua New Guinea and Nauru. ATCO
also supplied modular units for the
construction of Immigration Process
Facilities, which involved the design
and installation of a complex range
of buildings. The two-storey blocks
of highly technical medical facilities
feature fully-equipped operating
theatres and dental suites.

As part of ATCO’s innovation
initiative, the company’s Australian

than USD$340 million.”

LOGISTICS AND FACILITIES
OPERATIONS & MAINTENANCE
Logistics and facilities operations &
maintenance is a core business line
that provides a variety of services to
private and public sectors worldwide,
including defense operations.

North America
In April 2014, ATCO Structures &
Logistics was awarded a contract to
support five resource development
sites in northern Alberta operated by
a major Canadian exploration and
production company.

9 2014 ATCO ANNUAL REPORT

valued at more than USD$340
million, and is to provide
operations and maintenance
services to 15 strategic radar
sites that form the Alaska Radar
System (ARS).

ARCTEC will be responsible for
maintaining the geographically
isolated radar sites (accessible only
by air or seasonal barge), three
remote radio sites, and providing
operations and maintenance of
facilities at the primary base for
the ARS - Joint Base Elmendorf-
Richardson.

Europe/Middle East/Asia
ATCO Structures & Logistics,
through its wholly-owned subsidiary
company ATCO Frontec Europe Ltd.,
continues to support NATO and its
International Security Assistance

Force in Afghanistan. ATCO provides
first responder services, including
fire and ambulance, at Kandahar
Airfield for NATO troops assisting the
Government of Afghanistan’s nation
rebuilding efforts. ATCO won an
extension to its current fire response
contract to provide support until at
least mid-2015.

In December 2014, ATCO won a
contract to provide around-the-clock
fire protection services to support
NATO troops at Camp Novo Selo
near Pristina, Kosovo and known as
Kosovo Force. This contract, which

commenced in January 2015, may be
renewed annually for up to five years.
ATCO is responsible for identifying
and training fire wardens, developing
first-response plans for a variety
of incidents such as hazardous
materials risks, water shortage and
fuel and chemical spills. ATCO will
also supply the necessary emergency
equipment including a fire truck,
tanker truck and portable water
reservoirs.

ATCO also provides the
communications and information
services to support NATO and

European Forces Headquarters in
Sarajevo, Bosnia.

Australia
Building on the success of the
bundled solution business model
in North America, a new facilities,
operations and maintenance
offering was established in Australia.
Commencing in 2014, operations and
maintenance services were offered
alongside the design, construction
and installation of modular facilities.

 True Patriot Love

In January 2014, True Patriot Love, a foundation
dedicated to providing support to Canadian military
families, approached ATCO for assistance with its
bold plan to guide a group of 12 injured military
veterans, 24 business leaders, two Olympians, and
a documentary film crew from Resolute Bay to the
Magnetic North Pole. From April 19-29, they made
history as the largest-ever commercial expedition to
make the trip.

ATCO was in a unique position to assist. The
company had already been providing maintenance
and turnaround services in the far North for
government, commercial and scientific projects
since 1989.

ATCO’s support to the expedition included
accommodation at ATCO’s South Camp Inn
and Airport Hotel in Resolute Bay, a donated
snowmobile for the expedition’s documentary film
crew and a donation to the Foundation. ATCO chefs
also provided on-site catering for events related to
the expedition – a community feast and a hockey
game featuring visiting Canadian Olympians.

With its 25-year connection to the remote
community of Resolute Bay, ATCO also helped True
Patriot Love build relationships with local leaders
– an important step when bringing in more than 60
people to a community of just over 200.

Following three full days of ski training, gear testing and
traditional Inuit games, True Patriot Love North Pole expedition
members prepare to depart from ATCO Structures & Logistics’
lodges at Resolute Bay.

When one of the expedition’s injured veteran members, Bjarne
Nielsen, needed help to stabilize his sit ski, a pair of ATCO
mechanics were able to add a crossbar and outriggers from
recycled materials.

ATCO STRUCTURES & LOGISTICS 10

 Evolution of the ATCO Trailer

 Unit modernization and upgrades

Common spaces also showcase
functional and aesthetic
modernizations. The flooring
deserves a special mention. To call it
‘carpet’ would be an understatement
— the flooring material is a composite
textile that is incredibly durable,
stain-repellent, traps airborne
allergens and irritants and has a
major impact on noise suppression.
It is also recyclable.

ATCO Structures & Logistics
pioneered the modular construction
industry in Canada in 1947 when
father S.D. and son R.D. Southern
founded Alberta Trailer Hire with 15
utility trailers rented out to oilfield
clients. What was relatively a niche,
Alberta Trailer Hire has grown into
ATCO Structures & Logistics.

In 2014, ATCO raised the bar with
unit modernization and upgrades
that featured contemporary finishing
and details worthy of a show home.
The eye-catching yellow still remains,
narrowed down to a refined stripe on
the unit’s exterior.

The same durable box on the outside
is now sleek, spacious and high-
end within, featuring contemporary
colour palettes and fine finishes. To
rejuvenate the familiar space that has
served many for 67 years, ATCO’s
designer’s critical eyes found room
for a lounge chair, walk-in closet, full-
sized shower and a double bed. And
that’s just the bedroom.

11 2014 ATCO ANNUAL REPORT

ATCO STRUCTURES & LOGISTICS 12

 Diversifying Alberta’s Electricity Fuel Sources

Siegfried W. Kiefer
Chief Operating Officer, Power & Utilities

Alberta has demonstrated great
long-term foresight with decisions to
replace and upgrade critical electrical
transmission and natural gas pipeline
infrastructure. To support the
development, ATCO has invested
$6.4 billion in new utility infrastructure
in the province between 2012 and
2014. A number of well-thought-out
projects are increasing reliability and
improving public safety.

ATCO Pipelines and ATCO Gas
are undertaking the Urban Pipeline
Replacement Project, which will see
technically advanced high-pressure
natural gas pipelines relocated into
specifically designated Transportation
Utility Corridors and out of densely
populated areas of Calgary and
Edmonton. This initiative will improve
gas supply into our major cities
and dramatically increase safety by
minimizing the risk of any serious
incidents.

ATCO Electric’s largest project ever,
the $1.8 billion Eastern Alberta
Transmission Line, is scheduled to
be energized in 2015 reinforcing
the backbone of the provincial
transmission system.

ATCO will also build and operate
the $1.4 billion transmission line
planned for west of Edmonton to
Fort McMurray. This project was
awarded to ATCO after an intensely
competitive international bidding
process, demonstrating that ATCO
provides the lowest possible cost
infrastructure for our customers.

This significant infrastructure
investment will deliver benefits to all
Albertans for generations to come.
Similar foresight is now needed as
Alberta prepares to decommission
coal-fired power generating facilities
and replace them with more

environmentally friendly sources of
generation. As a province, we need
to carefully consider and plan on how
to best replace these soon-to-be
retired coal-fired power plants.

Throughout history, low-cost coal
has been the primary source of the
province’s power generation. In
2014, approximately 39 per cent
of all power generated in Alberta
came from coal plants. The situation
is about to change as coal-fired
plants are decommissioned to help
meet our country’s greenhouse gas
(GHG) emissions targets. By 2034,
the Alberta Electric System Operator
(AESO) projects coal will provide only
10 per cent of provincial power.

To support growth and replace
coal, Alberta will need to build
10,385 MW of new generation
within two decades—6,471 MW in
the next decade alone. The current
direction Alberta is taking will see
the province become dependent on
natural gas-fired power generation.
These plants are quicker to build,
less expensive than other long-
term options, cost-effective as long
as natural gas remains reasonably
priced, and have a streamlined and
established regulatory process in
place. Forecasts show that natural
gas will fuel three-quarters of the
province’s power generation within
two decades.

Two issues arise from this forecasted
outcome. Firstly, if we use only
natural gas as a replacement for
coal, Alberta will not meet its climate
change targets. Natural gas is only
50 per cent better than coal in terms
of GHG emissions. In absolute
numbers, when provincial growth
is factored in, total GHG emissions

will actually increase once coal is
eliminated.

Secondly, there is no long-term
assurance of price stability or
protection against price spikes.
Alberta has experienced significant
volatility in natural gas prices in
recent years, as have other parts of
the world.

Dependency on natural gas can
create real challenges when that
commodity is the foundation of
the vast majority of the province’s
electricity and heating needs.
When prices increase, it will have a
significant impact on the economy by
driving up the electricity and heating
bills of consumers and businesses.

As a province, we must take a step
back and evaluate the best options
for Alberta’s future and understand
the implications of not diversifying
our base load generation mix.

Hydro generation is emissions-free
and offers unmatched opportunity
for Alberta to achieve reduced GHG
emissions, while creating a “Green
Corridor” stretching along the east
side of the province. Although much
more capital-intensive and requiring
government and regulatory policy
support, hydro offers payback
through sustainable power rates.
It is a fuel source that is not at the

ATCO’s vision for a
high voltage backbone
for Alberta

Fort Smith
H

Rainbow
Lake

Fort
McMurray

Peace
River

Edmonton

Existing
lines
500 kV
240 kV

Calgary

Brooks

ATCO proposed
lines - 500 kV

Potential large-scale
hydroelectric locations

financial mercy of a North American
commodity market.

Hydro can also be an important water
management tool, allowing better
control during periods of high flow
to prevent farmland flooding and to
protect communities, such as Peace
River and Fort McMurray.

To succeed, we must create
regulatory certainty and efficiency
and a viable commercial framework

for financing. We need Indigenous
participation, consultation and true
partnerships that provide northern
growth and job opportunities.

In Alberta, three high-quality projects
immediately stand out—a minimally
invasive run-of-river 1,800 MW
facility on the Slave River and a more
traditional 1,500 MW facility on the
Athabasca River, near Fort McMurray.
The Peace River could also be used
to generate 1,500 MW of green
power.

Alberta, with appropriate foresight
and firm political will could, within
two decades, end up with just under
30 per cent of its power needs met
through hydro generation. The price
volatility of natural gas would be
mitigated.

Add to the mix significantly increased
cogeneration, where excess steam
generated from other industrial
processes is used to produce
electricity, and the province could
report an exceptionally positive
environmental story as coal
generation is phased out.

For future generations, it truly is a
story worthy of telling but it will take
the cooperation and collaboration of
all involved parties to achieve it. It is
a once-in-a-generation opportunity
and we should not miss it.

CURRENT AND PROJECTED ALBERTA ELECTRICAL ENERGY GENERATION

CURRENT (%)
(as of Dec. 31, 2014)
Total Capacity: 14,568 MW

PROJECTED 2034 (%)
Total Capacity: 24,953 MW

Hydro

Wind

Other

Coal

Natural Gas

Co-Gen

11 3

AESO
forecast

ATCO
proposed

13 2014 ATCO ANNUAL REPORT

DIVERSIFYING ALBERTA’S ELECTRICITY FUEL SOURCES 14

Utilities

• ATCO Electric
• ATCO Gas
• ATCO Pipelines

These companies are
focused on the safe,
reliable and efficient
transportation and
distribution of natural
gas and electricity.

ATCO Electric builds, owns and operates electrical
transmission and distribution facilities in east-central and northern
Alberta. It delivers safe, reliable electricity to more than 224,000 farm,
business and residential customers in 245 communities. By supplying
power to large industrial and oilfield customers, ATCO Electric supports
the development of Alberta’s energy-rich industrial sector.

ATCO Electric’s electrical system in
Alberta includes approximately 11,000 km
of transmission lines and 69,000 km of
distribution lines. The company also maintains
approximately 4,000 km of distribution lines
on behalf of farmer-owned Rural Electrification
Associations.

ATCO Electric’s Transmission Division is
accountable for planning, development,
operations and maintenance of transmission
infrastructure that transports electricity
from generating stations to substations.
The Distribution Division is accountable
for planning, development, operations and
maintenance of distribution facilities that
deliver power from substations directly to
customers’ homes and businesses.

ATCO ELECTRIC
TRANSMISSION DIVISION
The Transmission Division’s mandate is to
build transmission facilities on-time and on-
budget, mitigate social and environmental
impacts and consult with First Nations,
landowners and other Albertans to minimize
impacts associated with the construction and
maintenance of its projects.

In 2014, the Transmission Division invested
$1.2 billion in new transmission facilities and
upgrades to existing infrastructure.

Many projects completed in 2014 were
components of the Central East Transmission
Development, an upgrade of the transmission
system to meet the increased need for
electricity in east-central Alberta.

Best Practices and Innovation
Continually striving to provide the best value
to its customers, the Transmission Division
established an Asset Management Office and

Dallas Fjeld, Equipment Operator (back) and Brad Gerbrandt,
Powerline Technician – Line (front), replace a gang switch near
Grande Prairie. ATCO’s electrical system serves more than 224,000
customers in northern and east-central Alberta.

The 500 kilovolt direct current Eastern
Alberta Transmission Line running between
Brooks and the Gibbons-Redwater area
northeast of Edmonton, Alberta.

15 2014 ATCO ANNUAL REPORT

ATCO ELECTRIC 16

CENTRAL EAST
TRANSMISSION DEVELOPMENT
Major Project Components Completed in 2014*

Component Description Of Work

Bonnyville to Bourque
Transmission Project -
Phase 1

Kitscoty Transmission
Project

54 km of new 144 kV transmission line built to 240
kV standards to allow for future 240 kV capacity,
from the existing Bonnyville substation to the new
Bourque substation

Upgrades to the existing Kitscoty substation and
10 km of new 144 kV transmission line to connect
it to the existing transmission grid

Whitby Lake Substation New 144 kV circuit breaker and

telecommunications tower

Beartrap Substation New 144 kV line and substation

Irish Creek Substation Capacity upgrade

Cold Lake Development 44 km of new 144 kV line, one new substation and

upgrades to four existing substations

*This table shows the major project components completed for the Central East Transmission
Development in 2014. Additional projects of a smaller scope are not represented.

began implementation of an asset
management system to become
ISO 55001 compliant. The system
ensures adherence to best practices
in the management of ATCO Electric
Transmission’s $6.1 billion in assets,
as well as ensuring the company
provides the best value to customers
throughout each asset’s life cycle.

The Transmission Division also
implemented a Project Innovate team
which developed a new, modular
144-25 kV substation design called
the Next Generation substation.
This innovative new design has
resulted in a 40 per cent reduction in
labour required for the engineering,
construction and commissioning
of these substations and a 46 per
cent reduction in construction
costs over the previous standard
144-25 kV substation designs.

Safety
Health and safety is one of the
Transmission Division’s core values,
and continuous improvement in
this area is an ongoing goal. In

2014, Health and Safety Advisors
were placed in the field to provide
ongoing support to Project
Management teams, giving the
company the ability to review leading
and lagging indicator trends and
put corrective measures in place
to quickly eliminate or mitigate
hazards. In addition, two Safety
Improvement Steering Committees
were established to develop a
comprehensive action plan to
address the top opportunities
for improvement identified by
an extensive health and safety
perception survey conducted among
employees.

ATCO ELECTRIC
DISTRIBUTION DIVISION

Growth
Reinforcing system reliability
and meeting customer demand
continued to be key priorities in
2014. Approximately $369 million
was invested to add to and improve
ATCO Electric’s distribution system,
particularly in areas of the province

experiencing significant growth
driven by oilfield and industrial
activity.

September marked the opening of
a new, more efficient service centre
in Valleyview, Alberta. By bringing
employees from two buildings into
one, the company has improved the
flow of communications between
work groups and streamlined
operations to better serve customers
in this busy region.

Also in the fall, members of the Stry
and Warwick Rural Electrification
Associations (REAs) voted in favour
of selling their electrical distribution
assets to ATCO Electric. Pending the
approval of each sale, ATCO Electric
looks forward to welcoming just over
600 new customers in 2015. In both
REAs, ATCO Electric has been the
contracted service provider for many
decades.

Customer Service Improvements
With continued high volumes of
industrial activity in Alberta, the
company enhanced its customer
engagement and communication to
better meet the needs of this fast
growing sector.

ATCO Electric Distribution Division
created cross-functional customer
delivery teams for major customers
undertaking large projects. The
teams include specialists from
various professional disciplines that
represent the full end-to-end process
for building new services. This new
approach helps keep projects on
track and identify opportunities
to apply flexible solutions to meet
specific needs. Customers have
responded enthusiastically by
participating in meetings and have
expressed appreciation in having
direct access to specific expertise
as the project progresses. The result
is faster, more effective project
completion with early identification

and resolution of issues and
challenges.

The company also introduced a new,
online customer self-serve portal,
ATCO Electric Connects. This web
service provides industrial and oilfield
customers with access to “smart”
service request forms that they can
submit and track online in a secure
environment. The site also provides
access to project updates, maps and
information on rates and regulatory
changes that impact customers.

In response to customer feedback
about the complexities of the

electricity industry, residential, farm
and commercial customers were
introduced to an online electricity
awareness campaign. The goal of
the campaign is to help customers
understand how different electricity
services, including those provided
by ATCO Electric, contribute to their
electricity bills. The new campaign
includes an engaging video and
informative resources made available
online at www.atcoelectric.com.

Safety
ATCO Electric Distribution Division
continued its commitment to

public safety by developing a new
and improved power line safety
training program for emergency first
responders. ATCO Electric Powerline
Technicians and safety professionals
provide the half-day training at no
charge to fire, ambulance and police
personnel in ATCO Electric service
communities. This training provides
responders with the knowledge
and resources to safely handle
emergencies involving power lines.

The risks associated with “routine”
and complacency were the targets
of a new “Where’s the Line” safety
campaign co-sponsored by ATCO

 ATCO Electric recognized for environmentally-

innovative project in Jasper

ATCO Electric received national
profile for an environmentally-
innovative power line construction
project in Jasper National Park.
The project was featured as an
environmental performance case
study in the Canadian Electricity
Association’s 2014 annual report,
“Engaged for a Sustainable Future”.

The project involved upgrading a
section of power line serving some
of Jasper’s most popular tourist

attractions including Marmot Basin
Ski Resort and the Jasper Tramway.
The line was built on rocky terrain
along a narrow, heavily treed right-
of-way that crosses three mountain
rivers. Some sections of the line
couldn’t be accessed by traditional
means, so ATCO Electric engineers
and construction crews developed
several innovative solutions that
allowed work to be completed while
protecting the environment and
increasing service reliability.

The company used a helicopter
and small rubber-tracked vehicles
to reduce ground disturbance
in this environmentally-sensitive
area and protected the line from
heavy snowfall and falling trees by
using spacer cable along a six km
section. The insulated power cable
is constructed with a heavy-gauge,
non-energized messenger wire for
protection which reduces the risk
of power outages and the need for
emergency maintenance.

During the project, boatswain chairs were brought in allowing ATCO Electric crews to perform aerial work in
areas not accessible by bucket truck.

17 2014 ATCO ANNUAL REPORT

ATCO ELECTRIC 18

Electric and other members of
Alberta’s Joint Utility Safety Team
(JUST). Launched in the fall,
the television ads remind heavy
equipment operators of the serious
dangers of being complacent when
conducting hazard assessments on
the job site. Through JUST, Alberta’s
electric utilities, including ATCO
Electric, co-sponsor power line safety
messaging that benefits all Albertans.

Risk of contact with a power line
during the busy seeding and harvest
seasons continues to be an important
topic in the farming communities
ATCO Electric serves. Through radio,
print and online advertisements,
the company reached out to farm
customers, urging them to call ahead
and work with ATCO Electric when
moving tall equipment near power
lines.

ATCO Electric Connects, a new online customer self-serve portal, was
launched this year to provide industrial and oilfield customers with project
statuses, maps and information about rates and regulations.

 ATCO partnership wins $1.4 billion
competitive transmission project

In December 2014, following a
worldwide competitive process,
Alberta PowerLine was awarded a
$1.4 billion contract to build, own
and operate the Fort McMurray West
500 kV Transmission Project. This is
the first transmission project in Alberta
awarded by the Alberta Electric
System Operator (AESO) using the
AESO’s Competitive Process. This
win demonstrates that ATCO provides
the lowest cost infrastructure for its
customers.

Alberta PowerLine is 80 per cent
owned by ATCO and 20 per cent
owned by Quanta Services. Valard
Construction, a Canadian subsidiary
of Quanta, will be responsible for

designing and constructing the project
and ATCO Electric Transmission
Division will be responsible for route
planning and the operation and
maintenance of the facilities for 35
years.

The project, comprising approximately
500 km of 500 kV transmission
line and associated facilities from
Wabamun (west of Edmonton) to
Fort McMurray, has been deemed
Critical Transmission Infrastructure by
the Government of Alberta, needed
to reinforce the reliability, capacity
and efficiency of the electric grid
and address increasing growth in
northeast Alberta.

Fort McMurray

Edmonton

Calgary

Project
area

Proposed
routes

ATCO Electric’s exceptional response
to weather-related emergencies

ATCO Electric responded to two
widespread weather-related outages
in 2014. In spite of weather and
electrical system challenges, the
company continued to provide safe
and reliable service to customers.

In January 2014, a record-breaking
windstorm ripped through Alberta.
At times, wind speeds exceeded
120 km/h, toppling ATCO Electric
transmission towers and distribution
poles and creating dangerous
public safety hazards. In total, 500
separate outages covered ATCO
Electric’s service area, leaving 14,000
customers without power.

ATCO Electric’s Transmission and
Distribution Divisions acted swiftly.
More than 65 crews responded
immediately, restoring power to
approximately 12,000 customers
within 36 hours. Power to remaining
customers in heavily damaged

isolated areas was restored in the
days that followed. All the work was
done with no major safety incidents.

ATCO Electric enacted its crisis
management plan, establishing
incident command centres in eight
major hubs across the affected
service territory in northern and east-
central Alberta.

Throughout the incident,
communication to customers and
communities was unprecedented.
The company shared regular updates
via the ATCO Electric website and
Twitter account. Words of thanks
poured in from customers and
government officials alike.

Alberta was also hit with a frost
storm in December 2014. Heavy
frost triggered a series of outages
across the southeast part of the
province. The frost caused downed

and sagging lines and broken
wires, resulting in more than 29,000
customer service interruptions from
more than 1,080 separate outages
over 12 days.

On the first day of the storm,
ATCO Electric opened incident
command centres in Drumheller and
Lloydminster to manage the areas
most affected. At the peak of the
storm, more than 63 crews worked to
restore power. Despite a high volume
of work and difficult conditions, all
restoration was done without major
safety incidents.

Again, customers were kept up-to-
date through the company website
and Twitter account. Many customers
thanked crews for restoring power
as quickly as possible in such
challenging weather.

In January, severe windstorms resulted in extensive
damage to transmission towers and distribution poles
throughout northern Alberta, leaving more than 14,000
ATCO Electric customers without power.

Dangerous public hazards like the toppled transmission structure
shown here characterized the damage caused by the windstorm.
ATCO Electric crews responded immediately, restoring power to
more than 85 per cent of its customers within the first 36 hours.

19 2014 ATCO ANNUAL REPORT

ATCO ELECTRIC 20

Eastern Alberta Transmission Line

The $1.8 billion Eastern Alberta
Transmission Line (EATL) is the
largest project in ATCO’s history, the
largest transmission project ATCO
Electric has ever constructed, and
one of the first high voltage direct
current (HVDC) lines in Alberta. It
consists of 485 km of 500 kV line
between the Gibbons-Redwater
area north of Edmonton and an
area south of Brooks, with each end
anchored by a converter station that
will change direct current (DC) into
alternating current (AC).

Line construction was completed in
early 2015; once energized, EATL will
strengthen and reinforce Alberta’s
electrical grid to meet increased
demand and ensure all Albertans
have access to the most reliable and
cost-effective electricity available.

Nearly 100 ATCO Electric employees
were dedicated to the construction of
the project, and there were more than

800 contracted construction workers
during peak construction.

To mitigate environmental impacts,
much of the tower assembly and
foundation work took place during
the winter months, helping reduce
disturbance of wildlife and the spread
of soil-borne diseases. Clean-up
and reclamation on the right-of-
way began in September 2014. A
significant amount of the clean-up,
de-compaction of the soil and site
grading was completed prior to
ground freeze-up. Full reclamation
activities will resume in the second
quarter of 2015 and will be
completed by November 2015.

EATL’s advanced telecommunications
network consists of 485 km of
optical ground wire plus four optical
repeater stations and a 500 km
microwave network with 14 radio
systems, 14 microwave towers,
plus control buildings, buried fiber

and six communications rooms.
The advanced telecommunications
system monitors the line to make
sure it is functioning properly. In
the event of a malfunction, damage
to the line or security breach, the
system safeguards the line and works
to keep it operational.

Fort McMurray

Edmonton

Calgary

Brooks

Project
route

The Eastern Alberta Transmission Line stretches along the east side of Alberta and comprises 485 km of 500 kilovolt, direct
current line and associated converter stations and facilities. The project will reinforce the reliability, increase the capacity and
improve the efficiency of Alberta’s electricity grid.

EATL by the
numbers
14

Open Houses

8,300

consultations
with landowners and
interested parties

6,153

crossing permits, environmental
review permits, licences and
acquisition agreements

70,000

mats

19,528

cubic metres of concrete

4.4

million bolts

28,400

tons of tower steel

1,387

towers

5,200

km of conductor wire

upgraded
telecommunications
towers

new
telecommunications
towers

1 These spools at the laydown yard near
Duchess represent a small fraction
of the approximately 5,200 km of
conductor wire used to string EATL.

2 Much of EATL was built on private
land, part of the reason why ATCO
Electric held more than 8,300
consultations with Albertans. Here
workers put the finishing touches on
a section of the line near Lamont,
Alberta.

3 Minimizing environmental impacts of
ATCO Electric’s operations remains
at the core of how each project is
approached. Here, Environmental
Coordinator Joel VanderMey, drives
stakes into the ground to prevent
workers from straying off protective
mats used during construction.

21 2014 ATCO ANNUAL REPORT

ATCO ELECTRIC 22

ATCO in the North ATCO is one of Northern
Canada’s largest and most diverse corporations. With investments
and partnerships across all three northern territories, ATCO
provides a wide range of industrial and commercial services,
the majority of which are focused on energy.

ATCO ELECTRIC YUKON
After 113 years of providing safe, reliable
electrical service and playing a key role in
supporting the development of the territory,
in 2014 Yukon Electrical Company Limited
entered a new chapter in its long history under
the ATCO banner as ATCO Electric Yukon.
The company began operations in 1901
when it began generating electricity for the
residents of Whitehorse using a wood-fired,
horizontal piston steam engine. Today, the
company serves more than 17,000 customers
in 19 communities from south of the Yukon
border, to north of the Arctic Circle. The main
office and service centre are both located in
Whitehorse.

As ATCO Electric Yukon, the company can
reinforce its connection to ATCO. The new
name also provided an opportunity for the
company and its employees to connect with
customers through community events and
communication celebrating the name change.

Another highlight of the year was the
completion of the redevelopment of Fish Lake
Hydro One. The station has provided electrical
power to the Yukon for 64 years and was the
first hydro power facility in the territory.

During the redevelopment process, it was
discovered that some of the oldest equipment
onsite was original to the Engineer Mine,
dating back to the 1890s. In order to preserve
the historical value of the equipment, ATCO
Electric Yukon entered into a partnership
with the MacBride Museum to create a
permanent hydro exhibit featuring the original
pelton wheel and generator. The exhibit was
opened in conjunction with the unveiling of
the company’s new name to reinforce its
long history and renewed commitment to the
territory.

Fish Lake Hydro One is the Yukon’s first hydro power facility,
dating back 64 years. In 2014, ATCO Electric Yukon completed
the redevelopment of the station.

ATCO in the North

Eureka

Alert

Resolute Bay

ATCO Structures
& Logistics Operations

Alaska Radar
System Sites

Uqsuq Site

Inuvik Gas

Anchorage

Inuvik

Cambridge
Bay

Iqaluit

Major
Communities
Served by
ATCO Electric Yukon

1 Old Crow
2 Beaver Creek
3 Stewart Crossing
4 Keno
5 Pelly Crossing
6 Destruction Bay/
Burwash Landing
7 Carmacks
8 Ross River
9 Haines Junction

10 Whitehorse/
Marsh Lake
11 Carcross/Tagish
12 Teslin
13 Swift River
14 Watson Lake/
Upper Liard
15 Lower Post, BC

Whitehorse

Yellowknife

Inuvik

YUKON

10
Whitehorse

Major Communities Served
by Northland Utilities

16 Trout Lake
17 Dory Point
18 Fort Providence
19 Yellowknife
20 Wekweeti
21 Kakisa
22 Enterprise
23 Hay River/K’atl’odeeche First Nation

NORTHWEST TERRITORIES

Yellowknife

23 2014 ATCO ANNUAL REPORT

ATCO IN THE NORTH 24

ATCO Electric Yukon also received a
decision on its 2013–2015 General
Rate Application submission that
included the approval of a two-
year Demand Side Management
Conservation program.

NORTHLAND UTILITIES
Northland Utilities is jointly owned
by ATCO Electric and Denendeh
Investments Incorporated (DII),
whose members represent 27
Dene First Nations communities
in the Northwest Territories (NWT).
Northland Utilities provides electricity
services to more than 11,000
customers in nine communities in
the NWT through its two divisions
located in Yellowknife and Hay River.

The ATCO and Denendeh partnership
in Northland Utilities has been
in place for 30 years. This highly
successful business model has
continued to evolve to the benefit
of both organizations and their
customers. A successful northern
company, with roots going back more
than 60 years, Northland Utilities also
supports initiatives that contribute
to sustainable economic and social
development. ATCO and DII work
together to encourage local skill
development through programs such
as Northland Utilities Job Shadowing
and its Aboriginal Placement
Program.

In 2014, Northland Utilities
(Yellowknife) completed an extensive
renovation of its existing service
centre. Originally constructed
in 1984, the service centre was
designed to accommodate eight to
10 workers. The renovations focused
on accommodating the growth in the
number of employees - 23 staff work
in the new building - and it features
two new vehicle bays.

ATCO
STRUCTURES & LOGISTICS
In 2014, ATCO Structures & Logistics
continued its commitment to the
North and the communities located
there.

In September, ARCTEC Alaska, a
joint-venture partnership between
ATCO Structures & Logistics and
ASRC Federal Primus, was awarded
a contract to provide operations
and maintenance services to the 15
strategic radar sites that form the
Alaska Radar System (ARS). The 10-
year contract, awarded by the United
States Department of the Air Force,
is valued at more than USD$340
million.

The contract continues the 19-year
partnership that has seen ARCTEC
responsible for maintaining the
geographically isolated radar sites
(accessible only by air or seasonal
barge), three remote radio sites,
and providing operations and
maintenance of facilities at the
primary base for the ARS - Joint
Base Elmendorf-Richardson.

Resolute Bay is the second most
northern community in the world.
ATCO Structures & Logistics
supports the needs of this remote
community by operating two hotels,
a water treatment plant, the Resolute
Bay Incoherent Scatter Radar and a
bulk fuel storage facility.

ATCO Structures & Logistics and
the Northern Aboriginal Services
Company established a joint
venture in 1998 to operate and
maintain facilities, towers and
power generating systems at 150
Northwestel microwave sites in the
Northwest Territories, northern British
Columbia and the Yukon.

Since 1996, ATCO Structures &
Logistics and joint-venture partner
Nunavut Petroleum Corporation
(representing the Nunasi Corporation
and Qikiqtaaluk Corporation) have
operated the bulk fuel storage facility
and pipeline distribution system in
Iqaluit, Nunavut. Uqsuq’s workforce
is 100 per cent local and 85 per cent
Inuit.

The Eureka Weather Station is
located approximately 1,000 km
from the North Pole and is the
northern-most civilian outpost
in Canada. ATCO Structures &
Logistics supports the station for the
Government of Canada by providing
year-round life system support for
buildings and facilities, including
electricity, heat and water and
building maintenance, and operation
and maintenance of equipment,
airstrips and roads.

INUVIK GAS
Inuvik Gas, a partnership between
the Inuvialuit Petroleum Corporation,
ATCO Energy Solutions and AltaGas,
was formed to deliver energy to
residential, commercial, institutional
and municipal customers in the Town
of Inuvik.

In 2014, Inuvik Gas and the Town of
Inuvik signed a new 10-year franchise
agreement that ensures the more
than 900 customers in the community
will continue to have access to a
safe, reliable gas distribution system
for their energy needs.

Northland Utilities Board of Directors, including Denendeh CEO Darrell Beaulieu
(left), ATCO/Canadian Utilities Chair, President & CEO, Nancy Southern (centre), and
Manager, Northland Utilities, Duane Morgan (right,) at a town hall with employees.

ATCO Gas has been heating homes and warming
communities across Alberta for more than a century. Today,
ATCO Gas provides safe, reliable and cost-effective natural
gas delivery to more than 1.1 million customers in nearly
300 Alberta communities.

As Alberta’s largest natural gas distribution
company, ATCO Gas builds, operates and
maintains more than 40,000 km of natural gas
distribution pipelines. ATCO Gas provides
24-hour response to natural gas emergencies
in its service territory, responds to customer
service requests and works to maintain the
reliability of its pipeline system. Through the
ATCO Blue Flame Kitchen and ATCO Energy
Sense, ATCO Gas also provides safety and
energy efficiency programs and services.

OPERATIONS AND
CUSTOMER GROWTH
ATCO Gas experienced another year of strong
customer growth, adding more than 25,000
customers.

The company negotiated a new franchise
agreement template with the Alberta Urban
Municipalities Association. This new template
agreement, which is expected to receive
Alberta Utilities Commission approval early
in 2015, will enable ATCO Gas to renew
distribution service rights in communities as
their franchise terms expire.

With the launch of its Combined Heat and
Power (CHP) program in 2014, ATCO Gas
secured contracts to install CHP technology
at the Collicutt Centre recreation facility in Red
Deer and the Sierras of Tuscany adult condo
complex in Calgary. Aimed at increasing
energy efficiency, and reducing energy costs
and greenhouse gas emissions in municipal
and commercial facilities across Alberta, CHP
is a technology that uses natural gas as a
primary fuel source to generate both heat and
electricity simultaneously. ATCO Gas plans
to install several more CHP units in facilities
across the province within the next two years.
The CHP program is partially funded by the
Climate Change and Emissions Management
Corporation.

As part of a large distribution system upgrade, ATCO Gas
employee Brad Trautman, Distribution Operator – Field, Camrose,
works on a “farm tap unit” near Camrose, Alberta.

25 2014 ATCO ANNUAL REPORT

ATCO GAS 26

INVESTING IN CAPITAL
INFRASTRUCTURE
ATCO Gas continued to deliver
strong capital growth, investing
nearly $300 million in capital projects,
adding more than 500 km of pipeline
to its network and installing more
than 23,000 service lines.

As part of its capital expenditure,
the company invested more than
$60 million in replacing nearly 350
km of plastic and more than 20 km
of steel natural gas pipelines with
polyethylene pipe, to help ensure the
safety and reliability of its pipeline
network.

ATCO Gas is also working with
ATCO Pipelines on its Urban Pipeline
Replacement (UPR) Project. With this
project, ATCO Pipelines is relocating
high-pressure natural gas pipelines
located in densely populated areas
of Calgary and Edmonton into the
Transportation Utility Corridors
(TUCs) surrounding both cities,
helping ensure public safety and
providing capacity for future growth.
For its part of the UPR program,
ATCO Gas will construct regulating
(gate) stations within the TUCs and
new lower pressure distribution
pipelines to meet customer needs. In

addition, some existing high-pressure
pipelines will be transferred to the
ATCO Gas distribution system to be
operated at lower pressures. This
program is expected to be completed
in 2018.

In partnership with the Alberta
Common Ground Alliance, the
company hosted learning breakfasts
for excavators in Edmonton, Calgary
and Lethbridge in support of Safe
Digging Month.

DEDICATED TO PUBLIC SAFETY
Safety is a core component of
ATCO Gas’s business. The company
provides natural gas safety education
and resources to homeowners,
renovators, contractors and
builders, as well as for school safety
programs. ATCO Gas also works with
and provides safety training to local
fire departments and first responders
for emergency situations involving
natural gas.

In 2014, the company implemented
a number of safety initiatives across
the province. ATCO Gas continued its
commitment to public safety through
its Damage Prevention Program.
Aimed at achieving progressive,
year-over-year reductions in the
frequency of damages to its buried
infrastructure, this program promotes
safe digging practices around natural
gas pipelines. Last year, the company
provided more than 300,000 gas
line locates to support safe digging
practices across the province.

ATCO Gas launched Alberta’s first-
ever Carbon Monoxide Awareness
Week in 2014, raising awareness
about the dangers of carbon
monoxide and how Albertans can
prevent and detect it. This program
was developed in partnership with
the Office of the Fire Commissioner
and local fire departments.

ATCO Energy Theatre introduced
a new production in the fall,
educating students on natural gas
and electricity safety. In 2014, the
theatre troupe performed in front
of more than 14,500 students in 66
communities. Since its inception in
2007, it has edu-tained more than
112,000 Alberta students.

A highlight of the year for ATCO
Gas employees was being
recognized as Heroes of the Flood
by the Government of Alberta for
outstanding service to Albertans
during the June 2013 southern
Alberta flood.

 IdeaWorks 2.0 – ideas that work

ATCO Gas launched IdeaWorks
2.0 in 2014, a program that
encourages ATCO Gas employees
to share ideas that lead to positive
change in the areas of safety,
reliability, productivity, efficiency or
innovation.

new portion of polyethylene gas
line while the gas is still flowing.
The tool completely halts the gas
flow, so no gas is released into the
atmosphere, providing employees
with a safe way to perform the
connection.

The tubing tool (shown below) has
been tested to meet ATCO Gas and
all applicable code requirements.
Employees and contractors
throughout Alberta are currently
being trained to use it.

IdeaWorks 2.0 is led by the
company’s Continual Improvement
Team, consisting of employees
from across the company. In
addition to promoting the program,
the team collects and evaluates
improvement ideas and recognizes
individuals and teams when ideas
are successfully implemented.

In 2014, ATCO Gas employees
submitted more than 330 ideas
—23 of which have already been
implemented.

One idea that is making an impact
at ATCO Gas is a tubing tool that
was designed to enable employees
to safely and efficiently connect
an existing steel gas line with a

COMMITTED TO OUR
CUSTOMERS
ATCO Gas customers continue to
enjoy the lowest natural gas delivery
rates in Canada. In 2014, ATCO
Gas responded to nearly 135,000
customer-initiated service calls
and to nearly 3,000 natural gas
emergency calls.

The company introduced several
new customer service improvements
in the year, including a more
streamlined approach for service
line alteration estimates. The easier
and more efficient new rate structure
ensures greater equity in service
rates for customers across the
province.

ATCO Gas also enhanced its
Emergency Parts Replacement
Program. This program ensures
consistency and efficiency when
managing the parts needed to
fix appliances during emergency
service calls. This cost-recovery
service is highly valued by customers
and is unique among natural gas
distribution companies in Canada.

ATCO ENERGYSENSE
ATCO EnergySense, established
by ATCO Electric and ATCO Gas in
2001, provides Albertans with energy
management services, including
energy assessments for commercial
customers and energy efficiency
advice for residential customers.

The ATCO Energy Education Mobile,
an interactive classroom on wheels,
continued educating students and
the public about Alberta’s energy
resources and using energy wisely. In
its first five years, the ATCO Energy
Education Mobile has visited more
than 170 communities and engaged
more than 65,000 participants.

The Collicutt Centre, a 260,125 sq. ft. recreation facility in Red Deer, Alberta, was one of the first customers to sign up for
ATCO Gas’s Combined Heat and Power program. The program incorporates technology that increases energy efficiency and
reduces energy costs and greenhouse gas emissions.

27 2014 ATCO ANNUAL REPORT

Through the IdeaWorks 2.0 program, ATCO Gas employee Paul Kendall,
left, submitted an idea for a new tubing tool that is now being rolled out to
employees and contractors throughout Alberta. The tool provides a safe way
to connect two gas lines while gas is still flowing.

ATCO GAS 28

ATCO Blue Flame Kitchen expands its reach

ATCO Blue Flame Kitchen (BFK), a
service offered by ATCO Gas, has
provided Albertans with natural gas
safety information, energy efficiency
tips and household advice related to
food, cooking, recipes, stain removal
and other household problems for
85 years. The service has been
expanded to include cooking classes
and educational programs for
participants of all ages.

In 2014, ATCO Blue Flame Kitchen
focused on expanding connections
with customers, both in person
through classes led by professional
chefs and home economists, and
online through the web, social media
and smartphone and tablet apps.

Community engagement remains
an essential initiative at ATCO
Blue Flame Kitchen. This year, the
BFK team heightened community
outreach through numerous speaking
engagements to a wide range of
audiences across Alberta including
various community groups, military
families and post-secondary
students.

The Calgary Learning Centre
facility had another year of strong
attendance for cooking classes and
corporate events, and the partnership
with Alberta Health Services South
Health Campus in Calgary has also
assisted with an increased customer
reach. The team of community
educators in the Edmonton location
has likewise been hosting popular
lunch classes for ATCO employees
and customers in addition to their
regular selection of evening classes.
In total, more than 8,000 people have
attended BFK classes in Calgary and
Edmonton in 2014.

The ATCO BFK app was launched in
January 2014 to a positive reception

making it possible for consumers
to look up recipes, create shopping
lists, watch YouTube tutorial videos
and chat live with the team of
community educators from the
comfort of their smartphone or tablet
screen.

The ATCO Blue Flame Kitchen
website saw continued updates
and user experience improvements
including expanded how-to guides,
a large menu planning section and a

new blog. The resulting rise in traffic
is a strong indication that these
efforts are paying off.

This year saw the addition of
Facebook to the social media
platforms embraced by the ATCO
Blue Flame Kitchen. The BFK page
started collecting ‘likes’ almost as
soon as it went live, and there has
been an enthusiastic response to
both Facebook posts and ads.

 From Farm-to-Table

At ATCO Blue Flame Kitchen camps,
kids expect to get their hands dirty.
But at one special camp this year,
they also got their boots muddy.

by Cam, real working farms near
Strathmore, Alberta, where they
spent the morning digging up
organic potatoes and carrots.

As a founding partner of Ag for Life,
a non-profit organization dedicated
to building a greater understanding
and appreciation of agriculture and
its fundamental connection to life,
ATCO worked with the organization
to offer a unique one-day Farm-to-
Table experience for BFK campers.

The August 22 camp took kids to
Poplar Bluff Organics and Carrots

In the afternoon, they came back
to the Calgary Learning Centre
facility to learn how to turn those
freshly picked veggies into potato
gnocchi and carrot cupcakes. It was
an educational experience for the
kids, especially those who had little
exposure to farming or vegetable
gardening.

Kids ages 9-11 harvest organic potatoes as part of ATCO Blue Flame Kitchen’s
Farm-to-Table summer camp.

CONNECT WITH US

ATCO Pipelines plays an integral role in
delivering natural gas in the Alberta marketplace, serving
producers throughout Alberta, as well as distribution
companies and major industrial customers.

With peak delivery of 3.8 billion cubic feet per
day, ATCO Pipelines owns and operates more
than 8,500 km of pipeline, serving Alberta
customers through approximately 4,000
receipt and delivery points.

In 2014, ATCO Pipelines received regulatory
approval to proceed with two of its major
projects: the Urban Pipeline Replacement
Project and the Alberta System Integration.
The year also saw the company complete
the longest directional drill in the company’s
history, achieve 12 years without a lost-time
incident, install a new aerial crossing near
Banff and receive an environmental award
for its innovative approach to a pipeline river
crossing.

URBAN PIPELINE
REPLACEMENT PROJECT
Over the past 50 years, urban development
has overgrown the existing network of high-
pressure pipelines that were originally built on
the outskirts of Calgary and Edmonton. This
created three areas of concern: public safety,
construction standards and future demand.

As a result, ATCO Pipelines initiated the
Urban Pipeline Replacement (UPR) Project to
proactively relocate the transmission of high-
pressure natural gas from pipelines currently
running through densely populated areas
of Edmonton and Calgary to new, modern
pipelines located in the Transportation Utility
Corridors (TUCs) that surround the two cities.

In January 2014, ATCO Pipelines received
approval from the Alberta Utilities Commission
(AUC) to proceed with its UPR Project.

With the approval in place, ATCO Pipelines
has conducted additional public consultation
activities for the first Calgary segments

ATCO Pipelines successfully completed a new aerial crossing along
the Banff Transmission Pipeline, near Seebe, Alberta. Originally
installed in 1951, the pipeline was suspended from a vehicle bridge
no longer fit to safely support the pipeline river crossing.

29 2014 ATCO ANNUAL REPORT

ATCO PIPELINES 30

and received AUC approval on
its Northeast Calgary Connector
facilities application in January 2015.

Public consultation activities for
the first Edmonton segment, the
Southwest Edmonton Connector,
took place in early 2015.

Building new, modern pipelines in the
TUCs will improve public safety by
reducing the risk of an incident. The
new pipeline system will be built to
modern-day construction standards
and will help to ensure that ATCO
Pipelines can meet the demand for
natural gas as both cities continue to
grow.

ALBERTA SYSTEM INTEGRATION
ATCO Pipelines and Nova Gas
Transmission Limited (NGTL)
achieved a major regulatory
milestone in 2014 as the
companies continue to work
towards completing the Alberta
System Integration. In October,
the National Energy Board (NEB)
approved the asset swap between
ATCO Pipelines and NGTL.

The initiative stretches back to 2008
and will see the integration of the
two companies’ respective operating
systems, rates and customer service
functions within Alberta.

This integration combines the
physical assets of the companies
under a single rate and services
structure with a single commercial
interface for customers. However,
each company will continue to
separately own and manage assets
within distinct operating territories. It
is expected that this model will end
duplicative tolling and operational
activities and will result in more
efficient regulatory processes.

With approvals from both the NEB
and AUC in place, all regulatory

31 2014 ATCO ANNUAL REPORT

pieces of the integration have been
secured and the companies can
move forward with the physical swap
of assets. In 2015, both companies
will begin the exchange of pipelines
and facilities with all aspects of the
swap expected to be completed by
the end of 2016.

and maintaining safe work practices,
both in the field and the office.

As of that date, employees worked
the equivalent of 7.2 million person-
hours without a reportable workplace
injury serious enough to prevent
someone from reporting to work on
the next calendar day.

A NEW RECORD
Each year, ATCO Pipelines
undertakes a number of construction
projects in Alberta cities. This year,
the company completed a project
to supply natural gas to a new 800
megawatt (MW) combined-cycle,
natural gas-fired power plant in
southeast Calgary.

marked 12 years without

“In September, ATCO Pipelines
a lost-time incident.”

ATCO Pipelines’ strong safety
culture permeates throughout the
organization. The company’s safety
program – Target Zero – strives to
keep all employees injury, incident
and collision-free on the job by
reminding each individual of the
importance of personal safety.

Comprehensive training programs
are in place to ensure everyone
at ATCO Pipelines, including
contractors, has the knowledge
and resources to work safely and
achieve Target Zero. Only those
who share these safety values
are selected to work on ATCO

The project involved the installation
of approximately 16 km of 508 mm
(20”) pipeline and control facilities.
Adding to the complexity of this
project was that the pipeline would
have to cross a major highway
intersection at the edge of the city.

To do this, ATCO Pipelines used
horizontal directional drilling that
allows pipelines to be installed
without disturbing the area directly
above the pipe. For this project, the
team completed a 1.7 km horizontal
drill underneath the roadways, which
is a record length for ATCO Pipelines
and the City of Calgary. The project
was also completed on-time and on-
budget.

SAFETY
In September, ATCO Pipelines
marked 12 years without a lost-time
incident, a milestone achieved by
continuously focusing on building

Pipelines projects.

BANFF TRANSMISSION LINE
This year also saw ATCO Pipelines
complete a new aerial crossing along
the Banff Transmission Pipeline.
Originally installed in 1951, the
Banff Transmission Pipeline was
suspended from the TransCanada
Highway 1 vehicle bridge over the
Bow River near the town of Seebe,
Alberta. While the bridge was
closed to vehicle traffic in 1977, it
and the pipeline remained in place
until this year when ATCO Pipelines
determined that the bridge was no
longer fit for supporting the pipeline
river crossing.

ATCO Pipelines removed the existing
pipeline, as well as the abandoned
vehicle bridge and installed a new
aerial pipeline crossing of the Bow
River at the same location.

Innovative techniques safely restore
pipeline infrastructure

The southern Alberta floods of
2013 had a significant impact
on the natural gas and electricity
infrastructure that Albertans rely on
to deliver utility services. In Calgary’s
Weaselhead Flats Park, high flow
rates in the Elbow River washed
away riverbed, exposing one of ATCO
Pipelines’ high-pressure pipelines
that serves natural gas to southwest
Calgary. Restoring this infrastructure
posed a unique challenge with the
park falling in an environmentally-
sensitive area.

In conjunction with a number
of government agencies,
ATCO Pipelines developed a
comprehensive plan that would not
only protect the 12” high-pressure
natural gas pipeline, continuing its
safe and reliable operation, but also
minimize the disruption to the park
and surrounding natural habitat.

Some of the innovative techniques
employed to restore the riverbed and
surrounding banks over the pipeline
included:

• Using the rock structure as a work

surface to avoid unnecessary
disturbance on the bank

• Minimizing pruning or clearing for

• Transporting geo-technical drilling

access and workspace

equipment in and out of park
areas with helicopters to limit the
impact on natural vegetation and
disruption for regular park users

• Using existing pathways and

specialized low-impact equipment
to bring in 1000 m3 of rock

• Installing special environmental

elements such as woody debris to
protect and enhance fish habitat

• Using complete in-stream isolation
to prevent sediment disturbance
and ensuring this technique was
effective by employing a full water
quality monitoring program

• Planting new trees and bushes to

ensure long-term bank preservation

The Elbow River Crossing Project
was successfully completed in the
spring of 2014. As a result of careful
planning and engagement, the
project received the 2014 Alberta
Roadbuilders & Heavy Construction
Association’s (ARHCA) Environment
Award. The award recognizes the
positive achievements of ARHCA
member companies as they complete
projects or initiatives that change
operations in a way that respects or
enhances the environment.

1 Innovative techniques employed during the

restoration of the riverbed and surrounding banks,
minimized environmental impacts and ensured the
safe and reliable operation of the pipeline.

2 Following construction, the soil is seeded,

biodegradable coconut-fibre erosion control
blankets are installed, and native shrubs are
planted to help accelerate the reclamation process.

ATCO PIPELINES 32

 ATCO Moves into the Mexico Market

Steven J. Landry
Senior Vice President & Chief Development Officer

MEXICO’S ENERGY MARKET
REFORM
In August 2014, comprehensive
reforms were passed into law
in Mexico with the intention of
transforming Mexico’s energy sector
(hydrocarbon and electricity) and
paving the way for private-company
investment for the first time since
the sector was nationalized in 1938.
The goal of the reforms is to increase
competitiveness and economic
growth, and have a positive impact
on trade and investment in the
country.

Mexico’s energy sector is almost
entirely state-owned. Petróleos
Mexicanos (Pemex), the state-
owned oil and gas company, owns
all of Mexico’s oil and gas reserves
and is exclusively responsible
for exploration, production and
retail distribution.The Comisión
Federal de Electricidad (CFE), the
state-owned electricity company,
owns and controls 85 per cent
of power generation and 100 per
cent of electricity transmission and
distribution. As part of these industry
reforms, each of these companies
becomes a “State Productive
Enterprise” which provides a
motivation and encouragement to
partner with private enterprise.

Key elements of the reforms that
could potentially be of interest to
ATCO include:

• The opening of power generation
activities to the private sector,
allowing private businesses to
enter into bilateral contracts for the
sale of electricity to industrial and
commercial customers.

• Allowing joint ventures with

private parties for the financing,
installation, maintenance,

management, operation and
expansion of natural gas and
electricity transmission and
distribution networks.

• Establishing a wholesale market
for electricity and natural gas in
Mexico.

Overall, greater private-sector
participation is expected across the
energy sector value chain.

CANADA-MEXICO
RELATIONSHIP
Mexico is the world’s tenth largest
oil producer with some of the largest
reserves in the Western Hemisphere.
The country is Canada’s largest
export market in Latin America and
fifth largest in the world after the
U.S., U.K., China and Japan.

Canada and Mexico are strategic
North American partners with strong
economic, political, social and
cultural ties. Since the creation of the
North America Free Trade Agreement
in 1994, bilateral merchandise trade
between Canada and Mexico has
increased six-fold. In 2013, Canada-
Mexico two-way trade amounted to
$32 billion.

ATCO IS A GOOD FIT FOR
MEXICO
The opening of Mexico’s market to
foreign investment in the country’s
energy sector will bring expertise
in the fields of engineering and
operating energy infrastructure
assets.

ATCO’s worldwide expertise and
experience in its businesses of power
generation, natural gas and electricity
transmission and distribution, and
gas processing and storage is a
good fit for Mexico’s infrastructure
development plans. The capabilities

of ATCO Structures & Logistics are
a logical complement to provide the
accommodations and site services
support required for large-scale
projects. This provides a strong
backdrop for ATCO to continue its
global growth strategy with a focus
on Mexico.

ATCO Mexico has opened a new
office in Polanco, Mexico City to
continue to pursue business in this
busy country. ATCO Mexico’s growth
plan is modelled after ATCO’s growth
strategy in Canada and Australia,
which is to develop, build, own and
operate new energy infrastructure
assets through both greenfield
projects and acquisitions.

EARLY SUCCESSES
In the fall of 2014, ATCO Mexico
had early success with two business
wins. In October, the company was
awarded a contract by the CFE to
design, build, own and operate a
natural gas pipeline near the town of
Tula in the state of Hidalgo, Mexico.

Valued at approximately USD$50
million, ATCO will be responsible
for the design, construction,

operation and maintenance of the
pipeline that will transport natural
gas approximately 16 km to fuel the
existing Francisco Pérez Rios power
plant, near Tula. The environmentally-
friendly and cost-effective natural
gas in this new pipeline will replace
the ‘crude oil’ that currently fuels
this power plant. Expected to be
in-service in 2015, ATCO has hired
Cocomex, a local engineering,
procurement and construction firm,
to carry out most of the construction
of the project.

At a special event in Mexico in
February 2015, ATCO joined Mexico’s
Secretary of Energy, the Head of the
CFE and the Governor of the state of
Hidalgo to celebrate the official start
of construction of the project.

The second business win also came
in October 2014, when ATCO Mexico
and partner Grupo Hermes S.A. de
C.V. were selected by an affiliate
of Pemex, PMX Cogeneracion
S.A.P.I. de C.V., to begin the project
development and approval process
for a natural gas cogeneration plant
at the Miguel Hidalgo refinery near
Tula.

Cogeneration is a highly efficient, and
environmentally attractive process
that produces both electricity and
heat. The Tula cogeneration plant
is expected to have a generating
capacity of 638 megawatts of
electricity and produce 1,247 tonnes
of steam per hour. Initial estimates
value the capital cost of the
proposed project at USD$820 million
of which ATCO will be responsible
for approximately half of the required
investment. Partnership approval is
expected in 2015, with a commercial
operation date in the second half of
2018.

LONG-TERM INVESTMENT
ATCO is making a long-term
commitment to develop operations
in Mexico and will continue to
pursue new opportunities in 2015
and beyond. The company will
also continue with its longstanding
practice of developing long-term
local partnerships to grow our
business and invest in the local
communities where we have the
privilege to operate. Becoming part
of the community fabric is an ATCO
tradition.

Construction of the Ramal Tula Pipeline Project in Mexico was officially launched in February 2015. Above, the first section of
pipe is lowered into the ground.

33 2014 ATCO ANNUAL REPORT

ATCO MEXICO 34

Energy

• ATCO Power
• ATCO Energy Solutions

These companies are
engaged in power
generation and sales
and industrial water
infrastructure, natural gas
gathering, processing,
storage and liquids
extraction.

ATCO Power leverages its decades of experience and
industry-leading expertise developing, building and operating
independent power generation facilities to provide customers
with cost-effective power solutions including commercial and
industrial power sales and distributed power generation.

In 2014, ATCO Power had an ownership
position in 14 power generation plants in
Alberta, British Columbia, Saskatchewan,
Ontario and the United Kingdom, with a
combined capacity of 4,591 megawatts (MW)
and total ownership interest in 2,541 MW.
The company has expertise in developing,
constructing and operating gas-fired,
cogeneration, combined-cycle, hydro and
coal-fired generating stations.

FINANCIAL PERFORMANCE
From 2011-2013, ATCO Power’s financial
performance was very good and indicative
of the strong Alberta market with high plant
availability and tight margins caused by
a two-year outage of a large competitor
generating station. In 2014, the Alberta market
weakened considerably due to an increased
supply of electricity, mild weather and high
unit availability in the province.

ATCO Power extensively analyzes the market
and is focused on operational excellence
through the safe, reliable and economic
operation of existing assets.

With the power demand in Alberta forecasted
to increase by more than 50 per cent by
2022, alongside a retiring coal-fired power
fleet, Alberta will need to build 6,471 MW of
capacity over the next 10 years. ATCO Power
intends to develop new, clean and efficient
natural gas-fired power generation to meet
Alberta’s growing electricity demand.

The U.K. electricity market continued to be
challenging in 2014, making it difficult for a
mid-merit, high-availability gas-fired facility
such as ATCO Power’s Barking plant to
economically compete. After the completion
of a successful 15-year contract to supply

In 2014, ATCO Power introduced a new power choice for
Alberta businesses by offering competitively priced electricity
for large commercial and industrial customers.

ATCO Power’s Brighton Beach Combined-
Cycle Generation Plant, uses waste heat
from the gas turbines to generate steam,
significantly increasing the efficiency of power
production for the facility.

35 2014 ATCO ANNUAL REPORT

ATCO POWER 36

power in the U.K., Barking provided
periodic support to the market
through the provision of ancillary
services. The U.K. government’s
recent Energy Market Reform (EMR)
was seen as a potential avenue for
the station to continue its operations;
however, as Barking was unable to
economically secure term contracts
under the EMR, the decision was
made to shut down the facility and
decommissioning of the station
commenced in the latter part of 2014.

GROWTH
Significant project development work
continued on the proposed
400 MW Heartland Generating
Station in Strathcona County near
Edmonton, Alberta. Following the
completion of environmental studies
and public consultation, ATCO
Power submitted applications for
regulatory approval to the Alberta
Utilities Commission (AUC) and
Alberta Environment and Sustainable
Resource Development (AESRD)
to construct and operate the ATCO
Heartland Generating Station.
The AUC approval was received
in 2014 and the AESRD approval
is expected soon. Work remains
ongoing with potential partners and
power off-takers in order to remain
fully engaged until the market signals
optimal timing for the project to
commence.

ATCO Power also explored several
other growth and development
opportunities over the year as part of
the company’s ongoing commitment
to further expand its capabilities and
provide the same level of trusted
reliable service ATCO has become
known for in Alberta. This included
expanding into new geographies with
the launch of ATCO Mexico. Last year
the company publicly announced
that, along with a Mexican partner,
it was selected to begin the project
development and approval process

for a natural gas cogeneration plant
at the Miguel Hidalgo refinery near
the town of Tula in the state of
Hidalgo, Mexico.

The cogeneration plant is expected
to have a generating capacity of
638 MW of electricity and produce
approximately 1,247 tonnes of steam
per hour. Initial estimates value the
capital cost of the proposed project
at USD$820 million, of which ATCO
will be responsible for approximately
half of the required investment. A final
investment decision will take place
in 2015, with a commercial operation
date in the second half of 2018.

“Cost-effective power

solutions have won ATCO
Power a number of contracts
in its first seven months in

the market.”

ATCO Power also entered a new
market in Alberta in 2014, selling
electricity directly to commercial and
industrial (C&I) customers. These
power solutions include several
versatile product offerings that
can be customized for the needs
of each specific customer, helping
customers optimize their electricity
costs while providing a high level of
customer service. ATCO Power has
won a number of contracts in its first
seven months and remains focused
on providing innovative and cost-
effective solutions for C&I customers.

In 2014, ATCO Power began another
new generating initiative with the
Distributed Generation business.
Distributed Generation develops
natural gas-fired, smaller scale
generating projects that are designed
to connect to the electricity grid
or act as standalone generation,
either temporarily or in longer-term
partnerships with industrial facilities.

In December, Distributed Generation
signed its first contract with Apache
Canada Corporation to generate
electricity at its House Mountain
drilling site, which will be sold into
the Alberta grid.

OPERATIONS
The company’s generation fleet’s
excellent availability of 95 per cent
provided safe and reliable power
throughout the year. Over the
past several years, maintenance
windows at both coal-fired power
stations (Sheerness and Battle River)
provided the opportunity for ATCO
Power to uprate the steam turbines
and generators by an additional 20
MW per station, increasing capacity
numbers to 780 MW at Sheerness
and 689 MW at Battle River.

ATCO Power continues to work
closely with industry, government and
environmental organizations to help
develop standards for the Alberta
electricity sector. The company
has implemented and optimized
mercury emission controls through
the injection of activated carbon into
the flue gas to capture mercury at the
Sheerness and Battle River coal-
fired generating stations, achieving
a capture rate of greater than 80 per
cent and resulting in a 26 per cent
decrease in mercury emissions as
compared to the previous year.

SAFETY
Strong health and safety
performance continued with several
new programs implemented in 2014
including the New and/or Young
Worker Mentorship Program across
all ATCO Power sites, Standardized
Safe Work Processes, Training
Content Standardization, Hazard
Identification, Assessment and
Control Process Improvement
and Safety Communication
Standardization (Safety Alerts and
Safety Meeting templates).

ATCO Power’s 2014 Generation Facilities

ALBERTA

BRITISH
COLUMBIA

Edmonton

SASKATCHEWAN

Calgary

NATURAL GAS
Facility

Generating
Capacity (MW)
580
90

1 Brighton Beach
2 Rainbow Lake 4 & 5
3 Muskeg River
4 McMahon
5 Poplar Hill
6 Valleyview 1 & 2
7 Primrose
8 Scotford
9 Joffre

10 Cory
11 Barking

170
120
45
90
85
170
480
260
1,000

COAL-FIRED

12 Battle River 3, 4 & 5
13 Sheerness 1 & 2

689
780

RUN-OF-RIVER HYDRO

14 Oldman River

Total Generating Capacity
4,591 MW
Total Generating Capacity Owned
2,541 MW

37 2014 ATCO ANNUAL REPORT

ATCO POWER 38

ATCO Energy Solutions builds, owns and operates
non-regulated energy and water-related infrastructure. The company
focuses on offering industrial water infrastructure solutions; natural gas
gathering, processing, storage and liquids extraction; transportation
and services to the energy industry.

ATCO Energy Solutions owns or has interest
in five natural gas gathering and processing
facilities and four natural gas extraction
facilities which, combined, have a total
processing capacity of more than 1.7 billion
cubic feet per day.

In 2014, the company repositioned itself as an
energy infrastructure provider within Alberta’s
Industrial Heartland, Canada’s largest
hydrocarbon processing region with more
than 40 companies involved in the chemical,
petrochemical, and oil and gas sectors.
Industrial water contracts were executed and
a major storage partnership was announced
as part of this new direction.

The ATCO Heartland Energy Centre, located
approximately 12 km west of Bruderheim,
Alberta, is an area of energy activity in
Alberta’s Industrial Heartland. ATCO Energy
Solutions, alongside the operations of ATCO
Pipelines and ATCO Power, will be furthering
its position as an energy infrastructure
provider in the region and moving to secure
additional opportunities in the areas of
industrial water and hydrocarbon storage.

HYDROCARBON STORAGE
In September, ATCO Energy Solutions, in
partnership with Petrogas Energy Corp.,
announced the development of a hydrocarbon
storage facility consisting of four salt caverns
and associated above-ground hydrocarbon
handling facilities in Alberta’s Industrial
Heartland region. The location and in-service
date of this facility will help customers solve
the logistical challenges that restrict moving
natural gas liquids to market.

The caverns will contain propane, butane
and ethylene and this storage facility will be
connected to Petrogas Energy Corp.’s existing

ATCO Energy Solutions recently doubled its land position in
Alberta’s Industrial Heartland, an area critical to Alberta’s
energy industry. With the additional 160 acres of land, the
company has the potential to develop more than 40 salt
caverns on ATCO-owned land in the area.

Fort Saskatchewan hydrocarbon
truck and rail terminal that currently
receives and distributes multiple
products in the marketplace.

owned land to provide services to
existing customers and explore future
opportunities and solutions within the
Industrial Heartland region.

Cavern drilling and long-lead
procurement are currently underway
for the facility that will be built and
operated by ATCO Energy Solutions.
Commercial operation for two
caverns is targeted for the second
quarter of 2016, with the additional
two caverns anticipated to be
completed by the second quarter of
2017.

To support long-term salt cavern
developments, ATCO Energy
Solutions acquired an additional
160 acres of land and 400 acres of
salt mineral rights for further surface
facility and cavern development,
expanding the ATCO Heartland
Energy Centre to include more than
600 acres of contiguous, ATCO-

INDUSTRIAL WATER
In 2014, progress continued on two
industrial water projects to provide
essential water transportation
services and value-added benefits to
other customers in the region from a
common multi-user water system.

The Sturgeon Water Pipeline was
constructed to increase capacity to
service the North West Redwater
Partnership’s Sturgeon Refinery and
provide increased water accessibility
to the area. A new pump station is
under construction and is anticipated
to be completed by mid-2015.

In addition, the Scotford Water
Pipeline is under construction and is
also anticipated to be completed by
mid-2015.

Expansion of the ATCO Heartland
Industrial Water System to include
additional pumping and storage
facilities, commenced in 2014 to
provide Air Products Canada Ltd.
with industrial water services at its
hydrogen facility located adjacent
to the Shell Scotford Refinery in
Strathcona County.

ATCO Energy Solutions also
provided short-term water services
in 2014. The company negotiated
hydrotest water supply agreements
for two major pipeline construction
projects in close vicinity to the ATCO
Heartland Industrial Water Centre.
The first hydrotest water supply
service was completed in October
and the second will be completed in
the first quarter of 2015.

ATCO Energy Solutions in the Heartland

INDUSTRIAL WATER SYSTEM
River water intake & pump station
Sturgeon Water Pipeline
Heartland Water Pipeline
Scotford Water Pipeline
Customer delivery points

HYDROCARBON STORAGE
Salt Caverns

ELECTRICAL TRANSMISSION/

SUBSTATION FACILITIES

Scotford Transmission/Substation

NATURAL GAS LIQUIDS
EXTRACTION FACILITIES
Fort Saskatchewan Ethane Extraction Plant

Industrial customers

r
e
v
i
R
n
a
w
e
h

o rth Saskatc

ATCO
Heartland
Energy
Centre

ALBERTA

Edmonton

39 2014 ATCO ANNUAL REPORT

ATCO ENERGY SOLUTIONS 40

Australia

• ATCO Australia
• ATCO Power Australia
• ATCO Gas Australia

These companies
provide a full range of
energy infrastructure
services.

ATCO Australia, based in the Western
Australian capital, Perth, develops, builds, owns and
operates energy infrastructure assets across Australia.

ATCO Australia has ownership in and
operates three power generation facilities in
the country. ATCO Australia also owns and
maintains the largest gas distribution network
in Western Australia covering Geraldton,
Bunbury, Busselton, Harvey, Pinjarra,
Brunswick Junction, Capel and the greater
Perth metropolitan area. It also operates
two separate non-regulated gas distribution
networks, one serving Kalgoorlie and the
other, a liquefied petroleum gas storage-fed
gas distribution network serving Albany.

With a combined electricity generation
capacity of 299 megawatts (MW), more than
13,700 km of gas distribution pipelines serving
more than 700,000 customers, ATCO Australia
has established a solid asset base from which
to grow.

ATCO POWER AUSTRALIA
ATCO Power Australia experienced solid
performance in 2014 across its three power
stations, with commercial availability of
approximately 98 per cent. The Bulwer Island
Cogeneration Facility in Queensland is a 33
MW electrical and 55 MW thermal equivalent
cogeneration facility. The 180 MW Osborne
Combined-Cycle Facility is located near
Adelaide in South Australia. The 86 MW
Karratha Power Station is the most efficient
and environmentally-friendly facility connected
to the North West Interconnected System in
the Pilbara region in Western Australia.

Building upon ATCO’s relationship with
Horizon Power, in November 2014, the
Karratha Power Station secured an operations
and maintenance contract for Horizon’s gas
turbine which provides additional generation
capacity to the Pilbara region when required.

Jody McNeill and Pete Dainton, Gas Distribution
Officers, Facilities Maintenance at ATCO Gas Australia,
service the pressure reduction station in Ballajura to
ensure the safe and reliable delivery of natural gas for
consumers in Perth and surrounding regions.

The state-of-the-art business and operations
centre in Jandakot is part of ATCO Australia’s
ongoing commitment to the region and the safe,
reliable delivery of natural gas in Western Australia.

41 2014 ATCO ANNUAL REPORT

ATCO AUSTRALIA 42

In April 2014, BP announced that
the Bulwer Island Refinery will
cease operations by mid-2015. In
preparation for its closure, ATCO
Power Australia and BP continue
discussions regarding the operational
requirements for ATCO’s Bulwer
Island Cogeneration Facility. The
facility currently provides 100 per
cent of the electrical load, process
steam and the demineralized water
needs for the BP refinery.

In July 2014, ATCO Power Australia’s
Osborne Facility ceased its supply
of steam to Penrice Soda Holdings
following the company’s closure.
The Osborne Facility subsequently
adjusted its operation from
cogeneration to combined-cycle
mode. Additionally, due to the
changing gas market in Australia,
a new Power Purchase Agreement
(PPA) was negotiated with Origin
Energy, the 100 per cent off-taker of
power from Osborne. Effective July
2015, the revised PPA will provide for
flexible dispatch of the facility.

ATCO GAS AUSTRALIA
Despite a warmer than average
winter, ATCO Gas Australia has
performed well, driven by continued
growth in its rate base from capital
investment and interest savings
related to the credit rating upgrade
and refinancing that occurred at the
end of 2013.

During the year, ATCO Gas Australia
contributed to the development of
several major infrastructure projects
around Perth, including Perth City’s
riverfront development, Elizabeth
Quay. This significant network
installation will deliver a reliable
long-term gas supply, estimated
at 80 terajoules per year, providing
the potential for cogeneration
and trigeneration for commercial
developments surrounding the Quay.

With Perth being the fastest growing
capital city in Australia, ATCO Gas
Australia continued to extend the
gas distribution network to new
subdivisions, supporting the city’s
expansion in the outer-lying suburbs
of Yanchep, Yunderup, Byford
and Forrestdale. Servicing these
areas saw more than 200 km of
polyethylene pipeline added to the
existing network during the year, with
the expansion program positively
contributing to the overall increase
of more than 19,000 customers in
2014. In the three years of ATCO
Gas Australia’s ownership, the total
number of new homes able to access
natural gas has increased by more
than 55,000 and in December, ATCO
Gas Australia connected its 700,000th
customer.

connected its 700,000th

“ATCO Gas Australia
customer in 2014.”

Also under ATCO Gas Australia’s
ownership, the Mains Replacement
Program has been accelerated and
is ahead of schedule. The program
involves replacing the cast iron and
unprotected metallic gas mains with
polyethylene pipe to help ensure
the continued safe and reliable
delivery of natural gas to Perth and
surrounding regions.

ATCO Gas Australia’s capital
infrastructure growth has been
supported by investing in marketing
campaigns to increase natural gas
connections. In November 2014,
ATCO Gas Australia exceeded 2,650
connections in a single month, the
highest monthly connection figure
recorded during the past five years.

During the first quarter of 2014,
ATCO Gas Australia submitted its
access arrangement, for the period
July 1, 2014 to Dec. 31, 2019, to
the Western Australian Economic
Regulation Authority (ERA). In
October 2014, the ERA published its
draft decision. ATCO Gas Australia
has responded to the decision
and, as part of the process, other
interested parties were invited to
provide comment by mid-January
2015. Following conclusion of the
consultation process, the ERA is
expected to publish its final decision
in the second quarter of 2015.

In keeping with an ongoing focus
on customer satisfaction, ATCO
Gas Australia’s customer service
call centre was selected as a finalist
by the National Customer Service
Council and received a bronze medal
for excellence.

SAFETY
In its ongoing commitment to safety,
ATCO Australia held a safety summit
which brought together all the ATCO
companies in Australia—ATCO Gas
Australia, ATCO Power Australia
and ATCO Structures & Logistics.
The summit provided an opportunity
for an exchange of knowledge and
sharing of practices to maintain
the highest levels of safety in the
workplace across all operations.

ATCO Gas Australia, in its continued
commitment to public safety,
launched a gas safety awareness
campaign, focusing on how to detect
a gas leak and what to do in the
event of smelling gas either inside or
outside the home.

COMMUNITY ENGAGEMENT
ATCO Australia continued its
commitment to the community during
2014, supporting a range of initiatives
in the areas of youth education,

arts and culture, and Indigenous
communities. ATCO Gas Australia
also continued its support of Nulsen
Disability Services through the supply
of safer, more reliable and more cost-
effective natural gas appliances to
the homes which house its residents.

ATCO Australia’s relationship with
Nomad Two Worlds continued

throughout 2014 by supporting the
Boorongurup Project, a world-first
art project capturing the cultural
significance of the Porongurup
Ranges, one of the most sacred
Indigenous sites in the southwest
region of Western Australia. In
keeping with ATCO’s commitment
to develop and broaden an

understanding and appreciation
of the culture and history of the
oldest civilization in the world, ATCO
Australia provided the opportunity
for employees to attend cultural
awareness sessions, both in Perth
and Albany, as well as hosting the
art exhibition which was open to the
public.

 Jandakot Operations Centre & Blue Flame Kitchen

In March 2014, ATCO Gas Australia
opened its new operations centre
in the southern Perth suburb of
Jandakot.

The purpose-built facility showcases
new natural gas technologies. Its
state-of-the-art natural gas-powered
air conditioning units help to minimize
operating costs and its environmental
footprint. Covering more than
3,100 m², the Jandakot facility
houses more than 200 employees

and brings together operational and
office-based staff for the first time in
the company’s history.

The construction process
incorporated the removal and storage
of 243 native Australian plants
from the site, including 220 grass
trees and 23 Macrozamias. Upon
completion, they were replanted
around the new facility, restoring the
appearance and ecology of the site
to its former state.

The facility also houses the new
ATCO Gas Blue Flame Kitchen,
which introduced a schools program
in 2014. The hands-on, informative
program teaches Grades 5 and 6
students how to use gas cooking
appliances and cooking skills and
techniques with the aim to improve
the understanding of gas safety,
particularly with appliances.

The Australian chapter of the ATCO Blue Flame Kitchen launched its school program in 2014 designed for students in Grades
5 and 6. The workshops teach students about gas safety and healthy food choices.

43 2014 ATCO ANNUAL REPORT

ATCO AUSTRALIA 44

Indigenous Partnerships Building and
sustaining Indigenous relationships helps to form the foundation
of how ATCO does business. This is reflected through ATCO’s
longstanding relationships with Indigenous communities and
how the company engages with these communities every day.

Partnerships that stand the test of time
involve respect, trust, understanding and
transparency. Each party commits to bringing
value to the partnership and continues to
negotiate in good faith as the relationship
evolves over time. ATCO conducts all of its
business in this spirit, striving to maintain
positive relationships that contribute to
sustainable economic and social development
in the communities where ATCO does
business.

ATCO has more than 40 joint-venture
partnerships, services agreements and other
relationships with Indigenous communities.
Some of ATCO’s Indigenous partnerships
are now celebrating more than 25 years of
working together (see map on page 48).

BUILDING STRONGER RELATIONSHIPS
In 2014, ATCO continued to expand and
strengthen its relationships with Indigenous
communities across Canada, which included
a number of new relationships in British
Columbia, Alberta and the Northwest
Territories.

In February, ATCO Energy Solutions signed a
Relationship Agreement with the Simpcw First
Nation, in the North Thompson and Robson
Valley region of British Columbia, that will see
the two parties jointly pursue a number of
sustainable business opportunities related to
energy infrastructure development.

In May, ATCO Structures & Logistics signed a
joint-venture partnership with the Alexander
First Nation in Alberta to pursue business
opportunities and, in July, the company also
began a joint venture with the Naha Dehe
(Nahanni Butte Dene Band) in the Northwest
Territories.

In December, ATCO Power signed a joint-
venture agreement with the Sahtu Dene

ATCO Structures & Logistics President George Lidgett shares
a laugh with Chief Shawn Longman of the George Gordon
First Nation. ATCO’s joint-venture partnership with the
George Gordon First Nation was established in 2010 and has
included work on large projects in Saskatchewan.

 Kitchen skills program creates job opportunities

Two chefs from the ATCO Blue Flame Kitchen in Calgary
travelled to the Woodland Cree First Nation near Peace River,
Alberta, to deliver a week-long, accredited kitchen skills course
to 16 high school students in the afternoon and 16 community
members in the evening, initiating a crucial first step in creating
opportunities for potential food service and hospitality careers.
This course is just one facet of ATCO’s joint-venture partnership
with the Woodland Cree First Nation, which began in 2013 and
involves construction and operation of the 1,200-person Bluesky
Lodge, which will serve as living quarters for workers on the
nearby Shell Carmon Creek heavy oil project.

By the end of the week, the high school students and adults who
participated in the course learned how to prepare several dishes
including entrées, soups, sauces and breads. Important safety
skills such as food handling, proper temperatures for raw meat,
as well as knife-handling techniques were also covered. The final
exam involved preparing and serving an elegant, four-course
roast beef banquet for more than 80 community members.

ATCO Blue Flame Kitchen chef Paul Dokmanovic
instructed Woodland Cree First Nation students
and community members in the week-long culinary
training program.

Council to focus on developing
renewable energy projects in the
44,000 sq. km Sahtu region of the
Northwest Territories. The Sahtu’s
five main communities are not
connected to the electrical grid and
they rely on expensive diesel for
electrical generation. Through this
agreement, traditional knowledge
along with new and emerging
technologies will be combined to
minimize diesel consumption and
greenhouse gas emissions, while
creating a new renewable energy
future for the Sahtu Dene and Métis.

ATCO Structures & Logistics further
expanded its existing partnership
with the Woodland Cree First Nation
with the December announcement
of the construction and operation
of a 150-person camp to support
a compressor station in the Peace
River area. The community will
participate in all facets of the
construction and operation of the

lodge, which opened in January
2015.

ATCO Structures & Logistics was
recognized for its work in the area of
Indigenous relations when it received
a silver-level certification from the
Canadian Council for Aboriginal
Business Progressive Aboriginal
Relations program. The program
independently certifies and evaluates
all aspects of the company’s
Indigenous relations, including
strategy, policies, employment,
community engagement and
investment, and also provides
valuable feedback for continued
improvement.

EDUCATION, MENTORSHIP
AND EMPLOYMENT
ATCO is committed to bridging
employment barriers and creating a
lasting legacy through programs that
encourage mentorship, education
and employment in Indigenous
communities. For example, ATCO

Pipelines and ATCO Structures
& Logistics provide ongoing
educational awards and scholarship
programs that provide valuable
financial assistance to Indigenous
students, many of whom support a
family while pursuing post-secondary
education.

In 2014, ATCO Gas and ATCO
Structures & Logistics embarked
on a three-year partnership with the
Siksika Nation Community Cadet
Corps to support a program that
engages and mentors at-risk youth
during a critical time in their lives.
Now in its second year of operation,
the program is run by the Siksika
Nation Justice Department and the
Gleichen, Alberta RCMP.

Employment opportunities
through joint-venture partnerships
provide Indigenous communities
with valuable work placement
opportunities and on-the-job training.
In turn, ATCO benefits through

45 2014 ATCO ANNUAL REPORT

INDIGENOUS PARTNERSHIPS 46

much-needed skilled labour for its
projects. One example is ATCO
Structures & Logisitics’ joint venture
with the Haisla First Nation in British
Columbia. Through this partnership,
the company provides community
members with job placements in its
Calgary offices and manufacturing
plant. Another example is the
company’s partnership with the
Woodland Cree First Nation (see
story on page 46).

COMMUNITY INVOLVEMENT
ATCO supports and participates in a
multitude of events throughout the
year that bring Indigenous and non-
Indigenous people together to raise
awareness, to learn and to celebrate.
Several initiatives undertaken in 2014
include National Aboriginal Day in
Canada, National Aboriginal and
Islander Week in Australia and the

Canadian Truth and Reconciliation
Commission national events.

Canadians across the country take
part in National Aboriginal Awareness
Day on June 21 to recognize,
support and celebrate the country’s
Aboriginal community. In 2014,
ATCO was a sponsor of Calgary’s
Aboriginal Awareness Week and
several awareness events for ATCO
employees were also organized
during the month.

With the opening of a new
manufacturing facility in Australia,
ATCO Structures & Logistics stepped
up to support National Aboriginal
and Islander Week that celebrated
the unique Indigenous culture in
Kwinana, Western Australia.

ATCO also provided financial and
in-kind support to the Truth and
Reconciliation Commission National

events in Western Canada. The
events promoted a healing journey
for families who were involved in
Canada’s residential school system,
while providing a platform to educate
Canadians on the impact of this time
in the country’s history.

ATCO’s long-standing involvement
in communities involves supporting
young athletes who showcase
their talents in a variety of athletic
and cultural events. In 2014, the
company was involved in the Arctic
Winter Games in Fairbanks, Alaska,
the Circumpolar Northern Games in
Inuvik, Northwest Territories, and the
North American Indigenous Games in
Regina, Saskatchewan.

ATCO’s Indigenous Partnerships

NORTHWEST
TERRITORIES

Yellowknife

Indigenous
Partnerships

BRITISH
COLUMBIA

ALBERTA

SASKATCHEWAN

Edmonton

Calgary

Vancouver

2014 recipients Danielle Lightning (left) and Danika Lightning (right) celebrate after receiving scholarships through the ATCO
Pipelines Indigenous Education Awards Program. The program recognizes students from Indigenous communities who
demonstrate leadership capabilities and strive to be role models in their schools and communities.

47 2014 ATCO ANNUAL REPORT

INDIGENOUS PARTNERSHIPS 48

ATCO Sustainable Communities
ATCO Sustainable Communities provides a full range of pre-
fabricated, culturally-sensitive building solutions for Indigenous
and other remote communities.

Now in its third year of operation, ATCO
Sustainable Communities has continued to
demonstrate ATCO’s commitment to working
with Indigenous and remote communities
across Canada. With a focus on creating
healthy communities, the company employs
a holistic engagement process to develop
high-quality facilities in keeping with each
community’s unique needs and cultural
values.

APPROACH
Taking an engaged approach enables ATCO
Sustainable Communities to work closely with
all of its customers to truly understand their
specific cultural and physical requirements,
and identify solutions that best meet their
needs. The holistic engagement process also
welcomes and encourages community-owned
businesses and members to participate
throughout the life cycle of the project.
Identifying and incorporating these resources
strengthens the partnership with the
community and ensures the project’s overall
success.

Following completion of a project, the
company also supports the community
by offering specific training and education
programs to ensure qualified resources exist
in the community to manage and maintain the
infrastructure over the long-term.

GROWTH
2014 was a year of growth for ATCO
Sustainable Communities. In total, eight
significant projects were completed or nearing
completion across Canada. In May, members
of the George Gordon First Nation, located
120 km north of Regina, Saskatchewan,
celebrated the grand opening of a new retail
centre. The 5,000 sq. ft. centre features a
grocery, deli and gas station and is the only
retail facility in the 3,300-member community.

Members of the Piikani First Nation conducted a land
blessing ceremony that included ceremonial drumming
and dancing in preparation for a new sportsplex to be
constructed by ATCO Sustainable Communities in 2015.

In addition to creating nine full-
time jobs, the centre is projected
to generate between $400,000 and
$500,000 in revenue for the First
Nation, which will support additional
community projects.

In July, ATCO Sustainable
Communities was also engaged to
support the re-opening of a housing
manufacturing facility owned and
operated by the Blood Tribe in
southern Alberta. The company
has been working closely with
Blood Tribe Housing to provide
management and operations
support, and on-the-job training for
community members, in an effort to
meet the community’s immediate
housing needs and encourage
professional growth in the long-term.
With ATCO’s support, the re-opening
of the facility has resulted in 40 full-
time positions in the community.

Other projects undertaken include a
gas station at Dene Tha’ First Nation

near Meander River, Alberta; fire halls
at Peerless Trout First Nation near
Slave Lake, Alberta and Attawapiskat
First Nation in Attawapiskat,
Ontario; a school expansion for the
Blood Tribe in southern Alberta; a
soccer arena for Cowessess First
Nation near Regina, Saskatchewan;
and community centres in Nain,
Newfoundland and Labrador, and
Swan River First Nation in Kinuso,
Alberta.

INNOVATION
The past year can also be
characterized by continuing
innovation. ATCO Sustainable
Communities launched a number of
innovative products including new
standardized designs for critical
community facilities like fire halls,
convenience stores, gas stations,
community centres and gymnasiums.
Developed based on feedback from
community members, these new
standardized designs incorporate

modern materials with the attention
to detail ATCO is known for.

These products were developed by
ATCO Sustainable Communities’
in-house architectural design team
that has worked closely with clients
to create designs that are attractive,
easy to maintain and economical.
The designs also leverage ATCO’s
expertise in off-site pre-construction
techniques and tackling the unique
challenges of building in remote
communities.

The team also launched two new
school designs accommodating
school populations of 100 and 300 or
more students. These new designs
feature bright and functional custom
spaces that can be expanded as
a community grows. Through pre-
fabrication, community schools
can be constructed quickly and
economically, two characteristics that
have been well-received by ATCO
Sustainable Communities’ customers.

 ATCO Sustainable House elevates modular housing

After identifying a gap in the market
for high-quality, ready-to-move-
in housing, ATCO Sustainable
Communities launched the ATCO
Sustainable House – available in
three, five, and 11 bedroom models.

The new contemporary designs
incorporate durable and mold-
resistant materials, ideal for remote,

non-urban locations. Features like
large skylights, oversized tubs in the
main bath, energy efficient furnaces
and water heaters and vaulted
ceilings have been incorporated and
create welcoming and comfortable
spaces. The new models also offer
improved serviceability and require
minimal maintenance - important

qualities for customers located in
remote communities.

Combined with ATCO’s expertise in
building quality turnkey solutions and
excellent project management skills,
the ATCO Sustainable House helps to
create lasting value for communities
across Canada.

49 2014 ATCO ANNUAL REPORT

ATCO SUSTAINABLE COMMUNITIES 50

ATCO in the Community
ATCO and its people are committed to helping create healthy, vibrant
communities by developing meaningful partnerships with various
organizations and by providing time, expertise and financial support.

ATCO employees are at the heart of the
company’s EPIC (Employees Participating In
Communities) fundraising program. Based on
more than a century of ongoing community
support by ATCO and its employees, the
program was launched in 2006 as a way to
unite all of the ATCO companies’ fundraising
efforts and make a more meaningful impact
in communities. Since that time, the award-
winning program has raised more than
$28 million for more than 500 charities around
the world, while also facilitating hundreds of
thousands of employee volunteer hours.

The employee-led program combines
fundraising events, ‘Days of Caring’ volunteer
activities and financial donations that
employees direct to the charitable causes
that matter most to them. ATCO enhances its
peoples’ generosity by matching donations to
human health and wellness organizations. The
company also covers all administration costs
for the program, ensuring that the charities
benefit from 100 per cent of the financial
donations.

In Canada, the annual ATCO EPIC fundraising
campaigns run in the fall, while in Australia
the campaign runs year-round. Employee-led
committees plan and execute fundraising
events that encourage team comradery,
friendly competition and pride in their
community.

2014 CAMPAIGN HIGHLIGHTS
This year’s campaign lasted 42 days and
involved 147 fundraising and volunteering
events in locations across Alberta, and
in Saskatchewan, the Yukon and Perth,
Australia. The result was a record-breaking
$4.3 million raised by ATCO and its people for
charitable causes around the world.

During the celebration events held in February 2015, a
record-breaking $4.3 million was raised by the company and
its people for charitable causes through the 2014 campaign.

Fundraising events included
auctions, chili cook-offs, bake
sales, street hockey tournaments,
scavenger hunts and other friendly
team competitions. Unique events
like the perogy lunch hosted by
ATCO Gas, truly demonstrate
the spirit and dedication ATCO
employees put into their campaigns.
The lunch, now in its tenth year, was
conceived by ATCO Gas employee
John Lembryk who enlisted the
assistance of his mother and a team
of ATCO volunteers to prepare 2,750
perogies that were sold to employees
in support of their feature charity.

As part of the annual fall campaign,
the employees of each ATCO
company select feature charities
that receive the funds raised through
the campaign events. These feature
charities work closely with each
employee-led organizing committee
to identify ways of educating and
inspiring ATCO employees about the
cause they selected to support.

These causes often help shape the
unique fundraising events that each
company holds. This year, memory
games were played by ATCO Electric
Transmission Division employees
in support of the Alzheimer Society

of Alberta & NWT. “Hero Feud”
was played by ATCO Structures &
Logistics employees paying homage
to their “Be An Everyday Hero”
campaign.

VOLUNTEERISM
Another key component of the ATCO
EPIC program is volunteerism. ATCO
EPIC recognizes and encourages
employees who volunteer their time
and share their talents with charitable
and non-profit organizations.
Employees who volunteer 50 hours
or more are eligible to apply for a
donation to a registered charity of
their choice. In 2014, employees
volunteered more than 28,000 hours
to the communities where they work
and live.

The fall campaign included a number
of ‘Days of Caring’ where ATCO
employees rolled up their sleeves and
participated in volunteering activities
to support their feature charities. This
year’s events saw ATCO employees
head out in the community to
tackle specific projects including
refurbishing facilities, stocking food
bank shelves and selling items to
fundraise for charity.

ATCO EPIC by
the numbers
42

Fall campaign days

147

Fundraising and
volunteering events

500

Charitable organizations across
Canada and Australia supported

28,000

Hours volunteered by
ATCO employees

$4.3M

Raised by ATCO and
its people

$28M

Raised since program
launched in 2006

 ATCO recognized with international philanthropy award

In 2014, ATCO was recognized
as the year’s Outstanding
Corporation by the Association
of Fundraising Professionals
(AFP) for the company’s many
extraordinary contributions to
philanthropy and to the charitable
sector. In particular, the award
recognized the ATCO EPIC
program.

ATCO was nominated for the
award by Inn from the Cold,
a charitable organization that
provides emergency shelter,
support and programs to

homeless children and their
families in Calgary. The
organization is a past feature
charity of the ATCO EPIC
program and a member of the
AFP, which represents more than
32,000 charities and charitable
fundraisers around the world.

ATCO accepted the award at the
AFP’s National Philanthropy Day®
Honors – A Celebration of People
and Impact in Washington, D.C in
November.

Andrew Watt, President & CEO, AFP (left) presents
Erhard Kiefer, Senior Vice President & Chief
Administration Officer, ATCO Group (right) with
the 2014 Outstanding Corporation Award.

51 2014 ATCO ANNUAL REPORT

ATCO IN THE COMMUNITY 52

ATCO EPIC in Action

ATCO ELECTRIC
DISTRIBUTION DIVISION
Employees across Alberta
launched their 2014
fundraising campaign with a
variety of exciting events in
support of Pancreatic Cancer
Canada. Events included a
game with Louie the Lightning
Bug and “Donate for Duct
Tape”.

ATCO ENERGY SOLUTIONS
Employees hit the trails around Calgary’s
Glenmore Reservoir in support of the
Canadian Cancer Foundation.

KATHY’S RUN FOR
PANCREATIC CANCER
When co-worker and friend Kathy
McCollum was diagnosed with
pancreatic cancer, ATCO employees
Jessica Laird (left) and Danielle
Brown (right) helped start Kathy’s
Run in support of Pancreatic Cancer
Canada, the feature charity selected
by ATCO Electric Distribution Division
employees.

ATCO GAS
The EPICHL street hockey
tournament is the marquee event
of ATCO Gas’s annual fundraising
campaign. ATCO Gas employees
across their service territory
geared up to support this year’s
feature charity the Alzheimer
Society of Alberta and NWT.

ATCO ELECTRIC TRANSMISSION DIVISION
The Division surpassed its campaign fundraising and
participation goals in support of the Alzheimer Society
of Alberta and NWT, which resulted in President Sett
Policicchio shaving his 46-year-old moustache and
taking a pie in his cleanly-shaved face.

53 2014 ATCO ANNUAL REPORT

ATCO STRUCTURES & LOGISTICS Superheroes
suited up with capes designed by their feature
charities – Momentum, Calgary Women’s Emergency
Shelter and Champions Career Centre – and competed
head-to-head in games of “Hero Feud”.

ATCO PIPELINES Employees built and stained new benches for Easter Seals Camp Horizon located 50 km
southwest of Calgary for an ATCO EPIC ‘Day of Caring’. Teams in Edmonton competed in an “Amazing Race” in
support of the Zebra Child Protection Centre.

ATCO POWER
Messages of hope and
courage for young
people battling cancer
appeared on the
streets of downtown
Calgary as part of
ATCO Power’s support
of Kids Cancer Care.

ATCO GROUP
Sold! ATCO Group’s campaign
kicked-off with a lunch and
live auction hosted by ATCO
Group Chair, President
& CEO, Nancy Southern.
Employees were encouraged
to “Be a Dream Maker” and
support the campaign’s
feature charity, the Rainbow
Society of Alberta.

For a donation, ATCO ELECTRIC YUKON
employees could bring their dogs to work in
support of the Mae Bachur Animal Shelter.

ATCO
SUSTAINABLE
COMMUNITIES
Marketing Support
Coordinator, Tammy
Breeze got a tour
of the STARS Air
Ambulance facilities
– the feature charity
selected by their
employees.

ATCO AUSTRALIA Employees across the ATCO
Australia companies – ATCO Australia, ATCO Gas
Australia and ATCO Power Australia – embraced
the spirit of community and participated in
fundraising events that included the Cool Night
Classic, a run/walk for charity in Perth.

ATCO IN THE COMMUNITY 54

 Financial Excellence 2014

Brian R.Bale
Senior Vice President & Chief Financial Officer

ATCO’s earnings attributable to Class
I and Class II Shares were $420
million in 2014 and $418 million in
2013. These compare to $370 million
reported in 2012. The earnings in
2014 and 2013 included one-time
gains from the sale of assets as we
continuously assess our operations
to optimize our assets and effectively
redeploy capital. In 2014, the
Company completed the sale of its
information technology business. In
2013, ATCO monetized its investment
in its Structures & Logistics
operations in South America.
Proceeds from these sales were
redeployed to finance the Company’s
growth initiatives, including the
significant capital expenditure
program in the Utilities.

ATCO’s adjusted earnings, which
exclude one-time gains, were $374
million in 2014, $16 million lower than
the record earnings achieved in 2013.

Earnings growth from continued
capital investment in the Utilities,
along with improved earnings in
ATCO Energy Solutions and ATCO
Australia, were offset by lower
earnings in both ATCO Structures
& Logistics and ATCO Power. The
earnings for Structures & Logistics
were significantly influenced
by the cyclical nature of large
natural resource project activity.
Unfavourable market prices for
ATCO Power, together with reduced
market volatility, contributed to lower
adjusted earnings from this business.

218

179

148

2012

2013

2014

Utilities Earnings 2012-2014
($ millions)

The Utilities segment continued
to make significant investment
in Alberta infrastructure. Capital
expenditures in 2014 were $2.1 billion
and totaled $6.4 billion over the last
three years. This investment has
translated into significant growth
in the Utilities’ earnings. Adjusted
earnings for 2014 were $218 million,
a 22 per cent increase over last year.

A transition is underway at the
Company from growth focused
primarily in our regulated Utilities to
growth in all our business lines in
Canada, Australia, and most recently
in Mexico.

$374 million
2014 Adjusted
Earnings

Structures & Logistics
$67 million (18%)

Utilities $218 million (58%)

Energy $53 million (14%)

Australia $27 million (7%)

Corporate $9 million (3%)

In December, we were awarded a
35-year, $1.4 billion contract to build,
own and operate the Fort McMurray
West Transmission line. Over the next
couple of years, we will be seeking all
of our required approvals. We expect
this process to conclude in 2017, at
which point we will be in a position
to commence construction. The
line is expected to come into service
in 2019. We are pleased to have
come out on top in this international
competition to build and operate this
critical piece of transmission.

~$2.4B

~$1.8B

~$1.6B

Long-Term
Contracted
Capital

ATCO Australia

ATCO Pipelines

ATCO Gas

ATCO Electric
Distribution

ATCO Electric
Transmission

2015

2016

2017

~ $5.8 billion in utility and
contracted capital growth
projects expected in 2015-2017

In our Energy Solutions business,
we are moving forward with the
$200 million development of four
salt caverns for hydrocarbon
storage with our partner. Long-term
contracts have been secured for all
of the storage capacity. In response
to growing customer demand, we
acquired an additional 160 acres of
land for further hydrocarbon storage
development potential in the future.

Construction also carries on at the
two industrial water infrastructure
projects we announced in 2013.

In Mexico this past year, we opened
a business development office, won
a 25-year contract to build a 16 km
natural gas pipeline, and announced
we are working with Pemex on
the project development and
approval process for an estimated
USD$820 million, 638 megawatt
natural gas cogeneration power
plant.

Included in our three-year capital
forecasts, is $5.8 billion for utility and
contracted capital growth projects.
This investment includes $4.8 billion
of planned capital expenditures in
our regulated utilities and $1 billion in
long-term contracted projects.

DIVIDENDS
The Board of Directors increased the
quarterly dividends paid per Class
I and Class II Share for the four
quarters of 2014 from 18.75 cents
per share to 21.50 cents per share,
an increase of 15% over 2013.

And in January 2015, the Board of
Directors declared a first-quarter
dividend of 24.75 cents per share.
That amount represents a 15%
increase over the quarterly dividends
per share paid in 2014.

0.86

0.47

0.32

0.17

0.06

1993

1998

2003

2008

2014

Annual Dividends 1993-2014
($ per share)

The Board of Directors has approved
an increase in ATCO’s common share
dividends each year since 1993; a
track record we are very proud of.

FINANCIAL STRENGTH
We have experienced tremendous
growth over the last several years.
In 2010, we had total assets of
$10 billion. In 2014, we have assets
of $18 billion. Most of that growth
has been the result of investment
in utility operations. Through all of
this growth we have maintained our
financial strength. In 2014, Standard
and Poor’s Ratings Services and
DBRS Limited re-affirmed their
ratings for the Company as “A” with
a stable outlook and “A” (low) with a
stable trend, respectively.

We financed this asset expansion
through a number of sources. Our
most significant source of capital
is cash flow from operations. Our
strong financial position ensures
we maintain excellent access to
capital markets. In 2014, we issued
$1.2 billion in debt. This included
a $1 billion, 30-year bond which
was the single largest long-dated
corporate bond on record in Canada.

The Company has a long track
record of generating reliable and
growing earnings and dividends
over time. There is no doubt we face
some challenging conditions with
low commodity prices and reduced
activity levels in some of our markets.
However, we remain focused on
making prudent decisions to maintain
our strong financial position and
create long-term shareowner value.

55 2014 ATCO ANNUAL REPORT

FINANCIAL EXCELLENCE 2014 56

Consolidated Annual Results(1)

Consolidated Operating Summary

(Millions of Canadian dollars, except as indicated)

2014

2013

2012

2011

2010

(Millions of Canadian dollars, except as indicated)

2014

2013

2012

2011

2010

EARNINGS STATEMENT
Revenues
Earnings attributable to Class I and Class II shares
Adjusted earnings (2)

- Structures & Logistics
- Utilities
- Energy
- ATCO Australia
- Corporate & Other and eliminations

Adjusted earnings

BALANCE SHEET
Cash (3)
Total assets
Capitalization

- Bank indebtedness
- Long-term debt
- Non-recourse long-term debt
- Non-controlling interests
- Share owners’ equity

Capitalization

CASH FLOW STATEMENT
Funds generated by operations (4)
Capital expenditures (5)
- Structures & Logistics
- Utilities
- Energy
- ATCO Australia
- Corporate & Other & eliminations

Capital expenditures

PER SHARE DATA
Earnings per share ($)
Dividends paid per share ($)
Equity per share ($)
Class I Non-Voting closing share price ($)
Class II Voting closing share price ($)

4,554
420

4,359
418

4,012
370

3,991
327

3,486
281

67
218
53
27
9
374

96
179
80
24
11
390

114
148
72
23
13
370

89
124
86
10
21
330

74
126
76
9
11
296

590
17,689

741
16,010

470
14,055

755
12,453

645
10,084

5
7,256
127
3,112
3,168
13,668

2
6,230
165
3,153
2,860
12,410

-
5,352
186
2,551
2,370
10,459

-
4,389
378
2,500
2,163
9,430

-
3,090
422
2,202
1,978
7,692

1,786

1,854

1,636

1,514

1,234

91
2,079
75
81
47
2,373

3.66
0.86
27.51
47.66
47.75

116
2,178
68
89
67
2,518

3.64
0.75
24.84
46.66
46.35

199
2,142
42
74
30
2,487

3.21
0.66
20.61
40.36
40.25

132
1,316
33
23
24
1,528

2.83
0.57
18.74
30.12
29.66

98
788
26
27
13
952

2.42
0.53
17.08
29.58
29.60

Full disclosure of all financial information is available on the SEDAR website - www.sedar.com.

(1) Financial results have been prepared in
accordance with International Financial
Reporting Standards (IFRS).

(2) Adjusted earnings are earnings attributable to
Class I and Class II Shares after adjusting for
the timing of revenues and expenses associated
with rate-regulated activities. Adjusted earnings
also exclude one-time gains and losses,
significant impairments and items that are not

in the normal course of business or a result
of day-to-day operations. Descriptions of the
adjustments are provided in the Segmented
Information note of the Financial Statements.

in non-cash working capital. This measure is
not defined by IFRS and GAAP and may not be
comparable to similar measures used by other
companies.

(3) Cash is defined as cash and cash equivalents

(5) Includes purchases of property, plant and

less current bank indebtedness.

(4) Funds generated by operations is defined as

cash generated from operations before changes

equipment and intangibles, including capitalized
interest.

Structures & Logistics
Capital expenditures (1)
Workforce housing lease fleet (units in thousands)
Workforce housing lease fleet utilization (%)
Space rental lease fleet (units in thousands)
Space rental lease fleet utilization (%)

Utilities
Natural gas distribution operations
Capital expenditures (1)
Pipelines (thousands of kilometres)
Maximum daily demand (terajoules)
Natural gas distributed (petajoules)
Average annual use per residential customer (gigajoules)
Customers at year-end (thousands)
Electricity distribution and transmission operations
Capital expenditures (1)
Power lines (thousands of kilometres)
Electricity distributed (millions of kilowatt hours)
Average annual use per residential customer (kWh)
Customers at year-end (thousands)
Natural gas transmission operations
Capital expenditures (1)
Pipelines (thousands of kilometres)

Energy
Capital expenditures (1)
Generating capacity (megawatts)
Generating capacity owned (megawatts)
Availability (%)
Natural gas processed (mmcf/day)

- Natural gas liquids extraction (mmcf/day)
- Natural gas gathering and processing (mmcf/day)

Natural gas gathering lines (kilometres)

ATCO Australia
Natural gas distribution operations (2)
Capital expenditures (1)
Pipelines (thousands of kilometres)
Maximum daily demand (terajoules)
Natural gas distributed (petajoules)
Average annual use per residential customer (gigajoules)
Customers at year-end (thousands)
Power generation and other operations
Capital expenditures (1)
Generating capacity (megawatts)
Generating capacity owned (megawatts)
Availability (%)

91
3
77
13
75

116
3
83
13
77

199
3
86
13
81

132
3
87
19
80

98
3
78
16
78

292
40
2,148
263
117
1,144

1,602
81
11,600
7,815
252

185
9

75
3,591
2,286
95
337
316
21
1,016

81
14
121
26
14
702

-
299
193
98

268
40
2,064
249
117
1,119

1,763
81
11,283
7,743
248

147
9

68
4,591
2,541
94
376
340
36
1,122

88
14
118
26
15
683

1
299
193
95

323
39
2,128
248
121
1,096

1,732
76
10,974
7,604
244

288
38
2,069
247
121
1,074

197
38
2,169
237
120
1,057

916
74

507
73
10,596 10,532
7,555
237

7,747
240

87
9

112
9

84
8

42
4,590
2,550
90
398
350
48
1,097

33
4,590
2,550
91
393
342
51
1,171

26
4,658
2,618
93
401
337
64
1,075

72
13
125
27
15
667

2
299
193
98

18
13
106
12
15
653

5
299
193
98

-
-
-
-
-
-

27
299
193
90

(1) Includes purchases of property, plant and equipment and intangibles,

(2) 2011 amounts are for the 5 months of operation since the acquisition of

including capitalized interest.

ATCO Gas Australia on July 29, 2011.

57 2014 ATCO ANNUAL REPORT

CONSOLIDATED OPERATING SUMMARY 58

ATCO’s Global Leadership

Directors

Robert T. Booth, Q.C.
Partner, Bennett Jones, LLP

Bertrand P. Collomb, PhD
Honorary Chairman,
Lafarge S.A.

David A. Dodge
O.C., LL.D., PhD, F.R.S.C.
Senior Advisor,
Bennett Jones LLP

Denis M. Ellard
Corporate Director

Linda A. Heathcott
President & Chief Executive
Officer, Spruce Meadows Ltd.

Michael R.P. Rayfield
Corporate Director

Robert J. Routs, PhD
Chairman of the Supervisory
Boards of AEGON N.V. and Royal
DSM N.V.

Nancy C. Southern
Chair, President & Chief
Executive Officer, ATCO Ltd.

Ronald D. Southern
C.C., C.B.E., LL.D.
Founder, ATCO Group

59 2014 ATCO ANNUAL REPORT

Roger J. Urwin, PhD, C.B.E.
Corporate Director

Susan R. Werth
Corporate Director

Charles W. WIlson
Lead Director, ATCO Ltd.

Officers

Ronald D. Southern
Founder, ATCO Group

Nancy C. Southern
Chair, President &
Chief Executive Officer

Carson J. Ackroyd
Vice President, Marketing
& Communications

P. Derek Cook
Vice President, Controller

Carole M.D. Field
Vice President, Pension and Benefits &
Human Resources Information Systems

Alfred S. Han
Vice President, Finance & Treasury

Kevin P. Hunt
Vice President, Internal Audit
& Risk Management

Office of the Chair

Siegfried W. Kiefer
Chief Operating Officer,
Power & Utilities

Brian R. Bale
Senior Vice President &
Chief Financial Officer

Erhard M. Kiefer
Senior Vice President &
Chief Administration Officer

Steven J. Landry
Senior Vice President &
Chief Development Officer

Corporate Office

Lillian Hvatum-Brewster
Vice President, Indigenous Community
Relations & Development

Richard D. Stone
Vice President,
Legal & Corporate Secretarial

Brian G. Milne
Vice President,
Risk Management

Tracey L. Wallace
Vice President,
Human Resources

Robert C. Neumann
Vice President, Internal Audit

Clinton G. Warkentin
Vice President & Treasurer

Alan M. Skiffington
Vice President &
Chief Information Officer

Carol Gear
Corporate Secretary

Presidents and Senior Executives
of Principal Operating Subsidiaries

J.D. Patrick Creaghan
President, ATCO Energy Solutions

George Opocensky
President, ATCO Power

Brian R. Hahn
President, ATCO Pipelines

Roberta L. Lambright
President, Distribution Division,
ATCO Electric

George J. Lidgett
President, ATCO Structures & Logistics

Settimio F. Policicchio
President, Transmission Division,
ATCO Electric

Boris I. Rassin
President,
ATCO Sustainable Communities

Joseph J. Schnitzer
President, ASHCOR Technologies

Wayne K. Stensby
Managing Director & Chief
Operating Officer, ATCO Australia

William C. Stephens
President, ATCO Gas

OFFICERS 60

ATCO’s Beautiful Alberta Heritage

General Information

INCORPORATION

REGISTRAR & TRANSFER AGENT

In recognition of its
beautiful Alberta
heritage, ATCO has
featured scenes of
Alberta in annual
reports since 1990.

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

Class I Non-Voting and
Class II Voting Shares

CST Trust Company
Calgary/Montreal/Toronto/Vancouver

Telephone:
8:30 a.m. to 6:30 p.m. ET
Monday - Friday
Toll-Free in North America:
1-800-387-0825

Outside of North America:
1-416-682-3860

Fax in North America:
1-888-249-6189

Fax Outside of North America:
1-514-985-8846

www.canstockta.com

Mailing Address:
CST Trust Company
P.O. Box 700
Station B
Montreal, QC
Canada H3B 3K3

ATCO Ltd. was incorporated under the
laws of the Province of Alberta on
August 31, 1962.

ANNUAL MEETING

The Annual Meeting of Share Owners
will be held at 10:00 a.m. on Wednesday,
May 13, 2015, at The Fairmont Palliser
Hotel, 133 - 9 Avenue S.W.,
Calgary, AB.

AUDITORS

PricewaterhouseCoopers LLP
Calgary, AB

LEGAL COUNSEL

Bennett Jones LLP
Calgary, AB

STOCK EXCHANGE LISTINGS

Class I Non-Voting Shares
Symbol ACO.X

Class II Voting Shares
Symbol ACO.Y

Listing: The Toronto Stock Exchange

INVESTOR RELATIONS

Email: investorrelations@atco.com

Telephone: 403-292-7500

Fax: 403-292-7532

Mailing Address:
c/o ATCO Group Investor Relations
1500, 909 - 11 Avenue S.W.
Calgary, AB
Canada T2R 1N6

61 2014 ATCO ANNUAL REPORT

GENERAL INFORMATION 62

700, 909-11 Avenue S.W., Calgary, Alberta T2R 1N6

Telephone 403-292-7500

Fax 403-292-7623

www.atco.com

63 2014 ATCO ANNUAL REPORT