Recognizing the Value of Existing Hydropower June 25, 2009

2

Table of Contents

Brookfield Asset Management – Overview

Brookfield Renewable Power – Overview

Hydropower is an Important Contributor to Renewable Energy in

NE and NY

Why is Hydropower Capacity Declining?

Policies

Pumped Storage

3

Brookfield Asset Management | Overview

4

Brookfield Asset Management is an asset management company, focused

on property, power and infrastructure assets

Approximately US$80 billion of assets owned and under management

Approximately 10,000 employees in the Americas, Europe and Australia

A global asset management company

120 million sq. ft.office and retail space

165 renewable power plants

2.5 million acres of timberlands

11,000 km of transmission lines

Brookfield Asset Management

5

Brookfield Renewable Power | Overview

6

Brookfield Renewable Power is a responsible developer, owner and operator of renewable power generation facilities

Brookfield Renewable Power has strong corporate values

– Long-term commitment to communities in which we operate

– High safety standards– Environmentally responsible

Brookfield Renewable Power is committed to growth on a value basis

Brookfield Renewable Power

7

Brookfield Renewable Power

Brookfield Renewable Power is a leading producer and developer of renewable energy focused on:

– hydroelectric – wind

Over US$12 billion of assets owned and under management

Approximately 1,000 employees in North America and Brazil

Unique power operations focused on renewable energy sources

8

95% of our production is sourced from renewable energy

Generating assets on 64 river systems

Over 100 years of power generating experience

Leader in hydroelectric power in North America and Brazil

Total Output Capacity

90%

5% 5%

Hydroelectric

Wind

Other

Hydroelectric Portfolio

Markets Stations MW

United StatesNew England 20 841New York 75 705PJM/MISO 4 168Louisiana 1 192

CanadaQuebec 6 286

Ontario 21897British Columbia 5 135

Brazil32 532

164 3,756

Brookfield Renewable Power

9

Hydroelectric - New England

Operating Statistics

Installed capacity:

841 MW*

Annual generation:

1,828 GWh

Storage:

509 GWh

Generating stations:

20

Generating units:

68

- Located on five river systems in New Hampshire and Maine.

- New England assets are interconnected to the New England Power Pool.* Includes 600 MW Pumped Storage Facility

10

Hydroelectric - New York State

- Located on 15 river systems in upstate New York.

- New York assets are interconnected to five different NYISO market zones.

Operating Statistics

Installed capacity:

705 MW

Annual generation:

3,025 GWh

Storage:

541 GWh

Generating stations:

75

Generating units:

180

Production Centers Installed Annual Capacity Generation Generating Generating

in MW in GWh Units Stations

Lake Ontario Operations 215 892 79 29St. Lawrence Operations 229 1,131 57 32Hudson River Operations 261 1,002 41 14

11

Active Participant in New England and New York

New York– Own over 87% of all non-NYPA, non-utility owned/controlled hydropower in the state (13.5% of

all hydropower)– 12 NY projects participate in NY RPS Main Tier – selected via auction

Maine– Own over 20% of all hydropower in the state– Sell REC’s into ME RPS

New Hampshire– Own 5% of all hydropower in the state

Rhode Island– Participate in RI RPS

Massachusetts– Bear Swamp Pumped Storage is 8th largest power plant in state

Nationwide: 40% of Brookfield facilities are Low Impact Hydropower Institute (LIHI) certified 71% if our stations are 5 MW or under Participate in mandatory and voluntary attribute markets

12

Hydropower is an Important Contributor to Renewable Energy in NE and NY

13

63

14 x

28

47

414

5

1

FERC-Licensed Hydropower in New England

198 Hydropower facilities in operation– 3500 MWs installed nameplate capacity

138 facilities are under 5 MW– 70% of all stations– 5% of all capacity

Source: FERC

14

17%(49%)

1.6% (43%)

1.9% (46%)

11.5% (74%)

27.8% (79%)

11.5% (74%)

Hydropower Share of New England Generation

Hydropower is important share of overall electricity capacity

Hydropower generally makes up large percentage of overall renewable power capacity

Important to maintain if states are going to meet their clean energy goals

Source: EIA DOE, 2007 dataHydropower share of total capacity /

(percentage of all renewable capacity made up by Hydropower)

15

Hydropower Installed Capacity Declining

Change in Hydro Capacity by State

0

1000

State

MW

1997

2007

1997 261 758 472 4 151 371

2007 259 718 308 4 122 494

MA ME VT RI CT NH

Installed Hydro Capacity - All New England

1200

1300

1400

1500

1600

1700

1997 2007

Year

MW

Installed Hydro MW

Source: EIA - DOE

14% Decline in Hydropower Capacity from 1997 to 2007 in

New England states

Only New Hampshire has had increase

16

Why?

17

Possible Reasons

70% of FERC-licensed hydropower project are under 5 MW– Re-licensing costs are the same regardless of size of facility– Environmental safeguards have same capital cost regardless of

size– Size correlates to power revenues– Commodity pricing– Revenues from other sources (RPS, Voluntary RECs, Capacity)

limited Do smaller hydropower projects face greater challenges than large

ones? Dam retirements Natural retirements – maintenance & replacement ESA – Atlantic Salmon, American eels

– Compliance costs

18

Possible Policy Approaches

19

Policy Approaches

Renewable Electricity Standards– Have been focused on new growth

Baseline set – hydropower often is the baseline Little attention to erosion of baseline or replacement costs Some include tier for small hydropower regardless of project age

– Some have tiers that include small hydropower regardless of project age – but usually compliance obligations/demand not robust

New York has Maintenance Tier– Current national RES bills do not include any pre-1992 hydro

Waxman-Markey supports wind, solar, etc. regardless of vintage Inclusion of Low Impact Hydropower Institute certified hydro as opposed to age

cut-off would help preserve good, existing hydropower– Most advanced environmental safeguards– Rewards “good behavior”

Cap and Trade– Putting a price on carbon creates demand and pricing incentive for renewables

But only if the program accurately prices carbon (doesn’t artificially lower it through allocation scheme)

20

Pumped Storage

21

Pumped Storage

Two New England states (Massachusetts & Connecticut) and New York have pumped storage

Totals 2,969 MW in 2007 (31 MW increase from 1997)

Net user of electricity 1.3 MW used : 1 MW generated

Important resource as more intermittent renewable resources are added to the grid

– Quick start – Dispatchable– Transmission firming

Policy approach: Recognize value of pumped storage role in green energy future – investment tax credits, etc.

22