Ontario's Independent Electricity System Operator (the "IESO") recently issued its 18-month outlook, covering the period from April 2009 to September 2010 (the "Outlook"). The IESO "remains positive" in respect of the reliability of Ontario's electricity system over the Outlook period as nearly 4,700 MW of new and refurbished supply is expected to come into service. Moreover, the addition of a new interconnection between the Hawthorne transformer station in Ontario and the Outaouais station in Québec, allowing transfers of up to 1,250MW by May 2010, is also expected to contribute to reliability.

In addition, throughout the Outlook period, the installation of several shunt capacitors at Buchanan, Middleport and Nanticoke and the up-rating of the Hanover to Orangeville 230kV circuits will increase the capability to direct energy away from the Bruce area. These near term reinforcements are expected to reduce the potentially constrained generation of the seven or eight Bruce units before the 500kV double-circuit line between Bruce and Milton is available.

In evaluating the adequacy of available resources for the Outlook, the IESO incorporated planned reductions in coal-fired emissions in Ontario, which are scheduled to commence in 2009. The IESO concluded that such reductions should not affect reliability in 2009, though the picture in 2010 is less clear, since complete strategy for emissions reductions in 2010 has not been confirmed.

Over the Outlook horizon both peak and energy demand are expected to decline as the economy contracts. Energy demand is forecast to decrease by 1.6% in 2009 and in spite of eventual economic recovery, demand is forecast to decline by 2.0% in 2010 as embedded generation and conservation efforts further reduce demand.

The table summarizes peak demands under normal and extreme weather conditions:

The full text of the Outlook can be viewed at the following site:

http://www.ieso.ca/imoweb/pubs/marketReports/18MonthOutlook_2009mar.pdf