Revision of Clover Bar Offer Strategy

Effective Thursday March 6, 2003

February 27, 2003

Since 2001, the Balancing Pool has offered energy into the Power Pool at variable cost. This variable cost offer strategy was initially deemed necessary due to the overall size of the capacity controlled by the Balancing Pool.

During 2002, the Balancing Pool was successful in transferring control of over 1,200 megawatts of capacity to market participants through its Market Achievement Plan II (MAP II). The Balancing Pool MAP II sales to six different purchasers has increased competition in the market and reduced the Balancing Pool's share of capacity from 23 per cent in 2001 to 10 per cent at present. The residual Balancing Pool portfolio is now within the power purchase arrangement (PPA) holding restrictions that limit the maximum amount of PPA capacity that other market participants can hold.

Power Pool Council has approved the modification of the approach the Balancing Pool uses to offer some of the capacity it holds into the market. The change will provide more flexibility in the operation of the Balancing Pool's capacity and is consistent with how other market participants operate. Stakeholders and the Market Surveillance Administrator provided input to Council's decision.

In implementing this change in offer strategy, the Balancing Pool will act in a commercially reasonable and responsible manner. This policy change will initially apply only to the one Clover Bar Unit under management by the Balancing Pool and will be effective as of March 6, 2003. The offer strategy for the remaining Balancing Pool capacity will be reviewed at a later date.

If you have any questions or comments on this change, please contact Gary Reynolds, Acting Balancing Pool Administrator and Chief Financial Officer at (403) 538-3443.