2014 AltaLink Corporate Sustainability Report by AltaLink

2014 Corporate Sustainability Report

Table of Contents Measuring our success - Message from the President and CEO

Southern Alberta flood recovery efforts

Building better infrastructure for Alberta through innovation

Fleet services – efficient, effective and safe

AltaLink’s Acheson office – leading the way

Safety - never prioritized

Employee engagement

Environmental responsibility

Stakeholder engagement and community support

Community investment

Economic responsibility

Achieving a sustainability milestone Message from the Executive Vice President and COO

Data table

Company profile

Photo credit The cover photo and the photo on the following page were taken by photojournalist and photographer Shannon McDowell of Carstairs. Shannon’s interest in the tower structure build on the Western Alberta Transmission Line project near her home, combined with her skills as a photographer, resulted in a series of impressive photos which Shannon made available to AltaLink. We appreciate Shannon’s contribution to this report.

Our sustainability framework itâ&#x20AC;&#x2122;s all connected Sustainability can mean different things to different people. At AltaLink, we believe that sustainability is part of an overall business strategy that deliberately considers the environmental, social and economic aspects collectively in our planning and decision making. We have developed a corporate sustainability framework that specifically aligns with our core values and builds on our existing programs, policies and best practices. AltaLinkâ&#x20AC;&#x2122;s four guiding principles for corporate sustainability are: 1. W e will manage our business to avoid or minimize environmental impacts; seek opportunities to reclaim and restore where impacts are unavoidable; maintain a responsible approach to resource consumption. 2. W e will provide a safe, healthy work environment and be supportive and respectful of a diverse workplace. 3. W e will communicate and consult with stakeholders, First Nations and our customers in a transparent, timely and respectful manner that acknowledges cultures and traditions. 4. W e will deliver and use electricity in a safe, reliable and cost-effective manner to meet current and future needs.

Helicopter lifting structures during construction on the Western Alberta Transmission Line project

Measuring our success A message from Scott Thon, President and Chief Executive Officer At AltaLink we work hard to keep the lights on for 85 per cent of Albertans. We are proud to provide this essential service to our customers and want to ensure we continue to do it in the safest, most environmentally responsible and cost-effective way possible. We are proud to be releasing our inaugural corporate sustainability report. This report formally demonstrates our commitment to incorporating sustainable thinking in our business strategies by considering our four guiding principles of corporate sustainability.

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In this report you will learn about some of our programs and initiatives that are part of our journey to sustainability, including: •h ow our employees were on the front lines restoring power and supporting cleanup efforts across Southern Alberta during the June 2013 flood •h ow we work to minimize our environmental footprint by finding new and innovative ways to build and maintain our facilities, get our employees where they need to be and protect wildlife in our project areas

Our first corporate sustainability report is an important step for AltaLink. As we continue on our sustainability journey, this report will document our ongoing initiatives, measure our performance and identify trends. This will ensure we continue to maintain our commitment to corporate sustainability. I believe that this will be a great ongoing focus for us as we continue to reinforce and expand the provincial transmission system. With a strong transmission system we can support economic growth by providing reliable power to Albertans who rely on it every day.

•h ow AltaLink raised more than $600,000 for Alberta charities in 2013 • s ome of the ways AltaLink keeps safety top of mind for our employees and contractors

Scott Thon, P.Eng President and CEO

•h ow we aim to ensure our employees have the tools and opportunities they need to be happy and successful both at work and at home • o ur dedication to open and transparent engagement with landowners, industries and Aboriginal communities in our project areas

AltaLink | Connected to the Future

Southern Alberta Flood Recovery Efforts Along with our industry partners, we were on the front lines restoring power and supporting cleanup efforts in Calgary and across southern Alberta in the wake of the catastrophic flooding in June 2013.

During the flood, AltaLink activated our Emergency Response Plan to restore power and ensure that the transmission system continued to deliver a reliable supply of power. Although our facilities were not as significantly affected as other electricity providers, our staff responded to issues in communities throughout southern Alberta including Bragg Creek, the Calgary area, Black Diamond, the High River area, Kananaskis and the Bow Valley. We were inspired by our employees’ passion to help those affected by the flooding. We received an overwhelming response from employees wanting to volunteer. We coordinated volunteer opportunities for more than 150 employees including delivering much needed supplies, such as water and cleaning products, and renting a Hydro-vacuum truck to pump water out of basements. Employees were provided with the safety gear needed to get out and lend a helping hand including masks, gloves, protective eye glasses and coveralls. Employees were also invited to take a full paid day off to volunteer in the area of their choice.

The fund doesn’t recover administrative costs or transaction fees, so 100 per cent of the donations are directed toward recovery work. We are participating on the fund selection committee, which focuses on rebuilding social programs that entire communities rely on. Some of the areas the funds went to included daily medical clinics for seniors, providing essential household goods to families in need and assistance for temporary accommodations. For more information about the Calgary Foundation’s Flood Rebuilding Fund, visit the website at www.thecalgaryfoundation.org/grants-awards/floodrebuilding-fund.

Our generous employees also filled donation boxes for the Calgary Food Bank and raised $19,655, which AltaLink matched, donating $39,310 to the Red Cross. As a company, we saw the need to support organizations committed to the rebuilding of communities hit hard by the floods. AltaLink donated $100,000 to the Calgary Foundation’s Flood Rebuilding Fund. The Flood Rebuilding Fund was set up to support long-term community recovery efforts in Calgary and southern Alberta and we see that as the best way to leverage our contribution. For more information about AltaLink’s corporate giving and where that money comes from, please see page 19. AltaLink employees helping with the flood recovery efforts in southern Alberta

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Thursday, June 20 at 5:49 a.m. Our field crews sprung into action after a report that a pole on our transmission line that supplies the Town of Canmore was about to fall into Cougar Creek. At 6:02 a.m. the line was removed from service, with no impact to customers, shortly before it washed out. After a concerted effort that involved accessing a community that had many closed roads, high water levels, intermittent phone service and a lot of unknowns, the broken structure was removed and the line was returned to service at 6:02 p.m. Friday. Restoring this line was fundamental to providing Canmore with electricity throughout the flooding.

Building Better Infrastructure for Alberta Through Innovation The majority of Alberta’s transmission system was built decades ago. Since then, the population of Alberta has increased significantly and demand for electricity continues to grow. AltaLink is working hard to keep pace with this increased demand and prepare Alberta for future growth. We are building and upgrading the electrical transmission system across the province to ensure communities, homes, farms, businesses and industries have the electricity they rely on every day. As we work through this unprecedented construction phase, AltaLink continues to demonstrate a commitment to sustainability by exploring, testing and implementing innovative designs, technologies and practices.

Screw pile foundations reduce impact by 80 per cent

Ice roads and access mats protect the land

Conventional concrete foundations for tower structures require significant amounts of concrete, rebar and approximately 80 cubic metres of soil excavation per structure. Screw pile foundations provide an alternative solution because they don’t need as much material or soil disturbance. Similar to using a power drill to advance a screw into a block of wood, the thread on a screw pile allows it to be turned into the ground with accuracy and minimal soil disturbance. As a result of using screw piles, AltaLink’s overall surface footprint has been reduced by more than 80 per cent when compared to conventional concrete foundations.

Ice roads are artificially created access roads that are temporarily placed in sensitive or unstable areas. Taking advantage of frozen soil conditions, additional water is applied to the desired access road location to create a frozen, hard packed temporary road. This creates a stable foundation for heavy construction equipment to access rights-ofway in areas where access may be limited or environmentally sensitive. As a result, the access areas are safer for workers and potential impacts to soil and vegetation are minimized.

Screw pile foundations also: • minimize the amount of heavy equipment traffic along the transmission line rights-of-way • require fewer workers on the construction site • s ignificantly reduce the time it takes to install foundations concrete foundations can take more than 28 days per structure, compared to screw pile foundations that can take less than one day per structure Screw pile foundations help us to minimize environmental impacts, reduce construction schedules and save on our overall project costs. As a result, screw piles have become common practice for AltaLink’s transmission structure construction.

Tower leg screw pile foundation 6 AltaLink | Connected to the Future

Access mats are another method used to reduce impacts to soils and sensitive vegetation, and they can be used more frequently than ice roads because they do not rely on frozen conditions. Strong mats made of rubber or wood are used to form a temporary road surface over sensitive landscapes to minimize soil compaction or rutting. These temporary road surfaces displace the weight of heavy construction equipment and allow for access to construction sites. AltaLink has successfully used ice roads and access mats during construction on several of our projects. One example is the Christina Lake Area Transmission Development, a project that is located in sensitive muskeg areas in northern Alberta.

Using helicopters to assemble towers is efficient, cost-effective and sustainable Assembling transmission towers along the right-of-way requires large volumes of heavy construction traffic transporting materials to the site. In order to reduce heavy traffic along the right-of-way, we often use material assembly yards located off the right-of-way to assemble the tower structures. Once the towers are assembled, helicopters are used to lift and place the structures onto their foundations. Not only does this technique help to minimize potential impacts to the environment surrounding the right-of-way, it is significantly faster and more efficient than other construction techniques.

Innovation Den enables new ideas We recognize that innovation is an important key to continuous improvement. Because of this, AltaLink has created an ‘Innovation Den’ that allows employees to present an innovative idea, design or technique to a panel of senior decision makers in the company. If the panel determines that an idea should be explored further, resources are allocated to make this happen.

High Voltage Direct Current transmission lines reduce footprint AltaLink is currently constructing a High Voltage Direct Current (HVDC) transmission line between Edmonton and Calgary. Traditional transmission lines in Alberta use Alternating Current (AC) technology, but HVDC lines can transport large volumes of power more efficiently and with a smaller physical footprint than traditional AC lines. One 500 kilovolt (kV) HVDC line can transport a similar amount of power as four double circuit 240 kV AC lines or seven single circuit 240 kV AC lines. The HVDC technology also allows the capacity of the transmission line to be increased as Alberta’s need for power grows, reducing the need to build more transmission lines. This helps to reduce additional impacts to landowners and minimize impacts to the surrounding environment 168 metres while still providing reliable and efficient electricity to Albertans. 168 metres

500 kV HVDC

55 metres 55 metres

240 kV AC (Double Circuit) 168 metres

240 kV AC (Single Circuit)

308 metres 308 metres

55 metres

AltaLink’s Bowmanton to Whitla Transmission Project - a 240 kV transmission line from east of Medicine Hat to South of Whitla - was built on screw pile foundations AltaLink | Connected to the Future

Fleet Services Efficient, Effective and Safe With a service territory spanning 212,000 square kilometres, AltaLink employees are required to cover a lot of ground. It is a priority for us to have a strong fleet of vehicles that can support our employees, ensuring they can do their jobs as safely and efficiently as possible.

AltaLink is committed to enhancing our fleet of vehicles to make them operate in the most efficient and effective manner possible. We currently have 159 vehicles in our fleet, 77 of which are hybrid, electric or utilize Green Diesel Technology. We are investing in new technologies and equipment that ensure employee safety, improve efficiency and reduce fuel consumption. One of these new technologies can be found in our plug in, hybrid bucket truck. Rather than relying on the truck’s idling engine, the bucket is powered by a battery that can be plugged in to charge. This eliminates idling time at a jobsite, reducing emissions and fuel consumption. The truck is also equipped with an electrical hoisting mechanism that allows AltaLink to operate on electric power alone, rather than a battery and engine combination. As a result the truck is quieter, making it easier for employees to communicate with each other and work safely. We also invested in the use of a vehicle telematics system that can diagnose mechanical issues, provide locations of equipment requiring service and determine if a vehicle’s fuel consumption is trending in the right direction. Telematics allows us to proactively diagnose any maintenance issues and requirements a fleet vehicle may have in a timely manner. As a result, we can ensure the safety of our employees on the road and also avoid unnecessary delays or work stoppages, ultimately saving us time and money. We will continue to use telematics to improve our results. By investing in the fleet that our employees use every day, we aim to minimize our impact on the environment while ensuring our employees can safely reach their destination and effectively focus on doing the work that keeps Alberta’s lights on. Some of AltaLink’s fleet vehicles, including our plug-in, hybrid bucket truck

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AltaLink’s Acheson Office Leading the Way At AltaLink, we believe that an effective business should be run using sustainable facilities, and one of our buildings is leading the charge in this effort. AltaLink’s Acheson office is located in the Acheson Industrial Park, just outside of Edmonton.

The Acheson office was designed and built with innovative measures to make the office environmentally friendly. These measures have resulted in lower operating costs, decreased use of resources and positions AltaLink as an environmentally conscious business leader. AltaLink’s Acheson office has even been recognized by the local community, earning the Acheson Business Association 2008 Green Award. Some of the highlighted features of the building include: •C isterns under the building collect rain water that is used to wash fleet vehicles • Waterless urinals conserve an estimated 100,000 gallons per year • Low water consumption toilets in washrooms • Electric hand dryers in washrooms reduce paper towel usage •E nergy efficient, timed lighting systems that turn lights off after work hours and on weekends • Energy efficient laundry machines for field employees • Timed heating and cooling systems for maximum energy efficiency • 15-minute cycled timers on outside plug-ins for vehicles during winter • On-demand energy efficient hot water heaters

Sustainable business practices at the Acheson building result in an estimated

$1,200 worth of energy savings per month.

• Motion detection lighting in offices and washrooms It’s estimated that the Acheson building alone provides AltaLink with approximately $1,200 worth of energy savings per month. This is an example of how sustainable business practices can play a role in effectively running a business.

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Safety Never Prioritized As one of AltaLink’s core values, safety is part of who we are and what we stand for. It is never prioritized. We are proud of our world-class safety record and we are committed to upholding the highest standards of safety in our work and promoting awareness of electrical safety.

AltaLink was awarded the Canadian Electricity Association’s (CEA) Vice President’s Award of Safety Excellence in both 2011 and 2012. We earned this award for our outstanding annual safety performance and adherence to high safety standards. Employees are introduced to safety at AltaLink during an interactive safety orientation. Major contractors working on behalf of AltaLink are subject to comprehensive screening and qualification by ISN, a global leader in contractor and supplier management. Our Safety department ensures the safe working environment for all of our employees and contractors using a variety of standards and programs that meet or exceed industry standards, applicable government codes and regulations.

Right-of-Way Boot Camp provides hands-on training In 2013, a series of interactive Right-of-Way Boot Camp sessions were organized for employees and contractors who plan, manage, supervise or work on our rights-of-way. The boot camp participants learned through hands-on sessions with real-life situations presented in an interesting way. One of the key drivers for creating this training is the need to orient workers on safety issues. It is necessary to focus on safety and hazard awareness in the field so that workers understand the importance of planning work, and executing plans with safety top of mind. The training also focused on the importance of mitigating environmental impacts along the right-of-way and respecting landowners by learning effective communication tools. The training was based on real-life safety, environment and construction issues that may come up in the field.

Safety Share promotes dialogue Safety Share is an important aspect of AltaLink’s safety program. Safety Share is a monthly safety meeting that brings together members of AltaLink’s teams with our contractors and other utilities. These meetings provide a common forum to review safety related topics such as incidents, trends and emerging issues.

Near miss and hazard reporting keeps safety top of mind AltaLink has a program in place called “See something, say something, do something” to encourage employees to report near miss or hazard incidents at work. This program is designed to create a safer work environment by educating our workforce so they can identify potential risks or hazards before they become a more serious incident. To help employees keep safety top of mind, the Environment, Health and Safety team donates $5 to the United Way for every near miss or hazard that is reported by employees. This program is anticipated to improve AltaLink’s safety performance and provide more information about the types of safety issues being experienced by employees both in the field and in the office environment.

Participants at one of our Right-of-Way Boot Camp sessions 10 AltaLink | Connected to the Future

Safety Al encourages smart thinking Safety Al is pictured above with AltaLink employees. He is an employee advocate for safe working practices. Safety Al is updated monthly with stickers resembling hazard symbols representing the location and frequency of injuries reported each month. He helps our employees to think about injuries and hazards, rather than just focusing on statistics.

2013 exposure hours Exposure hours are the total number of hours of employment, including overtime and training. In 2013, AltaLink doubled our exposure hours from 2012, but we maintained our world-class safety record. It is important that we have a strong focus on safety training initiatives, including continued awareness of potential hazards and effective safe work planning and execution. It is important to remember that we all play a role in preventing incidents and must continue to strive toward a goal of zero injuries.

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Employee Engagement We are very proud of our collaborative culture, our expertise and our record of safety and performance excellence at AltaLink. We know that a large part of our company’s success is because of our employees. We strive to give employees what they need to be great not only in their jobs, but in their everyday lives.

Employee engagement surveys help us listen to employees

Professional development promotes a high-calibre workforce

Every two years, AltaLink conducts an employee engagement survey to help identify areas employees believe could be improved moving forward. The survey also gives AltaLink’s leadership a tool to further understand the areas of engagement that employees value.

Ongoing learning and development is important at AltaLink. AltaLink’s Performance Review and Development (PRD) process includes ongoing coaching, feedback, collaboration and development that reflect our commitment to continuous improvement and high performance, as well as supporting the growth and development of all employees.

Our 2013 survey responses were collected and analyzed by Mercer, a global consulting leader in talent, health, retirement and investments. We had an employee participation rate of 95 per cent and achieved an overall engagement score of 83 per cent from employees. Compared to Mercer’s normative data for Canada, we are in the top 10 per cent of Canadian companies for employee engagement.

An important element of the performance management and review process at AltaLink is to connect employees through their work to individual, team, department and organizational goals and strategies. As part of our support for ongoing development, we provide information and support for employee training and growth including internal seminars on a wide range of subjects and support for external training.

AltaLink’s more than 800 employees recently gathered for an annual employee meeting

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AltaLink employees building a playground as part of a Days of Caring event with Parks Foundation Calgary

Our Wellness Fund keeps us balanced

Days of Caring

The AltaLink Wellness Spending Account supports employees’ overall health and wellness. It provides employees with the flexibility to achieve a broad range of wellness goals and personal interests.

The Days of Caring initiative is another way AltaLink employees are encouraged to volunteer their time and effort to support registered charities. Every few months, AltaLink will sponsor a Day of Caring in the community where employees are encouraged to help out during regular working hours by building playgrounds, serving at the Mustard Seed or whatever our community may need.

Employee giving keeps us engaged in our communities At AltaLink we recognize that allowing our employees to actively participate in events and programs that improve the quality of life for those in challenging circumstances is an important aspect of being a good corporate citizen. AltaLink employees are encouraged to become engaged in identified charitable organizations and programs. Examples of these important AltaLink programs are highlighted below.

Powerful Giving Powerful Giving is an annual two-week fundraising campaign at AltaLink that supports registered charities in Alberta. AltaLink matches employee donations dollar for dollar. In 2013 we raised a total of $629,390 after our corporate match. Some highlights of the 2013 campaign include: • s everal employee events (including a lip sync contest, bake sale, poverty simulation and a Powerful Day of Caring) that raised almost $12,000 • reaching a 55 per cent employee pledge rate • r eaching a 76 per cent Informed Decision participation rate – this means that employees took the time to learn about the campaign’s fundraising initiatives before making a decision on whether or not to pledge

Powerful Giving and Days of Caring are important initiatives for employees, but they are also a couple of the ways AltaLink gives back to the community. To learn more about our community investment initiatives, please see page 18.

In addition to AltaLink’s commitment to community investment, in 2013 alone, AltaLink employees raised more than

$600,000 for Alberta charities - a tremendous commitment to charity for a group of approximately 800 people.

AltaLink employees building a playground as part of a Days of Caring event with Parks Foundation Calgary AltaLink | Connected to the Future 13

Environmental Responsibility AltaLink understands the importance of minimizing our impact on Alberta’s natural landscapes and its inhabitants, so we strive to balance the environmental effect of our operations while maintaining the safety and reliability of our electric system. We have set strict standards by which to operate our business with respect to our environmental responsibilities, and have several programs and procedures in place to help us continually improve.

Avian protection reduces impacts by 95 per cent At AltaLink, we understand the concerns about interactions between birds and the transmission system. AltaLink monitors avian research, participates actively in assessing bird interactions and takes significant steps to mitigate potential impacts. We strive to be a leader in mitigating avian power line collisions and are committed to improving performance in this area.

When identifying preliminary locations for new transmission facilities, AltaLink takes several factors into consideration in an effort to find a low overall impact solution. One of those factors is the environment. AltaLink considers the environment in project planning by: • c onducting desktop studies of the project area to determine potentially sensitive environmental features and locations • a voiding environmentally sensitive or significant areas where possible

AltaLink was the first Canadian utility to develop an Avian Protection Plan (APP), a management system designed to reduce the impact our transmission facilities can have on birds. We were also the first company to use Cantega Technologies’ GreenjacketTM protective covers. GreenjacketTM is a long-term solution to wildlife-caused outages in substations. It works by providing a barrier between wildlife and energized electrical equipment. Since installing the covers, we have seen a 95 per cent reduction in animal related power outages in substations with a history of animal contacts.

•d eveloping mitigations to reduce disturbance when avoidance is not possible

As a member of the Avian Power Line Interaction Committee (APLIC), the Alberta Ferruginous Hawk Recovery team, the Raptor Research Foundation and the Canadian Electricity Association’s Migratory Bird Task Group, AltaLink stays current with industry best practices.

During construction, all activities follow an Environmental Protection Plan created for the project. Specific measures may include scheduling construction to occur outside of wildlife seasonally sensitive time periods and working under frozen or dry conditions or using matting to protect sensitive natural areas and habitats.

Project siting and environmental evaluation aims to minimize potential impacts In 2013, AltaLink received permits for more than 1,400 kilometres (870 miles) of new transmission line and associated rights-of-way to the Alberta electric system. We are committed to the protection of the project areas and the environment is an important consideration in the route and site identification process for new transmission facilities. The environment remains a priority during construction and operation of the facilities.

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•p aralleling existing corridors such as roads, pipelines, power lines where appropriate • e nsuring routes meet all current environmental regulations • s eeking information from local landowners and First Nations communities

PCB management helps keep our equipment safe and clean Polychlorinated biphenyl (PCB) is a compound that was widely used in electrical equipment in the 1960s and 1970s. PCB was later found to be a potential health and environmental risk and manufacturing was banned in 1978.

GreenjacketTM covers on one of our substations

AltaLink actively manages oil filled equipment which contains low levels of PCB. Over the next 10 years, equipment that currently has more than 50 parts per million of PCB will be removed or refilled with non-PCB oil.

Transformer recycling helps us manage PCBs We have developed a process to recycle oil filled transformers that contain trace amounts of PCB. AltaLink collaborated with a specialized hazardous waste handling contractor to develop a process to recycle these transformers, which are typically larger than a full sized pick-up truck. The equipment is transported to a transformer recycling centre in a completely enclosed, secure containment system. All of the metal that is salvaged from the transformer is properly cleaned to remove all trace amounts of PCB, and then we sell the metals to a local metal recycler. In 2013 AltaLink recycled four pieces of oil filled equipment. Another six transformers are scheduled for recycling in 2014. In the transformer pictured here, 92 per cent of its original weight was recycled.

Did you know? 2011 – 2013: AltaLink sponsored a three-year, $300,000 University of Alberta research study on the effects of industrial development on ferruginous hawks. AltaLink’s experience is that up to 20 per cent of all power outages can be attributed to wildlife. Bird diverters have been shown to reduce collisions by 60 to 80 per cent. AltaLink employs a full-time professional biologist to address avian issues with AltaLink facilities.

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Stakeholder Engagement and Community Support Since we provide electricity to 85 per cent of Albertans, our existing facilities and proposed new projects touch communities all over the province. It is important that we build relationships with the communities where we live and work, which is why we have a number of business groups dedicated to engaging with various members of the public including landowners, local businesses and industries, Aboriginal communities and government representatives.

Aboriginal consultation and community support promotes collaboration and partnerships AltaLink recognizes the deep connections Aboriginal people have to the land and traditional territories and we respect the diversity of Aboriginal cultures. Our transmission facilities are located on or near 18 First Nations Reserves and two Métis Settlements in Alberta. We believe that true collaboration and partnership with Aboriginal communities requires mutual respect, open dialogue and a willingness to listen and learn.

Traditional Land Use studies As part of our consultation with Aboriginal communities on proposed new projects, we support the coordination of Traditional Land Use (TLU) studies within the proposed project area. TLU studies allow us to gather knowledge about the wildlife, vegetation and water in the area, as well as any sites of traditional or cultural importance. This knowledge helps us work with the community to minimize and mitigate any negative impacts to these sites during construction and through the life of the facilities.

Truth and Reconciliation Commission (TRC) This year we made an investment that is beneficial to all Aboriginal communities in Alberta. AltaLink donated a Bear Level contribution ($25,000) to the Truth and Reconciliation Commission (TRC). The TRC was established by the Government of Canada to support the survivors of residential schools and to contribute to truth, healing and reconciliation. The Commission’s mandate is to learn the truth about what happened in the residential schools and to inform all Canadians of the facts. One of the ways they achieve this is through

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national events aimed at promoting healing and reconciliation between Aboriginal and non-Aboriginal Canadians. AltaLink is proud to be able to contribute to this important initiative and support Alberta’s Aboriginal people.

Customer service is essential in order to deliver value Being customer focused is essential to the future of our business. AltaLink works with multiple customers every day, including those wanting to connect to the electric system and those that are already connected. Over the past two years we have been increasing our focus on our customers and we are deliberate about bringing their voice into AltaLink’s business. We have developed and implemented customer relationship surveys for most of our customer segments and we use feedback from those surveys to innovate new ways to improve service and develop new service offers.

Existing Connected Customer program We have developed a program to ensure we have proactive interactions with our existing customer segment, including large industrial customers and generators that are directly connected to the transmission grid. These customers depend on reliable service and we are committed to working with them to deliver the safety and reliability they need.

M-Power Connect This is a new service developed for our new connecting customers. M-Power Connect helps customers that want to have more control and involvement in their connection project by allowing them to be more engaged and providing enhanced collaboration and transparency in the process.

Connection Process Step-Change We are also currently working with our industry partners to develop a significant improvement in cycle time for customers connecting to the grid. Today, it takes more than three years to connect a customer facility to the electric system and our goal is to reduce the cycle time to less than two years.

AltaLink provides a variety of ways for interested individuals and groups to provide their input. Open houses, information centres, tollfree numbers, e-mail addresses, mailouts and one-on-one consultations are the primary channels used to connect with the public.

We continuously strive to earn our customers’ business rather than take it for granted, and we actively seek out and act on the feedback of our customers to deliver projects on time and on budget.

Consultation helps us identify low impact solutions for our projects At AltaLink we pride ourselves on our active and collaborative consultation program. When proposing new projects, we seek input early in the planning and siting process. We know that the people living and working in the communities know the area best, so we solicit local feedback to help us identify the lowest overall impact solutions for our projects.

2013 consultation highlights • 34,207 stakeholders reached • 2,207 consultations completed • 10 open houses attended by over 560 stakeholders • 134 project mail outs

We build relationships with community members during consultation and we appreciate the time and patience they provide during the process. It is important that we carry these relationships forward during construction activities and ongoing facility operations.

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Investing in our communities AltaLink is committed to corporate giving and establishing alliances with non-profit partners in the communities in which we live and operate. The funds for our corporate giving are provided by our parent company so that it does not affect Alberta’s rate-payers. Each year AltaLink invests in programs and initiatives across Alberta.

We are particularly proud of our annual Powerful Giving campaign which supports the United Way and registered charities. AltaLink has held the Powerful Giving campaign annually since the company was established in 2002, raising more than $3 million for Alberta charities. In addition to the Powerful Giving campaign, we are proud of our many other community initiatives.

4-H partnership provides skills for success Partnering with Alberta 4-H gives AltaLink the opportunity to support rural Alberta, the area in which a large part of our operations take place. We have been a sponsor of Alberta 4-H since 2005. Currently, we are a Legacy Builder sponsor and the title sponsor of all regional, district and provincial communications and public speaking programs. The skills 4-H members develop in the public speaking program contribute to their success as they become leaders in business and in their communities. We are proud to be involved in this component of Alberta 4-H’s leadership development.

Scholarships help support our future leaders Scholarships are another opportunity to support our future leaders. AltaLink launched the Centennial Scholarship program in 2005. This program is directed to students from rural Alberta attending one of the following post-secondary institutions: · Southern Alberta Institute of Technology (SAIT) · Bow Valley College · Lethbridge College · Red Deer College · Olds College · Northern Alberta Institute of Technology (NAIT) In 2007, we launched our Aboriginal scholarship program designed to recognize leaders in the Aboriginal community by offering four $2,000 scholarships to Aboriginal students attending post-secondary institutions. Each scholarship is awarded to one student from each of Treaty 6, 7, 8 and the Métis community in Alberta. Each year we look forward to meeting the exemplary students who receive our scholarships and learning about their future aspirations.

Some of the competitors at the 4-H Alberta Communications Finals that took place in April 2014 18 AltaLink | Connected to the Future

An AltaLink employee volunteering during one of our Days of Caring

Math tutoring initiative aims to reduce student dropout rates As part of AltaLlink’s overall desire to become actively engaged in the communities where we work, AltaLink teamed up with the United Way’s All In for Youth initiative to keep kids in high school by providing free, high quality math tutoring. The All In for Youth initiative is the first program to offer high school students free group tutoring opportunities in the city. Alberta has the highest high school dropout rate in Canada and 42 per cent of the students who do graduate don’t go on to pursue further education. Currently 11 AltaLink employees are providing tutoring and mentoring opportunities to increase the likelihood of students completing grade 12 and pursuing higher education.

Days of Caring support communities in need AltaLink employees across the company volunteer their time and effort to support the Days of Caring initiative, which is another way AltaLink supports registered charities. Every few months, AltaLink will sponsor a Day of Caring to help a particular registered charity. This is unique in that employees are encouraged to participate during regular working hours and includes more than just a financial contribution. Previously, AltaLink has supported Inn from the Cold, the Calgary Boys and Girls Clubs, Project 118 Camp, Habitat for Humanity, the Calgary Food Bank and the Calgary Community Kitchen.

Some of AltaLink’s volunteer math tutors

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Economic Responsibility AltaLink is an economically responsible Transmission Facility Owner (TFO) that strives to cost-effectively and transparently build, operate and maintain Alberta’s transmission grid.

General Tariff Application ensures costeffective transmission for Albertans The Alberta Utilities Commission’s (AUC) General Tariff Application (GTA) process ensures that Albertans pay a fair price for transmission services. The GTA is a publicly transparent process that requires AltaLink to forecast and defend its future costs for providing transmission services to Albertans. AltaLink submits a GTA to the AUC for approval. The GTA explores the driving factors behind AltaLink’s revenue needs. AltaLink’s GTA is scrutinized by the AUC, along with industry and consumer associations, ensuring AltaLink’s proposed revenue is reasonable and that transmission costs remain fair for the upcoming period. Any financial proposals made by AltaLink must be supported with strong evidence to justify the expense to customers. Through the transparent GTA process, AltaLink is able to demonstrate that it is both financially responsible and economically sustainable.

Innovation resulted in $90 million of project cost savings The adoption of innovative construction techniques have produced significant cost savings. One example is from AltaLink’s Christina Lake Area Transmission Development project that is located within muskeg terrain and an important woodland caribou area. The project team developed an innovative tower structure design that resulted in a significant reduction in potential environmental impacts and resulted in a cost savings of more than $90 million - another example of AltaLink’s sustainable business practices in action.

20 AltaLink | Connected to the Future

Reliability measurements confirm we are effectively maintaining and operating our system AltaLink’s core function is to transport electricity across the province from where it is generated to where it is needed, so measuring system reliability is essential to monitoring our performance. Electricity service is measured by calculating three reliability indexes: Average customer outage time · measured by the System Average Interruption Duration Index (SAIDI) Average customer outage frequency ·m easured by the System Average Interruption Frequency Index (SAIFI) Average customer restore time · measured by the System Average Restoration Index (SARI) Reliability indexes are calculated annually and compared to the previous year and rolling five year averages. AltaLink’s SAIDI and SAIFI results have consistently been 20-40 per cent more reliable than the average of Canadian utilities (shown in the graphs on the next page). Lower index values confirm we are effectively maintaining and operating the transmission system. Although we have managed to minimize the number of outages on our system, we remain focused on improving our outage restoration results (SARI) across our 212,000 square kilometre service area.

SAIDI 2011

2012

2013

AltaLink 0.78

0.61

0.83

CEA 1.37

1.11

n/a

SAIFI 2011

2012

2013

AltaLink 1.04

0.77

0.62

CEA 1.65

1.74

n/a

SARI 2011 AltaLink 1.34 CEA 1.69

2012

2013

1.5

2.25

1.23

n/a

AltaLink | Connected to the Future

Achieving a Sustainability Milestone A message from Dennis Frehlich, Executive Vice President & Chief Operating Officer

Over the past few years AltaLink has built up a strong inventory of programs, policies and procedures that are all consistent with our understanding of corporate sustainability and as you have read in this report, we are delivering practical results. We reached an important milestone along our journey to sustainability recently with the Canadian Electricity Association (CEA) designating us as a Sustainable Electricity CompanyTM. We are the first transmission company and second utility company in Canada to achieve this distinction. I was very proud to accept this award on behalf of all of our employees in recognition of the great work AltaLink has been doing. Our designation as a Sustainable Electricity CompanyTM is a reflection of our commitment to meeting the needs of our stakeholders, communities and employees through sustainable business practices. I look forward to us demonstrating even better results next year.

Dennis Frehlich, P.Eng Executive Vice President and COO

22 AltaLink | Connected to the Future

Celebrating our achievements On January 10, 2014, AltaLink was honoured to be designated by the Canadian Electricity Association (CEA) as a Sustainable Electricity CompanyTM. The designation was developed by the CEA for utility companies across Canada and requires utilities to commit to standards for environmental and social responsibility. In addition to the standards, companies must also pass a third-party external verification to ensure adherence to the standard. “Sustainable development means pursuing innovative business strategies and activities that meet the needs of members, stakeholders and the communities in which we operate today, while protecting and enhancing the human and natural resources that will be needed in the future.” – Canadian Electricity Association

From left to right: President and CEO of the Canadian Electricity Association Jim Burpee, Executive Vice President and COO of AltaLink Dennis Frehlich and Director of Sustainable Development at the Canadian Electricity Association Channa Perera at AltaLink’s Susatainable Electricity CompanyTM designation event. AltaLink | Connected to the Future

Data Table An important component of any corporate sustainability report is performance data that shows how a company is tracking and trending. The following table provides an overview of AltaLink’s performance and represents baseline corporate sustainability data. Additional data points may be added as our corporate sustainability performance continues to mature and expand.

2013

2014

2015

Environment a

Avian Protection - # of high risk substations mitigated

# Significant Spill Events

Amount of recycled or destroyed material containing PCBs (kg)

Units of e-waste recycled

Paper recycled (kg)

92 0 7,573 kg 181 158,760 kg

Social Total # employees

829

Employee engagement

83%

Employee attrition

Safety – All Injury Frequency Rate

7 0.40

Corporate Giving ($)

$650,000

Financial h i j

Customer Outage time (SAIDI)

0.83 hours/customer

Customer Outage frequency (SAIFI)

0.62 #outages/ customer

Customer Restoration time (SARI)

1.85 hours/outage

Capital Investment ($B)

$1.8

Provincial Taxes - (business, property, GST and non- residential) ($M)

$25.1

Federal Taxes – ($M) Definitions/notes: Risk assessments have defined specific power poles and substation locations that pose a high risk of bird electrocution and potential threats to power disruptions

$9.3 Third party vendor states recycling in trees saved and uses equation of 200 kg per tree (793.8 trees saved in 2013)

Staff turn-over excluding retirements

Significant Spill as defined by the Canadian Electrical Association is any PCB spill, any spill to water, or a spill > 500 litres

Material recycled or sent for destruction includes liquids and solids at concentrations equal to or greater than 50ppm PCB. Conversion of litres to kg used is 1kg =1.16L

SAIFI – System Average Interruption Frequency

SARI – System Average Restoration Index

Retired electronic assets (computers, monitors, etc.)

24 AltaLink | Connected to the Future

AltaLink medical aid events per 200,000 hours worked

SAIDI – System Average Interruption Duration

Company Profile In 2002, AltaLink assumed control of Alberta’s largest transmission system from TransAlta, becoming the first stand-alone transmission provider in Canada. As Alberta’s largest transmission company, AltaLink owns more than half the provincial transmission system with a 212,000 square kilometre service area. Our network of more than 12,000 kilometres of transmission lines and 280 substations delivers electricity safely, reliably and efficiently to 85 per cent of Albertans. We transport power from the generation facilities where it is created to the communities, homes, farms, businesses and industries that need it every day. AltaLink is regulated by the Alberta Utilities Commission (AUC) and subject to rulings and regulations put in place by the AUC.

Governance AltaLink has an independent Board of Directors and is currently owned by SNCLavalin. On May 1, 2014 it was announced that Berkshire Hathaway Energy reached an agreement to purchase SNC-Lavalin’s equity in AltaLink. Pending regulatory approval from the Alberta Utilities Commission (AUC) and others, Berkshire Hathaway Energy will hold 100 per cent of the equity ownership of AltaLink.

AltaLink’s Board of Directors is responsible for governance oversight and has a number of working committees focused on, among other things, the social environmental and economic impacts of AltaLink operations. The current working committees include: · Audit Committee · Environmental, Health and Safety Committee · Human Resources and Governance Committee · Major Projects Committee We publish a publicly available Annual Information Form on www.sedar.com that provides information on where accountability and responsibility lies across the organization as well as specific information on the activities and findings of these working committees. We also publish an annual Compliance Report on our website at www.altalink.ca/regulatory that outlines where and how AltaLink has remained compliant in order to conduct business as it pertains to governance related issues.

2611 - 3rd Avenue S.E. Calgary AB T2A 7W7 Telephone 403.267.3400 Toll free 1.866.451.7817 www.altalink.ca