ATLANTIC POWER CORP (Form: 10-Q, Received: 08/08/2013 17:11:26)

Date: August 8, 2013

Atlantic Power Corporation

/s/ TERRENCE RONAN

Terrence Ronan

Chief Financial Officer (Duly Authorized
Officer and Principal Financial Officer)

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2013
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

COMMISSION FILE NUMBER 001-34691

ATLANTIC POWER CORPORATION
(Exact name of registrant as specified in its charter)


British Columbia, Canada (State or other jurisdiction of incorporation or organization)		55-0886410 (I.R.S. Employer Identification No.)
One Federal Street, 30 ^th Floor Boston, MA (Address of principal executive offices)		02110 (Zip code)

(617) 977-2400
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer ý		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The number of shares outstanding of the registrant's Common Stock as of August 5, 2013 was 119,948,759.

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ATLANTIC POWER CORPORATION

FORM 10-Q

THREE AND SIX MONTHS ENDED JUNE 30, 2013

Index


	General:	3
	PART I—FINANCIAL INFORMATION	4
ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	4
	Consolidated Balance Sheets as of June 30, 2013 (unaudited) and December 31, 2012	4
	Consolidated Statements of Operations for the three and six months ended June 30, 2013 and June 30, 2012 (unaudited)	5
	Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2013 and June 30, 2012 (unaudited)	6
	Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and June 30, 2012 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	47
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	76
ITEM 4.	CONTROLS AND PROCEDURES	80
	PART II—OTHER INFORMATION	81
ITEM 1.	LEGAL PROCEEDINGS	81
ITEM 1A.	RISK FACTORS	82
ITEM 6.	EXHIBITS	83

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GENERAL

In this Quarterly Report on Form 10-Q, references to "Cdn$" and "Canadian dollars" are to the lawful currency of Canada and references to "$" and "US$" and "U.S. dollars" are to the lawful currency of the United States. All dollar amounts herein are in U.S. dollars, unless otherwise indicated.

Unless otherwise stated, or the context otherwise requires, references in this Quarterly Report on Form 10-Q to "we," "us," "our," "Atlantic Power" and the "Company" refer to Atlantic Power Corporation, those entities owned or controlled by Atlantic Power Corporation and predecessors of Atlantic Power Corporation.

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PART I—FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

ATLANTIC POWER CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions of U.S. dollars)

	June 30, 2013			December 31, 2012

	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	195.6		$	60.2
Restricted cash		40.1			28.6
Accounts receivable		71.4			58.5
Current portion of derivative instruments asset (Notes 6 and 7)		0.7			9.5
Inventory		18.1			16.9
Prepayments and other current assets		17.2			13.4
Security deposits		1.1			19.0
Assets held for sale (Note 11)		—			351.4
Refundable income taxes		1.4			4.2

Total current assets		345.6			561.7
Property, plant, and equipment, net of accumulated depreciation of $128.8 million and $79.2 million at June 30, 2013 and December 31, 2012, respectively		1,932.3			2,055.5
Equity investments in unconsolidated affiliates		410.4			428.7
Other intangible assets, net of accumulated amortization of $106.6 million and $76.9 million at June 30, 2013 and December 31, 2012, respectively		483.6			524.9
Goodwill (Note 4)		331.2			334.7
Derivative instruments asset (Notes 6 and 7)		8.3			11.1
Other assets		56.0			86.1

Total assets	$	3,567.4		$	4,002.7

Liabilities
Current liabilities:
Accounts payable	$	13.2		$	17.8
Accrued interest		17.8			19.0
Other accrued liabilities		46.3			73.7
Revolving credit facility (Note 5)		—			67.0
Current portion of long-term debt (Note 5)		65.7			121.2
Current portion of derivative instruments liability (Notes 6 and 7)		32.2			33.0
Dividends payable		3.8			11.5
Liabilities held for sale (Note 11)		—			189.0
Other current liabilities		3.1			3.3

Total current liabilities		182.1			535.5
Long-term debt (Note 5)		1,462.0			1,459.1
Convertible debentures		408.3			424.2
Derivative instruments liability (Notes 6 and 7)		82.0			118.1
Deferred income taxes		155.6			164.0
Power purchase and fuel supply agreement liabilities, net of accumulated amortization of $6.5 million and $4.4 million at June 30, 2013 and December 31, 2012, respectively		40.8			44.0
Other non-current liabilities		70.5			71.4
Commitments and contingencies (Note 14)		—			—

Total liabilities		2,401.3			2,816.3
Equity
Common shares, no par value, unlimited authorized shares; 119,901,246 and 119,446,865 issued and outstanding at June 30, 2013 and December 31, 2012, respectively (Note 12)		1,285.4			1,285.5
Preferred shares issued by a subsidiary company (Note 12)		221.3			221.3
Accumulated other comprehensive income (loss)		(19.5	)		9.4
Retained deficit		(597.3	)		(565.2	)

Total Atlantic Power Corporation shareholders' equity		889.9			951.0
Noncontrolling interest (Note 12)		276.2			235.4

Total equity		1,166.1			1,186.4

Total liabilities and equity	$	3,567.4		$	4,002.7

See accompanying notes to consolidated financial statements.

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ATLANTIC POWER CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions of U.S. dollars, except per share amounts)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,

	2013			2012			2013			2012
Project revenue:
Energy sales	$	68.1		$	49.4		$	137.1		$	109.4
Energy capacity revenue		54.4			37.5			99.2			74.5
Other		16.5			14.5			42.9			36.2

		139.0			101.4			279.2			220.1
Project expenses:
Fuel		52.0			37.3			101.6			83.5
Operations and maintenance		46.9			37.9			75.2			62.6
Development		1.8			—			3.5			—
Depreciation and amortization		42.2			30.3			83.5			56.8

		142.9			105.5			263.8			202.9
Project other income (expense):
Change in fair value of derivative instruments (Notes 6 and 7)		24.3			(4.8	)		36.9			(62.0	)
Equity in earnings of unconsolidated affiliates (Note 3)		8.7			5.5			15.9			8.4
Interest expense, net		(8.7	)		(4.1	)		(16.7	)		(8.1	)
Other, net		(4.8	)		—			(4.8	)		—

		19.5			(3.4	)		31.3			(61.7	)

Project income (loss)		15.6			(7.5	)		46.7			(44.5	)
Administrative and other expenses (income):
Administration		11.8			8.0			20.1			15.7
Interest, net		25.3			21.4			51.2			43.4
Foreign exchange gain (Note 7)		(14.5	)		(4.2	)		(22.0	)		(3.2	)
Other income, net		(9.5	)		(6.0	)		(9.5	)		(6.0	)

		13.1			19.2			39.8			49.9

Income (loss) from continuing operations before income taxes		2.5			(26.7	)		6.9			(94.4	)
Income tax expense (benefit) (Note 8)		0.6			(5.3	)		(1.9	)		(22.2	)

Income (loss) from continuing operations		1.9			(21.4	)		8.8			(72.2	)
Income (loss) from discontinued operations, net of tax (Note 11)		(0.7	)		19.3			0.2			30.9

Net income (loss)		1.2			(2.1	)		9.0			(41.3	)
Net income (loss) attributable to noncontrolling interests		1.1			(0.2	)		(0.8	)		(0.3	)
Net income attributable to preferred shares dividends of a subsidiary company		3.1			3.2			6.3			6.4

Net income (loss) attributable to Atlantic Power Corporation	$	(3.0	)	$	(5.1	)	$	3.5		$	(47.4	)

Basic earnings (loss) per share: (Note 10)
Income (loss) from continuing operations attributable to Atlantic Power Corporation	$	(0.02	)	$	(0.21	)	$	0.03		$	(0.69	)
Income (loss) from discontinued operations, net of tax		(0.01	)		0.17			0.00			0.27

Net income (loss) attributable to Atlantic Power Corporation	$	(0.03	)	$	(0.04	)	$	0.03		$	(0.42	)
Diluted earnings (loss) per share: (Note 10)
Income (loss) from continuing operations attributable to Atlantic Power Corporation	$	(0.02	)	$	(0.21	)	$	0.03		$	(0.69	)
Income (loss) from discontinued operations, net of tax		(0.01	)		0.17			0.00			0.27

Net income (loss) attributable to Atlantic Power Corporation	$	(0.03	)	$	(0.04	)	$	0.03		$	(0.42	)
Weighted average number of common shares outstanding: (Note 10)
Basic		119.9			113.7			119.7			113.6
Diluted		119.9			113.7			120.3			113.6

See accompanying notes to consolidated financial statements.

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ATLANTIC POWER CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions of U.S. dollars)

(Unaudited)

	Three months ended June 30,

	2013			2012
Net income (loss)	$	1.2		$	(2.1	)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on hedging activities	$	0.6		$	(0.5	)
Net amount reclassified to earnings		0.1			0.2

Net unrealized gain (loss) on derivatives		0.7			(0.3	)
Foreign currency translation adjustments		(18.0	)		(13.9	)

Other comprehensive loss, net of tax		(17.3	)		(14.2	)

Comprehensive loss		(16.1	)		(16.3	)

Less: Comprehensive income attributable to noncontrolling interest		4.2			3.0

Comprehensive loss attributable to Atlantic Power Corporation	$	(20.3	)	$	(19.3	)

	Six months ended June 30,

	2013			2012
Net income (loss)	$	9.0		$	(41.3	)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on hedging activities	$	0.6		$	(0.5	)
Net amount reclassified to earnings		0.4			0.5

Net unrealized gain on derivatives		1.0			—
Foreign currency translation adjustments		(30.1	)		3.3

Other comprehensive (loss) income, net of tax		(29.1	)		3.3

Comprehensive loss		(20.1	)		(38.0	)

Less: Comprehensive income attributable to noncontrolling interest		5.5			6.1

Comprehensive loss attributable to Atlantic Power Corporation	$	(25.6	)	$	(44.1	)

See accompanying notes to consolidated financial statements.

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ATLANTIC POWER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions of U.S. dollars)

(Unaudited)

	Six months ended June 30,

	2013			2012
Cash flows from operating activities:
Net income (loss)	$	9.0		$	(41.3	)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization		92.8			76.8
Loss of discontinued operations		32.8			—
Gain on sale of assets & other charges		(4.4	)		—
Long-term incentive plan expense		1.2			1.5
Impairment charges		4.9			3.0
Gain on sale of equity investments		—			(0.6	)
Equity in earnings from unconsolidated affiliates		(15.9	)		(10.8	)
Distributions from unconsolidated affiliates		18.0			8.7
Unrealized foreign exchange (gain) loss		(8.7	)		11.8
Change in fair value of derivative instruments		(47.7	)		58.2
Change in deferred income taxes		(6.5	)		(26.0	)
Change in other operating balances
Accounts receivable		(3.6	)		20.3
Inventory		(1.3	)		(4.3	)
Prepayments, refundable income taxes and other assets		46.3			(9.8	)
Accounts payable		(9.4	)		(0.4	)
Accruals and other liabilities		(10.6	)		2.2

Cash provided by operating activities		96.9			89.3
Cash flows provided by (used in) investing activities:
Change in restricted cash		(19.4	)		2.3
Proceeds from sale of assets, net		148.3			—
Proceeds from sale of equity investments		—			24.2
Cash paid for equity investment		—			(0.3	)
Proceeds from treasury grant		53.7			—
Biomass development costs		(0.1	)		(0.2	)
Construction in progress		(26.2	)		(230.2	)
Purchase of property, plant and equipment		(5.0	)		(0.8	)

Cash provided by (used in) investing activities		151.3			(205.0	)
Cash flows (used in) provided by financing activities:
Proceeds from project-level debt		20.8			255.3
Repayment of project-level debt		(64.2	)		(9.3	)
Offering costs related to tax equity		(1.0	)		—
Payments for revolving credit facility borrowings		(67.0	)		(60.8	)
Proceeds from revolving credit facility borrowings		—			22.8
Equity contribution from noncontrolling interest		44.6			—
Deferred financing costs		—			(18.9	)
Dividends paid		(52.5	)		(71.4	)

Cash (used in) provided by financing activities		(119.3	)		117.7

Net increase in cash and cash equivalents		128.9			2.0
Cash and cash equivalents at beginning of period at discontinued operations		6.5			—
Cash and cash equivalents at beginning of period		60.2			60.7

Cash and cash equivalents at end of period	$	195.6		$	62.7

Supplemental cash flow information
Interest paid	$	65.3		$	58.2
Income taxes paid, net	$	1.4		$	1.5
Accruals for construction in progress	$	8.6		$	25.5

See accompanying notes to consolidated financial statements.

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of presentation and summary of significant accounting policies

General

Atlantic Power owns and operates a diverse fleet of power generation and infrastructure assets in the United States and Canada. Our power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements ("PPAs"), which seek to minimize exposure to changes in commodity prices. As of June 30, 2013, our power generation projects in operation had an aggregate gross electric generation capacity of approximately 3,018 megawatts ("MW") in which our aggregate ownership interest is approximately 2,098 MW. These totals exclude our 17.1% interest in Gregory Power Partners, L.P. ("Gregory") which was sold August 7, 2013 and our 40% interest in the Delta-Person generating station ("Delta-Person") for which we entered into an agreement to sell in December 2012. Our current portfolio of continuing operations consists of interests in twenty-nine operational power generation projects across eleven states in the United States and two provinces in Canada. Piedmont Green Power project ("Piedmont"), our 53 MW biomass project in Georgia, achieved commercial operations in April 2013. In December 2012, we acquired a wind and solar development company, Ridgeline Energy Holdings, Inc. ("Ridgeline"), located in Seattle, Washington, which has enhanced our ability to develop, construct, and operate wind and solar energy projects across the United States and Canada. We also own a majority interest in Rollcast Energy Inc. ("Rollcast"), a biomass power plant developer in North Carolina. Twenty-three of our projects are wholly owned subsidiaries.

Atlantic Power is a corporation established under the laws of the Province of Ontario, Canada on June 18, 2004 and continued to the Province of British Columbia on July 8, 2005. Our shares trade on the Toronto Stock Exchange under the symbol "ATP" and on the New York Stock Exchange under the symbol "AT." Our registered office is located at 355 Burrard Street, Suite 1900, Vancouver, British Columbia V6C 2G8 Canada and our headquarters is located at One Federal Street, 30 ^th Floor, Boston, Massachusetts 02110, USA. Our telephone number in Boston is (617) 977-2400 and the address of our website is www.atlanticpower.com. Information contained on Atlantic Power's website or that can be accessed through its website is not incorporated into and does not constitute a part of this Quarterly Report on Form 10-Q. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website. We make available on our website, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission ("SEC"). Additionally, we make available on our website our Canadian securities filings, which are not incorporated by reference into our Exchange Act filings.

The interim consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with the SEC regulations for interim financial information and with the instructions to Form 10-Q. The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012. Interim results are not necessarily indicative of results for the full year.

In our opinion, the accompanying unaudited interim consolidated financial statements present fairly our consolidated financial position as of June 30, 2013, the results of operations and

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

1. Basis of presentation and summary of significant accounting policies (Continued)

comprehensive income (loss) for the three and six months ended June 30, 2013 and 2012, and our cash flows for the six months ended June 30, 2013 and 2012. In the opinion of management, all adjustments (consisting of normal recurring accruals and other adjustments) considered necessary for a fair presentation have been included.

Use of estimates

The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. Actual results could differ from those estimates. During the periods presented, we have made a number of estimates and valuation assumptions, including the fair values of acquired assets, the useful lives and recoverability of property, plant and equipment, intangible assets and liabilities related to PPAs and fuel supply agreements, the recoverability of equity investments, the recoverability of deferred tax assets, tax provisions, the valuation of shares associated with our Long-Term Incentive Plan ("LTIP") and the fair value of financial instruments and derivatives. In addition, estimates are used to test long-lived assets and goodwill for impairment and to determine the fair value of impaired assets. These estimates and valuation assumptions are based on present conditions and our planned course of action, as well as assumptions about future business and economic conditions. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2012. As better information becomes available or actual amounts are determinable, the recorded estimates are revised. Should the underlying valuation assumptions and estimates change, the recorded amounts could change by a material amount.

Recently issued accounting standards

Adopted

In July 2012, the Financial Accounting Standards Board ("FASB") issued changes to the testing of indefinite-lived intangible assets for impairment, similar to the goodwill changes issued in September 2011. These changes provide an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the fair value of an indefinite-lived intangible asset is less than its carrying amount. Such qualitative factors may include the following: macroeconomic conditions; industry and market considerations; cost factors; overall financial performance; and other relevant entity-specific events. If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform the existing two-step quantitative impairment test, otherwise no further analysis is required. An entity also may elect not to perform the qualitative assessment and, instead, proceed directly to the two-step quantitative impairment test. These changes became effective for us for any indefinite-lived intangible asset impairment test performed on January 1, 2013 or later. The adoption of these changes did not impact the consolidated financial statements.

On January 1, 2012, we adopted changes issued by the FASB to conform existing guidance regarding fair value measurement and disclosure between U.S generally accepted accounting principles

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

1. Basis of presentation and summary of significant accounting policies (Continued)

("GAAP") and International Financial Reporting Standards. These changes both clarify the FASB's intent about the application of existing fair value measurement and disclosure requirements and amend certain principles or requirements for measuring fair value or for disclosing information about fair value measurements. The clarifying changes relate to the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity's shareholders' equity, and disclosure of quantitative information about unobservable inputs used for Level 3 fair value measurements. The amendments relate to measuring the fair value of financial instruments that are managed within a portfolio; application of premiums and discounts in a fair value measurement; and additional disclosures concerning the valuation processes used and sensitivity of the fair value measurement to changes in unobservable inputs for those items categorized as Level 3, a reporting entity's use of a nonfinancial asset in a way that differs from the asset's highest and best use, and the categorization by level in the fair value hierarchy for items required to be measured at fair value for disclosure purposes only. The adoption of these changes had no impact on the consolidated financial statements.

In December 2011, the FASB issued changes to the disclosure of offsetting assets and liabilities. These changes require an entity to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The enhanced disclosures will enable users of an entity's financial statements to understand and evaluate the effect or potential effect of master netting arrangements on an entity's financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. These changes became effective for us on January 1, 2013. Other than the additional disclosure requirements, the adoption of these changes did not impact the consolidated financial statements.

On January 1, 2013, we adopted changes issued by the FASB to the reporting of amounts reclassified out of accumulated other comprehensive income. These changes require an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. These requirements are to be applied to each component of accumulated other comprehensive income. Other than the additional disclosure requirements (see below), the adoption of these changes had no impact on the consolidated financial statements.

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

1. Basis of presentation and summary of significant accounting policies (Continued)

The changes in accumulated other comprehensive loss by component were as follows:

	Three months ended June 30,

	2013			2012
Foreign currency translation
Balance at beginning of period	$	0.6		$	13.8
Other comprehensive loss:
Foreign currency translation adjustments ⁽¹⁾		(18.0	)		(13.9	)

Balance at end of period	$	(17.4	)	$	(0.1	)
Cash flow hedges
Balance at beginning of period	$	(1.1	)	$	(1.1	)
Other comprehensive loss:
Net change from periodic revaluations		1.0			(0.8	)
Tax (expense) benefit		(0.4	)		0.3

Total Other comprehensive income (loss) before reclassifications, net of tax		0.6			(0.5	)
Net amount reclassified to earnings:
Interest rate swaps ⁽²⁾		0.4			0.3
Fuel commodity swaps ⁽³⁾		(0.1	)		—

Sub-total		0.3			0.3
Tax benefit ⁽⁴⁾		0.2			0.1

Total amount reclassified from Accumulated other comprehensive loss, net of tax ⁽⁵⁾		0.1			0.2
Total Other comprehensive income (loss)		0.7			(0.3	)

Balance at end of period	$	(0.4	)	$	(1.4	)

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

1. Basis of presentation and summary of significant accounting policies (Continued)

	Six months ended June 30,

	2013			2012
Foreign currency translation
Balance at beginning of period	$	12.7		$	(3.4	)
Other comprehensive loss:
Foreign currency translation adjustments ⁽¹⁾		(30.1	)		3.3

Balance at end of period	$	(17.4	)	$	(0.1	)
Cash flow hedges
Balance at beginning of period	$	(1.4	)	$	(1.4	)
Other comprehensive loss:
Net change from periodic revaluations		1.0			(0.8	)
Tax (expense) benefit		(0.4	)		0.3

Total Other comprehensive income (loss) before reclassifications, net of tax		0.6			(0.5	)
Net amount reclassified to earnings:
Interest rate swaps ⁽²⁾		0.8			0.8
Fuel commodity swaps ⁽³⁾		(0.2	)		—

Sub-total		0.6			0.8
Tax benefit ⁽⁴⁾		0.2			0.3

Total amount reclassified from Accumulated other comprehensive loss, net of tax ⁽⁵⁾		0.4			0.5
Total Other comprehensive income		1.0			—

Balance at end of period	$	(0.4	)	$	(1.4	)

⁽¹⁾: In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings.
⁽²⁾: This amount was included in Interest, net on the accompanying Statement of Consolidated Operations.
⁽³⁾: These amounts were included in Fuel on the accompanying Statement of Consolidated Operations.
⁽⁴⁾: These amounts were included in Income tax expense (benefit) on the accompanying Statement of Consolidated Operations.
⁽⁵⁾: A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 1 through 4.

Issued

In February 2013, the FASB issued changes to the accounting for obligations resulting from joint and several liability arrangements. These changes require an entity to measure such obligations for which the total amount of the obligation is fixed at the reporting date as the sum of (i) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors, and (ii) any additional amount the reporting entity expects to pay on behalf of its co-obligors. An entity will also be required to disclose the nature and amount of the obligation as well as other information about those obligations. Examples of obligations subject to these requirements are debt arrangements and settled

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

1. Basis of presentation and summary of significant accounting policies (Continued)

litigation and judicial rulings. These changes become effective for us on January 1, 2014. We have determined that the adoption of these changes will not have a material impact on the consolidated financial statements.

In March 2013, the FASB issued changes to a parent entity's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. A parent entity is required to release any related cumulative foreign currency translation adjustment from accumulated other comprehensive income into net income in the following circumstances: (i) a parent entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided; (ii) a partial sale of an equity method investment that is a foreign entity; (iii) a partial sale of an equity method investment that is not a foreign entity whereby the partial sale represents a complete or substantially complete liquidation of the foreign entity that held the equity method investment; and (iv) the sale of an investment in a foreign entity. These changes become effective for us on January 1, 2014. We have determined that the adoption of these changes will not have a material impact on the consolidated financial statements.

2. Acquisitions and divestments

2012 Acquisitions

(a): Canadian Hills

On January 31, 2012, Atlantic Oklahoma Wind, LLC ("Atlantic OW"), a Delaware limited liability company and our wholly owned subsidiary, entered into a purchase and sale agreement with Apex Wind Energy Holdings, LLC, a Delaware limited liability company ("Apex"), pursuant to which Atlantic OW acquired a 51% interest in Canadian Hills Wind, LLC, an Oklahoma limited liability company ("Canadian Hills") for a nominal sum. Canadian Hills is the owner of a 300 MW wind energy project in the state of Oklahoma.

On March 30, 2012, we completed the purchase of an additional 48% interest in Canadian Hills for a nominal amount, bringing our total interest in the project to 99%. Apex retained a 1% interest in the project. We also closed a $310 million non-recourse, project-level construction financing facility for the project, which included a $290 million construction loan and a $20 million 5-year letter of credit facility. In July 2012 we funded approximately $190 million of our equity contribution (net of financing costs). In December 2012, the project received tax equity investments in aggregate of $225 million from a consortium of four institutional tax equity investors along with an approximately $44 million tax equity investment of our own. The project's outstanding construction loan was repaid by the proceeds from these tax equity investments, decreasing the project's short-term debt by $265 million as of December 31, 2012. Canadian Hills has no debt at June 30, 2013. On May 2, 2013, we syndicated our $44 million tax equity investment in Canadian Hills to an institutional investor and received net cash proceeds of $42.1 million. The syndication of our interest completes the sale of 100% of Canadian Hills' $269 million of tax equity interests. The cash proceeds will be held for general corporate purposes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

2. Acquisitions and divestments (Continued)

We own 99% of the project and consolidate it in our consolidated financial statements. Income attributable to the tax equity investors is classified as noncontrolling interests and is allocated utilizing the hypothetical liquidation book value method ("HLBV").

2013 Divestments

(a): Gregory

On April 2, 2013, we and the other owners of Gregory, entered into a purchase and sale agreement with an affiliate of NRG Energy, Inc. to sell the project for approximately $274.2 million including working capital adjustments. We received net cash proceeds for our ownership interest of approximately $34.6 million in the aggregate, after repayment of project-level debt and transaction expenses. Approximately $5 million of these proceeds will be held in escrow for up to one year after the closing date. We intend to use the net proceeds from the sale for general corporate purposes. The sale of Gregory closed August 7, 2013 resulting in a gain on sale of approximately $31 million that will be recorded in the three months ended September 30, 2013.

(b): Path 15

On March 11, 2013 we entered into a purchase and sale agreement with Duke-American Transmission Company, a joint venture between Duke Energy Corporation and American Transmission Co., to sell our interests in the Path 15 transmission line ("Path 15"). The sale closed on April 30, 2013 and we received net cash proceeds from the sale, including working capital adjustments, of approximately $52.0 million, plus a management agreement termination fee of $4.0 million, for a total sale price of approximately $56.0 million. The cash proceeds will be used for general corporate purposes. All project level debt issued by Path 15, totaling $137.2 million, transferred with the sale. Path 15 was accounted for as an asset held for sale in the consolidated balance sheets at December 31, 2012 and as a component of discontinued operations in the consolidated statements of operations for the three and six months ended June 30, 2013 and 2012. See Note 11, Assets held for sale and discontinued operations , for further information.

(c): Auburndale, Lake and Pasco

On January 30, 2013, we entered into a purchase and sale agreement for the sale of our Auburndale Power Partners, L.P. ("Auburndale"), Lake CoGen, Ltd. ("Lake") and Pasco CoGen, Ltd. ("Pasco") projects (collectively, the "Florida Projects") for approximately $140 million, including working capital adjustments. The sale closed on April 12, 2013 and we received net cash proceeds of approximately $117 million in the aggregate, after repayment of project-level debt at Auburndale and settlement of all outstanding natural gas swap agreements at Lake and Auburndale. This includes approximately $92 million received at closing and cash distributions from the Florida Projects of approximately $25 million received since January 1, 2013. We used a portion of the net proceeds from the sale to fully repay our senior credit facility, which had an outstanding balance of approximately $64.1 million on the closing date. The remaining cash proceeds will be used for general corporate purposes. The Florida Projects were accounted for as assets held for sale in the consolidated balance sheets at December 31, 2012 and are a component of discontinued operations in the consolidated statements of operations for the three and six months ended June 30, 2013 and 2012. See Note 11, Assets held for sale and discontinued operations , for further information.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

2. Acquisitions and divestments (Continued)

2012 Divestments

(d): Primary Energy Recycling Corporation

On February 16, 2012, we entered into an agreement with Primary Energy Recycling Corporation ("Primary Energy" or "PERC"), whereby PERC agreed to purchase our 7,462,830.33 common membership interests in Primary Energy Recycling Holdings, LLC ("PERH") (14.3% of PERH total interests) for approximately $24.2 million, plus a management agreement termination fee of approximately $6.0 million, for a total sale price of $30.2 million. The transaction closed in May 2012 and we recorded a $0.6 million gain on sale of our equity investment.

3. Equity method investments

The following summarizes the operating results for the three and six months ended June 30, 2013 and 2012, respectively, for earnings in our equity method investments:

	Three months ended June 30,						Six months ended June 30,

(in millions)	2013			2012			2013			2012
Project revenue
Chambers	$	13.4		$	14.7		$	26.6		$	28.0
Other		41.2			38.8			80.6			78.9

		54.6			53.5			107.2			106.9
Project expenses
Chambers		11.1			8.7			20.7			18.5
Other		34.5			36.6			68.1			72.3

		45.6			45.3			88.8			90.8
Project other expenses
Chambers		(0.6	)		(0.4	)		(1.2	)		(1.6	)
Other		0.3			(2.3	)		(1.3	)		(6.1	)

		(0.3	)		(2.7	)		(2.5	)		(7.7	)
Project income
Chambers		1.7			5.6			4.7			7.9
Other		7.0			(0.1	)		11.2			0.5

		8.7			5.5			15.9			8.4

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

4. Goodwill

Our goodwill balance was $331.2 million and $334.7 million as of June 30, 2013 and December 31, 2012, respectively. We recorded $331.1 million of goodwill in connection with the acquisition of Capital Power Income L.P. (the "Partnership") in 2011 and $3.5 million associated with the step-up acquisition of Rollcast in March 2010. We apply an accounting standard under which goodwill has an indefinite life and is not amortized. Goodwill is tested for impairments at least annually, or more frequently whenever an event or change in circumstances occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We test goodwill for impairment at the reporting unit level, which is at the project level and, the lowest level below the operating segments for which discrete financial information is available. Subsequent to the three months ended June 30, 2013, based on a prolonged decline in our market capitalization and initiatives started at reducing our development and administrative expenses, we determined that it was appropriate to initiate a test of goodwill to determine if it is more likely than not that the fair value of our reporting units do not exceed their carrying amounts. For reporting units that fail step 1 of the goodwill impairment test, we will initiate a step 2 test to quantify the amount, if any, of non-cash impairment to record. As of the date of this Quarterly Report on Form 10-Q, we are currently gathering the necessary information to perform these tests and expect to complete them during the three months ended September 30, 2013.

During the three months ended June 30, 2013, we recorded a $3.5 million impairment of goodwill at Rollcast which is a component of our Un-allocated corporate segment. We determined, based on the results of the two-step process, that the carrying amount of goodwill exceeded the implied fair value of goodwill. We also wrote-off $1.4 million of capitalized development costs at Rollcast related to the Greenway development project. The determination to impair goodwill and write-off the capitalized development costs was based on the reduced expectation of the Greenway project being further developed. The following table is a rollforward of goodwill for the six months ended June 30, 2013:

(in millions)	Northeast		Northwest		Southwest		Un-allocated corporate			Total

Balance at December 31, 2012	$	135.3	$	138.3	$	57.6	$	3.5		$	334.7
Impairment of Goodwill		—		—		—		(3.5	)		(3.5	)

Balance at June 30, 2013	$	135.3	$	138.3	$	57.6	$	—		$	331.2

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

5. Long-term debt

Long-term debt consists of the following:

(in millions)	June 30, 2013			December 31, 2012			Interest Rate

Recourse Debt:
Senior unsecured notes, due 2018	$	460.0		$	460.0		9.0%
Senior unsecured notes, due June 2036 (Cdn$210.0)		199.7			211.1		6.0%
Senior unsecured notes, due July 2014		190.0			190.0		5.9%
Series A senior unsecured notes, due August 2015		150.0			150.0		5.9%
Series B senior unsecured notes, due August 2017		75.0			75.0		6.0%
Non-Recourse Debt:
Epsilon Power Partners term facility, due 2019		32.0			33.5		7.4%
Cadillac term loan, due 2025		36.6			37.8		6.0% – 8.0%
Piedmont construction loan, due 2013		126.1	⁽¹⁾		127.4		Libor plus 3.5%
Meadow Creek term loan, due 2024		171.4	⁽²⁾		208.7		5.1% – 5.6%
Rockland term loan, due 2027		85.8			86.5		6.4% – 6.7%
Other long-term debt		1.1			0.3		5.5% – 6.7%
Less: current maturities		(65.7	)		(121.2	)

Total long-term debt	$	1,462.0		$	1,459.1

Current maturities consist of the following:

	June 30, 2013			December 31, 2012		Interest Rate

Current Maturities:
Epsilon Power Partners term facility, due 2019	$	4.0		$	3.0	7.4%
Cadillac term loan, due 2025		2.2			2.4	6.0% – 8.0%
Piedmont construction loan, due 2013		53.9	⁽¹⁾		55.1	Libor plus 3.5%
Meadow Creek term loan, due 2024		4.1	⁽²⁾		59.5	5.1% – 5.6%
Rockland term loan, due 2027		1.4			1.2	6.4% – 6.7%
Other current maturities		0.1			—	5.5% – 6.7%

Total current maturities	$	65.7		$	121.2

(1): The terms of the Piedmont project-level debt financing include a $51.0 million bridge loan and an $82.0 million construction loan that is expected to convert to a term loan in the third quarter of 2013. On April 19, 2013, Piedmont achieved commercial operations and submitted an application under the 1603 federal grant program to recover approximately 30% of its capital cost. The grant application was approved and we received a $49.5 million grant from the U.S. Treasury in July 2013. Upon receipt of the grant, we repaid in full the $51.0 million bridge loan with the proceeds of the grant and a $1.5 million contribution from Atlantic Power to cover the shortfall resulting from the federal sequester on spending. We expect to commence the repayment of the $82.0 million term loan in 2013.
(2): Meadow Creek debt consists of $172.8 million term loan and a $56.5 million cash grant loan. The cash grant loan was repaid in April 2013 with $49.0 million of proceeds from the 1603 grant with the U.S. Treasury, $4.7 million from the former owners to cover the shortfall resulting from the federal sequester on spending and a $2.8 million contribution from us to cover the shortfall from lower grant-eligible costs, primarily as a result of a lower project cost versus budget.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

5. Long-term debt (Continued)

Non-Recourse Debt

Project-level debt of our consolidated projects is secured by the respective project and its contracts with no other recourse to us. Project-level debt generally amortizes during the term of the respective revenue generating contracts of the projects. The loans have certain financial covenants that must be met.

Senior Credit Facility

At June 30, 2013, we had a senior credit facility of $300.0 million on a senior secured basis (the "senior credit facility"), $200.0 million of which could have been utilized for letters of credit. At June 30, 2013, the senior credit facility was undrawn and the applicable margin was 2.75%. At June 30, 2013, $82.5 million was issued in letters of credit, but not drawn, to support contractual credit requirements at several of our projects.

On August 2, 2013 we entered into an amendment to our senior credit facility with our lenders (the "amended credit facility"). The most significant changes to the senior credit facility include the following:

•: a decrease in capacity from $300 million to $150 million, all of which may be utilized for letters of credit (as compared to the previous $200 million that could have been utilized for letters of credit) and a sublimit of $25 million which may be utilized for other borrowings.
•: a requirement to cash collateralize outstanding letters of credit in an amount equal to the excess above $125 million if the aggregate amount of letters of credit and borrowings outstanding under the amended credit facility exceeds $125 million;
•: a requirement to maintain at all times unrestricted cash and cash equivalents of at least $75 million (inclusive of any cash collateral provided as described above), which shall be pledged to the lenders as security for the amended credit facility;
•: an amendment to the maximum permissible Consolidated Total Net Debt to Consolidated EBITDA (each as defined in the amended credit facility) to 7.75 to 1.00 (as compared to a prior ratio of 7.50 to 1.00 declining to 7.00 to 1.00 over time);
•: an amendment to the minimum permissible Consolidated EBITDA to Consolidated Interest Expense (each as defined in the amended credit facility) ratio to 1.60 to 1.00 (as compared to a prior ratio of 2.25 to 1.00);
•: a requirement to pay a commitment fee of between 0.75% and 1.75% per year based on a percentage of the amount committed under the amended credit facility, which fee varies based on our unsecured debt rating (currently, the applicable commitment fee is 1.50%); and
•: an amendment to the maturity date from November 4, 2015 to March 4, 2015.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

5. Long-term debt (Continued)

covenants, certain of which were amended in the amended credit facility. The amended covenants limit our ability to, among other things, incur additional indebtedness, merge or consolidate with others, make acquisitions, change our business and sell or dispose of assets. These amended covenants also include limitations on investments, limitations on dividends and other restricted payments, limitations on entering into certain types of restrictive agreements, limitations on transactions with affiliates and limitations on the use of proceeds from the amended credit facility. Specifically, under the amended credit facility, we are only permitted to make voluntary prepayments or repurchases of the $150 million in principal amount of 5.87% Senior Guaranteed Notes, Series A, due August 15, 2015 that were issued by our subsidiary Atlantic Power (US) G.P., except that under the amended credit facility we may also voluntarily prepay or repurchase any of our outstanding debt (including for these purposes subsidiary debt guaranteed by us) from the proceeds of debt permitted to be incurred to refinance that outstanding debt or during the 60-day period preceding the maturity of that outstanding debt. Under the senior credit facility, we had the right generally to repurchase substantially more of our outstanding debt issuances, subject to the satisfaction of certain conditions. Under the amended credit facility, the lenders also consented to (i) our previously announced sale of Delta-Person and (ii) the sale of AP Onondaga, LLC, Onondaga Renewables, LLC and their property.

Borrowings under the amended credit facility are available in U.S. dollars and Canadian dollars and bear interest at a variable rate equal to the US Prime Rate, the Eurocurrency LIBOR Rate or the Cdn. Prime Rate (each as defined in the amended credit facility), as applicable, plus a margin of between 1.75% and 4.75% that varies based on our unsecured debt rating. Currently, the applicable margin for loans bearing interest at the Eurocurrency LIBOR Rate and for outstanding letters of credit is 4.25%. The foregoing summary is qualified in its entirety by reference to the amended credit facility, which has been filed as an exhibit to our Current Report on Form 8-K on August 5, 2013.

6. Fair value of financial instruments

The following represents the recurring measurements of fair value hierarchy of our financial assets and liabilities that were recognized at fair value as of June 30, 2013 and December 31, 2012. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

	June 30, 2013

	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	195.6	$	—	$	—	$	195.6
Restricted cash		40.1		—		—		40.1
Derivative instruments asset		—		9.0		—		9.0

Total	$	235.7	$	9.0	$	—	$	244.7

Liabilities:
Derivative instruments liability	$	—	$	114.2	$	—	$	114.2

Total	$	—	$	114.2	$	—	$	114.2

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

6. Fair value of financial instruments (Continued)

	December 31, 2012

	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	60.2	$	—	$	—	$	60.2
Restricted cash		28.6		—		—		28.6
Derivative instruments asset		—		20.6		—		20.6

Total	$	88.8	$	20.6	$	—	$	109.4

Liabilities:
Derivative instruments liability	$	—	$	151.1	$	—	$	151.1

Total	$	—	$	151.1	$	—	$	151.1

The carrying amounts for cash and cash equivalents and restricted cash approximate fair value due to their short-term nature.

The fair values of our derivative instruments are based upon trades in liquid markets. Valuation model inputs can generally be verified and valuation techniques do not involve significant judgment. The fair values of such financial instruments are classified within Level 2 of the fair value hierarchy. We use our best estimates to determine the fair value of commodity and derivative contracts we hold. These estimates consider various factors including closing exchange prices, time value, volatility factors and credit exposure. The fair value of each contract is discounted using a risk free interest rate.

We also adjust the fair value of financial assets and liabilities to reflect credit risk, which is calculated based on our credit rating and the credit rating of our counterparties. As of June 30, 2013, the credit valuation adjustments resulted in a $12.0 million net increase in fair value, which consists of a $0.6 million pre-tax gain in other comprehensive income and an $11.4 million gain in change in fair value of derivative instruments. As of December 31, 2012, the credit valuation adjustments resulted in an $18.4 million net increase in fair value, which consists of a $1.0 million pre-tax gain in other comprehensive income, a $13.8 million gain in change in fair value of derivative instruments and a $3.6 million increase related to interest rate swaps assumed in the acquisition of Ridgeline.

7. Derivative instruments and hedging activities

We recognize all derivative instruments on the balance sheet as either assets or liabilities and measure them at fair value each reporting period. For certain contracts designated as cash flow hedges, we defer the effective portion of the change in fair value of the derivatives in accumulated other comprehensive income (loss), until the hedged transactions occur and are recognized in earnings. The ineffective portion of a cash flow hedge is immediately recognized in earnings.

For derivatives that are not designated as cash flow hedges, the changes in the fair value are immediately recognized in earnings. The guidelines apply to our natural gas swaps, interest rate swaps, and foreign exchange contracts.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Derivative instruments and hedging activities (Continued)

Gas purchase agreements

On March 12, 2012, we discontinued the application of the normal purchase normal sales ("NPNS") exemption on gas purchase agreements at our North Bay, Kapuskasing and Nipigon projects. On that date, we entered into an agreement with a third party that resulted in the gas purchase agreements no longer qualifying for the NPNS exemption. The agreements at North Bay and Kapuskasing expire on December 31, 2016. These gas purchase agreements are derivative financial instruments and are recorded in the consolidated balance sheets at fair value and the changes in their fair market value are recorded in the consolidated statements of operations.

In May 2012, the Nipigon project entered into a long-term contract for the purchase of natural gas beginning on January 1, 2013 and expiring on December 31, 2022. This contract is accounted for as a derivative financial instrument and is recorded in the consolidated balance sheet at fair value at June 30, 2013 and December 31, 2012. Changes in the fair market value of the contract are recorded in the consolidated statements of operations.

In April and June 2013, the Tunis project entered into contracts for the purchase of natural gas beginning on November 1, 2013 and expiring on March 31, 2014. These contracts are accounted for as derivative financial instruments and are recorded in the consolidated balance sheet at fair value as of June 30, 2013. Changes in the fair market value of the contracts are recorded in the consolidated statement of operations.

Natural gas swaps

Our strategy to mitigate a portion of the future exposure to changes in natural gas prices at our projects consists of periodically entering into financial swaps that effectively fix the price of natural gas expected to be purchased at these projects. These natural gas swaps are derivative financial instruments and are recorded in the consolidated balance sheets at fair value and the changes in their fair market value are recorded in the consolidated statements of operations.

The operating margin at our 50% owned Orlando project is exposed to changes in natural gas prices following the expiration of its fuel contract at the end of 2013. We have entered into natural gas swaps to effectively fix the price of 3.2 million Mmbtu of future natural gas purchases, or approximately 74% of our share of the expected natural gas purchases at the project during 2014 and 2015. We also entered into natural gas swaps to effectively fix the price of 1.3 million Mmbtu of future natural gas purchases representing approximately 38% of our share of the expected natural gas purchases at the project during 2016 and 2017.

Interest rate swaps

Cadillac Renewable Energy, LLC ("Cadillac") has an interest rate swap agreement that effectively fixes the interest rate at 6.0% from February 16, 2011 to February 15, 2015, 6.1% from February 16, 2015 to February 15, 2019, 6.3% from February 16, 2019 to February 15, 2023, and 6.4% thereafter. The notional amount of the interest rate swap agreement matches the outstanding principal balance over the remaining life of Cadillac's debt. This swap agreement, which qualifies for and is designated as a cash flow hedge, is effective through June 2025 and the effective portion of the changes in the fair market value is recorded in accumulated other comprehensive income (loss).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Derivative instruments and hedging activities (Continued)

Piedmont has interest rate swap agreements to economically fix its exposure to changes in interest rates related to its variable-rate debt. The interest rate swap agreement effectively converts the floating rate debt to a fixed interest rate of 1.7% plus an applicable margin ranging from 3.5% to 3.8% through February 29, 2016. From February 2016 until November 2017, the fixed rate of the swap is 4.5% and the applicable margin is 4.0%, resulting in an all-in rate of 8.5%. The swap continues at the fixed rate of 4.5% from the maturity of the debt in November 2017 until November 2030. The notional amounts of the interest rate swap agreements match the estimated outstanding principal balance of Piedmont's cash grant bridge loan and the construction loan facility that will convert to a term loan. The interest rate swaps were executed on October 21, 2010 and November 2, 2010 and expire on February 29, 2016 and November 30, 2030, respectively. The interest rate swap agreements are not designated as hedges, and changes in their fair market value are recorded in the consolidated statements of operations.

Epsilon Power Partners ("Epsilon") has an interest rate swap to economically fix the exposure to changes in interest rates related to the variable-rate non-recourse debt. The interest rate swap agreement effectively converted the floating rate debt to a fixed interest rate of 7.4% and has a maturity date of July 2019. The notional amount of the swap matches the outstanding principal balance over the remaining life of Epsilon's debt. This interest rate swap agreement is not designated as a hedge and changes in its fair market value are recorded in the consolidated statements of operations.

Rockland Wind Farm, LLC ("Rockland") entered into interest rate swaps to manage interest rate risk exposure. These swaps effectively modify the project's exposure by converting the project's floating rate debt to a fixed basis. The interest rate swaps are with various counterparties and swap 100% of the expected interest payments from floating LIBOR to fixed rates structured in two tranches. The first tranche is for the notional amount due on the term loan commencing on December 30, 2011 and ending December 31, 2026 and fixes the interest rate at 4.2% plus an applicable margin of 2.3% - 2.8%. The second tranche is the post-term portion of the loan, or the balloon payment and commences on December 31, 2026 and ends on December 31, 2031, fixing the interest rate at 7.8%. The interest rate swap agreements are not designated as a hedge and changes in their fair market value are recorded in the consolidated statements of operations.

The Meadow Creek project ("Meadow Creek") has interest rate swap agreements to economically fix its exposure to changes in interest rates related to its variable-rate debt. The interest rate swap agreements effectively converted 75% of the floating rate debt to a fixed interest rate of 2.3% plus an applicable margin of 2.8% - 3.3% from December 31, 2012 to December 31, 2024. The second tranche is the post-term portion of the loan, or the balloon payment and commences on December 31, 2024 and ends on December 31, 2030, fixing the interest rate at 7.2%. The interest rate swaps were both executed on September 17, 2012 and expire on December 31, 2024 and December 31, 2030, respectively. The interest rate swap agreements are not designated as hedges, and changes in their fair market value are recorded in the consolidated statements of operations.

Foreign currency forward contracts

We use foreign currency forward contracts to manage our exposure to changes in foreign exchange rates, as many of our projects generate cash flow in U.S. dollars and Canadian dollars but we pay dividends to shareholders and interest on corporate level long-term debt and convertible debentures predominantly in Canadian dollars. We have a hedging strategy for the purpose of mitigating the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Derivative instruments and hedging activities (Continued)

currency risk impact on future payments of dividends to shareholders. We have executed this strategy utilizing cash flows from our projects that generate Canadian dollars and by entering into forward contracts to purchase Canadian dollars at a fixed rate to hedge an average of approximately 71% of our expected dividend, long-term debt and convertible debenture interest payments through 2015. Changes in the fair value of the forward contracts partially offset foreign exchange gain or losses on the U.S. dollar equivalent of our Canadian dollar obligations. At June 30, 2013, the forward contracts consist of (1) monthly purchases through the end of July 2013 of Cdn$6.0 million at an exchange rate of Cdn$1.134 per U.S. dollar and (2) contracts assumed in our acquisition of the Partnership with various expiration dates through December 2015 to purchase a total of Cdn$34.9 million at an average exchange rate of Cdn$1.10 per U.S. dollar. It is our intention to periodically consider extending or terminating these forward contracts.

In April 2013, we terminated various foreign currency forward contracts with expiration dates through June 2015 assumed in our acquisition of the Partnership resulting in proceeds and a realized gain of $9.4 million.

Volume of forecasted transactions

We have entered into derivative instruments in order to economically hedge the following notional volumes of forecasted transactions as summarized below, by type, excluding those derivatives that qualified for the NPNS exemption as of June 30, 2013 and December 31, 2012:

	Units

Natural gas swaps	Natural Gas (Mmbtu)	5.6	10.6
Gas purchase agreements	Natural Gas (GJ)	46.1	49.8
Interest rate swaps	Interest (US$)	166.6	172.0
Foreign currency forwards	Cdn$	40.9	176.6

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Derivative instruments and hedging activities (Continued)

Fair value of derivative instruments

The fair value of our derivative assets and liabilities under counterparty master netting agreement are disclosed net on the consolidated balance sheets at June 30, 2013 and December 31, 2012. In the following table, we have elected to disclose derivative instrument assets and liabilities on a trade-by-trade basis and do not offset amounts at the counterparty master agreement level. The following table summarizes the fair value of our derivative assets and liabilities:

	June 30, 2013

	Derivative Assets		Derivative Liabilities
Derivative instruments designated as cash flow hedges:
Interest rate swaps current	$	—	$	1.3
Interest rate swaps long-term		—		3.4

Total derivative instruments designated as cash flow hedges		—		4.7

Derivative instruments not designated as cash flow hedges:
Interest rate swaps current		—		7.2
Interest rate swaps long-term		7.3		12.9
Foreign currency forward contracts current		0.9		0.3
Foreign currency forward contracts long-term		1.3		0.3
Natural gas swaps current		—		0.7
Natural gas swaps long-term		—		3.8
Gas purchase agreements current		—		23.0
Gas purchase agreements long-term		—		62.0

Total derivative instruments not designated as cash flow hedges		9.5		110.2

Total derivative instruments	$	9.5	$	114.9

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Derivative instruments and hedging activities (Continued)

	December 31, 2012

	Derivative Assets		Derivative Liabilities
Derivative instruments designated as cash flow hedges:
Interest rate swaps current	$	—	$	1.3
Interest rate swaps long-term		—		5.2

Total derivative instruments designated as cash flow hedges		—		6.5

Derivative instruments not designated as cash flow hedges:
Interest rate swaps current		—		7.3
Interest rate swaps long-term		0.1		27.7
Foreign currency forward contracts current		9.5		—
Foreign currency forward contracts long-term		11.0		—
Natural gas swaps current		—		—
Natural gas swaps long-term		0.1		3.9
Gas purchase agreements current		0.1		24.5
Gas purchase agreements long-term		—		81.4

Total derivative instruments not designated as cash flow hedges		20.8		144.8

Total derivative instruments	$	20.8	$	151.3

Accumulated other comprehensive income

The following table summarizes the changes in the accumulated other comprehensive income (loss) ("OCI") balance attributable to derivative financial instruments designated as a hedge, net of tax:

(in millions) Three months ended June 30, 2013	Interest Rate Swaps			Natural Gas Swaps			Total

Accumulated OCI balance at March 31, 2013	$	(1.2	)	$	0.1		$	(1.1	)
Change in fair value of cash flow hedges		0.6			—			0.6
Realized from OCI during the period		0.2			(0.1	)		0.1

Accumulated OCI balance at June 30, 2013	$	(0.4	)	$	—		$	(0.4	)

Three months ended June 30, 2012	Interest Rate Swaps			Natural Gas Swaps		Total

Accumulated OCI balance at March 31, 2012	$	(1.4	)	$	0.3	$	(1.1	)
Change in fair value of cash flow hedges		(0.5	)		—		(0.5	)
Realized from OCI during the period		0.2			—		0.2

Accumulated OCI balance at June 30, 2012	$	(1.7	)	$	0.3	$	(1.4	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Derivative instruments and hedging activities (Continued)

Six months ended June 30, 2013	Interest Rate Swaps			Natural Gas Swaps			Total

Accumulated OCI balance at December 31, 2012	$	(1.5	)	$	0.1		$	(1.4	)
Change in fair value of cash flow hedges		0.6			—			0.6
Realized from OCI during the period		0.5			(0.1	)		0.4

Accumulated OCI balance at June 30, 2013	$	(0.4	)	$	—		$	(0.4	)

Six months ended June 30, 2012	Interest Rate Swaps			Natural Gas Swaps		Total

Accumulated OCI balance at December 31, 2011	$	(1.7	)	$	0.3	$	(1.4	)
Change in fair value of cash flow hedges		(0.5	)		—		(0.5	)
Realized from OCI during the period		0.5			—		0.5

Accumulated OCI balance at June 30, 2012	$	(1.7	)	$	0.3	$	(1.4	)

Impact of derivative instruments on the consolidated statements of operations

The following table summarizes realized (gains) and losses for derivative instruments not designated as cash flow hedges:

		Three months ended June 30,

	Classification of (gain) loss recognized in income	Three months ended June 30,
	Classification of (gain) loss recognized in income	2013			2012
Gas purchase agreements	Fuel	$	14.1		$	13.2
Foreign currency forwards	Foreign exchange gain		(10.8	)		(3.1	)
Interest rate swaps	Interest, net		4.0			1.1

		Six months ended June 30,

	Classification of (gain) loss recognized in income	Six months ended June 30,
	Classification of (gain) loss recognized in income	2013			2012
Gas purchase agreements	Fuel	$	30.4		$	16.0
Foreign currency forwards	Foreign exchange gain		(13.3	)		(15.0	)
Interest rate swaps	Interest, net		6.6			2.2

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Derivative instruments and hedging activities (Continued)

The following table summarizes the unrealized gains and losses resulting from changes in the fair value of derivative financial instruments that are not designated as cash flow hedges:

		Three months ended June 30,

	Classification of (gain) loss recognized in income	Three months ended June 30,
	Classification of (gain) loss recognized in income	2013			2012
Natural gas swaps	Change in fair value of derivatives	$	1.1		$	0.5
Gas purchase agreements	Change in fair value of derivatives		(7.4	)		1.2
Interest rate swaps	Change in fair value of derivatives		(18.0	)		3.0

Total change in fair value of derivative instruments		$	(24.3	)	$	4.7

Foreign currency forwards	Foreign exchange loss	$	12.8		$	7.7

		Six months ended June 30,

	Classification of (gain) loss recognized in income	Six months ended June 30,
	Classification of (gain) loss recognized in income	2013			2012
Natural gas swaps	Change in fair value of derivatives	$	0.7		$	1.4
Gas purchase agreements	Change in fair value of derivatives		(15.5	)		59.1
Interest rate swaps	Change in fair value of derivatives		(22.1	)		1.5

Total change in fair value of derivative instruments		$	(36.9	)	$	62.0

Foreign currency forwards	Foreign exchange loss	$	18.8		$	12.9

8. Income taxes

Income tax benefit from continuing operations for the six months ended June 30, 2013 was $1.9 million. The difference between the actual tax benefit of $1.9 million and the expected income tax expense of $1.7 million, based on the Canadian enacted statutory rate of 25%, is primarily due to permanent difference benefits of $19.7 million generated from U.S. Treasury grant proceeds, production tax credits and foreign exchange differences, partially offset by a $12.7 million increase in the valuation allowance, $2.6 million in dividend withholding and preferred share taxes, and $0.8 of other permanent differences.

	Three months ended June 30,						Six months ended June 30,

	2013			2012			2013			2012
Current income tax expense	$	3.4		$	3.0		$	5.4		$	3.8
Deferred tax benefit		(2.8	)		(8.3	)		(7.3	)		(26.0	)

Total income tax expense (benefit)	$	0.6		$	(5.3	)	$	(1.9	)	$	(22.2	)

As of June 30, 2013, we have recorded a valuation allowance of $ 127.1 million. The amount is comprised primarily of provisions against Canadian and U.S. net operating loss carryforwards. In assessing the recoverability of our deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

8. Income taxes (Continued)

tax assets is dependent upon projected future taxable income in the United States and in Canada and available tax planning strategies.

9. Employee incentive programs

Long-Term Incentive Program

The following table summarizes the changes in LTIP notional units during the six months ended June 30, 2013:

(Units in thousands)			Grant Date Weighted-Average Price per Unit

Outstanding at December 31, 2012	492,535		$	13.9
Granted	587,201			4.9
Additional shares from dividends	27,151			10.0
Forfeited	(42,000	)		12.3
Vested	(202,696	)		13.5

Outstanding at June 30, 2013	862,191		$	7.8

Certain awards have a market condition based on our total shareholder return during the performance period compared to a group of peer companies and, in some cases, Project Adjusted EBITDA per common share compared to budget. Compensation expense for notional units granted in 2013 is recorded net of estimated forfeitures. See Note 14 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012 for further details. Cash payments made for vested notional units for the six months ended June 30, 2013 was $0.9 million. Compensation expense for LTIP was $0.8 million and $1.2 million for the three and six months end June 30, 2013, respectively.

The calculation of simulated total shareholder return under the Monte Carlo model for the remaining time in the performance period for awards with market conditions included the following assumptions as of June 30, 2013 and December 31, 2012:



Weighted average risk free rate of return	0.1 – 0.6%	0.1 – 0.3%
Dividend yield	9.7%	10.1%
Expected volatility—Atlantic Power	37.9 – 62.1%	22.5%
Expected volatility—peer companies	14.7 – 82.7%	11.9 – 97.1%
Weighted average remaining measurement period	2.2 years	1.4 years

10. Basic and diluted earnings (loss) per share

Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average common shares outstanding during their respective period. Diluted earnings (loss) per share are computed including dilutive potential shares as if they were outstanding shares during the year. Dilutive potential shares include shares that would be issued if all of the convertible debentures were converted into shares at January 1, 2013. Dilutive potential shares also include the weighted average

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

10. Basic and diluted earnings (loss) per share (Continued)

number of shares, as of the date such notional units were granted, that would be issued if the unvested notional units outstanding under the LTIP were vested and redeemed for shares under the terms of the LTIP. The following table sets forth the diluted net income and potentially dilutive shares utilized in the per share calculation for the three and six months ended June 30, 2013 and 2012:

	Three months ended June 30,						Six months ended June 30,

	2013			2012			2013		2012
Numerator:
Income (loss) from continuing operations attributable to Atlantic Power Corporation	$	(2.3	)	$	(24.4	)	$	3.3	$	(78.3	)
Income (loss) from discontinued operations, net of tax		(0.7	)		19.3			0.2		30.9

Net income (loss) attributable to Atlantic Power Corporation	$	(3.0	)	$	(5.1	)	$	3.5	$	(47.4	)
Denominator:
Weighted average basic shares outstanding		119.9			113.7			119.7		113.6
Dilutive potential shares:
Convertible debentures		27.7			13.3			27.7		13.3
LTIP notional units		0.8			0.5			0.6		0.5

Potentially dilutive shares		148.4			127.5			148.0		127.4

Diluted earnings (loss) per share from continuing operations attributable to Atlantic Power Corporation	$	(0.02	)	$	(0.21	)	$	0.03	$	(0.69	)
Diluted earnings (loss) per share from discontinued operations		(0.01	)		0.17			0.00		0.27

Diluted earnings (loss) per share attributable to Atlantic Power Corporation	$	(0.03	)	$	(0.04	)	$	0.03	$	(0.42	)

Potentially dilutive shares from convertible debentures and LTIP notional units have been excluded from fully diluted shares for the three months ended June 30, 2013 and the three and six months ended June 30, 2012 because their impact would be anti-dilutive. Potentially dilutive shares from convertible debentures have been excluded from fully diluted shares for the six months ended June 30, 2013 because their impact would be anti-dilutive.

11. Assets held for sale and discontinued operations

The Florida Projects and Path 15 were sold on April 12, 2013 and April 30, 2013, respectively. Accordingly, the projects' net income (loss) is recorded as income (loss) from discontinued operations, net of tax in the statements of operations for the three and six months ended June 30, 2013 and 2012.

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

11. Assets held for sale and discontinued operations (Continued)

The following tables summarize the revenue, income (loss) from operations, and income tax expense of Path 15, Auburndale, Lake, and Pasco for the three and six months ended June 30, 2013 and 2012:

	Three months ended June 30,						Six months ended June 30,

(in millions)	2013			2012			2013		2012
Revenue	$	8.4		$	53.8		$	71.6	$	102.7

Income (loss) from operations of discontinued businesses		(0.3	)		19.1			1.0		31.3

Income tax expense (benefit)		0.4			(0.2	)		0.8		0.4

Income (loss) from operations of discontinued businesses, net of tax	$	(0.7	)	$	19.3		$	0.2	$	30.9

Basic and diluted earnings (loss) per share related to income from discontinued operations for the Florida Projects and Path 15 were $(0.01) and $0.17 for the three month periods ended June 30, 2013 and 2012, respectively, and $0.00 and $0.27 for the six month periods ended June 30, 2013 and 2012, respectively.

The assets and liabilities of these projects classified as assets held for sale in the accompanying consolidated balance sheets as of December 31, 2012 consisted of the following:

(in millions)	December 31, 2012

Current assets:
Cash and cash equivalents	$	6.5
Restricted cash		12.6
Accounts receivable		21.9
Other current assets		6.3

		47.3
Non-current assets:
Property, plant & equipment		111.9
Transmission system rights		172.4
Goodwill		8.9
Other assets		10.9

Assets from discontinued operations		351.4
Current liabilities:
Accounts payable and other accrued liabilities	$	16.5
Current portion of long-term debt		14.3
Current portion of derivative instruments liability		20.0
Other liabilities		0.5

		51.3
Long-term liabilities
Long-term debt		137.7
Other long-term liabilities		—

Liabilities from discontinued operations		189.0

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Equity

The following table provides a reconciliation of the beginning and ending equity attributable to shareholders of Atlantic Power, preferred shares issued by a subsidiary company, noncontrolling interests and total equity for the six months ended June 30, 2013 and 2012:

	Six months ended June 30, 2013

(in millions)	Total Atlantic Power Corporation Shareholders' Equity			Preferred shares issued by a subsidiary company			Noncontrolling Interests			Total Equity
Balance at January 1	$	729.7		$	221.3		$	235.4		$	1,186.4
Net income (loss)		3.5			6.3			(0.8	)		9.0
Realized and unrealized loss on hedging activities, net of tax		1.0			—			—			1.0
Foreign currency translation adjustment, net of tax		(30.1	)		—			—			(30.1	)
Common shares issued for LTIP		0.9			—			—			0.9
Contribution by and sale of noncontrolling interst		—			—			44.5			44.5
Costs associated with tax equity raise		(0.9	)		—			—			(0.9	)
Dividends paid to noncontrolling interest		—			—			(2.9	)		(2.9	)
Dividends declared on common shares		(35.5	)		—			—			(35.5	)
Dividends declared on preferred shares of a subsidiary company		—			(6.3	)		—			(6.3	)

Balance at June 30	$	668.6		$	221.3		$	276.2		$	1,166.1

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

12. Equity (Continued)

	Six months ended June 30, 2012

	Total Atlantic Power Corporation Shareholders' Equity			Preferred shares issued by a subsidiary company			Noncontrolling Interests			Total Equity
Balance at January 1	$	891.5		$	221.3		$	3.0		$	1,115.8
Net income (loss)		(47.4	)		6.4			(0.3	)		(41.3	)
Realized and unrealized loss on hedging activities, net of tax		(0.1	)		—			—			(0.1	)
Foreign currency translation adjustment, net of tax		3.3			—			—			3.3
Common shares issued for LTIP		1.0			—			—			1.0
Dividends declared on common shares		(64.8	)		—			—			(64.8	)
Dividends declared on preferred shares of a subsidiary company		—			(6.4	)		—			(6.4	)

Balance at June 30	$	783.5		$	221.3		$	2.7		$	1,007.5

13. Segment and geographic information

Our operating segments are Northeast, Northwest, Southeast, Southwest and Un-allocated Corporate. Our segments align with management's resource allocation and assessment of performance and reflect our current operating focus. The segment classified as Un-allocated Corporate includes activities that support the executive offices, capital structure and costs of being a public registrant in the United States and Canada. Un-allocated Corporate also includes Rollcast, a 60% owned company, which develops, owns and operates renewable power plants that use wood or biomass fuel and Ridgeline, which develops and operates wind and solar power projects. These costs are not allocated to the operating segments when determining segment profit or loss.

We analyze the performance of our operating segments based on Project Adjusted EBITDA which is defined as project income plus interest, taxes, depreciation and amortization (including non-cash impairment charges) and changes in fair value of derivative instruments. Project Adjusted EBITDA is not a measure recognized under GAAP and does not have a standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. We use Project Adjusted EBITDA to provide comparative information about project performance without considering how projects are capitalized or whether they contain derivative contracts that are required to be recorded at fair value. Path 15, a component of the Southwest segment, and the Auburndale, Lake and Pasco projects, which are components of the Southeast segment, are included in the income from discontinued operations line item in the table below. We have adjusted prior periods

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

13. Segment and geographic information (Continued)

to reflect this reclassification. A reconciliation of project income to Project Adjusted EBITDA is included in the tables below.

	Northeast			Southeast			Northwest			Southwest		Un-allocated Corporate			Consolidated

Three months ended June 30, 2013
Project revenues	$	52.8		$	6.2		$	21.3		$	58.7	$	—		$	139.0
Segment assets		1,144.1			229.6			1,118.9			939.5		135.3			3,567.4
Project Adjusted EBITDA	$	26.0		$	2.4		$	12.3		$	19.0	$	(3.5	)		56.2
Change in fair value of derivative instruments		(8.3	)		(2.3	)		(15.3	)		—		(0.9	)		(26.8	)
Depreciation and amortization		17.8			3.0			14.8			14.8		0.2			50.6
Interest, net		4.3			1.2			4.7			0.3		(1.0	)		9.5
Other project expense		0.5			0.1			—			—		6.7			7.3

Project income (loss)		11.7			0.4			8.1			3.9		(8.5	)		15.6
Administration		—			—			—			—		11.8			11.8
Interest, net		—			—			—			—		25.3			25.3
Foreign exchange gain		—			—			—			—		(14.5	)		(14.5	)
Other expense, net		—			—			—			—		(9.5	)		(9.5	)

Income (loss) from continuing operations before income taxes		11.7			0.4			8.1			3.9		(21.6	)		2.5
Income tax expense		—			—			—			—		0.6			0.6

Net income (loss) from continuing operations		11.7			0.4			8.1			3.9		(22.2	)		1.9
Income (loss) from discontinued operations		—			(1.4	)		—			0.7		—			(0.7	)

Net income (loss)	$	11.7		$	(1.0	)	$	8.1		$	4.6	$	(22.2	)	$	1.2

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

13. Segment and geographic information (Continued)

	Northeast			Southeast			Northwest		Southwest			Un-allocated Corporate			Consolidated

Three months ended June 30, 2012
Project revenues	$	45.9		$	—		$	16.7	$	38.2		$	0.6		$	101.4
Segment assets		1,180.0			434.3			784.2		987.7			42.4			3,428.6
Project Adjusted EBITDA	$	22.4		$	2.1		$	12.4	$	12.6		$	(4.1	)	$	45.4
Change in fair value of derivative instruments		(1.6	)		3.7			—		—			—			2.1
Depreciation and amortization		20.2			1.4			10.6		9.1			—			41.3
Interest, net		4.7			—			1.5		0.3			(0.1	)		6.4
Other project expense		0.3			—					2.7			0.1			3.1

Project income (loss)		(1.2	)		(3.0	)		0.3		0.5			(4.1	)		(7.5	)
Administration		—			—			—		—			8.0			8.0
Interest, net		—			—			—		—			21.4			21.4
Foreign exchange gain		—			—			—		—			(4.2	)		(4.2	)
Other expense, net		—			—			—		—			(6.0	)		(6.0	)

Income (loss) from continuing operations before income taxes		(1.2	)		(3.0	)		0.3		0.5			(23.3	)		(26.7	)
Income tax benefit		—			—			—		—			(5.3	)		(5.3	)

Net income (loss) from continuing operations		(1.2	)		(3.0	)		0.3		0.5			(18.0	)		(21.4	)
Income (loss) from discontinued operations		—			19.6			—		(0.3	)		—			19.3

Net income (loss)	$	(1.2	)	$	16.6		$	0.3	$	0.2		$	(18.0	)	$	(2.1	)

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

13. Segment and geographic information (Continued)

	Northeast			Southeast			Northwest			Southwest		Un-allocated Corporate			Consolidated

Six months ended June 30, 2013
Project revenues	$	120.6		$	6.2		$	46.0		$	106.7	$	(0.3	)	$	279.2
Segment assets		1,144.1			229.6			1,118.9			939.5		135.3			3,567.4
Project Adjusted EBITDA	$	71.9		$	4.5		$	33.6		$	35.0	$	(8.2	)		136.8
Change in fair value of derivative instruments		(16.4	)		(3.6	)		(18.3	)		—		—			(38.3	)
Depreciation and amortization		37.9			4.5			30.6			29.8		0.2			103.0
Interest, net		8.7			1.2			9.4			0.5		(0.8	)		19.0
Other project expense		0.9			0.1			—			—		5.4			6.4

Project income (loss)		40.8			2.3			11.9			4.7		(13.0	)		46.7
Administration		—			—			—			—		20.1			20.1
Interest, net		—			—			—			—		51.2			51.2
Foreign exchange gain		—			—			—			—		(22.0	)		(22.0	)
Other expense, net		—			—			—			—		(9.5	)		(9.5	)

Income (loss) from continuing operations before income taxes		40.8			2.3			11.9			4.7		(52.8	)		6.9
Income tax benefit		—			—			—			—		(1.9	)		(1.9	)

Net income (loss) from continuing operations		40.8			2.3			11.9			4.7		(50.9	)		8.8
Income (loss) from discontinued operations		—			(1.1	)		—			1.3		—			0.2

Net income (loss)	$	40.8		$	1.2		$	11.9		$	6.0	$	(50.9	)	$	9.0

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ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

13. Segment and geographic information (Continued)

	Northeast			Southeast			Northwest		Southwest		Un-allocated Corporate			Consolidated

Six months ended June 30, 2012
Project revenues	$	112.8		$	—		$	32.0	$	73.7	$	1.6		$	220.1
Segment assets		1,180.0			434.3			784.2		987.7		42.4			3,428.6
Project Adjusted EBITDA	$	64.8		$	4.2		$	25.9	$	24.7	$	(7.7	)	$	111.9
Change in fair value of derivative instruments		56.4			3.2			—		—		—			59.6
Depreciation and amortization		37.7			2.8			21.0		19.6		—			81.1
Interest, net		9.4			—			2.7		0.3		—			12.4
Other project expense		0.5			—			—		2.8		—			3.3

Project income (loss)		(39.2	)		(1.8	)		2.2		2.0		(7.7	)		(44.5	)
Administration		—			—			—		—		15.7			15.7
Interest, net		—			—			—		—		43.4			43.4
Foreign exchange gain		—			—			—		—		(3.2	)		(3.2	)
Other expense, net		—			—			—		—		(6.0	)		(6.0	)

Income (loss) from continuing operations before income taxes		(39.2	)		(1.8	)		2.2		2.0		(57.6	)		(94.4	)
Income tax benefit		—			—			—		—		(22.2	)		(22.2	)

Net income (loss) from continuing operations		(39.2	)		(1.8	)		2.2		2.0		(35.4	)		(72.2	)
Income from discontinued operations		—			30.2			—		0.7		—			30.9

Net income (loss)	$	(39.2	)	$	28.4		$	2.2	$	2.7	$	(35.4	)	$	(41.3	)

The tables below provide information, by country, about our consolidated operations. Revenue is recorded in the country in which it is earned and assets are recorded in the country in which they are located.

									Property, Plant and Equipment, net of accumulated depreciation

	Project Revenue Three months ended June 30,				Project Revenue Six months ended June 30,
	Project Revenue Three months ended June 30,				Project Revenue Six months ended June 30,				June 30, 2013		December 31, 2012
	2013		2012		2013		2012		June 30, 2013		December 31, 2012
United States	$	93.9	$	55.5	$	166.7	$	110.9	$	1,428.3	$	1,504.8
Canada		45.1		45.9		112.5		109.2		504.0		550.7

Total	$	139.0	$	101.4	$	279.2	$	220.1	$	1,932.3	$	2,055.5

The Ontario Electricity Financial Corp ("OEFC") and British Columbia Hydro and Power Authority ("BC Hydro") provided for approximately 22.2% and 10.1%, respectively, of total consolidated revenues for the three months ended June 30, 2013 and 29.1% and 11.1%, respectively, of total consolidated revenues for the six months ended June 30, 2013. OEFC and BC Hydro provided for approximately 28.7% and 16.4%, respectively, of total consolidated revenues for the three months ended June 30, 2012 and 34.9% and 14.5%, respectively, of total consolidated revenues for the six

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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13. Segment and geographic information (Continued)

months ended June 30, 2012. OEFC purchases electricity from the Calstock, Kapuskasing, Nipigon, North Bay and Tunis projects in the Northeast segment and BC Hydro purchases electricity from the Mamquam, Moresby Lake and Williams Lake projects in the Northwest segment.

14. Commitments and contingencies

We are party to numerous legal proceedings, including securities class actions, from time to time. In particular, we and/or certain of our current and former officers have been named as defendants in various class action lawsuits. Due to the nature of these proceedings, the lack of precise damage claims and the type of claims we are subject to, we are unable to determine the ultimate or maximum amount of monetary liability or financial impact, if any, to us in these legal matters, which unless otherwise specified, seek damages from the defendants of material or indeterminate amounts.

Shareholder class action lawsuits

On March 8, 14, 15 and 25, 2013 and April 23, 2013, five purported securities fraud class action complaints were filed by alleged investors in Atlantic Power common shares in the United States District Court for the District of Massachusetts (the "District Court") against Atlantic Power and Barry E. Welch, our President and Chief Executive Officer and a Director of Atlantic Power, in each of the actions, and, in addition to Mr. Welch, some or all of Patrick J. Welch, our former Chief Financial Officer, Lisa Donahue, our former interim Chief Financial Officer, and Terrence Ronan, our current Chief Financial Officer, in certain of the actions (the "Individual Defendants," and together with Atlantic Power, the "Defendants") (the "U.S. Actions").

On March 19, 2013, April 2, 2013 and May 10, 2013, three notices of action relating to Canadian securities class action claims against the Defendants were also issued by alleged investors in Atlantic Power common shares, and in one of the actions, holders of Atlantic Power convertible debentures, with the Ontario Superior Court of Justice in the Province of Ontario. On April 8, 2013, a similar claim issued by alleged investors in Atlantic Power common shares seeking to initiate a class action against the Defendants was filed with the Superior Court of Quebec in the Province of Quebec (the "Canadian Actions").

On April 17, May 22, and June 7, 2013 statements of claim relating to the notices of action were filed with the Ontario Superior Court of Justice in the Province of Ontario. The next steps in the Ontario litigation will be directed toward determining which firms and plaintiff or plaintiffs will have carriage of the action. The District Court complaints differ in terms of the identities of the Individual Defendants they name, as noted above, the named plaintiffs, and the purported class period they allege (July 23, 2010 to March 4, 2013 in three of the District Court actions and August 8, 2012 to February 28, 2013 in the other two District Court actions), but in general each alleges, among other things, that in Atlantic Power's press releases, quarterly and year-end filings and conference calls with analysts and investors, Atlantic Power and the Individual Defendants made materially false and misleading statements and omissions regarding the sustainability of Atlantic Power's common share dividend that artificially inflated the price of Atlantic Power's common shares. The District Court complaints assert claims under Section 10(b) and, against the Individual Defendants, under Section 20(a) of the Securities Exchange Act of 1934, as amended. The allegations in the Canadian Actions are essentially the same as those asserted in the District Court actions.

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14. Commitments and contingencies (Continued)

The parties to each District Court action have filed joint motions requesting that the District Court set a schedule in the District Court actions, including: (i) setting a deadline for the lead plaintiff to file a consolidated amended class action complaint (the "Amended Complaint"), after the appointment of lead plaintiff and counsel; (ii) setting a deadline for Defendants to answer, file a motion to dismiss or otherwise respond to the Amended Complaint (and for subsequent briefing regarding any such motion to dismiss); and (iii) confirming that Defendants need not answer, move to dismiss or otherwise respond to any of the five District Court complaints prior to the filing of the Amended Complaint. On May 7, 2013, each of six groups of investors (the "U.S. Lead Plaintiff Applicants") filed a motion (collectively, the "U.S. Lead Plaintiff Motions") with the District Court seeking: (i) to consolidate the five U.S. Actions (the "Consolidated U.S. Action"); (ii) to be appointed lead plaintiff in the Consolidated U.S. Action; and (iii) to have its choice of lead counsel confirmed. On May 22, 2013, three of the U.S. Lead Plaintiff Applicants filed oppositions to the other U.S. Lead Plaintiff Motions, and on June 6, 2013, those three Lead Plaintiff Applicants filed replies in support of their respective motions. The District Court has scheduled a hearing for August 9, 2013 to address, among other issues, the Lead Plaintiff Motions.

Pursuant to the Private Securities Litigation Reform Act of 1995, all discovery is stayed in the five District Court actions. As of May 6, 2013, the plaintiffs have not specified an amount of alleged damages in the respective U.S. and Canadian Actions filed on March 19, 2013 and April 2, 2013 (including the related statement of claim filed on May 2, 2013), in which the plaintiffs have alleged damages of Cdn$1,100,000,000 and Cdn$208,500,000, respectively, plus interest and costs. However, because both the U.S. and Canadian Actions are in their early stages, Atlantic Power is unable to reasonably estimate the possible loss or range of losses, if any, arising from the litigation. Atlantic Power intends to defend vigorously against these actions.

Morris

On May 29, 2011, our Morris facility was struck by lightning. As a result, steam and electric deliveries were interrupted to our host Equistar Chemicals, LP. ("Equistar"). We believed the interruption constituted a force majeure under the energy services agreement with Equistar. Equistar disputed this interpretation and initiated arbitration proceedings under the relevant agreement for recovery of resulting lost profits and equipment damage among other items. The Equistar arbitration claim has now been fully resolved. The lost profits portion of the claim was dismissed by the Arbitration Panel and all claims for equipment damage were resolved by the parties and their insurers through mediation on April 11 and 12, 2013, and a definitive Settlement Agreement and Mutual Release was executed effective as of April 30, 2013.

Other

Other than as described above, there were no material changes to legal proceedings disclosed in "Item 3. Legal Proceedings" of our Annual Report on Form 10-K for the year ended December 31, 2012.

In addition to the other matters listed, from time to time, Atlantic Power, its subsidiaries and the projects are parties to disputes and litigation that arise in the normal course of business. We assess our exposure to these matters and record estimated loss contingencies when a loss is likely and can be

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14. Commitments and contingencies (Continued)

reasonably estimated. With respect to such other matters arising in the normal course of business, there are no matters pending which are expected to have a material adverse impact on our financial position or results of operations or have been reserved for as of June 30, 2013.

15. Guarantees and condensed consolidating financial information

In connection with the tax equity investments in our Canadian Hills project, we have expressly indemnified the investors for certain representations and warranties made by a wholly-owned subsidiary with respect to matters which we believe are remote and improbable to occur. The expiration dates of these guarantees vary from less than one year through the indefinite termination date of the project. Our maximum undiscounted potential exposure is limited to the amount of tax equity investment less cash distributions made to the investors and any amount equal to the net federal income tax benefits arising from production tax credits.

We and our subsidiaries enter into various contracts that include indemnification and guarantee provisions as a routine part of our business activities. Examples of these contracts include asset purchases and sale agreements, joint venture agreements, operation and maintenance agreements, and other types of contractual agreements with vendors and other third parties, as well as affiliates. These contracts generally indemnify the counterparty for certain tax, environmental liability, litigation and other matters, as well as breaches of representations, warranties and covenants set forth in these agreements.

As of June 30, 2013 and December 31, 2012, we had $460.0 million of Senior Notes. These notes are guaranteed by certain of our wholly owned subsidiaries, or guarantor subsidiaries. These guarantees are joint and several.

Unless otherwise noted below, each of the following 100% owned guarantor subsidiaries fully and unconditionally guaranteed the Senior Notes as of June 30, 2013:

Atlantic Power Limited Partnership, Atlantic Power GP Inc., Atlantic Power (US) GP, Atlantic Oklahoma Wind LLC, Atlantic Power Corporation, Atlantic Power Generation, Inc., Atlantic Power Transmission, Inc., Atlantic Power Holdings, Inc,. Atlantic Power Services Canada GP Inc., Atlantic Power Services Canada LP, Atlantic Power Services, LLC, Atlantic Rockland Holdings, LLC, Teton Power Funding, LLC, Harbor Capital Holdings, LLC, Epsilon Power Funding, LLC, Atlantic Cadillac Holdings, LLC, Atlantic Idaho Wind Holdings, LLC, Atlantic Idaho Wind C, LLC, Baker Lake Hydro, LLC, Olympia Hydro, LLC, Teton East Coast Generation, LLC, Atlantic Renewables Holdings, LLC, Orlando Power Generation I, LLC, Orlando Power Generation II, LLC, Atlantic Piedmont Holdings LLC, Teton Selkirk, LLC, Teton Operating Services, LLC, Atlantic Ridgeline Holdings, LLC, Ridgeline Energy Holdings, Inc., Ridgeline Energy LLC, Pah Rah Holding Company LLC, Lewis Ranch Wind Project LLC, Hurricane Wind LLC, Ridgeline Power Services LLC, Ridgeline Eastern Energy LLC, Ridgeline Alternative Energy LLC, Frontier Solar LLC, Ridgeline Energy Solar LLC, Pah Rah Project Company LLC, Monticello Hills Wind LLC, Dry Lots Wind LLC, Smokey Avenue Wind LLC, Saunders Bros. Transportation Corporation, Bruce Hill Wind LLC, South Mountain Wind LLC, Great Basin Solar Ranch LLC, Goshen Wind Holdings LLC, Meadow Creek Holdings LLC, Ridgeline Holdings Junior Inc., Rockland Wind Ridgeline Holdings LLC and Meadow Creek Intermediate Holdings LLC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

15. Guarantees and condensed consolidating financial information (Continued)

The following condensed consolidating financial information presents the financial information of Atlantic Power, the guarantor subsidiaries, and Curtis Palmer, LLC ("Curtis Palmer") (our non-guarantor subsidiary) in accordance with Rule 3-10 under the SEC's Regulation S-X. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. The financial information may not necessarily be indicative of results of operations or financial position had the guarantor subsidiaries or Curtis Palmer operated as independent entities.

In this presentation, Atlantic Power consists of parent company operations. Guarantor subsidiaries of Atlantic Power are reported on a combined basis. For companies acquired, the fair values of the assets and liabilities acquired have been presented on a push-down accounting basis.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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15. Guarantees and condensed consolidating financial information (Continued)

ATLANTIC POWER CORPORATION

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2013

(in millions of U.S. dollars)
(Unaudited)

	Guarantor Subsidiaries			Curtis Palmer		Atlantic Power			Eliminations			Consolidated Balance

Assets
Current assets:
Cash and cash equivalents	$	195.6		$	—	$	—		$	—		$	195.6
Restricted cash		40.1			—		—			—			40.1
Accounts receivable		151.9			23.9		3.0			(107.4	)		71.4
Prepayments, supplies, and other current assets		36.9			1.2		1.4			(1.0	)		38.5

Total current assets		424.5			25.1		4.4			(108.4	)		345.6
Property, plant, and equipment, net		1,761.1			172.5		—			(1.3	)		1,932.3
Equity investments in unconsolidated affiliates		3,706.5			—		973.9			(4,270.0	)		410.4
Other intangible assets, net		331.3			152.3		—			—			483.6
Goodwill		273.0			58.2		—			—			331.2
Other assets		521.4			—		437.1			(894.2	)		64.3

Total assets	$	7,017.8		$	408.1	$	1,415.4		$	(5,273.9	)	$	3,567.4

Liabilities
Current liabilities:
Accounts payable and accrued liabilities	$	97.5		$	18.5	$	68.7		$	(107.4	)	$	77.3
Revolving credit facility		—			—		—			—			—
Current portion of long-term debt		65.7			—		—			—			65.7
Liabilities from discontinued operations		—			—		—			—			—
Other current liabilities		36.3			—		3.8			(1.0	)		39.1

Total current liabilities		199.5			18.5		72.5			(108.4	)		182.1
Long-term debt		812.0			190.0		460.0			—			1,462.0
Convertible debentures		(0.1	)		—		408.4			—			408.3
Other non-current liabilities		1,184.5			8.5		0.5			(844.6	)		348.9

Total liabilities		2,195.9			217.0		941.4			(953.0	)		2,401.3
Equity
Common shares		4,302.9			191.1		1,285.3			(4,493.9	)		1,285.4
Preferred shares issued by a subsidiary company		248.2			—		—			(26.9	)		221.3
Accumulated other comprehensive income (loss)		(19.5	)		—					—			(19.5	)
Retained deficit		14.1			—		(811.3	)		199.9			(597.3	)

Total Atlantic Power Corporation shareholders' equity		4,545.7			191.1		474.0			(4,320.9	)		889.9

Noncontrolling interest		276.2			—		—			—			276.2

Total equity		4,821.9			191.1		474.0			(4,320.9	)		1,166.1

Total liabilities and equity	$	7,017.8		$	408.1	$	1,415.4		$	(5,273.9	)	$	3,567.4

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15. Guarantees and condensed consolidating financial information (Continued)

ATLANTIC POWER CORPORATION

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Three months ended June 30, 2013

(in millions of U.S. dollars)

	Guarantor Subsidiaries			Curtis Palmer			Atlantic Power			Eliminations			Consolidated Balance

Project revenue:
Total project revenue	$	128.3		$	10.8		$	—		$	(0.1	)	$	139.0

Project expenses:
Fuel		52.0			—			—			—			52.0
Project operations and maintenance		47.6			(0.7	)		0.2			(0.2	)		46.9
Development		1.8			—			—			—			1.8
Depreciation and amortization		38.3			3.9			—			—			42.2

		139.7			3.2			0.2			(0.2	)		142.9
Project other income (expense):
Change in fair value of derivative instruments		24.3			—			—			—			24.3
Equity in earnings of unconsolidated affiliates		8.7			—			—			—			8.7
Interest expense, net		(5.9	)		(2.8	)		—			—			(8.7	)
Other		(5.1	)		—			0.3			—			(4.8	)

		22.0			(2.8	)		0.3			—			19.5

Project income		10.6			4.8			0.1			0.1			15.6
Administrative and other expenses (income):
Administration expense		5.8			—			6.0			—			11.8
Interest, net		18.9			—			6.4			—			25.3
Foreign exchange gain		(5.5	)		—			(9.0	)		—			(14.5	)
Other income		(9.5	)		—			—			—			(9.5	)

		9.7			—			3.4			—			13.1

Income (loss) from continuing operations before income taxes		0.9			4.8			(3.3	)		0.1			2.5
Income tax expense		0.6			—			—			—			0.6

Net income (loss) from continuing operations		0.3			4.8			(3.3	)		0.1			1.9
Net loss from discontinued operations		(0.7	)		—			—			—			(0.7	)

Net income (loss)		(0.4	)		4.8			(3.3	)		0.1			1.2
Net income attributable to noncontrolling interest		1.1			—			—			3.1			4.2

Net income (loss) attributable to Atlantic Power Corporation	$	(1.5	)	$	4.8		$	(3.3	)	$	(3.0	)	$	(3.0	)

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15. Guarantees and condensed consolidating financial information (Continued)

ATLANTIC POWER CORPORATION

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Six months ended June 30, 2013

(in millions of U.S. dollars)

	Guarantor Subsidiaries			Curtis Palmer			Atlantic Power			Eliminations			Consolidated Balance

Project revenue:
Total project revenue	$	259.9		$	19.6		$	—		$	(0.3	)	$	279.2

Project expenses:
Fuel		101.6			—			—			—			101.6
Project operations and maintenance		74.1			0.9			0.5			(0.3	)		75.2
Development		3.5			—			—			—			3.5
Depreciation and amortization		75.8			7.7			—			—			83.5

		255.0			8.6			0.5			(0.3	)		263.8
Project other income (expense):
Change in fair value of derivative instruments		36.9			—			—			—			36.9
Equity in earnings of unconsolidated affiliates		15.9			—			—			—			15.9
Interest expense, net		(11.1	)		(5.6	)		—			—			(16.7	)
Other		(5.1	)		—			0.3			—			(4.8	)

		36.6			(5.6	)		0.3			—			31.3

Project income (loss)		41.5			5.4			(0.2	)		—			46.7
Administrative and other expenses (income):
Administration expense		10.4			—			9.7			—			20.1
Interest, net		38.2			—			13.0			—			51.2
Foreign exchange gain		(8.0	)		—			(14.0	)		—			(22.0	)
Other income		(9.5	)		—			—			—			(9.5	)

		31.1			—			8.7			—			39.8

Income (loss) from continuing operations before income taxes		10.4			5.4			(8.9	)		—			6.9
Income tax benefit		(1.9	)		—			—			—			(1.9	)

Net income (loss) from continuing operations		12.3			5.4			(8.9	)		—			8.8
Net income from discontinued operations		0.2			—			—			—			0.2

Net income (loss)		12.5			5.4			(8.9	)		—			9.0
Net income (loss) attributable to noncontrolling interest		(0.8	)		—			—			6.3			5.5

Net income (loss) attributable to Atlantic Power Corporation	$	13.3		$	5.4		$	(8.9	)	$	(6.3	)	$	3.5

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15. Guarantees and condensed consolidating financial information (Continued)

ATLANTIC POWER CORPORATION

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Three and six months ended June 30, 2013

(in millions of U.S. dollars)

	Guarantor Subsidiaries			Curtis Palmer		Atlantic Power			Eliminations		Consolidated Balance

Net income (loss)	$	(0.4	)	$	4.8	$	(3.3	)	$	0.1	$	1.2
Other comprehensive income (loss):
Unrealized gain on hedging activities		0.6			—		—			—		0.6
Net amount reclassified to earnings		0.1			—		—			—		0.1

Net unrealized gain on derivatives		0.7			—		—			—		0.7
Foreign currency translation adjustments		(18.0	)		—		—			—		(18.0	)

Other comprehensive loss, net of tax		(17.3	)		—		—			—		(17.3	)

Comprehensive income (loss)		(17.7	)		4.8		(3.3	)		0.1		(16.1	)

Less: Comprehensive income attributable to noncontrolling interest		4.2			—		—			—		4.2

Comprehensive income (loss) attributable to Atlantic Power Corporation	$	(21.9	)	$	4.8	$	(3.3	)	$	0.1	$	(20.3	)

	Guarantor Subsidiaries			Curtis Palmer		Atlantic Power			Eliminations		Consolidated Balance

Net income (loss)	$	12.5		$	5.4	$	(8.9	)	$	—	$	9.0
Other comprehensive income (loss):
Unrealized gain on hedging activities		0.6			—		—			—		0.6
Net amount reclassified to earnings		0.4			—		—			—		0.4

Net unrealized gain on derivatives		1.0			—		—			—		1.0
												—
Foreign currency translation adjustments		(30.1	)		—		—			—		(30.1	)

Other comprehensive loss, net of tax		(29.1	)		—		—			—		(29.1	)

Comprehensive income (loss)		(16.6	)		5.4		(8.9	)		—		(20.1	)

Less: Comprehensive income attributable to noncontrolling interest		5.5			—		—			—		5.5

Comprehensive income (loss) attributable to Atlantic Power Corporation	$	(22.1	)	$	5.4	$	(8.9	)	$	—	$	(25.6	)

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15. Guarantees and condensed consolidating financial information (Continued)

ATLANTIC POWER CORPORATION

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six months ended June 30, 2013

(in millions of U.S. dollars)

	Guarantor Subsidiaries			Curtis Palmer			Atlantic Power			Eliminations		Consolidated Balance

Net cash provided by operating activities	$	45.6		$	1.4		$	49.9		$	—	$	96.9
Cash flows provided by (used in) investing activities:
Proceeds from treasury grant		53.7			—			—			—		53.7
Proceeds from sale of assets		148.3			—						—		148.3
Cash (paid) received from equity investment		5.5			—			(5.5	)		—		—
Change in restricted cash		(19.4	)		—			—			—		(19.4	)
Biomass development costs		(0.1	)		—			—			—		(0.1	)
Construction in progress		(26.2	)		—			—			—		(26.2	)
Purchase of property, plant and equipment		(3.6	)		(1.4	)		—			—		(5.0	)

Net cash provided by (used in) investing activities		158.2			(1.4	)		(5.5	)		—		151.3
Cash flows provided by (used in) financing activities:
Offering costs related to tax equity		(1.0	)		—			—			—		(1.0	)
Repayment of project-level debt		(64.2	)		—			—			—		(64.2	)
Proceeds from project-level debt		20.8			—			—			—		20.8
Payments for revolving credit facility borrowings		(47.0	)		—			(20.0	)		—		(67.0	)
Equity investment from noncontrolling interest		42.7			—			1.9			—		44.6
Dividends paid		(9.3	)		—			(43.2	)		—		(52.5	)

Net cash provided by (used in) financing activities		(58.0	)		—			(61.3	)		—		(119.3	)

Net increase (decrease) in cash and cash equivalents		145.8			—			(16.9	)		—		128.9
Cash and cash equivalents at beginning of period		49.8			—			16.9			—		66.7

Cash and cash equivalents at end of period	$	195.6		$	—		$	—		$	—	$	195.6

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FORWARD-LOOKING INFORMATION

Certain statements in this Quarterly Report on Form 10-Q constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook," "objective," "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "plans," "continue," or similar expressions suggesting future outcomes or events. Examples of such statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements with respect to the following:

•: our ability to generate sufficient amounts of cash and cash equivalents to maintain our operations and meet obligations as they become due;
•: the amount of cash proceeds expected to be received following the sale of our projects and the timing of such sales;
•: the results of our goodwill impairment testing;
•: our ability to meet the financial covenants under our amended credit facility and other indebtedness and the ability to maintain our dividend payments at the current level; and
•: the impact of legislative, regulatory, competitive and technological changes.

Such forward-looking statements reflect our current expectations regarding future events and operating performance and speak only as of the date of this Quarterly Report on Form 10-Q. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to the assumption that the projects will operate and perform in accordance with our expectations. Many of these risks and uncertainties can affect our actual results and could cause our actual results to differ materially from those expressed or implied in any forward-looking statement made by us or on our behalf.

Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. In addition, a number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors included in the filings Atlantic Power makes from time to time with the SEC and the risk factors described under "Item 1A. Risk Factors" in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2012. Our business is both highly competitive and subject to various risks.

These risks include, without limitation:

•: the expiration or termination of power purchase agreements;
•: the dependence of our projects on their electricity and thermal energy customers;
•: exposure of certain of our projects to fluctuations in the price of electricity or natural gas;
•: projects not operating according to plan;
•: the dependence of our projects on third-party suppliers;
•: the effects of weather, which affects demand for electricity and fuel as well as operating conditions;
•: the dependence of our windpower projects on suitable wind and associated conditions;
•: U.S., Canadian and/or global economic conditions and uncertainty;
•: risks beyond our control, including but not limited to acts of terrorism or related acts of war, geopolitical crisis, natural disasters or other catastrophic events;

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•: the adequacy of our insurance coverage;
•: the impact of significant energy, environmental and other regulations on our projects;
•: increased competition, including for acquisitions;
•: our limited control over the operation of certain minority owned projects;
•: transfer restrictions on our equity interests in certain projects;
•: construction risks;
•: labor disruptions;
•: our ability to retain, motivate and recruit executives and other key employees;
•: unstable capital and credit markets;
•: our indebtedness and financing arrangements;
•: the impact on us of recent amendments to our senior credit facility;
•: compliance with our senior credit facility and our ability to obtain requested waivers and/or amendments;
•: the impact of compliance with covenants under our 9% senior unsecured notes;
•: changes in our creditworthiness; and
•: the outcome of certain shareholder class action lawsuits.

Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include third party projections of regional fuel and electric capacity and energy prices or cash flows that are based on assumptions about future economic conditions and courses of action. Although the forward-looking statements contained in this Quarterly Report on Form 10-Q are based upon what are believed to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. Certain statements included in this Quarterly Report on Form 10-Q may be considered "financial outlook" for the purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this Quarterly Report on Form 10-Q. These forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q and, except as expressly required by applicable law, we assume no obligation to update or revise them to reflect new events or circumstances.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations of Atlantic Power should be read in conjunction with the interim consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. All dollar amounts discussed below are in millions of U.S. dollars except per share amounts, or unless otherwise stated. The interim financial statements have been prepared in accordance with GAAP.

OVERVIEW

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generation capacity of approximately 3,018 MW in which our aggregate ownership interest is approximately 2,098 MW. These totals exclude our 17.1% interest in Gregory which was sold August 7, 2013, and our 40% interest in the Delta-Person for which we entered into an agreement to sell in December 2012. Our current portfolio of continuing operations consists of interests in twenty-nine operational power generation projects across eleven states in the United States and two provinces in Canada. Piedmont, our 53 MW biomass project in Georgia, achieved commercial operations in April 2013. We also own a wind and solar development company, Ridgeline, located in Seattle, Washington, which enhances our ability to develop, construct, and operate wind and solar energy projects across the United States and Canada. We also own a majority interest in Rollcast, a biomass power plant developer in North Carolina. Twenty-three of our projects are wholly owned subsidiaries.

We sell the capacity and energy from our power generation projects under PPAs to a variety of utilities and other parties. Under the PPAs, which have expiration dates ranging from August 2013 to December 2037, we receive payments for electric energy sold to our customers (known as energy payments), in addition to payments for electric generation capacity (known as capacity payments). We also sell steam from a number of our projects to industrial purchasers under steam sales agreements. Sales of electricity are generally higher during the summer and winter months, when temperature extremes create demand for either summer cooling or winter heating.

Our power generation projects generally have long-term fuel supply agreements, typically accompanied by fuel transportation arrangements. In most cases, the term of the fuel supply and transportation arrangements correspond to the term of the relevant PPAs and many of the PPAs and steam sales agreements provide for the indexing or pass-through of fuel costs to our customers. In cases where there is no pass-through of fuel costs, we often attempt to mitigate the market price risk of changing commodity costs through the use of hedging strategies.

We directly operate and maintain more than half of our power generation projects. We also partner with recognized leaders in the independent power industry to operate and maintain our other projects, including Colorado Energy Management ("CEM"), Power Plant Management Services ("PPMS") and Delta Power Services ("DPS"). Under these operation, maintenance and management agreements, the operator is typically responsible for operations, maintenance and repair services.

RECENT DEVELOPMENTS

Amended Credit Facility

On August 2, 2013, we entered into the amended credit facility with our lenders to amend our senior credit facility primarily to obtain more favorable financial ratios. The amended credit facility includes changes to our borrowing capacity, financial ratios and certain other customary representations, warranties, terms and conditions and covenants. For a description of these changes, see "—Liquidity and Capital Resources" and Note 5 to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

Goodwill Impairment Testing

Subsequent to the three months ended June 30, 2013, based on a prolonged decline in our market capitalization and initiatives started at reducing our development and administrative expenses, we determined that it was appropriate to initiate a test of goodwill to determine if it is more likely than not that the fair value of our reporting units do not exceed their carrying amounts. For reporting units that fail step 1 of the goodwill impairment test, we will initiate a step 2 test to quantify the amount, if any, of non-cash impairment to record. As of the date of this Quarterly Report on Form 10-Q, we are currently gathering the necessary information to perform these tests and expect to complete them during the three months ended September 30, 2013.

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Administration and Development Reductions

In July 2013 we implemented changes in several key areas that are expected to result in an approximate $8.0 million reduction to administration and development expenses relative to our previous budget. The expense reductions will occur in three broad areas, which are, in order of significance: (1) reduction in the development budget, both for personnel and third-party expenses, consistent with de-emphasizing early-stage development projects; (2) consolidation of accounting and finance functions in two offices, down from three; and (3) additional synergies from full integration of areas such as health care, plant insurance, IT, travel and other functions.

Most of the one-time costs that will be incurred to implement these changes will be recorded in the third and fourth quarters of 2013. The savings are expected to be realized beginning in 2014. However, the Company may experience increases in unrelated costs such as those associated with its debt reduction objectives and plant optimization initiatives. The net impact on cash flows is expected to be positive in 2014.

Piedmont Commercial Operations and Receipt of Grant Proceeds

In May 2013, Piedmont submitted an application under the federal 1603 grant program. In July, the grant was approved and $49.5 million was received from the U.S. Treasury. With the proceeds received and a $1.5 million contribution from Atlantic Power to cover the shortfall created by the U.S. federal budget sequestration, the project's outstanding $51 million bridge loan was fully repaid in July 2013. Piedmont's construction loan in the amount of $82 million ($75.1 million at June 30, 2013) is expected to convert to a term loan in the third quarter of 2013. We contributed an additional $2.7 million equity investment during the three months ended June 30, 2013 to fund the project's working capital.

Piedmont achieved commercial operation under its PPA with Georgia Power Company at a declared capacity of 53.5 MW on April 19, 2013. Piedmont and its engineering, procurement and construction ("EPC") contractor, Zachry Industrial, Inc. ("Zachry"), are disputing certain issues under the EPC agreement regarding the condition and performance of the project, during which time Piedmont is withholding the amount still retained under the agreement.

Canadian Hills Tax Equity

On May 2, 2013, we syndicated our $44.0 million tax equity investment in Canadian Hills to an institutional investor and received cash proceeds of $42.1 million. The cash proceeds received were based on our initial tax equity investment of $44.1 million less distributions received from Canadian Hills resulting in an immaterial loss on the sale. During this short-term ownership as a tax equity investor in the project, we generated an immaterial amount of production tax credits and approximately $5.5 million of net operating losses, which we will be able to use to offset against future taxable income. The syndication of our interest completes the sale of 100% of Canadian Hills' $269 million of tax equity interests. The cash proceeds will be held for general corporate purposes. We continue to own 99% of the project and consolidate it in our consolidated financial statements. Income, (losses), and distributions attributable to the tax investors are recorded as a component of noncontrolling interests.

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Sale of Gregory

On April 2, 2013 we and the other owners of Gregory entered into a purchase and sale agreement with an affiliate of NRG Energy, Inc. to sell the project for approximately $274.2 million including working capital adjustments. We received net cash proceeds from our ownership interest of approximately $34.6 million in the aggregate, after repayment of project-level debt and transaction expenses. Approximately $5 million of these proceeds will be held in escrow for up to one year after the closing date. We intend to use the net proceeds from the sale for general corporate purposes. The sale of Gregory closed on August 7, 2013 resulting in a gain of approximately $31 million that will be recorded in the three months ended September 30, 2013.

Sale of Path 15

On March 11, 2013 we entered into a purchase and sale agreement with Duke-American Transmission Company, a joint venture between Duke Energy Corporation and American Transmission Co., to sell our interests in Path 15. The sale closed on April 30, 2013 and we received net cash proceeds from the sale, including working capital adjustments, of approximately $52 million, plus a management agreement termination fee of $4.0 million, for a total sale price of approximately $56 million. The cash proceeds will be used for general corporate purposes. All project level debt issued by Path 15, totaling $137.2 million, transferred with the sale. Path 15 was accounted for as an asset held for sale in the consolidated balance sheets at December 31, 2012 and as a component of discontinued operations in the consolidated statements of operations for the three and six months ended June 30, 2013 and 2012.

Sale of Florida Projects

On January 30, 2013, we entered into a purchase and sale agreement for the sale of the Florida Projects, for approximately $140 million, with working capital adjustments. The sale closed on April 12, 2013 and we received net cash proceeds of approximately $117 million in the aggregate, after repayment of project-level debt at Auburndale and settlement of all outstanding natural gas swap agreements at Lake and Auburndale. This includes approximately $92 million received at closing and cash distributions from the projects of approximately $25 million received since January 1, 2013. We used a portion of the net proceeds from the sale to fully repay our senior credit facility, which had an outstanding balance of approximately $64.1 million on the closing date. The Florida Projects were accounted for as assets held for sale in the consolidated balance sheets at December 31, 2012 and are a component of discontinued operations in the consolidated statements of operations for the three and six months ended June 30, 2013 and 2012.

OUR POWER PROJECTS

The table on the following page outlines our portfolio of power generating assets in operation as of August 5, 2013, including our interest in each facility. Management believes the portfolio is well diversified in terms of electricity and steam buyers, fuel type, regulatory jurisdictions and regional power pools, thereby partially mitigating exposure to market, regulatory or environmental conditions specific to any single region. Our customers are generally large utilities and other parties with investment-grade credit ratings, as measured by Standard & Poor's ("S&P"). Customers that have assigned ratings at the top end of the range have, in the opinion of the rating agency, the strongest capability for payment of debt or payment of claims, while customers at the bottom end of the range have the weakest capacity. Agency ratings are subject to change, and there can be no assurance that a ratings agency will continue to rate the customers, and/or maintain their current ratings. A security rating is not a recommendation to buy, sell or hold securities, it may be subject to revision or withdrawal at any time by the rating agency, and each rating should be evaluated independently of any other rating. We cannot predict the effect that a change in the ratings of the customers will have on their liquidity or their ability to pay their debts or other obligations.

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Project	Location	Type	MW		Economic Interest			Net MW		Primary Electric Purchasers	Power Contract Expiry		Customer Credit Rating (S&P)

Northeast Segment

Cadillac	Michigan	Biomass		40		100.00	%		40	Consumers Energy		December 2028	BBB

Chambers	New Jersey	Coal		262		40.00	%		89	Atlantic City Elec.		December 2024	BBB+

									16	DuPont		December 2024	A

Kenilworth	New Jersey	Natural Gas		30		100.00	%		30	Merck, & Co., Inc.		September 2018 ⁽¹⁾	AA

Curtis Palmer	New York	Hydro		60		100.00	%		60	Niagara Mohawk Power Corperation		December 2027	A-

Selkirk	New York	Natural Gas		345		18.50	%		15	Merchant		N/A	N/R

									49	Consolidated Edison		August 2014	A-

Calstock	Ontario	Biomass		35		100.00	%		35	Ontario Electricity Financial Corp		June 2020	AA-

Kapuskasing	Ontario	Natural Gas		40		100.00	%		40	Ontario Electricity Financial Corp		December 2017	AA-

Nipigon	Ontario	Natural Gas		40		100.00	%		40	Ontario Electricity Financial Corp		December 2022	AA-

North Bay	Ontario	Natural Gas		40		100.00	%		40	Ontario Electricity Financial Corp		December 2017	AA-

Tunis	Ontario	Natural Gas		43		100.00	%		43	Ontario Electricity Financial Corp		December 2014	AA-

Southeast Segment

Orlando	Florida	Natural Gas		129		50.00	%		46	Progress Energy Florida		December 2023	BBB+

									19	Reedy Creek Improvement District ⁽²⁾		December 2013	A

Piedmont	Georgia	Biomass		53		98.0	%		52	Georgia Power		December 2032	A

Northwest Segment

Mamquam	British Columbia	Hydro		50		100.00	%		50	British Columbia Hydro and Power Authority		September 2027	AAA

Moresby Lake	British Columbia	Hydro		6		100.00	%		6	British Columbia Hydro and Power Authority		August 2022	AAA

Williams Lake	British Columbia	Biomass		66		100.00	%		66	British Columbia Hydro and Power Authority		March 2018	AAA

Idaho Wind	Idaho	Wind		183		27.56	%		50	Idaho Power Co.		December 2030	BBB

Rockland	Idaho	Wind		80		50.00	%		40	Idaho Power Co.		December 2036	BBB

Goshen North	Idaho	Wind		125		12.50	%		16	Southern California Edison		November 2030	BBB+

Meadow Creek	Idaho	Wind		120		100.00	%		120	PacifiCorp		December 2032	A-

Frederickson	Washington	Natural Gas		250		50.15	%		50	Benton Co. PUD		August 2022	A+

									45	Grays Harbor PUD		August 2022	A

									30	Franklin, Co. PUD		August 2022	A

Koma Kulshan	Washington	Hydro		13		49.80	%		6	Puget Sound Energy		December 2037	BBB

Southwest Segment

Naval Station	California	Natural Gas		47		100.00	%		47	San Diego Gas & Electric		December 2019	A

Naval Training Center	California	Natural Gas		25		100.00	%		25	San Diego Gas & Electric		December 2019	A

North Island	California	Natural Gas		40		100.00	%		40	San Diego Gas & Electric		December 2019	A

Oxnard	California	Natural Gas		49		100.00	%		49	Southern California Edison		May 2020	BBB+

Greeley	Colorado	Natural Gas		72		100	%		72	Public Service Company of Colorado		August 2013 ⁽³⁾	A-

Manchief	Colorado	Natural Gas		300		100	%		300	Public Service Company of Colorado		October 2022	A-

Morris	Illinois	Natural Gas		177		100	%		77	Merchant		N/A	N/R

									100	Equistar Chemicals, LP		November 2023	BBB

Canadian Hills	Oklahoma	Wind		298		99.0	%		199	Southwestern Electric Power Company		December 2037	BBB

									48	Oklahoma Municipal Power Authority		December 2037	A

									48	Grand River Dam Authority		December 2032	A

⁽¹⁾: The Kenilworth Energy Service Agreement ("ESA"), under which Kenilworth sells electricity and steam to Merck expired on July 31, 2012 and was extended on a month-to month basis by agreement with the purchaser. In July 2013, we entered into a new ESA with Merck that becomes effective November 1, 2013 and expires on September 30, 2018. Kenilworth will operate under the month-to-month extension of the prior ESA until the new ESA is effective.
⁽²⁾: Upon the expiry of the Reedy Creek PPA, the associated capacity and energy will be sold to Progress Energy Florida under the terms of the current agreement.
⁽³⁾: The Greeley project will be shut down at the expiration of its PPA in August 2013.

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Consolidated Overview and Results of Operations

Performance highlights

The following table provides a summary of our consolidated results of operations for the three and six months ended June 30, 2013 and 2012 which are analyzed in greater detail below:

	Three months ended June 30,						Six months ended June 30,

	2013			2012			2013		2012
Project income (loss)	$	15.6		$	(7.5	)	$	46.7	$	(44.5	)
Income (loss) from continuing operations		1.9			(21.4	)		8.8		(72.2	)
Income (loss) from discontinued operations, net of tax		(0.7	)		19.3			0.2		30.9
Net income (loss) attributable to Atlantic Power Corporation		(3.0	)		(5.1	)		3.5		(47.4	)
Basic and diluted earnings (loss) per share from continuing operations	$	(0.02	)	$	(0.21	)	$	0.03	$	(0.69	)
Project Adjusted EBITDA ⁽¹⁾		56.2			45.4			136.8		111.9
Cash Available for Distribution ⁽¹⁾		(6.7	)		13.0			75.0		72.8

⁽¹⁾: See reconciliation and definition in Supplementary Non-GAAP Financial Information.

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Three months ended June 30, 2013 compared to the three months ended June 30, 2012

The following table provides our consolidated results of operations:

	Three months ended June 30,

	2013			2012			$ change			% change
Project revenue:
Energy sales	$	68.1		$	49.4			18.7			37.9	%
Energy capacity revenue		54.4			37.5			16.9			45.1	%
Other		16.5			14.5			2.0			13.8	%

		139.0			101.4			37.6			37.1	%
Project expenses:
Fuel		52.0			37.3			14.7			39.4	%
Operations and maintenance		46.9			37.9			9.0			23.7	%
Development		1.8			—			1.8			NM
Depreciation and amortization		42.2			30.3			11.9			39.3	%

		142.9			105.5			37.4			35.5	%
Project other income (expense):
Change in fair value of derivative instruments		24.3			(4.8	)		29.1			NM
Equity in earnings of unconsolidated affiliates		8.7			5.5			3.2			58.2	%
Interest expense, net		(8.7	)		(4.1	)		(4.6	)		112.2	%
Other, net		(4.8	)		—			(4.8	)		NM

		19.5			(3.4	)		22.9			NM

Project income (loss)		15.6			(7.5	)		23.1			NM
Administrative and other expenses (income):
Administration		11.8			8.0			3.8			47.5	%
Interest, net		25.3			21.4			3.9			18.2	%
Foreign exchange (gain) loss		(14.5	)		(4.2	)		(10.3	)		NM
Other income, net		(9.5	)		(6.0	)		(3.5	)		58.3	%

		13.1			19.2			(6.1	)		-31.8	%

Income (loss) from continuing operations before income taxes		2.5			(26.7	)		29.2			109.4	%
Income tax expense (benefit)		0.6			(5.3	)		5.9			111.3	%

Income (loss) from continuing operations		1.9			(21.4	)		23.3			108.9	%
Income (loss) from discontinued operations, net of tax		(0.7	)		19.3			(20.0	)		-103.6	%

Net income (loss)		1.2			(2.1	)		3.3			NM
Net income (loss) attributable to noncontrolling interests		1.1			(0.2	)		1.3			NM
Net income attributable to preferred shares dividends of a subsidiary company		3.1			3.2			(0.1	)		-3.1	%

Net loss attributable to Atlantic Power Corporation	$	(3.0	)	$	(5.1	)		2.1			41.2	%

Project Income (loss) by Segment

We have five reportable segments: Northeast, Southeast, Northwest, Southwest and Un-allocated Corporate. The segment classified as Un-allocated Corporate includes activities that support the executive offices, capital structure, costs of being a public registrant in the United States and Canada, costs to develop future projects and intercompany eliminations. Unallocated Corporate also includes Rollcast, a 60% owned company, which develops, owns and operates renewable power plants that use wood or biomass fuel and Ridgeline, which develops and operates wind and solar renewable projects.

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These costs are not allocated to the operating segments when determining segment profit or loss. Project income (loss) is the primary GAAP measure of our operating results and is discussed below by reportable segment. A significant non-cash item that impacts project income (loss) and is subject to potentially significant fluctuations is the change in fair value of certain derivative financial instruments. These instruments are required by GAAP to be revalued at each balance sheet date (see Item 3. "Quantitative and Qualitative Disclosures About Market Risk" for additional information).

	Three months ended June 30, 2013

	Northeast			Southeast ⁽¹⁾			Northwest			Southwest ⁽²⁾			Un-allocated Corporate			Consolidated Total
Project revenue:
Energy sales	$	29.5		$	2.1		$	16.7		$	19.4		$	0.4		$	68.1
Energy capacity revenue		21.1			4.0			—			29.6			(0.3	)		54.4
Other		2.2			0.1			4.6			9.7			(0.1	)		16.5

		52.8			6.2			21.3			58.7			—			139.0
Project expenses:
Fuel		23.7			2.9			1.2			24.2			—			52.0
Operations and maintenance		11.9			3.2			13.6			16.3			1.9			46.9
Development		—			—			—			—			1.8			1.8
Depreciation and amortization		15.1			1.6			10.9			14.2			0.4			42.2

		50.7			7.7			25.7			54.7			4.1			142.9
Project other income (expense):
Change in fair value of derivative instruments		7.9			2.3			14.1			—			—			24.3
Equity in earnings of unconsolidated affiliates		5.7			0.8			1.8			0.1			0.3			8.7
Interest expense, net		(4.0	)		(1.2	)		(3.4	)		(0.2	)		0.1			(8.7	)
Other, net		—			—			—			—			(4.8	)		(4.8	)

		9.6			1.9			12.5			(0.1	)		(4.4	)		19.5

Project income (loss)	$	11.7		$	0.4		$	8.1		$	3.9		$	(8.5	)	$	15.6

	Three months ended June 30, 2012

	Northeast			Southeast ⁽¹⁾			Northwest			Southwest ⁽²⁾			Un-allocated Corporate			Consolidated Total
Project revenue:
Energy sales	$	26.6		$	—		$	11.6		$	11.0		$	0.2		$	49.4
Energy capacity revenue		17.2			—			—			20.4			(0.1	)		37.5
Other		2.1			—			5.1			6.8			0.5			14.5

		45.9			—			16.7			38.2			0.6			101.4
Project expenses:
Fuel		22.9			—			1.2			13.0			0.2			37.3
Operations and maintenance		12.2			—			8.4			12.7			4.6			37.9
Development		—			—			—			—			—			—
Depreciation and amortization		15.2			—			6.6			8.5			—			30.3

		50.3			—			16.2			34.2			4.8			105.5
Project other income (expense):
Change in fair value of derivative instruments		(1.3	)		(3.2	)		—			—			(0.3	)		(4.8	)
Equity in earnings of unconsolidated affiliates		8.5			0.7			(0.2	)		(3.5	)		—			5.5
Interest expense, net		(4.0	)		—			—			—			(0.1	)		(4.1	)

		3.2			(2.5	)		(0.2	)		(3.5	)		(0.4	)		(3.4	)

Project income (loss)	$	(1.2	)	$	(2.5	)	$	0.3		$	0.5		$	(4.6	)	$	(7.5	)

⁽¹⁾: Excludes the Florida Projects which are designated as discontinued operations.
⁽²⁾: Excludes Path 15 which is designated as discontinued operations.

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Northeast

Project income for the three months ended June 30, 2013 increased $12.9 million from the comparable 2012 period primarily due to:

•: increased project income from Nipigon of $8.6 million due primarily to a positive $8.9 million non-cash change in the fair value of gas purchase agreements that were accounted for as derivatives;
•: increased project income from Curtis Palmer of $4.7 million due primarily to increased generation resulting from higher water levels than the comparable period; and
•: increased project income from Calstock of $2.9 million due primarily to steam turbine maintenance in the second quarter of 2012 that contributed to increased generation, lower maintenance costs, and lower fuel costs in the comparable period.

These increases were partially offset by:

•: decreased project income from Tunis of $2.1 million due primarily to higher maintenance and fuel costs than in the comparable period.

Southeast

Project income for the three months ended June 30, 2013 increased $2.9 million from the comparable 2012 period primarily due to the Piedmont project becoming commercially operational in April 2013 which contributed project income of $4.0 million. Piedmont's project income was primarily due to a positive $6.6 million non-cash change in the fair value of interest rate swap agreements that were accounted for as derivatives, partially offset by fuel, maintenance and interest expenses.

Project income for the Southeast segment excludes the Florida Projects which are accounted for as a component of discontinued operations and were sold on April 12, 2013. Project income for the Florida Projects was immaterial for the three months ended June 30, 2013 and was $19.7 million for the three months ended June 30, 2012.

Northwest

Project income for the three months ended June 30, 2013 increased $7.8 million from the comparable 2012 period primarily due to:

•: increased project income from Rockland of $6.8 million attributable to an ownership percentage increase from 30% to 50% resulting from the Ridgeline acquisition in December 2012; and
•: project income of $5.4 million from Meadow Creek, which was a component of the Ridgeline acquisition and achieved commercial operations in December 2012. Meadow Creek's project income was primarily attributable to a positive $6.9 million non-cash change in the fair value of interest rate swap agreements that were accounted for as derivatives.

These increases were partially offset by:

•: decreased project income from Williams Lake of $3.1 million due primarily to higher operations and maintenance costs from a scheduled outage; and
•: decreased project income from Mamquam of $2.2 million due primarily to higher maintenance costs from a scheduled outage and decreased revenues from lower generation.

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Southwest

Project income for the three months ended June 30, 2013 increased $3.4 million from the comparable 2012 period primarily due to:

•: project income from Canadian Hills of $1.8 million due primarily to the project becoming commercially operational during the fourth quarter of 2012; and
•: $3.6 million of project loss in the comparable 2012 from the Badger and PERC projects which were sold in 2012.

These increases were partially offset by:

•: decreased project income from Morris of $2.0 million due primarily to higher maintenance costs, higher fuel expenses, and lower revenues.

Project income for the Southwest segment excludes the Path 15 project which was sold on April 30, 2013 and which is accounted for as an asset held for sale and as a component of discontinued operations. Project income (loss) for Path 15 was $1.1 million and $(0.4) million for the three months ended June 30, 2013 and 2012, respectively and did not change materially.

Un-allocated Corporate

Total project loss increased $3.9 million for the three months ended June 30, 2013 from the comparable 2012 period primarily due to a $3.5 million non-cash impairment of goodwill charge and a $1.4 million non-cash impairment of capitalized development expenses recorded at Rollcast.

Administrative and other expenses (income)

Administrative and other expenses (income) include the income and expenses not attributable to our projects and are allocated to the Un-allocated Corporate segment. These costs include the activities that support the executive offices, capital structure, costs of being a public registrant in the United States and Canada, costs to develop future projects, interest costs on our corporate obligations, the impact of foreign exchange fluctuations and corporate tax. Significant non-cash items that impact Administrative and other expenses (income), which are subject to potentially significant fluctuations, include the non-cash impact of foreign exchange fluctuations from period to period on the U.S. dollar equivalent of our Canadian dollar-denominated obligations and the related deferred income tax expense (benefit) associated with these non-cash items.

Administration

Administration expense increased $3.8 million or 47.5% from the comparable 2012 period primarily due to transactional fees related to divestitures during the three months ended June 30, 2013.

Interest, net

Interest expense increased $3.9 million or 18.2% from the comparable 2012 period primarily due to the issuance of the $130 million principal amount of convertible debentures in July of 2012 and issuance of the Cdn$100 million principal amount of convertible debentures in December of 2012.

Foreign exchange gain

Foreign exchange gain increased $10.3 million primarily due to a $7.7 million increase in unrealized gain in the revaluation of instruments denominated in Canadian dollars and a $7.7 million increase in realized gains on the settlement of foreign currency forward contracts, offset by a $5.1 million increase in unrealized loss of foreign currency forward contracts. The U.S. dollar to

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Canadian dollar exchange rate was 1.05 at June 30, 2013 and increased by 3.5% in three months ended June 30, 2013 compared to a 2.1% increase in the comparable 2012 period. In April 2013, we terminated various foreign currency forward contracts with expiration dates through 2015 resulting in a $9.4 million realized gain recorded in the three months ended June 30, 2013.

Other income, net

Other income increased $3.5 million or 58.3% from the comparable 2012 period primarily due to a $10.3 million gain and management agreement termination fee resulting from the sale of Path 15. In the comparable 2012 period, we recorded a $6.0 million management agreement termination fee related to the sale of our equity interest in Primary Energy Holdings, LLC ("PERH").

Income tax expense (benefit)

Income tax expense from continuing operations for the three months ended June 30, 2013 was $0.6 million, which is consistent with the expected income tax expense based on the Canadian enacted statutory rate of 25%.

Income tax benefit for the three months ended June 30, 2012 was $5.3 million. The difference between the actual tax benefit and the expected income tax benefit, based on the Canadian enacted statutory rate of 25%, of $6.7 million for the three months ended June 30, 2012 is primarily due to permanent differences related to one of our equity method projects.

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Six months ended June 30, 2013 compared to the six months ended June 30, 2012

The following table provides our consolidated results of operations:

	Six months ended June 30,

	2013			2012			$ change			% change
Project revenue:
Energy sales	$	137.1		$	109.4			27.7			25.3	%
Energy capacity revenue		99.2			74.5			24.7			33.2	%
Other		42.9			36.2			6.7			18.5	%

		279.2			220.1			59.1			26.9	%
Project expenses:
Fuel		101.6			83.5			18.1			21.7	%
Operations and maintenance		75.2			62.6			12.6			20.1	%
Development		3.5			—			3.5			NM
Depreciation and amortization		83.5			56.8			26.7			47.0	%

		263.8			202.9			60.9			30.0	%
Project other income (expense):
Change in fair value of derivative instruments		36.9			(62.0	)		98.9			159.5	%
Equity in earnings of unconsolidated affiliates		15.9			8.4			7.5			89.3	%
Interest expense, net		(16.7	)		(8.1	)		(8.6	)		106.2	%
Other, net		(4.8	)		—			(4.8	)		NM

		31.3			(61.7	)		93.0			150.7	%

Project income (loss)		46.7			(44.5	)		91.2			204.9	%
Administrative and other expenses (income):
Administration		20.1			15.7			4.4			28.0	%
Interest, net		51.2			43.4			7.8			18.0	%
Foreign exchange (gain) loss		(22.0	)		(3.2	)		(18.8	)		NM
Other income, net		(9.5	)		(6.0	)		(3.5	)		58.3	%

		39.8			49.9			(10.1	)		-20.2	%

Income (loss) from continuing operations before income taxes		6.9			(94.4	)		101.3			107.3	%
Income tax benefit		(1.9	)		(22.2	)		20.3			91.4	%

Income (loss) from continuing operations		8.8			(72.2	)		81.0			112.2	%
Income from discontinued operations, net of tax		0.2			30.9			(30.7	)		-99.4	%

Net income (loss)		9.0			(41.3	)		50.3			121.8	%
Net loss attributable to noncontrolling interests		(0.8	)		(0.3	)		(0.5	)		166.7	%
Net income attributable to preferred shares dividends of a subsidiary company		6.3			6.4			(0.1	)		-1.6	%

Net income (loss) attributable to Atlantic Power Corporation	$	3.5		$	(47.4	)		50.9			107.4	%

Project Income (loss) by Segment

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	Six months ended June 30, 2013

	Northeast			Southeast ⁽¹⁾			Northwest			Southwest ⁽²⁾			Un-allocated Corporate			Consolidated Total
Project revenue:
Energy sales	$	65.5		$	2.1		$	34.1		$	35.1		$	0.3		$	137.1
Energy capacity revenue		43.8			4.0			—			51.5			(0.1	)		99.2
Other		11.3			0.1			11.9			20.1			(0.5	)		42.9

		120.6			6.2			46.0			106.7			(0.3	)		279.2
Project expenses:
Fuel		49.0			2.9			4.5			45.2			—			101.6
Operations and maintenance		20.0			3.2			19.4			28.5			4.1			75.2
Development		—			—			—			—			3.5			3.5
Depreciation and amortization		30.3			1.6			22.6			28.6			0.4			83.5

		99.3			7.7			46.5			102.3			8.0			263.8
Project other income (expense):
Change in fair value of derivative instruments		16.3			3.6			16.9			—			0.1			36.9
Equity in earnings of unconsolidated affiliates		11.2			1.4			2.5			0.7			0.1			15.9
Interest expense, net		(8.0	)		(1.2	)		(7.0	)		(0.4	)		(0.1	)		(16.7	)
Other, net		—			—			—			—			(4.8	)		(4.8	)

		19.5			3.8			12.4			0.3			(4.7	)		31.3

Project income (loss)	$	40.8		$	2.3		$	11.9		$	4.7		$	(13.0	)	$	46.7

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	Six months ended June 30, 2012

	Northeast			Southeast ⁽¹⁾			Northwest		Southwest ⁽²⁾			Un-allocated Corporate			Consolidated Total
Project revenue:
Energy sales	$	64.8		$	—		$	20.4	$	24.0		$	0.2		$	109.4
Energy capacity revenue		39.5			—			—		35.0			—			74.5
Other		8.5			—			11.6		14.7			1.4			36.2

		112.8			—			32.0		73.7			1.6			220.1
Project expenses:
Fuel		49.1			—			4.9		29.2			0.3			83.5
Operations and maintenance		21.0			—			12.2		20.5			8.9			62.6
Development		—			—			—		—			—			—
Depreciation and amortization		27.4			—			13.1		16.4			(0.1	)		56.8

		97.5			—			30.2		66.1			9.1			202.9
Project other income (expense):
Change in fair value of derivative instruments		(59.2	)		(1.8	)		—		—			(1.0	)		(62.0	)
Equity in earnings of unconsolidated affiliates		12.5			0.5			0.4		(5.7	)		0.7			8.4
Interest expense, net		(7.9	)		—			—		—			(0.2	)		(8.1	)

		(54.6	)		(1.3	)		0.4		(5.7	)		(0.5	)		(61.7	)

Project income (loss)	$	(39.3	)	$	(1.3	)	$	2.2	$	1.9		$	(8.0	)	$	(44.5	)

⁽¹⁾: Excludes the Florida Projects which are designated as discontinued operations.
⁽²⁾: Excludes Path 15 which is designated as discontinued operations.

Northeast

Project income for the six months ended June 30, 2013 increased $80.1 million from the comparable 2012 period primarily due to:

•: increased project income from North Bay of $31.1 million due primarily to a positive $32.1 million non-cash change in the fair value of gas purchase agreements that were accounted for as derivatives;
•: increased project income from Kapuskasing of $30.8 million due primarily to a positive $32.1 million non-cash change in the fair value of gas purchase agreements that were accounted for as derivatives;
•: increased project income from Nipigon of $11.8 million due primarily to a positive $10.7 million non-cash change in the fair value of gas purchase agreements that were accounted for as derivatives;
•: increased project income from Calstock of $4.4 million due primarily to steam turbine maintenance that occurred in the comparable 2012 period; and
•: increased project income from Curtis Palmer of $2.7 million due primarily to increased generation resulting from higher water levels than the comparable period.

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These increases were partially offset by:

•: decreased project income from Tunis of $2.9 million due primarily to lower generation and energy prices than in the comparable period.

Southeast

Project income for the six months ended June 30, 2013 increased $3.6 million from the comparable 2012 period primarily due to the Piedmont project becoming commercially operational in April 2013. Piedmont's $3.5 million of project income was primarily due to a positive $6.1 million non-cash change in the fair value of interest rate swap agreements that were accounted for as derivatives. The gain was offset by increased maintenance and interest expenses.

Project income for the Southeast segment excludes the Florida Projects which are accounted for as a component of discontinued operations and were sold on April 12, 2013. Project income for the Florida Projects was immaterial for the six months ended June 30, 2013 and was $30.2 million for the six months ended June 30, 2012.

Northwest

Project income for the six months ended June 30, 2013 increased $9.7 million from the comparable 2012 period primarily due to:

•: increased project income from Rockland of $7.8 million attributable to an ownership percentage increase from 30% to 50% resulting from the Ridgeline acquisition during the fourth quarter of 2012; and
•: project income from Meadow Creek of $4.3 million which achieved commercial operations in December 2012. Meadow Creek's project income was primarily due to a positive $8.6 million non-cash change in the fair value of interest rate swap agreements that were accounted for as derivatives. This gain was offset by $4.2 million of interest expense.

These increases were partially offset by:

•: decreased project income from Mamquam of $2.7 million due primarily to increased maintenance costs from a scheduled outage and lower revenues than the comparable period.

Southwest

Project income for the six months ended June 30, 2013 increased $2.8 million from the comparable 2012 period primarily due to:

•: project income from Canadian Hills of $2.7 million which achieved commercial operations in December 2012.

These increases were partially offset by:

•: decreased project income from Morris of $4.8 million due primarily to higher maintenance costs from a scheduled outage, higher fuel expenses, and lower revenues in the comparable period.

Project income for the Southwest segment excludes the Path 15 project, which was sold on April 30, 2013 and which is accounted for as a component of discontinued operations. Project income for Path 15 was $2.1 million and $1.3 million for the six months ended June 30, 2013 and 2012, respectively and did not change materially.

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Un-allocated Corporate

Total project loss increased $5.0 million for the six months ended June 30, 2013 from the comparable 2012 period primarily due to a $3.5 million non-cash impairment of goodwill charge and a $1.4 million non-cash impairment of capitalized development expenses recorded at Rollcast.

Administrative and other expenses (income)

Administration

Administration expense increased $4.4 million or 28.0% from the comparable 2012 period primarily due to transactional fees during the six months ended June 30, 2013 related to divestitures.

Interest, net

Interest expense increased $7.8 million or 18.0% from the comparable 2012 period primarily due to the issuance of the $130 million principal amount of convertible debentures in July of 2012 and issuance of the Cdn$100 million principal amount of convertible debentures in December of 2012.

Foreign exchange (gain)

Foreign exchange gain increased $18.8 million primarily due to a $26.4 million increase in unrealized gain in the revaluation of instruments denominated in Canadian dollars offset by a $5.9 million increase in unrealized loss on foreign exchange forward contracts and a $1.7 million decrease in realized gains on the settlement of foreign currency forward contracts. The U.S. dollar to Canadian dollar exchange rate was 1.05 at June 30, 2013 and increased by 5.7% in the six months ended June 30, 2013 compared to a 0.1% increase in the comparable 2012 period.

Other income, net

Income tax expense (benefit)

Income tax benefit for the six months ended June 30, 2012 was $22.2 million. The difference between the actual tax benefit and the expected income tax benefit, based on the Canadian enacted statutory rate of 25%, of $23.6 million for the six months ended June 30, 2012 is primarily due to permanent differences related to one of our equity method projects and is partially offset by the increase in our valuation allowance.

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Generation and Availability

	Three months ended June 30,

	2013			2012			% change 2013 vs. 2012
Aggregate power generation (thousands of Net MWh)
Northeast		640.0			536.7			19.2	%
Southeast ⁽¹⁾		181.5			103.6			75.2	%
Northwest		376.3			312.4			20.5	%
Southwest ⁽²⁾		878.4			441.3			99.0	%

Total		2,076.2			1,394.0			48.9	%
Weighted average availability
Northeast		96.5	%		91.8	%		5.1	%
Southeast ⁽¹⁾		92.5	%		100.0	%		-7.5	%
Northwest		88.4	%		95.2	%		-7.1	%
Southwest ⁽²⁾		90.3	%		90.2	%		0.1	%

Total		93.1	%		94.8	%		-1.8	%

⁽¹⁾: Excludes the Florida Projects which are designated as discontinued operations.
⁽²⁾: Excludes Delta-Person for which we have entered into an agreement to sell and Gregory which was sold on August 7, 2013.

Three months ended June 30, 2013 compared with three months ended June 30, 2012

Aggregate power generation for the three months ended June 30, 2013 increased 48.9% from the comparable 2012 period primarily due to:

•: increased generation in the Northeast segment due to higher water flow at Curtis Palmer and increased dispatch at Chambers and Selkirk;
•: increased generation in the Southeast segment due to Piedmont, which achieved commercial operations in April 2013;
•: increased generation in the Northwest segment primarily due to Meadow Creek, which achieved commercial operations in late December 2012, as well as generation from Goshen North. Both projects were acquired in December 2012; and
•: increased generation in the Southwest segment due to Canadian Hills, which achieved commercial operations in late December 2012 and increased dispatch at Manchief.

Weighted average availability decreased from 94.8% for the three months ended June 30, 2012 to 93.1% for the three months ended June 30, 2013 period primarily due to:

•: decreased availability in the Southeast segment resulting from Piedmont, which achieved commercial operations in April 2013 and had low availability consistent with the initial start-up period of a new plant; and
•: decreased availability in the Northwest segment resulting from decreased availability at Mamquam, Moresby Lake and Williams Lake which underwent scheduled maintenance during the three months ended June 30, 2013. This was partially offset by increased availability at Meadow Creek and Goshen which were acquired in December 2012.

This was partially offset by

•: increased availability in the Northeast segment due to Calstock and Tunis which had scheduled maintenance outages in the three months ended June 30, 2012.

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	Six months ended June 30,

	2013			2012			% change 2013 vs. 2012
Aggregate power generation (thousands of Net MWh)
Northeast		1,337.8			1,201.9			11.3	%
Southeast ⁽¹⁾		286.4			208.3			37.5	%
Northwest		728.6			560.4			30.0	%
Southwest ⁽²⁾		1,635.7			915.9			78.6	%

Total		3,988.5			2,886.5			38.2	%
Weighted average availability
Northeast		96.3	%		95.2	%		1.2	%
Southeast ⁽¹⁾		95.6	%		100.0	%		-4.4	%
Northwest		89.9	%		94.2	%		-4.6	%
Southwest ⁽²⁾		92.7	%		93.7	%		-1.1	%

Total		94.1	%		92.2	%		2.1	%

⁽¹⁾: Excludes the Florida Projects which are designated as discontinued operations.
⁽²⁾: Excludes Delta-Person for which we have entered into an agreement to sell and Gregory which was sold on August 7, 2013.

Six months ended June 30, 2013 compared with six months ended June 30, 2012

Aggregate power generation for the six months ended June 30, 2013 increased 38.2% from the comparable 2012 period primarily due to:

•: increased generation in the Northeast segment due to increased dispatch at Chambers and Selkirk;
•: increased generation in the Southeast segment due to Piedmont, which achieved commercial operations in April 2013;
•: increased generation in the Northwest segment primarily due to Meadow Creek, which achieved commercial operations in late December 2012, as well as generation from Goshen North and increased ownership of Rockland, all of which resulted from our December 2012 acquisition of Ridgeline; and
•: increased generation in the Southwest segment due to Canadian Hills, which achieved commercial operations in late December 2012 and increased dispatch at Manchief.

Weighted average availability increased from 92.2% for the six months ended June 30, 2012 to 94.1% for the six months ended June 30, 2013 period primarily due to:

•: increased availability in the Northeast segment due to Calstock, which had a scheduled maintenance outage in April 2012, and increased availability at Selkirk, which had higher dispatch than the comparable 2012 period.

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This was partially offset by

•: decreased availability in the Southeast segment resulting from Piedmont, which achieved commercial operations in April 2013 and had low availability consistent with the initial start-up period of a new plant;
•: decreased availability in the Northwest segment resulting from decreased availability at Mamquam, Moresby Lake and Williams Lake which underwent scheduled maintenance during the three months ended June 30, 2013. This was partially offset by increased availability at Meadow Creek and Goshen which were acquired in December 2012; and
•: decreased availability in the Southwest segment resulting from scheduled maintenance at Morris during the first quarter of 2013 and a forced maintenance outage in June 2013.

Generation (in thousands of Net MWh) and availability statistics for the Southeast segment exclude the Florida Projects which are accounted for as a component of discontinued operations. Total generation for Auburndale was 456.1 MWh and availability was 98.7% for the six months ended June 30, 2012. Total generation for Lake was 240.6 MWh and availability was 98.9% for the six months ended June 30, 2012. Total generation for Pasco was 141.6 MWh and availability was 96.3% for the six months ended June 30, 2012. Generation statistics for the Florida Projects were not material for the period of our ownership prior to the sale during the three months ended June 30, 2013. Total generation for Auburndale was approximately 270 MWh and availability was approximately 98.8% for the six months ended June 30, 2013. Total generation for Lake was approximately 240 MWh and availability was approximately 97.3% for the six months ended June 30, 2013. Total generation for Pasco was approximately 40 MWh and availability was approximately 91.6% for the six months ended June 30, 2013.

Supplementary Non-GAAP Financial Information

A key measure we use to evaluate the results of our business is Cash Available for Distribution. Cash Available for Distribution is not a measure recognized under GAAP, does not have a standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other issuers. We believe Cash Available for Distribution is a relevant supplemental measure of our ability to pay dividends to our shareholders. A reconciliation of cash flows from operating activities, the most directly comparable GAAP measure, to Cash Available for Distribution is set out below under "Cash Available for Distribution." Investors are cautioned that we may calculate this measure in a manner that is different from other companies.

The primary factor influencing Cash Available for Distribution is cash distributions received from the projects. These distributions received are generally funded from Project Adjusted EBITDA generated by the projects, reduced by project-level debt service, capital expenditures, dividends paid on preferred shares of a subsidiary company and adjusted for changes in project-level working capital and cash reserves. Project Adjusted EBITDA is defined as project income (loss) plus interest, taxes, depreciation and amortization (including non-cash impairment charges) and changes in fair value of derivative instruments. Project Adjusted EBITDA is not a measure recognized under GAAP and does not have a standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. We use Project Adjusted EBITDA to provide comparative information about project performance without considering how projects are capitalized or whether they contain derivative contracts that are required to be recorded at fair value. A reconciliation of project income (loss) to Project Adjusted EBITDA is set out below by segment under "Project Adjusted EBITDA" and a reconciliation of project income (loss) by segment to Project Adjusted EBITDA by segment is set out in Note 13 to the consolidated financial statements of this Quarterly Report on Form 10-Q. Investors are cautioned that we may calculate this measure in a manner that is different from other companies.

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Project Adjusted EBITDA

	Three months ended June 30,						Six months ended June 30,

(unaudited)	2013			2012			2013			2012
Project Adjusted EBITDA by Segment
Northeast	$	26.0		$	22.4		$	71.9		$	64.8
Southeast ⁽¹⁾		2.4			2.1			4.5			4.2
Northwest		12.3			12.4			33.6			25.9
Southwest ⁽²⁾		19.0			12.6			35.0			24.7
Un-allocated Corporate		(3.5	)		(4.1	)		(8.2	)		(7.7	)

Total		56.2			45.4			136.8			111.9
Reconciliation to project income (loss)
Depreciation and amortization		50.6			41.3			103.0			81.1
Interest, net		9.5			6.4			19.0			12.4
Change in the fair value of derivative instruments		(26.8	)		2.1			(38.3	)		59.6
Other (income) expense		7.3			3.1			6.4			3.3

Project income (loss)		15.6			(7.5	)		46.7			(44.5	)

⁽¹⁾: Excludes the Florida Projects which are designated as discontinued operations.
⁽²⁾: Excludes Path 15 which is designated as discontinued operations.

Northeast

The following table summarizes Project Adjusted EBITDA for our Northeast segment for the periods indicated:

	Three months ended June 30,

	2013		2012		% change 2013 vs. 2012
Northeast
Project Adjusted EBITDA	$	26.0	$	22.4		16	%

Three months ended June 30, 2013 compared with three months ended June 30, 2012

Project Adjusted EBITDA for the three months ended June 30, 2013 increased $3.6 million or 16% from the comparable 2012 period primarily due to increases in Project Adjusted EBITDA of:

•: $4.6 million at Curtis Palmer primarily attributable to increased generation resulting from higher water levels than the comparable period; and
•: $2.9 million at Calstock which had steam turbine maintenance in comparable 2012 period.

These increases were partially offset by decreases in Project Adjusted EBITDA of:

•: $3.7 million at Chambers primarily attributable to the collection of the DuPont partial settlement associated with the dispute of the electricity calculation under its PPA in the second quarter of 2012.

	Six months ended June 30,

	2013		2012		% change 2013 vs. 2012
Northeast
Project Adjusted EBITDA	$	71.9	$	64.8		11	%

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Six months ended June 30, 2013 compared with six months ended June 30, 2012

Project Adjusted EBITDA for the six months ended June 30, 2013 increased $7.1 million or 11% from the comparable 2012 period primarily due to increases in Project Adjusted EBITDA of:

•: $4.4 million at Calstock primarily attributable to steam turbine maintenance that occurred in the second quarter of 2012;
•: $2.8 million at Curtis Palmer primarily attributable to increased generation resulting from higher water flows than the comparable period in 2012; and
•: $2.3 million at Kenilworth primarily attributable to increased capacity revenues under the month to month renewal of the project's energy service arrangement.

These increases were partially offset by decreases in Project Adjusted EBITDA of:

•: $3.8 million at Chambers primarily attributable to the collection of the DuPont partial settlement associated with the dispute of the electricity calculation under its PPA in the second quarter of 2012; and
•: $2.3 million at Tunis primarily attributable to lower generation and energy prices.

Southeast

The following table summarizes Project Adjusted EBITDA for our Southeast segment for the periods indicated:

	Three months ended June 30,

	2013		2012		% change 2013 vs. 2012
Southeast
Project Adjusted EBITDA	$	2.4	$	2.1	NM

Three months ended June 30, 2013 compared with three months ended June 30, 2012

Project Adjusted EBITDA in the Southeast segment did not change materially. Piedmont, which achieved commercial operations in April 2013, had $0.2 million of Project Adjusted EBITDA for the three months ended June 30, 2013.

Project Adjusted EBITDA for the Southeast segment excludes the Florida Projects which are accounted for as a component of discontinued operations. Project Adjusted EBITDA for Auburndale was $1.9 million and $12.9 million for the three months ended June 30, 2013 and 2012, respectively, Project Adjusted EBITDA for Lake was $0.6 million and $9.2 million for the three months ended June 30, 2013 and 2012, respectively and Project Adjusted EBITDA for Pasco was $0.2 million and $0.9 million for the three months ended June 30, 2013 and 2012, respectively. The decrease is attributable to the projects being sold in April 2013.

	Six months ended June 30,

	2013		2012		% change 2013 vs. 2012
Southeast
Project Adjusted EBITDA	$	4.5	$	4.2	NM

Six months ended June 30, 2013 compared with six months ended June 30, 2012

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Project Adjusted EBITDA for the Southeast segment excludes the Florida Projects which are accounted for as a component of discontinued operations. Project Adjusted EBITDA for Auburndale was $12.4 million and $23.4 million for the six months ended June 30, 2013 and 2012, respectively, Project Adjusted EBITDA for Lake was $13.7 million and $17.3 million for the six months ended June 30, 2013 and 2012, respectively and Project Adjusted EBITDA for Pasco was $1.2 million and $1.8 million for the six months ended June 30, 2013 and 2012, respectively. The decrease is attributable to the projects being sold in April 2013.

Northwest

The following table summarizes Project Adjusted EBITDA for our Northwest segment for the periods indicated:

	Three months ended June 30,

	2013		2012		% change 2013 vs. 2012
Northwest
Project Adjusted EBITDA	$	12.3	$	12.4		NM

Three months ended June 30, 2013 compared with three months ended June 30, 2012

Project Adjusted EBITDA for the three months ended June 30, 2013 decreased by $0.1 million from the comparable 2012 period primarily due to decreases in Project Adjusted EBITDA of:

•: $2.2 million at Mamquam resulting from higher maintenance costs due to a scheduled outage and decreased revenues caused by lower water levels; and
•: $3.1 million at Williams Lake resulting from lower generation and higher maintenance costs from a scheduled outage and decreased revenues due to a lower firm energy price beginning in April 2013 under the PPA.

These decreases were partially offset by increases in Project Adjusted EBITDA of:

•: $3.4 million at Meadow Creek which achieved commercial operations in December 2012; and
•: $1.2 million at Rockland attributable to an ownership percentage increase from 30% to 50% resulting from the Ridgeline acquisition in December 2012.

	Six months ended June 30,

	2013		2012		% change 2013 vs. 2012
Northwest
Project Adjusted EBITDA	$	33.6	$	25.9		30	%

Six months ended June 30, 2013 compared with six months ended June 30, 2012

Project Adjusted EBITDA for the six months ended June 30, 2013 increased by $7.7 million or 30% from the comparable 2012 period primarily due to increases in Project Adjusted EBITDA of:

•: $6.5 million at Meadow Creek which achieved commercial operations and was part of the Ridgeline acquisition in December 2012; and
•: $2.9 million at Rockland attributable to an ownership percentage increase from 30% to 50% resulting from the Ridgeline acquisition in December 2012.

These increases were partially offset by decreases in Project Adjusted EBITDA of:

•: $2.5 million at Mamquam resulting from higher maintenance costs due to a scheduled outage and decreased revenues caused by lower water levels.

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Southwest

The following table summarizes Project Adjusted EBITDA for our Southwest segment for the periods indicated:

	Three months ended June 30,

	2013		2012		% change 2013 vs. 2012
Southwest
Project Adjusted EBITDA	$	19.0	$	12.6		51	%

Three months ended June 30, 2013 compared with three months ended June 30, 2012

Project Adjusted EBITDA for the three months ended June 30, 2013 increased by $6.4 million or 51% from the comparable 2012 period primarily due to increases in Project Adjusted EBITDA of:

•: $7.8 million at Canadian Hills which became commercially operational in December 2012.

This increase was partially offset by decreases in Project Adjusted EBITDA of:

•: $1.7 million at Morris attributable to higher maintenance costs, higher fuel expenses, and lower revenues than the comparable period.

	Six months ended June 30,

	2013		2012		% change 2013 vs. 2012
Southwest
Project Adjusted EBITDA	$	35.0	$	24.7		42	%

Six months ended June 30, 2013 compared with six months ended June 30, 2012

Project Adjusted EBITDA for the six months ended June 30, 2013 increased by $10.3 million or 42% from the comparable 2012 period primarily due to increases in Project Adjusted EBITDA of:

•: $14.6 million at Canadian Hills which became commercially operational in December 2012; and
•: $2.0 million at Gregory attributable to lower maintenance costs, increased revenues, and increased generation.

These increases were partially offset by decreases in Project Adjusted EBITDA of:

•: $4.6 million at Morris attributable to higher maintenance costs, higher fuel expenses, and lower revenues.

Project Adjusted EBITDA for the Southwest segment excludes the Path 15 project which is accounted for as a component of discontinued operations and was sold on April 30, 2013. Project Adjusted EBITDA for Path 15 was $2.8 million and $9.0 million for the three and six months ended June 30, 2013, respectively and $4.4 million and $11.1 million for the three and six months ended June 30, 2012, respectively.

Cash Available for Distribution

The payout ratio associated with the cash dividends declared to shareholders was (165)% and 249% for the three months ended June 30, 2013 and 2012 respectively, and 48% and 89% for the six months ended June 30, 2013 and 2012, respectively. On February 28, 2013, we announced a reduction in the dividend level from a monthly dividend level of Cdn$0.09583 to Cdn$0.03333 commencing with the March 2013 dividend to shareholders of record on March 28, 2013. The payout ratio for the three

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months ended June 30, 2013 as compared to the same period in 2012 was negatively impacted by lower operating cash flows as a result of the sale of the Florida Projects and Path 15 in April 2013 and transaction costs incurred related to selling these projects. This was partially offset by reduced cash dividends declared to shareholders as well as the inclusion of operating results from Canadian Hills and Meadow Creek which achieved commercial operations in late December 2012. The payout ratio for the six months ended June 30, 2013 compared to the same period in 2012 was positively impacted by reduced cash dividends declared to shareholders. Due to the timing of numerous working capital adjustments and the cash payments associated with our corporate level interest payments, our payout ratio will fluctuate from quarter to quarter. For example, the interest payments on the $460 million Senior Notes are due semi-annually (May and November) and will impact our payout ratios in the second and fourth quarters.

The table below presents our calculation of Cash Available for Distribution for the three and six months ended June 30, 2013 and 2012, and the reconciliation to cash flows from operating activities, the most directly comparable GAAP measure:

(unaudited)	Three months ended June 30,						Six months ended June 30,

(in millions of U.S. dollars, except as otherwise stated)	2013			2012			2013			2012
Cash flows from operating activities ⁽¹⁾	$	7.2		$	22.9		$	96.9		$	89.3
Project-level debt repayments		(7.9	)		(6.6	)		(10.5	)		(9.3	)
Purchases of property, plant and equipment		(2.9	)		(0.1	)		(5.1	)		(0.8	)
Dividends on preferred shares of a subsidiary company		(3.1	)		(3.2	)		(6.3	)		(6.4	)

Cash Available for Distribution ⁽²⁾		(6.7	)		13.0			75.0			72.8
Total cash dividends declared to shareholders		11.0			32.3			36.3			65.1
Payout ratio		(165	)%		249	%		48	%		89	%

⁽¹⁾: We reclassified $(15.5) million from cash flows from operations to construction in progress in cash flows used in investing activities in the three months ended March 31, 2013. The reclassification increases Cash Available for Distribution from $66.2 million to $81.7 million and reduced the payout ratio from 38% to 31% for the three months ended March 31, 2013.
⁽²⁾: Cash Available for Distribution is not a recognized measure under GAAP and does not have any standardized meaning prescribed by GAAP. Therefore, this measure may not be comparable to similar measures presented by other companies. See "Supplementary Non-GAAP Financial Information" above.

Consolidated Cash Flows

At June 30, 2013, cash and cash equivalents increased $135.4 million from December 31, 2012 to $195.6 million. The increase in cash and cash equivalents was due to $96.9 million provided by operating activities and $151.3 provided by investing activities offset by $119.3 million of cash used in financing activities. The operating, investing and financing activities include the Florida Projects and Path 15 discontinued operations. There was $6.5 million of cash located at these projects at December 31, 2012.

At June 30, 2012, cash and cash equivalents increased $2.0 million from December 31, 2011 to $62.7 million. The increase in cash and cash equivalents was primarily due to $89.3 million provided by

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operating activities and $117.7 million of cash provided by financing activities, offset by $205.0 million of cash used in investing activities.

	Six months ended June 30,						$ Change

	Six months ended June 30,						2013 vs. 2012
	2013			2012			2013 vs. 2012
Net cash provided by operating activities	$	96.9		$	89.3		$	7.6
Net cash provided by (used in) investing activities		151.3			(205.0	)		356.3
Net cash (used in) provided by financing activities		(119.3	)		117.7			(237.0	)

Operating Activities

Our cash flow from the projects may vary from year to year based on working capital requirements and the operating performance of the projects, as well as changes in prices under the PPAs, fuel supply and transportation agreements, steam sales agreements and other project contracts and the transition to market or re-contracted pricing following the expiration of PPAs. Project cash flows may have some seasonality and the pattern and frequency of distributions to us from the projects during the year can also vary, although such seasonal variances do not typically have a material impact on our business.

Cash flow from operating activities increased by $7.6 million for the six months ended June 30, 2013 from the comparable period in 2012. The change from the prior year is primarily attributable to the increases in Project Adjusted EBITDA noted above.

Investing Activities

Cash flow from investing activities includes changes in restricted cash. Restricted cash fluctuates from period to period in part because non-recourse project-level financing arrangements typically require all operating cash flow from the project to be deposited in restricted accounts and then released at the time that principal payments are made and project-level debt service coverage ratios are met. As a result, the timing of principal payments on project-level debt causes significant fluctuations in restricted cash balances, which typically benefits investing cash flow in the second and fourth quarters of the year and decreases investing cash flow in the first and third quarters of the year.

Cash flow provided by (used in) investing activities includes cash used to fund acquisitions and construct development projects in North American markets. Cash flows provided by investing activities for the six months ended June 30, 2013 were $151.3 million compared to cash flows used in investing activities of $205.0 million for the six months ended June 30, 2012. The change is due to a $219.5 million decrease of cash used in construction in progress related to the Piedmont and Canadian Hills projects which have both recently completed construction and achieved commercial operations, partially offset by $148.3 million in cash received for the sale of the Florida Projects and Path 15 and $53.7 million in treasury grant proceeds received for Meadow Creek in the six months ended June 30, 2013.

Financing Activities

Cash used in financing activities for the six months ended June 30, 2013 resulted in a net outflow of $119.3 million compared to a net inflow of $117.7 million for the comparable 2012 period. The change from the prior year is due to a $234.5 million decrease in the proceeds from long-term debt primarily attributable to $176.1 million construction loan proceeds received for the Canadian Hills construction loan in the six months ended June 30, 2012 and a $54.9 million increase in the repayment of project level debt primarily related to Meadow Creek's construction debt paid down with treasury grant proceeds. This was partially offset by an $18.9 million decrease in dividends paid to common shareholders and $44.6 million received in equity contributions from noncontrolling interests at Canadian Hills.

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Liquidity and Capital Resources

(in millions of U.S. dollars, except as otherwise stated)	June 30, 2013		December 31, 2012		June 30, 2013 ⁽¹⁾

Cash and cash equivalents	$	195.6	$	60.2	$	120.6
Restricted cash		40.1		28.6		115.1

Total		235.7		88.8		235.7
Senior credit facility availability		217.5		120.1		67.5

Total liquidity	$	453.2	$	208.9	$	303.2

⁽¹⁾: This column represents a pro forma liquidity as of June 30, 2013 pursuant to the August 2, 2013 amended credit facility as discussed below.

Overview

Our primary sources of liquidity are distributions from our projects and availability of letters of credit under our senior credit facility. Substantially all of the cash received from project distributions is used to pay dividends to our common and preferred shareholders and interest on our outstanding convertible debentures, senior notes and other corporate-level debt. Our liquidity depends in part on our ability to successfully enter into new PPAs at facilities where PPAs expire or terminate. PPAs in our portfolio have expiration dates ranging from August 2013 to 2037. When a PPA expires or is terminated, it may be difficult for us to secure a new PPA, if at all, or the price received by the project for power under subsequent arrangements may be reduced significantly, which may reduce the cash received from project distributions. We may fund future acquisitions with a combination of cash on hand, the issuance of additional corporate debt or equity securities and the incurrence of privately-placed bank or institutional non-recourse operating level debt, although we can provide no assurances regarding the availability of public or private financing on acceptable terms or at all.

We do not expect any material unusual requirements for cash outflows during the remainder of 2013 for capital expenditures or other required investments. In addition, as of August 5, 2013, there are no debt instruments with maturities in 2013. In April 2013, we utilized a portion of the net proceeds received from the sale of the Florida Projects to fully repay our senior credit facility which had an outstanding balance of $64.1 million at close of the transaction. At June 30, 2013, our senior credit facility was undrawn and the applicable margin was 2.75%. As of June 30, 2013, $82.5 million was issued in letters of credit, but not drawn, to support contractual credit requirements at several of our projects. We must meet certain financial covenants under the terms of our senior credit facility, which are generally based on ratios as described in Note 5 to the consolidated financial statements in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2013 and in Note 9 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012.

We believe that we will be able to generate sufficient amounts of cash and cash equivalents to maintain our operations and meet obligations as they become due for the next 12 months.

On August 2, 2013 we entered into the amended credit facility. The most significant changes to the senior credit facility include the following:

•: a decrease in capacity from $300 million to $150 million, all of which may be utilized for letters of credit (as compared to the previous $200 million that could have been utilized for letters of credit) and a sublimit of $25 million which may be utilized for other borrowings;

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•: a requirement to cash collateralize outstanding letters of credit in an amount equal to the excess above $125 million if the aggregate amount of letters of credit and borrowings outstanding under the amended facility exceeds $125 million;
•: a requirement to maintain at all times unrestricted cash and cash equivalents of at least $75 million (inclusive of any cash collateral provided as described above), which amounts shall be pledged to the lenders as security for the amended credit facility;
•: an amendment to the maximum permissible Consolidated Total Net Debt to Consolidated EBITDA ratio (each as defined in the amended credit facility) to 7.75 to 1.00 (as compared to a prior ratio of 7.50 to 1.00 declining to 7.00 to 1.00 over time);
•: an amendment to the minimum permissible Consolidated EBITDA to Consolidated Interest Expense (each as defined in the amended credit facility) ratio to 1.60 to 1.00 (as compared to a prior ratio of 2.25 to 1.00);
•: a requirement to pay a commitment fee of between 0.75% and 1.75% per year based on a percentage of the amount committed under the amended credit facility, which fee varies based on our unsecured debt rating (currently, the applicable commitment fee is 1.50%); and
•: an amendment to the maturity date from November 4, 2015 to March 4, 2015.

Among other restrictions set forth in the amended credit facility, we are restricted from paying cash dividends to our shareholders if we do not comply with the financial covenants specified above. The amended credit facility is secured by pledges of certain assets and interests in certain subsidiaries. The senior credit facility contained customary representations, warranties, terms and conditions, and covenants, certain of which were amended in the amended credit facility. The amended covenants limit our ability to, among other things, incur additional indebtedness, merge or consolidate with others, make acquisitions, change our business and sell or dispose of assets. These amended covenants also include limitations on investments, limitations on dividends and other restricted payments, limitations on entering into certain types of restrictive agreements, limitations on transactions with affiliates and limitations on the use of proceeds from the amended credit facility. Specifically, under the amended credit facility, we are only permitted to make voluntary prepayments or repurchases of the $150 million in principal amount of 5.87% Senior Guaranteed Notes, Series A, due August 15, 2015 that were issued by our subsidiary Atlantic Power (US) G.P., except that under the amended credit facility we may also voluntarily prepay or repurchase any of our outstanding debt (including for these purposes subsidiary debt guaranteed by us) from the proceeds of debt permitted to be incurred to refinance that outstanding debt or during the 60-day period preceding the maturity of that outstanding debt. Under the senior credit facility, we had the right generally to repurchase substantially more of our outstanding debt issuances, subject to the satisfaction of certain conditions. Under the amended credit facility, the lenders also consented to (i) our previously announced sale of Delta-Person and (ii) the sale of AP Onondaga, LLC, Onondaga Renewables, LLC and their property.

Borrowings under the amended credit facility are available in U.S. dollars and Canadian dollars and bear interest at a variable rate equal to the US Prime Rate, the Eurocurrency LIBOR Rate or the Cdn. Prime Rate (each as defined in the amended credit facility), as applicable, plus a margin of between 1.75% and 4.75% that varies based on our unsecured debt rating. Currently, the applicable margin for loans bearing interest at the Eurocurrency LIBOR Rate and for the outstanding letters of credit is 4.25%. The foregoing summary is qualified in its entirety by reference to the amended credit facility which has been filed as an exhibit to our Current Report on Form 8-K on August 5, 2013.

We expect to meet covenants under the amended credit facility for the next twelve months. As of August 5, 2013, we were in compliance with these covenants.

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We must also meet certain financial covenants under the terms of our 9% senior unsecured notes, including a Consolidated EBITDA to Consolidated Interest Expense ratio. As of August 5, 2013, we were in compliance with these ratios. After further review of our currently forecasted results and taking into account implications of our recently amended credit facility, we currently believe that it is likely, during the third quarter of 2014, that we may not meet the provision requiring that our Fixed Charge Coverage Ratio (included in the restricted payments covenant in the indenture governing our 9% senior unsecured notes) be no less than 1.75 to 1.00. If we are not in compliance with this covenant, dividend payments in the aggregate must not exceed the basket provision in such covenant of the greater of $50 million and 2% of Consolidated Net Assets (approximately $68 million at June 30, 2013). Based on the current dividend level, we believe that this basket would permit the payment of the current dividend level for at least 12 months beyond a determination of non-compliance. Additionally, during any potential period of non-compliance, we would be permitted under other basket provisions of the indenture to borrow up to $350 million under a revolving credit facility and incur additional indebtedness of up to 15% of Consolidated Net Assets (approximately $500 million at June 30, 2013). Dividends or borrowings made in compliance with such basket provisions would not trigger an event of default under such indenture or a cross-default with respect to our other indebtedness.

We are currently considering various initiatives to maintain compliance with such covenants, including potentially, among other things, debt reduction, expense reduction and asset optimization. Because we are at the preliminary stages of considering initiatives, we cannot provide assurance that any of these potential initiatives will be successful.

Defined terms used in the foregoing discussion are as defined in the indenture governing the 9% senior unsecured notes and the foregoing summary is qualified in its entirety by reference to such indenture, which has been filed as an exhibit to our Annual Report on Form 10-K.

Corporate Debt

The following table summarizes the maturities of our corporate debt at June 30, 2013:

			Total Remaining Principal Repayments		2013		2014		2015		2016		2017		Thereafter

Atlantic Power Corporation Notes	9.0	%	$	460.0	$	—	$	—	$	—	$	—	$	—	$	460.0
Atlantic Power US (GP) Note	6.0	%		150.0		—		—		150.0		—		—		—
Atlantic Power US (GP) Note	5.9	%		75.0		—		—		—		—		75.0		—
Atlantic Power Income LP Note	6.0	%		199.7		—		—		—		—		—		199.7
Convertible Debenture	6.5	%		42.6		—		42.6		—		—		—		—
Convertible Debenture	6.3	%		64.1		—		—		—		—		64.1		—
Convertible Debenture	5.6	%		76.5		—		—		—		—		76.5		—
Convertible Debenture	5.8	%		130.0		—		—		—		—		—		130.0
Convertible Debenture	6.0	%		95.1		—		—		—		—		—		95.1

Total Corporate Debt			$	1,293.0	$	—	$	42.6	$	150.0	$	—	$	215.6	$	884.8

Project-Level Debt

The following table summarizes the maturities of project-level debt. The amounts represent our share of the non-recourse project-level debt balances at June 30, 2013 and exclude any purchase accounting adjustments recorded to adjust the debt to its fair value at the time the project was acquired. Certain of the projects have more than one tranche of debt outstanding with different maturities, different interest rates and/or debt containing variable interest rates. Project-level debt agreements contain covenants that restrict the amount of cash distributed by the project if certain debt service coverage ratios are not attained. As of June 30, 2013, the covenants at Delta-Person, for which we have entered into an agreement to sell and Gregory which was sold on August 7, 2013, are temporarily preventing those projects from making cash distributions to us. All project-level debt is non-recourse to us and substantially all of the principal is amortized over the life of the projects' PPAs. The non-recourse holding company debt relating to our investment in Chambers is held at Epsilon Power Partners, our wholly owned subsidiary.

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The range of interest rates presented represents the rates in effect at June 30, 2013. The amounts listed below are in millions of U.S. dollars, except as otherwise stated.

	Range of Interest Rates	Total Remaining Principal Repayments		2013		2014		2015		2016		2017		Thereafter

Consolidated Projects:
Epsilon Power Partners	7.4%	$	32.0	$	1.5	$	5.0	$	5.8	$	6.0	$	6.3	$	7.4
Piedmont ⁽¹⁾	3.8% – 5.2%		126.1		53.6		4.5		4.5		3.4		2.9		57.2
Cadillac	6.0% – 8.0%		36.6		1.2		2.0		3.9		2.5		3.0		24.0
Rockland	6.4% – 6.7%		85.8		0.4		1.5		1.8		1.9		2.2		78.0
Ridgeline	5.5% – 5.9%		0.3		—		—		—		—		0.3		—
Curtis Palmer ⁽²⁾	5.9%		190.0		—		190.0		—		—		—		—
Meadow Creek	5.1% – 5.6%		171.4		1.6		4.9		4.6		5.3		5.3		149.7

Total Consolidated Projects			642.2		58.3		207.9		20.6		19.1		20.0		316.3
Equity Method Projects:
Chambers	0.6% – 7.2%		46.7		5.5		0.9		0.2		0.1		—		40.0
Delta-Person ⁽³⁾	1.9%		7.1		0.6		1.3		1.4		1.5		1.1		1.2
Gregory ⁽⁴⁾	2.3% – 7.7%		9.6		1.0		2.1		2.2		2.4		1.9		—
Goshen	3.0% – 7.1%		24.6		0.3		0.4		0.5		0.7		0.9		21.8
Idaho Wind	5.6%		48.0		1.3		2.4		2.6		2.5		2.7		36.5

Total Equity Method Projects			136.0		8.7		7.1		6.9		7.2		6.6		99.5

Total Project-Level Debt		$	778.2	$	67.0	$	215.0	$	27.5	$	26.3	$	26.6	$	415.8

⁽¹⁾: As of June 30, 2013 the balance of $126.1 million on the Piedmont debt was funded by a $51.0 million bridge loan and an $82.0 million construction loan ($75.1 million at June 30, 2013) that is expected to convert to a term loan in the third quarter of 2013. On April 19, 2013, Piedmont achieved commercial operations and submitted an application under the 1603 federal grant program to recover approximately 30% of its capital cost. The grant application was approved and we received a $49.5 million grant from the U.S. Treasury in July 2013. Upon receipt of the grant, we repaid in full the $51.0 million bridge loan with the proceeds of the grant and a $1.5 million contribution from Atlantic Power to cover the shortfall resulting from the federal sequester on spending. We expect to commence the repayment of the $75.1 million balance of the construction loan in 2013.
⁽²⁾: The Curtis Palmer Notes are not considered non-recourse project-level debt as these notes are guaranteed by the Partnership. Interest expense associated with the Curtis Palmer notes are recorded as a component of project income.
⁽³⁾: We have entered into an agreement to sell our interest in the Delta-Person project with plans to close the sale in the fourth quarter of 2013.
⁽⁴⁾: The Gregory project was sold on August 7, 2013.

Uses of Liquidity

Our requirements for liquidity and capital resources, other than operating our projects, consist primarily of dividend payments to our common shareholders and preferred shareholders of a subsidiary company, principal and interest on our outstanding convertible debentures, Senior Notes and other corporate and project level debt and capital expenditures, including major maintenance and business development costs. We may fund future acquisitions with a combination of cash on hand, the issuance of additional corporate debt or equity securities and the incurrence of privately placed bank or institutional non-recourse operating level debt, although we can provide no assurances regarding the availability of public or private financing on acceptable terms or at all.

Capital and Major Maintenance Expenditures

Capital expenditures and maintenance expenses for the projects are generally paid at the project level using project cash flows and project reserves. Therefore, the distributions that we receive from the

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projects are made net of capital expenditures needed at the projects. The operating projects which we own consist of large capital assets that have established commercial operations. On-going capital expenditures for assets of this nature are generally not significant because most major expenditures relate to planned repairs and maintenance and are expensed when incurred.

We expect to reinvest approximately $30 to $35 million in 2013 in our project portfolio in the form of capital expenditures and major maintenance expenses, of which we have already reinvested approximately $23.3 million as of June 30, 2013. As explained above, this investment is generally paid at the project level. We believe one of the benefits of our diverse fleet is that plant overhauls and other major expenditures do not occur in the same year for each facility. Recognized industry guidelines and original equipment manufacturer recommendations provide a source of data to assess major maintenance needs. In addition, we utilize predictive and risk based analysis to refine our expectations, prioritize our spending and balance the funding requirements necessary for these expenditures over time. Future capital expenditures and major maintenance expenses may exceed the level in 2012 or the projected level in 2013 as a result of the timing of more infrequent events such as steam turbine overhauls and/or gas turbine and hydroelectric turbine upgrades.

In all cases, scheduled maintenance outages during the three and six months ended June 30, 2013 and 2012 occurred at such times that did not adversely impact the facilities' availability requirements under their respective PPAs.

Recently Adopted and Recently Issued Accounting Guidance

See Note 1 to the consolidated financial statements in this Quarterly Report on Form 10-Q.

Off-Balance Sheet Arrangements

As of June 30, 2013, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and commodity prices, will affect our cash flows or the value of our holdings of financial instruments. The objective of market risk management is to minimize the impact that market risks have on our cash flows as described in the following paragraphs.

Our market risk-sensitive instruments and positions have been determined to be "other than trading." Our exposure to market risk as discussed below includes forward-looking statements and represents an estimate of possible changes in fair value or future earnings that would occur assuming hypothetical future movements in fuel and electricity commodity prices, currency exchange rates or interest rates. Our views on market risk are not necessarily indicative of actual results that may occur and do not represent the maximum possible gains and losses that may occur, since actual gains and losses will differ from those estimated based on actual fluctuations in fuel commodity prices, currency exchange rates or interest rates and the timing of transactions. See Note 6 to the consolidated financial statements, Derivative instruments and hedging activities for additional information.

Fuel Commodity Market Risk

Our current and future cash flows are impacted by changes in electricity, natural gas and coal prices. See "Item 1A. Risk Factors—Risks Related to Our Business and Our Projects—Our projects depend on third-party suppliers under fuel supply agreements, and increases in fuel costs may adversely affect the profitability of the projects" in our Annual Report on Form 10-K for the year ended December 31, 2012. The combination of long-term energy sales and fuel purchase agreements is

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generally designed to mitigate the impacts to cash flows of changes in commodity prices by passing through changes in fuel prices to the buyer of the energy.

The operating margin at our 50% owned Orlando project is also exposed to changes in natural gas prices following the expiration of its fuel contract at the end of 2013. As of August 5, 2013, we have entered into natural gas swaps in order to effectively fix approximately 74% of our share of the expected natural gas purchases at the project during 2014 and 2015 and approximately 38% of our share of the expected natural gas purchases at the project during 2016 and 2017.

In April and June 2013, we entered into contracts for the purchase of natural gas beginning on November 1, 2013 and expiring on March 31, 2014 for the Tunis project in order to fix approximately 50% of the expected natural gas purchase requirement during that period. Adjusted for these transactions, projected annual cash distributions at Tunis in 2013 would change by approximately $1.6 million per $1.00/MMBtu change in the price of natural gas based on the current level of natural gas volumes used by the project.

Electricity Commodity Market Risk

Our current and future cash flows are impacted by changes in electricity prices when our projects operate with no PPA or projects that operate with PPAs that are based on spot market pricing. Our most significant exposure to market power prices is at the Chambers and Morris projects. At Chambers, our utility customer has the right to sell a portion of the plant's output into the spot power market if it is profitable to do so, and the Chambers project shares in the profits from these sales. In addition, during periods of low spot electricity prices the utility takes less generation, which negatively affects the project's operating margin. In 2013, projected cash distributions at Chambers would change by approximately $0.6 million per 10% change in the spot price of electricity based on a forecasted level of approximately $42/MWh and certain other assumptions. Our equity investment in the Chambers project is 40%. At Morris, the facility can sell approximately 100MW above the off-taker's demand into the grid at market prices. If market prices do not justify the increased generation the project has no requirement to sell power in excess of the off-taker's demand which can negatively impact operating margins. In 2013, projected cash distributions at Morris would change by approximately $1.0 million per 20% change in the spot price of electricity based on the current level of approximately 300,000 MWh grid sales and all other variables being held constant. We own 100% of the Morris project. See Item 1A. "Risk Factors—Risks Related to Our Business and Our Projects—Certain of our projects are exposed to fluctuations in the price of electricity, which may have a material adverse effect on the operating margin of these projects and on our business, results of operations and financial condition" in our Annual Report on Form 10-K for the year ended December 31, 2012.

When a PPA expires or is terminated, it is possible that the price received by the project for power under subsequent arrangements may be reduced and in some cases, significantly. Our projects may not be able to secure a new agreement and could be exposed to sell power at spot market prices. See Item 1A. "Risk Factors—Risks Related to Our Business and Our Projects—The expiration or termination of our power purchase agreements could have a material adverse impact on our business; results of operations and financial condition" in our Annual Report on Form 10-K for the year ended December 31, 2012. It is possible that subsequent PPAs or the spot markets may not be available at prices that permit the operation of the project on a profitable basis. If this occurs, the affected project may temporarily or permanently cease operations.

Foreign Currency Exchange Risk

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predominantly in Canadian dollars. We have a hedging strategy for the purpose of mitigating the currency risk impact on future payments of dividends to shareholders. We have executed this strategy utilizing cash flows from our projects that generate Canadian dollars and by entering into forward contracts to purchase Canadian dollars at a fixed rate to hedge an average of approximately 71% of our expected dividend, long-term debt and convertible debenture interest payments through 2015. Changes in the fair value of the forward contracts partially offset foreign exchange gain or losses on the U.S. dollar equivalent of our Canadian dollar obligations. At June 30, 2013, the forward contracts consist of (1) monthly purchases through the end of July 2013 of Cdn$6.0 million at an exchange rate of Cdn$1.134 per U.S. dollar and (2) contracts assumed in our acquisition of the Partnership with various expiration dates through December 2015 to purchase a total of Cdn$34.9 million at an average exchange rate of Cdn$1.10 per U.S. dollar. It is our intention to periodically consider extending or terminating these forward contracts. In April 2013, we terminated various foreign currency forward contracts with expiration dates through June 2015 assumed in our acquisition of the Partnership, resulting in proceeds of $9.4 million.

The foreign exchange forward contracts are recorded at estimated fair value based on quoted market prices and the estimation of the counter-party's credit risk. Changes in the fair value of the foreign currency forward contracts are recorded in foreign exchange (gain) loss in the consolidated statements of operations.

The following table contains the components of recorded foreign exchange (gain) loss for the three and six months ended June 30, 2013 and 2012 (in millions):

	Three months ended June 30,						Six months ended June 30,

	2013			2012			2013			2012
Unrealized foreign exchange (gain) loss:
Convertible debentures and other	$	(16.5	)	$	(8.8	)	$	(27.5	)	$	(1.1	)
Forward contracts		12.8			7.7			18.8			12.9

		(3.7	)		(1.1	)		(8.7	)		11.8
Realized foreign exchange gains on forward contract settlements		(10.8	)		(3.1	)		(13.3	)		(15.0	)

Total foreign exchange gain	$	(14.5	)	$	(4.2	)	$	(22.0	)	$	(3.2	)

The U.S dollar to Canadian dollar exchange rate was 1.0518 at June 30, 2013. The following table illustrates the impact on the fair value of our financial instruments of a 10% hypothetical change in the value of the U.S. dollar compared to the Canadian dollar as of June 30, 2013 (in millions):


Convertible debentures denominated in Canadian dollars, at carrying value	$	(25.3	)
Foreign currency forward contracts	$	3.9

Interest Rate Risk

Changes in interest rates do not have a significant impact on cash payments that are required on our debt instruments as approximately 94% of our debt, including our share of the project-level debt associated with equity investments in affiliates, either bears interest at fixed rates or is financially hedged through the use of interest rate swaps. After considering the impact of interest rate swaps described below, a hypothetical change in the average interest rate of 100 basis points would change annual interest costs, including interest at equity investments, by approximately $1.9 million.

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Cadillac

We have an interest rate swap at our consolidated Cadillac project to economically fix its exposure to changes in interest rates related to the variable-rate debt. The interest rate swap agreement was designated as a cash flow hedge of the forecasted interest payments under the project-level Cadillac debt and changes in their fair market value are recorded in other comprehensive income (loss). The interest rate swap expires on September 30, 2025.

In accounting for the cash flow hedge, gains and losses on the derivative contract are reported in other comprehensive income (loss), but only to the extent that the gains and losses from the change in value of the derivative contracts can later offset the loss or gain from the change in value of the hedged future cash flows during the period in which the hedged cash flows affect net income (loss). That is, for cash flow hedge, all effective components of the derivative contract's gains and losses are recorded in other comprehensive income (loss), pending occurrence of the expected transaction. Other comprehensive income (loss) consists of those financial items that are included in "Accumulated other comprehensive loss" in our accompanying consolidated balance sheets but not included in our net income (loss). Thus, in highly effective cash flow hedges, where there is no ineffectiveness, other comprehensive income changes by exactly as much as the derivative contracts and there is no impact on net income (loss) until the expected transaction occurs.

Piedmont

We executed two interest rate swaps at our consolidated Piedmont project to economically fix its exposure to changes in interest rates related to its variable-rate debt. The interest rate swap agreements are not designated as hedges and changes in their fair market value are recorded in the statements of operations. The interest rate swaps expire on February 29, 2016 and November 30, 2030, respectively.

Epsilon Power Partners

Epsilon Power Partners, a wholly owned subsidiary, has an interest rate swap to economically fix the exposure to changes in interest rates related to the variable-rate non-recourse debt. The interest rate swap agreement effectively converted the floating rate debt to a fixed interest rate of 7.4% and a maturity date of July 2019. The notional amount of the swap matches the outstanding principal balance over the remaining life of Epsilon Power Partners' debt. This interest rate swap agreement is not designated as a hedge and changes in its fair market value are recorded in the consolidated statements of operations.

Meadow Creek

Meadow Creek executed interest rate swaps that we assumed in our acquisition to economically fix the exposure to changes in interest rates related to 75% of the outstanding variable-rate non-recourse debt. These swaps effectively modify the project's exposure by converting the project's floating rate debt to a fixed basis. The interest rate swaps are with various counterparties and swap the expected interest payments from floating LIBOR to fixed rates structured in two tranches. The first tranche is for the notional amount due of the term loan commencing on December 30, 2012 and ending December 31, 2024 and fixes the interest rate at 2.3% plus an applicable margin of 2.8% – 3.3%. The second tranche is the post-term portion of the loan, or the balloon payment and commences on December 31, 2024 and ends on December 31, 2030 fixing the interest rate at 7.2%.

Rockland

The Rockland project entered into interest rate swaps to manage interest rate risk exposure. These swaps effectively modify the project's exposure by converting the project's floating rate debt to a fixed basis. The interest rate swaps are with various counterparties and swap 100% of the expected interest

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payments from floating LIBOR to fixed rates structured in two tranches. The first tranche is for the notional amount due on the term loan commencing on December 30, 2011 and ending December 31, 2026 and fixes the interest rate at 4.2% plus an applicable margin of 2.3% – 2.8%. The second tranche is the post-term portion of the loan, or the balloon payment and commences on December 31, 2026 and ends on December 31, 2031 fixing the interest rate at 7.8%.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report, and they have concluded that these controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the three and six months ended June 30, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Disclosure Controls and Internal Control over Financial Reporting

Because of their inherent limitations, our disclosure controls and procedures and our internal control over financial reporting may not prevent material errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to risks, including that the control may become inadequate because of changes in conditions or that the degree of compliance with our policies or procedures may deteriorate.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Shareholder class action lawsuits

On March 8, 14, 15 and 25, 2013 and April 23, 2013, five purported securities fraud class action complaints were filed by alleged investors in Atlantic Power common shares in the District Court against Atlantic Power and Barry E. Welch, our President and Chief Executive Officer and a Director of Atlantic Power, in each of the actions, and, in addition to Mr. Welch, some or all of Patrick J. Welch, our former Chief Financial Officer, Lisa Donahue, our former interim Chief Financial Officer, and Terrence Ronan, our current Chief Financial Officer, in certain of the actions.

The parties to each District Court action have filed joint motions requesting that the District Court set a schedule in the District Court actions, including: (i) setting a deadline for the lead plaintiff to file an Amended Complaint, after the appointment of lead plaintiff and counsel; (ii) setting a deadline for Defendants to answer, file a motion to dismiss or otherwise respond to the Amended Complaint (and for subsequent briefing regarding any such motion to dismiss); and (iii) confirming that Defendants need not answer, move to dismiss or otherwise respond to any of the five District Court complaints prior to the filing of the Amended Complaint. On May 7, 2013, the U.S. Lead Plaintiff Applicants filed the U.S. Lead Plaintiff Motions with the District Court seeking: (i) to consolidate the five U.S. Actions; (ii) to be appointed lead plaintiff in the Consolidated U.S. Action; and (iii) to have its choice of lead counsel confirmed. On May 22, 2013, three of the U.S. Lead Plaintiff Applicants filed oppositions to the other U.S. Lead Plaintiff Motions, and on June 6, 2013, those three Lead Plaintiff

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Applicants filed replies in support of their respective motions. The District Court has scheduled a hearing for August 9, 2013 to address, among other issues, the Lead Plaintiff Motions.

Morris

On May 29, 2011, our Morris facility was struck by lightning. As a result, steam and electric deliveries were interrupted to our host Equistar. We believed the interruption constituted a force majeure under the energy services agreement with Equistar. Equistar disputed this interpretation and initiated arbitration proceedings under the relevant agreement for recovery of resulting lost profits and equipment damage among other items. The Equistar arbitration claim has now been fully resolved. The lost profits portion of the claim was dismissed by the Arbitration Panel and all claims for equipment damage were resolved by the parties and their insurers through mediation on April 11 and 12, 2013, and a definitive Settlement Agreement and Mutual Release was executed effective as of April 30, 2013.

Other

From time to time, Atlantic Power, its subsidiaries and the projects are parties to disputes and litigation that arise in the normal course of business. We assess our exposure to these matters and record estimated loss contingencies when a loss is likely and can be reasonably estimated. With respect to such other matters arising in the normal course of business, there are no matters pending as of June 30, 2013 that are expected to have a material impact on our financial position or results of operations or have been reserved for as of June 30, 2013.

Other than as described above, there were no material changes to legal proceedings disclosed in "Item 3. Legal Proceedings" of our Annual Report on Form 10-K for the year ended December 31, 2012.

ITEM 1A. RISK FACTORS

There were no material changes to the risk factors disclosed in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2012, other than as set forth in "Part II. Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the three months ended March 31, 2013 (except to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations").

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ITEM 6. EXHIBITS

EXHIBIT INDEX

		Description

4.1		Advance Notice Policy, dated April 1, 2013 (incorporated by reference to our Current Report on Form 8-K filed on April 3, 2013)
10.1	*	Fifth Amended and Restated Atlantic Power Holdings, Inc. Long Term Incentive Plan, dated April 11, 2013
10.2	*	Participation Agreement and Confirmation between the Company and Paul H. Rapisarda, dated April 11, 2013
10.3	*	Participation Agreement and Confirmation (performance-based vesting) between the Company and Terrence Ronan, dated April 11, 2013
10.4	*	Offer Letter between the Company and Edward C. Hall, dated March 26, 2013
10.5	*	Employment Agreement between the Company and Terrence Ronan, dated April 15, 2013
10.6	*	Amended and Restated Employment Agreement between the Company and Paul H. Rapisarda, dated April 15, 2013
10.7	*	Employment Agreement between the Company and Edward C. Hall, dated April 15, 2013
10.8	*	Amended and Restated Employment Agreement between the Company and Barry E. Welch, dated April 15, 2013
10.9	*	Participation Agreement and Confirmation between the Company and Edward C. Hall dated April 2, 2013
10.10	*	Participation Agreement and Confirmation (time vesting) between the Company and Terrence Ronan dated April 11, 2013
12.1	*	Statement re: Computation of Ratios
31.1	*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
31.2	*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
32.1	**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase.
101.DEF		XBRL Taxonomy Extension Definition Linkbase.
101.LAB		XBRL Taxonomy Extension Label Linkbase.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase.

*: Filed herewith.
**: Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Exhibit 10.1

ATLANTIC POWER HOLDINGS, INC.
FIFTH AMENDED AND RESTATED
LONG-TERM INCENTIVE PLAN

RECITALS

A. The Board initially adopted the Plan on May 10, 2006, which Plan was then approved by the shareholders of the Issuer on June 7, 2006 and implemented by Atlantic Power Holdings, LLC, the predecessor of Atlantic Holdings.

B. The Board approved an amended and restated Plan effective April 24, 2007 to reflect certain amendments of an administrative, non-material nature.

C. The independent directors of the Board approved the terms of the second amended and restated Plan on April 24, 2008, which amended and restated Plan was then approved by the shareholders of the Issuer on June 4, 2008 and implemented by Atlantic Power Holdings, LLC.

D. The Board approved the terms of the third amended and restated Plan on January 29, 2010 for use beginning in the Issuer’s 2010 fiscal year.

E. The Board approved the terms of the fourth amended and restated long-term incentive Plan effective as of November 5, 2011 to reflect certain amendments necessary or desirable in connection with the completion of the direct and indirect acquisition by the Issuer of all of the limited partnership units of Capital Power Income L.P.

F. During April 2012, the Compensation Committee approved certain changes to the fourth amended and restated long-term incentive Plan that are reflected in this fifth amended and restated long-term incentive Plan.

1. PURPOSE

The purpose of the Plan is to align the interests of Eligible Persons with those of the holders of common shares (“ Common Shares ”) of Atlantic Power Corporation (the “ Issuer ”), to assist in attracting, retaining and motivating key employees of the Issuer and its subsidiaries by making a significant portion of the incentive compensation of key employees directly dependent upon the achievement of key strategic, financial and operational objectives that are critical to ongoing growth and profitability of the Issuer.

2. DEFINITIONS

In this Plan:

“ Administrators ” refers to the Compensation Committee of the Board or Person(s) to whom the Independent Directors delegate their powers hereunder;

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative

meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise;

“ Aggregate Performance Amount ” means the amount determined in accordance with Section 6 hereof;

“ Annual LTIP Award ” has the meaning set forth in Section 6 hereof;

“ Associate ” has the meaning ascribed by the Securities Act (Ontario);

“ Atlantic Holdings ” means Atlantic Power Holdings, Inc., a U.S. “C” corporation under the laws of the State of Delaware;

“ Award Amount ” has the meaning set forth in Section 5 hereof;

“ Base Salary ” means the base salary paid by the Issuer or any of its subsidiaries to a Participant for his or her services, as the same may be amended from time to time;

“ Board ” the board of directors of the Issuer;

“ Budget Date ” means the date on which the Board approves the Issuer’s projection of project distributions and the management and administrative budget for its upcoming fiscal year;

“ Business Day ” means any day, other than a Saturday, Sunday, or a day on which the principal chartered banks located in the Province of Ontario or British Columbia or the State of Massachusetts are not open for business during normal business hours;

“ Cause ” means any conduct by an Eligible Person which would constitute just cause for dismissal as recognized by law in the province or state in which the Eligible Person is employed or, where cause is defined in the employment agreement of an Eligible Person, as defined therein;

“ CEO ” means the Chief Executive Officer of the Issuer;

“ Change of Control ” means the occurrence of any of the following:

(a) the sale, lease or transfer to any person or group, in one or a series of related transactions, of the assets of the Issuer or Atlantic Holdings which assets generated more than 50% of Atlantic Holdings’ total cash distributions received from the assets owned, directly or indirectly, by the Issuer in a 12-month period ended on the last day of the most recent fiscal quarter to any person or group;

(b) the adoption of a plan related to the liquidation or dissolution of the Issuer or Atlantic Holdings;

(c) the acquisition by any person or group of a direct or indirect interest in more than 50% of (i) the Common Shares or the common shares of Atlantic Holdings; or (ii) the voting power of the Issuer or Atlantic Holdings; by way of purchase, merger, or consolidation or otherwise (other than a creation of a holding company that does not involve a change in the beneficial ownership of Atlantic Holdings as a result of such transaction);

(d) the merger or consolidation of the Issuer or Atlantic Holdings with or into another person or the merger of another person into the Issuer or Atlantic Holdings with the effect that immediately after such transaction the shareholders of the Issuer or the holders of common shares of Atlantic Holdings immediately prior to such transaction hold, directly or indirectly, less than 50% of the voting control over the person surviving such merger or consolidation, in each case other than the creation of a holding company that does not involve a change in the beneficial ownership of the Issuer or Atlantic Holdings as a result as such transaction; or

(e) the Issuer or Atlantic Holdings or any of their shareholders enters into any agreement providing for any of the foregoing, or the date which is 90 days prior to a definitive announcement by the Issuer or Atlantic Holdings of any of the foregoing, whichever is earlier, and the transaction contemplated thereby is ultimately consummated;

provided, however, that for the purposes of this Plan, the sale of any Common Shares (or equivalent thereof) of the Issuer (or any successor Person thereto) pursuant to a public offering shall not constitute a Change of Control;

“ Code ” has the meaning set forth in Section 11(i) hereof;

“ Common Share ” means a common share of the Issuer;

“ Common Share Compensation Arrangement ” means a Common Share option, Common Share option plan, employee Common Share purchase plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares to directors, managers, officers and employees of the Issuer or its subsidiaries including a Common Share purchase from treasury which is financially assisted by the Issuer by way of a loan, guarantee or otherwise;

“ Common Share Ineligible Participant ” means a Participant that does not qualify under applicable exemptions from the requirement to file a prospectus or registration statement in order to issue Common Shares to the Participant on a redemption of Notional Shares under this Plan;

“ Disability ” means an illness, disease, injury, mental or physical disability or similar mental or physical state of a Participant that causes the Participant to be unable to fulfil his or her obligations as an officer or other employee of the Issuer or any of its subsidiaries for a period of 90 consecutive days, or for an aggregate of 180 days in any 365-day period;

“ Eligible Person ” means an officer or other employee of the Issuer or any of its subsidiaries;

“ Financial Statement Approval Date ” means for a given fiscal year the date that the Board approves the audited financial statements of the Issuer for such fiscal year of the Issuer, but in no event shall a Financial Statement Approval Date for a given fiscal year be later than the last Business Day of the immediately following fiscal year of the Issuer;

“ Free Cash Flow ” means the Company cash flow before distribution or dividend;

“ Good Reason ” means the occurrence of any one or more of the following events:

(a) the assignment to the Participant of any duties inconsistent in any material respect with the Participant’s then position of employment (including status, offices, titles and reporting relationships), authority, duties or responsibilities, or any other action that when taken as a whole results in a diminution in the Participant’s position, authority, duties or responsibilities, excluding for this purpose any isolated, immaterial and inadvertent action not taken in bad faith and which is remedied within seven Business Days after receipt of notice thereof given by the Participant,

(b) a reduction in the Participant’s Base Salary without the consent of such Participant or the failure to continue in effect any material benefit or compensation plan, life insurance plan, health and accident plan or disability plan in existence as of the date of this Plan (or a replacement or substitute plan providing the Participant with substantially similar benefits) in which the Participant is participating or the material reduction of the Participant’s benefits under any of such plans (or replacement or substitute plans), or

(c) requiring the Participant to be based at any location more than 35 miles from his or her place of employment with the Issuer or any of its subsidiaries on the date immediately prior to the occurrence of the related Change of Control, except for requirements of travel in the ordinary course of the Participant’s duties;

“ Growth Cash Flow ” means the pro forma annualized aggregate cash flow from new projects or companies purchased during the year;

“ Independent Directors ” means those members of the Board who are not members of the management of the Issuer;

“ Individual Non-Officer Pool Award ” has the meaning set forth in Section 9(a) hereof;

“ Insider Participant ” means a Participant who is a “reporting insider” as defined in National Instrument 55-104 — Insider Reporting Requirements and Exemptions , and also includes Associates and Affiliates of the Insider Participant;

“ Issuer ” means Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia;

“ Market Price per Common Share ” means the weighted average Canadian dollar closing price of Common Shares on the TSX for the five days immediately preceding the applicable day;

“ Net Cash Flow Multiplier ” means the percentage multiplier, determined in accordance with Section 8(c) hereof, that is used to calculate the adjustment, if any, to the Non-Officer LTI Pool pursuant to Section 8(b) hereof;

“ Net Project Cash Flow ” means, for a fiscal year of the Issuer, an amount equal to the total cash distributions received from the assets owned, directly or indirectly, by the Issuer, less management and administrative expenses;

“ Non-Officer Group ” means, collectively, Participants who are not members of the Officer Group;

“ Non-Officer LTI Pool ” means an amount determined in accordance with Section 8(a) hereof to be available for allocation among the Non-Officer Group for awards hereunder;

“ Notional Shares ” means notional shares to be issued under the Plan, with each Notional Share notionally representing one Common Share;

“ Notional Share Account ” means an account that shall be maintained by Atlantic Holdings for each Participant that will show the Notional Shares credited to a Participant from time to time;

“ NYSE ” means the New York Stock Exchange;

“ Officer Group ” means, collectively, the President, CEO, Chief Financial Officer, Executive Vice-President — Commercial Development and Executive Vice President — Chief Operating Officer of the Issuer, and any other senior executive officers of the Issuer that the Administrators may designate as belonging to the Officer Group from time to time;

“ Participant ” means an Eligible Person who receives a grant of Notional Shares in accordance with this Plan;

“ Peer Group ” has the meaning set forth in Section 5(a) hereof;

“ Performance Measure ” means Project Adjusted EBITDA per Share, Free Cash Flow, Growth Cash Flow and Relative TSR or such other measures as may be determined from time to time by the Administrators pursuant to Section 5(b);

“ Performance Score ” means the score for each Performance Measure for a given fiscal year being an amount measured out of 100;

“ Person ” means any individual, issuer, partnership, business trust, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity;

“ Plan ” means this Long-Term Incentive Plan, as amended and/or amended and restated from time to time;

“ Project Adjusted EBITDA per Share ” means project income plus interest, taxes, depreciation and amortization (including non-cash impairment charges) and changes in fair value of derivative instruments;

“ Relative TSR ” means the Issuer’s percentile ranking of its TSR for a fiscal year among the Peer Group’s TSR’s;

“ Retirement ” means the retirement or resignation of an officer or other employee of the Issuer or a subsidiary of the Issuer from that capacity upon attaining 62 years of age or older;

“ Target ” has the meaning set forth in Section 8(c) hereof;

“ TSR ” means total shareholder return, which refers to the change in the total value of a Common Share investment in the Issuer over a given period, calculated by comparing the change in the Market Price per Common Share from the first Business Day of the period to the last Business Day of the period, taking into account reinvested dividends on the Common Shares during such period, as may be calculated more particularly by the Administrators from time to time;

“ TSX ” means the Toronto Stock Exchange; and

“ Vesting Date ” means the date upon which Notional Shares vest to a Participant pursuant to the terms hereof.

3. ADMINISTRATION

The Plan shall be administered by the Administrators, who will have, except as otherwise provided herein, the sole and complete authority to make all determinations and to take all actions necessary or advisable for the implementation and administration of the Plan, subject to Sections 15(a) and 22 and, in the case of Participants who are members of the Officer Group, subject to the terms of such Participants’ employment agreements. Subject to Section 13 and other limitations of the Plan, the Administrators shall have the power and authority to:

(a) adopt rules and regulations for implementing the Plan;

(b) determine when Notional Shares shall be granted to Eligible Persons, the vesting period for each grant of Notional Shares and whether any adjustment(s) (performance-related or otherwise) shall apply prior to vesting of any Notional Shares granted;

(d) interpret and construe the provisions of the Plan;

(e) alter or adjust any provision that is expressly provided herein in circumstances so as to operate the Plan as objectively as possible;

(f) subject to regulatory requirements, make exceptions to the Plan in circumstances which they determine to be exceptional;

(g) impose certain conditions at the date of grant for any Notional Shares, which would have to be met for a Participant to be entitled to redeem Notional Shares granted; and

(h) make amendments to the Plan in accordance with Section 15 hereof.

All decisions and determinations of the Administrators respecting the Plan shall be binding and conclusive on the Plan and the Participants.

4. PARTICIPATION IN THE PLAN

(a) Participation Right

No person shall be entitled as of right to participate in the Plan and the decision as to who will have the opportunity to participate in the Plan and the extent of such participation shall be made by the Administrators in the case of the Officer Group, and the CEO in the case of the Non-Officer Group, in their sole and absolute discretion.

(b) Participation Agreement and Confirmation

Participation in the Plan by each Participant is conditional on the Participant signing a Participation Agreement and Confirmation in the form attached hereto as Schedule “A”.

5. GENERAL PERFORMANCE METRICS

(a) Peer Group

The Peer Group shall be comprised of the entities determined by the Administrators from time to time in their sole discretion (the “ Peer Group ”).

(b) Establishment of Target Ranges and Performance Scores

On the Budget Date, the Administrators shall establish target ranges for Project Adjusted EBITDA per Share, Free Cash Flow, Growth Cash Flow and Relative TSR (the “ Performance Measures ”) for the upcoming fiscal year of the Issuer. From time to time, the Administrators may change the Performance Measures and in the event of any such change, will establish a target range for such measure on the Budget Date. Subject to the exception below for the 2013 fiscal year, on or prior to the Financial Statement Approval Date following the applicable Budget Date, the Administrators will assign Performance Scores for each Performance Measure for such fiscal year and for each Performance Score, the Administrators will assign an award amount (the “ Award Amount ”) for the fiscal year for each Officer Group Participant. Attached as Schedule “B” hereto are the Performance Measures, Performance Scores and Award Amounts for

the 2012 fiscal year for each Officer Group Participant. For the 2013 fiscal year, the Administrators will assign Performance Scores and Award Amounts prior to April 30, 2013.

6. CALCULATION OF OFFICER AWARD

On the Financial Statement Approval Date immediately following each fiscal year, or such other time as may be determined by the Administrators in their discretion, the Administrators shall approve the calculation of each Performance Measure for the prior fiscal year and calculate the Award Amounts and Aggregate Performance Amount for such fiscal year. The Aggregate Performance Amount will be equal to the sum of the Award Amounts for each Performance Measure for the applicable fiscal year.

Based on the Administrators’ evaluation of the Aggregate Performance Amount and taking into account such other factors as they deem appropriate in determining the Officer Group Participant’s performance for the applicable fiscal year, the Administrators shall approve, on each Financial Statement Approval Date or such other time as may be determined by the Administrators in their discretion, a long-term incentive award for the prior fiscal year for each Officer Group Participant (the “ Annual LTIP Award ”).

7. NOTIONAL GRANT OF SHARES TO OFFICER GROUP PARTICIPANTS

(a) Grant of Notional Shares

On the Financial Statement Approval Date following each fiscal year or such other date as determined by the Administrators in their discretion, each Participant who is a member of the Officer Group shall have credited to their Notional Share Account the number of Notional Shares (the “ Notional Award ”) that is determined by dividing the Annual LTIP Award by the Market Price per Common Share on such date.

(b) Entitlement to Dividends on Notional Shares

Each Notional Share credited to an Officer Group Participant’s Notional Share Account shall receive a distribution equal to the amount of dividends paid per Common Share. Such distributions shall be credited to an Officer Group Participant’s Notional Share Account in the form of additional Notional Shares immediately following any dividend on the Common Shares. The number of Notional Shares to be credited for each dividend will be equal to the amount of the dividend divided by the Market Price per Common Share determined on the payment date for the dividend. For the purposes of the Plan, any references to an Officer Group Participant’s Notional Shares for a specific period shall include Notional Shares credited to such Officer Group Participant’s Notional Share Account in lieu of Common Share dividends pursuant to this Section 7(b).

8. CALCULATION AND ADJUSTMENT OF NON-OFFICER LTI POOL

(a) Initial Determination of Non- Officer LTI Pool

On the Financial Statement Approval Date of each fiscal year of the Issuer, the Non-Officer LTI Pool in respect of such fiscal year shall be proposed by the CEO based on the

salaries and target long-term incentives of then-current members of the Non-Officer Group and approved by the Administrators.

(b) Performance Adjustment of Non-Officer LTI Pool

On the Financial Statement Approval Date immediately following each fiscal year of the Issuer, the Non-Officer LTI Pool shall be adjusted at the discretion of the Administrators taking into account the amount determined by the calculat ion below as well as the Issuer’s TSR for the applicable fiscal year. The amount determined by the following formula, in addition to the Company’s TSR for the applicable year, shall serve as a guideline for the Administrators in determining the adjustment to the Non-Officer LTI Pool:

Non-Officer LTI Pool

[

2/3 Net Cash Flow
Multiplier*

1/3 Growth Cash Flow
Multiplier**

]

* Calculated in accordance with Section 8(c) below.
** Calculated in accordance with Section 8(d) below.

In their discretion, the Administrators may also increase the Non-Officer LTI Pool if the Administrators determine that an increase is warranted for a given fiscal year. The Administrators also have discretion to select alternative measures to Net Cash Flow and Growth Cash Flow from time to time in considering the multiplier formula above.

The CEO shall calculate the Net Cash Flow Multiplier in accordance with the following scale with the Net Cash Flow Multiplier adjusted on a pro rata basis if the Issuer’s Net Project Cash Flow falls between the budgeted amount set on the applicable Budget Date (the “ Target ”) and 25% below the Target:

Net Project Cash Flow	Net Cash Flow Multiplier
At or above the Target	100	%
25% below the Target	50	%
More than 25% below the Target	0	%

(d) Calculation of Growth Cash Flow Multiplier

The CEO shall calculate the Growth Cash Flow Multiplier in accordance with the following scale with the Growth Cash Flow Multiplier adjusted on a pro rata basis if the Issuer’s Growth Cash Flow falls between the budgeted amount set on the applicable Budget Date (the “ Target ”) and 25% below the Target:

Growth Cash Flow	Growth Cash Flow Multiplier
At or above the Target	100	%
25% below the Target	50	%
More than 25% below the Target	0	%

(e) References to Adjusted Non-Officer LTI Pool

For greater certainty, for the purposes of the Plan, any references to the Non-Officer LTI Pool for a given fiscal year of the Issuer shall include adjustment thereto made pursuant to Section 8(b) hereof.

9. ALLOCATION OF NON-OFFICER AWARDS

(a) Allocation of Non-Officer Awards from Non-Officer LTI Pool

Following the Financial Statement Approval Date for a given fiscal year of the Issuer, the CEO, in consultation with the Issuer’s other senior officers, shall have the discretion to allocate to each Participant who is a member of the Non-Officer Group a percentage of the Non-Officer LTI Pool based on such Participant’s performance during such fiscal year (the “ Individual Non-Officer Pool Award ”).

(b) Grant of Notional Shares

As soon as possible following the determination of Individual Non-Officer Pool Awards pursuant to Section 9(a) hereof, each Participant that is a member of the Non-Officer Group who receives an Individual Non-Officer Pool Award shall have credited to their Notional Share Account a number of Notional Shares determined by dividing the dollar amount of the Individual Non-Officer LTI Pool Award by the Market Price per Common Share on the day of the award.

Each Notional Share credited to a Non-Officer Group Participant’s Notional Share Account pursuant to Section 9(b) hereof shall receive dividends equal to the amount of dividends paid per Common Share. Such distributions shall be credited to a Non-Officer Group Participant’s Notional Share Account in the form of additional Notional Shares immediately following any dividend on the Common Shares. The number of Notional Shares to be credited for each dividend will be equal to the amount of the dividend divided by the Market Price per Common Share determined on the payment date for the dividend. For the purposes of the Plan, any references to an Non-Officer Group Participant’s Notional Shares shall include Notional Shares issued on such Notional Shares pursuant to this Section 9(c).

10. VESTING OF NOTIONAL SHARES

(a) Timing

Except as otherwise specified herein or as otherwise determined by the Administrators, a Participant’s Notional Shares for a given fiscal year of the Issuer shall vest in respect of one-third of such Notional Shares after each of the first three anniversaries of the Financial Statement Approval Date for such fiscal year of the Issuer.

(b) Termination of Employment — Death or Without Cause

If the employment of a Participant is terminated by the death of such Participant, or by the Issuer or a subsidiary of the Issuer without Cause, all Notional Shares credited to such Participant’s Notional Share Account shall vest or be deemed to have vested effective the date immediately prior to the date of such Participant’s death or termination without Cause.

If the employment of a Participant is terminated due to the Disability or Retirement of such Participant, all Notional Shares credited to such Participant’s Notional Share Account shall vest on the Vesting Date as if such Participant continued to be actively employed until the Vesting Date.

(d) Termination of Employment — Change of Control

If the employment of a Participant is terminated following a Change of Control by such Participant for Good Reason or by the Issuer of any of its subsidiaries without Cause prior to the Vesting Date, all Notional Shares credited to such Participant’s Notional Share Account shall vest effective the date immediately prior to the date of such termination of such Participant’s employment.

(e) Termination of Employment for Cause

If the employment of a Participant is terminated for Cause, such Participant shall, unless otherwise expressly determined by the Administrators in writing, forfeit all rights, title and interest with respect to Notional Shares which have not vested on or prior to such Participant’s termination date. A Non-Officer Group Participant’s termination date shall be such Participant’s last day at work and shall not include any period of statutory or common law notice of termination of employment or period of salary continuation following such Participant’s termination date for vesting or any other purpose under this Plan.

(f) Termination of Employment — Other than Death, Disability, Retirement, For Cause, Without Cause or Change of Control

If the employment of a Participant is terminated for any reason other than death, Retirement, Disability, for Cause, without Cause or upon a Change of Control prior to the Vesting Date, the Participant shall, unless otherwise expressly determined by the Administrators in writing, forfeit all rights, title and interest with respect to Notional Shares which have not vested on or prior to a Participant’s termination date. A Participant’s termination date shall be the Participant’s last day at work and shall not include any period of statutory or common law notice of termination of employment or period of salary continuation following a Participant’s termination date for vesting or any other purpose under this Plan.

(g) Termination of Employment — Employment Agreement

Notwithstanding any provision to the contrary herein, if a Participant has entered into an employment agreement with the Issuer or any of its subsidiaries, all Notional Shares credited to such Participant’s Notional Share Account shall vest subject to any vesting provisions set forth in such employment agreement. For certainty, to the extent there is any conflict or inconsistency between the vesting provisions set out in such Participant’s employment agreement and the vesting provisions set out in this Plan, the vesting provisions of such Participant’s employment agreement shall govern.

11. REDEMPTION OF VESTED NOTIONAL SHARES

(a) General

Effective as of the Vesting Date, Atlantic Holdings shall, subject to Section 11(b) below, forthwith following the applicable Vesting Date, redeem the vested portion of each Participant’s Notional Shares (including fractional Notional Shares) by:

(i) making a lump sum cash payment (net of any applicable withholdings) to each Participant or the Participant’s legal representative, if applicable, in respect of one-third of the Notional Shares to be redeemed; and

(ii) exchanging two-thirds of the Notional Shares to be redeemed for Common Shares pursuant to Section 11(e) below.

(b) Payment of up to 100% Cash

Notwithstanding Section 11(a) above and Section 11(c) below, effective as of the Vesting Date, acting within the scope of their discretion pursuant to Section 3 hereof, the Administrators may elect to cause Atlantic Holdings to redeem the vested portion of each Participant’s Notional Shares (including fractional Notional Shares) by making a lump sum cash payment (net of any applicable withholdings) to each Participant or the Participant’s legal representative, if applicable, in respect of the Notional Shares to be redeemed.

Notwithstanding Section 11(a) above and subject to Section 11(b), each Participant that is a member of the Officer Group may elect to redeem vested Notional Shares for up to 100% Common Shares, provided that the Participant provides written notice of such election at least 30 days prior to the date of such redemption.

(d) Redemption from Common Share Ineligible Participants

Notwithstanding Sections 11(a) and 11(c) above, effective as of the Vesting Date, acting within the scope of their discretion pursuant to Section 3 hereof, the Administrators shall cause Atlantic Holdings to redeem the vested portion of each Common Share Ineligible Participant’s Notional Shares (including fractional Notional Shares) by making a lump sum cash payment (net of any applicable withholdings) to each Common Share Ineligible

Participant or the Participant’s legal representative, if applicable, in respect of 100% of the Notional Shares to be redeemed.

(e) Delivery of Common Shares on a Redemption

To satisfy its obligation to deliver Common Shares on a redemption of vested Notional Shares, Atlantic Holdings shall, at its option, elect to acquire Common Shares either:

(i) from the Issuer at the Market Price per Common Share; or

(ii) on the TSX or NYSE.

(f) Acquisition of Common Shares from the Issuer

If Atlantic Holdings elects to acquire Common Shares from the Issuer under Section 11(e)(i) above, the following provisions shall apply:

(i) Upon actual receipt by the Issuer of written notice and payment for the aggregate purchase price for the Common Shares from Atlantic Holdings, subject to payment of all applicable security transfer, income, withholding or other taxes or other governmental charges and compliance with all applicable securities laws, the Issuer shall issue to Atlantic Holdings the applicable number of Common Shares and Atlantic Holdings will use such Common Shares to satisfy the redemption.

(ii) The Issuer shall not be required to issue, and Atlantic Holdings shall not be required to cause the issuance of, fractional Common Shares upon the acquisition of Common Shares pursuant to Section 11(e)(i) above. If any fractional interest in an Common Share would be deliverable upon the acquisition of Common Shares pursuant to Section 11(e)(i) above, Atlantic Holdings shall, in lieu of delivering, or causing the delivery of, any certificate representing such fractional interest, make a cash payment to the Participant of an amount equal to the fractional interest which would have been issuable multiplied by the Market Price per Common Share, less applicable withholding taxes, if any.

(iii) The Issuer covenants with Atlantic Holdings that it will at all times reserve and keep available out of its authorized Common Shares (if the number thereof is or becomes limited), solely for the purpose of issuing such Common Shares to Atlantic Holdings in connection with a redemption under this Plan, such number of Common Shares as shall then be deliverable by Atlantic Holdings under the Plan, to enable and permit Atlantic Holdings to perform its obligation hereunder to deliver the requisite number of Common Shares to Participants. The Issuer covenants with Atlantic Holdings that all Common Shares, which shall be so issuable, shall be duly and validly issued as fully-paid and non-assessable upon receipt by the Issuer of fair value consideration for such Common Shares from Atlantic Holdings in the form of a cash payment. The Issuer

further covenants with Atlantic Holdings that it shall take all actions and do all things necessary or desirable to enable and permit Atlantic Holdings, in accordance with applicable law, to perform all of its obligations hereunder.

(iv) Immediately following the acquisition of Common Shares from the Issuer by Atlantic Holdings to satisfy a redemption of Notional Shares pursuant to Section 11(e)(i) above, the Issuer shall, at its option, using the proceeds of the issuance of Common Shares, either: (A) acquire from Atlantic Holdings common shares or (B) acquire Common Shares on the TSX, such acquisition in (A) or (B) shall be equivalent in number to the number of Common Shares acquired by Atlantic Holdings pursuant to this Section 11(f). Atlantic Holdings covenants with the Issuer that it will at all times reserve and keep available out of its authorized capital a sufficient number of common shares to be issued from treasury to satisfy the acquisition by the Issuer pursuant to this Section 11(f)(iv).

(g) Effect of Redemption of Notional Shares

A Participant shall have no further rights respecting any Notional Share, which has been redeemed.

(h) Calculation of Cash Payments

Lump sum cash payments made under this Section 11 by Atlantic Holdings to a Participant or a Participant’s legal representative, if applicable, in respect of Notional Shares to be redeemed shall be calculated by multiplying the number of Notional Shares to be redeemed by the Market Price per Common Share as at the Vesting Date, converted into United States dollars based on the closing rate of exchange published by the Bank of Canada on the Vesting Date.

(i) Section 409A

To the extent that the Plan is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “ Code ”), the Plan shall be administered in accordance with Section 409A. In this regard, to the extent any provision of the Plan is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Further, if any amount payable hereunder is payable upon a “separation from service” (within the meaning of Section 409A) to a Participant who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the Participant’s separation from service, or (ii) the Participant’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A.

12. COMMON SHARES SUBJECT TO ISSUANCE UNDER THE PLAN

The aggregate number of Common Shares that may be issued under the Plan upon the redemption of Notional Shares is 1,000,000 Common Shares subject to increase or decrease by reason of amalgamation, rights offerings, reclassifications, consolidations or subdivisions, or as may otherwise be permitted by applicable law and the TSX.

13. LIMIT ON ISSUANCE OF COMMON SHARES

Except with the approval of the shareholders of the Issuer given by the affirmative vote of a majority of the votes cast at a meeting of the shareholders of the Issuer, excluding the votes attaching to Common Shares beneficially owned by Insider Participants to whom Common Shares may be issued pursuant to this Plan and their Associates, no Notional Shares shall be credited to any Participant if such credit could result, at any time, in:

(a) the number of Common Shares reserved for issuance to Participants pursuant to the redemption of Notional Shares together with any other Common Share Compensation Arrangement exceeding 10% of Common Shares then issued and outstanding;

(b) the number of Common Shares issuable to Insider Participants, at any time under this Plan pursuant to the redemption of Notional Shares and any other Common Share Compensation Arrangements, exceeding 10% of Common Shares then issued and outstanding; or

(c) the number of Common Shares issued to Insider Participants, within any one-year period, under this Plan pursuant to the redemption of Notional Shares and any other Common Share Compensation Arrangements, exceeding 10% of Common Shares then issued and outstanding.

In the event that the Issuer or any of its subsidiaries purchases Common Shares for cancellation or if Common Shares are separated pursuant to their terms, the Issuer shall be deemed to be in compliance with the foregoing maximum limits, if immediately prior to such purchase, expiration, separation or other extinguishment, the Issuer was in compliance with such limit.

14. UNFUNDED PLAN

Unless otherwise determined by the Administrators, the Plan shall be unfunded. To the extent a Participant holds any rights by virtue of participation in the Plan, such rights (unless otherwise determined by the Administrators) shall be no greater than the rights of an unsecured general creditor of Atlantic Holdings.

15. AMENDMENT

(a) The Administrators may amend the Plan or any grant of Notional Shares at any time without the consent of Participants provided that such amendment shall:

(i) not operate to materially affect any rights already acquired by a Participant under the Plan, including the vesting terms of any award previously made under the Plan;

(ii) be subject to any regulatory approvals including, where required, the approval of the TSX; and

(iii) not be subject to approval of the Issuer’s shareholders unless such amendment involves:

(A) any increase in the number of Common Shares reserved for issuance under the Plan;

(B) any reduction in the pricing of Notional Shares issuable under the Plan or cancellation and reissue of entitlements under the Plan;

(D) amendments to the Eligible Persons under the Plan that may permit the introduction of non-employee directors on a discretionary basis;

(E) an amendment which would permit Notional Shares granted under the Plan to be transferable or assignable other than for normal estate settlement purposes; or

(F) an amendment to the plan amendment provisions contained in this Section 15.

(b) For greater certainty, any amendment to the Plan shall not affect the rights already acquired by a Participant under a previous version of the Plan, and any awards granted under a previous version of the Plan shall continue to be governed by their terms and the terms of the Plan in place at the time of their award.

(c) Without amending the Plan, the Administrators may, with the consent of the Participant, approve any variation in terms, including the acceleration of the redemption of Notional Shares held in the Notional Share Accounts of Participants which have not vested.

16. OPERATION OF PLAN

The cost of the operation of the Plan shall be borne by Atlantic Holdings.

17. NOTICES

All notices under the Plan shall be in writing and if to Atlantic Holdings shall be delivered to Atlantic Holdings by first class post to its head office, and if to a Participant, shall be delivered personally or sent by first class post to the Participant at the address

which the Participant shall give for the purpose, or failing any such address to the Participant’s last known place of residence. If a notice is sent by post, service thereof shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the same to such address and shall be deemed to be served 48 hours after such posting.

18. WITHHOLDING

The Administrators may adopt and apply rules that will ensure that Atlantic Holdings and any other person complies with all federal, provincial, foreign, state or local laws relating to the withholding of tax or other levies on employment compensation in relation to payments and distributions contemplated in this Plan. Such parties may withhold the minimum required tax withholding obligation from amounts payable to a Participant, under the Plan or otherwise, and shall have the absolute right to satisfy such minimum required withholding obligation by retaining and selling a number of Common Shares that would otherwise have been issued to a Participant upon a redemption having an aggregate fair market value (as of the date of withholding) that would satisfy the minimum required withholding amount due, or by accepting a sum sufficient from a Participant to indemnify Atlantic Holdings and any other person for any liability to withhold hereunder.

19. INTERPRETATION

In this Plan, unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.

20. NO RIGHT OF EMPLOYMENT

Neither participation in the Plan nor any action under the Plan shall be construed so as to give any Participant a right to continue as a manager, officer or senior management employee of the Issuer or any of its subsidiaries.

21. NON-TRANSFERABILITY

A Participant shall not be entitled to transfer, assign, charge, pledge or hypothecate, or otherwise alienate, whether by operation of law or otherwise, the Participant’s Notional Shares or any rights the Participant has in the Plan.

22. TERMINATION

The Administrators may at any time terminate the Plan provided that such termination shall not affect any rights of Participants to receive Notional Shares for any Performance Period or partial Performance Period prior to the effective date of such termination.

23. CHOICE OF LAWS

This Plan shall be governed by the laws of the State of Delaware.

24. ADOPTION AND AMENDMENT AND RESTATEMENT OF THE PLAN

This Plan was originally adopted on the 10 th day of May, 2006 and approved by the Issuer’s shareholders on the 7 th day of June, 2006. The Plan has been amended and restated on the 24 th day of April, 2007, the 4 th day of June, 2008, the 29 th day of January, 2010 (effective as of the 5 th of November, 2011) and effective April 2012.

SCHEDULE “A”

FIFTH AMENDED AND RESTATED
LONG-TERM INCENTIVE PLAN

PARTICIPATION AGREEMENT AND CONFIRMATION

[Name of Employee] (“ Participant ”)

Pursuant to the Fifth Amended and Restated Long-Term Incentive Plan (the “ Plan ”) of Atlantic Power Holdings, Inc. (“ Atlantic Holdings ”) and in consideration of services provided to the Issuer and/or any of its subsidiaries by the Participant in respect of the 20 year, Atlantic Holdings hereby grants to the Participant Notional Shares under the Plan.

Capitalized terms not defined in this agreement have the meanings given in the Plan.

Atlantic Holdings and the Participant understand and agree that these Notional Shares are subject to the terms and conditions of the Plan (as they exist on the date hereof), all of which are incorporated into and form a part of this agreement.

DATED , 20 .

	ATLANTIC POWER HOLDINGS, INC.


	Per:
		Name:
		Title:

I agree to the terms and conditions set out herein and confirm and acknowledge that I have not been induced to enter into this agreement or acquire any Notional Shares or any other interest in the Plan or the Issuer by expectation of employment or continued employment with the Issuer or any of its subsidiaries.


	Signature



	Name (please print)

SCHEDULE “B”

2012 LTIP CALCULATION – OFFICERS

Project Adjusted EBITDA per Share
Result/Target	<=$2.73	$2.74 – $2.85	$2.86 – $2.97	$2.98 – $3.03	$3.04 – $3.09	$3.10 – $3.14	>=$3.15
Score	0	92%	96%	100%	102%	104%	106%
Award (EVP/CFO)	$—	$62,500	$125,000	$187,500	$250,000	$312,500	$375,000
Award (CEO)	$—	$ 116,667	$ 233,333	$ 350,000	$ 466,667	$ 583,334	$700,000
Free Cash Flow (millions)
Result/Target	<=$129.05	$129.06 – $134.66	$134.67 – $140.27	$140.28 – $143.08	$143.09 – $145.88	$145.89 – $148.67	>=$148.68
Score	0	92%	96%	100%	102%	104%	106%
Award (EVP/CFO)	$—	$62,500	$125,000	$187,500	$250,000	$312,500	$375,000
Award (CEO)	$—	$ 116,667	$ 233,333	$ 350,000	$ 466,667	$ 583,334	$700,000
Growth Cash Flow (millions)
Result/Target	<=$9.25	$9.26 – $13.90	$13.91 – $18.50	$18.51 – 21.70	$21.71 – $24.50	$24.51 – $29.99	>=$30.00
Score	0	92%	96%	100%	102%	104%	106%
Award (EVP/CFO)	$—	$62,500	$125,000	$187,500	$250,000	$312,500	$375,000
Award (CEO)	$—	$ 116,667	$ 233,333	$ 350,000	$ 466,667	$ 583,334	$700,000
Relative Total Shareholder Return
Result/Target	<=35th%	36th – 45th%	46th – 55th%	56th – 65th%	66th – 75th%	76th – 84th%	>=85th%
Score	0	92%	96%	100%	102%	104%	106%
Award (EVP/CFO)	$—	$62,500	$125,000	$187,500	$250,000	$312,500	$375,000
Award (CEO)	$—	$ 116,667	$ 233,333	$ 350,000	$ 466,667	$ 583,334	$700,000

Note

1. Award range for CEO is 0 – $2,800,000 and for Executive Vice President – Commercial Development and CFO is 0 – $1,500,000.

Exhibit 10.2

PARTICIPATION AGREEMENT AND CONFIRMATION

PAUL H. RAPISARDA (“ Participant ”)

Pursuant to the Fifth Amended and Restated Long-Term Incentive Plan (the “ Plan ”) of Atlantic Power Holdings, Inc. (“ Atlantic Holdings ”) and in consideration of services provided to the Issuer and/or any of its subsidiaries by the Participant in respect of the 2012 year, Atlantic Holdings hereby grants to the Participant 41,237 Notional Shares under the Plan (“ 2012 Notional Shares ”).

Capitalized terms not defined in this agreement (the “ Agreement ”) have the meanings given in the Plan. In the event of an inconsistency between the Plan, any existing employment agreement between Atlantic Holdings and the Participant and this Agreement, the terms of this Agreement shall govern.

Atlantic Holdings and the Participant understand and agree that these Notional Shares are subject to the terms and conditions of the Plan (as they exist on the date hereof), except to the extent modified by the terms set forth below, all of which are incorporated into and form a part of this Agreement:

1. Vesting of Notional Shares . The Vesting Date with respect to the 2012 Notional Shares shall be March 31, 2016.

2. Payment . Payment or settlement in respect of the 2012 Notional Shares shall be made promptly following the Administrator’s certification of the achievement of the performance metrics set forth in Section 3 below, but no later than June 15, 2016.

3. General Performance Metrics and Calculation of Award . The following target ranges for Relative TSR and Project Adjusted EBITDA per Share over the three-year performance period of April 1, 2013 to March 31, 2016, each with an equal 50% weighting, shall be used to determine the final award to be settled to the Participant, subject to terms and conditions of the Plan and this Agreement:

a. Relative TSR

Relative TSR percentile ranking	Below 25th percentile		25th percentile		Median		75th percentile or above

% vesting of TSR portion of award	0	%	50	%	100	%	150	%

b. Project Adjusted EBITDA per Share

Project Adjusted EBITDA per Share vs. Budget	Below 75% of Budget	75% of Budget or above

% vesting of Project Adjusted EBITDA per Share portion of award (rounded down to the nearest whole number)	0%	50-150% vesting, equal to 50% plus an additional 2% for every 1% increase over 75% of Budget (with vesting capped at 150%)

DATED: April 11, 2013.

	ATLANTIC POWER HOLDINGS, INC.


	Per:	/s/ Barry E. Welch
		Name:
		Title:

I agree to the terms and conditions set out herein and confirm and acknowledge that I have not been induced to enter into this Agreement or acquire any Notional Shares or any other interest in the Plan or the Issuer by expectation of employment or continued employment with the Issuer or any of its subsidiaries.

	PAUL H. RAPISARDA

		/s/ Paul H. Rapisarda
		Signature

Exhibit 10.3

PARTICIPATION AGREEMENT AND CONFIRMATION

TERRENCE RONAN (“ Participant ”)

Pursuant to the Fifth Amended and Restated Long-Term Incentive Plan (the “ Plan ”) of Atlantic Power Holdings, Inc. (“ Atlantic Holdings ”) and in consideration of services provided to the Issuer and/or any of its subsidiaries by the Participant in respect of the 2012 year, Atlantic Holdings hereby grants to the Participant 20,619 Notional Shares under the Plan (“ 2012 Notional Shares ”).

1. Vesting of Notional Shares . The Vesting Date with respect to the 2012 Notional Shares shall be March 31, 2016.

a. Relative TSR

Relative TSR percentile ranking		Below 25th percentile		25th percentile		Median		75th percentile or above
% vesting of TSR portion of award		0	%	50	%	100	%	150	%

b. Project Adjusted EBITDA per Share

Project Adjusted EBITDA per Share vs. Budget	Below 75% of Budget	75% of Budget or above

% vesting of Project Adjusted EBITDA per Share portion of award (rounded down to the nearest whole number)	0%	50-150% vesting, equal to 50% plus an additional 2% for every 1% increase over 75% of Budget (with vesting capped at 150%)

DATED: April 11, 2013.

	ATLANTIC POWER HOLDINGS, INC.


	Per:	/s/ Barry E. Welch
		Name:
		Title:

TERRENCE RONAN

	/s/ Terrence Ronan
	Signature

Exhibit 10.4

March 26, 2013

Mr. Edward C. Hall

6719 Wemberly Way

McLean, VA 22101

Dear Ned:

It is my sincere pleasure to offer you the position of Executive Vice President - Chief Operating Officer of Atlantic Power Corporation (“the Company”). We look forward to having you join the team and we are confident that you will bring success to the position.

We anticipate your start date to be as soon as possible.

In conjunction with the Company’s Employee Information Booklet this letter outlines the basic terms and conditions of your position. This letter and your Employment Agreement represent the entire understanding of your employment conditions and replace any prior verbal or written discussions relating to the subject matter. This offer is contingent upon your eligibly to work in the United States as required by federal law, satisfactory results of reference checks and a background screen.

Title:		Executive Vice President - Chief Operating Officer

Reporting to:		Barry Welch, Chief Executive Officer

Start Date:		April 2, 2013

Base salary:		You will be paid $16,346.15 on a bi-weekly basis, which is equivalent to an annual salary of $425,000.00.

STIP:		You will be eligible to participate in the Company’s Short Term Incentive Program; which has a range from zero to 100 % of your base salary with a target range of 50-100% (subject to normal taxes and deductions) with the first year’s payout pro-rated based on your start date. Components and proposed weightings used to evaluate performance for your STIP, which will be discussed with the Compensation Committee Chair and subject to approval by the full Committee, will be (i) Performance of Existing Portfolio

		(40%), (ii) Growth (20%), (iii) Financial & Risk Management (20%) and (iv) Discretionary (20%).

LTIP:		In addition, you will be eligible to participate in the Company’s Long-Term Incentive Plan (“LTIP”). Grants of Notional Shares under the LTIP are determined on an annual basis and are based on projected adjusted EBITDA per share, free cash flow, growth cash flow and relative shareholder return. Each of these four metrics will be given an equal 25% weighting. The LTIP grants, if any, are administered by the Board of Directors of the Company and shares vesting one third over each of three years are subject to normal deductions and taxes. Per the April 30, 2012 Proxy Statement, the maximum award possible for a full year would be $1.5 million and the midpoint would be $750,000, with the first year’s grant pro-rated based on your start date.

Vacation:		You will be entitled to four weeks paid vacation each year;

Sign on Grant:		The Company will provide you with $180,000 in notional shares within 30 days of your start date, with a price determined by calculating the Volume Weighted Average Price (VWAP) for the five trading days immediately prior to your start date. The notional units will vest on the same three-year cliff performance-adjusted basis as the most recently granted officer awards.

Employment
Agreement:		Your employment will be subject to the terms of a rolling three-year employment agreement, which will be substantially in the form of the copy provided of Mr. Paul Rapisarda’s agreement that was provided for your review, with the exception of the revisions outlined in Exhibit A and discussed with Barry Welch.

Relocation:		We will cover your moving costs up to a maximum to be mutually agreed upon, to be paid directly by Atlantic Power to the greatest extent feasible including, but not limited to, the following:
		· Packing household goods and personal belongings, moving, and insurance for your belongings, including personal travel costs of family members.
		· House selling brokerage commission up to $120,000.
		· The cost of three visits to the Boston area by your family, including travel to/from, lodging and meals.
		· The cost of twenty (20) additional trips back to your family during weekends until they have relocated to the Boston area.
		· Customary closing costs on a new principal residence, not including up front points on a mortgage.

		· The cost of your initial housing in Boston for up to five (5) months.

Benefits:		The Company has a comprehensive Employee Benefits Program including a 401k Plan with up to 7% company match. Details are outlined in the attached summary.

Parking:		If needed, the company will cover the cost of monthly parking at One Federal Street, Boston.

By attaching your signature to this document, you confirm that you are free to accept this position and that you are not restricted from accepting employment with Atlantic Power Holdings Inc. as a result of any employment agreement with a prior employer. We acknowledge that you have disclosed that Article V of The AES Corporation Amended and Restated Executive Severance Plan, which is a publicly available document, imposes certain confidentiality obligations and other restrictive covenants to which you are subject. Please indicate your agreement with and understanding of this letter by signing below and returning to me.

We are excited by our Company’s prospects and your ability to help us maximize the potential of Atlantic Power. We will provide you with every support to help make you successful in this position.

Atlantic Power Holdings Inc.


/s/ Barry E. Welch		3/26/13
Barry Welch		Date
Chief Executive Officer


/s/ Edward C. Hall		3/26/13
Edward C. Hall		Date

Exhibit 10.5

EXECUTION VERSION

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (this “ Agreement ”) is entered into among Atlantic Power Holdings, Inc. (“ Atlantic Holdings ” or the “ Company ”), Atlantic Power Corporation (“ Atlantic Power ”), and Terrence Ronan (“ Executive ”). Atlantic Holdings, Atlantic Power and Executive are collectively referred to herein as the “ Parties .” This Agreement shall be effective as of April 15, 2013 (the “ Effective Date ”).

WITNESSETH:

WHEREAS , Atlantic Power, a corporation continued under the laws of the Province of British Columbia, Canada, through Atlantic Holdings and other subsidiaries, owns a portfolio of power generation assets in the United States and Canada; and

WHEREAS , Atlantic Holdings, a Delaware corporation, is wholly-owned by Atlantic Power; and

WHEREAS the Company, Atlantic Power and Executive desire to enter into this Agreement on the terms and conditions set out in this Agreement.

NOW, THEREFORE , in consideration of the promises and mutual covenants herein contained, it is hereby agreed between and among the Parties as follows:

1. Employment.

The Company agrees to continue to employ Executive and Executive agrees to continue to serve in the employ of the Company as an executive, as follows:

(a) Executive agrees to serve as Executive Vice President — Chief Financial Officer of Atlantic Power and Vice President of the Company during the term of this Agreement. Executive further agrees to use his best efforts, and apply his skill and experience, to the proper performance of his duties hereunder and to the business and affairs of the Company and its affiliates. Executive agrees to serve the Company and its affiliates faithfully, diligently and to the best of his ability.

(b) The principal location from which Executive will serve the Company and its affiliates and perform his duties hereunder shall be Boston, Massachusetts.

2. Term.

The Company hereby agrees to continue to employ the Executive and Executive hereby agrees to continue to serve the Company and its affiliates from the Effective Date until March 31, 2016, unless further extended or sooner terminated as hereinafter provided.

On the first day of the month of January in the year 2014, and on the first day of such month in each succeeding year, the remaining twenty-seven (27) month term of this Employment Agreement shall be automatically extended for one additional year unless, prior to such date, the Company shall have given the Executive, or the Executive shall have given the Company, written notice that the Employment Agreement shall not be extended.

3. Compensation.

(a) Base Salary. During the period of the Executive’s employment hereunder, the Company shall pay to the Executive a minimum base salary at the rate of not less than $375,000 per annum with the same frequency and on the same basis that the Company normally makes salary payments to its other executive personnel. This minimum base salary may be increased from time to time in accordance with normal business practices of the Company (the minimum base salary as increased from time to time, the “Base Salary”). If such increases take place, the Company shall not thereafter decrease the Executive’s Base Salary without the Executive’s consent during the term of this Agreement.

(b) Annual Bonus. During the employment period, in addition to the Base Salary, for each calendar performance year of the Company ending during the employment period, Executive shall be afforded the opportunity to receive an annual bonus (the “ Annual Bonus ”) based on the an evaluation of Executive’s performance by the Atlantic Power Board of Directors (the “ Board ”) under the short term incentive program adopted by the Board from time to time; provided that such program may not be altered to the material detriment of the Executive without his consent. Annual Bonus earned shall be paid in cash after the end of the calendar year to which it relates, at the same time and under the same terms and conditions as historically paid to Executive.

As used in this Agreement, “ Total Annual Compensation ” shall mean the sum of Base Salary, Annual Bonus (calculated as above) and the Company’s most recent 401(k) matching contribution contributed on Executive’s behalf.

(c) Long Term Incentive Plan. Executive shall participate in the Company’s Fifth Amended and Restated Long Term Incentive Plan (“ LTIP ”) as it may be amended by the Board from time to time; provided that the LTIP may not be altered to the material detriment of the Executive without his consent.

(d) Expenses. The Executive shall be entitled to receive a prompt reimbursement of all reasonable business expenses incurred by the Executive in performing his services hereunder including expenses related to travel and other business expenses while away from home on business. Such expenses shall be reimbursed and accounted for in accordance with the policies and procedures presently established by Atlantic Holdings.

(e) Other Benefits. The Company shall maintain and the Executive shall be entitled to participate in all of the Company’s employee benefit plans and arrangements in effect on the date hereof including, without limitation, all pension and retirement plans, life insurance, health, accident, medical and disability insurance, and the Company’s holiday and vacation plans, provided, however, that such plans and arrangements shall be no less favourable to Executive, taken as a whole, than those previously provided to Executive by the Company. The Company may make changes in any such arrangements provided that such changes are made pursuant to a program which is applicable to all officers of the company and which changes do not result in a proportionately greater reduction in the rights and benefits to the Executive as compared with any other officers, provided that the Executive shall be entitled to a minimum of four (4) weeks paid vacation during each calendar year in addition to all normal and customary holidays observed by the Company and provided further that such plans and arrangements shall be no less favourable to Executive, taken as a whole, than those previously provided to Executive by the Company. The Company also shall ensure and take all measure necessary to provide that Executive encounters or suffers no gap in any insurance coverages and other benefits as a result of the termination of his employment by the Company and his employment hereunder and that all coverages and benefits are continuous through and after such transition.

The Executive shall also be entitled to participate or receive benefits under any future employee benefit plan or arrangement that the Company establishes for its key executives consistent with the general terms of any such future benefits plans.

(f) Bonus Calculation. Whenever the Company is required to make payments to the Executive under this Section or Sections 4 and 7 below, if such payments include bonus payments for a period or periods of time which have not yet occurred, Executive will be paid his Annual Bonus at no less than 100% of the average amount of such Annual Bonus paid to Executive in the preceding two years.

4. Compensation Upon Death Or Disability.

In the event Executive shall, by reason of illness or incapacity, be unable to fulfill his obligations on behalf of the Company for a period of 90 consecutive days, the Company’s long term disability group coverage for Executive will pay up to 60% of his Base Salary, subject to its terms and conditions. The Company will provide term life insurance coverage in accordance with its group policy.

5. Indemnification.

The Company and Atlantic Power shall each indemnify and hold harmless Executive to the fullest extent permitted under the laws of the State of Delaware (to the same extent that a corporation organized under the laws of the State of Delaware could indemnify an officer or employee), in the case of the Company, and to the fullest extent permitted under the Business Corporations Act (British Columbia), in the case of Atlantic Power, in each case with respect to any and all costs, charges and expenses (including, without limitation, expenses of investigations, judicial or administrative proceedings or appeals, and attorney’s fees and disbursements), judgments, fines and amounts paid in settlement (collectively, “ Claims ”) incurred, awarded, suffered or otherwise arising in connection with any threatened, pending or completed action, suit or proceeding, whether brought by or in the right of the Company and/or Atlantic Power or otherwise and whether of a civil, criminal, administrative or investigative nature, in which Executive may be or may have been involved as a party, witness or otherwise, by reason of the fact that Executive is or was a director, officer and/or employee of the Company or any parent, subsidiary or affiliate of the Company, by reason of any action taken by him or of any inaction on his part while acting as such a director, officer and/or employee, or by reason of the fact that he is or was serving as the request of the Company as a director, partner, trustee, officer, employee or agent of another corporation, domestic or foreign, non-profit or for-profit, partnership, joint venture, trust or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification or reimbursement can be provided under this Agreement, unless such Claims arise principally and directly from the fraud, willful default or gross negligence of Executive. All indemnification required under this paragraph shall be paid by the Company and/or Atlantic Power, as applicable, in advance of the final disposition of such matter, provided, however, that such payment in advance of the final disposition of such matter shall be made only upon receipt of an undertaking by or on behalf of Executive to repay all amounts so advanced in the event that it shall ultimately be determined that under the laws of the State of Delaware (in the case of the Company) or the Business Corporations Act (British Columbia) (in the case of Atlantic Power) the Executive would not be entitled to be indemnified by the Company and/or Atlantic Power, as applicable, as authorized in this Agreement.

6. Termination.

The Executive’s employment may be terminated only under the following conditions:

(a) By Executive. The Executive may voluntarily resign his employment, and thereby terminate this Agreement upon ninety (90) days prior written notice to the Company and the Atlantic Power Board.

(b) By Executive. The Executive may terminate his employment hereunder if, within ninety (90) days preceding and one year following a “change in control”, as defined below:

(i) the Executive is assigned any duties inconsistent in any material respect with the Executive’s current position of employment (including status, offices, titles and reporting relationships), authority, duties or responsibilities, or any other action that when taken as a whole results in a diminution in the Executive’s position, authority, duties or responsibilities, excluding for this purpose any isolated, immaterial and inadvertent action not taken in bad faith and which is remedied within seven business days after receipt of notice thereof given by the Executive;

(ii) the Executive’s base salary is reduced in any material respect without the consent of the Executive, or the Company or, in the case of the LTIP, Atlantic Power, fails to continue in effect any material benefit or compensation plan (including annual cash bonus or LTIP), life insurance plan, health and accident plan or disability plan in existence as of the date of this Agreement (or a replacement or substitute plan providing the Executive with substantially similar benefits) in which the Executive is participating or materially reduces the Executive’s benefits under any of such plans (or replacement or substitute plans);

(iii) the Executive is required to be based at any location more than 35 miles from Boston, Massachusetts except for requirements of travel in the ordinary course of the Executive’s duties; or

(iv) there is a failure by the Company or Atlantic Power to comply with any material provisions of this Agreement and such failure has continued for a period of thirty (30) days after notice of such failure has been given by the Executive to the Company and the Atlantic Power Board.

For purposes of this Agreement, a “ change in control ” means the occurrence of any of the following events:

(i) the sale, lease or transfer to any person or group, in one or a series of related transactions, of the assets of Atlantic Power or Atlantic Holdings which assets generated more than 50 % of Atlantic Holding’s Cash Flow in a 12- month period ended on the last day of the most recent fiscal quarter to any person or group;

(ii) the adoption of a plan related to the liquidation or dissolution of Atlantic Power or Atlantic Holdings;

(iii) the acquisition by any person or group of a direct or indirect interest in more than 50% of: (A) the common shares of Atlantic Power or the common membership interests of Atlantic Holdings; or (B) the voting power of Atlantic Power or Atlantic Holdings; by way of purchase, merger, or consolidation or otherwise (other than a creation of a holding company that does not involve a change in the beneficial ownership of the Company as a result of such transaction);

(iv) the merger or consolidation of Atlantic Power or Atlantic Holdings with or into another person or the merger of another person into Atlantic Power or Atlantic Holdings with the effect that immediately after such transaction the shareholders of Atlantic Power or the holders of common membership interests of Atlantic Holdings immediately prior to such transaction hold, directly or indirectly, less than 50% of the voting control over the person surviving such merger or consolidation, in each case other than the creation of a holding company that does not involve a change in the beneficial ownership of Atlantic Power or Atlantic Holdings as a result as such transaction; or

(v) Atlantic Power or Atlantic Holdings or any of their shareholders or members enters into any agreement providing for any of the foregoing, or the date which is 90 days prior to a definitive announcement by the Company or Atlantic Power of any of the foregoing, whichever is earlier, and the transaction contemplated thereby is ultimately consummated.

(c) By the Company. The Company may terminate Executive’s employment immediately for Cause. As used herein, “Cause” is a termination by reason of the Company’s good faith determination that the Executive (i) engaged in willful misconduct in the performance of his duties, (ii) breached a fiduciary duty to the Company for personal profit to himself, (iii) after determination by a court of competent jurisdiction, wilfully violated any law, rule or regulation of a governmental authority with jurisdiction over the Executive or the Company at the time and place of such violation (other than traffic violation or similar offenses) or any final cease and desist order of a court or other tribunal of competent jurisdiction, or (iv) materially and willfully breached this Agreement. No act, or failure to act, on the Executive’s part shall be considered “wilful” unless he has acted, or failed to act, with an absence of good faith and without a reasonable belief that this action or failure to act was in the best interest of the Company.

( d) By the Company. The Company may terminate Executive’s employment upon ninety (90) days prior written notice to Executive in the event that the Company (as determined by a majority vote of the Atlantic Power Board) has determined that the Executive’s performance is unsatisfactory with respect to his execution of the annually approved Goals & Objectives, and Strategy; provided that the Company may not be permitted to terminate Executive pursuant to this Section 6(d) during any period that is 90 days preceding or one year following a “change of control” as defined in Section 6(a).

7. Compensation Upon Termination.

(a) If (i) the Executive shall terminate his employment hereunder as provided in Section 6(b) hereof, (ii) the Company shall terminate the Executive’s employment pursuant to Section 6(d) hereof, or (iii) the Company terminates Executive’s employment for any other reason other than as specified in Section 6(c) or 7(b), subject to the Company’s receipt of an executed and irrevocable general release from the Executive within 30 days following the date of termination substantially in a form to be mutually agreed between the Board and the Executive as soon as reasonably practicable following the date hereof and to be attached hereto as Exhibit B (other than in respect of the amounts in Section 7(a)(A)), Executive shall be entitled to the following:

(A) to the extent not yet paid, the Executive’s Base Salary through the date of termination of employment;

(B) an amount in cash in a single lump sum equal to two times his Total Annual Compensation under this Agreement (the value of which shall reflect the average Total Annual Compensation during the preceding two years), which shall be paid to Executive on the thirtieth day following his termination of employment;

(C) all employee benefits including, without limitation, all pension and retirement plans, life insurance, health, accident, medical and disability insurances, for a period of 1 year following termination of employment, provided, however, that if for any reason any such benefits cannot be provided through the Company’s group or other plans, and the Company is unable to provide equivalent benefits within 14 days of termination of employment, the Company shall reimburse the Executive for his reasonable cost of obtaining equivalent benefits, such payment to be made within 15 days of his submission of documentation establishing such cost;

(D) immediate acceleration of vesting of all awards previously made under the LTIP that have not yet vested on the thirtieth day following his termination of employment; and

(E) outplacement services at the Company’s cost, customary for executives at his level (including, without limitation, office space and telephone support services) provided by a qualified and experienced third party provider acceptable to Executive, for a period of 12 months following termination of employment with a cost capped at $25,000.

(b) If the Executive’s employment is terminated (i) by the Company as provided in Section 6(c) hereof, or (ii) by Executive as provided in Section 6(a) hereof, Executive shall be entitled to the following:

(A) to the extent not yet paid, the Executive’s Base Salary through the date of termination of employment;

(B) any and all vested benefits under any incentive compensation or other plan of the Company in accordance with the terms and conditions of such plan.

(c) Not later than 30 days following the date of this Agreement, the Company will establish for the benefit of the Executive and on his behalf a “rabbi trust” within the meaning of, and containing terms and provisions substantially similar to those approved by, Internal Revenue Service Rev. Proc. 92-64, 1992-2 C.B. 422 (the “Rabbi Trust”). Within 10 days following the earlier of (1) a change of control and (2) the occurrence of an event obligating the Company to provide compensation pursuant to the terms of Section 7(a)(B) above, the Company will deposit with the Rabbi Trust of the Executive cash in an amount equal to the aggregate dollar amount of the cash payable under Section 7(a)(B). Provided, however, that such funding shall not be required if the funding would cause the assets to be included in the Executive’s income at the time of funding under Internal Revenue Code Section 409A. The Company will pay all expenses

associated with the establishment, maintenance and operation of the rabbi trust, including without limitation reasonable trustee and attorneys’ fees, as they accrue.

If the Executive’s employment is terminated because of any breach of this Agreement by the Company, the Executive shall also be entitled to any other damages which he may sustain as a result of such breach including damages for loss of benefits under any of the Company’s benefit, incentive compensation, or other plans that the Executive would have received had his employment continued for the full term provided for in this Agreement.

If Executive’s employment shall terminate because of Executive’s retirement at the age of sixty-two (62), or thereafter, then any unvested portion of LTIP held by Executive shall continue to vest in accordance with the LTIP in effect at the date of retirement.

If the Executive asserts any claim in any contest (whether initiated by the Executive or by the Company) as to the breach, validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay the Executive’s legal expenses (or cause such expenses to be paid) including, without limitation, his reasonable attorney’s fees, on a quarterly basis, upon presentation of proof of such expenses, provided that the Executive shall reimburse the Company for such amounts, plus simple interest thereon at the 90-day United States Treasury Bill rate as in effect from time to time, compounded annually, if a court of competent jurisdiction shall find that the Executive did not have a good faith and reasonable basis to believe that he would prevail as to at least one material issue presented to the court.

The Executive shall not be required to mitigate the amount of any payment under this Agreement by seeking other reemployment or otherwise.

8. Confidentiality.

The Executive hereby agrees that, unless the written consent of the managers of Atlantic Holdings and the Atlantic Power Board is obtained, the Executive will not at any time use, or disclose or make available to any individual, corporation, limited partnership, general partnership, joint stock company, limited liability corporation, joint venture, association, company, trust, bank, trust company, pension fund, business trust or other organization, whether or not legal entities and governments and agencies and political subdivisions thereof (each a “ Person ”), any information (herein “ Confidential Information ”) concerning the business of Atlantic Holdings and Atlantic Power, consisting primarily of the direct and indirect ownership, management, operation and leasing of assets and property in connection with the generation, transmission, distribution, purchase and sale of electricity and thermal energy, together with investments and other direct or indirect rights in Persons involved in such business and all activities ancillary or incidental to any of the foregoing (collectively, the “ Business ”) acquired in connection with the performance of the services by the Executive hereunder.

Executive acknowledges and agrees that all memoranda, notes, records and other documents made or compiled by Executive or made available to Executive as an employee of the Company concerning Atlantic Power or Atlantic Holdings shall be the Company’s exclusive property and shall be delivered by Executive to the Company upon expiration or termination of this Agreement or at any other time upon the written request of the Company.

Notwithstanding the foregoing, Executive may make use of, reveal or disclose Confidential Information:

(a) as may be expressly permitted by, or necessary for the performance of, Executive’s obligations under this Agreement;

(b) where it is already in the public domain when disclosed to the Executive or becomes, after having been disclosed to the Executive, generally available to the public through publication or otherwise unless the publication or other disclosure was made directly or indirectly by the Executive in breach of this Agreement;

regulatory authority having jurisdiction, including compliance with the disclosure obligations of the Executive;

(d) where it was made available to the Executive on a non-confidential basis from a third party source, or where such information can be demonstrated by the Executive to have come into its possession independently of anything done by the Executive under or pursuant to this Agreement;

(e) as necessary in connection with any dispute resolution or any litigation commenced in respect of this Agreement.

The provisions of this Section 8 shall survive the expiration or termination of this Agreement or any part thereof, without regard to the reason therefore, but shall expire and be at an end on the second anniversary of the termination of the Executive’s employment hereunder.

Executive hereby acknowledges that the services to be rendered by him are of a special, unique and extraordinary character and, in connection with such services, he will have access to confidential information concerning the business of Atlantic Power and Atlantic Holdings. By reason of this, Executive consents and agrees that if he violates any of the provisions of this Agreement with respect to confidentiality, the Company and Atlantic Power would sustain irreparable harm and, therefore, in addition to any other remedies which the Company and Atlantic Power may have under this Agreement or otherwise, the Company and Atlantic Holdings will each be entitled to seek an injunction restraining Executive from committing or continuing any such violation.

9. Non-Competition and Non-Solicitation.

(a) Non-Compete. The Executive agrees that during the term of this Agreement, and for a period of (i) six months following termination of his employment as set forth in Section 7(a)(i) or (ii) hereof or (ii) one month following termination of his employment as set forth in Section 7(b) hereof; Executive will not be employed (i) by any public company whose primary business is investment in independent power projects in the United States or Canada if termination occurs in connection with scenarios referenced in Section 7(a)(i) or 7(b), or (ii) by any public or private company, whose primary business is investment in independent power projects in the United States or Canada if the termination occurs in connection with scenarios referenced in Section 7(a)(ii).

The Executive hereby agrees that all restrictions in this clause are reasonable, valid and do not go beyond what is necessary to protect the interests of the Company and Atlantic Power. The provisions of this clause are only intended to safeguard against the Executive participating in certain competitive endeavors against the Company and Atlantic Power relative to the business above and not from engaging in subsequent businesses which do not meet the description in the preceding paragraph.

(b) Non-Solicitation. The Executive agrees that for one year after the date of termination of employment, he will not attempt, directly or indirectly, to induce any employee of the Company or its affiliates to be employed elsewhere or otherwise to cease providing services to the Company or its affiliates.

10. Deduction and Withholding.

Executive agrees that the Company shall withhold from any and all payments required to be made to Executive in accordance with this Agreement all federal, state, local and other taxes that the Company or any such affiliates determine are required to be withheld in accordance with applicable statutes and regulations from time to time in effect.

11. Compliance with Code Section 409A.

This Agreement is intended to comply with the requirements of Internal Revenue Code Section 409A, or any applicable exemptions from Code Section 409A, as the case may be. Despite any contrary provision of this Agreement:

(a) Any payments that qualify for the “short-term deferral” exception or another exception under Code Section 409A will be paid under such exception.

(b) All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A of the Code. Executive may in no event, directly or indirectly, designate the calendar year of any payment under this Agreement.

(c) Any reference to termination of employment or Executive’s date of termination shall mean and refer to the date of Executive’s “separation from service,” as that term is defined in Treas. Reg. Section 1.409A-1(h).

(d) All reimbursements and in-kind benefits provided under this Agreement will be made or provided in accordance with the requirements of Code Section 409A, including, where applicable, the requirement that (A) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement); (B) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year; (C) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (D) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit. For clarity, the parties agree that the restriction under (B) above does not apply to outplacement services provided under Section7(a)(E).

(e) If Executive is a “specified employee” for purposes of Code Section 409A (as determined in accordance with the methodology established by the Company as in effect on the date of termination), (A) any payment that constitutes nonqualified deferred compensation within the meaning of Code Section 409A that is otherwise due to Executive under this Agreement during the six-month period following his separation from service (as determined in accordance with Code Section 409A) will be accumulated and paid to Executive on the first business day of the seventh month following separation from service (the “Delayed Payment Date”) and (B) in the event any equity compensation awards that vest upon termination of employment constitute nonqualified deferred compensation within the meaning of Code Section 409A, the delivery of shares of common stock (or cash) as applicable in settlement of such awards shall be made on the earliest permissible payment date (including the Delayed Payment Date) or event under Code Section 409A on which the shares (or cash) would otherwise be delivered or paid. Executive will be entitled to interest on any delayed cash payments from the date of termination to the Delayed Payment Date at a rate equal to the applicable federal short-term rate in effect under Code Section 1274(d) for the month in which separation from service occurs. If the case of death during the postponement period, the amounts and entitlements delayed on account of Code Section 409A will be paid to Executive’s personal representative on the first to occur of the Delayed Payment Date or 30 days after death. For the avoidance of doubt, it is intended that this provision apply only to amounts payable under this Agreement that are subject to regulation under Code Section 409A and will not be interpreted or applied so as to delay or otherwise defer any the payment of any amount that qualifies as a “short-term deferral” (within the meaning of Treas. Reg. Section 1.409A-1(b)(4)) or “separation pay” (within the meaning of Treas. Reg. Section 1.409A-1(b)(9)(3).

(f) For purposes of the limitations on nonqualified deferred compensation under Code Section, each payment of compensation under this Agreement will be treated as a separate payment of compensation for purposes of applying the Code Section 409A deferral election rules and the exclusion under Code Section 409A for certain short-term deferral amounts.

(g) Within the time period permitted by the applicable Code Section 409A or other applicable guidance, the Parties may by mutual written agreement modify the Agreement in order to cause the provisions of the Agreement to comply with the requirements of Code Section 409A, so as to avoid the imposition of taxes and penalties.

12. Assignability, Binding Effect.

The rights and obligations under this Agreement shall inure to the benefit of and shall be binding upon the heirs, executors, administrators, successors, and legal representatives of Executive, and shall inure to the benefit and be binding upon the Company and its successors (including, without limitation, any person, firm, corporation, partnership or entity who succeeds to the business of the Company), but neither this Agreement nor the rights or obligations of Executive hereunder may be assigned, pledged, hypothecated or otherwise transferred by Executive to another, person, firm corporation or entity without the prior written consent of the Company, nor may the obligations of Executive hereunder be delegated to any person, firm, corporation or entity.

13. Notices.

All notices, requests, demands and other communications hereunder shall be in writing and shall be delivered personally or sent by registered or certified mail, prepaid and return receipt requested, to the other parties hereto at his or their mailing address as set forth on the signature page of this Agreement, and in the case of Atlantic Power, marked to the attention of the Chairman of the Board of Atlantic Power. Any party may change the address to which such communications hereunder shall be sent by sending notice of such change to the other parties as herein provided.

14. Severability.

If any provision of this Agreement of any part hereof is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all conditions and provisions of this Agreement which can be given effect without such invalid, unlawful or unenforceable provision shall, nevertheless, remain in full force and effect.

15. Warranty.

Executive warrants and represents that he is not and will not become a party to any agreement, contract, arrangement or understanding, whether of employment or otherwise, that would in any way restrict or prohibit him from undertaking or performing his duties in accordance with this Agreement.

16. Authority.

By execution of this Agreement, (a) Atlantic Power represents that this Agreement has been reviewed and adopted by a resolution approved by a majority of the members of the Board of Directors of Atlantic Power, (b) Atlantic Holdings represents that this Agreement has been reviewed and approved by its Board of Managers; and (c) Executive represents that he has reviewed this Agreement, had the opportunity to consult with counsel and other advisors and is voluntarily entering into and executing this Agreement.

17. Complete Understanding; Prior Agreements.

This Agreement constitutes the complete understanding among the Parties with respect to the undertaking of the Executive hereunder, and no statement, representation, warranty or covenant has been made by either party with respect thereto except as expressly set forth herein. Unless otherwise specifically referred to herein, this Agreement shall, from and after the Effective Date, supersede, in all respects, all previous agreements in regard to employment between Executive and the Company, and Executive shall, as of the Effective Date, unless otherwise specifically referred to herein, have no rights under such agreements all of which are merged herein and shall be governed hereby. This Agreement shall not be altered, modified, amended or terminated except by written instrument signed by each of the Parties hereto.

18. Governing Law.

This Employment Agreement shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Massachusetts. The Courts of the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts, shall have exclusive jurisdiction over any dispute relating to this Agreement.

19. Recoupment.

Executive agrees that Executive shall be subject to a financial restatement and clawback policy attached hereto as Exhibit A.

20. Warranty / Certification of Authority.

Each of the undersigned hereby personally warrants that he has the full authority to execute and enter into this Agreement and has obtained all consents, approvals and authorities of any person, committee or entity necessary to make this Agreement binding and fully enforceable against the party for which he signs.

This Agreement shall not become effective until the Secretary of Atlantic Holdings and the Secretary of Atlantic Power each has delivered to the Executive a duly signed certificate certifying that this Agreement and all of its terms have been duly approved by the Board of Directors of their respective companies.

[Signature Pages Follow]

IN WITNESS WHEREOF , the parties hereto have executed this Agreement effective as of the day of the year first written above.





/s/ Paul Rapisarda	/s/ Terrence Ronan
Witness	TERRENCE RONAN

	ATLANTIC POWER HOLDINGS, INC.

	By:	/s/ Barry Welch
		Name: Barry Welch
		Title: President

	ATLANTIC POWER CORPORATION

	By:	/s/ Irving Gerstein
		Name: Irving Gerstein
		Title: Director

EXHIBIT A

Financial Restatement and Clawback Policy

Recoupment Upon Restatement or Misstatement of Financial Results: If, in the opinion of the independent directors of the Board, due in whole or in part to intentional fraud or misconduct by one or more of the Company’s Chief Executive Officer and President, Executive Vice President—Chief Operating Officer, Executive Vice President—Chief Financial Officer and Executive Vice President—Commercial Development, either the Company’s financial results are restated (the “Restatement”) or the Company’s financial results are found to be inaccurate in a manner that materially affects the calculation of compensation for such officers but does not give rise to a Restatement (the “Inaccuracy”), the independent directors have the discretion to use their best efforts to remedy the fraud or misconduct and prevent its recurrence. The Company’s independent directors may, based upon the facts and circumstances surrounding the Restatement or Inaccuracy, direct that the Company recover all or a portion of any bonus or incentive compensation paid, or cancel all, or part of, the stock-based awards granted, to an executive officer that is related to the Restatement or Inaccuracy, as further described in the next paragraph. In addition, the independent directors may also seek to recoup any gains realized with respect to equity-based awards, including stock awards granted under the Company’s Long Term Incentive Plan (“LTIP”), or other incentive payments made or required to be made by the Company under any discretionary, non-discretionary, targeted or other compensation plan of the Company the awarding of which was related to the Restatement or the Inaccuracy, regardless of when issued or required to be issued at a future date. Notwithstanding the foregoing, in the event of an Inaccuracy, any amount recovered, cancelled or recouped will not exceed the amount by which the compensation based on the inaccurate financial results exceeded the compensation calculated under the accurate financial results.

The remedies that may be sought by the independent directors are subject to a number of conditions, including that: (1) the bonus or incentive compensation to be recouped was based on the achievement of objective financial or other similar criteria or factors as provided for in the executive officer’s employment agreement and was calculated based upon the financial results that were restated or found to be inaccurate, (2) the executive officer in question engaged in the intentional misconduct, (3) the bonus or incentive compensation calculated or to be calculated under the restated or accurate financial results is less than the amount actually paid or awarded or to be paid or awarded and (4) no remedy, action or proceeding for the recovery of any amount from an executive officer that is provided for in this Policy shall be commenced after a period of three years from the date of such Restatement or Inaccuracy.

In addition, the independent directors may take other disciplinary action, including, without limitation: (1) adjustment of future compensation of the executive officer, (2) termination of the executive officer’s employment, (3) pursuit of any and all remedies available in law and/or equity in any country, and (4) pursuit of such other action as may fit the circumstances of the particular case. The independent directors may take into account penalties or punishments imposed by third parties, such as law enforcement agencies, regulators or other authorities. The independent directors’ power to determine the appropriate punishment for the wrongdoers is in addition to, and not in replacement of, remedies imposed by such entities and is in addition to any right of recoupment under Section 304 of the Sarbanes-Oxley Act of 2002, or otherwise required by law or stock exchange requirements.

EXHIBIT B

GENERAL RELEASE AND WAIVER AGREEMENT

1. General Release and Waiver

a. In consideration of the payment of $ [ an amount in cash equal to two years worth of Employee’s Total Annual Compensation as provided in Section 7 of Employee’s Employment Agreement ], and in consideration of other “Compensation Upon Termination” described in Section 7 of the Executive Employment Agreement dated April 15, 2013 (the “ Employment Agreement ”) among Terrence Ronan (the “ Employee ”) and Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia (“ Atlantic Power ”), and Atlantic Power Holdings, Inc., a Delaware corporation that is wholly owned by Atlantic Power ( “ Atlantic Holdings ” or “ the Company ”), Employee hereby releases, remises, discharges, and acquits Atlantic Power and all of its subsidiaries, affiliates (including the Company), successors, and assigns, and their respective past, present, and future officers, directors, shareholders, members, partners, agents, employees, and attorneys (collectively, the “ Released Parties ”), jointly and severally, of and from any and all claims, charges, demands, causes of action, obligations, damages, or liabilities or claims under any contract (including the Employment Agreement, except as expressly provided herein), known or unknown (the “ Claims ”), which the Employee or the Employee’s heirs, successors or assigns have ever had or may now have against any of the Released Parties, arising from, connected with, or related to any event that has happened, developed, or occurred, or any state of facts existing, up to and including the date of the Employee’s execution of this General Release and Waiver Agreement (the “ Agreement ”). Without limiting the generality of the foregoing, the Employee specifically releases the Released Parties from all Claims that could have been asserted as a result of Employee’s employment with the Company, separation from employment, or other status with Atlantic Power or the Company, including but not limited to Claims conferred by or arising under any federal, state, local, and/or municipal law, including but not limited to the Age Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, Title VII of the United States Civil Rights Act of 1964, 42 U.S.C. § 1981, the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act, the Older Workers Benefit Protection Act (“OWBPA”), the Massachusetts Fair Employment Practices Act (“MFEPA”), the Massachusetts Equal Rights Law, and the Massachusetts Wage Act, M.G.L.c. 149, §§148 and 150 (including Claims for compensation, salary, wages, bonuses, commission, multiple damages, or attorneys’ fees) and Claims for any form of relief, no matter how denominated, including any claims for injunctive relief, additional compensation, wages, or benefits (including front pay and back pay), compensatory or consequential damages, liquidated or punitive damages, attorneys’ fees, employment, re-employment, or future employment in any capacity, provided however , that this Agreement shall not act to release, and shall not apply to (1) all continuing obligations of the Atlantic Power or its affiliates, including the Company, pursuant to Section 7 (“Compensation Upon Termination”) of the Employment Agreement; (2) all rights in the nature of indemnification and rights to continued coverage under directors’ and officers’ insurance policies (including tail policies) which the Employee may have with respect to claims against the Employee relating to or arising out of his employment with the Atlantic Power or its affiliates (including the Company), including rights under Section 5 of the Employment Agreement (entitled “Indemnification”) and any Indemnity Agreement between Atlantic Power and the Company and the Employee, all of which survive the Employee’s termination of employment ; (3) any vested benefit to which the Employee is entitled under any tax qualified pension plan of Atlantic Power or its affiliates, including the Company; or (4) COBRA continuation coverage benefits or any other similar benefits required to be provided by statute or the Employment Agreement.

b. The Employee agrees that he will not file or permit to be filed on the Employee’s behalf any Claim against any of the Released Parties involving any matter occurring up to and including the date of the Employee’s execution of this Agreement, except with respect to those obligations, rights, and benefits that are excepted and excluded from the scope of the foregoing release. Notwithstanding any other provision of this Agreement, this Agreement is not intended to interfere with the Employee’s right to file a charge with the Equal Employment Opportunity Commission or any state human rights commission in connection with any claim he believes he may have against Atlantic Power or its affiliates (including the Company), or to bar or prohibit contact with or participation in any proceeding before a federal or state administrative agency, provided however , that by executing this Agreement, the Employee hereby waives the right to recover monetary damages or personal relief

with respect to any such charge or proceeding. In addition, this Agreement is not intended to interfere with the Employee’s right to challenge that his waiver of any and all ADEA claims pursuant to this Agreement is a knowing and voluntary waiver, notwithstanding the Employee’s specific representation that he has entered into this Agreement knowingly and voluntarily.

2. Knowing and Voluntary Waiver .

The Employee acknowledges that, by the Employee’s free and voluntary act of signing below, the Employee agrees to all of the terms of this Agreement and intends to be legally bound thereby.

3. OWBPA Compliance .

This Agreement is intended to comply with the Older Workers’ Benefit Protection Act of 1990 (“OWBPA”) with regard to Employee’s waiver of rights under the Age Discrimination in Employment Act of 1967 (“ADEA”).

a . Employee is specifically waiving rights and claims under the ADEA.

b . The waiver of rights under the ADEA does not extend to any rights or claims arising after the date this Agreement is signed by Employee.

c . Employee is receiving consideration in addition to what he would otherwise already be entitled.

d . Employee acknowledges that he has been advised to consult with an attorney before signing this Agreement, and that he has in fact consulted with an attorney regarding this Agreement.

e . Employee acknowledges that he has had a period of twenty-one (21) days to consider his decision to sign this Agreement, and the Employee may execute this Agreement by the date that is twenty — one (21) days after the date of the Employee’s termination of employment, to acknowledge his understanding of and agreement with the terms contained in this Agreement.

f . Employee understands that he may revoke this Agreement in the seven (7) day period following the date on which the Employee signs this Agreement. Any notice of revocation must be in writing, and submitted to the Chief Executive Officer of Atlantic Power within the seven (7) day period after Employee’s execution of the Agreement. This Agreement shall not become effective or enforceable until after this revocation period has expired. If the Employee exercises his right to revoke during the revocation period, he shall forfeit his rights to the “Compensation Upon Termination” provided by Section 7 of the Employment Agreement. This Agreement will become effective, enforceable and irrevocable on the eighth day after the date on which it is executed by the Employee, provided it has not been previously revoked by the Employee.

IN WITNESS WHEREOF , the Employee has executed this Agreement as of the date set forth below.

EMPLOYEE		WITNESS

		NAME (PRINT)
Date:		NAME (SIGN)
		Date:

AGREED, ACCEPTED AND ACKNOWELDGED BY:

ATLANTIC POWER CORPORATION		ATLANTIC HOLDINGS LLC


Name:		Name:
Title:		Title:
Date:		Date:

Exhibit 10.6

EXECUTION VERSION

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

This Amended and Restated Executive Employment Agreement (this “ Agreement ”) is entered into among Atlantic Power Holdings, Inc. (“ Atlantic Holdings ” or the “ Company ”), Atlantic Power Corporation (“ Atlantic Power ”), and Paul H. Rapisarda (“ Executive ”). Atlantic Holdings, Atlantic Power and Executive are collectively referred to herein as the “ Parties .” This Agreement shall be effective as of April 15, 2013 (the “ Effective Date ”).

WITNESSETH:

WHEREAS , Atlantic Holdings, a Delaware corporation, is wholly-owned by Atlantic Power; and

WHEREAS , the Company, Atlantic Power and Executive previously entered into that certain employment agreement dated December 31, 2009 (the “ Existing Employment Agreement ”); and

WHEREAS the Company, Atlantic Power and Executive desire to amend and restate the Existing Employment Agreement to reflect a change in Executive’s title and certain other desired changes, on the terms and conditions set out in this Agreement.

NOW, THEREFORE , in consideration of the promises and mutual covenants herein contained, it is hereby agreed between and among the Parties as follows:

1. Employment.

The Company agrees to continue to employ Executive and Executive agrees to continue to serve in the employ of the Company as an executive, as follows:

(a) Executive agrees to serve as Executive Vice President — Commercial Development of Atlantic Power and Vice President of the Company during the term of this Agreement. Executive further agrees to use his best efforts, and apply his skill and experience, to the proper performance of his duties hereunder and to the business and affairs of the Company and its affiliates. Executive agrees to serve the Company and its affiliates faithfully, diligently and to the best of his ability.

(b) The principal location from which Executive will serve the Company and its affiliates and perform his duties hereunder shall be Boston, Massachusetts.

2. Term.

3. Compensation.

personnel. This minimum base salary may be increased from time to time in accordance with normal business practices of the Company (the minimum base salary as increased from time to time, the “Base Salary”). If such increases take place, the Company shall not thereafter decrease the Executive’s Base Salary without the Executive’s consent during the term of this Agreement.

(e) Other Benefits. The Company shall maintain and the Executive shall be entitled to participate in all of the Company’s employee benefit plans and arrangements in effect on the date hereof including, without limitation, all pension and retirement plans, life insurance, health, accident, medical and disability insurance, and the Company’s holiday and vacation plans, provided, however, that such plans and arrangements shall be no less favourable to Executive, taken as a whole, than those previously provided to Executive by Atlantic Management. The Company may make changes in any such arrangements provided that such changes are made pursuant to a program which is applicable to all officers of the company and which changes do not result in a proportionately greater reduction in the rights and benefits to the Executive as compared with any other officers, provided that the Executive shall be entitled to a minimum of four (4) weeks paid vacation during each calendar year in addition to all normal and customary holidays observed by the Company and provided further that such plans and arrangements shall be no less favourable to Executive, taken as a whole, than those previously provided to Executive by Atlantic Management. The Company also shall ensure and take all measure necessary to provide that Executive encounters or suffers no gap in any insurance coverages and other benefits as a result of the termination of his employment by the Company and his employment hereunder and that all coverages and benefits are continuous through and after such transition.

4. Compensation Upon Death Or Disability.

5. Indemnification.

6. Termination.

The Executive’s employment may be terminated only under the following conditions:

(a) By Executive. The Executive may voluntarily resign his employment, and thereby terminate this Agreement upon ninety (90) days prior written notice to the Company and the Atlantic Power Board.

(b) By Executive. The Executive may terminate his employment hereunder if, within ninety (90) days preceding and one year following a “change in control”, as defined below:

(iii) the Executive is required to be based at any location more than 35 miles from Boston, Massachusetts except for requirements of travel in the ordinary course of the Executive’s duties; or

For purposes of this Agreement, a “ change in control ” means the occurrence of any of the following events:

(ii) the adoption of a plan related to the liquidation or dissolution of Atlantic Power or Atlantic Holdings;

execution of the annually approved Goals & Objectives, and Strategy; provided that the Company may not be permitted to terminate Executive pursuant to this Section 6(d) during any period that is 90 days preceding or one year following a “change of control” as defined in Section 6(a).

7. Compensation Upon Termination.

(A) to the extent not yet paid, the Executive’s Base Salary through the date of termination of employment;

(D) immediate acceleration of vesting of all awards previously made under the LTIP that have not yet vested on the thirtieth day following his termination of employment; and

(A) to the extent not yet paid, the Executive’s Base Salary through the date of termination of employment;

(B) any and all vested benefits under any incentive compensation or other plan of the Company in accordance with the terms and conditions of such plan.

the aggregate dollar amount of the cash payable under Section 7(a)(B). Provided, however, that such funding shall not be required if the funding would cause the assets to be included in the Executive’s income at the time of funding under Internal Revenue Code Section 409A. The Company will pay all expenses associated with the establishment, maintenance and operation of the rabbi trust, including without limitation reasonable trustee and attorneys’ fees, as they accrue.

The Executive shall not be required to mitigate the amount of any payment under this Agreement by seeking other reemployment or otherwise.

8. Confidentiality.

Notwithstanding the foregoing, Executive may make use of, reveal or disclose Confidential Information:

(a) as may be expressly permitted by, or necessary for the performance of, Executive’s obligations under this Agreement;

(c) as required in order to comply with applicable laws, the orders or directions of any governmental authority, the requirements of any stock exchange or clearing house, or the requirements of any other regulatory authority having jurisdiction, including compliance with the disclosure obligations of the Executive;

(e) as necessary in connection with any dispute resolution or any litigation commenced in respect of this Agreement.

9. Non-Competition and Non-Solicitation.

10. Deduction and Withholding.

11. Compliance with Code Section 409A.

(a) Any payments that qualify for the “short-term deferral” exception or another exception under Code Section 409A will be paid under such exception.

Agreement to comply with the requirements of Code Section 409A, so as to avoid the imposition of taxes and penalties.

12. Assignability, Binding Effect.

13. Notices.

14. Severability.

15. Warranty.

16. Authority.

17. Complete Understanding; Prior Agreements.

This Agreement constitutes the complete understanding among the Parties with respect to the undertaking of the Executive hereunder, and no statement, representation, warranty or covenant has been made by either party with respect thereto except as expressly set forth herein. Unless otherwise specifically referred to herein, this Agreement shall, from and after the Effective Date, supersede, in all respects, all previous agreements in regard to employment between Executive and the Company, and Executive shall, as of the Effective Date, unless otherwise specifically referred to herein, have no rights under such agreements all of which are merged herein and shall be governed hereby. Notwithstanding the aforesaid, nothing herein shall abrogate or diminish any right of Executive to earned compensation, to benefits or to indemnification under his employment agreement with Atlantic Management for his service through the termination of such agreement, to the extent not already paid or provided. This Agreement shall not be altered, modified, amended or terminated except by written instrument signed by each of the Parties hereto.

18. Governing Law.

19. Recoupment.

Executive agrees that Executive shall be subject to a financial restatement and clawback policy attached hereto as Exhibit A.

20. Warranty / Certification of Authority.

[Signature Pages Follow]

IN WITNESS WHEREOF , the parties hereto have executed this Agreement effective as of the day of the year first written above.

/s/ Renée Viens	/s/ Paul Rapisarda
Witness	PAUL RAPISARDA


	ATLANTIC POWER HOLDINGS, INC.


	By:	/s/ Barry Welch
		Name: Barry Welch
		Title: President


	ATLANTIC POWER CORPORATION


	By:	/s/ Irving Gerstein
		Name: Irving Gerstein
		Title: Director

EXHIBIT A

Financial Restatement and Clawback Policy

EXHIBIT B

GENERAL RELEASE AND WAIVER AGREEMENT

1. General Release and Waiver

a. In consideration of the payment of $ [ an amount in cash equal to two years worth of Employee’s Total Annual Compensation as provided in Section 7 of Employee’s Amended and Restated Employment Agreement ], and in consideration of other “Compensation Upon Termination” described in Section 7 of the Amended and Restated Executive Employment Agreement dated April 15, 2013 (the “ Employment Agreement ”) among Paul H. Rapisarda (the “ Employee ”) and Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia (“ Atlantic Power ”), and Atlantic Power Holdings, Inc., a Delaware corporation that is wholly owned by Atlantic Power ( “ Atlantic Holdings ” or “ the Company ”), Employee hereby releases, remises, discharges, and acquits Atlantic Power and all of its subsidiaries, affiliates (including the Company), successors, and assigns, and their respective past, present, and future officers, directors, shareholders, members, partners, agents, employees, and attorneys (collectively, the “ Released Parties ”), jointly and severally, of and from any and all claims, charges, demands, causes of action, obligations, damages, or liabilities or claims under any contract (including the Employment Agreement, except as expressly provided herein), known or unknown (the “ Claims ”), which the Employee or the Employee’s heirs, successors or assigns have ever had or may now have against any of the Released Parties, arising from, connected with, or related to any event that has happened, developed, or occurred, or any state of facts existing, up to and including the date of the Employee’s execution of this General Release and Waiver Agreement (the “ Agreement ”). Without limiting the generality of the foregoing, the Employee specifically releases the Released Parties from all Claims that could have been asserted as a result of Employee’s employment with the Company, separation from employment, or other status with Atlantic Power or the Company, including but not limited to Claims conferred by or arising under any federal, state, local, and/or municipal law, including but not limited to the Age Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, Title VII of the United States Civil Rights Act of 1964, 42 U.S.C. § 1981, the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act, the Older Workers Benefit Protection Act (“OWBPA”), the Massachusetts Fair Employment Practices Act (“MFEPA”), the Massachusetts Equal Rights Law, and the Massachusetts Wage Act, M.G.L.c. 149, §§148 and 150 (including Claims for compensation, salary, wages, bonuses, commission, multiple damages, or attorneys’ fees) and Claims for any form of relief, no matter how denominated, including any claims for injunctive relief, additional compensation, wages, or benefits (including front pay and back pay), compensatory or consequential damages, liquidated or punitive damages, attorneys’ fees, employment, re-employment, or future employment in any capacity, provided however , that this Agreement shall not act to release, and shall not apply to (1) all continuing obligations of the Atlantic Power or its affiliates, including the Company, pursuant to Section 7 (“Compensation Upon Termination”) of the Employment Agreement; (2) all rights in the nature of indemnification and rights to continued coverage under directors’ and officers’ insurance policies (including tail policies) which the Employee may have with respect to claims against the Employee relating to or arising out of his employment with the Atlantic Power or its affiliates (including the Company), including rights under Section 5 of the Employment Agreement (entitled “Indemnification”) and any Indemnity Agreement between Atlantic Power and the Company and the Employee, all of which survive the Employee’s termination of employment ; (3) any vested benefit to which the Employee is entitled under any tax qualified pension plan of Atlantic Power or its affiliates, including the Company; or (4) COBRA continuation coverage benefits or any other similar benefits required to be provided by statute or the Employment Agreement.

2. Knowing and Voluntary Waiver .

The Employee acknowledges that, by the Employee’s free and voluntary act of signing below, the Employee agrees to all of the terms of this Agreement and intends to be legally bound thereby.

3. OWBPA Compliance .

a . Employee is specifically waiving rights and claims under the ADEA.

b . The waiver of rights under the ADEA does not extend to any rights or claims arising after the date this Agreement is signed by Employee.

c . Employee is receiving consideration in addition to what he would otherwise already be entitled.

d . Employee acknowledges that he has been advised to consult with an attorney before signing this Agreement, and that he has in fact consulted with an attorney regarding this Agreement.

IN WITNESS WHEREOF , the Employee has executed this Agreement as of the date set forth below.

EMPLOYEE			WITNESS

			NAME (PRINT)
Date:			NAME (SIGN)
			Date:

AGREED, ACCEPTED AND ACKNOWELDGED BY:

ATLANTIC POWER CORPORATION			ATLANTIC HOLDINGS LLC


Name:			Name:
Title:			Title:
Date:			Date:

Exhibit 10.7

EXECUTION VERSION

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (this “ Agreement ”) is entered into among Atlantic Power Holdings, Inc. (“ Atlantic Holdings ” or the “ Company ”), Atlantic Power Corporation (“ Atlantic Power ”), and Edward Hall (“ Executive ”). Atlantic Holdings, Atlantic Power and Executive are collectively referred to herein as the “ Parties .” This Agreement shall be effective as of April 15, 2013 (the “ Effective Date ”).

WITNESSETH:

WHEREAS , Atlantic Holdings, a Delaware corporation, is wholly-owned by Atlantic Power; and

WHEREAS the Company, Atlantic Power and Executive desire to enter into this Agreement on the terms and conditions set out in this Agreement.

NOW, THEREFORE , in consideration of the promises and mutual covenants herein contained, it is hereby agreed between and among the Parties as follows:

1. Employment.

The Company agrees to employ Executive and Executive agrees to serve in the employ of the Company as an executive, as follows:

(a) Executive agrees to serve as Executive Vice President — Chief Operating Officer of Atlantic Power and Vice President of the Company during the term of this Agreement. Executive further agrees to use his best efforts, and apply his skill and experience, to the proper performance of his duties hereunder and to the business and affairs of the Company and its affiliates. Executive agrees to serve the Company and its affiliates faithfully, diligently and to the best of his ability.

(b) The principal location from which Executive will serve the Company and its affiliates and perform his duties hereunder shall be Boston, Massachusetts.

2. Term.

The Company hereby agrees to employ the Executive and Executive hereby agrees to serve the Company and its affiliates from the Effective Date until March 31, 2016, unless further extended or sooner terminated as hereinafter provided.

3. Compensation.

(a) Base Salary. During the period of the Executive’s employment hereunder, the Company shall pay to the Executive a minimum base salary at the rate of not less than $425,000 per annum with the same frequency and on the same basis that the Company normally makes salary payments to its other executive personnel. This minimum base salary may be increased from time to time in accordance with normal business practices of the Company (the minimum base salary as increased from time to time, the “Base Salary”). If such increases take place, the Company shall not thereafter decrease the Executive’s Base Salary without the Executive’s consent during the term of this Agreement.

(e) Other Benefits. The Company shall maintain and the Executive shall be entitled to participate in all of the Company’s employee benefit plans and arrangements in effect on the date hereof including, without limitation, all pension and retirement plans, life insurance, health, accident, medical and disability insurance, and the Company’s holiday and vacation plans. The Company may make changes in any such arrangements provided that such changes are made pursuant to a program which is applicable to all officers of the company and which changes do not result in a proportionately greater reduction in the rights and benefits to the Executive as compared with any other officers, provided that the Executive shall be entitled to a minimum of four (4) weeks paid vacation during each calendar year in addition to all normal and customary holidays observed by the Company. The Company also shall ensure and take all measure necessary to provide that Executive encounters or suffers no gap in any insurance coverages and other benefits as a result of the termination of his employment by the Company and his employment hereunder and that all coverages and benefits are continuous through and after such transition.

4. Compensation Upon Death Or Disability.

5. Indemnification.

6. Termination.

The Executive’s employment may be terminated only under the following conditions:

(a) By Executive. The Executive may voluntarily resign his employment, and thereby terminate this Agreement upon ninety (90) days prior written notice to the Company and the Atlantic Power Board.

(b) By Executive. The Executive may terminate his employment hereunder if, within ninety (90) days preceding and one year following a “change in control”, as defined below:

(iii) the Executive is required to be based at any location more than 35 miles from Boston, Massachusetts except for requirements of travel in the ordinary course of the Executive’s duties; or

For purposes of this Agreement, a “ change in control ” means the occurrence of any of the following events:

(ii) the adoption of a plan related to the liquidation or dissolution of Atlantic Power or Atlantic Holdings;

7. Compensation Upon Termination.

(A) to the extent not yet paid, the Executive’s Base Salary through the date of termination of employment;

(D) immediate acceleration of vesting of all awards previously made under the LTIP that have not yet vested on the thirtieth day following his termination of employment; and

(A) to the extent not yet paid, the Executive’s Base Salary through the date of termination of employment;

(B) any and all vested benefits under any incentive compensation or other plan of the Company in accordance with the terms and conditions of such plan.

associated with the establishment, maintenance and operation of the rabbi trust, including without limitation reasonable trustee and attorneys’ fees, as they accrue.

The Executive shall not be required to mitigate the amount of any payment under this Agreement by seeking other reemployment or otherwise.

8. Confidentiality.

Notwithstanding the foregoing, Executive may make use of, reveal or disclose Confidential Information:

(a) as may be expressly permitted by, or necessary for the performance of, Executive’s obligations under this Agreement;

regulatory authority having jurisdiction, including compliance with the disclosure obligations of the Executive;

(e) as necessary in connection with any dispute resolution or any litigation commenced in respect of this Agreement.

9. Non-Competition and Non-Solicitation.

10. Deduction and Withholding.

11. Compliance with Code Section 409A.

(a) Any payments that qualify for the “short-term deferral” exception or another exception under Code Section 409A will be paid under such exception.

12. Assignability, Binding Effect.

13. Notices.

14. Severability.

15. Warranty.

16. Authority.

17. Complete Understanding; Prior Agreements.

This Agreement together with the Offer Letter dated as of March 26, 2013 by and between the Executive and the Company (the “ Offer Letter ”) constitute the complete understanding among the Parties with respect to the undertaking of the Executive hereunder, and no statement, representation, warranty or covenant has been made by either party with respect thereto except as expressly set forth herein or therein. This Agreement together with the Offer Letter shall, from and after the Effective Date, supersede, in all respects, all previous agreements in regard to employment between Executive and the Company, and Executive shall, as of the Effective Date, unless otherwise specifically referred to herein, have no rights under such agreements all of which are merged herein and shall be governed hereby. This Agreement shall not be altered, modified, amended or terminated except by written instrument signed by each of the Parties hereto.

18. Governing Law.

19. Recoupment.

Executive agrees that Executive shall be subject to a financial restatement and clawback policy attached hereto as Exhibit A.

20. Warranty / Certification of Authority.

[Signature Pages Follow]

IN WITNESS WHEREOF , the parties hereto have executed this Agreement effective as of the day of the year first written above.





/s/ Terrence Ronan	/s/ Edward Hall
Witness	EDWARD HALL


	ATLANTIC POWER HOLDINGS, INC.


	By:	/s/ Barry Welch
		Name: Barry Welch
		Title: President


	ATLANTIC POWER CORPORATION


	By:	/s/ Irving Gerstein
		Name: Irving Gerstein
		Title: Director

EXHIBIT A

Financial Restatement and Clawback Policy

EXHIBIT B

GENERAL RELEASE AND WAIVER AGREEMENT

1. General Release and Waiver

a. In consideration of the payment of $ [ an amount in cash equal to two years worth of Employee’s Total Annual Compensation as provided in Section 7 of Employee’s Employment Agreement ], and in consideration of other “Compensation Upon Termination” described in Section 7 of the Executive Employment Agreement dated April 15, 2013 (the “ Employment Agreement ”) among Edward C. Hall (the “ Employee ”) and Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia (“ Atlantic Power ”), and Atlantic Power Holdings, Inc., a Delaware corporation that is wholly owned by Atlantic Power ( “ Atlantic Holdings ” or “ the Company ”), Employee hereby releases, remises, discharges, and acquits Atlantic Power and all of its subsidiaries, affiliates (including the Company), successors, and assigns, and their respective past, present, and future officers, directors, shareholders, members, partners, agents, employees, and attorneys (collectively, the “ Released Parties ”), jointly and severally, of and from any and all claims, charges, demands, causes of action, obligations, damages, or liabilities or claims under any contract (including the Employment Agreement, except as expressly provided herein), known or unknown (the “ Claims ”), which the Employee or the Employee’s heirs, successors or assigns have ever had or may now have against any of the Released Parties, arising from, connected with, or related to any event that has happened, developed, or occurred, or any state of facts existing, up to and including the date of the Employee’s execution of this General Release and Waiver Agreement (the “ Agreement ”). Without limiting the generality of the foregoing, the Employee specifically releases the Released Parties from all Claims that could have been asserted as a result of Employee’s employment with the Company, separation from employment, or other status with Atlantic Power or the Company, including but not limited to Claims conferred by or arising under any federal, state, local, and/or municipal law, including but not limited to the Age Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, Title VII of the United States Civil Rights Act of 1964, 42 U.S.C. § 1981, the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act, the Older Workers Benefit Protection Act (“OWBPA”), the Massachusetts Fair Employment Practices Act (“MFEPA”), the Massachusetts Equal Rights Law, and the Massachusetts Wage Act, M.G.L.c. 149, §§148 and 150 (including Claims for compensation, salary, wages, bonuses, commission, multiple damages, or attorneys’ fees) and Claims for any form of relief, no matter how denominated, including any claims for injunctive relief, additional compensation, wages, or benefits (including front pay and back pay), compensatory or consequential damages, liquidated or punitive damages, attorneys’ fees, employment, re-employment, or future employment in any capacity, provided however , that this Agreement shall not act to release, and shall not apply to (1) all continuing obligations of the Atlantic Power or its affiliates, including the Company, pursuant to Section 7 (“Compensation Upon Termination”) of the Employment Agreement; (2) all rights in the nature of indemnification and rights to continued coverage under directors’ and officers’ insurance policies (including tail policies) which the Employee may have with respect to claims against the Employee relating to or arising out of his employment with the Atlantic Power or its affiliates (including the Company), including rights under Section 5 of the Employment Agreement (entitled “Indemnification”) and any Indemnity Agreement between Atlantic Power and the Company and the Employee, all of which survive the Employee’s termination of employment ; (3) any vested benefit to which the Employee is entitled under any tax qualified pension plan of Atlantic Power or its affiliates, including the Company; or (4) COBRA continuation coverage benefits or any other similar benefits required to be provided by statute or the Employment Agreement.

2. Knowing and Voluntary Waiver .

The Employee acknowledges that, by the Employee’s free and voluntary act of signing below, the Employee agrees to all of the terms of this Agreement and intends to be legally bound thereby.

3. OWBPA Compliance .

a . Employee is specifically waiving rights and claims under the ADEA.

b . The waiver of rights under the ADEA does not extend to any rights or claims arising after the date this Agreement is signed by Employee.

c . Employee is receiving consideration in addition to what he would otherwise already be entitled.

d . Employee acknowledges that he has been advised to consult with an attorney before signing this Agreement, and that he has in fact consulted with an attorney regarding this Agreement.

IN WITNESS WHEREOF , the Employee has executed this Agreement as of the date set forth below.

EMPLOYEE		WITNESS

		NAME (PRINT)
Date:		NAME (SIGN)
		Date:

AGREED, ACCEPTED AND ACKNOWELDGED BY:

ATLANTIC POWER CORPORATION		ATLANTIC HOLDINGS LLC


Name:		Name:
Title:		Title:
Date:		Date:

Exhibit 10.8

EXECUTION VERSION

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

This Amended and Restated Executive Employment Agreement (this “ Agreement ”) is entered into among Atlantic Power Holdings, Inc. (“ Atlantic Holdings ” or the “ Company ”), Atlantic Power Corporation (“ Atlantic Power ”), and Barry E. Welch (“ Executive ”). Atlantic Holdings, Atlantic Power and Executive are collectively referred to herein as the “ Parties .” This Agreement shall be effective as of April 15, 2013 (the “ Effective Date ”).

WITNESSETH:

WHEREAS , Atlantic Holdings, a Delaware corporation, is wholly-owned by Atlantic Power; and

WHEREAS , the Company, Atlantic Power and Executive previously entered into that certain employment agreement dated December 1, 2009 (the “ Existing Employment Agreement ”); and

WHEREAS the Company, Atlantic Power and Executive desire to amend and restate the Existing Employment Agreement to reflect certain desired changes, on the terms and conditions set out in this Agreement.

NOW , THEREFORE , in consideration of the promises and mutual covenants herein contained, it is hereby agreed between and among the Parties as follows:

1. Employment.

The Company agrees to continue to employ Executive and Executive agrees to continue to serve in the employ of the Company as an executive, as follows:

(a) Executive agrees to serve as President and Chief Executive Officer (CEO) of the Company during the term of this Agreement. Executive further agrees to use his best efforts, and apply his skill and experience, to the proper performance of his duties hereunder and to the business and affairs of the Company and its affiliates. Executive agrees to serve the Company and its affiliates faithfully, diligently and to the best of his ability.

(b) The principal location from which Executive will serve the Company and its affiliates and perform his duties hereunder shall be Boston, Massachusetts.

2. Term.

3. Compensation.

(a) Base Salary. During the period of the Executive’s employment hereunder, the Company shall pay to the Executive a minimum base salary at the rate of not less than $700,000 per annum with the same frequency and on the same basis that the Company normally makes salary payments to its other executive personnel. This minimum base salary may be increased from time to time in accordance with normal

business practices of the Company (the minimum base salary as increased from time to time, the “Base Salary”). If such increases take place, the Company shall not thereafter decrease the Executive’s Base Salary without the Executive’s consent during the term of this Agreement.

(e) Other Benefits. The Company shall maintain and the Executive shall be entitled to participate in all of the Company’s employee benefit plans and arrangements in effect on the date hereof including, without limitation, all pension and retirement plans, life insurance, health, accident, medical and disability insurance, and the Company’s holiday and vacation plans, provided, however, that such plans and arrangements shall be no less favourable to Executive, taken as a whole, than those previously provided to Executive by Atlantic Management. The Company may make changes in any such arrangements provided that such changes are made pursuant to a program which is applicable to all officers of the company and which changes do not result in a proportionately greater reduction in the rights and benefits to the Executive as compared with any other officers, provided that the Executive shall be entitled to a minimum of four (4) weeks paid vacation during each calendar year in addition to all normal and customary holidays observed by the Company and provided further that such plans and arrangements shall be no less favourable to Executive, taken as a whole, than those previously provided to Executive by Atlantic Management. The Company also shall ensure and take all measure necessary to provide that Executive encounters or suffers no gap in any insurance coverages and other benefits as a result of the termination of his employment by the Company and his employment hereunder and that all coverages and benefits are continuous through and after such transition.

4. Compensation Upon Death Or Disability.

5. Indemnification.

6. Termination.

The Executive’s employment may be terminated only under the following conditions:

(a) By Executive. The Executive may voluntarily resign his employment, and thereby terminate this Agreement upon ninety (90) days prior written notice to the Company and the Atlantic Power Board.

(b) By Executive. The Executive may terminate his employment hereunder if, within ninety (90) days preceding and one year following a “change in control”, as defined below:

(iii) the Executive is required to be based at any location more than 35 miles from Boston, Massachusetts except for requirements of travel in the ordinary course of the Executive’s duties; or

For purposes of this Agreement, a “ change in control ” means the occurrence of any of the following events:

(ii) the adoption of a plan related to the liquidation or dissolution of Atlantic Power or Atlantic Holdings;

7. Compensation Upon Termination.

(A) to the extent not yet paid, the Executive’s Base Salary through the date of termination of employment;

(B) an amount in cash in a single lump sum equal to three years’ worth of Total Annual Compensation under this Agreement (the value of which shall reflect three times the average Total Annual Compensation during the preceding two years), which shall be paid to Executive on the thirtieth day following his termination of employment;

(C) all employee benefits including, without limitation, all pension and retirement plans, life insurance, health, accident, medical and disability insurances, for a period of 2 years following termination of employment, provided, however, that if for any reason any such benefits cannot be provided through the Company’s group or other plans, and the Company is unable to provide equivalent benefits within 14 days of termination of employment, the Company shall reimburse the Executive for his reasonable cost of obtaining equivalent benefits, such payment to be made within 15 days of his submission of documentation establishing such cost;

(D) immediate acceleration of vesting of all awards previously made under the LTIP that have not yet vested on the thirtieth day following his termination of employment; and

(A) to the extent not yet paid, the Executive’s Base Salary through the date of termination of employment;

(B) any and all vested benefits under any incentive compensation or other plan of the Company in accordance with the terms and conditions of such plan.

of the cash payable under Section 7(a)(B). Provided, however, that such funding shall not be required if the funding would cause the assets to be included in the Executive’s income at the time of funding under Internal Revenue Code Section 409A. The Company will pay all expenses associated with the establishment, maintenance and operation of the rabbi trust, including without limitation reasonable trustee and attorneys’ fees, as they accrue.

The Executive shall not be required to mitigate the amount of any payment under this Agreement by seeking other reemployment or otherwise.

8. Confidentiality.

Notwithstanding the foregoing, Executive may make use of, reveal or disclose Confidential Information:

(a) as may be expressly permitted by, or necessary for the performance of, Executive’s obligations under this Agreement;

(e) as necessary in connection with any dispute resolution or any litigation commenced in respect of this Agreement.

9. Non-Competition and Non-Solicitation.

(a) Non-Compete. The Executive agrees that during the term of this Agreement, and for a period of (i) one year following termination of his employment as set forth in Section 7(a)(i) or (ii) hereof or (ii) one month following termination of his employment as set forth in Section 7(b) hereof; Executive will not be employed (i) by any public company whose primary business is investment in independent power projects in the United States or Canada if termination occurs in connection with scenarios referenced in Section 7(a)(i) or 7(b), or (ii) by any public or private company, whose primary business is investment in independent power projects in the United States or Canada if the termination occurs in connection with scenarios referenced in Section 7(a)(ii).

(b) Non-Solicitation. The Executive agrees that for two years after the date of termination of employment, he will not attempt, directly or indirectly, to induce any employee of the Company or its affiliates to be employed elsewhere or otherwise to cease providing services to the Company or its affiliates.

10. Deduction and Withholding.

11. Compliance with Code Section 409A.

(a) Any payments that qualify for the “short-term deferral” exception or another exception under Code Section 409A will be paid under such exception.

Agreement to comply with the requirements of Code Section 409A, so as to avoid the imposition of taxes and penalties.

12. Assignability, Binding Effect.

13. Notices.

14. Severability.

15. Warranty.

16. Authority.

17. Complete Understanding; Prior Agreements.

This Agreement constitutes the complete understanding among the Parties with respect to the undertaking of the Executive hereunder, and no statement, representation, warranty or covenant has been made by either party with respect thereto except as expressly set forth herein. Unless otherwise specifically referred to herein, this Agreement shall, from and after the Effective Date, supersede, in all respects, all previous agreements in regard to employment between Executive and the Company, and Executive shall, as of the Effective Date, unless otherwise specifically referred to herein, have no rights under such agreements all of which are merged herein and shall be governed hereby. Notwithstanding the aforesaid, nothing herein shall abrogate or diminish any right of Executive to earned compensation, to benefits or to indemnification under his employment agreement with Atlantic Management for his service through the termination of such agreement, to the extent not already paid or provided. This Agreement shall not be altered, modified, amended or terminated except by written instrument signed by each of the Parties hereto.

18. Governing Law.

19. Recoupment.

Executive agrees that Executive shall be subject to a financial restatement and clawback policy attached hereto as Exhibit A.

20. Warranty / Certification of Authority.

[Signature Pages Follow]

IN WITNESS WHEREOF , the parties hereto have executed this Agreement effective as of the day of the year first written above.

/s/ Renée Viens	/s/ Barry Welch
Witness	BARRY WELCH


	ATLANTIC POWER HOLDINGS, INC.


	By:	/s/ Terrence Ronan
		Name: Terrence Ronan
		Title: Chief Financial Officer


	ATLANTIC POWER CORPORATION


	By:	/s/ Irving Gerstein
		Name: Irving Gerstein
		Title: Director

EXHIBIT A

Financial Restatement and Clawback Policy

EXHIBIT B

GENERAL RELEASE AND WAIVER AGREEMENT

1. General Release and Waiver

a. In consideration of the payment of $ [ an amount in cash equal to three years worth of Employee’s Total Annual Compensation as provided in Section 7 of Employee’s Amended and Restated Employment Agreement ], and in consideration of other “Compensation Upon Termination” described in Section 7 of the Amended and Restated Executive Employment Agreement dated April 15, 2013 (the “ Employment Agreement ”) among Barry E. Welch (the “ Employee ”) and Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia (“ Atlantic Power ”), and Atlantic Power Holdings, Inc., a Delaware corporation that is wholly owned by Atlantic Power ( “ Atlantic Holdings ” or “ the Company ”), Employee hereby releases, remises, discharges, and acquits Atlantic Power and all of its subsidiaries, affiliates (including the Company), successors, and assigns, and their respective past, present, and future officers, directors, shareholders, members, partners, agents, employees, and attorneys (collectively, the “ Released Parties ”), jointly and severally, of and from any and all claims, charges, demands, causes of action, obligations, damages, or liabilities or claims under any contract (including the Employment Agreement, except as expressly provided herein), known or unknown (the “ Claims ”), which the Employee or the Employee’s heirs, successors or assigns have ever had or may now have against any of the Released Parties, arising from, connected with, or related to any event that has happened, developed, or occurred, or any state of facts existing, up to and including the date of the Employee’s execution of this General Release and Waiver Agreement (the “ Agreement ”). Without limiting the generality of the foregoing, the Employee specifically releases the Released Parties from all Claims that could have been asserted as a result of Employee’s employment with the Company, separation from employment, or other status with Atlantic Power or the Company, including but not limited to Claims conferred by or arising under any federal, state, local, and/or municipal law, including but not limited to the Age Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, Title VII of the United States Civil Rights Act of 1964, 42 U.S.C. § 1981, the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act, the Older Workers Benefit Protection Act (“OWBPA”), the Massachusetts Fair Employment Practices Act (“MFEPA”), the Massachusetts Equal Rights Law, and the Massachusetts Wage Act, M.G.L.c. 149, §§148 and 150 (including Claims for compensation, salary, wages, bonuses, commission, multiple damages, or attorneys’ fees) and Claims for any form of relief, no matter how denominated, including any claims for injunctive relief, additional compensation, wages, or benefits (including front pay and back pay), compensatory or consequential damages, liquidated or punitive damages, attorneys’ fees, employment, re-employment, or future employment in any capacity, provided however , that this Agreement shall not act to release, and shall not apply to (1) all continuing obligations of the Atlantic Power or its affiliates, including the Company, pursuant to Section 7 (“Compensation Upon Termination”) of the Employment Agreement; (2) all rights in the nature of indemnification and rights to continued coverage under directors’ and officers’ insurance policies (including tail policies) which the Employee may have with respect to claims against the Employee relating to or arising out of his employment with the Atlantic Power or its affiliates (including the Company), including rights under Section 5 of the Employment Agreement (entitled “Indemnification”) and any Indemnity Agreement between Atlantic Power and the Company and the Employee, all of which survive the Employee’s termination of employment ; (3) any vested benefit to which the Employee is entitled under any tax qualified pension plan of Atlantic Power or its affiliates, including the Company; or (4) COBRA continuation coverage benefits or any other similar benefits required to be provided by statute or the Employment Agreement.

Employee’s right to challenge that his waiver of any and all ADEA claims pursuant to this Agreement is a knowing and voluntary waiver, notwithstanding the Employee’s specific representation that he has entered into this Agreement knowingly and voluntarily.

2. Knowing and Voluntary Waiver .

The Employee acknowledges that, by the Employee’s free and voluntary act of signing below, the Employee agrees to all of the terms of this Agreement and intends to be legally bound thereby.

3. OWBPA Compliance .

a . Employee is specifically waiving rights and claims under the ADEA.

b . The waiver of rights under the ADEA does not extend to any rights or claims arising after the date this Agreement is signed by Employee.

c . Employee is receiving consideration in addition to what he would otherwise already be entitled.

d . Employee acknowledges that he has been advised to consult with an attorney before signing this Agreement, and that he has in fact consulted with an attorney regarding this Agreement.

f . Employee understands that he may revoke this Agreement in the seven (7) day period following the date on which the Employee signs this Agreement. Any notice of revocation must be in writing, and submitted to the Vice President of Human Resources of Atlantic Power within the seven (7) day period after Employee’s execution of the Agreement. This Agreement shall not become effective or enforceable until after this revocation period has expired. If the Employee exercises his right to revoke during the revocation period, he shall forfeit his rights to the “Compensation Upon Termination” provided by Section 7 of the Employment Agreement. This Agreement will become effective, enforceable and irrevocable on the eighth day after the date on which it is executed by the Employee, provided it has not been previously revoked by the Employee.

IN WITNESS WHEREOF , the Employee has executed this Agreement as of the date set forth below.

EMPLOYEE		WITNESS

		NAME (PRINT)
Date:		NAME (SIGN)
		Date:

AGREED, ACCEPTED AND ACKNOWELDGED BY:

ATLANTIC POWER CORPORATION		ATLANTIC HOLDINGS LLC


Name:		Name:
Title:		Title:
Date:		Date:

Exhibit 10.9

FOURTH AMENDED AND RESTATED
LONG-TERM INCENTIVE PLAN

PARTICIPATION AGREEMENT AND CONFIRMATION

Edward C. Hall (“ Participant ”)

Pursuant to the Fourth Amended and Restated Long-Term Incentive Plan (the “ Plan ”) of Atlantic Power Holdings, Inc. (“ Atlantic Holdings ”) dated November 05, 2011 and in consideration of services provided to the Issuer and/or any of its subsidiaries by the Participant, Atlantic Holdings hereby grants to the Participant 36,961 Notional Shares under the Plan.

Capitalized terms not defined in this agreement have the meanings given in the Plan.

DATED April 02, 2013.

	ATLANTIC POWER HOLDINGS, INC.


	Per:	/s/ Barry E. Welch
		Name: Barry E. Welch
		Title: President

	/s/ Edward Hall
	Signature

	Edward Hall
	Name (please print)

Exhibit 10.10

FOURTH AMENDED AND RESTATED
LONG-TERM INCENTIVE PLAN

PARTICIPATION AGREEMENT AND CONFIRMATION

Terrence Ronan (“ Participant ”)

Pursuant to the Fourth Amended and Restated Long-Term Incentive Plan (the “ Plan ”) of Atlantic Power Holdings, Inc. (“ Atlantic Holdings ”) dated November 5, 2011 and in consideration of services provided to the Issuer and/or any of its subsidiaries by the Participant, Atlantic Holdings hereby grants to the Participant 6,000 Notional Shares under the Plan.

Capitalized terms not defined in this agreement have the meanings given in the Plan.

DATED April 11, 2013.

	ATLANTIC POWER HOLDINGS, INC.


	Per:	/s/ Barry E. Welch
		Name: Barry E. Welch
		Title: President

	/s/ Terrence Ronan
	Signature

	Terrence Ronan
	Name (please print)

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Exhibit 12.1

Computation of Ratio of Earnings to Fixed Charges
Atlantic Power Corporation

The following table sets forth the ratio of earnings to fixed charges for the periods indicated below.

				Year Ended December 31,

	Six Months Ended June 30, 2013			Year Ended December 31,
(in millions of U.S. dollars)	Six Months Ended June 30, 2013			2012			2011			2010			2009			2008
Earnings (loss) from continuing operations before income taxes	$	6.9		$	(143.7	)	$	(82.9	)	$	(12.0	)	$	(82.7	)	$	(2.6	)
Loss attributable to noncontrolling interests		(0.8	)		0.6			0.5			0.1			—			—
Distributions from equity investments		18.1			38.3			21.9			16.8			27.8			41.0
Interest capitalized		(1.6	)		(16.9	)		(2.9	)		(5.0	)		—			—
Preferred share dividends of a subsidiary company		(6.3	)		(13.0	)		(3.2	)		—			—			—
Fixed charges (from below)		79.4			151.4			52.1			34.3			74.7			61.0

	$	95.7		$	16.7		$	(14.5	)	$	34.2		$	19.8		$	99.4
Preferred share dividends of a subsidiary company	$	6.3		$	13.0		$	3.2		$	—		$	—		$	—
Project level interest	$	21.9		$	44.9		$	22.9		$	22.6		$	18.7		$	17.7
Corporate level interest		51.2			93.5			26.0			11.7			56.0			43.3

	$	79.4		$	151.4		$	52.1		$	34.3		$	74.7		$	61.0
Ratio of earnings to fixed charges		1.21			⁽¹⁾			⁽¹⁾			1.00			⁽¹⁾			1.63

⁽¹⁾: Our ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For these purposes, "earnings" is the amount resulting from adding together earnings (loss) from continuing operations before income taxes, distributions from equity investments and fixed charges and subtracting loss attributable to noncontrolling interests, interest capitalized and preferred share dividends of a subsidiary company. "Fixed charges" is the amount resulting from adding together preferred share dividends of a subsidiary company, project level interest (including interest capitalized and interest from discontinued operations) and corporate level interest expenses. Earnings were insufficient to cover fixed charges by $134.7 million, $66.6 million and $54.9 million for the years ended December 31, 2012, 2011 and 2009, respectively, due to a loss from continuing operations before taxes of $143.7, $82.9 and $82.7, for the years ended December 31, 2012, 2011 and 2009, respectively.

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Exhibit 12.1

Computation of Ratio of Earnings to Fixed Charges Atlantic Power Corporation

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Exhibit 31.1

Certifications

I, Barry E. Welch, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Atlantic Power Corporation;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a): Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b): Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c): Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d): Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a): All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b): Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 8, 2013		/s/ BARRY E. WELCH Barry E. Welch President and Chief Executive Officer

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Exhibit 31.1

Certifications

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Exhibit 31.2

Certifications

I, Terrence Ronan, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Atlantic Power Corporation;

2.

3.

4.

a): Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b): Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c): Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d): Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

a): All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b): Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 8, 2013		/s/ TERRENCE RONAN Terrence Ronan Chief Financial Officer

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Exhibit 31.2

Certifications

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Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

The undersigned officer of Atlantic Power Corporation (the "Company") hereby certifies to his knowledge that the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2013 (the "Report"), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 8, 2013
		/s/ BARRY E. WELCH Barry E. Welch *President and Chief Executive Officer*

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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002


Date: August 8, 2013
		/s/ TERRENCE RONAN Terrence Ronan *Chief Financial Officer*

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Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002