Jess Nieukerk - Director of Finance and Communications David Cornhill - Chairman and CEO Debbie Stein - SVP and CFO David Harris - President, Power and Gas

Linda Ezergailis – TD Securities Steven Paget - First Energy Robert Kwan - RBC Capital Markets David Noseworthy - CIBC World Markets

Thank you. Good morning, everyone.

Welcome to AltaGas’ first quarter 2013 conference call. Speaking today are David Cornhill, Chairman and Chief Executive Officer; Debbie Stein, Senior Vice President and Chief Financial Officer; and David Harris, President, Power and Gas.

After some formal comments this morning, we will have a question-and-answer session. Before we begin, I’d like to remind you that certain information presented today may include forward-looking statements.

Such statements reflect the corporation’s current expectations, estimates, projections and assumptions. These forward-looking statements are not guarantees of future performance and they are subject to certain risks, which could cause actual performance and financial results to vary materially from those contemplated in the forward-looking statements.

For additional information on these risks, please take a look at our annual information form under the heading Risk Factors. I’ll now turn the call over to David Cornhill.

Thank you, Jess. Good morning, everyone.

This morning, we reported an 18% increase in normalized earnings per share achieving $0.53 per share compared to $0.45 per share in the first quarter 2012 our normalized EBITDA for the first quarter 2013 increased by 59% to 145.8 million compared 91.6 million in the same quarter 2012. Normalized funds from operations for the first quarter 2013 was 122.3 million or $1.16 per share, compared to 74.7 million or $0.83 per share in the first quarter of 2012.

In the first quarter of ’13 we have made significant progress on our journey. SEMCO and (inaudible) are performing as expected and delivered over $96 million of EBITDA in the first two quarters of ownership.

The Blythe Energy Center acquisition provides long term stable and reliable earnings and cash flow. Forrest Kerr Hydro Project continues to track ahead of schedule and within budget.

We have substantially completed the water intake area of the project as well as the tunneling and expeditions. Finally we are now expecting the completion (inaudible) volcano hydro projects to be mid-2015, a few months earlier than previously expected.

In view of the progress achieved and the strong financial results the Board of Directors has increased the monthly dividend by one half cent to $0.012 per share. This increase will be affective with the June 17th dividend payment.

In the quarter we made several announcements that will drive our growth. Our growth initiatives support the development of infrastructure that produces clean and affordable energies primarily through the use of natural gas.

We are pursuing new export markets for Canadian Gas, expanding our natural gas fire generation capacity, growing our local gas distribution utilities and developing opportunities to use clean and low cost natural gas through CNG and LNG. We announced the acquisition of the 507 megawatt Blythe Energy Center which provides stable cash flows through the PPA with a strong counter party.

The acquisition is expected to close in the second quarter. The Blythe Energy Center provides us with significant geographic footprint in a growing our market and provides us with the opportunity to expand our clean power generation capacity at the site.

In addition, growth is expected to come from our plants to develop energy export business through the partnership we announced with Idemitzu as well as a planned 600 million cubic feet a day expansion of the PNG system which is expected to deliver natural gas to the West Coast. Planning and development of these two initiatives are underway and we expect to have more details later this year.

In BC PNG is currently delivering CNG to customers by truck. We are exploring additional CNG and LNG initiatives in BC and provide the customers with clean and affordable energy solutions.

In Nova Scotia heritage gas is expecting to begin distributing CNG by truck to industrial and commercial customers in a few weeks. CNG will reduce the energy cost, reduce carbon emissions and increase our customers’ competitiveness.

AltaGas expects to deliver stronger earnings and cash flow in 2013 as compared to 2012. 2013 will be another exciting year on our journey as we benefit from new assets added in 2012 as we complete construction of the Forrest Kerr project and prepare to deliver power to BC grid in May 2014 as we complete the feasibility studies for the PNG expansion and energy export business and as we embark on the next leg of our growth beyond 2014.

We remain committed to our strategy to increase stable cash flow from long life assets to further support both dividend growth and capital growth. I will now pass the call on to Debby.

Thank you David and good morning everyone. Normalized net income applicable to common shares for the first quarter 2013with 55.5 million or $0.53 per share compared to 40.1 million or $0.45 per share for same quarter 2012.

On a GAAP basis, first quarter 2013 net income applicable to common shares was $49 million compared to $41.3 million for first quarter 2012. On a per share basis, we reported $0.46 per share for both quarters on a GAAP basis.

In the first quarter 2013, on an after tax basis, we normalized for 4.6 million related to mark-to-market accounting and $0.3 million for transaction costs related to the Blythe acquisition. The business segments reported normalized operating income of approximately 115 million in first quarter 2013 compared to $76.4 million for the same period last year.

As David mentioned, the increase was driven by the addition of SEMCO and higher volumes processed in the gas business and higher power generated in the power business. In gas, Gordondale and coal-stream both began commercial operations in fourth quarter and so first quarter this year was their first full quarter contribution.

Blair Creek began operating in third quarter last year so operated for a full quarter compared to first quarter last year. The utility segment also benefitted from continued rate based growth at the Canadian utility.

So, first quarter 2013 interest expense was 24.6 million compared to 12.8 million in same quarter 2012 due to a higher average debt level of 2.7 billion in first quarter 2013 compared to 1.4 billion in first quarter 2012, partially offset by lower average borrowing rate of 4.7% in the quarter compared to 5.5% in the same quarter last year. The effective tax rate in first quarter 2013 was 27% compared to 24% in the same quarter last year.

The increase is mainly due to higher tax rates and higher income subject to tax in the U.S. compared to last year and current taxes also increased as a result of higher earnings from the utility segment but the majority of the current taxes are recovered through the regulated revenue model at the utilities.

In first quarter, net invested capital was approximately a $104 million, the majority of which was growth capital related to the construction of the Northwest projects and capital expenditures of the utilities. For the full year, we expect to invest approximately $350 to $400 million excluding the Blythe acquisition.

Our balance sheet remains strong with debt to total capitalization of 57% at the end of first quarter. Pro forma the equity raised through the Blythe acquisitions and following the closing of Blythe our debt to total capitalization is expected to be approximately 54%.

We continue to have strong support from the credit markets and we obtained a new $300 million credit commitment to support the Blythe acquisition and on April 12, we issued a 175 million U.S. denominated floating rate note at LIBOR plus 0.79% for a two year period.

Our debt maturity remains very manageable and we will continue to balance our long term and short term financings as well as floating in fixed rate debts in order to execute a financing strategy that supports our business strategy. We continue to be well positioned for long term earnings, cash flow and sustainable dividend growth into the future.

And with that, I will now turn the call over to David Harris.

Thank you, Debbie and good morning everyone. As David mentioned earlier, our new gas and power assets diluted financial results we expected in the quarter.

The Gordondale and Co-stream gas processing facilities as well as the Blair Creek expansion all hope to partially offset the impact of the lower contribution in the sale of liquids. The Gordondale is operating as planned and we reported earnings based on our take or pay volumes.

At Co-stream volumes are down slightly due to some inlet pressure issues from NGTL systems (inaudible) have these resolved in the second quarter. Our Q1 2013 total extraction volumes increased by over 1,300 barrels per day primarily as a result of increased ethane volumes coming from the addition of our (inaudible) Co-stream facility.

NGL volumes decreased by approximately 850 barrels per day compared to same quarter 2012 mainly due to low volumes at (inaudible). FGNP throughput in the first quarter 2013 averaged 403 MMCF per day, slightly above the Q1 2012 but well above the overall 2012 average of 372 MMCF per day and the fourth quarter throughput of 377 MMCF per day.

Our new Gordondale facility is operating as designed with 40% current utilization. We expect volumes at Gordondale to ramp up throughout the year based on planned producer activity in the area.

The Blair Creek expansion is operating close to capacity and expansion like the Gordondale and Co-stream facilities are underpinned by long term take and pay cost of service arrangements. For the first quarter 2013, AltaGas hedged approximately 58% of active dispose reduction at an average price of approximately $34 per barrel before deducting extraction premiums.

This compares to approximately 70% hedge or approximately $36 per barrel last year. The spot NGL frac spread for Q1 2013 was approximately $27 per barrel compared to approximately $40 per barrel a year ago.

We estimate that 12% of the total extraction volumes through the remainder of 2013 will be exposed to frac spread, approximately 45% of that exposure has been hedged at an average price of approximately $30 per barrel before deducting extraction premiums. In our power segment, the assets we added in 2012 outperformed as expected.

The biomass and win assets contribute to earnings as expected in the Cogen-2 facility in Alberta was able to benefit from high power prices in the quarter. We did see lower results overall in the power segment mainly due to the impact of unplanned outage at Sundance Street for eight and half days.

in addition lower hedge prices in volume, lower generation of the amount and lower power prices we see from power generated by peak is added to the lower results. The Alberta power market showed considerable volatility in Q1 with February averaging $29 and March averaging $108.

as a result overall first quarter price increased averaged $65 per megawatt hour compared to $60 per megawatt hour in Q1 of 2012. For the first quarter 2013, AltaGas power generation was 61 hedged at an average price of $68 per megawatt hour compared to 75% hedged at approximately $80 per megawatt hour for the same last year.

We are approximately two thirds 45% and 40% hedged for the second through fourth quarters respectfully all at approximately $65 per megawatt hour. Construction on Forrest Kerr continues to outpace expectations with the project running ahead of schedule and on budget.

The total project is approximately 80% complete and there are no major components outstanding that are on critical path. The excavation of the power tunnel was completed on April 4, 2013 with the 30 meter plug still in place to mitigate the risk of flooding during powerhouse construction.

The inner work is complete with (inaudible) completely removed and completion of the powerhouse is progressing ahead of schedule. We have completed commissioning of the intake structure and the inflatable wear with the majority of remaining work being the completion of the powerhouse construction and the instillation of the turbines which is ahead of schedule.

We expect the plant to be mechanically complete by the end of 2013. We expect to be commissioning of the plant this year and be in position to synchronize the northwest transmission line which is scheduled for COD in May 2014.

At McLymont Creek and Volcano Creek all material permits are in place and construction is well underway. The McLymont Creek access road and bridge were completed in the first quarter.

Excavation of the Volcano Creek powerhouse is complete with the foundation pole. The intake site and diversion are currently underway and are expected to be completed by the end of second quarter 2013.

Finally before turning the call back to Jess, I just like to comment on our recent acquisition of the Blythe energy center. Blythe who had 570 megawatt to our total jet power generation portfolio while helping us secure a strong foothold in the California power market.

The power purchase agreement brought stable earnings and cash flow for the next seven years. Post PPA live strategic operations allows us to access two premium power markets California and Arizona.

Loan growth in California market is expected to be approximately 1.5% range and based on the environmental initiatives in that market we expect there to be significant retirements over the next decade. As such we expect to see reserve margin compress and we are very confident in being able to contract Blythe quite favorably in the future.

The acquisition is on track to close in the second quarter that concludes my prepared remarks. I will now pass the call back to Jess.

Thank you, David. Operator, I will now turn the call over to you for our Q&A session.

Just want to start off on your joint venture with Idemitsu. Since several months since that’s been announced I was wondering if you can provide us any additional detail regarding the LPG export facility that you’re pursuing in terms of size, cost?

It’s a little premature. Idemitsu was targeting 25,000 barrels a day, that’s our current working assumption.

We’re in the process of doing a number of feasibility studies right now on the plant and a number of other items. So, probably more in the July timeframe that you’ll see more clarity around that.

And then maybe just a follow on question, you know (inaudible) has also mentioned that they’re pursuing an LPG export facility on the west coast. Is there any opportunity for you to work together by the cheap operational or capital efficiencies?

There is always that opportunity. We have a number of joint ventures and (inaudible) we operate and jointly own the younger facility.

And maybe just turn to the BC LNG project. that has been delayed by the requirement for a 45 megawatt generation facility.

Is there any opportunity for AltaGas to construct and operate that facility?

We know how to do it, that’s all I can say at this point.

And maybe one last question on the BC LNG, you obviously the joint venture you’re targeting I think was called small scale LNG facility. Will development of that include potentially an acquisition of such facility?

I can’t speculate on that.

I have some questions around your gas business volumes Younger and Jeffery I think extraction plant volumes were down. What was driving that and what would be the outlook for volumes from those facilities going forward?

If you look at and compare to Q1 of last year there is a fair amount of extra product in the market with respect to propane and gas prices were relatively low keeping volumes down. We're starting to see strength coming back to the gas pricing, I think if you look at gas pricing at the beginning of Q1 it was around the high 2.80 mark.

It's up around 3.80, so we'll see some strength coming back there and should see volumes pressing up especially at our Younger facility.

Okay great and then similarly the reduced inlet compression off of the Novagas transmission system, can you comment on if that might be recurring or what was going on there?

I think it's a combination of a couple of things. as we turn around and bring a new facility in, you're always working through some tuning and issues when you first bring on a major facility like that, but in addition to that I think it's also an adjustment to the overall system as it relates to that particular facility coming online, so we're working closely with TransCanada to turn around and mitigate those pressure drops they've had on that system and working towards a solution on that through the quarter.

We're not anticipating that because it's a long term problem at all.

And then maybe this is a question more for David or Davy or David Cornhill, can you maybe provide us with an update on the dividend policy? My sense is traditionally the board has increased the dividend recently in the fall, so would this be accelerating up that traditional annual increase or might this be in addition to the regular annual review?

The board will continuously review, I think from our perspective and the board's perspective as I laid out strong performance of the Central and MSTAR, clearly we are tracking faster in derisking the construction of Forrest Kerr than we anticipated and with, that we're totally operational and water is flowing and taking out tunneling risk on the (inaudible), that was prudent on top of very strong earnings. So it may have been a few months earlier than anticipated but the board felt we're progressing faster than we anticipated, so that's the reason for the dividend increase.

Can you give us some updates on the outcome of the PNG, prefeasibility study, so what size capacity increase seems most probable at this point?

We're looking at 600 million cubic feet a day.

Okay and have you made it as far as advancing commercial discussions beyond what has already been relayed to us?

We're active in discussions and we've done routing and things like that. First Nation's discussions are beginning, so we're moving down that road but I think you will see the progress accelerate over the next few quarters.

Okay and just on the Blythe acquisition, two things that it does for AltaGas is one it obviously diversifies a way diversifies the power assets a bit but also comes with a growth opportunity given the undeveloped land and underutilized transmission. Which of those two items was more important in the acquisition rationale?

Robert I think both of them for us were probably equally weighted.

Okay let me ask the question in a different way. If what's the best strategy to maximize the value of the undeveloped land and transmission capacity after closing.

Do you wait to see how the market develops or do you know enough today to perhaps pursue a growth opportunity shortly after closing?

No I think we have a pretty healthy view of the California market, not only as it exists today but how it will probably trend on a trajectory basis over the next five years or so to a decade. so we will start to work down the path of the strategy that would allow us to turn around and expand the Blythe facility in the future to support the needs whether they being California or in Arizona.

My question is for David Harris. David if I were to get an AltaGas style analysis or the BC hydro power line, what do you think it would look like?

What percentage of lead time items have been ordered? What percent has been delivered?

How much of the cost have been locked in and so on?

Well I couldn’t really talk with respect to where they are and on what they have locked in for pricing. I can give a pretty healthy view of where I think they are with respect to construction.

That would be great.

The line is pretty much completely cleared. They are making substantial progress with respect to foundations being installed, towers being erected and towers being assembled.

Probably over the last 30 days they have added additional crews with respect to foundation work and tower assembly. Weather has been cooperating very nicely.

Up in the area it has been a relatively low key tail end of the winter and spring if you can call it spring up there it is come a little bit early. So we are very pleased with the progress we are seeing BC hydro make and we've got very good relation with them we talk to them on a weekly basis and we help each other quite a bit up there.

So we are very optimistic. The right on track with what they announced I think it was in the middle of last year to be (inaudible) in May of 2014.

David, thank you. (Inaudible) you appear to be getting about 20,000 barrels a day of C3+; are these volumes correct?

And could you just discuss please, how AltaGas is processing and marketing propane plus volumes? are you selling spec product, for example?

Well, with respect to the volumes, that’s rough right maybe slightly a little lower than that. Some of it is already contracted product that goes out the door and we have a smaller percentage that we play in the spec market.

If I can just first make sure I understand on the dividends. David you were mentioning, really it was just the progress you are making and de-risking Forrest Kerr specifically that led to a bit of the acceleration and looking at the divi, just to be clear what, is there anything in the base business that maybe surprising you to the upside that helped to push the divi increase to today?

I think the base business has been very stable. We have been able to grow and also a little weakness in commodity prices and with Blythe with the performance of (inaudible) and SEMCO and utility business and then the Forrest Kerr and McClimon moving up a bit.

We just felt that the whole northwest projects were substantially de-risked from where we were six months ago. And so on top of the strong earnings that we were able to generate we did, the Board decided that to increase.

I wouldn’t read anything more than things are going quite well on our growth projects and we are right on-track with our strategy so. We are pleased where we are and we are pleased where we are going and so that was the rationale from the Board perspective.

Okay. Just a follow-up on the co-stream inlet pressure issue; does that impact throughout the earnings that you receive under the Nova contract?

Not so much, right because we got a fee for service type of contract. It’s just more, the result of a facility like that coming online just being adjusted into the system, more than anything else.

Okay so it’s more of in operational statement rather than anything that impact the cash flow?

That’s correct.

Okay. And just the last question on NTL you are tracking really well for Forrest Kerr and then they are as you mentioned expected to come in on May.

As you talk with them, is there any scope for them to try to accelerate the timing, either their work or, is there the potential for you to even try to help them out a little bit given if you have that line in before, now they are part of the run-off season, that’s actually quite a financial benefit to you?

We have had a working dialogue going on with BC hydro since the project has begun and those type of conversations have been taking place.

Okay, so there is a scope for you to maybe help them out?

Potentially, yes.

In the power business, you sell I believe both the end contracted power that you generate here in Alberta and the power you are entitled to from your PPAs as well as some power that you purchase for resale and where did these purchases take place? Is it all in Alberta?

Yes, it is.

And do you buy it from other PPA's and so on?

It can come from a number of sources but whether it's PPAs or on the direct market.

I just have a follow-up question on the Northwest function project commission force occur; is there an opportunity to do some of the commissioning work maybe in a more atypical way if you had the power lines there to kind of speed up that commission processes. Is that something that you are exploring?

I just have a follow-up question on the Northwest function project commission force occur; is there an opportunity to do some of the commissioning work maybe in a more atypical way if you had the power lines there to kind of speed up that commission processes. Is that something that you are exploring?

We have already actually implemented that plan, when we turned around and built out the camp, David we added additional generating capacity so that for all intents and purposes of the gases in a position to complete all the commissioning we can do short of having the NTL lines services.

So, then just to get an idea of how long would it be between the high line coming on being commissioned and you been able to complete your commission; get a feel for that time length?

So, then just to get an idea of how long would it be between the high line coming on being commissioned and you been able to complete your commission; get a feel for that time length?

I do, under the original schedule, if we didn’t add that added capacity; it would have been about a 90 day time frame. Right now, we have got that time frame probably down to 30 days, give or take maybe five to 10 days, we decided that depending on how well things go once you tie into the NTL, so we shrunk that by about 60 days comfortably.

At this time there are no further questions registered. I would like to turn the meeting back over to Mr.

Nieukerk

Perfect thank you that concludes our first quarter 2013 conference call. As always I or Debbie am available after the call here for any follow-up questions that anyone may have.

Thank you everyone for joining us today.