There is no debt being assumed with the acquisition. The non-recourse acquisition debt associated with this transaction amortizes fully over the term of the power purchase agreement.

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The acquisition brings a number of benefits to Atlantic Power's shareholders, as it:

- Generates strong cash flow that is expected to result in distributions to the Company of between $20 million and $23 million in 2009 and $8 million to $10 million per year during the 2010 to 2013 period

- Has a power purchase agreement with Progress Energy Florida that provides strong and steady cash flow through 2013 with promising near-term opportunities to recontract the plant beyond the term of the current PPA

- Has a fuel supply agreement with El Paso Corporation through mid-2012 with fixed prices, leaving only 18% of required volumes exposed to spot natural gas prices; management will execute hedging strategy to further mitigate this risk

- Has an excellent operating history and will allow Atlantic Power to capitalize on its base of existing knowledge and relationships from its interests in three other Florida plants

- Project-level debt fully amortizes over the term of the existing PPA

- Was funded without raising equity in the public markets

The Company intends but is not required to refinance the indebtedness incurred to acquire Auburndale, including the borrowing under the Company's credit facility and the non-recourse acquisition debt, within 12-18 months. Any anticipated refinancing is expected to be non-recourse to the Company and fully amortize over the remaining term of the PPA, leaving the project free of debt at the end of 2013. The cash distribution projections above assume that the refinancing is completed by the end of 2009, but the total cash distributions through 2013 are not dependent on or significantly impacted by the refinancing assumption.

Dividend Increase and Sustainability

The acquisition of Auburndale further diversifies and strengthens the Company's long-term cash flow available for distribution. As a result, the Company announced today that the dividend to common shareholders will be increased by Cdn$0.034, or 8%, to Cdn$0.46 per year beginning in January 2009. When combined with the interest payment on the subordinated notes portion of the Company's IPS, the dividend increase results in a total annual distribution of Cdn$1.094 per IPS.

In addition, management of the Company has reaffirmed that cash on hand and projected future cash flows from existing projects, including cash flows from Auburndale and the distribution increase discussed above, are sufficient to meet the new level of cash distributions to IPS holders into 2015.

About Atlantic Power

Atlantic Power Corporation owns interests in a diversified portfolio of 14 power generation projects and one transmission line located in major markets in the United States. Atlantic Power's objectives are to sustain and its cash distributions and increase the long term value of the company by enhancing the performance of its existing assets and by making accretive acquisitions.

When used in this news release, the words "anticipate", "expect", "project", "believe", "estimate", "forecast" and similar expressions are intended to identify forward-looking statements, which include statements relating to the anticipated financial and operational performance of Auburndale and the expected distributions to the Company from Auburndale in 2009 through 2013.

Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to the ability of the Company to refinance the non-recourse acquisition debt and the anticipated financial and operating performance of Auburndale. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements contained in this news release represent our expectations as of the date of this press release and, accordingly, are subject to change after such date. Except as required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE: Atlantic Power Corporation

Atlantic Power Corporation
Barry Welch
(617) 977-2700
Email: info@atlanticpowercorporation.com

- Cash available for distribution up 76% through first nine months of year

- Payout ratio of 72% for nine months ended September 30, 2008

- Executed natural gas hedges at Lake project at favorable prices

- Currency hedges extended at attractive rates for two years through 2013

- Acquisition of Auburndale cogeneration facility to boost cash flow

- Remaining $35.6 million Auction Rate Securities sold at par, further strengthening the balance sheet

"We continue to generate strong and sustainable cash available for distribution, and are on track to achieve an 11% increase in distributions from our projects in 2008," commented Barry Welch, President and CEO. "We are also on track to close the Auburndale acquisition in the fourth quarter and continue to look for additional accretive acquisitions that will further strengthen and extend our cash flows and the value of our power-producing portfolio."

Operating Performance

Adjusted EBITDA at the Projects, including earnings from equity investments, was $32.6 million for the quarter ended September 30, 2008 compared $41.8 million for the same period last year. The decrease in Adjusted EBITDA in the third quarter was due to a number of factors, including:

- Higher Adjusted EBITDA in 2008 at Pasco due to the acquisition of the additional interest in the Project in December 2007 and higher power prices, offset by higher fuel costs following the expiration of its fuel supply agreement at the end of the second quarter. Beginning January 1, 2009, a new ten-year PPA at the Pasco Project requires the PPA counterparty to provide natural gas required to operate the plant and, as a result, the Pasco Project will no longer be exposed to changes in market prices of natural gas.

- Increased Adjusted EBITDA Lake in 2008 due to higher power prices and higher plant efficiency as a result of the turbine upgrades performed in the fourth quarter of 2007.

- The absence of revenue at Onondaga as the contracts that provided substantially all of the Project's cash flow expired in the second quarter of this year, as previously disclosed. This plant was taken out of service as a result of the efficiency of its equipment and the regional electricity market. This combination of factors is not typical at the Company's other Projects.

- Delay in timing of distributions from Selkirk as a result of restrictions under the terms of the Project's non-recourse debt. Management currently expects that the restricted cash will become available in the fourth quarter of 2008 and in 2009.

For the first nine months of 2008, Adjusted EBITDA increased approximately 3.4% to $125.2 million compared to the same nine-month period last year. In addition to the factors described above for the third quarter, the change in Adjusted EBITDA was primarily due to the following factors:

- Receipt of an $8.9 million distribution from the Gregory Project resulting from a release of debt services reserves at that Project that was anticipated after signing a new PPA in the second quarter of 2007

- The absence of Adjusted EBITDA from Jamaica in 2008 due to the sale of the Project in the fourth quarter of 2007.

- Lower Adjusted EBITDA at Chambers due to a planned outage in the second quarter of 2008

- Reduced Adjusted EBITDA at Stockton attributable to a planned outage in the second quarter of 2008.

Cash Flow Available for Distribution

For the three months ended September 30, 2008, Cash Flow Available for Distribution declined to $9.5 million compared to $12.0 million for the same period last year. Distributions declared in the third quarter of 2008 were $15.4 million, resulting in a payout ratio of 162% compared to a payout ratio of 131% in last year's third quarter.

The decrease in Cash Flow Available for Distribution is due primarily to lower Project Adjusted EBITDA. In addition, changes in working capital had a significant negative impact on operating cash flow in the third quarters of both 2007 and 2008, primarily due to the timing of the build-up of cash at the Company's Projects that becomes available following scheduled debt payments.

For the nine months ended September 30, 2008, Cash Flow Available for Distribution rose to $66.6 million compared to $37.8 million for the same period last year. Distributions declared for the first nine months of 2008 were $47.9 million, resulting in a payout ratio of 72% compared to 118% in the prior year period. The increase in Cash Flow Available for Distribution reflects higher Project Adjusted EBITDA and the positive impact of working capital changes in the first half of 2008 when compared to the prior year, partially offset by the factors impacting the third quarter described above.

Recent Developments

On September 30, 2008, the Company announced that it had agreed to acquire Auburndale Power Partners, Limited Partnership ("Auburndale"), which owns and operates a 155 MW natural gas-fired combined cycle cogeneration facility located in Polk County, Florida. The purchase price will be approximately US$134.5 million plus routine working capital adjustments and will be funded by cash on hand, a borrowing under the Company's credit facility and $35 million of acquisition debt. Closing of the acquisition is subject to customary closing conditions, and is anticipated to occur in the fourth quarter of 2008.

In September approximately $1 million of the Company's investment in auction-rate securities ("ARS") were redeemed at par value, reducing the Company's ARS par value investment to $35.6 million. In November the Company completed the sale of the remaining $35.6 million of ARS investments for proceeds of $35.6 million, which will be received on November 13, 2008. "We were pleased to have sold our ARS investments for their full value, and will use the proceeds to fund a portion of the Auburndale acquisition," Mr. Welch concluded.

The Lake Project's operating margin is exposed to changes in natural gas prices from the expiry of its natural gas supply contract on June 30, 2009 through the expiry of its PPA on July 31, 2013. In the third quarter of 2008, the Company entered into a series of financial swaps that effectively fixed the price of natural gas at the Lake Project during the second half of 2009 at a weighted average price of $8.64/Mmbtu. In October 2008, the Company entered into a series of financial swaps that effectively fix the price of natural gas at $7.85/Mmbtu, for approximately 25% of the natural gas volumes that are projected to be consumed by the Lake Project in 2010.

On July 25, 2008, the Toronto Stock Exchange ("TSX") approved a normal course issuer bid to purchase up to four million IPSs, representing approximately 8% of the Company's public float. As of September 30, 2008, the Company had acquired and cancelled 558,620 IPSs at an average price of Cdn$8.78 under the terms of the issuer bid.

The calculation of Cash Flow Available for Distribution and a summary of Adjusted EBITDA by individual project for the three and nine months ended September 30, 2008 are attached to this news release.

The Company's financial statements for the period and management's discussion and analysis for the three and nine months ended September 30, 2008 are available on the Company's website at www.atlanticpowercorporation.com and on SEDAR at www.sedar.com.

Atlantic Power Corporation owns interests in a diversified portfolio of 13 power generation projects and one transmission line located in major markets in the United States. Atlantic Power's objectives are to sustain and grow its cash distributions over the long term by enhancing the performance of its existing assets and by making accretive acquisitions.

Certain statements in this news release may constitute "forward-looking statements", which reflect the expectations of Atlantic Power Management, LLC (the "Manager") regarding future growth, results of operations, performance and business prospects and opportunities of Atlantic Power Corporation (the "Company"), Atlantic Power Holdings, LLC ("Atlantic Holdings") and the Projects (as defined below). Such forward-looking statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release. 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. 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 discussed under "Risk Factors" section in this the Company's management's discussion and analysis for the year ended December 31, 2007 and under "Risk Factors" in the Company's annual information form dated March 28, 2008. Although the forward-looking statements contained in this news release 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. These forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to update or revise them to reflect new events or circumstances.

Cash Flow Available for Distribution is not a measure recognized under Canadian generally accepted accounting principles ("GAAP") and does not have a standardized meaning prescribed by GAAP. Management believes Cash Flow Available for Distributions is a relevant supplemental measure of the Company's ability to earn and distribute cash returns to investors. A reconciliation of Cash Flows from Operating Activities to Cash Flow Available for Distributions is attached to this news release and is also included in the Company's management's discussion and analysis for the three months ended March 31, 2008. Investors are cautioned that the Company may calculate this measure in a manner that is different from other companies. Adjusted EBITDA, earnings before interest, taxes, depreciation and amortization (including non-cash impairment charges), is not a measure recognized under GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers and does not have a standardized meaning prescribed by GAAP. Management uses Adjusted EBITDA at the Project-level to provide comparative information about Project performance. Investors are cautioned that the Company may calculate this measure in a manner that is different from other issuers.

Atlantic Power Corporation
Cash Flow Available for Distribution(2)
(In thousands of U.S. dollars, except as otherwise stated)
                                         Three months           Nine months
                                   ended September 30,   ended September 30,
(unaudited)                          2008      2007(1)    2008       2007(1)
----------------------------------------------------------------------------
Cash flows from operating
 activities                         7,176       8,007   64,932       38,717
Project-level debt repayment       (6,676)     (4,643) (24,693)     (24,425)
Interest on IPS portion of
 Subordinated Notes                 9,242       9,390   28,637       26,758
Purchase of property, plant and
 equipment                           (222)       (779)  (2,325)      (3,238)
----------------------------------------------------------------------------
Cash flow available for
 distribution,
 US$                                9,520      11,975   66,551       37,812
----------------------------------------------------------------------------
Interest on IPS Subordinated Notes  9,242       9,390   28,637       26,758
Dividends on IPS Common Shares      6,206       6,305   19,230       17,969
----------------------------------------------------------------------------
Total IPS distributions, US$       15,448      15,695   47,867       44,727
----------------------------------------------------------------------------
Cash flow available for
 distribution per IPS, US$
 - basic                             0.16        0.19     1.08         0.62
 - diluted                           0.14        0.18     1.03         0.60
Total distribution declared per
 IPS, US$                            0.25        0.26     0.78         0.73
Cash flow available for
 distribution, Cdn$                 9,915      12,336   67,800       40,840
Total IPS distributions, Cdn$      16,216      16,295   48,815       48,886
Cash flow available for
 distribution per IPS, Cdn$
 - basic                             0.16        0.20     1.10         0.66
 - diluted                           0.15        0.19     1.05         0.65
Total distribution declared per
 IPS, Cdn$                           0.26        0.27     0.79         0.80
----------------------------------------------------------------------------

1 Amounts previously reported in 2007 have been revised to conform to the calculation of Cash Available for Distribution adopted in 2008, which does not include any adjustment for income taxes recoverable. Through the end of 2007, the Company was required to pay tax instalments based on estimates of taxable income without the benefit of the interest deduction related to the Subordinated Notes and Debentures. This requirement resulted in the payment of significant tax instalments to the IRS, followed by a refund of most of the instalment payments when the actual tax returns were filed in subsequent periods with the full benefit of the interest deductions on the Subordinated Notes and Debentures. As of January 1, 2008, the Company is permitted to calculate tax instalment payments with the full benefit of these interest payments factored into estimated taxable income. As a result, management expects significant fluctuations in working capital related to tax instalments and subsequent refunds to decrease and the adjustment to Cash Flow Available for Distribution is no longer needed.

2 Cash Flow 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 issuers. See "Non-GAAP Financial Measures".

Atlantic Power Corporation
Project Adjusted EBITDA(1) (in thousands of U.S. dollars)
                                     Three months ended   Nine months ended
                                           September 30,       September 30,
(unaudited)                            2008        2007     2008       2007
----------------------------------------------------------------------------
Adjusted EBITDA from consolidated
 and proportionately
 consolidated Projects
Badger Creek                            377         669    2,664      2,795
Chambers                              8,081       7,899   21,537     23,066
Koma Kulshan                            334         188      653        873
Lake                                  8,364       7,154   25,062     21,409
Mid-Georgia                           1,641       2,812    3,616      4,605
Onondaga                               (314)      5,437    8,332     17,285
Orlando                               2,733       2,112    3,037      6,122
Pasco                                 1,292       3,659   17,293     10,592
Stockton                                415         879    1,003      2,537
Topsham                                 415         415    1,670      1,561
Path 15                               8,131       8,152   22,555     23,389
Other                                    38         274      578        738
----------------------------------------------------------------------------
Total adjusted EBITDA from
 consolidated and proportionately
 consolidated Projects               31,507      39,650  108,000    114,972
Amortization                         11,747      12,893   36,703     38,396
Interest expense, net                 6,297       7,461   19,044     18,108
Change in the fair value of
 derivative
 instruments                        (98,040)      6,451   22,431     89,647
Other income                         (3,584)         (8)  (5,465)   (10,040)
----------------------------------------------------------------------------
Earnings (loss) from consolidated
 and proportionately
 consolidated Projects              115,087      12,853   35,287    (21,139)
----------------------------------------------------------------------------
Adjusted EBITDA from equity and
 cost method Projects
Delta-Person                            473         574    1,475      1,697
Gregory                                   -           -    8,933          -
Jamaica                                   -           -        -     (2,734)
Rumford                                 601         657    1,794      1,930
Selkirk                                   -         862    5,197      5,529
Other                                     -          47     (163)      (221)
----------------------------------------------------------------------------
Total adjusted EBITDA from equity
 and cost method Projects             1,074       2,140   17,236      6,201
Amortization                            455         486    1,381      1,485
Interest expense, net                   155         248      527        949
Other expense                             -           -        -          -
Income tax                                -          12        -        594
----------------------------------------------------------------------------
Income from equity and cost method
 projects                               464       1,394   15,328      3,173
Project income
Total adjusted EBITDA from all
 Projects                            32,581      41,790  125,236    121,173
Amortization                         12,202      13,379   38,084     39,881
Interest expense, net                 6,451       7,709   19,570     19,057
Other (income) expense               (3,584)         (8)  (5,465)   (10,040)
Change in fair value of derivative
 instruments                        (98,040)      6,451   22,431     89,647
Income tax                                -          12        -        594
----------------------------------------------------------------------------
Project income (loss) as reported
 in the statement of income         115,552      14,247   50,616    (17,966)
----------------------------------------------------------------------------
Earnings (loss) from consolidated
 and proportionately
 consolidated Projects              115,087      12,853   35,287    (21,139)
Income from long-term investments       465       1,394   15,329      3,173
----------------------------------------------------------------------------
Project income (loss) as reported
 in the statement of income         115,552      14,247   50,616    (17,966)
----------------------------------------------------------------------------
1. Adjusted EBITDA is not a measure recognized under GAAP and does not have
   a standardized meaning prescribed by GAAP. Adjusted EBITDA is defined as
   earnings before interest, taxes, depreciation, amortization (including
   non-cash impairment charges) and changes in fair value of derivative
   instruments. Management uses adjusted EBITDA at the Projects to provide
   comparative information about Project performance. See "Non-GAAP
   Financial Measures" in this MD&A.

Contacts:
Atlantic Power Corporation
Barry Welch
President and CEO
(617) 977-2700
Email: info@atlanticpowercorporation.com
Website: www.atlanticpowercorporation.com

SOURCE: Atlantic Power Corporation

mailto:info@atlanticpowercorporation.com
http://www.atlanticpowercorporation.com

The Company executed these forward Canadian dollar purchases for 2012 and 2013 at Cdn$1.14 and Cdn$1.23, respectively, per U.S. dollar. As a result of the new currency hedges, the Company's cash on hand and projected future cash flows from existing projects are sufficient to meet the current level of cash distributions to IPS holders through 2015 without including additional cash flows from the pending Auburndale acquisition or any future potential acquisitions. This represents an improvement from the Company's previous projections that had indicated the current level of cash distributions to IPS holders could be made through 2014.

About Atlantic Power

Atlantic Power Corporation owns interests in a diversified portfolio of 13 power generation projects and one transmission line located in major markets in the United States. Atlantic Power's objectives are to sustain and its cash distributions and increase the long term value of the company by enhancing the performance of its existing assets and by making accretive acquisitions.

When used in this news release, the words "anticipate", "expect", "project", "believe", "estimate", "forecast" and similar expressions are intended to identify forward-looking statements, which include statements relating to the impact of the currency hedges on Atlantic Power's future cash distributions.

Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to the anticipated financial and operating performance of the Company's projects. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements contained in this news release represent our expectations as of the date of this press release and, accordingly, are subject to change after such date. Except as required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts:
Atlantic Power Corporation
Barry Welch
(617) 977-2700
Email: info@atlanticpowercorporation.com

SOURCE: Atlantic Power Corporation

mailto:info@atlanticpowercorporation.com