Legal Notice This presentation includes certain forward looking - PowerPoint PPT Presentation

Legal Notice This presentation includes certain forward looking information (“FLI”) to provide Enbridge Energy Partners, L.P. (“EEP”) and Enbridge Energy Management, L.L.C. (“EEQ”) investors and potential investors with information about EEP and EEQ and management’s assessment of the future plans and operations, which may not be appropriate for other purposes. FLI involves statements that frequently use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “position,” “projection,” “should,” “strategy,” “will” and similar words. Although we believe that such forward looking statements are reasonable based on currently available information, such statements involve risks, uncertainties and assumptions and are not guarantees of performance. Future actions, conditions or events and future results of operations may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond EEP’s ability to control or predict. Specific factors that could cause actual results to differ from those in the forward-looking statements include: (1) changes in the demand for or the supply of, forecast data for and price trends related to crude oil, liquid petroleum, natural gas and NGLs, including the rate of development of the Alberta Oil Sands; (2) EEP’s ability to successfully complete and finance expansion projects; (3) the effects of competition, in particular, by other pipeline systems; (4) shut-downs or cutbacks at facilities of EEP or refineries, petrochemical plants, utilities or other businesses for which EEP transports products or to whom EEP sells products; (5) hazards and operating risks that may not be covered fully by insurance, including those related to Line 6B and any additional fines and penalties assessed in connection with the crude oil release on that line; (6) changes in or challenges to EEP’s tariff rates; and (7) changes in laws or regulations to which EEP is subject, including compliance with environmental and operational safety regulations that may increase costs of system integrity testing and maintenance. FLI regarding “drop - down” sales opportunities for our ownership in Midcoast Operating, L.P. are further qualified by the fact that Midcoast Energy Partners, L.P. is under no obligation to buy any of our interests in Midcoast Operating, L.P., and we are under no obligation to sell any such additional interests. As a result, we do not know when or if any such additional interests will be sold. Our FLI is also subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, weather, economic conditions, interest rates and commodity prices, including but not limited to those discussed more extensively in our filings with U.S. securities regulators. The impact of any one risk, uncertainty or factor on any particular FLI is not determinable with certainty as these are interdependent and our future course of action depends on management’s assessment of all information available at the relevant time. Any FLI in this presentation is based only on information currently available to us and speaks only of the date on which it is made. Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this presentation is expressly qualified in its entirety by these cautionary statements and by such other factors as discussed in EEP’s and EEQ’s SEC filings, including its most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. 2

Agenda 1. Program Overview 2. Line 3 Replacement Benefits 3. Commercial Structure 4. Funding Plan Update 5. Question & Answer 3

Line 3 Replacement • Line 3: – Part of Enbridge mainline system – Replace all remaining segments from Hardisty to Superior with latest available high strength steel and coating technology • EEP Capital Investment: – border to Superior ~ $2.6 billion capital • Expected Completion: – 2nd Half of 2017 • 30 year Cost-of-Service • Shipper Support (CAPP/RSG) 4

Benefits of Line 3 Replacement • Benefits to Industry – high reliability and assurance to key markets – reduced scheduling impacts of future maintenance – increased scheduling flexibility – improved line balancing • Supports our #1 priority - safety and operational reliability • Positive investment attributes – capital investment provides solid accretion to EEP unitholders – avoids $100 million maintenance capital through 2017 and mounting thereafter 5

Capacity Implications • Ex-Gretna annual operating capacity rises to 2,850 kbpd following Alberta Clipper (Line 67) expansions – System in balance ex-Superior • Line 3 Replacement Program will not increase effective system capacity ex-Gretna • Capacity of 2,850 kbpd will accommodate expected late decade throughput of 2,600 kbpd • Line 3 Replacement Program will improve system flexibility and reliability in meeting expected throughput level 6

Line 3 Replacement Commercial Structure and Returns Profile • Low-risk commercial framework: cost-of-service – providing highly predictable, long-term cash flows – no volume risk; no capital cost risk; no commodity price risk • Cost-of-service parameters – Incremental $2.6 billion capital included in existing Facilities Surcharge Mechanism (FSM) surcharge – Rate-base composed of 55% equity, 45% debt – Recover equity return of ~11% on equity rate base • Inflation component deferred, amortized and collected in rates over time – Tolled as surcharge in annual rates (annual true-up for over/under recovery) – Income tax allowance included – Incremental operating costs and depreciation recovered • Returns Profile Low double digits full life return on equity on incremental capital – 7

Commercial Structure & Risk Profile Line 3 Replacement Project expands cost-of-service revenues for EEP 100% Commodity Sensitive 12% 23% Line 3 80% Replacement 28% In-Service Fee-Based 60% 59% 40% 60% Cost of Service / Take-or-Pay 20% 18% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Post 2016 Cost of Service/Take-or-Pay : Contribution from Liquids and Natural Gas business cost of service and take-or-pay contracts. Fee-based: Contribution from Liquids and Natural Gas business fee-based service. Commodity Sensitive : Contribution from Natural Gas business from its commodities length (before hedging). Contribution is based on revenues from Liquids segment and gross margin from Natural Gas segment, including non-controlling interest. 8

Project Funding Joint funding enhances Partnership’s financing flexibility • Joint funding agreement with Enbridge Inc. for Line 3 Replacement Project being negotiated • Assumed 50% joint funding participation levels to be finalized and approved by Independent Special Committee • Incremental investment capital of ~$2.6 billion to be jointly funded. Net EEP funding of $1.3 billion  Joint funding with Enbridge Inc. enhances the Partnership’s financing flexibility 9 9

Funding Plan 2014-2017 (unconsolidated) ($billion) Uses/(Sources) Secured Growth Capital 9.4 Maintenance Capital 0.4 Joint Funding Call Back on Lakehead Expansions 0.7 10.5 ENB Joint Funding* (3.3) Sandpiper Joint Funding (1.0) MEP Drop-Downs +/- (2.6) Net Funding Required 3.6 Debt Equity Total Requirement 2.4 Total Requirement 1.2 2014 – 2017 Maturities 0.9 EEQ PIK (0.6) Debt Requirement 3.3 Equity Requirement 0.6 Financing Options   Additional MEP Drop-Downs Additional MEP Drop-Downs   Bank Credit Facility Hybrid Securities   Floating Rate Note Private Placement   Term Debt ATM program   Hybrid Securities EEP/EEQ Common Unit Offering 10 * Joint funding with Enbridge Inc. includes estimated 50% funding by Enbridge Inc. for U.S. component of Line 3 Replacement program and 50% estimated funding by EEP. Participation levels being finalized and approved by Independent Special Committee.

Project Execution Proven Execution Record Disciplined Project Execution Enbridge Wide Capital Placed In Service • Successful Alberta Clipper team to 2008 - 2013 execute Line 3 • Well-known construction corridor $17 B • Relationships with landowners and communities along Line 3 Portfolio completed at 1% under total budget • Estimate based on extensive historical & Line 3 Major Components current market cost data − Over 50 projects executed/in execution • Estimate in development for over a year • Standardized facilities design across project Repeatable Reliable Estimating De-Risking the Supply Chain 11

Key Takeaways • Provides enhanced ability to reliably accommodate shipper throughput requirements • Attractive commercial terms: cost- of-service provides low- risk, long term predictable cash flow stream • Additional funding requirements are modest and manageable • Major Projects capability provides high confidence in cost and schedule • Accretive to unitholders and bolsters distribution growth outlook 12