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environmental and performance standards, reviews the RCAM and sets the rate adjustment factors as appropriate. 

The ERA also annually reviews and approves CUC’s capital investment plan (“CIP”). In 2010, the Company submitted the 2011 - 2015 CIP totalling approximately $219 million. In March 2011, the ERA approved the $134 million of proposed non-generation installation expenditures in the 2011 - 2015 CIP. CUC submitted its 2012 - 2016 CIP, totalling approximately $192 million, during the fourth quarter of 2011 for ERA approval. $131.0 million of the submission is proposed non- generation installation expenditures. Generation needs are subject to a competitive bid process. The 2012 - 2016 CIP has been prepared in-line with the Certificate of Need that was filed with the ERA in November 2011 for 18 megawatts (“MW”) of new generating capacity to be installed in 2014 and for an additional 18 MW of generating capacity to be installed in either 2015 or 2016, contingent on growth over the next two years. ERA approval of the 2012 - 2016 CIP is expected during the first three 

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months of 2012. 

A licence fee of 1%, payable to the Government, is charged on gross revenues, then prorated and applied only to customer billings with consumption over 1,000 kWh per month as a pass-through charge. In addition to the licence fee, a regulatory fee of ½ of 1% is charged on gross revenues, then prorated and applied only to customer billings with consumption over 1,000 kWh per month. 

In the event of a natural disaster as defined in the T&D Licence, the actual increase in base rates will be 

capped for the year at 60% of the change in the Price Level Index and the difference between the calculated rate increase and the actual increase expressed as a percentage, shall be carried over and applied in addition to the normal RCAM adjustment in either of the two following years if the Company’s RORB is below the target range. In the event of a disaster the Company would also write-off destroyed assets over the remaining life of the asset that existed at time of destruction. Z Factor rate changes will be required for insurance deductibles and other extraordinary expenses. 

## Earnings 

Net earnings for Fiscal 2011 were $20.4 million, representing a 3% or $0.5 million increase from net earnings of $19.9 million for the twelve months ended December 31, 2010 (“Fiscal 2010”). Operating Income decreased for Fiscal 2011 when compared to the same period of 2010 as a result of increased G&A and Depreciation costs. This change in Operating Income was offset by a decrease in Finance Charges and an increase in Other Income resulting in an overall increase to earnings year over year. 

