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## ALGONQUIN POWER & UTILITIES CORP. 

Notes to the Consolidated Financial Statements December 31, 2012 and 2011  (in thousands of Canadian dollars except as noted and amounts per share) 

## 24. Financial instruments (continued) 

(b) Derivative instruments (continued) 

(i) Commodity derivatives – regulated accounting (continued) 

The change in fair value of the derivative instruments is recorded as an offsetting adjustment to regulatory assets and liabilities. As a result, the changes in fair value of these natural gas derivative contracts and their offsetting adjustment to regulatory assets and liabilities had no earnings impact. The following table presents the impact of the change in the fair value of the Company’s natural gas derivative contracts had on the accompanying balance sheets: 

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(ii) Cash flow hedges 

APCo reduces the price risk on the expected future sale of power generation at Sandy Ridge, Senate and Minonk and at one of its hydro facilities no longer subject to a power purchase agreement by entering into the following long-term energy derivative contracts. 

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The effects on the Consolidated Statement of Operations of derivative financial instruments designated as cash flow hedge consist of the following: 

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The following table summarizes changes in other comprehensive income attributable to derivative financial instruments designated as a hedge: 

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