May 3, 2006
STOCK SYMBOL: GLH.UN/TSX

Great Lakes Hydro Income Fund Reports Strong 2006 First Quarter Results - Independent Trustees to review proposed acquisition of Carmichael Falls

GATINEAU, Québec, May 3, 2006 – Great Lakes Hydro Income Fund (GLH.UN: TSX) today reported strong results for the first quarter ended March 31, 2006; and that the Independent Trustees of the Board will review the proposed acquisition of Carmichael Falls Generating Station from Brookfield Power.

Strong Generation – The Fund’s power generation output exceeded long-term average during the first quarter of the year, fuelled by improved inflows in Quebec, Ontario and New England. The Fund’s power generation totalled 1,140 gigawatts hours (GWh), an increase of 24% over the same period last year and approximately 21% above long-term average for the quarter.


  • Revenue from operations totalled $48.8 million for the three months ended March 31, 2006, compared to $40.5 million for the same period in 2005, an increase of 21%.

  • Income before non-cash items totalled $25.4 million for the first quarter ended March 31, 2006, an increase of 34% compared to the same period in the prior year.

  • Net income reached $16.1 million for the first quarter, an increase of almost 50% over last year.

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    2006 FINANCIAL AND OPERATING HIGHLIGHTS
    Unaudited
    (CDN$ millions)    		   Three months ended
      March 31
          2006 2005
    Revenues     $ 48.8 $ 40.5
    Income before non-cash items       25.4 18.9
    Net income       16.1 10.8
    Distribution       15.0 14.7
    Per unit          
      Income before non-cash items       0.53 0.39
      Net income       0.33 0.22
      Distribution       0.31 0.30
    Power generated (GWh)       1,140 922
    Average price (¢/KWh)       4.3 4.4

    Carmichael Acquisition – The Independent Trustees of the Board will review the proposed transaction to purchase, from Brookfield Power, the Carmichael Falls hydroelectric generating station, a 19 megawatt facility located on the Groundhog River, in Northern Ontario. The proposed transaction is subject to a number of conditions, including successful completion of due diligence, and negotiation of a definitive purchase and sale agreement, as well as regulatory and Independent Trustee approvals. Details of the terms of the proposed transaction will not be disclosed until the independent committee has completed the review process. There is no assurance that this transaction will be completed.

    “We believe we are well positioned to capture the opportunity to grow the Fund with our healthy liquidity position at the end of the first quarter,” said Richard Legault, President and Chief Executive Officer. “Our commitment to expand the Fund, in addition to investing in our existing facilities, enhances the sustainability and stability of distributions for our unitholders,” added Mr. Legault.

    DISTRIBUTIONS

    Distributions year to date totalled 31 cents per unit for all unitholders, an increase of 0.6 cents over last year’s distribution for the same period. This is as a result of the increase in distributions from 10.125 cents/unit/month to 10.33 cents/unit/month that took effect January 1, 2006.

    The schedule below sets out cash distribution history for the last six months:















    RECORD DATE PAYMENT DATE DISTRIBUTION PER UNIT
    March 31, 2006 April 28, 2006 10.33 cents
    February 28, 2006 March 31, 2006 10.33 cents
    January 31, 2006 February 28, 2006 10.33 cents
    December 30, 2005 January 31, 2006 10.125 cents
    November 30, 2005 December 30, 2005 10.125 cents
    October 31, 2005 November 30, 2005 10.125 cents

    Forward-Looking Statements

    This new release may contain forward-looking statements concerning the Great Lakes Hydro Income Fund (“Fund”) business and operations. Forward looking statements can be identified by the use of words, such as “believe”, “well positioned”, “long-term”, “grow”, “expand”, “enhance” or variations of such words and phrases or state that certain actions, events or results “will” be taken, occur or be achieved. Forward looking statements involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results or performance to be materially different from any future results or performance expressed or implied by the forward statements. More details relating to risk factors can be found in the Fund’s annual information form in the section entitled Risk Factors.

    Examples of such statements include, but are not limited to factors relating to production and the business, financial position, operations and prospects for the Fund. They include (1) the Fund’s level of generation;(2) the Fund’s cost of production; (3) interest rates as they bear on the Fund’s indebtedness; (4) planned capital expenditures; (5) the impact of changes in the Canadian dollar – U.S. dollar on the Fund’s costs and results of operations; the negotiation of collective agreements with its unionized employees; (6) business and economic conditions; (7) the legislation governing air emissions, discharges into water, waste, hazardous materials and workers’ health and safety as well as the impact of future legislation and regulations on expenses, capital expenditures and restrictions on operations; (8) regulatory investigations, claims, lawsuits and other proceedings; and (9) reliance on the guaranteed price for electricity by Brookfield Power Inc. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied in the forward-looking statements contained herein, and as a such, you are cautioned not to place undue reliance on these forward-looking statements.

    These forward-looking statements represent our views as of the date of this news release. While the Fund anticipates that subsequent events and developments may cause the Fund’s views to change, the Fund disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Fund’s views as of any date subsequent to May 3, 2006, the date of this news release.

    Q1 CONFERENCE CALL

    A conference call for investors and media to review the first quarter results for 2006 will be held on May 4, 2006 at 10:00 a.m. (EST). To participate in the conference call, please dial 416-644-3425 or 1-800-814-4862 toll free in North America, at 9:50 a.m. (EDT). For those unable to participate in the Conference Call, a taped rebroadcast will also be available until midnight May 6, 2006. To access this rebroadcast, please call 1-877-289-8525, toll free in North America, and enter the passcode 21185033#.

    ABOUT GREAT LAKES HYDRO INCOME FUND

    Great Lakes Hydro Income Fund is a premier Canadian income fund and one of the largest power income funds in North America with 995 megawatts of power generating capacity and an average annual production of 3,788 gigawatt hours.

    Great Lakes Hydro Income Fund produces electricity exclusively from environmentally friendly hydroelectric resources. The Fund owns, operates and manages 25 high quality hydroelectric generating stations located on seven river systems in four distinct geographic regions across North America: Quebec, Ontario, British Columbia and New England.

    Brookfield Power, which comprises the majority of the power operations of Brookfield Asset Management, owns 50.1% of the Fund’s outstanding units. Great Lakes Hydro Income Fund units are listed for trading on the Toronto Stock Exchange under the symbol GLH.UN.


    For further information:
    Shelley Moorhead
    Director Corporate Communications and Investor Relations
    (819) 561-8072, unitholderenquiries@greatlakeshydro.com