Emera increases investment in Algonquin Power & Utilities Corp.

HALIFAX, May 14, 2012 /CNW/ - Emera Inc. (TSX: EMA) announced today that it has exchanged certain previously acquired subscription receipts into 12 million common shares of Algonquin Power & Utilities Corp. ("Algonquin") (TSX: AQN), at a price of C$5.00 per common share.

The subscription receipts were acquired on March 25, 2011 in connection with the previous announcement by Algonquin that Liberty Energy Utilities Co. ("Liberty Energy"), Algonquin's regulated utility subsidiary, had entered into agreements to acquire all issued and outstanding shares of Granite State Electric Company ("Granite State"), a regulated electric utility, and Energy North Natural Gas Inc. ("Energy North"), a regulated natural gas utility from National Grid USA ("National Grid") for total consideration of US$285.0 million.  Algonquin will use the proceeds from the subscription receipt conversion to partially fund this acquisition, which is expected to be completed during the second quarter of 2012.

In addition to the 12 million common shares acquired today, Emera owns 8.523 million previously acquired common shares of Algonquin, representing a current ownership position of 20.523 million common shares or approximately 13% of Algonquin's issued and outstanding shares.

In addition to the common shares Emera currently holds, Emera holds 8.211 million subscription receipts (the "Calpeco Subscription Receipts") which are exchangeable for common shares in connection with the previously announced sale to Algonquin of the 49.999% interest held by Emera in California Pacific Electric Company, LLC ("Calpeco")  The Calpeco Subscription Receipts are exchangeable for common shares of Algonquin on a one-for-one basis in two tranches as follows:  (a) 4.790 million common shares following regulatory approval of the ownership transfer which is expected to be received in 2012; and (b) the balance following completion of Calpeco's first rate case which is expected to be completed in 2013.

Emera expects to acquire, on a private placement basis, an additional 17.433 million subscription receipts (the "2012 Subscription Receipts") of Algonquin exchangeable into common shares.  The 2012 Subscription Receipts are expected to be issued in two tranches: (i) 6.977 million subscription receipts at a purchase price of $6.45 per receipt, in connection with the previously announced acquisition by Algonquin's regulated utility subsidiary of certain gas distribution assets in the U.S. Midwest; and (ii) 10.456 million subscription receipts at a purchase price of $5.74 per receipt, in connection with the previously announced acquisition by Algonquin's power generation subsidiary of a 51% interest in a 480 MW U.S. wind power portfolio.  The acquisition of the 2012 Subscription Receipts is subject to applicable regulatory approvals. Algonquin and Emera are finalizing agreements in respect of the 2012 Subscription Receipts.

In the event that all of the 17.433 million common shares that may be issued pursuant to the 2012 Subscription Receipts and the 8.211 million common shares issuable pursuant to the Calpeco Subscription Receipts are issued, the common shares so issued, together with the 20.523 million common shares currently held by Emera, would represent approximately 25% of Algonquin's issued and outstanding shares.

The common shares acquired today have been acquired for investment purposes only and the 2012 Subscription Receipts will be acquired for investment purposes only.  Emera has no intention of acquiring control of Algonquin.  Depending upon relevant economic, market or business conditions prevailing from time to time, Emera may determine to acquire or to dispose of common shares of Algonquin in TSX traded or privately negotiated transactions or otherwise.  Under certain agreements previously entered into with Algonquin, Emera has agreed not to acquire any additional securities of Algonquin except in accordance with such agreements.

Forward Looking Information

This news release contains forward looking information. Actual future results may differ materially. Additional information related to Emera, including the company's Annual Information Form, can be found on SEDAR at www.sedar.com or on EDGAR at www.sec.gov.

About Emera

Emera Inc. is an energy and services company with $6.9 billion in assets and 2011 revenues of $2.1 billion. The company invests in electricity generation, transmission and distribution, as well as gas transmission and utility energy services. Emera's strategy is focused on the transformation of the electricity industry to cleaner generation and the delivery of that clean energy to market. Emera operates throughout northeastern North America, in three Caribbean countries and in California. More than 80% of the company's earnings come from regulated investments. Emera common and preferred shares are listed on the Toronto Stock Exchange and trade respectively under the symbol EMA and EMA.PR.A. Additional information can be accessed at www.emera.com, www.sedar.com or www.sec.gov.

Jill MacDonald, CA
Manager, Investor Relations
[phone]

Sasha Irving
Director, Corporate Communications
[phone]