Creststreet Power & Income Fund LP Commences Strategic Review and Reports Third Quarter 2007 Financial Results and Restates Previous Quarters'



    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES./

    CALGARY, Nov. 8 /CNW/ - Creststreet Power & Income Fund LP (the
"Partnership") (CRS.UN, CRS.DB, CRS.DB.A) reported electrical based revenue of
$3.3 million for the third quarter of 2007 compared to $3.1 million for the
same period in 2006 due to improved operating performance despite a 20 day
curtailment to 25 MW by Hydro Quebec. Revenue for the nine month period ended
September 30, 2007 increased to $12.5 million from $10.8 million in 2006 as
both wind energy projects had improved turbine availability for the nine month
period. For the three and nine month periods ended September 30, 2007 the
Partnership's production was approximately 17% and 6%, (2006: 17% and 17%)
respectively below the independent engineer's long-term projection. The third
quarter is traditionally the lowest season for wind speeds for the wind farms.
The results from Mount Copper were negatively impacted by curtailments imposed
by Hydro Quebec for maintenance work which limited production to 25 MW for 20
days. This reduced the quarterly revenue by $0.26 million and accounted for 9%
of the shortfall to the independent engineers forecast.
    Pubnico Point and Mount Copper delivered an aggregate 50.0 gigawatt hours
of electricity during the third quarter of 2007 to Hydro-Québec and Nova
Scotia Power pursuant to their long-term power purchase agreements compared to
48.7 gigawatt hours in 2006. For the nine months ended September 30, 2007 the
Partnership delivered an aggregate of 192.6 gigawatt hours compared to
168.4 gigawatt hours in 2006. Cash flow from operations before non-cash
working capital changes for the third quarter of 2007 was $0.6 million
compared to $0.76 million in the prior year. For the nine months ended
September 30, 2007 operating cashflow before non-cash working capital changes
was $5.02 million, a 37% increase over the $3.7 million generated in the nine
months ended September 30, 2006, due to improved turbine availability and wind
performance in the first quarter. The Partnership had cash outflow from
operations including non cash working capital items of ($1.45) million for the
third quarter of 2007 which was lower than the prior year quarter in 2006 of
$0.6 million cash flow, as the improved operating performance was partially
offset by an increase in non-cash working capital items. Non-cash working
capital increased, because of the payment of accrued interest on the
Partnership's convertible debentures on September 15th, the accrual of
interest on the Partnership's investment in Kettles Hill subordinated notes
and an increase in trade accounts receivable due to the improved results. The
Partnership generated cash flow from operations including changes in non-cash
working capital items of $1.62 million in the first nine months of 2007
compared with $4.34 million in 2006, as the improved operating performance was
partially offset by an increase in non-cash working capital items due to
continued growth in interest receivable on the Kettles Hill Subordinated Notes
investment. This receivable will ultimately be collected when Kettles Hill
completes its sale process. We declared total cash distributions of
$5.61 million and paid monthly cash distributions of $0.0542 per Unit during
the first nine months of 2007. At September 30, 2007, the Partnership had cash
and cash equivalents of $2.6 million on hand.
    The Partnership's revenue, earnings and cash flow are subject to seasonal
fluctuations. The highest level of revenue is expected in winter months
(generally the first and fourth quarters) and the lowest level of revenue in
the third quarter (summer months).

    
    Distributions

    The Board of Directors of the Partnership has authorized monthly cash
distributions of $0.0542 per Unit to be paid according to the following
schedule:

    Distribution period       Record date        Payment date     $ per Unit
    -------------------------------------------------------------------------
    December 2007       December 31, 2007    January 15, 2008        $0.0542
    January 2008         January 31, 2008   February 15, 2008        $0.0542
    February 2008       February 29, 2008      March 14, 2008        $0.0542
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Operations

    For the nine months period ended September 30, 2007, Mount Copper's
production was 4% below the independent engineers projection compared to 23%
below in 2006. This increase is due to higher wind speeds and improved turbine
availability. During the third quarter of 2007, Mount Copper's production was
approximately 12% below the independent engineer's long-term projection
compared to 20% below in the prior year. In the third quarter of 2007,
production at Mount Copper was curtailed to 25 megawatts (MW) (from 54 MW) for
20 days during the quarter as Hydro-Quebec performed maintenance work on its
own transmission lines, this resulted in a loss of revenue of approximately
$0.26 million. Turbine availability at Mount Copper was in line with the
Manager's expectations for the three and nine months period ended
September 30, 2007.
    For the nine months period ended September 30, 2007, Pubnico Point's
production was 8% below the independent engineers projection compared to 7%
below in 2006. During the third quarter of 2007, Pubnico Point's production
was approximately 27% below the independent engineer's long-term projection
compared to approximately 17% below in the prior year. This deviation was
principally a result of lower wind speeds in the quarter. Turbine availability
was in line with the Manager's expectations for the three and nine months
period ended September 30, 2007.

    Restatement of Prior Quarters

    Subsequent to the third quarter the Partnership determined that the
results for the three months ended March 31, 2006, June 30, 2006,
September 30, 2006, March 31, 2007 and June 30, 2007 needed to be restated to
properly record the Partnership's obligation to Creststreet Power Holdings Ltd
Class B as shareholders of Pubnico Point and Mount Copper who have a put
option to exchange these Class B shares into Partnership Units. During these
periods this financial instrument liability should have been marked to market,
however, given that it was not and the non-cash gains and losses were deemed
material for these quarters the Partnership has restated these unaudited
consolidated financial statements to correct this error. While these non cash
adjustments impacted net income there was no impact on the Partnership's
ability to pay its distributions to the Limited Partners. As the cumulative
amount of these adjustments was not deemed material to the full year audited
financial statements at December 31, 2006, these financial statements have not
been restated. These restated financial statements will be available in the
near future on our website www.creststreet.com/cpif/ and on the Canadian
Securities Administrators website at www.sedar.com.
    The Class B shares are exchangeable at the option of the shareholders for
Units of the Partnership commencing on August 3, 2007 and ending on August 3,
2010. The exchange ratio will be determined based on the relative value of a
Class B share to a Unit so that the Partnership will pay fair value to acquire
the Class B shares such that there will be no economic dilution of
Distributable Cash on a per Unit basis arising from this exchange. The fair
value of the Class B shares will be determined for this purpose based on the
dividends paid on these shares during the previous 12 months and the value of
the Units will be based on distributions during the same period.

    Strategic Review

    Following the announcement of the taxation of distributions from income
trusts and limited partnerships in October, 2006 the Board of Directors of the
Partnership began to consider the impact on Limited Partner's Unit values. In
the third quarter of 2007 the independent members of the Board of Directors,
formed a Special Committee which was mandated to review strategic options
available to maximize Unitholder value. The Special Committee hired CIBC World
Markets Inc. and Davies Ward Phillips Vineberg LLP to assist them in this
process. The Special Committee has formally instructed CIBC World Markets Inc.
to begin a process to maximize Unitholder value.
    Subsequent to the end of the third quarter of 2007, the Board of
Directors evaluated and determined that it was not in the interest of the
Partnership to participate in the Kettles Hills auction process.

    Management's Discussion and Analysis

    For the three and nine month periods ended September 30, 2007 and 2006
    November 8, 2007

    Forward Looking Statements

    Except for the historical and present factual information, certain
statements contained in this Management Discussion and Analysis ("MD&A")
constitute "forward-looking statements" within the meaning of the Securities
Act (Ontario). These forward-looking statements, by their nature, are not
guarantees of future performance and involve risks and uncertainties, which
could cause actual results to differ materially from those anticipated in
these forward-looking statements. We consider the assumptions on which these
forward-looking statements are based to be reasonable, but caution the reader
that assumptions regarding future events, many of which are beyond our
control, may ultimately prove to be incorrect. Some of these risks and
uncertainties are outlined in the MD&A for the year ended December 31, 2006.
    Creststreet Power & Income Fund LP (the "Partnership") (CRS.UN, CRS.DB,
CRS.DB.A) disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future
events or otherwise, except as required by law. These cautionary statements
expressly qualify all forward-looking statements attributable to the
Partnership.
    The following is a discussion of the consolidated financial condition and
results of operations of Creststreet Power & Income Fund LP for the three and
nine months ended September 30, 2007. It should be read in conjunction with
the Partnership's unaudited consolidated financial statements for the same
period along with the MD&A and audited consolidated financial statements for
the year ended December 31, 2006, and the MD&A and unaudited interim
consolidated financial statements for periods ended March 31, 2007 and
June 30, 2007. The Partnership prepares its consolidated financial statements
in accordance with Canadian generally accepted accounting principles ("GAAP")
applied on a consistent basis with those used to prepare the prior year
consolidated financial statements, except as noted in the consolidated
financial statements. All dollar amounts in this MD&A are in Canadian dollars
unless otherwise stated. Where we say "we," "us," or the "Partnership," we
mean Creststreet Power & Income Fund LP.
    Additional information relating to the Partnership can be found in the
Annual Information Form of the Partnership, which is available on our website
at www.creststreet.com/cpif/ and on the Canadian Securities Administrators
website at www.sedar.com.

    Non - GAAP Measurements

    Management uses cash flow from operations (before changes in non-cash
working capital) ("cash flow") to analyze operating performance. Cash flow as
presented does not have any standardized meaning prescribed by Canadian GAAP
and therefore it may not be comparable with the calculation of similar
measures for other entities. Cash flow as presented is not intended to
represent operating income for the period nor should it be viewed as an
alternative to operating income, net earnings or other measures of financial
performance calculated in accordance with Canadian GAAP.
    On July 6, 2007, the CSA issued revised National Policy 41-201, Income
Trusts and Other Indirect Offerings. We have adopted their recommendations in
this third quarter MD&A.
    During the third quarter, the Canadian Performance Reporting Board of the
CICA also published an Interpretive Release titled Standardized Cash in Income
Trusts and Other Flow-Through Entities: guidance on Preparation and
Disclosure. The Fund is currently reviewing the document to determine the
potential impact that the guidance may have on its disclosures.

    Overview

    The Partnership was initially established to invest in Mount Copper Wind
Power Energy Inc. ("Mount Copper"), which operates a wind energy facility with
54.0 megawatts ("MW") of power generating capacity near Murdochville, Quebec,
on the Gaspé Peninsula, and Pubnico Point Wind Farm Inc. ("Pubnico Point"),
which operates a wind energy facility with 30.6 MW of power generating
capacity near Yarmouth, Nova Scotia. Electricity sales from both wind energy
facilities are made pursuant to long-term power purchase agreements. Full
commercial operations commenced for both wind energy projects in the third
quarter of 2005 and concurrently, the Partnership initiated monthly
distributions to unitholders.
    Mount Copper erected five test wind turbines in early 2004 ("CRCE Phase")
that commenced commercial operations in May 2004. In September 2004, Mount
Copper began to erect its remaining 25 wind turbines (the "Infill Phase"). The
project was completed and the turbines were fully commissioned in September
2005 and the facility began full commercial operations. Pubnico Point erected
two test wind turbines in early 2004 that commenced commercial operations in
May 2004 ("CRCE Phase"). In September 2004, Pubnico Point began to erect its
remaining 15 wind turbines (the "Infill Phase"). The project was completed and
the turbines were fully commissioned in February 2005 and the facility began
full commercial operations.
    The Partnership is also permitted to invest in other windpower, renewable
energy or conventional electricity-generation companies or assets, provided
that the Partnership may not invest in flow-through shares of any companies
other than Mount Copper and Pubnico Point. The first project subsequent to
Mount Copper and Pubnico Point that Creststreet Power & Income Management
Limited (the "Manager") recommended the Partnership invest in, is Kettles Hill
Wind Energy Inc. ("Kettles Hill"), a 63 MW windpower project in southern
Alberta that commenced construction in July 2005. Kettles Hill announced
substantial completion of the project on July 30, 2007. The Partnership has
invested $35.90 million in subordinated notes of Kettles Hill (the "Kettles
Notes") to fund the construction of the Infill Phase of the project. The
Kettles Notes are further described in the Related Party Section of this MD&A.

    Third Quarter and Year-to-Date Results

    (greater than) Revenue

    For the three-month period ended September 30, 2007, the Partnership
earned $3.18 million (2006 - $3.00 million) in revenue from the delivery of a
total of 50.0 (2006 - 48.7) gigawatt hours ("GWh") of electricity.
    For the nine months period ended September 30, 2007, the Partnership
earned $11.98 (2006 - $10.37 million) in revenue from the delivery of a total
of 192.6 GWh (2006 - 168.4 GWh) of electricity. The increase of $1.61 million
was primarily due to higher wind speeds in the first quarter of 2007 and
improved turbine availability.
    The Partnership's revenue, earnings and cash flow are subject to seasonal
fluctuations. The highest level of revenue is expected in winter months
(generally the first and fourth quarters) and the lowest level of revenue in
the third quarter (summer months).

    (greater than) Mount Copper

    Mount Copper has 30 interconnected wind turbines with a nameplate
capacity of 54 megawatts. Mount Copper is estimated to have a mean annual
average energy production level of 185.9 GWh according to Garrad Hassan the
independent wind engineer. The following graph illustrates our analysis of the
ratio of actual net energy production to Garrad Hassan's projected energy
production from September 2005 (beginning of full commercial operations) to
September 2007.
    For the three months ended September 30, 2007 production was 12% below
the independent engineer's long-term projection due to lower than expected
wind speeds and production was also curtailed to 25 megawatts (MW) from
(54 MW) for 20 days during the third quarter as Hydro Quebec performed
maintenance on its own transmission lines, this resulted in approximately
$0.26 million of loss revenue and approximately 3.9 GWh loss production.
Production for the nine month period ended September 30, 2007 of 125.6 GWh,
from Mount Copper was approximately 4% below the independent engineer's
long-term projection. In 2006 for the three and nine months ended September
30, 2006, production was 20% and 23%, respectively below the independent
engineer's long-term projection, due to lower than expected wind speeds.
    The Manager evaluates wind performance at Mount Copper on a continual
basis. The deviation from the independent engineer's long-term average
projection for the nine month period, is within variability expectations. Wind
performance will continue to be evaluated to determine whether the actual
operating performance would suggest any revision be required to the
independent engineer's projection.
    Turbine availability at Mount Copper of 97% and 94% for the three and
nine months ended September 30, 2007 respectively was greatly improved over
the prior year three and nine months of 96% and 92% respectively. This is
within the Manager's expectations and the warranted levels. The Manager
continues to work closely with Vestas to correct key problems to ensure
availability meets or exceeds the 95% annual warranty threshold. Maintenance
and service of the turbines is the responsibility of Vestas-Canadian Wind
Technology Inc. ("Vestas") pursuant to the Warranty, Maintenance and Service
Agreement ("WMS"). The WMS agreement provides for 95% annual availability for
the remaining three years of the contract. Turbine availability for the second
warranty year was 94% which was below the warranted availability of 95%.
Vestas has agreed to pay liquidated damages of $0.13 million for this loss of
production. Vestas has also begun a gearbox replacement program to replace the
remaining 11 Metso gearboxes. To date five of these gearboxes have been
replaced. The program is to be finished prior to the end of the second quarter
of 2008.

    (greater than) Pubnico Point

    Pubnico Point has 17 interconnected wind turbines with a nameplate
capacity of 30.6 megawatts. Pubnico Point has an estimated mean annual energy
production level of 100.8 GWh according to Garrad Hassan, the independent wind
engineer. The following graph illustrates our analysis of the ratio of actual
net energy production to Garrad Hassan's projected energy production from
March 2005 (beginning of full commercial operations) to September 2007.
    For the three months ended September 30, 2007 production was 27% below
(2006 - 17% above) the independent engineer's long-term projection due to
lower than expected wind speeds. During the nine months ended September 30,
2007, Pubnico Point's production of 66.9 GWh was also approximately 8% below
the independent engineer's long-term projection compared to approximately 7%
below in the prior year nine months.
    The Manager evaluates wind performance at Pubnico Point on a continual
basis. Wind performance will continue to be evaluated to determine whether the
actual operating performance would suggest any revision be required to the
independent engineer's projection.
    On-site operations of the Pubnico Point project are the contractual
responsibility of the Pubnico Management Ltd (formerly "Atlantic Wind Power
Corporation Ltd.") of Pubnico Point, Nova Scotia. The availability of turbines
is supported by a Vestas warranty as part of its Warranty, Maintenance and
Service Agreement ("WMS") which, for the remaining 3 years provides for 95%
availability. Turbine availability of 95% and 97% at Pubnico Point during the
three and nine months period ended September 30, 2007, respectively was within
warranty levels. The turbine availability for the three and nine months period
ended September 2006 was 96% and 94% respectively. The warranty entered into
its third year in March 2007. The warranted availability level of 95% was met
for the second warranty year. Turbine performance at Pubnico Point has been
subject to the same issues that have affected Mount Copper's availability,
although to a lesser extent. Pubnico Point and the Manager are working closely
with Vestas to correct key problems to ensure availability continues to meet
or exceeds the Manager's expectations. This includes having seven Metso
gearboxes at Pubnico Point replaced. It is anticipated this will be completed
prior to the end of 2008. Any gearbox failures in the meantime will be
replaced as soon as possible as they always have been.

    (greater than) Investment Income

    Investment income of $0.90 million and $2.66 million was earned for the
three and nine months ended September 30, 2007, respectively, an increase of
$0.28 million and $1.71 million respectively over the three and nine months
ended September 30, 2006. Investing in an additional $29.40 million of
Subordinated Notes of Kettles Hill Wind Energy Inc., since September 30, 2006,
was the principal reason for the increase. The Partnership had invested
$35.90 million in Subordinated notes of Kettles Hill at September 30, 2007.
The terms of these notes are described in the related party section of the
MD&A. Accrued interest on these notes is currently expected to be collected
late in the fourth quarter of this year and will all be collected upon the
completion of the sale of Kettles Hill.

    (greater than) Operating Costs

    For the three and nine months period ended September 30, 2007, the
Partnership incurred operating costs of $0.78 million (2006 - $0.72 million)
and $2.25 million (2006 - $2.35 million), respectively resulting in an
operating margin of 77% of revenue (2006 - 77%) and 82% (2006 - 78%),
respectively of revenue. The changes in the margin reflects the movement in
revenue over the periods. The expenses related to the operation of the
projects are primarily fixed costs such as warranty and maintenance,
insurance, leases, and property taxes. Other operating costs for the three and
nine months period ended September 30, 2007, included management fees of
$0.12 million (2006 - $0.25 million) and $0.34 million (2006 - $0.72 million),
respectively. Management fees have decreased from the prior year as the
Partnership is no longer paying management fees to 3Ci, its former joint
venture partner in Quebec that it bought out in the fourth quarter of last
year. As a result of the 3Ci acquisition costs that were previously reimbursed
through the management fee have become direct costs and are now recorded as
operating or administrative costs.
    Administrative costs for the three and nine months period ended
September 30, 2007 were $0.65 million (2006 - $0.59 million) and $1.85 million
(2006 - $1.62 million), respectively. Administrative costs have increased due
to some of Mount Copper's management fees becoming direct costs of the
Partnership following the 3Ci acquisition. The Manager in accordance with the
management agreement has charged increased costs to the Partnership as the
Manager has increased its staff to better service the Partnership.
    In the third quarter of 2007 the independent members of the Board of
Directors formed a Special Committee which was mandated to review strategic
options available to maximize Unitholder value. The Special Committee hired
CIBC World Markets Inc. and Davies Ward Phillips Vineberg LLP to assist them
in this process. The Special Committee has formally instructed CIBC World
Markets Inc. to begin a process to maximize Unitholder value. During the third
quarter of 2007 the Partnership incurred costs of $274,000 related to this
review process.

    (greater than) Mark to Market Loss on Financial Instruments

    The fair market value of the right of the Class B shareholders to
exchange their Class B shares into Partnership Units was determined to be
$4.44 million at September 30, 2007, (2006 - $2.88 million). A mark to market
loss on these options of $0.42 million (2006 - ($0.09) million gain) was
recorded for the three months period ended September 30, 2007 and a loss of
$1.17 million was recorded for the nine months ended September 30, 2007
(2006 - $0.99 million). This expense is a non-cash expense and does not impact
operating cash flow including changes in net working capital.

    (greater than) Amortization

    The amortization on the property and equipment was $1.74 million (2006 -
$1.75 million) and $5.22 million (2006 - $5.29 million) for the three months
and nine months period ended September 30, 2007, respectively.

    (greater than) Interest Expense

    Interest expenses for the third quarter of $2.16 million and year to date
of $6.35 million are higher than the prior year comparative period by
$0.70 million and $2.83 million, respectively. The increase in the interest
expenses is attributable to the issuance of the $30.00 million convertible
debenture in the third quarter of last year and the expansion of the Notes
payable from $7.00 million to $14.00 million in the last half of 2006, and
further expansion in the third quarter of 2007 to $17.90 million. Included
within interest expense is, the non cash accretion of the debt which, for the
three months ended September 30, 2007 was incurred $0.36 million (2006 -
$0.05 million), and for the nine months ended September 30, 2007 was $1.02
million (2006 - $0.11 million).

    (greater than) Future Income Taxes

    On June 22, 2007 the federal government's bill regarding the taxation of
distributions from trusts and partnerships beginning January 1, 2011 passed
the third reading making it substantively enacted in accordance with Canadian
GAAP. In particular, income earned by these entities will be taxed in a manner
similar to income earned and distributed by a corporation. Prior to January 1,
2007, the Partnership was only taxable on amounts that were not distributed to
Unitholders. This new legislation results in earnings of the Partnership are
now subject to income tax regardless of whether amounts are distributed to
Unitholders or not, post January 1, 2011. Previously, the future income tax
liability on the consolidated balance sheet represented the future income tax
liability of the Partnership's subsidiaries Mount Copper and Pubnico Point.
    Following this new legislation, the Manager carried out a review to
assess if any temporary differences arises post 2011 between amounts recorded
on the Partnerships balance sheet for book compared to tax basis. No
significant temporary differences were noted at the Partnership level as the
majority of the capital assets are held at the subsidiary level where a future
income tax liability had already been recorded. As such, the new legislation
had no impact to the Partnership. A future income tax recovery of $67,420
relating to the federal tax rate reduction to 18.5% in 2011 was recorded in
the second quarter of 2007 on temporary differences that existed at the
subsidiary level.
    The Partnership has estimated its future income taxes on its best
estimates of future results of operations and tax pool claims, in the future
assuming no material change to the Partnership's current organizational
structure. As currently interpreted, Canadian GAAP does not permit the
Partnership's estimate of future income taxes to incorporate any assumptions
related to acquisitions or dispositions of assets and liabilities until these
are given legal effect. The Partnership's estimates and assumptions of future
income taxes will vary based on actual results of the factors described above
and such variations may be material. Until 2011, the new legislation does not
directly affect the Partnership's cash flows from operations.

    
    Quarterly Financial Information

    The Partnership revenue and earnings are subject to seasonal fluctuations
with the highest level of revenue during the winter months (generally, the
first and fourth quarters).

    (In millions, except
     per Unit amounts)                Q1       Q2       Q3       Q4  FY 2005
    -------------------------------------------------------------------------
    Revenue                        $2.00    $3.17    $3.37    $4.90   $13.44
    Net income (loss)              (0.73)   (1.82)   (1.78)    0.40    (3.93)
    Net income (loss) per Unit     (0.17)   (0.43)   (0.19)    0.03    (0.54)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                      Q1       Q2       Q3       Q4  FY 2006
    -------------------------------------------------------------------------
    Revenues                       $4.15    $3.86    $3.73    $5.82   $17.56
    Net income (loss)              (1.67)    0.81    (0.87)   (3.91)   (5.64)
    Net income/(loss) per Unit     (0.15)    0.07    (0.08)   (0.33)   (0.49)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                               Q1       Q2       Q3  FY 2007
    -------------------------------------------------------------------------
    Revenue                                 $6.42     $4.51   $4.23   $15.16
    Net loss                                (0.73)    (0.23)  (1.57)   (2.53)
    Net loss per Unit                       (0.06)    (0.02)  (0.14)   (0.22)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    The Partnership restated the results for the three months ended March 31,
2006, June 30, 2006, September 30, 2006, March 31, 2007 and June 30, 2007 to
properly record the Partnership's obligation to Creststreet Power Holdings Ltd
Class B shareholders of Pubnico Point and Mount Copper who have a put option
to exchange these Class B shares into Partnership Units. During these periods
this financial instrument liability should have been marked to market, however
given that it was not and the non-cash gains and losses were deemed material
for these quarters. The Partnership restated these unaudited consolidated
financial statements to correct this error. While these non cash adjustments
impacted net income there was no impact on the Partnership's ability to pay
its distributions to the Limited Partners. As the cumulative amount of these
adjustments was not deemed material to the full year audited financial
statements at December 31, 2006, these financial statements have not been
restated.
    The first quarter of 2005 reflected revenue from the CRCE Phase turbines
and a portion of the Infill Phase turbines. The expenses for the first quarter
of 2005 included a write-off of deferred charges of $856,000 related to the
cancellation of the junior debt facilities. The second quarter of 2005
included revenue from the CRCE Phase turbines, the Infill Phase turbines at
Pubnico Point, and a portion of the Infill Phase turbines at Mount Copper. The
expenses in the second quarter of 2005 included a loss on derivative
instruments of $2.96 million. The third quarter of 2005 included revenue from
the CRCE Phase turbines and all Infill Phase turbines at Mount Copper and
Pubnico Point. The expenses for the third quarter of 2005 included a write-off
of deferred charges of $1.87 million related to the cancellation of the term
debt facilities. In the fourth quarter of 2005, the Manager finalized the
purchase price allocation resulting from the purchase of the Class A shares
not held by the Partnership. We allocated all of the excess costs to
intangible assets and began amortizing the intangible asset over the life of
the applicable power purchase agreement.
    Windpower electrical generation experiences seasonality with peak seasons
occurring in first and fourth quarters and the low season in the third
quarter. Project-specific issues have tempered the seasonality of our
quarterly revenues in 2006. The second and third quarter appear relatively
stronger than expectations as the first quarter not only had unusually low
wind speeds but also suffered from poor turbine availability. Turbine
availability increased in the second and third quarters versus the first
quarter at both wind power facilities, although this was offset by the
seasonally lower wind speeds. In the fourth quarter the wind resource
seasonally increased, but this increase was masked by the impact of the 9-day
shutdown of Mount Copper during the transition to the 161kV transmission line.
The wind resource at Mount Copper was below the long-term average forecast for
the year, while the wind resource at Pubnico Point was much closer to its
long-term average forecast level. The first quarter of 2006 also contained a
non-cash mark to market loss of $2.26 million related to the right of the
Class B shareholders to exchange their Class B shares into Partnership Units.
In the second quarter of 2006 a mark to market gain of $1.19 million was
recorded on the same right. In October 2006 a $4.10 million loss was
recognized on the settlement of the financial instrument liability recorded
for 3Ci's put option to exchange their Class B shares for Partnership Units.
This loss was realized as the Partnership acquired all of 3Ci's ownership and
other interests in Mount Copper including the management services contract and
their Class B shares.
    During the first quarter of 2007 the Partnership recorded a non-cash mark
to market loss of $1.61 million. The first quarter of 2007 experienced higher
wind speeds than the projected long term average as well as higher turbine
availability compared to prior quarters. For the second quarter of 2007, the
Partnership experienced similar production to prior quarters for the same
period. Turbine availability improved over prior quarters. A non cash mark to
market gain of $0.31 million was recorded in the second quarter of 2007.

    Financial Condition

    (greater than) Liquidity

    During the third quarter of 2007, the Partnership expanded the Notes
payable facility of $14.00 million to $30.00 million to provide for additional
liquidity for the Partnership. The term of the Notes payable facility was also
extended by a year and is now due January 25, 2009. Additional draws on this
facility will accrue interest at the three month BA rate prevailing at the
time of the advance, plus 225 bps. The Notes payable remain repayable at any
time at the option of the Partnership. A financing fee of $240,000 was paid on
finalization of the extension. A standby fee of 50 bps will be charged for all
funds not drawn. To date the Partnership has drawn $3.9 million of the
increased facility, with a remaining $12.10 million undrawn.
    We declared total cash distributions for the three and nine month period
ended September 30, 2007 of $1.87 million and $5.61 million, respectively with
a monthly distribution of $0.0542 per Partnership Unit.

    (greater than) Contractual Obligations

    Other obligations have increased due to the inclusion of additional
long-term lease obligations, and have been partially offset by a reduction of
the Warranty, Maintenance and Service Agreement with Vestas.

    
    Information concerning contractual obligations is shown below:

                                      Due less     Due 2     Due 4       Due
                                          than        to        to     after
    (In millions)              Total    1 year   3 years   5 years   5 years
    -------------------------------------------------------------------------
    Long-term debt
     obligations             $104.90       $ -    $17.90    $87.00       $ -
    Other obligations           5.69      1.50      2.22      0.32      1.65
    -------------------------------------------------------------------------
    Total obligations        $110.59     $1.50    $20.12    $87.32     $1.65
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (greater than) Related Party Transactions

    The current amounts incurred to/ (by) related parties were as follows:

                      Three months  Three months   Nine months   Nine months
                             ended         ended         ended         ended
                      September 30, September 30, September 30, September 30,
                              2007          2006          2007          2006
    -------------------------------------------------------------------------
    3Ci                          -          $141             -          $269
    PML                        573           169         1,920         1,552
    CHL                          -
    CCC                         26            54           172           227
    CPHL                        84            17           287            63
    Kettles Hill              (937)         (411)       (2,601)         (591)
    Grand Valley                 -             -            (2)            -
    Dokie Wind
     Energy Inc.               (19)          (70)          (44)          (70)
    General Partner	           275           125           824           332
    Manager                     83            83           248           256
    -------------------------------------------------------------------------
                              $(85)         $109          $804        $2,038
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Transactions with related parties have been measured at their exchange
value.

    Creststreet Power & Income General Partner Limited (the "General
Partner") is reimbursed for reasonable costs it incurs in attending to the
administration of the Partnership. For the three and nine months ended
September 30, 2007, the General Partner was reimbursed $274,622 (2006 -
$125,001) and $823,867 (2006 - $332,419), respectively.
    The Manager is also entitled to reimbursement of its operating expenses
incurred in providing the services under the Management Agreement. For the
three and nine months ended September 30, 2007, the Manager earned $82,712
(2006 - $82,712) and $248,135 (2006 - $255,795), respectively under the
Management Agreement, and reimbursements of $6,032 (2006 - $35,478) and $7,277
(2006 - $41,326), respectively for out-of-pocket expenses.
    For the three and nine months ended September 30, 2007, Creststreet
Capital Corporation ("CCC"), a related party through common management was
paid $nil (2006 - nil) and $106,031 (2006 - $126,941), respectively to
reimburse CCC for costs it had paid directly on behalf of the Partnership.
    For the three and nine months ended September 30, 2007, Mount Copper
incurred $15,000 (2006 - $15,000) and $45,000 (2006 - $45,000), respectively,
under the financial administration agreements. In the three and nine months
ended September 30, 2006, Mount Copper incurred $140,615 and $436,560
respectively under the management services agreement, including out of pocket
expenses of $7,411 and $67,687, respectively. No fees were incurred under the
management services agreement in 2007 as the Partnership acquired all the
interests of 3Ci, its former joint venture partner in Mount Copper, in October
2006. This acquisition included 3Ci's interest in the management services
agreement and its Class B shares.
    Creststreet Power Holdings Limited ("CPHL") owns 100% of the Class B
shares of Mount Copper. Holders of the Class B shares are entitled to
cumulative dividends based on the annual level of operating cash flow achieved
by Mount Copper. If the operating cash flow is below $9.00 million per year
(the "Mount Copper Hurdle Cash Flow"), the dividends on the Class B shares
will be nil. Commencing the month during which the Mount Copper wind energy
facility was commissioned, the Class B shares are entitled to dividends equal
to 50% of the annual operating cash flow above the Mount Copper Hurdle Cash
Flow. For the nine months ended September 30, 2007 no dividends were paid.
    The Class B shares are exchangeable at the option of the shareholders for
Units of the Partnership commencing on August 3, 2007 and ending on August 3,
2010. The exchange ratio will be determined based on the relative value of a
Class B share to a Unit so that the Partnership will pay fair value to acquire
the Class B shares such that there will be no economic dilution of
Distributable Cash on a per Unit basis arising from this exchange. The fair
value of the Class B shares will be determined for this purpose based on the
dividends paid on these shares during the previous 12 months and the value of
the Units will be based on distributions during the same period. On January 1,
2007 a financial instrument liability and a property plant and equipment
addition of $0.16 million (2006 - $0.17 million) was recorded for this Class B
put option liability. As the amount of this adjustment was not deemed material
comparative amounts have not been restated. The redemption value of this right
to exchange was determined to be zero at September 30, 2007 as no Class B
dividends have been paid for the previous 12 months. An unrealized mark to
market gain on this liability of nil and $0.17 million (2006 - $nil and
$0.17 million) was recorded to the statement of operations for the three and
nine months period ended September 30, 2007, respectively.
    For the three and nine months ended September 30, 2007, Pubnico Point
incurred $63.458 (2006 - $62,712) and $189,467 (2006 - $189,671), respectively
under the management services, lease, and financial administration agreements
plus reimbursement of out of pocket expenses of $12,324 (2006 - $12,041) and
$67,868 (2006 - $41,055), respectively.
    Pubnico Management Limited ("PML") and CPHL own Class B shares of Pubnico
Point. Holders of the Class B shares will be entitled to cumulative dividends
based on the annual level of operating cash flow achieved by Pubnico Point. If
the operating cash flow is below $4.75 million per year (the "Pubnico Point
Hurdle Cash Flow"), the dividends on the Class B shares will be nil.
Commencing the month during which the Pubnico Point Facility was commissioned
in 2005, the Class B shares are entitled to dividends equal to 70% of the
annual operating cash flow above the Pubnico Point Hurdle Cash Flow. For the
three and nine months ended September 30, 2007, a dividend was declared to the
Class B shareholders of $166,882 (2006 - $204,115) and $258,858 (2006 -
$249,432), respectively. As required under the Class B dividends the annual
calculation was completed in Q1 2007 and the dividends paid earlier in the
year were estimated to be over paid by approximately $0.23 million.
    The Class B shares may be exchanged for Units commencing on August 3,
2007 and ending on August 3, 2010. The exchange ratio will be determined based
on the relative value of a Class B share to a Unit so that the Partnership
will pay fair value to acquire the Class B shares such that there would be no
economic dilution of Distributable Cash on a per Unit basis arising from this
exchange. The fair value of the Class B shares will be determined for this
purpose based on the dividends paid on these shares during the previous
12 months and the value of the Units will be based on distributions during the
same period. On January 1, 2007 a financial instrument liability and a
property plant and equipment addition of $0.23 million was recorded for the
CPHL put option liability and in 2006, $1.35 million was recorded effective
January 1, 2006 as a financial instrument and a plant and equipment addition
for PML's Class B put option. As the amount of this adjustment was not deemed
material comparative amounts have not been restated.
    The redemption value of this right to exchange was determined to be
$4.44 million at September 30, 2007, (PML - $3.80 million and CPHL -
$0.63 million). An unrealized mark to market gain on this liability of $0.42
million (2006 - $0.09 million) was recorded to the statement of operations for
the three month period ended September 30, 2007 and for the nine months ended
September 30, 2007, a mark to market loss of $1.86 million (2006 -
$1.31 million).
    During 2006, the Partnership issued subordinated promissory notes
receivable to Kettles Hill Wind Energy Inc. ("Kettles Hill") in the amount of
$32.00 million related to the construction of a wind farm. During the first
quarter of 2007, a further $2.00 million was invested and during the third
quarter a further $1.9 million was invested. The $1.9 million note will bear
interest at 12% with a financing fee of $100,000 all other terms and
conditions are similar to the original investment. The promissory note is
unsecured and will not hold any liens over any assets of Kettles Hill. The
note bears interest at 9.25% per annum until October 31, 2009 and thereafter
at a rate of 10.5% per annum. This receivable will ultimately be collected
when Kettles Hill completes its sale process. The loan receivable is due on
October 31, 2009, unless the Partnership acquires more than 50% of Kettles
Hill, in which case the Kettles Notes will mature October 31, 2026. If Kettles
Hill is acquired by a third party other than the Partnership, the Partnership
has a right to put all or a portion of the Kettles Notes to Creststreet
Kettles Hill Windpower LP ("CKHWP"), and CKHWP shall be required to purchase
such Kettles Notes at 110% of par plus 50% of the amount, if any, that the
fair market value of each Class A Share of Kettles Hill, realized upon a
change of control, exceeds $1.87 per Class A share multiplied by the principal
amount of the Kettles Hill subordinated notes held by the Partnership divided
by $1.70.
    Financing fees earned for the three and nine months ended September 30,
2007, related to the issuance of the notes to Kettles Hill were $100,000
(2006 - $nil) and $200,000 (2006 $nil), respectively and will be amortized
over the term of the notes. For the three and nine months ended September 30,
2007 amortization of deferred revenue totaled $21,711 (2006 - $nil) and
$43,550 (2006 - $nil). The notes to Kettles Hill are valued at their exchange
value.
    For the three and nine months ended September 30, 2007, the Partnership
recorded interest income of $834,564 (2006 - $411,419) and $2,369,051 (2006 -
$590,885), respectively on the Kettles Hill notes.
    During 2006, the Partnership invested $4.50 million in subordinated
promissory notes ("Dokie Notes") of Dokie Wind Energy Inc. ("Dokie"). These
Dokie Notes were unsecured and bear interest at 15% per annum. During the
fourth quarter of 2006, Dokie redeemed $3.28 million of the outstanding notes.
On January 3, 2007 Dokie repaid the remaining balance of $1.22 million and the
outstanding interest of $43,280. The deferred financing fee recorded as
deferred revenue of $48,915 was written off and recognized in the income
statement in the first quarter of 2007 as the notes were fully repaid. A
redemption fee was also recorded as income in the first quarter of $60,950.

    Change in Partners' Capital

    For the nine-month period ended September 30, 2007, Partners' capital
decreased by $5.65 million from $75.16 million at December 31, 2006 to
$69.51 million at September 30, 2007. The decrease was mainly due to monthly
distributions of $0.0542 per Unit which totaled $5.61 million. The Partnership
declared a further $0.0542 per Unit which totaled $623,340 payable in October
2007.
    As at November 8, 2007, the Partnership had 11,500,737 Units outstanding.

    CHANGES IN ACCOUNTING POLICIES

    On January 1, 2007, the Partnership adopted the Canadian Institute of
Chartered Accountants "CICA" Handbook Section 1530 "Comprehensive Income",
Section 3251 "Equity", Section 3855 "Financial Instruments - Recognition and
Measurement", and Section 3865 "Hedges". As required by the new standards,
prior periods have not been restated.
    The adoption of these standards has had no material impact on the
Partnership's cash flows. The other effects of the implementation of the new
standards are discussed below.

    Comprehensive Income

    The new standards introduce comprehensive income, which consists of net
earnings and other comprehensive income ("OCI"). Upon adoption of Section
1530, the Partnership revised its "Consolidated Statements of Operations" to
include the newly required Statement of Comprehensive Income by creating a
combined statement. On the Consolidated Balance Sheet in the Partnership
Capital section the line "Deficit" is now "Deficit and Accumulated Other
Comprehensive Income".
    The adoption of comprehensive income has been made in accordance with the
applicable transitional provisions and no amounts have been reclassified to
Accumulated Other Comprehensive Income and currently CPIF has no OCI.

    Financial Instruments

    The financial instruments standard establishes the recognition and
measurement criteria for financial assets, financial liabilities and
derivatives. All financial instruments are required to be measured at fair
value on initial recognition of the instrument, except for certain related
party transactions. Measurement in subsequent periods depends on whether the
financial instrument has been classified as "held-for-trading",
"available-for-sale", "held-to-maturity", "loans and receivables", or "other
financial liabilities" as defined by the standard.
    Financial assets and financial liabilities "held-for-trading" are
measured at fair value with changes in those fair values recognized in net
earnings. Financial assets "available-for-sale" are measured at fair value,
with changes in those fair values recognized in OCI. Financial assets "held-to
maturity", "loans and receivables" and "other financial liabilities" are
measured at amortized cost using the effective interest method of
amortization.
    Cash and cash equivalents are designated as "held-for-trading" and are
measured at carrying value, which approximates fair value due to the
short-term nature of these instruments.
    Accounts receivable is designated as "loans and receivables". Accounts
payable and accrued liabilities, cash distributions payable and long term debt
are designated as "other liabilities".
    The Partnership currently does not utilize hedges or other derivative
financial instruments in its operations, and as a result the adoption of
Section 3865 currently has no material impact on the consolidated financial
statements of the Partnership.
    The adoption of the financial instruments standard has been made in
accordance with its transitional provisions. Accordingly, at January 1, 2007,
deferred charges were reclassified to debt to reflect the adopted policy of
capitalizing long-term debt transaction costs, premiums and discounts within
long-term debt. The costs capitalized within long-term debt will be amortized
using the effective interest method. Previously, the Partnership deferred
these costs within deferred charges and amortized them straight-line over the
life of the related long-term debt. The adoption of the effective interest
method of amortization reduced the opening deficit by $0.36 million. See
Note 1 to the consolidated interim financial statements for further details.

    Accounting Changes

    Effective January 1, 2007, the Partnership adopted the revised
recommendations of CICA section 1506, "Accounting Changes."
    The new recommendations permit voluntary changes in accounting policy
only if they result in financial statements which provide more reliable and
relevant information. Accounting policy changes are applied retrospectively
unless it is impractical to determine the period or cumulative impact of the
change.
    Corrections of prior period errors are applied retrospectively and
changes in accounting estimates are applied prospectively by including these
changes in earnings. The guidance was effective for all changes in accounting
policies, changes in accounting estimates and corrections of prior period
errors initiated in periods beginning on or after January 1, 2007.

    FUTURE CHANGES IN ACCOUNTING POLICIES

    Capital Disclosures

    The CICA issued a new accounting standard, Section 1535 Capital
Disclosures, which requires the disclosure of both qualitative and
quantitative information that provides users of financial statements with
information to evaluate the entity's objectives, policies and processes for
managing capital. This new section is effective for the Partnership beginning
January 1, 2008.

    Financial Instruments - Disclosure and Financial Instruments Presentation

    Two new accounting standards were issued by the CICA, Section 3862
Financial Instruments - Disclosures, and Section 3863 Financial Instruments -
Presentation. These sections will replace Section 3861 Financial Instruments -
Disclosure and Presentation once adopted. The objective of Section 3862 is to
provide users with information to evaluate the significance of the financial
instruments on the entity's financial position and performance, the nature and
extent of risks arising from financial instruments, and how the entity manages
those risks. The provisions of Section 3863 deal with the classification of
financial instruments, related interest, dividends, losses and gains, and the
circumstances in which financial assets and financial liabilities are offset.
These new sections are effective for Partnership beginning January 1, 2008.
    The Partnership is currently assessing the impact on the financial
statements of the above changes.

    Distribution to Unitholders

    Management monitors the Partnership's distribution payout policy with
respect to forecasted net cash flow before working capital changes, debt
levels and capital expenditures. It is expected that normal seasonal
fluctuations in working capital will be funded from cash resources or from
credit facilities, and thus will not significantly affect the level of
distributions. Distributions are declared monthly with date of record on the
last day of the month and payable within 15 days following. The Partnership
began monthly distributions in September 2005. Starting June 2006, the
Partnership reduced its monthly distributions from $0.0627 per Unit to
$0.0542 per Unit. The Board of Directors assesses on a quarterly basis future
cash flows anticipated to be generated from operation. Based on its
assessment, the Board of Directors may increase, decrease or suspend monthly
distributions. Distributions will normally be decreased or suspended if the
Board of Directors assessment reveals that anticipated future cash flows from
operations are insufficient to sustain current distribution levels.

    
                     Three     Three      Nine      Nine
                    months    months    months    months      Year      Year
                     ended     ended     ended     ended     ended     ended
                 September September September September  December  December
    In millions   30, 2007  30, 2006  30, 2007  30, 2006  31, 2006  31, 2005
    -------------------------------------------------------------------------

    Cashflow from
     operating
     activities
     including
     changes in non
     cash working
     capital items  ($1.45)    $0.58     $1.62     $4.34     $5.63     $7.22
    -------------------------------------------------------------------------
    Net loss         (1.57)    (0.87)    (2.53)    (1.72)    (5.64)    (3.93)
    -------------------------------------------------------------------------
    Actual cash
     distributions
     paid or payable
     relating to the
     period           1.87      1.87      5.61      6.19      8.07      2.88
    -------------------------------------------------------------------------
    Excess
     (shortfall) of
     cash flows
     from operating
     activities over
     cash dist-
     ributions paid
     funded from
     cash on hand/
     credit
     facilities      (3.32)    (1.29)    (3.99)    (1.85)    (2.44)     4.34
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Shortfall of
     net income over
     cash dist-
     ributions paid  (3.44)    (2.74)    (8.14)    (7.91)   (13.71)    (6.81)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    During the three and nine months ended September 30, 2007, respectively
cash distributions declared to unitholders exceeded cash flows from operating
activities by $3.32 million and $3.99 million. This shortfall was financed
indirectly through drawings made under the credit facility to fund working
capital items.
    During the three and nine months ended September 30, 2007, respectively
the Partnership declared cash distributions to unitholders of $1.87 million
and $5.61 million respectively, even though it recorded a net loss of
$1.57 million and $2.53 million respectively. The Partnership does not use net
(loss) earnings as a basis to calculate distributions. Non cash items such as
amortization and unrealized gain/losses on financial instruments are items
which will fluctuate from period to period depending on various factors or are
based on long term assumptions and as such may not be indicative of cash
generation capacity of the Partnership. The Partnership instead uses operating
cash flow before and after net working capital as a basis to calculate
distributions.
    The Partnership's distributions of $1.87 million (2006 - $1.87 million)
for the third quarter of 2007 compared to operating cash flow before changes
in non cash working capital items had a payout ratio for the three months end
September 30, 2007 of 317% (2006 - 246%). The Partnership's revenue, earnings
and cash flow are subject to seasonal fluctuations. The lowest level of
revenue is generated in the third quarter as well the 2007 third quarter
results were also affected by the 20 day curtailment by Hydro Quebec at the
Mount Copper facility. The Partnership had a payout ratio of negative 129%,
(2006 - 322%) of cash flow from operating activities including changes in non
cash working capital items as the benefits of improved operating performance
were offset by an increase in non-cash working capital due to continued growth
in interest receivable on the Kettles Hill subordinated notes investment and
the payment of the quarterly and semi annual interest amounts on the Notes
Payable and the Convertible Debentures. This resulted in the Partnership
borrowing $2.0 million to fund the distributions in the quarter. It is
anticipated that this borrowing and the funding of future distributions will
be from funds generated by operations in the seasonally windy fourth quarter.
The collection of the interest on the Kettles Hill subordinated note
investment is anticipated to begin late in the fourth quarter and be all
collected upon the closing of the sale of Kettles Hill.
    The Partnership's distributions of $5.61 million for the first nine
months (2006 - $6.29 million) if compared to operating cash flow before
changes in non-cash working capital items would have a payout ratio of 112% in
2007 versus 192% in 2006. The Partnership's payout ratio is 346% (2006 - 145%)
of cash flow from operating activities including changes in non cash working
capital items for the nine months ended September 30, 2007. The shortfalls to
distribution levels for the first nine months occurred for the same reasons
that they occurred in the third quarter. The Partnership targets to hold
$1.9 million in cash reserves to support its cash distribution policy. After
setting aside amounts held for remaining capital expenditures and interest
obligations, the Partnership holds $1.9 million in cash reserves to support
its cash distribution policy. Such cash reserves, by themselves, are
sufficient to fund three months of distributions at the current level of
distributions per Partnership Unit. The Partnership intends to fund future
distributions from cash flows generated by operations.

    Outlook

    The assets of the Partnership continue to prove themselves. Pubnico
Point's overall performance in the first nine months of 2007 was 8% below the
long-term projection and Mount Copper's overall performance in the first nine
months was approximately 4% below the long-term projection. In the first nine
months, turbine availability at Pubnico Point exceeded the warranted level
while Mount Copper's turbine availability met the 95% warranted levels.
    The Manager continues to closely monitor the wind speeds, production,
operations and performance of both windpower facilities. The Manager is also
looking to continue to benefit from improved performance of the turbines. In
addition, the acquisition of full operational control of Mount Copper allows
the Manager to incorporate operational efficiencies between Mount Copper,
Pubnico Point and Kettles Hill.
    Kettles Hill announced substantial completion of the project on July 30,
2007. Kettles Hill is a 63 MW windpower project in Southern Alberta that has
completed its construction, and that is producing and selling electricity from
all thirty five of its turbines. On March 5, 2007, Creststreet Kettles Hill
Windpower LP announced it had retained a financial advisor to assist the
Independent Committee of its Board of Directors on its mandate to provide
liquidity to its unitholders after completion of the wind power project. The
Partnership has determined that it will not be bidding to acquire the Kettles
Hill wind power project. As the Partnership is not going to acquire Kettles
Hill, we expect to exercise our put agreement to have our $35.90 million note
investment to be purchased for cash for its principal amount plus a 10%
premium plus accrued and unpaid interest in that auction.
    Following the announcement of the taxation of distributions from income
trusts and limited partnerships in October, 2006 the Board of Directors of the
Partnership began to consider how this would impact Limited Partner's Unit
values. In the third quarter of 2007 the independent members of the Board of
Directors formed a Special Committee which was mandated to review strategic
options available to maximize Unitholder value. The Special Committee hired
CIBC World Markets Inc. and Davies Ward Phillips Vineberg LLP to assist them
in this process. The Special Committee has formally instructed CIBC World
Markets Inc. to begin a process to maximize Unitholder value. During the third
quarter of 2007 the Partnership incurred costs of $274,000 related to this
review process.

    
    Consolidated Balance Sheets

    (Unaudited, In Thousands,                            Sept. 30,   Dec. 31,
     except per unit data)                                   2007       2006
    -------------------------------------------------------------------------
    Assets:
    Current Assets
    Cash and cash equivalents                           $   2,387  $   5,721
    Restricted cash (Note 2)                                  225        225
    Accounts receivable                                     2,511      2,908
    Due from related parties (Note 6)                       3,866      1,363
    Prepaid and other assets                                  659        347
    -------------------------------------------------------------------------
                                                            9,648     10,564
    Prepaid and other assets                                   61         89
    Notes receivable (Note 6)                              35,900     33,219
    Deferred charges (Note 1)                                   -      3,850
    Plant and equipment (Note 3)                          122,313    127,146
    Pre-operating costs (Note 4)                              136        198
    Intangible asset (Note 5)                               4,475      4,696
    -------------------------------------------------------------------------
                                                        $ 172,533  $ 179,762
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities:
    Current Liabilities
    Accounts payable and accrued liabilities            $   1,777  $   2,865
    Deferred revenue (Note 6)                                  98         33
    Distribution payable (Note 10)                            623        623
    Due to related parties (Note 6)                         4,417      2,501
    -------------------------------------------------------------------------
                                                            6,915      6,022
    Notes payable (Note 7)                                 46,880     44,000
    Unsecured convertible debentures (Note 8)              53,120     55,532
    Deferred revenue (Note 6)                                 107         64
    Asset retirement obligation (Note 11)                   1,382      1,280
    Future income tax liability (Note 9)                    9,225     10,127
    -------------------------------------------------------------------------
                                                          117,629    117,025
    Partners' capital                                      69,505     75,156
    Deficit and accumulated other comprehensive income    (14,601)   (12,419)
    -------------------------------------------------------------------------
                                                        $ 172,533  $ 179,762
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Commitments (Note 12)

    See accompanying notes to interim unaudited consolidated financial
    statements



    Combined Statements of Operations and Comprehensive Income

                                   Three months ended     Nine months ended
    (Unaudited, In Thousands,      Sept. 30,  Sept. 30,  Sept. 30,  Sept. 30,
     except per unit data)             2007       2006       2007       2006
    -------------------------------------------------------------------------
    Revenue:
    Electricity sales             $   3,181  $   2,966  $  11,978  $  10,373
    Windpower production
     incentive                          149        141        517        425
    Investment income (Note 6)          900        621       2662        948
    -------------------------------------------------------------------------
                                      4,230      3,728     15,157     11,746
    Expenses:
    Operating costs                     775        723      2,246      2,345
    Management fees                     115        248        344        720
    Administrative costs                647        585      1,854      1,615
    -------------------------------------------------------------------------
                                      1,537      1,556      4,444      4,680
    -------------------------------------------------------------------------
    Income before the undernoted      2,693      2,172     10,713      7,066
    Strategic review costs
     (Note 16)                          274          0        274          0
    Unrealized loss on financial
     instrument (Note 6)                418        (89)     1,712        988
    Amortization of deferred
     charges                              -        241          -        540
    Amortization of intangible
     assets (Note 5)                     74         74        220        220
    Amortization of plant and
     equipment (Note 3)               1,737      1,751      5,221      5,285
    Amortization of pre-operating
     costs (Note 4)                      21         22         62         62
    Accretion on asset retirement
     obligation (Note 11)                35          7        102         19
    Interest expense (Notes 7
     and 8)                           2,163      1,467      6,346      3,514
    -------------------------------------------------------------------------
    Loss before taxes and
     non-controlling interest        (2,029)    (1,301)    (3,224)    (3,562)
    -------------------------------------------------------------------------
    Income taxes
      Future income tax expense
       (recovery) (Note 9)             (628)      (637)      (946)    (2,087)
    -------------------------------------------------------------------------
                                       (628)      (637)      (946)    (2,087)
    Non-controlling interest
     (Note 6)                           167        204        259        249
    -------------------------------------------------------------------------
    Net loss and comprehensive
     income (loss)                   (1,568)      (868)    (2,537)    (1,724)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net loss per unit - basic
     and diluted                  $   (0.14) $   (0.08) $   (0.22) $   (0.15)
    -------------------------------------------------------------------------
    Weighted average number
     of units                        11,501     11,501     11,501     11,501
    -------------------------------------------------------------------------


    Deficit, beginning of period,
     as previously reported         (13,033)    (7,640)   (12,419)    (6,784)
    Financial instruments -
     recognition and measurement
     (Note 1)                             -          -        355          -
    -------------------------------------------------------------------------
    Restated deficit, beginning
     of period                      (13,033)    (7,640)   (12,064)    (6,784)
    Net Loss                         (1,568)      (868)    (2,537)    (1,724)
    -------------------------------------------------------------------------
    Deficit, end of period        $ (14,601) $  (8,508) $ (14,601) $  (8,508)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Accumulated other
     comprehensive income                 -          -          -          -
    -------------------------------------------------------------------------
    Deficit and accumulated
     other comprehensive income   $ (14,601) $  (8,508) $ (14,601) $  (8,508)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to interim unaudited consolidated financial
    statements



    Consolidated Statements of Partners' Capital

                                   Three months ended     Nine months ended
    (Unaudited, In Thousands,      Sept. 30,  Sept. 30,  Sept. 30,  Sept. 30,
     except per unit data)             2007       2006       2007       2006
    -------------------------------------------------------------------------
    Partners' capital -
     beginning of  period         $  71,376  $  77,751 $   75,156  $  81,980
    Unsecured convertible
     debentures option value              -      1,146        (40)     1,146
    Distributions declared to
     the unitholders (Note 10)       (1,871)    (1,870)    (5,611)    (6,099)
    -------------------------------------------------------------------------
    Partners' capital -
     end of period                $  69,505  $  77,027 $   69,505  $  77,027
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Statements of Cash Flows

                                   Three months ended     Nine months ended
    (Unaudited, In Thousands,      Sept. 30,  Sept. 30,  Sept. 30,  Sept. 30,
     except per unit data)             2007       2006       2007       2006
    -------------------------------------------------------------------------
    Cash flow from operating
     activities:
      Net Loss                    $  (1,568) $    (868) $  (2,537) $  (1,724)
      Add (deduct) items not
       affecting cash:
      Unrealized loss on financial
       instrument (Note 6)              418        (89)     1,712        988
      Amortization of deferred
       charges (Note 1)                   -        241          -        540
      Amortization of intangible
       assets (Note 5)                   74         74        220        220
      Amortization of plant and
       equipment (Note 3)             1,737      1,751      5,221      5,285
      Amortization of pre-operating
       costs (Note 4)                    21         22         62         62
      Accretion of asset retirement
       obligation                        35          7        102         19
      Accretion of interest expense     356         51      1,019        105
      Recognition of deferred
       revenue                          (22)         -        (92)         -
      Future income tax recovery       (628)      (637)      (946)    (2,087)
      Non-controlling interest
       (Note 6)                         167        204        259        249
    -------------------------------------------------------------------------
                                        590        756      5,020      3,657

      Non -cash operating working
       capital:
      (Increase) decrease in
       accounts receivable             (808)       (10)       397      1,589
      Increase (decrease) in
       prepaid expense and other
       assets                          (226)       202       (284)      (105)
      Increase (decrease) in
       accounts payable and accrued
       liabilities                     (150)         8     (1,088)      (245)
      Increase in deferred revenue      100        194        200        194
      Increase in amounts due to/
       from related parties (Note 6)   (956)      (567)    (2,625)      (752)
    -------------------------------------------------------------------------
                                     (1,450)       583      1,620      4,338
    -------------------------------------------------------------------------
    Cash flows from financing
     activities:
      Finance issue costs                 -     (1,777)         -     (1,812)
      Increase in notes payable       3,659      7,000      3,659     14,000
      Issue of unsecured
       convertible debentures             -     30,000          -     30,000
      Dividends to non-controlling
       interest (Note 6)               (106)      (153)      (310)      (198)
      Distributions to unitholders
       (Note 10)                     (1,871)    (1,870)    (5,611)    (6,197)
    -------------------------------------------------------------------------
                                      1,682     33,200     (2,262)    35,793
    -------------------------------------------------------------------------
    Cash flows from investing
     activities:
    Decrease in restricted cash           -        493          -      4,065
    Net increase in loans
     receivable                      (1,900)   (29,000)    (2,681)   (35,500)
    Additions to plant and
     equipment                            -       (578)       (11)    (4,456)
    -------------------------------------------------------------------------
                                     (1,900)   (29,085)    (2,692)   (35,891)
    -------------------------------------------------------------------------
    Net increase (decrease) in
     cash                            (1,668)     4,698     (3,334)     4,240
    Cash and cash equivalents,
     beginning of period              4,055      3,437      5,721      3,895
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                $   2,387  $   8,135  $   2,387  $   8,135
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash information:
    Interest paid                 $   2,560  $   1,400  $   6,241  $   3,407
    Interest received             $     (46) $    (130) $    (210) $    (276)
    Large corporate tax paid      $       -  $       -  $       -  $      34
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to interim unaudited consolidated financial
    statements



    Notes to Consolidated Financial Statements
    (All tabular amounts stated in thousands, except per Unit information)

    1.  Significant Accounting Policies

    The accompanying interim period consolidated financial statements have
    been prepared in accordance with Canadian generally accepted accounting
    principles ("GAAP") applied on a consistent basis with those used to
    prepare the audited consolidated statements for the year ended
    December 31, 2006 and should be read in conjunction with those statements
    except for the adoption of new accounting policies described below. The
    accompanying unaudited consolidated financial statements have been
    prepared in accordance with GAAP for interim financial statements and,
    accordingly, certain information and footnote disclosure normally
    included in annual financial statements have been condensed or omitted.
    These consolidated financial statements include the accounts of
    Creststreet Power & Income Fund LP (the "Partnership") and its subsidiary
    Mount Copper Wind Power Energy Inc. ("Mount Copper") and its variable
    interest entity Pubnico Point Wind Farm Inc. ("Pubnico Point"). All
    significant transactions and balances between the Partnership, Mount
    Copper and Pubnico Point have been eliminated on consolidation. In
    management's opinion, the accompanying unaudited consolidated financial
    statements include all adjustments (consisting solely of normal recurring
    adjustments) necessary to present fairly the financial position of the
    Partnership as at September 30, 2007, and December 31, 2006, and the
    consolidated results of operations and cash flows for the three and nine
    months ended September 30, 2007 and 2006. The results of operations and
    cash flows of any interim period are not necessarily indicative of the
    results of operations for any other interim period or for a full fiscal
    year. The Partnership's revenue, earnings and cash flows are subject to
    seasonal fluctuations. The highest level of revenue is expected in winter
    months (generally, the first and fourth quarters) and the lowest level of
    revenue in the third quarter (summer months).

    CHANGES IN ACCOUNTING POLICIES

    As disclosed in the December 31, 2006 annual audited consolidated
    financial statements, on January 1, 2007, the Partnership adopted the
    Canadian Institute of Chartered Accountants ("CICA") Handbook Section
    1530 "Comprehensive Income", Section 3251 "Equity", Section 3855
    "Financial Instruments - Recognition and Measurement", and Section 3865
    "Hedges". As required by the new standards, prior periods have not been
    restated.

    The adoption of these standards had no material impact on the
    Partnership's cash flows. The other effects of the implementation of the
    new standards are discussed below.

    Comprehensive Income

    The new standards introduce comprehensive income, which consists of net
    earnings and other comprehensive income ("OCI"). Upon adoption of
    Section 530, the Partnership revised its "Consolidated Statements of
    Operations" to include the newly required Statement of Comprehensive
    Income by creating a combined statement. On the Consolidated Balance
    Sheet in the Partnership Capital section the line "Deficit" is now
    "Deficit and Accumulated Other Comprehensive Income".

    The adoption of comprehensive income has been made in accordance with the
    applicable transitional provisions and no amounts have been reclassified
    to Accumulated Other Comprehensive Income and currently CPIF has no OCI.

    Financial Instruments

    The financial instruments standard establishes the recognition and
    measurement criteria for financial assets, financial liabilities and
    derivatives. All financial instruments are required to be measured at
    fair value on initial recognition of the instrument, except for certain
    related party transactions. Measurement in subsequent periods depends on
    whether the financial instrument has been classified as "held-for-
    trading", "available-for-sale", "held-to-maturity", "loans and
    receivables", or "other financial liabilities" as defined by the
    standard.

    Financial assets and financial liabilities "held-for-trading" are
    measured at fair value with changes in those fair values recognized in
    net earnings. Financial assets "available-for-sale" are measured at fair
    value, with changes in those fair values recognized in OCI. Financial
    assets "held-to maturity", "loans and receivables" and "other financial
    liabilities" are measured at amortized cost using the effective interest
    method of amortization.

    Cash and cash equivalents are designated as "held-for-trading" and are
    measured at carrying value, which approximates fair value due to the
    short-term nature of these instruments.

    Accounts receivable is designated as "loans and receivables". Accounts
    payable and accrued liabilities, cash distributions payable and long term
    debt are designated as "other liabilities".

    The Partnership currently does not utilize hedges or other derivative
    financial instruments in its operations, and as a result the adoption of
    Section 3865 currently has no material impact on the consolidated
    financial statements of the Partnership.

    The adoption of the financial instruments standard has been made in
    accordance with its transitional provisions. Accordingly, at January 1,
    2007, deferred charges were reclassified to debt to reflect the adopted
    policy of capitalizing long-term debt transaction costs, premiums and
    discounts within long-term debt. The costs capitalized within long-term
    debt will be amortized using the effective interest method. Previously,
    the Partnership deferred these costs within deferred charges and
    amortized them straight-line over the life of the related long-term debt.
    The adoption of the effective interest method of amortization had
    $0.36 million effect on opening deficit.

    The following table summarizes the prospective adoption adjustments that
    were required as at January 1, 2007.

                                     December 31,                  January 1,
                                            2006      Adoption          2007
    (in $ millions)                 (As Reported)   Adjustment  (As Restated)
    -------------------------------------------------------------------------
    Assets
    Deferred Charges
      Cost of deferred charges             5.36          (5.36)            -
      Accumulated amortization            (1.51)          1.51             -
      Net book value                       3.85          (3.85)            -
    Liabilities and Partners' Capital
      Notes payable (a)                   44.00          (1.02)        42.98
      Unsecured convertible
       debentures (b)                     55.53          (3.19)        52.34
      Future Income Taxes                 10.13           0.03         10.16
      Partners' Capital                   75.16          (0.04)        75.12
      Deficit                            $12.42          (0.36)        12.06
    -------------------------------------------------------------------------

        (a)   Includes transaction costs of $1.40 million transferred from
              deferred charges. Notes payable have been valued using the
              effective interest method.

        (b)   Includes transaction costs transferred from deferred charges of
              $3.93 million.

    Accounting Changes

    Effective January 1, 2007, the Partnership adopted the revised
    recommendations of CICA section 1506, "Accounting Changes."

    The new recommendations permit voluntary changes in accounting policy
    only if they result in financial statements which provide more reliable
    and relevant information. Accounting policy changes are applied
    retrospectively unless it is impractical to determine the period or
    cumulative impact of the change.

    Corrections of prior period errors are applied retrospectively and
    changes in accounting estimates are applied prospectively by including
    these changes in earnings. The guidance was effective for all changes in
    accounting policies, changes in accounting estimates and corrections of
    prior period errors initiated in periods beginning on or after January 1,
    2007.

    FUTURE CHANGES IN ACCOUNTING POLICIES

    Capital Disclosures

    The CICA issued a new accounting standard, Section 1535 Capital
    Disclosures, which requires the disclosure of both qualitative and
    quantitative information that provides users of financial statements with
    information to evaluate the entity's objectives, policies and processes
    for managing capital. This new section is effective for the Partnership
    beginning January 1, 2008.

    Financial Instruments - Disclosure and Financial Instruments Presentation

    Two new accounting standards were issued by the CICA, Section 3862
    Financial Instruments - Disclosures, and Section 3863 Financial
    Instruments - Presentation. These sections will replace Section 3861
    Financial Instruments - Disclosure and Presentation once adopted. The
    objective of Section 3862 is to provide users with information to
    evaluate the significance of the financial instruments on the entity's
    financial position and performance, the nature and extent of risks
    arising from financial instruments, and how the entity manages those
    risks. The provisions of Section 3863 deal with the classification of
    financial instruments, related interest, dividends, losses and gains, and
    the circumstances in which financial assets and financial liabilities are
    offset. These new sections are effective for Partnership beginning
    January 1, 2008.

    The Partnership is currently assessing the impact on the financial
    statements on the above changes.

    2.  Restricted Cash

    Restricted cash includes amounts funded to Mount Copper through its
    credit facilities. These funds may only be accessed for construction-
    related expenses upon acceptance by the lenders. At September 30, 2007
    $225,000 (2006 - $225,000) was held as restricted cash.

    3.  Plant and Equipment

                                                  September 30,  December 31,
                                                          2007          2006
    -------------------------------------------------------------------------
    Mount Copper                                       $90,765       $90,596
    Pubnico Point                                       50,136        49,907
    -------------------------------------------------------------------------
                                                       140,901       140,503
    Less: accumulated amortization                      18,581        13,357
    -------------------------------------------------------------------------
    Total Plant and Equipment                         $122,320      $127,146
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    4.  Pre-operating Costs

                                                  September 30,  December 31,
                                                          2007          2006
    -------------------------------------------------------------------------
    Mount Copper                                          $319          $319
    Pubnico Point                                           93            93
    -------------------------------------------------------------------------
                                                           412           412
    Less: accumulated amortization                         276           214
    -------------------------------------------------------------------------
    Total Pre-operating costs                             $136          $198
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    5.  Intangible Asset

                                                  September 30,  December 31,
                                                          2007          2006
    -------------------------------------------------------------------------
    Cost                                                $5,111        $5,111
    Less: accumulated amortization                         636           415
    -------------------------------------------------------------------------
    Total                                               $4,475        $4,696
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    6.  Related Party Transactions

    The current amounts due to (from) related parties are as follows:

                                                  September 30,  December 31,
                                                          2007          2006
    -------------------------------------------------------------------------
    Due to Creststreet Power & Income
     Management Limited                                    $ -          $120
    Due to (from) Creststreet Capital Corporation            -             7
    Due to PPWF Management Limited                       3,783         2,374
    Due (from) Grand Valley                                 (2)            -
    Due to CPHL                                            634             -
    Due (from) Dokie Wind Energy Inc.                      (42)          (42)
    Due (from) Kettles Hill                             (3,822)       (1,321)
    -------------------------------------------------------------------------
    Total                                                 $551        $1,138
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Transactions with related parties have been measured at their exchange
    value.

    Payments to General Partner

    Creststreet Power & Income General Partner Limited (the "General
    Partner") is reimbursed for reasonable costs it incurs in attending to
    the administration of the Partnership. For the three and nine months
    ended September 30, 2007, the General Partner was reimbursed $274,622
    (2006 - $125,001) and $823,867 (2006 - $332,419), respectively.

    Payments to Creststreet Power & Income Management Limited

    The Manager is also entitled to reimbursement of its operating expenses
    incurred in providing the services under the Management Agreement. For
    the three and nine months ended September 30, 2007, the Manager earned
    $82,712 (2006 - $82,712) and $248,135 (2006 - $255,795), respectively
    under the Management Agreement, and reimbursements of $6,032 (2006 -
    $35,478) and $7,277 (2006 - $41,326), respectively for out-of-pocket
    expenses.

    For the three and nine months ended September 30, 2007, Creststreet
    Capital Corporation ("CCC"), a related party through common management
    was paid $nil (2006 - nil) and $106,031 (2006 - $126,941), respectively
    to reimburse CCC for costs it had paid directly on behalf of the
    Partnership.

    Mount Copper

    For the three and nine months ended September 30, 2007, Mount Copper
    incurred $15,000 (2006 - $15,000) and $45,000 (2006 - $45,000),
    respectively, under the financial administration agreements. In the three
    and nine months ended September 30, 2006, Mount Copper incurred $140,615
    and $436,560 respectively under the management services agreement,
    including out of pocket expenses of $7,411 and $67,687, respectively.
    No fees were incurred under the management services agreement in 2007 as
    the Partnership acquired all the interests of 3Ci, its former joint
    venture partner in Mount Copper, in October 2006. This acquisition
    included 3Ci's interest in the management services agreement and its
    Class B shares.

    Creststreet Power Holdings Limited ("CPHL") owns 100% of the Class B
    shares of Mount Copper. Holders of the Class B shares are entitled to
    cumulative dividends based on the annual level of operating cash flow
    achieved by Mount Copper. If the operating cash flow is below
    $9.00 million per year (the "Mount Copper Hurdle Cash Flow"), the
    dividends on the Class B shares will be nil. Commencing the month during
    which the Mount Copper wind energy facility was commissioned, the Class B
    shares are entitled to dividends equal to 50% of the annual operating
    cash flow above the Mount Copper Hurdle Cash Flow. For the nine months
    ended September 30, 2007 no dividends were paid.

    The Class B shares are exchangeable at the option of the shareholders for
    Units of the Partnership commencing on August 3, 2007 and ending on
    August 3, 2010. The exchange ratio will be determined based on the
    relative value of a Class B share to a Unit so that the Partnership will
    pay fair value to acquire the Class B shares such that there will be no
    economic dilution of Distributable Cash on a per Unit basis arising from
    this exchange. The fair value of the Class B shares will be determined
    for this purpose based on the dividends paid on these shares during the
    previous 12 months and the value of the Units will be based on
    distributions during the same period. On January 1, 2007 a financial
    instrument liability and a property plant and equipment addition of
    $0.16 million (2006 - $0.17 million) was recorded for this Class B put
    option liability. As the amount of this adjustment was not deemed
    material comparative amounts have not been restated. The redemption value
    of this right to exchange was determined to be zero at September 30, 2007
    as no Class B dividends have been paid for the previous 12 months. An
    unrealized mark to market gain on this liability of nil and $0.17 million
    (2006 - $nil and $0.17 million) was recorded to the statement of
    operations for the three and nine months period ended September 30, 2007,
    respectively.

    Pubnico Point

    For the three and nine months ended September 30, 2007, Pubnico Point
    incurred $63,457 (2006 - $62,712) and $189,467 (2006 - $189,671),
    respectively under the management services, lease, and financial
    administration agreements plus reimbursement of out of pocket expenses of
    $12,324 (2006 - $12,041) and $67,868 (2006 - $41,055), respectively.

    Pubnico Management Limited ("PML") and CPHL own Class B shares of Pubnico
    Point. Holders of the Class B shares will be entitled to cumulative
    dividends based on the annual level of operating cash flow achieved by
    Pubnico Point. If the operating cash flow is below $4.75 million per year
    (the "Pubnico Point Hurdle Cash Flow"), the dividends on the Class B
    shares will be nil. Commencing the month during which the Pubnico Point
    Facility was commissioned in 2005, the Class B shares are entitled to
    dividends equal to 70% of the annual operating cash flow above the
    Pubnico Point Hurdle Cash Flow. For the three and nine months ended
    September 30, 2007, a dividend was declared to the Class B shareholders
    of $166,882 (2006 - $204,115) and $258,858 (2006 - $249,432),
    respectively. As required under the Class B dividends the annual
    calculation was completed in Q1 2007 and the dividends paid earlier in
    the year were estimated to be over paid by approximately $0.23 million.

    The Class B shares may be exchanged for Units commencing on August 3,
    2007 and ending on August 3, 2010. The exchange ratio will be determined
    based on the relative value of a Class B share to a Unit so that the
    Partnership will pay fair value to acquire the Class B shares such that
    there would be no economic dilution of Distributable Cash on a per Unit
    basis arising from this exchange. The fair value of the Class B shares
    will be determined for this purpose based on the dividends paid on these
    shares during the previous 12 months and the value of the Units will be
    based on distributions during the same period. On January 1, 2007 a
    financial instrument liability and a property plant and equipment
    addition of $0.23 million was recorded for the CPHL put option liability
    and in 2006, $1.35 million was recorded effective January 1, 2006 as a
    financial instrument and a plant and equipment addition for PML's Class B
    put option. As the amount of this adjustment was not deemed material
    comparative amounts have not been restated.

    The redemption value of this right to exchange was determined to be
    $4.44 million at September 30, 2007, (PML - $3.80 million and CPHL -
    $0.63 million). An unrealized mark to market gain on this liability of
    $0.42 million (2006 - $0.09 million) was recorded to the statement of
    operations for the three month period ended September 30, 2007 and for
    the nine months ended September 30, 2007, a mark to market loss of
    $1.86 million (2006 - $1.31 million).

    Kettles Hill

    During 2006, the Partnership issued subordinated promissory notes
    receivable to Kettles Hill Wind Energy Inc. ("Kettles Hill") in the
    amount of $32.00 million related to the construction of a wind farm.
    During the first quarter of 2007, a further $2.00 million was invested
    and during the third quarter a further $1.9 million was invested. The
    $1.9 million note will bear interest at 12% with a financing fee of
    $100,000 all other terms and conditions are similar to the original
    investment. The promissory note is unsecured and will not hold any liens
    over any assets of Kettles Hill. The note bears interest at 9.25% per
    annum until October 31, 2009 and thereafter at a rate of 10.5% per annum.
    This receivable will ultimately be collected when Kettles Hill completes
    its sale process. The loan receivable is due on October 31, 2009, unless
    the Partnership acquires more than 50% of Kettles Hill, in which case the
    Kettles Notes will mature October 31, 2026. If Kettles Hill is acquired
    by a third party other than the Partnership, the Partnership has a right
    to put all or a portion of the Kettles Notes to Creststreet Kettles Hill
    Windpower LP ("CKHWP"), and CKHWP shall be required to purchase such
    Kettles Notes at 110% of par plus 50% of the amount, if any, that the
    fair market value of each Class A Share of Kettles Hill, realized upon a
    change of control, exceeds $1.87 per Class A share multiplied by the
    principal amount of the Kettles Hill subordinated notes held by the
    Partnership divided by $1.70.

    Financing fees earned for the three and nine months ended September 30,
    2007, related to the issuance of the notes to Kettles Hill were $100,000
    (2006 - $nil) and $200,000 (2006 $nil), respectively and will be
    amortized over the term of the notes. For the three and nine months ended
    September 30, 2007 amortization of deferred revenue totaled $21,711
    (2006 - $nil) and $43,550 (2006 - $nil). The notes to Kettles Hill are
    valued at their exchange value.

    For the three and nine months ended September 30, 2007, the Partnership
    recorded interest income of $834,564 (2006 - $411,419) and $2,369,051
    (2006 - $590,885), respectively on the Kettles Hill notes.

    Dokie

    During 2006, the Partnership invested $4.50 million in subordinated
    promissory notes ("Dokie Notes") of Dokie Wind Energy Inc. ("Dokie").
    These Dokie Notes were unsecured and bear interest at 15% per annum.
    During the fourth quarter of 2006, Dokie redeemed $3.28 million of the
    outstanding notes. On January 3, 2007 Dokie repaid the remaining balance
    of $1.22 million and the outstanding interest of $43,280. The deferred
    financing fee recorded as deferred revenue of $48,915 was written off and
    recognized in the income statement in the first quarter of 2007 as the
    notes were fully repaid. A redemption fee was also recorded as income in
    the first quarter of $60,950.

    7.  Notes Payable

    The Mount Copper note facility of $18.95 million bears interest at 6.10%
    per annum and is due March 31, 2011. This note facility was valued using
    the interest method at an effective interest rate of 6.66%. The fair
    value at September 30, 2007 was $18.63 million. For the three and nine
    months ended September 30, 2007 $21,010 (2006 - $nil) and $61,334
    (2006 - $nil), respectively, of accretion was included in the statement
    of operations.

    The Pubnico Point note facility of $11.05 million bears interest at
    6.041% and is due March 31, 2011. At September 30, 2007 this note
    facility was valued at $10.62 million using an effective interest rate of
    7.29%. For the three and nine months ended September 30, 2007
    $26,804 (2006 - $nil) and $78,128 (2006 - $nil), respectively, of
    accretion was included in the statement of operations.

    To finance a portion of the Partnership's commitment to Kettles Hill, the
    Partnership arranged a $14.00 million line of credit with a major
    Canadian financial institution with a floating interest rate equal to the
    three month banker's acceptance rate plus 200 basis points in 2005 and
    2006. In the second year of the term the credit spread increases to
    225 basis points. The line of credit is collateralized by the advances to
    Kettles Hill. In July, 2007, the Partnership extended the line of credit
    facility of $14.00 million to an increased facility limit of
    $30.00 million. The term of the facility was also extended to three years
    from initial drawdown to January 25, 2009. Additional draws on this
    facility will accrue interest at the three month BA rate prevailing at
    the time of the advance, plus 225 bps. The Notes payable remain repayable
    at any time at the option of the Partnership. A financing fee of 1.5% of
    the increase limit was paid of $240,000 on finalization of the extension.
    A standby fee of 50 bps will be charged for all funds not drawn. In July,
    2007, the Partnership drew down $1.90 million of the increased facility
    and in September, 2007 a further $2.00 million was drawn. The total
    facility drawn at September 30, 2007 was $17.90 million, with a remaining
    $12.10 million undrawn.

    As at September 30, 2007, the floating interest rate was 7.16%. This line
    of credit was valued at September 30, 2007 at $17.63 million using an
    average effective interest rate of 8.03%. For the three and nine months
    ended September 30, 2007 $38,591 (2006 - $nil) and $104,027
    (2006 - $nil), respectively, of accretion was included in the statement
    of operations.

    These financing agreements contain customary representations, warranties
    and covenants (including financial covenants and restriction on incurring
    additional indebtedness). Collateral for the facilities is provided by a
    first priority security interest in the assets of Mount Copper and
    Pubnico Point and various security interests granted by some of Mount
    Copper's and Pubnico Point's shareholders.

    8.  Unsecured Convertible Debentures

    On August 18, 2006, the Partnership issued 30.0 million CRS.DB.A
    Debentures for total proceeds of $30.00 million. The CRS.DB.A Debentures
    have a coupon rate of 8% and mature September 15, 2011. Each CRS.DB.A
    Debenture is convertible into a Partnership Unit at the option of the
    holder at any time at a conversion price of $6.65 per Partnership Unit.
    The conversion option was valued at $1.14 million (including financing
    costs of $0.08 million) and is included in the statement of partners'
    capital. Accretion expense has been included in the statement of
    operations for the three and nine months ended September 30, 2007 of
    $143,567 (2006 - $28,554) and $414,885 (2006 - $28,554), respectively.

    The net proceeds of $28.02 million after underwriter fees and other
    expenses of $1.98 million were used to purchase additional Kettles Notes
    and for general business purposes including funding a temporary
    investment in Dokie.

    On January 20, 2005, the Partnership issued 27.0 million CRS.DB
    Debentures for total proceeds of $27.00 million. The CRS.DB Debentures
    have a coupon rate of 7% and mature March 15, 2010. Each CRS.DB Debenture
    is convertible into a Partnership Unit at the option of the holder at any
    time at a conversion price of $9.625 per Unit. The conversion option was
    valued at $0.53 million and is included in the statement of partners'
    capital. Accretion expense has been included in the statement of
    operations for the three and nine months ended September 30, 2007 of
    $124,375 (2006 - $24,029) and $360,743 (2006 - $76,913), respectively.

    The net proceeds of approximately $24.96 million after underwriter fees
    and other expenses were used to fund further investments by the
    Partnership in Mount Copper and Pubnico Point by way of subordinated
    notes issued by Mount Copper and Pubnico Point to fund capital
    expenditures, to permit the refinancing of a portion of their
    construction debt facilities and for general business purposes.

    As at September 30, 2007 the fair value of the $27.00 million CRS.DB
    Debentures was $25.64 million and the $30.00 million CRS.DB.A Debentures
    was $27.48 million.

    9.  Future Income Taxes

    On June 22, 2007 the federal government's bill regarding the taxation of
    distributions from trusts and partnerships beginning January 1, 2011
    passed the third reading making it substantively enacted in accordance
    with Canadian GAAP. In particular, income earned by these entities will
    be taxed in a manner similar to income earned and distributed by a
    corporation. Prior to January 1, 2007, the Partnership was only taxable
    on amounts that were not distributed to Unitholders. This new legislation
    results in earnings of the Partnership are now subject to income tax
    regardless of whether amounts are distributed to Unitholders or not, post
    January 1, 2011. Previously, the future income tax liability on the
    consolidated balance sheet represented the future income tax liability of
    the Partnership's subsidiaries Mount Copper and Pubnico.

    No significant temporary differences were noted at the Partnership level
    as the majority of the capital assets are held at the subsidiary level
    where a future income tax liability had already been recorded. As such
    the new legislation had no impact to the Partnership. A future income tax
    recovery of $67,420 relating to the federal tax rate reduction to 18.5%
    in 2011 was recorded in the second quarter of 2007 on temporary
    differences that existed at the subsidiary level.

    As the legislation is new, future technical interpretations of the
    legislation could occur and could materially affect management's estimate
    of the future income tax liability.

    The Partnership has estimated its future income taxes on its best
    estimates of future results of operations and tax pool claims in the
    future assuming no material change to the Partnership's current
    organization structure. As currently interpreted, Canadian GAAP does not
    permit the Partnership's estimate of future income taxes to incorporate
    any assumptions related to acquisitions or dispositions of assets and
    liabilities until these are given legal effect. The Partnership's
    estimates and assumptions of future income taxes will vary based on
    actual results of the factors described above and such variations may be
    material.

    10. Distributions to Unitholders

    Distributions to unitholders are paid on or about the 15th of each month,
    in arrears. The following distributions have been declared to unitholders
    for the nine months ended September 30, 2007.

                                                                      Amount
                                                           Amount   declared
                                                Date of  declared     ($ per
    Period of distribution                      payment        ($)      Unit)
    -------------------------------------------------------------------------
    January 1 - January 31, 2007      February 15, 2007       624    $0.0542
    February 1 - February 28, 2007       March 15, 2007       623     0.0542
    March 1 - March 31, 2007             April 16, 2007       623     0.0542
    April 1 - April 30, 2007               May 15, 2007       624     0.0542
    May 1 - May 31, 2007                  June 15, 2007       623     0.0542
    June 1 - June 30, 2007                July 16, 2007       623     0.0542
    July 1 - July 31, 2007              August 15, 2007       624     0.0542
    August 1 - August 31, 2007       September 14, 2007       624     0.0542
    September 1 - September 30, 2007   October 15, 2007       623     0.0542
    -------------------------------------------------------------------------
    Nine months ended
     September 30, 2007                                    $5,611    $0.4878
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    At September 30, 2007 the Partnership had 11,500,737 Units outstanding.

    11. Asset Retirement Obligation

    The following table presents the reconciliation of the beginning and
    ending aggregate carrying amount of the obligation associated with the
    retirement of wind farm properties.

                                                  September 30,  December 31,
                                                          2007          2006
    -------------------------------------------------------------------------
    Mount Copper:
    Asset retirement obligation, beginning
     of period                                            $804          $143
    Accretion expense                                       64            16
    Revision in estimated cash flow                          -           645
    -------------------------------------------------------------------------
    Asset retirement obligation, end of period            $868          $804
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                  September 30,  December 31,
                                                          2007          2006
    -------------------------------------------------------------------------
    Pubnico Point:
    Asset retirement obligation, beginning
     of period                                            $476           $91
    Accretion expense                                       38            10
    Revision in estimated cash flow 	                         -           375
    -------------------------------------------------------------------------
    Asset retirement obligation, end of period              514          476
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total                                                $1,382       $1,280
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Asset retirement obligations are primarily associated with certain
    closure, reclamation and restoration costs related to retirement of the
    wind farm properties. Most of these obligations are not expected to be
    paid for 20 years and will be funded from general company resources at
    that time. Actual obligations could differ from these estimates.
    Revisions to the Partnership's asset retirement obligation will be made
    prospectively if new information is available.

    12. Commitments

    The Partnership has committed to certain payments as follows:

                                      Due less     Due 2     Due 4       Due
                                          than        to        to     after
    (In millions)              Total    1 year   3 years   5 years   5 years
    -------------------------------------------------------------------------
    Long-term debt
     obligations             $104.90       $ -    $17.90    $87.00       $ -
    Other obligations           5.69      1.50      2.22      0.32      1.65
    -------------------------------------------------------------------------
    Total obligations        $110.59     $1.50    $20.12    $87.32     $1.65
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    13. Economic Dependence

    For the nine months period ended September 30, 2007, the Partnership was
    dependent on Hydro-Québec, the Canadian Federal Government and Nova
    Scotia Power Inc. for 59% (2006 - 53%), 4% (2006 - 4%), 37% (2006 - 43%)
    of consolidated revenues, respectively.

    14. Fair Value of Instruments

    At September 30, 2007, the carrying amount of cash, restricted cash,
    accounts receivable, accounts payable, accrued liabilities and due
    to/from related parties approximates fair value due to their short-term
    nature.

    At September 30, 2007, the exchange amount of loan receivable of
    $35.90 million approximates the carrying value due to the nature of the
    related party loan receivable.

    At September 30, 2007, the fair market value of the Class B share
    liability was $4.44 million (see note 6).

    See note 7 and 8 for the fair value of debt.

    Credit Risk

    Accounts receivable include amounts receivable from electricity sales
    that are made to large credit-worthy purchasers, Hydro-Quebec, the
    Canadian Federal Government and Nova Scotia Power Inc. Accordingly, the
    Partnership views credit risks on these amounts as low.

    20.8% ($35.90 million) of the Partnership's assets are invested as notes
    receivable from Kettles Hill, which are collateralized as described in
    Note 6. The Partnership views these notes as fully collectible.

    Interest Rate

    The Partnership is exposed to interest rate risk on the notes payable of
    $17.90 million with a floating interest rate.

    15. Reclassifications

    Certain prior year balances have been reclassified to conform to the
    presentation adopted in the current year.

    16. Subsequent Events

    Following the announcement of the taxation of distributions from income
    trusts and limited partnerships in October, 2006 the Board of Directors
    of the Partnership began to consider how this would impact Limited
    Partner's Unit values. In the third quarter of 2007 the independent
    members of the Board of Directors formed a Special Committee which was
    mandated to review strategic options available to maximize Unitholder
    value. The Special Committee hired CIBC World Markets Inc. and Davies
    Ward Phillips Vineberg LLP to assist them in this process. The Special
    Committee has formally instructed CIBC World Markets Inc. to begin a
    process to maximize Unitholder value. During the third quarter of 2007
    the Partnership incurred costs of $274,000 related to this review
    process.

    Subsequent to the end of the third quarter of 2007, the Board of
    Directors evaluated and determined that is was not in the interest of the
    Partnership to participate in the Kettles Hills auction process.
    

    About Creststreet Power & Income Fund LP

    Creststreet Power & Income Fund LP (the "Partnership") owns and operates
two wind energy projects in Quebec and Nova Scotia with a total of 47 wind
turbines and power generating capacity of 84.6 megawatts. All electricity
generated by these wind energy projects is being sold pursuant to long-term
power purchase agreements with provincial electricity utilities.

    THE PARTNERSHIP IS ORGANIZED IN ACCORDANCE WITH THE TERMS AND CONDITIONS
OF A LIMITED PARTNERSHIP AGREEMENT WHICH PROVIDES THAT NO UNITS MAY BE OWNED
BY, AMONG OTHER THINGS, A PERSON WHO IS A "NON-RESIDENT" OF CANADA FOR
PURPOSES OF THE INCOME TAX ACT (CANADA) OR A PARTNERSHIP.

    CERTAIN STATEMENTS INCLUDED IN THIS NEWS RELEASE CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES ACT
(ONTARIO). SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS,
PERFORMANCE OR ACHIEVEMENTS OF THE PARTNERSHIP TO BE MATERIALLY DIFFERENT FROM
ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS.

    THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS
THE EXPECTATIONS OF CRESTSTREET POWER & INCOME FUND LP AS AT NOVEMBER 9, 2007,
AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. HOWEVER, CRESTSTREET
POWER & INCOME FUND LP EXPRESSLY DISCLAIMS ANY INTENTION OR OBLIGATION TO
UPDATE OR REVISE ANY FORWARD-LOOKING INFORMATION, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED BY APPLICABLE LAW.





For further information:

For further information: Derren Newell, VP, Finance and CFO, Creststreet
Power & Income General Partner Limited, Tel: (403) 513-0766, E-mail:
dnewell@creststreet.com

Organization Profile

CRESTSTREET POWER & INCOME FUND LP

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