UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.   )

Algonquin Power & Utilities Corp.

(Name of Issuer)

Common Shares, no par value

(Title of Class of Securities)

015857105

(CUSIP Number)

Stephen D. Aftanas

1223 Lower Water St.

Halifax, Nova Scotia

B3J 3S8

902-428-6096

(Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications)

February 14, 2013

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13(g), check the following box  ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.

(Page 1 of 5 Pages)

Item 1. Security and Issuer

This statement relates to the common shares, no par value (“Common Shares”) of Algonquin Power & Utilities Corp., a corporation organized under the Canada Business Corporations Act whose principal executive offices are located at 2845 Bristol Circle, Oakville, Ontario L6H 7H7 (the “Issuer”).

Item 2. Identity and Background

(a) – (c)

The person filing this statement is Emera Incorporated, a corporation organized under the laws of Nova Scotia, Canada (the “Reporting Person”).

The Reporting Person is an energy and services operating company. The Reporting Person also invests in electricity generation, transmission and distribution, as well as gas transmission and utility energy services.

The Reporting Person’s principal business and principal office address is 1223 Lower Water St., Halifax, Nova Scotia B3J 3S8.

(d) – (f)

Schedule A attached to this Statement and incorporated herein by reference provides the requested information with respect to each executive officer and director, as applicable, of the Reporting Person (“Schedule A Persons”).

During the last five years, neither the Reporting Person nor any of the Schedule A Persons (to the knowledge of the Reporting Person) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

During the last five years, neither the Reporting Person nor any of the Schedule A Persons (to the knowledge of the Reporting Person) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration

The Reporting Person acquired beneficial ownership of the Common Shares reported on this Statement through the exchange of previously acquired subscription receipts into 11,263,016 Common Shares of the Issuer. The subscription receipts were issued in three tranches, in connection with two separate transactions. The first tranche, consisting of 3,421,000 subscription receipts exchangeable at a price of C$4.72 per Common Share, was acquired in connection with the previously announced sale to the Issuer of the 49.999% interest held by the Reporting Person in California Pacific Electric Company, LLC (“Calpeco”). This tranche was exchanged on February 14, 2013. The second and third tranches, consisting of 2,614,005 and 5,228,011 subscription receipts for an aggregate of 7,842,016 subscription receipts, all of which are exchangeable at a price of C$5.74 per Common Share, were acquired in connection with the previously announced acquisition by the Issuer’s power generation subsidiary of a 51% interest in a 480 MW U.S. wind power portfolio. The tranche consisting of 2,614,005 million subscription receipts was exchanged on February 6, 2013 and the remaining tranche was exercised on February 14, 2013. In addition to the 11,263,016 Common Shares acquired on exchange of the three tranches, the Reporting Person beneficially owns 34,903,750 previously acquired Common Shares of the Issuer, representing a current ownership position of 46,166,766 Common Shares, or approximately 23.0% of the Issuer’s issued and outstanding shares. The sources of funding for the purchase of the Common Shares were available cash on hand of the Reporting Person and the utilization of existing lines of credit of the Reporting Person.

Item 4. Purpose of Transaction

On April 29, 2011 the Reporting Person and the Issuer entered into a strategic investment agreement (the “Strategic Investment Agreement”) in respect of the pursuit of investment opportunities of mutual benefit. Under the Strategic Investment Agreement, where the Issuer pursues an investment opportunity developed in conjunction with the Reporting Person and wishes to issue additional Common Shares (or securities convertible into Common Shares) in connection with such opportunity, the Reporting Person has a right of first refusal to subscribe for up to 100% of such additional Common Shares (or securities convertible into Common Shares) in an amount that would bring the Reporting Person’s holdings of the Issuer Common Shares to a maximum of 25% of the Issuer Common Shares issued and outstanding, subject to any approvals required under applicable laws including the rules of the Toronto Stock Exchange (the “TSX”)). The Reporting Person also has the right under the Strategic Investment Agreement to purchase additional Common Shares through the public markets in connection with the pursuit of investment opportunities under the Strategic Investment Agreement if the Issuer does not effect an equity issuance in connection with such opportunity, or elects to fund the investment with debt. In such an instance, the Reporting Person has the right to purchase additional Common Shares through the public markets in an aggregate number of shares equal to or less than the lesser of: (i) the amount that would result in its holdings being equal to 25% of the Common Shares issued and outstanding or (ii) the number of shares equal to 50% of the aggregate investment made by the Issuer divided by the average closing price of the Common Shares for the 20 days preceding the investment.

The Strategic Investment Agreement and a prior subscription agreement dated April 22, 2009, as amended (the “2009 Subscription Agreement”) contain certain restrictions on the transfer of Common Shares by the Reporting Person and requirements with respect to the voting of Common Shares held by the Reporting Person. The 2009 Subscription Agreement provides for certain restrictions for a period of time on the voting rights exercisable by the Reporting Person in respect of Common Shares held by it and consisting up to 15% of outstanding Common Shares (the “15% Holding”):

The 2009 Subscription Agreement also provides for a standstill period expiring January 1, 2014, during which the Reporting Person may not acquire any additional securities of the Issuer except in accordance with the 2009 Subscription Agreement.

The Strategic Investment Agreement provides for certain restrictions on the voting rights exercisable by the Reporting Person in respect of any Common Shares held by it in excess of the 15% Holding:

provided that the restrictions described in (ii)(a), (b) and (c) shall not apply (A) in connection with any matter in which the Reporting Person is not treated identically to all other holders of Common Shares in Canada or (B) any matter which is an unsolicited offer for Common Shares in respect of which the Board of Directors has made no recommendation; and further provided that with respect to the restrictions described in (ii)(a), (b) and (c), in connection with any transaction which would be materially prejudicial to the Reporting Person’s interests, the Reporting Person shall not be required to vote such Common Shares in favour of such matter.

The Strategic Investment Agreement further provides that any permitted acquisitions under that later agreement constitute an exception to the Reporting Person’s standstill obligations under the 2009 Subscription Agreement. The foregoing descriptions of the Strategic Investment Agreement and 2009 Subscription Agreement are not complete and are qualified in their entirety by the full text of the Strategic Investment Agreement and 2009 Subscription Agreement, which are filed hereto as Exhibits 99.1 and 99.2, respectively, and each is incorporated by reference herein.

The Common Shares have been acquired for investment purposes only, and the Reporting Person has no current intention of acquiring control of the Issuer. Depending upon relevant economic, market or business conditions prevailing from time to time, the Reporting Person may determine to acquire or to dispose of Common Shares of the Issuer in TSX traded or privately negotiated transactions or otherwise.

Item 5. Interest in Securities of the Issuer

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The responses to Item 4 are incorporated herein by reference.

Item 7. Material to be Filed as Exhibits

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: February 20, 2013

SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS

OF THE REPORTING PERSONS

The following sets forth the name, position, principal occupation and citizenship of each director and executive officer of the Reporting Person. The business address of each director and executive officer is c/o Emera Incorporated, 1223 Lower Water St., Halifax, Nova Scotia B3J 3S8. To the best of the Reporting Person’s knowledge, except as set forth in this Statement on Schedule 13D, none of the directors or executive officers of the Reporting Person own any Common Shares.

Emera Incorporated

Exhibit 99.1

STRATEGIC INVESTMENT AGREEMENT

between

ALGONQUIN POWER & UTILITIES CORP.

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EMERA INCORPORATED

DATED as of April 29, 2011

TABLE OF CONTENTS

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TABLE OF CONTENTS

(continued)

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STRATEGIC INVESTMENT AGREEMENT

THIS AGREEMENT made as of April 29, 2011

BETWEEN:

ALGONQUIN POWER & UTILITIES CORP., a corporation incorporated under the laws of Canada (“APUC”)

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EMERA INCORPORATED, a corporation incorporated under the laws of the Province of Nova Scotia (“Emera”)

BACKGROUND:

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree as follows:

ARTICLE 1

INTERPRETATION

Whenever used in this Agreement, unless there is something in the subject matter or context inconsistent therewith, the following words and phrases shall have the respective meanings ascribed to them as follows:

“15% Holding” means 15% of the outstanding Common Shares.

“25% Threshold” means, at any particular date, 25% of the Common Shares issued and outstanding at such date and for certainty, shall not include Common Shares into which Convertible Securities are convertible or Common Shares reserved for issuance in respect of options granted APUC to the Board of Directors or management.

“Additional Shares” means any Common Shares held by Emera from time to time in excess of the 15% Holding, including any Common Shares acquired by Emera under Article 4 (including upon exercise or conversion of any Convertible Securities issued under Article 4).

“Additional Securities” means any Additional Shares and Convertible Securities held by Emera from time to time in excess of the 15% Holding.

“Affiliate” means, with respect to any Person, any other Person who directly or indirectly Controls, is Controlled by, or is under direct or indirect common Control with, such Person, and includes any Person in like relation to an Affiliate.

“Agreement” means this Strategic Investment Agreement, as it may be amended, restated or replaced from time to time,

“APCo” means Algonquin Power Co. (formerly known as Algonquin Power Income Fund), a trust of which APUC, directly or indirectly, holds all of the outstanding units, and which owns and operates, through its Subsidiaries, APUC’s renewable power generating assets.

“APCo Shareholder Agreement” means the Subscription and Unitholder Agreement dated April 22, 2009 between APCo, APUC and Emera, as amended.

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“Applicable Securities Laws” means the securities acts, rules, instruments, orders, published policy statements and notices of the securities regulatory authorities of the provinces and territories of Canada and any other jurisdiction, and the rules of any stock exchange, including the TSX, in each case which may be applicable to the Person or the transaction in question.

“APUC” has the meaning ascribed to such term in the opening paragraph to this Agreement.

“Areas of APUC Pursuit” means (i) Non-Rate Base Power Projects including Development Projects (other than Development Projects located within the service territories of Emera or its Affiliates), Small US Electrical LDCs and US Natural Gas LDCs and (ii) Rate Base Power Projects within the service territory of APUC or any of its Affiliates, Contiguous US Electrical LDCs and Transmission Projects, each as related to APUC or any of its Affiliates.

“Areas of Emera Pursuit” means (i) Large US Electrical LDCs; (ii) Development Projects located within the service territories of Emera or its Affiliates; (iii) Non-Rate Base Power Projects, including Development Projects, located within the Province of Newfoundland and Labrador; and (iv) Rate Base Power Projects within the service territory of Emera or any of its Affiliates, Contiguous US Electrical LDCs, and Transmission Projects, each as related to Emera or any of its Affiliates.

“Board of Directors” means the board of directors of APUC from time to time.

“Business Day” means a day, other than a Saturday, Sunday or statutory holiday, on which the banks located in Ontario and Nova Scotia are open for business.

“Calpeco” has the meaning ascribed to such term in the recitals to this Agreement.

“Calpeco Holdco” means California Pacific Utility Ventures, LLC.

“Calpeco Agreements” means the Subscription Agreement dated April 22, 2009 among Algonquin Power Fund (America) Inc. (as assigned to Liberty Electric Co.), Emera US Holdings Inc. and Calpeco Holdco and the Operating Agreement of Calpeco Holdco dated April 22, 2009 between Algonquin Power Fund (America) Inc. (as assigned to Liberty Electric Co.) and Emera US Holdings Inc.

“Calpeco Transaction” has the meaning ascribed to such term in the recitals to this Agreement.

“Calpeco Transaction Shares” means any Common Shares acquired by Emera pursuant to the transactions contemplated by Schedule B.

“Change of Control Transaction” means a take-over bid, arrangement, reorganization, merger or other transaction pursuant to which a third party acquires Control of APUC.

“Committed Platform” means, in respect of Non-Rate Base Power Projects, APCo, and in respect of US Electrical LDCs and US Natural Gas LDCs, Liberty Energy, or in each case, such other Subsidiary of APUC as may be designated by APUC from time to time.

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“Common Shares” means the common shares of APUC.

“Contiguous US Electrical LDC” for a particular Party, means an electric utility local distribution company located in the United States or Canada which has a utility service territory that is generally geographically contiguous with the service territory of one of such Party’s (or any of such Party’s Subsidiaries) regulated electric distribution utilities in the United States or Canada.

“Control” means, with respect a Person (the first Person), the possession by another Person, directly or indirectly, of the power to direct or cause the direction of the management and policies of the first Person, whether through the ownership of voting securities, by contract or otherwise; and the term “Controlled” and similar terms shall have corresponding meanings.

“Convertible Securities” means any securities convertible or exchangeable into, or otherwise carrying the right to acquire, Common Shares.

“Development Projects” means a Non-Rate Base Power Project which has not yet been constructed or commissioned.

“Emera” has the meaning ascribed to such term in the opening paragraph to this Agreement.

“Emera Holdings” means the number of Common Shares held by Emera plus the number of Common Shares into which any Convertible Securities held by Emera are convertible.

“Issuance” has the meaning ascribed to such term in Section 4.1.

“Joint Pursuit Notice” means a written notice generally describing a Potential Opportunity.

“Large US Electrical LDC” means an electric utility local distribution company located in the United States having, at the relevant time, an enterprise value of greater than U.S. $250 million.

“Liberty Energy” means Liberty Energy Utilities Co., the wholly owned Subsidiary of APUC owning and operating, directly and indirectly, APUC’s regulated electrical and natural gas distribution utility assets.

“Non-Qualified Opportunity” has the meaning ascribed to such term in Section 3.2.1.

“Non-Rate Base Power Projects” means independent renewable electrical power generation projects in the United States and Canada, the assets of which are not, for greater certainty, subject to utility rate base calculations or regulated tariff with any utilities commission or similar authority.

“Other Non-Rate Base Power Project” has the meaning ascribed to such term in Section 3.1.2(c).

“Operating Facilities” means that portion of a Qualified Opportunity related to existing generating facilities which are operational.

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“Party” means APUC or Emera.

“Person” means an individual, firm, trust, partnership, limited partnership, company or corporation (with or without share capital), joint venture, sole proprietorship, governmental authority or other entity of any kind.

“Potential Opportunity” means a legitimate and credible business opportunity for investment by APUC in an opportunity related to (i) an Area of APUC Pursuit; or (ii) at the sole discretion of Emera a Non-Rate Base Power Project including a Development Project located within the service territories of Emera or its Affiliates.

“Qualified Opportunity” has the meaning ascribed to such term in Section 3.2.1.

“Rate Base Power Projects” for a particular Party, means renewable electrical power generation projects located within the service territories of such Party’s (or any of such Party’s Subsidiaries’) regulated utilities in the United States or Canada, the assets of which would be subject to utility rate base calculations with the applicable utilities commission or similar authority.

“ROFR” means the rights of first refusal set forth in Section 4.1.

“Shareholder” means a holder of one or more Common Shares.

“Shareholder Rights Plan” means the shareholder rights plan agreement between APUC and CIBC Mellon Trust Company dated June 9, 2010, as the same may be amended, restated or replaced from time to time.

“Small US Electrical LDC” means an electric utility local distribution company located in the United States having, at the relevant time, an enterprise value of less than or equal to U.S. $250 million.

“Subject Unit” has the meaning ascribed to such term in Section 1.1 of the APCo Shareholder Agreement.

“Subsidiary” means, in respect of any Person, an Affiliate which is directly or indirectly Controlled by such Person.

“Transfer” includes any sale, exchange, assignment, gift, bequest, disposition, mortgage, charge, pledge, encumbrance, grant of security interest or other arrangement by which possession, legal title or beneficial ownership passes, directly or indirectly, from one Person to another, or to the same Person in a different capacity, whether or not voluntary and whether or not for value, and any agreement to effect any of the foregoing; and the terms “Transferred”, “Transferring” and similar terms shall have corresponding meanings.

“Transmission Project” for a particular Party, means transmission lines and associated facilities located within or contiguous with the service territories, of such Party’s (or any of such Party’s Subsidiaries’) regulated utilities in the United States or Canada, the assets of which would be subject to utility rate base calculations or regulated tariffs with the applicable utilities commission or similar authority.

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“TSX” means the Toronto Stock Exchange.

“United States” means, for the purposes of this Agreement, the forty-eight contiguous States of the United States of America on the Continent of North America, each such State’s territories and possessions, and the District of Columbia.

“US Natural Gas LDC” mean a natural gas local distribution company located in the Untied States.

Words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine gender and words importing individuals shall include all Persons and vice versa.

Unless otherwise specified, all dollar amounts in this Agreement, including the symbol “$”, are expressed in Canadian dollars.

The division of this Agreement into Articles, Sections, Schedules and other subdivisions and the inclusion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The headings in this Agreement are not intended to be full or precise descriptions of the text to which they refer. Unless something in the subject matter or context is inconsistent therewith, references herein to an Article, Section, Subsection, paragraph, clause or Schedule are to the applicable article, section, subsection, paragraph, clause or schedule of this Agreement.

Wherever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation” and the words following “include”, “includes” or “including” shall not be considered to set forth an exhaustive list.

ARTICLE 2

SCHEDULES

The following are the Schedules attached to and incorporated in this Agreement by reference and deemed to be a part hereof:

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ARTICLE 3

MUTUAL BUSINESS COMMITMENTS

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or in such other manner as the Parties may mutually agree.

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If APUC wishes to pursue a business opportunity within the Emera Areas of Pursuit, it shall communicate its interest in such opportunity to Emera and Emera and Algonquin shall consult with each other to determine whether there is any mutually amenable method of cooperating with respect to such opportunity.

(a) APUC and its Affiliates will not develop, own, manage, operate or control any utility construction or wholesale energy trading, energy management or gas transportation or storage services businesses that compete with services currently provided by Emera Energy Services Inc. and/or Emera Utility Services Inc.; provided that APUC’s Affiliate which carries on an energy trading business shall be permitted to continue to carry on such business as currently conducted and APUC shall be permitted to own and operate a wholesale energy trading business which predominantly serves the internal energy trading, energy management or gas transportation or storage service requirements of the assets of APUC and its Affiliates, whether now owned or subsequently acquired (b) in respect of any Qualified Opportunity, it is agreed that to the extent that APUC elects to procure utility construction services, energy trading services, energy management services or gas transportation or storage services which Emera Energy Services Inc. or Emera Utility Services Inc. is qualified to provide, APUC shall, to the extent reasonably practicable, discuss the requirements with Emera’s Affiliate and offer such affiliate an opportunity to make a proposal to fulfill APUC’s requirements for such services and APUC agrees to give such proposal due consideration.

ARTICLE 4

RIGHT OF FIRST REFUSAL

From time to time, as APUC pursues Qualified Opportunities developed in conjunction with Emera pursuant to Article 3, and in respect of which APUC wishes to issue (an “Issuance”) additional Common Shares or Convertible Securities, subject to any approvals required under Applicable Securities Laws (including TSX approval, if required):

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subject at all times to Emera Holdings being less than or equal to the 25% Threshold.

For greater certainty, (i) if an Issuance which the Board of Directors determines is anticipated to be in whole or in part related to one or more Qualified Opportunities occurs before the acquisition or development of one or more Qualified Opportunities, the ROFR shall apply to the portion of such Issuance which the Board of Directors determines is anticipated to be related to one or more Qualified Opportunities; and (ii) if an Issuance relates in part to one or more Qualified Opportunities and in part to Non-Qualified Opportunities or other purposes, the Board of Directors shall determine the portion of such Issuance which relates to one or more Qualified Opportunities and the ROFR shall apply to such portion of the Issuance.

If APUC elects not to effect an Issuance in connection with a Qualified Opportunity or elects to fund a Qualified Opportunity in whole or in part by debt then, APUC shall provide written notice (an “Election Notice”) to Emera of such election and Emera shall be entitled, but not obligated, to purchase Common Shares in the public market at any time prior to 90 days after APUC makes its investment in such Qualified Opportunity in an aggregate number of shares equal to or less than the lesser of (i) the amount which would result in its holdings being equal to the 25% Threshold; or (ii) a number of shares equal to fifty percent (50%) of the aggregate investment made by APUC in such Qualified Opportunity divided by the average closing price of the Common Shares for the 20 days preceding the investment in such Qualified Opportunity.

Emera shall also have the right to purchase additional Common Shares from time to time through the public markets, provided that the percentage ownership of Common Shares held by Emera and its Affiliates after completion of such purchases, being the number expressed as a percentage by multiplying (A) the quotient obtained by dividing (i) the Emera Holdings after completion of such purchases by (ii) the number of Common Shares issued and outstanding at that time, by (B) 100 does not exceed the highest percentage ownership of Common Shares held by Emera and its Affiliates in compliance with this Agreement (and subject always to the 25% Threshold) prior to such date and calculated in the manner set forth above.

At any time when APUC is contemplating an Issuance which would be subject to the ROFR, APUC shall provide written notice of such Issuance to Emera and Emera shall have ten (10) Business Days thereafter in which to advise APUC in writing whether or not it wishes to exercise its ROFR in whole or in part. If the exercise of the ROFR requires any regulatory approval, APUC shall use its reasonable efforts to obtain such approval in a timely manner and

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Emera agrees to use its reasonable efforts to cooperate and assist APUC in obtaining such approval. Any subscription by Emera for Common Shares or Convertible Securities under its ROFR shall be on the same terms and conditions as APUC proposes to offer to third party purchasers of such securities. Without limiting the foregoing, any such subscription shall be completed pursuant to a subscription agreement setting out such representations, warranties and covenants as are customary in private placements of the securities of a reporting issuer in Canada, Any purchase of Common Shares or Convertible Securities pursuant to Section 4.1 shall be subject to applicable Securities Laws, including any requirements of the TSX, and Emera agrees to comply with Applicable Securities Laws in exercising its rights under Section 4.1.

APUC shall, at its next annual meeting of Shareholders, request that Shareholders pass resolutions approving (a) any issuance pursuant to this Agreement of Common Shares or Convertible Securities which would cause the total holdings by Emera of Common Shares on a fully diluted basis to exceed 19.99% of the total Common Shares outstanding on a fully diluted basis, subject to the 25% Threshold, (b) any issuance of Calpeco Transaction Shares, and (c) the waiver of the applicable provisions of the Shareholder Rights Plan in respect of the issuance of securities approved under the resolution described in clause (a) or clause (b) above. In connection with the foregoing, APUC shall include its request for the approval of such resolutions in the notice of meeting and management information circular prepared for such meeting, which circular shall include the recommendation of the Board of Directors that Shareholders vote in favour of such resolutions.

APUC shall make such filings with the TSX as are necessary to obtain conditional approval of Issuances to Emera, pursuant to the ROFR, including to the extent following any such Issuance(s), Emera’s holdings of Common Shares on a fully diluted basis would exceed 19.99% of the total Common Shares outstanding on a fully diluted basis.

Emera’s right to acquire, and the issuance and acquisition of, Common Shares under Section 4.1 and the issuance and acquisition of any Calpeco Transaction Shares by Emera shall each constitute an exception to Emera’s standstill obligations under Sections 8.4(a), (d) and (e) (as it relates to Sections 8.4(a) and (d)) and to the provisions of Section 8.5 (other than Section 8.5(f) with respect to Common Shares that are not Additional Shares) of the APCo Shareholder Agreement, including the 15% Holding.

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In the event of a Common Share buyback, whether pursuant to a redemption, purchase for cancellation, issuer bid or otherwise, Emera agrees to participate in same on terms identical to that offered to other shareholders such that it will not exceed the 25% Threshold after completion of such Common Share buyback.

ARTICLE 5

RIGHTS AND OBLIGATIONS WITH RESPECT TO THE ADDITIONAL SHARES

Emera agrees that, to the extent permitted by applicable laws, it shall:

provided that Section 5.1.2 shall not apply (A) in connection with any matter in which Emera is not treated identically to all other holders of Common Shares in Canada or (B) any matter which is an unsolicited offer for Common Shares in respect of which the Board of Directors has made no recommendation. Further provided that with respect to Section 5.1.2, in connection with any transaction which would be materially prejudicial to Emera’s interests, Emera shall not be required to vote such shares in favour of such matter and the Parties agree that such shares are not to be counted for the purposes of such vote.

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Emera will be permitted to make proposals concerning potential nominees for the Board of Directors from time to time to the nominating committee established by the Board of Directors and APUC will cause its nominating committee to consider such proposals as part of its mandate. For certainty, nothing contained herein shall obligate the nominating committee to recommend any potential nominees advanced by Emera to the Board of Directors.

ARTICLE 6

OTHER CONSIDERATIONS

Emera and APUC shall negotiate in good faith an agreement for the sale to APUC of the interest held by Emera in Calpeco, substantially on the terms set out in Schedule B – Calpeco Transaction.

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ARTICLE 7

REPRESENTATIONS, WARRANTIES AND COVENANTS OF EMERA

By executing this Agreement, Emera represents, warrants and covenants to APUC, and acknowledges that APUC is relying thereon, that:

ARTICLE 8

REPRESENTATIONS, WARRANTIES AND COVENANTS OF APUC

APUC hereby represents and warrants to Emera, and acknowledges that Emera is relying thereon, as follows:

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ARTICLE 9

TERMINATION

Either Party may terminate this Agreement:

If either Party breaches any of its obligations under Article 3, the other Party’s sole right and remedy in respect of any such breach shall be the termination of this Agreement. For greater certainty, neither Party shall have any liability to the other in connection with any breach of any of its obligations under Article 3.

(i) Emera’s obligations under Section 5.1 and Section 5.2, (ii) APUC’s obligations under Article 4 in respect of any right of Emera that arose prior to the termination of this Agreement, and (iii) Emera’s rights under Section 4,5 shall survive any termination of this Agreement for so long as Emera holds Additional Securities. This Article 9 and Sections 10.2 to 10.15 shall survive the termination of this Agreement.

Emera’s obligations under Section 5.1 and Section 5.2 do not apply to: (i) any third party who purchases Additional Shares or Additional Securities from Emera, and (ii) any Additional Shares or Additional Securities acquired by Emera after the termination of this Agreement.

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ARTICLE 10

MISCELLANEOUS

Each of the Parties upon the request of the other Party shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may reasonably be necessary or desirable to complete the transactions contemplated herein.

Any demand, notice or other communication (hereinafter in this Section 10.2 referred to as a “Communication”) to be given in connection with this Agreement shall be given in writing and may be given by personal delivery, by registered mail or by electronic means of communication addressed to the recipient as follows:

if to APUC, to:

Algonquin Power & Utilities Corp.

2845 Bristol Circle

Oakville, Ontario L6H 7H7

Attention: Corporate Secretary

Fax: (905) 465-4540

with a copy to:

Blake, Cassels & Graydon LLP

199 Bay Street, Suite 2800

Commerce Court West

Toronto, Ontario M5A 1A9

Attention: Ken Pearce

Fax: (416) 863-2653

if to Emera, to:

Emera Incorporated

1894 Barrington Street

Halifax, Nova Scotia B3J 2A8

Attention: Corporate Secretary

Fax: (902) 428-6171

or such other address, electronic communication number or individual as may be designated by notice by any Party to the other. Any Communication given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof and, if given by registered mail, on the fifth Business Day following the deposit thereof in the mail and, if given by electronic communication, on the day of transmittal thereof. If the Party giving any Communication knows or ought reasonably to know of any difficulties with the postal system which might affect the delivery of mail, any such Communication shall not be mailed but shall be given by personal delivery or by electronic communication.

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Time shall be of the essence of this Agreement and every part hereof.

Each Party shall pay all fees, costs and expenses incurred by such Party in connection with this Agreement and the transactions contemplated herein.

This Agreement shall be construed and enforced in accordance with, and the rights of the Parties shall be governed by, the laws of the Province of Ontario and the laws of Canada applicable therein. Any and all disputes arising under this Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of the courts of the Province of Ontario and each of the Parties hereto hereby irrevocably attorns to the jurisdiction of the courts of such Province.

This Agreement and the APCo Shareholder Agreement, including the Schedules hereto, constitutes the entire agreement between the Parties with respect to the transactions contemplated herein and cancels and supersedes any prior understandings, agreements, negotiations and discussions between the Parties, There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understandings, express or implied, between the Parties hereto relating to the subject matter of this Agreement, other than those expressly set forth in this Agreement.

The Parties confirm that their respective rights and obligations under the APCo Shareholder Agreement continue in full force and effect, unamended, except to the extent expressly provided herein.

This Agreement may not be amended or modified in any respect except by written instrument executed by each of the Parties hereto.

A waiver of any default, breach or non-compliance under this Agreement shall not be effective unless in writing and signed by the Party to be bound by the waiver. No waiver shall be inferred from or implied by any failure to act or delay in acting by a Party in respect of

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any default, breach or non-observance or by anything done or omitted to be done by the other Party. The waiver by a Party of any default, breach or non-compliance under this Agreement will not operate as a waiver of that Party’s rights under this Agreement in respect of any continuing or subsequent default, breach or non-observance (whether of the same or any other nature).

This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same Agreement, Counterparts may be delivered either in original, faxed form or by other electronic transmission and the Parties adopt any signature received by a receiving fax machine or by e-mail as original signatures of the Parties.

This Agreement may not be assigned by either Party except with the prior written consent of the other Party hereto.

This Agreement shall enure to the benefit of and be binding upon the Parties hereto and their respective successors (including any successor by reason of the amalgamation or merger of any Party) and permitted assigns.

Each of APUC and Emera hereby acknowledges that it has consented and requested this Agreement be drawn up in the English language only. Nous sousignes reconnaissons par les presentes avoir consenti et demande que cette entente soit rédigée en anglais seulement.

Emera agrees that, to the extent permitted by applicable laws, it shall, other than as contemplated in the last sentence of Section 5.1.2, take reasonable steps to ensure that the Additional Shares are represented at each meeting of holders of Common Shares.

Subject to Section 10.16, the Parties agree to keep this Agreement and the contents thereof confidential, except to the extent any Party is required to disclose this Agreement or the contents thereof pursuant to the requirements of applicable law or the rules or policies of any stock exchange to which such Party is subject and then only such disclosure as is required thereunder shall be made and written notice thereof shall be given to the other Party.

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The Parties shall upon execution and delivery of this Agreement make a joint press release, in form and substance acceptable to the Parties, in respect of this Agreement.

This Agreement shall only become effective on the date that the Shareholders of APUC approve this Agreement.

[Signature pages follow.]

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IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of the date first written above.

ALGONQUIN POWER & UTILITIES CORP.
By:
Name:		Ian E. Robertson
Title:		Chief Executive Officer
EMERA INCORPORATED
By:
Name:		Christopher Huskilson
Title:		President and Chief Executive Officer
By:
Name:		STEPHEN D. AFTANAS
Title:		CORPORATE SECRETARY

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SCHEDULE A

JV OPPORTUNITY TERMS AND CONDITIONS

The following broad terms and conditions would apply in connection with a joint venture in respect of an Other Non-Rate Base Power Project contemplated by Section 3.1.2(c):

SCHEDULE B

CALPECO TRANSACTION

The following broad terms and conditions would apply in connection with the sale by Emera contemplated by Section 6.1:

The transaction shall be subject to the execution and delivery of definitive documents by the Parties.

The Parties will consider utilizing subscription receipts as was done for Calpeco initially if it makes sense to do so.

Exhibit 99.2

SUBSCRIPTION AND UNITHOLDER AGREEMENT

between

ALGONQUIN POWER INCOME FUND

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EMERA INCORPORATED

DATED as of the 22nd day of April, 2009

TABLE OF CONTENTS

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SUBSCRIPTION AND UNITHOLDER AGREEMENT

THIS AGREEMENT made as of the 22nd day of April, 2009

BETWEEN:

ALGONQUIN POWER INCOME FUND, a trust formed under the laws of the Province of Ontario (the “Fund”)

- and -

EMERA INCORPORATED, a corporation incorporated under the laws of the Province of Nova Scotia (“Emera”)

BACKGROUND:

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration) the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:

ARTICLE 1 INTERPRETATION

Whenever used in this Agreement, unless there is something in the subject matter or context inconsistent therewith, the following words and phrases shall have the respective meanings ascribed to them as follows:

“Acquisition” has the meaning ascribed to such term in the recitals to this Agreement.

“Affiliated Entity” means, with respect to any Person, any other Person who directly or indirectly Controls, is Controlled by, or is under direct or indirect common Control with, such Person, and includes any Person in like relation to an Affiliated Entity; and the term “Affiliated Entities” has a corresponding plural meaning.

“Agreement” means this Subscription and Unitholder Agreement, as it may be amended, restated or replaced from time to time.

“APA Parties” means, collectively, OpCo and Sierra, and “APA Party” means either one of them;

“Applicable Securities Laws” means the securities acts, rules, instruments, orders, published policy statements and notices of the securities regulatory authorities of the provinces and territories of Canada and any other jurisdiction, and the rules of any stock exchange, including the TSX, in each case which may be applicable to the Person or the transaction in question.

“Asset Purchase Agreement” has the meaning ascribed to such term in the recitals to this Agreement.

“Assets” has the meaning ascribed to such term in the recitals to this Agreement.

“Board of Trustees” means the board of Trustees of the Fund from time to time or any successor thereto following a Trust Conversion.

“Business Day” means a day, other than a Saturday, Sunday or statutory holiday, on which the banks located in Ontario, Nova Scotia and Nevada are open for business.

“Change of Control Transaction” means (i) a take-over bid, arrangement, reorganization, merger or other transaction pursuant to which a third party acquires Control of the Fund or (ii) a Transfer to a third party of all or substantially all of the Fund’s direct or indirect assets. For greater certainty, a Change of Control Transaction shall not include a Trust Conversion, provided that such Trust Conversion does not involve, and would not result in, a transaction contemplated by clause (i) or (ii) of this definition.

“Closing” shall have the meaning ascribed to such term in Section 4.1.

“Closing Date” shall have the meaning ascribed to such term in Section 4.1.

“Closing Time” shall have the meaning ascribed to such term in Section 4.1.

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“Common Units” means the trust units of the Fund, and Includes any securities into which the trust units of the Fund may be converted or exchanged or reclassified pursuant to a Trust Conversion or a capital reorganization of the Fund.

“Control” means, with respect a Person (the first Person), the possession by another Person, directly or indirectly, of the power to direct or cause the direction of the management and policies of the first Person, whether through the ownership of voting securities, by contract or otherwise; and the term “Controlled” and similar terms shall have corresponding meanings.

“Current Diluted Ownership Percentage” means, at any date, the percentage ownership of the outstanding Common Units of the Fund that Emera would have on the date hereof assuming that the Common Units to be delivered in satisfaction of the rights evidenced by the Subject Receipts were delivered on the date hereof, being the number expressed as a percentage obtained by multiplying (A) the quotient obtained by dividing (i) the sum of 8,523,000 Common Units and the aggregate number of Common Units (including the aggregate number of Common Units issuable upon the conversion or exchange of any convertible or exchangeable securities of the Fund held by Emera or any of its Affiliates as of such date) acquired by Emera pursuant to Section 8.5 or Section 8,6 on or before such date by (ii) the sum of 8,523,000 Common Units, 77,910,032 Common Units and the aggregate number of Common Units (including the aggregate number of Common Units issuable upon the conversion or exchange of any convertible or exchangeable securities of the Fund issued by the Fund pursuant to Section 8.6 and outstanding on such date) issued by the Fund as contemplated by Section 8.6 and outstanding on such date, by (B) 100.

“Declaration of Trust” means the amended and restated declaration of trust of the Fund dated May 26, 2004, as further amended, supplemented or restated or replaced from time to time.

“Emera” has the meaning ascribed to such term in the opening paragraph to this Agreement.

“Emera Subsidiary” has the meaning ascribed to such term in the recitals to this Agreement.

“Escrow Agreement” means the escrow agreement dated the date hereof between Emera, the Fund, Holdco and the Escrow Agent.

“Escrow Agent” means CIBC Mellon Trust Company, or its successors, as applicable.

“Fund” has the meaning ascribed to such term in the opening paragraph to this Agreement.

“Fund Governance Committee” means the Corporate Governance Committee of the Fund established from time to time by the Trustees or any successor thereto following a Trust Conversion.

“Fund Subsidiary” has the meaning ascribed to such term in the recitals to this Agreement.

“Holdco” has the meaning ascribed to such term in the recitals to this Agreement.

“Holdco Subscription Agreement” has the meaning ascribed to such term in the recitals to this Agreement.

“Holdco Operating Agreement” has the meaning ascribed to such term in the recitals to this Agreement.

- 3 -

“Mandatory Trigger Event” means the satisfaction of any one of paragraphs (a), (b), (c) or (d) below:

“Mandatory Trigger Notice” has the meaning ascribed to such term in Section 7.1(a).

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“Manager” means the manager of the Fund from time to time, currently Algonquin Power Management Inc.

“Material Breach” has the meaning ascribed to such term in the Holdco Operating Agreement.

“OpCo” has the meaning ascribed to such term in the recitals to this Agreement.

“OpCo Operating Agreement” means the operating agreement dated the date hereof between Holdco and OpCo relating to the management of the business and affairs of OpCo, as amended from time to time.

“Optional Trigger Event” has the meaning ascribed to such term in Section 7.2(a).

“Party” means the Fund or Emera, as applicable, and the term “Parties” means both the Fund and Emera.

“Person” means an individual, firm, trust, partnership, limited partnership, company or corporation (with or without share capital), joint venture, sole proprietorship, governmental authority or other entity of any kind.

“Promissory Note” means the non-interest bearing promissory note in the principal amount of $27,699,750, in the form attached hereto as Schedule B, issued by Emera to the Fund pursuant to Section 4.1 in satisfaction of the Subscription Price.

“Sale Notice” has the meaning ascribed to such term in Section 8.1(b)(iii).

“Sierra” has the meaning ascribed to such term in the recitals to this Agreement.

“SIFT Rules” means the provisions of the Income Tax Act (Canada) applicable to “SIFT Trusts” and “SIFT Partnerships” as defined in the Income Tax Act (Canada).

“Subject Unit” means a Common Unit delivered in satisfaction of the right evidenced by a Subscription Receipt pursuant to the terms hereof following a Trigger Event; and the term “Subject Units” has a corresponding plural meaning.

“Subject Receipts” has the meaning ascribed to such term in Section 3.1.

“Subscription Price” has the meaning ascribed to such term in Section 3.1.

“Subscription Receipt” means a subscription receipt of the Fund issued pursuant to this Agreement and from time to time outstanding, each evidencing the contingent rights to Common Units provided for herein.

“Termination Event” has the meaning ascribed to such term in Section 9.1.

“Transfer” includes any sale, exchange, assignment, gift, bequest, disposition, mortgage, charge, pledge, encumbrance, grant of security interest or other arrangement by which possession, legal title or beneficial ownership passes, directly or indirectly, from one Person to another, or to the same Person in a different capacity, whether or not voluntary and whether or not for value, and any agreement to effect any of the foregoing; and the terms “Transferred”, “Transferring” and similar terms shall have corresponding meanings.

“Transaction Financing” has the meaning ascribed to such term in the recitals to this Agreement.

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“Trigger Event” means a Mandatory Trigger Event or an Optional Trigger Event, as applicable.

“Trust Conversion” means a merger, reorganization, conversion, sale, acquisition or other transaction undertaken by the Fund having regard to the potential application of the SIFT Rules.

“Trustee” means a trustee of the Fund; and the term “Trustees” shall have a corresponding plural meaning.

“TSX” means the Toronto Stock Exchange.

“United States” means the United States of America, its territories and possessions, any State of the United States and the District of Columbia.

“Unitholder” means a holder of one or more Common Units; and the term “Unitholders” has a corresponding plural meaning.

“U.S. Securities Act” means the United States Securities Act of 1933, as amended.

Words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine gender and words importing individuals shall include all Persons and vice versa.

Unless otherwise specified, all dollar amounts in this Agreement, including the symbol “$”, are expressed in Canadian dollars.

The division of this Agreement into Articles, Sections, Schedules and other subdivisions and the inclusion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The headings in this Agreement are not intended to be full or precise descriptions of the text to which they refer. Unless something in the subject matter or context is inconsistent therewith, references herein to an Article, Section, Subsection, paragraph, clause or Schedule are to the applicable article, section, subsection, paragraph, clause or schedule of this Agreement.

ARTICLE 2 SCHEDULES

The following are the Schedules attached to and incorporated in this Agreement by reference and deemed to be a part hereof:

- 6 -

ARTICLE 3 SUBSCRIPTION AND DESCRIPTION OF SUBSCRIPTION RECEIPTS

Emera hereby irrevocably subscribes for, on and subject to the terms and conditions set out in this Agreement, an aggregate of 8,523,000 Subscription Receipts (the “Subject Receipts”) at a price of $3.25 per Subscription Receipt, for an aggregate subscription price of $27,699,750 (the “Subscription Price”). The Parties agree that payment of the Subscription Price shall be satisfied by the delivery of the Promissory Note by Emera to the Fund.

Each Subscription Receipt represents a right that entitles the holder thereof to receive, in accordance with the terms hereof following the occurrence of a Trigger Event, without delivery of additional consideration, one Common Unit, subject to adjustment as contemplated by Section 8.7. The Subject Receipts shall be represented by a single certificate, in the form attached hereto as Schedule A, registered in the name of Emera at the address for Emera set forth in Section 10.2 and delivered to Emera at Closing against delivery of the Promissory Note pursuant to Section 4.1.

ARTICLE 4 CLOSING

Delivery and issuance of the Subject Receipts and delivery of the Promissory Note as payment of the Subscription Price will be completed (the “Closing”) at the offices of the Fund’s counsel, Blake, Cassels & Graydon LLP, Toronto at 5:00 p.m. (Toronto time) (the “Closing Time”) on April 22, 2009 or such other place or date or time as the Fund and Emera may agree (the “Closing Date”). If by the Closing Time, the conditions contained in Sections 4.2 or 4.3 have been satisfied (or waived by the relevant Party), Emera will deliver to the Fund any documents required hereunder to be executed by Emera and payment of the aggregate Subscription Price for all of the Subject Receipts against delivery by the Fund of a certificate representing all such Subject Receipts. If by the Closing Time, the conditions contained in Sections 4.2 or 4.3 have not been satisfied (and have not been waived by the relevant Party), neither Emera nor the Fund will have any further obligations under this Agreement.

The Fund shall not be obligated to complete the subscription for Subscription Receipts under this Agreement unless, by the Closing Time, each of the conditions listed below in this Section 4.2 has been satisfied:

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Emera shall not be obligated to complete the subscription for Subscription Receipts under this Agreement unless, by the Closing Time, each of the conditions listed below in this Section 4.3 has been satisfied:

Immediately following the Closing:

ARTICLE 5 REPRESENTATIONS, WARRANTIES AND COVENANTS OF EMERA

By executing this Agreement, Emera represents, warrants and covenants to the Fund, and acknowledges that the Fund is relying thereon, that:

- 8 -

Emera agrees that the above representations, warranties and covenants will be true and correct both as of the execution of this Agreement and as of the Closing Time and shall not merge on but shall survive the Closing.

- 9 -

The foregoing representations, warranties and covenants are made by Emera with the intent that they be relied upon by the Fund in determining the eligibility of Emera as a subscriber for the Subject Receipts and of any Subject Units. Emera undertakes to notify the Fund promptly of any change in any representation or warranty of Emera set forth herein which takes place prior to the Closing Time.

Emera acknowledges that legends will be placed on the certificates representing the Subject Receipts and, if applicable, Subject Units, to the effect that the securities represented by the certificates are subject to a hold or restricted period and may not be traded until the expiry of such hold or restricted period except as permitted by Applicable Securities Laws.

Emera shall, within the applicable time frames, execute, deliver; file and otherwise assist the Fund in filing, such reports, undertakings and other documents required by Applicable Securities Laws in connection with the issuance of the Subject Receipts and, if applicable, Subject Units, including any requirements of the TSX, and the filing by the Fund of a Form 45-106F1 with the applicable securities regulatory authority or authorities in respect of the subscription for the Subject Receipts by Emera hereunder.

ARTICLE 6 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FUND

The Fund hereby represents and warrants to Emera, and acknowledges that Emera is relying upon each of such representations and warranties in completing the subscription for the Subject Receipts, as follows:

- 10 -

The Fund agrees that the above representations, warranties and covenants shall be true and correct both as of the execution of this Agreement and as of the Closing Time and shall not merge on but shall survive the Closing.

The foregoing representations and warranties are made by the Fund with the intent that they be relied upon by Emera in entering into this Agreement.

The Fund agrees to make such filings with the TSX as are necessary to obtain conditional approval by the TSX of the terms of the subscription under this Agreement, to the extent not already obtained.

The Fund undertakes to notify Emera promptly of any change in any representation and warranty of the Fund set forth herein which takes place prior to the Closing Time.

- 11 -

ARTICLE 7 TRIGGER EVENTS

- 12 -

ARTICLE 8 RIGHTS AND OBLIGATIONS WITH RESPECT TO THE SUBJECT RECEIPTS

AND SUBJECT UNITS

- 13 -

The Parties agree that:

As soon as practicable following the subscription for the Subject Receipts, Chris Huskilson (or in the event that Chris Huskilson is unable to accept such appointment, another individual designated by the Board of Trustees and acceptable to Emera, acting reasonably, but for greater certainty,

- 14 -

such individual shall not be required to be affiliated with Emera) shall be appointed as a Trustee, At the first general meeting of Unitholders which is held subsequent to the subscription for the Subject Receipts, the management information circular prepared and mailed in respect of such meeting shall include Chris Huskilson (or such other individual, if applicable) as standing for election by Unitholders as a Trustee. For greater certainty, except as provided in the preceding sentence with respect to the inclusion of Chris Huskilson (or such other individual, if applicable) in the management information circular as standing for election as a Trustee at such first general meeting, the composition of the slate of proposed Trustees to stand for election as Trustees of the Fund at subsequent meetings of Unitholders shall be determined by the then-current Trustees and the Manager in accordance with the policies and procedures of the Fund Governance Committee. Upon the request of the chairman of the Board of Trustees made following the occurrence of a Termination Event, Chris Huskilson (or such other individual appointed pursuant hereto) shall tender his resignation from the Board of Trustees.

From the date hereof until the third anniversary of the first to occur of a Mandatory Trigger Event or Optional Trigger Event, Emera shall not, and shall cause its Affiliated Entities not to, without the prior written consent of the Board of Trustees:

Nothing contained in this Agreement will restrict Emera or any of its Affiliated Entities from making a proposal to the Fund relating to an offer for any securities or any assets of the Fund or any of its Affiliated Entities.

- 15 -

Notwithstanding Section 8.4, from and after the date hereof, Emera shall have the right to purchase additional Common Units through the public markets, provided that:

The provisions of this Section 8.5 shall terminate and cease to be of any further force or effect on the third anniversary of the first to occur of a Mandatory Trigger Event or an Optional Trigger Event.

- 16 -

The Fund will take all necessary corporate actions and will use commercially reasonable efforts to obtain all necessary approvals, consents, authorizations and waivers in connection with the exercise by Emera of its rights under Section 8.6(a)(i) including the approval of the TSX to the listing of any Common Units issued pursuant to Section 8.6(a)(i) or issuable upon the conversion or exchange of convertible or exchangeable securities issued pursuant to Section 8.6(a)(i).

In the event that, prior to the occurrence of a Trigger Event, the Fund undertakes a Trust Conversion or a capital reorganization, pursuant to which the Common Units are consolidated into a lesser number of Common Units, subdivided into a greater number of Common Units or converted into or exchanged for other securities, the number of Common Units to be delivered in satisfaction of the rights evidenced by the Subject Receipts shall be adjusted accordingly (so as to be equal to such number of Common Units or other securities that Emera would have held upon completion of such Trust Conversion or capital reorganization, had Emera exercised its rights evidenced by all of its Subscription Receipts to be delivered Common Units immediately prior to such Trust Conversion or capital reorganization). For greater certainty, the payment of distributions (including the payment of distributions by the issuance of Common Units) on the Common Units by the Fund from time to time shall not give rise to any adjustment hereunder.

- 17 -

ARTICLE 9 TERMINATION

Each of the following events shall constitute a “Termination Event” hereunder:

Upon the occurrence of a Termination Event, this Agreement shall be terminated, and the Parties shall have no further rights or obligations hereunder or under the Subject Receipts or the Promissory Note, including without limitation, Article 8, except the following:

ARTICLE 10 MISCELLANEOUS

Each of the Parties hereto upon the request of each of the other Parties hereto, whether before or after the Closing Time, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may reasonably be necessary or desirable to complete the transactions contemplated herein.

- 18 -

Any demand, notice or other communication (hereinafter in this Section 10.2 referred to as a “Communication”) to be given in connection with this Agreement shall be given in writing and may be given by personal delivery, by registered mail or by electronic means of communication addressed to the recipient as follows:

if to the Fund, to:

Algonquin Power Income Fund

c/o Algonquin Power Management Inc.

2845 Bristol Circle

Oakville, Ontario L6H 7H7

Attention: Ian Robertson

Fax: (905) 465-4540

with a copy to:

Blake, Cassels & Graydon LLP

199 Bay Street, Suite 2800

Commerce Court West

Toronto, Ontario M5A 1A9

Attention: Ken Pearce

Fax: (416) 863-2653

if to Emera, to:

Emera Incorporated

1894 Barrington Street

Halifax, Nova Scotia B3J 2A8

Attention: Corporate Secretary

Facsimile: (902) 428-6171

with a copy to:

McCarthy Tetrault LLP

Suite 5300

Toronto-Dominion Bank Tower

Toronto, Ontario M5K 1E6

Attention: Harold Huber

Fax: 416-868-0673

or such other address, electronic communication number or individual as may be designated by notice by any party to the others. Any Communication given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof and, if given by registered mail, on the fifth Business Day following the deposit thereof in the mail and, if given by electronic communication, on the day of transmittal thereof. If the party giving any Communication knows or ought reasonably to know of any difficulties with the postal system which might affect the delivery of mail, any such Communication shall not be mailed but shall be given by personal delivery or by electronic communication.

- 19 -

Time shall be of the essence of this Agreement and every part hereof.

Each Party shall pay all fees, costs and expenses incurred by such Party in connection with this Agreement and the transactions contemplated herein.

This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Province of Ontario and the laws, of Canada applicable therein. Any and all disputes arising under this Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of the courts of the Province of Ontario and each of the parties hereto hereby irrevocably attorns to the jurisdiction of the courts of such Province.

This Agreement, including the Schedules hereto, the Promissory Note, the Escrow Agreement, the Holdco Operating Agreement, the OpCo Operating Agreement and the Holdco Subscription Agreement and the certificates, affidavits, statutory declarations and other documents contemplated by any such note or agreement, constitute the entire agreement between the parties with respect to the transactions contemplated herein and cancels and supersedes any prior understandings, agreements, negotiations and discussions between the parties. There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understandings, express or implied, between the parties hereto relating to the subject matter of this Agreement other than those expressly set forth in this Agreement or in any such note, agreement, certificate, affidavit, statutory declaration or other document as aforesaid. This Agreement may not be amended or modified in any respect except by written instrument executed by each of the parties hereto.

This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and ail of which together shall constitute one and the same Agreement. Counterparts may be delivered either in original, faxed form or by other electronic transmission and the parties adopt any signature received by a receiving fax machine or by e-mail as original signatures of the parties.

This Agreement may not be assigned by either Party except with the prior written consent of the other Party hereto.

This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, successors (including any successor by reason of the amalgamation or merger of any party), administrators and permitted assigns.

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Each of the Fund and Emera hereby acknowledges that it has consented and requested that all documents evidencing or relating in any way to the Subscription Receipts and this Agreement be drawn up in the English language only. Nous sousignés reconnaissons par les présentes avoir consenti et demandé que tous les documents faisant foi ou se rapportant de quelque maniére aux reçus de subscription et à la présente convention dé souscription solent rédigés en anglais seulement.

IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of the date first written above.

ALGONQUIN POWER INCOME FUND, by its
manager, ALGONQUIN POWER MANAGEMENT INC.
By:
Name:		Ian E. Robertson
Title:		AUTHORIZED SIGNING OFFICER
EMERA INCORPORATED
By:
Name:
Title:

- 21 -

Each of the Fund and Emera hereby acknowledges that it has consented and requested that all documents evidencing or relating in any way to the Subscription Receipts and this Agreement be drawn up in the English language only. Nous sousignés reconnaissons par les présentes avoir consent et demandé que tous les documents faisant foi ou se rapportant de quelque maniére aux reçcus de subscription et à la présente convention de souscription solent rédigés en anglais sculement.

IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of the date first written above.

ALGONQUIN POWER INCOME FUND, by its manager, ALGONQUIN POWER MANAGEMENT INC.
By:
Name:
Title:
EMERA INCORPORATED
By:
Name:		Nancy Tower
Title:		Chief Financial Officer
		James G. Spurr
		General Counsel

- 21 -

SCHEDULE A

FORM OF SUBSCRIPTION RECEIPT CERTIFICATE

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE AUGUST     , 2009.

SUBSCRIPTION RECEIPTS

TO ACQUIRE COMMON UNITS OF

ALGONQUIN POWER INCOME FUND

THIS IS TO CERTIFY THAT, for value received, Emera Incorporated (herein called “Emera”) is the registered holder of 8,523,000 Subscription Receipts represented hereby. The Subscription Receipts evidenced by this certificate (this “Subscription Receipt Certificate”) are issued pursuant to the subscription and unitholder agreement dated —, 2009 (the “Subscription and Unitholder Agreement”) between Emera and Algonquin Power Income Fund (the “Fund”).

Capitalized terms used in this Subscription Receipt Certificate and not otherwise defined herein shall have the meanings ascribed to them in the Subscription and Unitholder Agreement, In the event of any inconsistency between the terms set forth in this certificate and the terms of the Subscription and Unitholder Agreement, the terms of the Subscription and Unitholder Agreement shall govern.

Subject to the Subscription and Unitholder Agreement and the Escrow Agreement;

Without limiting the provisions of Section 9.2 of the Subscription and Unitholder Agreement, upon the occurrence of a Termination Event, the Fund shall have no further obligation to deliver Common Units to Emera hereunder.

As set forth in Section 8.7 of the Subscription and Unitholder Agreement, in the event that, prior to the occurrence of a Trigger Event, the Fund undertakes a Trust Conversion or a capital reorganization,

pursuant to which the Common Units are consolidated into a lesser number of Common Units, subdivided into a greater number of Common Units or converted into or exchanged for other securities, the number of Common Units to be delivered in satisfaction of the rights evidenced by this Subscription Receipt Certificate shall be adjusted accordingly (so as to be equal to such number of Common Units or other securities that Emera would have held upon completion of such Trust Conversion or capital reorganization, had Emera exercised its rights evidenced by all of its Subscription Receipts to be delivered Common Units immediately prior to such Trust Conversion or capital reorganization). For greater certainty, the payment of distributions (including the payment of distributions by the issuance of Common Units) on the Common Units by the Fund from time to time shall not give rise to any adjustment hereunder.

The holding of the Subscription Receipts evidenced by this Subscription Receipt Certificate shall not constitute Emera a unitholder of the Fund or entitle Emera to any right or interest in respect thereof except as herein and in the Subscription and Unitholder Agreement expressly provided.

The Subscription Receipts evidenced by this Subscription Receipt Certificate may only be transferred in accordance with applicable securities laws and the conditions prescribed in the Subscription and Unitholder Agreement.

Emera acknowledges that this Subscription Receipt Certificate will be deposited with the Escrow Agent pursuant to the Subscription and Unitholder Agreement and will be subject to conditions of release as set out in the Escrow Agreement.

Time shall be of the essence hereof.

IN WITNESS WHEREOF the Fund has caused this Subscription Receipt Certificate to be signed by its duly authorized officer as of the                  day of April, 2009.

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SCHEDULE B

FORM OF PROMISSORY NOTE

FOR VALUE RECEIVED, EMERA INCORPORATED (“Emera”), unconditionally promises to pay to or to the order of ALGONQUIN POWER INCOME FUND (the “Fund”) at 2845 Bristol Circle, Oakville, Ontario, L6H 7H7 or such other place as the Holder may direct in writing, the sum of TWENTY-SEVEN MILLION SIX HUNDRED AND NINETY-NINE THOUSAND SEVEN HUNDRED AND FIFTY DOLLARS ($27,699,750.00) in lawful money of Canada, such amount payable in full upon the occurrence of a Mandatory Trigger Event or an Optional Trigger Event in accordance with, and subject to, the respective terms hereof, of the subscription and unitholder agreement dated April —, 2009 (the “Subscription and Unitholder Agreement”) between Emera and the Fund and of the escrow agreement dated April —, 2009 (the “Escrow Agreement”) among Emera, the Fund and CIBC Mellon Trust Company. The principal amount of this promissory note (this “Promissory Note”) shall not bear interest.

Capitalized terms used in this Promissory Note and not otherwise defined herein shall have the meanings ascribed to them in the Subscription and Unitholder Agreement.

This Promissory Note has been delivered by Emera to the Fund pursuant to the Subscription and Unitholder Agreement in satisfaction of the Subscription Price for 8,523,000 Subscription Receipts.

Subject to the Subscription and Unitholder Agreement and the Escrow Agreement:

Without limiting the provisions of Section 9.2 of the Subscription and Unitholder Agreement, upon the occurrence of a Termination Event Emera shall have no further obligation to pay any of the principal amount of this Promissory Note.

Emera waives presentment for payment, notice of dishonour, protest and notice of protest in respect of this Promissory Note. The provisions of this Promissory Note shall enure to the benefit of the Fund and its successors and assigns and shall be binding upon Emera and its successors and assigns.

The Fund acknowledges that this Promissory Note will be deposited with the Escrow Agent pursuant to the Subscription and Unitholder Agreement and will be subject to the conditions of release set out in the Escrow Agreement

This Promissory Note shall be governed by and construed in accordance with the laws of the Province of Ontario.

MADE AT                     ,             , this day of April, 2009,

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AMENDING AND JOINDER AGREEMENT

THIS AGREEMENT is dated as of January 1, 2011 (the “Agreement”) and is entered into between Algonquin Power Co, (formerly Algonquin Power Income Fund), a trust formed under the laws of the Province of Ontario (“APCo”), Algonquin Power & Utilities Corp. (“APUC”), a corporation incorporated under the laws of Canada, and Emera Incorporated, a corporation incorporated under the laws of the Province of Nova Scotia (“Emera”, and together with APCo and APUC, the “Parties”);

WHEREAS APCo and Emera entered into a subscription and unitholder agreement dated April 22, 2009 (the “Subscription and Unitholder Agreement”) pursuant to which APCo issued and sold to Emera subscription receipts (the “Subscription Receipts”) entitling the holder thereof to acquire units of APCo upon the occurrence of certain events;

AND WHEREAS APCo effected a capital reorganization in 2009 pursuant to which APCo became a wholly-owned subsidiary of APUC;

AND WHEREAS the Parties wish to (i) add APUC as a party to the Subscription and Unitholder Agreement, and (ii) amend certain provisions of the Subscription and Unitholder Agreement in the manner set forth herein;

NOW THEREFORE, in consideration of the covenants and agreements herein contained, the Parties agree as follows:

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The Subscription and Unitholder Agreement is amended as follows:

““APUC” means Algonquin Power & Utilities Corp.”

“Board of Directors” means the board of directors of APUC from time to time.”

““Change of Control Transaction” means (i) a take-over bid, arrangement, reorganization, merger or other transaction pursuant to which a third party acquires Control of APUC or (ii) a Transfer to a third party of all or substantially all of APUC’s direct or indirect assets.”

““Common Shares” means the common shares of APUC and includes any securities into which the common shares of APUC may be converted, exchanged, changed or reclassified pursuant to a recapitalization of APUC.”

““Current Diluted Ownership Percentage” means, at any date, the ratio, expressed as a percentage, obtained by dividing (i) the sum of the number of Common Shares held by Emera or its Affiliates on such date plus the number of Common Shares issuable upon the conversion or exchange of any convertible or exchangeable securities of APUC held by Emera or its Affiliates as of such date, by (ii) the sum of the number of Common Shares issued and outstanding on such date plus the number of Common Shares issuable upon the conversion or exchange of any convertible or exchangeable securities of APUC held by Emera or its Affiliates as of such date.”

““Director” means a director of APUC; and the term “Directors” shall have a corresponding plural meaning.”

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“(a)(ii) Emera has received written confirmation, in a form acceptable to Emera acting reasonably, from OpCo that the Transaction Financing has been completed and the full amount of the Transaction Financing requested by OpCo to complete the Acquisition has been paid to Sierra or deposited into an escrow established in connection with the completion of the Acquisition and to which Emera is a party; and”

““Party” means the Fund, APUC or Emera, as applicable, and the term “Parties” means the Fund, APUC and Emera.”

““Shareholder” means a holder of one or more Common Shares; and the terra “Shareholders” has a corresponding plural meaning.”

““Strategic Relationship Agreement” means the strategic relationship agreement to be entered into between Emera and APUC.”

““Subject Share” means a Common Share delivered in satisfaction of the right evidenced by a Subscription Receipt pursuant to the terms hereof following a Trigger Event.”

“(b) Upon receipt by Emera of a Mandatory Trigger Notice following occurrence of a Mandatory Trigger Event, the full principal amount of the Promissory Note shall become due and payable to the Fund and the

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rights evidenced by the Subject Receipts shall be deemed to be satisfied by delivery of Common Shares on a one-for-one basis, subject to adjustment as may be required pursuant to Section 8.7 and subject to being rounded (i) up in respect of fractions of 0.5 or greater, and (ii) down in respect of fractions of less than 0.5, in each case to the nearest whole number of Common Shares. Emera shall, upon receipt by Emera of a Mandatory Trigger Notice, following occurrence of a Mandatory Trigger Event, pay to or to the order of the Fund (which payment may be effected out of an escrow established by written agreement of the Parties) the full principal amount of the Promissory Note and shall deliver to the Escrow Agent the certificates evidencing the Subject Receipts.”

“and except pursuant to the Strategic Relationship Agreement”

“(with the exception of Section 8.5(c))”

“the later of (i) the date of termination of the Strategic Relationship Agreement; and (ii)”

“This Agreement may not be assigned by any Party except with the prior written consent of each of the other Parties.”

“The Subscription Receipts evidenced by this certificate (this “Subscription Receipt Certificate”) are issued pursuant to the subscription and unitholder agreement dated as of April 22, 2009, as amended from time to time (the “Subscription and Unitholder Agreement”) between Emera and Algonquin Power Co. (formerly Algonquin Power Income Fund (the “Fund”)).^”

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Except as expressly herein amended, the terms and conditions of the Subscription and Unitholder Agreement remain in full force and effect, unamended as of the date hereof, and this Agreement will be deemed to be an integral part of the Subscription and Unitholder Agreement. If there is any inconsistency between any provision hereof and the provisions of the Subscription and Unitholder Agreement, the provision contained in this Agreement will prevail to the extent of the inconsistency.

This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same Agreement. Counterparts may be delivered either in original, faxed form or by other electronic transmission and the parties adopt any signature received by a receiving fax machine or by e-mail as original signatures of the parties,

This Agreement shall be construed and enforced in accordance with, and the rights of the Parties shall be governed by, the laws of the Province of Ontario and the laws of Canada applicable therein. Any and all disputes arising under this Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of the courts of the Province of Ontario and each of the Parties hereto hereby irrevocably attorns to the jurisdiction of the courts of such Province.

This Agreement shall enure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, successors (including any successor by reason of the amalgamation or merger of any party), administrators and permitted assigns.

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first above written.

ALGONQUIN POWER CO.
Per:
Name:
Title:
EMERA INCORPORATED
Per:
Name:		Nancy Tower
Title:		Chief Financial Officer
Per:
Name:		STEPHEN D. AFTANAS
Title:		CORPORATE SECRETARY
ALGONQUIN POWER & UTILITIES CORP.
Per:
Name:
Title:

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