880285--2/21/2008--ENBRIDGE_ENERGY_PARTNERS

related topics

{tax, income, asset}

{debt, indebtedness, cash}

{interest, director, officer}

{condition, economic, financial}

{gas, price, oil}

{cost, contract, operation}

{operation, natural, condition}

{stock, price, share}

{cost, regulation, environmental}

{acquisition, growth, future}

RISKS RELATED TO OUR BUSINESS Our financial performance could be adversely affected if our pipeline systems are used less. Changes in, or challenges to, our rates could have a material adverse effect on our financial condition and results of operations. Competition may reduce our revenues. Our gas marketing operations involve market and certain regulatory risks. Our results may be adversely affected by commodity price volatility and risks associated with our hedging activities. Compliance with environmental and operational safety regulations, including any remediation of soil or water pollution or hydrostatic testing of our pipeline systems, may increase our costs and/or reduce our revenues. Pipeline operations involve numerous risks that may adversely affect our business and financial condition. Our acquisition strategy may be unsuccessful if we incorrectly predict operating results, are unable to identify and complete future acquisitions and integrate acquired assets or businesses or are unable to raise financing on acceptable terms. Our actual construction and development costs could exceed our forecast and our cash flow from construction and development projects may not be immediate which may limit our ability to increase cash distributions. Measurement losses on our pipeline system can be materially impacted by changes in estimation, commodity prices and other factors. The interests of Enbridge may differ from our interests and the interests of our security holders, and the board of directors of Enbridge Management may consider the interests of all parties to a conflict, not just the interests of our security holders, in making important business decisions. We are exposed to credit risks of our customers Canada's ratification of the Kyoto Protocol may adversely impact our operations. RISKS ARISING FROM OUR PARTNERSHIP STRUCTURE AND RELATIONSHIPS WITH OUR GENERAL PARTNER AND ENBRIDGE MANAGEMENT Our partnership agreement and the delegation of control agreement limit the fiduciary duties that Enbridge Management and our general partner owe to our unitholders and restrict the remedies available to our unitholders for actions taken by Enbridge Management and our general partner that might otherwise constitute a breach of a fiduciary duty. Potential conflicts of interest may arise among Enbridge and its shareholders, on the one hand, and us and our unitholders and Enbridge Management and its shareholders, on the other hand. Because the fiduciary duties of the directors of our general partner and Enbridge Management have been modified, the directors may be permitted to make decisions that benefit Enbridge and its shareholders or Enbridge Management and its shareholders more than us and our unitholders. We can issue additional common or other classes of units, including additional i-units to Enbridge Management when it issues additional shares, which would dilute your ownership interest. We are a holding company and depend entirely on our operating subsidiaries' distributions to service our debt obligations. Enbridge Management's discretion in establishing our cash reserves gives it the ability to reduce the amount of cash available for distribution to our unitholders. RISKS RELATED TO OUR DEBT AND OUR ABILITY TO MAKE DISTRIBUTIONS Agreements relating to our debt restrict our ability to make distributions, which could adversely affect the value of our Class A Common Units, and our ability to incur additional debt and otherwise maintain financial and operating flexibility. TAX RISKS TO COMMON UNITHOLDERS We may be classified as an association taxable as a corporation rather than as a partnership, which would substantially reduce the value of our Class A common units. If the Internal Revenue Service does not respect our curative tax allocations, the after-tax return to our unitholders on their investment in our Class A common units would be adversely affected. The tax liability of our unitholders could exceed their distributions or proceeds from sales of Class A common units. A unitholder may be required to file tax returns with and pay income taxes to the states where we or our subsidiaries own property and conduct business. Ownership of Class A common units raises issues for tax-exempt entities and other investors. Our registration with the Secretary of the Treasury as a "tax shelter" may increase your risk of an IRS audit. We have adopted certain valuation methodologies that may result in a shift of income, gain, loss and deduction between the general partner and the unitholders. The IRS may challenge this treatment, which could adversely affect the value of the Class A Common Units. We treat each purchaser of Class A Common Units as having the same tax benefits without regard to the actual Class A Common Units purchased. The IRS may challenge this treatment, which could result in a unitholder owing more tax and may adversely affect the value of the Class A Common Units.

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880285--2/21/2008--ENBRIDGE_ENERGY_PARTNERS_LP