Newfoundland Power Inc: Fortis Inc - Improves Performance Despite Record Snowfalls

Gateway To North America's Electrical Industry -

St. John's, NF -- Despite battling the worst winter on record, Newfoundland Power Inc. continued to improve its financial and operational performance in the first quarter of 2001.

"Our employees repeatedly rose to the challenges presented by more than 600 centimetres of snow and delivered outstanding service to our customers," says Philip G. Hughes, President and Chief Executive Officer, Newfoundland Power Inc. "In true Newfoundland spirit, they helped their neighbors and communities through this harsh winter. Likewise, we take heart that so many customers have lent us a helping hand and encouraging words during recent storms."

Earnings for the first quarter of 2001 were $12.2 million, up $2.5 million from the same quarter last year. The increase in earnings is attributed to higher energy sales, productivity improvements and a tax refund from Canada Customs and Revenue Agency in the first quarter of 2001.

"Although extreme weather increased trouble calls and delayed progress on our 2001 capital program, we were able to overcome these challenges and improve earnings and reliability," says Hughes.

Despite record snowfalls, 2001 system reliability has been consistent with levels achieved during the mild winter of 2000. In the first quarter last year, the number of outages and length of service interruptions were reduced 12 per cent and 27 per cent, respectively, compared to the same period of 1999.

"The resolution of a long-standing tax case in 2000, combined with improvements in productivity and cost control, has enabled Newfoundland Power to keep its electrical rates the lowest in Atlantic Canada while providing the extra benefit of a rebate to our customers," says Hughes.

Newfoundland Power initiated a $7.7 million rebate to customers in February. The rebate was approved by the Newfoundland & Labrador Board of Commissioners of Public Utilities in March and is being issued on April electrical bills. The rebate, which is equivalent to 1.9 per cent of each customer's 2000 electrical bill, will provide a credit of approximately $34.00 to the average residential electrical customer.

In March, Newfoundland Power entered into an agreement with Aliant Telecom Inc. (operating as NewTel Communications in Newfoundland and Labrador) to acquire NewTel's poles and related infrastructure on the island of Newfoundland over a five-year period at a price of approximately $50 million. The purchase price represents an increase of approximately 10 per cent in Newfoundland Power's fixed assets. The transaction is subject to regulatory approval and is expected to close before July 31, 2001. All the common shares of Newfoundland Power Inc. are owned by Fortis Inc., a utility holding company with assets exceeding $1.6 billion. Newfoundland Power's first preference shares series A, B and D are listed on the Montreal Exchange under the symbol NFL. The common shares of Fortis Inc. are traded on The Toronto Stock Exchange under the symbol FTS.