Newfoundland Power Signs $50 Million Agreement to Buy Newtel Poles

ST.JOHN'S, NEWFOUNDLAND -- -

ST.JOHN'S, NEWFOUNDLAND -- Newfoundland Power Inc. and Aliant Telecom Inc., operating as NewTel in Newfoundland and Labrador, have signed a Support Structure Agreement that will see Newfoundland Power acquire NewTel's poles a island of Newfoundland. Newfoundland Power already owns the majority of poles on the island of Newfoundland. The arrangements, which were settled in St. John's, provide that Newfoundland Power will acquire NewTel's support structures including poles, anchors and related equipment on the island of Newfoundland over a five-year period at a price of approximately $50 million, which represents approximately a 10 per cent increase in Newfoundland Power's rate base. Newfoundland Power will assume responsibility for the construction, operation and maintenance of NewTel's future support structure requirements on the island of Newfoundland. In turn, NewTel will have full access to Newfoundland Power support structures under a 10-year renewable agreement. "This is an exciting and positive opportunity for both companies," says Frank Fagan, President, NewTel and Senior Vice-President, Customer Services, Aliant Telecom. "Newfoundland Power already provides our company with much of the design, engineering and maintenance to our support structures. This agreement is a natural extension to our existing relationship and allows us to more efficiently utilize our resources." Philip G. Hughes, President and Chief Executive Officer, Newfoundland Power, says the new agreement will create opportunities for more efficient, productive operations through a single owner and single engineering. "This relationship is a great example of Newfoundland companies working together to work smarter," says Hughes. "By working together to combine a service, we are able to do more for our customers in an increasingly productive manner and focus more closely on our respective core services." The proposed transaction has been approved by the boards of directors of both Aliant Telecom and Newfoundland Power and is subject to various other approvals, including that of the appropriate regulators.