Energy Savings Supports Removal of Politics from Setting of Ontario Electricity Prices

TORONTO - Energy Savings Income Fund ("Energy Savings" or the "Fund") announced their strong support for the transfer over the coming year of control of the Ontario electricity price away from political process to the independent regulator, the Ontario Energy Board ("OEB"). Incumbent with this announcement will be a shift on April 1, 2004 to a new higher price cap which better reflects the true cost of power followed by a move no later than May 1, 2005 to a market-based rate regulated by the OEB.

Energy Savings Income Fund ("Energy Savings" or the "Fund") announced their strong support for the transfer over the coming year of control of the Ontario electricity price away from political process to the independent regulator, the Ontario Energy Board ("OEB"). Incumbent with this announcement will be a shift on April 1, 2004 to a new higher price cap which better reflects the true cost of power followed by a move no later than May 1, 2005 to a market-based rate regulated by the OEB. Based on the limited details available, the long-term structure closely resembles that of the very successful deregulated natural gas market, which has been in place in Ontario for the past 17 years. This market offers all consumers the choice between a regulated short-term price through their local utility and a long-term fixed price through a competitive retailer. Energy Savings is a leading retailer of both gas and electricity in Ontario, and expects to be offering consumers a long-term choice for their power as soon as it is economic to do so. The Fund sees no reason to alter its existing electricity offering to larger volume users (over 250,000 kwh) not covered by either the existing or new price cap.

Rebecca MacDonald, Chief Executive Officer of Energy Savings, stated that: "This legislation moves us away from politics and toward market rate electricity. This can only benefit consumers in the long term. Market prices combined with choice is the best option for the customer and is the key to creating a sustainable electricity market in Ontario. The Ontario natural gas market has proven a very successful model by including these two key factors."

"The Government should be allowed enough time to properly structure the details of the plan to maximize conservation, protect those on low and fixed incomes and encourage badly needed new generation. The period between now and April should be sufficient to allow the OEB and the Department of Energy to finalize details and carefully develop and implement a transition plan. Energy Savings and other retailers will fully co-operate with the OEB and the Government in this important planning process and transition."

The Fund

Energy Savings' business, which is conducted in Ontario and Manitoba, involves the sale of natural gas to residential, small to mid-size commercial and small industrial customers under long term, irrevocable fixed price contracts. Energy Savings also supplies electricity to Ontario customers under contracts secured prior to the November 11, 2002 price freeze and to certain large volume users who do not fall under the Government's price cap. By fixing the price of natural gas or electricity under its fixed price contracts for a period of three to five years, Energy Savings' customers eliminate their exposure to changes in the price of these essential commodities. Energy Savings, which commenced business in July of 1997, derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the matching volumes from its suppliers.