IPL Energy, Hydro-Quebec and Gaz de France Close First Stage of Transaction

Business Wire, August 27, 1997

CALGARY, Alberta--(BUSINESS WIRE)--Aug. 27, 1997--IPL (TSE;ME:IPL)(NASDAQ:IPPIF) IPL Energy Inc., Hydro-Quebec, Gaz de France and Noverco Inc. announced the completion today of the first stage of the previously announced acquisition by IPL Energy of a 32 percent interest in Noverco and the acquisition by Noverco of an 8 percent interest in IPL Energy.

Under this transaction, IPL Energy will become a partner with Hydro-Quebec and Gaz de France in the development and operation of gas pipelines to serve Quebec and the Maritime provinces in Canada and the northern New England states in the United States and gas distribution systems in Quebec and the United States.

As part of the transactions completed today, IPL Energy purchased $181.5 million in preference shares of Noverco and an option for $148 million entitling IPL Energy to acquire 32 percent of the common shares of Noverco. IPL Energy also sold to Noverco for $750,000 a warrant to acquire 1.5 million IPL Energy common shares on June 30, 1998 at a price of $51.00 per share. IPL Energy and Noverco will complete their respective investments in each other on October 1, 1997 when Noverco and its wholly-owned subsidiary, Gaz Metropolitain, Inc., will acquire an aggregate of 6 million IPL Energy common shares from treasury for $287 million and IPL Energy will exercise the option which it purchased today.

Noverco is a holding company whose principal asset is an 80 percent interest in Gaz Metropolitain and Company, Limited Partnership (GMLP) which is engaged in natural gas distribution in Quebec and Vermont, and holds a 50 percent interest in TQM Pipeline and Company, Limited Partnership which owns and operates a pipeline transporting gas in Quebec.

IPL Energy is a North American leader in energy services and delivery, operating the world's longest crude oil and liquids pipeline system, and Canada's largest natural gas distribution company. The latter serves 1.3 million residential, commercial and industrial customers in south central and eastern Ontario, Quebec, and upper New York State, through The Consumers' Gas Company Ltd. Of Toronto, Gazifere Inc. of Hull (Quebec) and St. Lawrence Gas Company, Inc. (New York State). IPL Energy's common shares trade on the Toronto and Montreal stock exchanges in Canada under the symbol "IPL". In the United States the shares trade on the NASDAQ under "IPPIF". IPL Energy's 1996 revenue was $2.5 billion (Cdn).

Hydro-Quebec is North America's largest generator of electricity, serving 3.4 million residential, commercial and industrial customers in Quebec. In addition, it makes regular deliveries to 10 municipal systems throughout Quebec and some 15 electrical utilities in the northeastern United States, Ontario and New Brunswick. Its 1996 revenue was $7.7 billion (Cdn).

Gaz de France is a state owned company in charge of the importation, transportation, storage and distribution of natural gas in France. Its sales in 1996 reached approximately 1.2 tcf of natural gas to 9 million customers. Its revenue the same year was approximately $13 billion (Cdn) and its assets total $21 billion (Cdn).

CONTACT: IPL Energy Inc., Calgary

Frank Ternan, 403/231-3906

or 403/686-3268 (Residence)

403/231-4848 (FAX)

E-mail: frank_ternan@notes.ipl.ca

http://www.iplenergy.com

or

Hydro-Quebec

Guy Litalien, 514/289-2314

514/289-3658 (FAX)

E-mail: glitalien@mail.dcrp.hydro.qc.ca