Newfoundland Power Rates to Decrease on January 1, 2005

Business Wire, Nov 9, 2004

ST. JOHN'S, Newfoundland And Labrador -- Newfoundland Power Inc. (TSX:FTS) reported today that its electrical rates to customers will decrease by approximately 0.5% effective January 1, 2005 due to the application of the automatic adjustment formula.

The automatic adjustment formula, which was originally adopted in 1998 by the Newfoundland and Labrador Board of Commissioners of Public Utilities (PUB), has been applied to determine the cost of capital to be included in Newfoundland Power's electrical rates for 2005.The formula employs observed long-term Canada bond yields to estimate the cost of common equity to be used in setting rates.

"The purpose of the automatic adjustment formula is to reflect the impact of current bond market conditions on electrical rates without having to incur the expense of regulatory hearings," said Lisa A. Hutchens, Vice President, Finance and Chief Financial Officer, Newfoundland Power Inc."The recent yields of the long-term Canada bonds used as benchmarks in the automatic adjustment formula were just under 5%, which was below the 5.6% used to establish the Company's current electrical rates."

Newfoundland Power submitted the preliminary results of the operation of the automatic adjustment formula for 2005 to the PUB today for its review.The application of the formula will reduce Newfoundland Power's rate of return on common equity, for the purpose of setting rates for 2005, from 9.75% to 9.24%.

All the common shares of Newfoundland Power Inc. are owned by Fortis Inc., a diversified, international electric utility holding company with assets of $3.9 billion and annual revenues of approximately $1.2 billion.The Common Shares, Series C First Preference Shares, Series E First Preference Shares and First Preference Units of Fortis Inc. are traded on the Toronto Stock Exchange under the symbols FTS, FTS.PR.C, FTS.PR.E and FTS.UN, respectively.Fortis Inc. information can be accessed at www.fortisinc.com

With a customer base of approximately 224,000 accounts, Newfoundland Power is dedicated to providing the highest level of customer service and reliability of electrical supply in the most cost-efficient manner possible.

Newfoundland Power Inc. (TSX:FTS)