Media Advisory: Newfoundland Power Announces Third Quarter Results

Business Wire, Oct 15, 2004

ST. JOHN'S, Newfoundland And Labrador -- Newfoundland Power Inc. (TSX:FTS) today released its 2004 third quarter results, reporting lower operating costs, an improved customer satisfaction rating, higher earnings and increased energy sales versus the same quarter last year.

"Newfoundland Power continues to deliver quality customer service," said Karl W. Smith, President and Chief Executive Officer, Newfoundland Power Inc. "In the third quarter of 2004, the Company achieved a customer satisfaction rating of 90% compared to 88% in the same quarter last year. It is the commitment and hard work of our employees that enables us to meet customers' expectations and maintain such a high rating.

"Earnings for the third quarter were $5.0 million, compared to $4.2 million for the same quarter last year. Year to date earnings were $27.8 million, compared to $24.6 million for the same period last year. The increase in earnings was due to increased energy sales, and cost management and control initiatives."

Energy sales were 0.7% higher in the third quarter of this year than in the third quarter of 2003. Total energy sales were 855.6 gigawatt hours (GWh), compared to 849.5 GWh in the same quarter last year. Residential energy sales for the quarter increased by 2.3 GWh and commercial energy sales increased by 3.8 GWh compared to the same quarter of 2003.

The growth in residential energy sales was due primarily to an increase in the number of customers, which was driven by a strong housing market, and to higher average usage by customers. The increase in commercial sales was attributable to growth in the service sector of the economy and activity related to the White Rose offshore oil project.

Operating expenses for the quarter were $9.8 million, compared to $10.9 million for the same quarter last year. The Company is committed to keeping electrical rates as low as possible for its customers and has undertaken successful cost management and control initiatives to that end.

On August 31, 2004, the Company filed its $48.1 million capital budget for 2005 and appeared in public hearings before the Newfoundland and Labrador Board of Commissioners of Public Utilities on September 20 and 21, 2004. The proposed 2005 capital budget is driven by the Company's commitment to serve increasing customer needs and to provide customers throughout its entire service territory with a reliable supply of electricity. It also takes into account safety and environmental requirements. A ruling on the proposed 2005 capital budget is expected in the fourth quarter.

"Last month, one of our sister companies, Caribbean Utilities Company Ltd., requested emergency assistance from our employees after Hurricane Ivan significantly damaged the electrical system on Grand Cayman," added Smith. "We responded immediately. On September 18, 2004, we led a delegation of 20 Newfoundland Power operations employees along with approximately 40 employees from other Fortis companies to Grand Cayman to begin restoration efforts. The Company will continue to provide support over the coming weeks."

During the third quarter, the Company signed-on as a Partner for Life with Canadian Blood Services in Newfoundland and Labrador. Partners for Life is a new program that reaches out to businesses and organizations to help meet the need for blood and blood products in the province and country. The Company was one of the five founding members of the program, and its employees have pledged to make at least 200 blood donations over the next year.

Fortis Inc. is 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 222,000 accounts, Newfoundland Power is dedicated to providing the highest level of customer service and a reliable electrical supply in the most cost-efficient manner possible. For more information on Newfoundland Power's programs, services and community partnerships, please visit www.newfoundlandpower.com.

NEWFOUNDLAND POWER INC. (TSX:FTS)