Fortis Earns $49 Million in the Third Quarter

Corporate and other expenses were $15 million for the third quarter compared to $16 million for the same quarter last year. The decrease was primarily driven by the approximate $2 million favourable impact of the tax settlement at Terasen Inc.

Year to date, cash flow from operating activities was $449 million compared to $221 million for the same period last year, primarily due to the contributions from the Terasen Gas companies for nine months in 2008 compared to 4 1/2 months in 2007.

Consolidated capital expenditures, before customer contributions, were $623 million year to date and are expected to exceed $900 million in 2008. The consolidated capital program is being driven by the utilities in western Canada and regulated and non-regulated electric utility operations in the Caribbean.

As at September 30, 2008, Fortis had consolidated credit facilities of $2.2 billion, of which $1.5 billion was unused. Over the next five years, average annual long-term debt maturities are expected to be approximately $180 million.

To the end of October, Fortis and its utilities have raised almost $900 million in preferred equity and 30-year debt in 2008, including $230 million 5.25% Five-Year Fixed Rate Reset First Preference Shares, Series G, at Fortis Inc., $250 million 5.80% debentures at Terasen Gas Inc., $250 million 6.05% debentures at Terasen Gas (Vancouver Island) Inc., $100 million 5.85% debentures at FortisAlberta, and $60 million 6.05% bonds at Maritime Electric.

In August, Caribbean Utilities completed a Rights Offering, raising gross proceeds of approximately US$28 million of which Fortis contributed US$24 million as a result of its participation in the Rights Offering. The proceeds are being used to repay credit facility borrowings and to finance capital expenditures.

In October, Standard & Poor's removed Fortis from the S&P/TSX Completion and Equity Completion indices and placed Fortis in the S&P/TSX 60, 60 Capped and Equity 60 indices.

"Our utilities remain focused on executing their remaining capital projects for 2008. Over the next five years, our consolidated capital program is expected to surpass $4.5 billion, substantially all of which will be funded at the subsidiary level. This capital investment, which will mainly be in western Canada and the Caribbean, will add value for our customers and shareholders and fortify our position as a leading owner of energy infrastructure in Canada," says Stan Marshall, President and Chief Executive Officer, Fortis Inc.

Interim Management Discussion and Analysis

For the three and nine months ended September 30, 2008

Dated October 31, 2008

The following analysis should be read in conjunction with the Fortis Inc. ("Fortis" or the "Corporation") interim unaudited consolidated financial statements and notes thereto for the three and nine months ended September 30, 2008 and the Management Discussion and Analysis ("MD&A") and audited consolidated financial statements for the year ended December 31, 2007 included in the Corporation's 2007 Annual Report. This material has been prepared in accordance with National Instrument 51-102 - Continuous Disclosure Obligations relating to MD&As. Financial information in this release has been prepared in accordance with Canadian generally accepted accounting principles ("Canadian GAAP") and is presented in Canadian dollars unless otherwise specified.