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Hydro One Files Preliminary Prospectus for Initial Public Debt Offering

TORONTO, Ontario May 10, 2000 - Hydro One Inc. announced today that it has filed a preliminary prospectus with each of the provincial securities' regulatory authorities in Canada and a registration statement with the Securities and Exchange Commission in the United States for an initial public debt offering in Canada and the United States.

The debentures will be senior unsecured obligations of Hydro One Inc. and will be offered concurrently in all provinces of Canada and in the United States. The debentures will be offered by a syndicate of underwriters co-led by Scotia Capital Inc. and BMO Nesbitt Burns Inc. and including Merrill Lynch Canada Inc., RBC Dominion Securities Inc., CIBC World Markets Inc., TD Securities Inc., Goldman Sachs Canada Inc. and National Bank Financial Inc.

Net proceeds of the offering will be used to repay a portion of the Company's indebtedness to the Ontario Electricity Financial Corporation. This indebtedness was incurred by Hydro One Inc. in connection with the acquisition of the electricity transmission, distribution and energy services businesses of Ontario Hydro as part of the reorganization of Ontario Hydro in 1999.

Hydro One Inc., through its subsidiaries, is principally engaged in electricity transmission, distribution, and energy services businesses. Through a wholly owned subsidiary, Hydro One Inc. owns and operates the largest transmission and distribution system in Ontario and one of the ten largest in North America.

A registration statement relating to the debentures has been filed with the Securities and Exchange Commission but has not yet become effective. The debentures may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the debentures in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

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For more information, please contact:

Ian Chadsey Director, Investor Relations Hydro One 416-345-6136
ian.chadsey@HydroOne.com

Terry Young
Director, Public Affairs
Hydro One
416-345-6072
terry.young@HydroOne.com