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Hydro One Announces Closing of $1 Billion Initial Public Debt Offering

TORONTO, June 1, 2000 - Hydro One Inc. today announced the closing of its initial public offering in Canada and the United States of $1 billion principal amount of debentures.

"We are very pleased with the reception this offering has received in the capital markets," said Malen Ng, Executive Vice President and Chief Financial Officer of Hydro One Inc. "As the first of a number of offerings we expect to undertake over the next few years, it has been gratifying to see such support for Hydro One."

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

The debentures were offered in three series, as follows:

• Series 1, $200 million principal amount of senior unsecured debentures due 2005, bearing interest at a rate of 6.94%, payable semi-annually.
• Series 2, $400 million principal amount of senior unsecured debentures due 2010, bearing interest at a rate of 7.15%, payable semi-annually.
• Series 3, $400 million principal amount of senior unsecured debentures due 2030, bearing interest at a rate of 7.35%, payable semi-annually.

Hydro One Inc., through its subsidiaries, is principally engaged in electricity transmission, distribution and energy services businesses. Through a wholly-owned subsidiary, Hydro One Networks Inc., it owns and operates the largest transmission and distribution system in Ontario and one of the 10 largest in North America.

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For more information, please contact:

Ian Chadsey Director, Investor Relations Hydro One 416-345-6136