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Hydro One First Quarter Net Income Increases

TORONTO, May 14, 2001 - Hydro One Inc. today announced its financial results for the first quarter of 2001. For the period ended, March 31, 2001, net income was up 6% to $134 million compared to $126 million last year.

"We are achieving our goal of reducing expenses while improving efficiencies in the business," said Eleanor Clitheroe, President and Chief Executive Officer of Hydro One. "In addition, our program of integrating acquired municipal electric utilities into Hydro One's existing network is proceeding well."

The increase in net earnings was the result of lower operations, maintenance and administration expenses primarily due to lower sustaining and recoverable work program costs. Revenues totaled $816 million versus $828 million in 2000. Net cash flow provided from operations increased 34% to $247 million compared with $185 million in 2000. Cash flow increased as the business generated an additional $62 million from operations.

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 further information, please contact:

Terry Young
Media Relations
(416) 345-6072

Ian Chadsey
Investor Relations
(416) 345-6136