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Hydro One Inc. Board of Directors Announces Termination of Employment of President and Chief Executive Officer

Toronto, July 19, 2002 - The Board of Directors of Hydro One Inc. today terminated the employment of Eleanor Clitheroe as President and Chief Executive Officer of the government-owned utility. The Board of Directors has concluded that Ms. Clitheroe repeatedly breached her fiduciary obligation owed to Hydro One to act in good faith and with a view to furthering the Company's best interests.

The Board of Directors' areas of concern with Ms Clitheroe's conduct included but were not limited to:

• Use of service providers retained in relation to Company projects to perform renovations to her personal residence, which resulted in Hydro One paying for renovations to her personal residence, some of which was not repaid until June 2002.
• Excessive personal use by her and her family of the car service provided to her for the express purpose of transportation to and from work and business-related use and despite being provided with a vehicle and an additional transportation allowance under the terms of her employment contract.
• Personal use of Hydro One credit card contrary to clear Company policy.
• Having both personal and business expenses administered through the Office of the Chief Executive Officer, resulting in confusion of payment.
• Obtaining club memberships at the Company's expense, many of which had no business-related purpose.

The Board of Directors was left with no other option in that her actions evidence a clear pattern of a lack of judgment, care and diligence which has had and will continue to have a negative impact on Hydro One's image and reputation with its ratepayers, its employees and its shareholder, the people of Ontario.

"This is an issue of corporate governance and inappropriate behaviour at the most senior level of the company," said Glen Wright, Chair, Hydro One Inc. "Every day thousands of Hydro One employees work hard, follow the rules and provide the province with power."

The Board of Directors today appointed Tom Parkinson as President and Chief Operating Officer. Mr. Parkinson joined Hydro One in the fall of 2001 as the head of Hydro One Network Services Inc. Prior to this he was the President and Chief Executive Officer of NorthPower, one of Australia's government-owned electrical distribution and retail businesses, where he oversaw the merger of seven separate electrical utilities. An accountant and business strategist, Mr. Parkinson has over 20 years experience in the electrical utility business including seven as President and CEO.

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For more information:
Terry Young
Hydro One
416-345-6072