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Hydro One signs agreement to purchase Terrace Bay electric utility

July 13, 2007 — Hydro One has entered into an agreement with the Township of Terrace Bay to purchase its local electric utility, Terrace Bay Superior Wires Inc., for approximately $1 million. It is expected that the purchase of the utility will become final in September of this year.

In October 2006 the provincial government announced a two-year transfer tax exemption on the sale of publicly-owned electricity assets to other Ontario-based, publicly-owned distributors. As part of that announcement, the government also announced the lifting of the moratorium on the purchase and sale of electricity distribution assets by Hydro One. The province's decision to implement the two-year transfer tax exemption helped to conclude an agreement that is commercially sound and represents the interests of the local community, the customers and employees of Superior Wires.

Terrace Bay will keep 100 per cent of proceeds from the sale.

"We are pleased to welcome Terrace Bay customers into Hydro One and we look forward to directly serving residents and businesses in the community," said Laura Formusa, Hydro One Acting President and CEO. "We will ensure that the transition for customers is smooth and seamless."

"This is a good deal for both Terrace Bay and Hydro One," said Mike King, Mayor, Township of Terrace Bay. "Hydro One has committed to investing in our electricity delivery system and providing the high level of service that our citizens and businesses deserve. The funds from the sale can be put to good use in community projects and capital investments."

Hydro One and the township have submitted an application to the Ontario Energy Board for approval of the acquisition.

Hydro One delivers electricity safely, reliably and responsibly to homes and businesses across the province of Ontario and owns and operates Ontario's 29,000 kilometre high-voltage transmission network that delivers electricity to large industrial customers and municipal utilities, and a 122,000 kilometre low-voltage distribution system that serves about 1.3 million end-use customers and smaller municipal utilities in the province. Hydro One is wholly owned by the Province of Ontario.

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For more information and to make arrangements for photography, contact Hydro One Media Relations 24 hours a day at 1-877-506-7584 (toll-free in Ontario only) or 416-345-6868. Our website is www.HydroOne.com.