ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(CCNMatthews - Jan. 31, 2006) - Newfoundland Power Inc. (TSX:FTS) today released its 2005 results, delivering a strong performance in the areas of reliability, customer service, safety and earnings.
Customers experienced the best reliability on record in 2005, with a 17% decrease in the number of outages and 28% decrease in outage duration, compared to 2004. "Continued capital investment in the electricity system, combined with effective management of our assets and scheduled outages, directly benefit our customers through improved reliability," said Karl Smith, President and Chief Executive Officer, Newfoundland Power Inc.
The Company continues to maintain a strong customer satisfaction rating, achieving an overall rating of 89% in 2005. "We remain committed to providing innovative solutions to meet our customers' ever changing needs," said Smith. "Our customers are seeing the results and, through our quarterly surveys, have told us that we are meeting their expectations."
In 2005, the Company led the charge on energy efficiency through its Bright Ideas campaign aimed at informing customers on how to use energy wisely. In addition to continuing ongoing financing and rebate programs, such as Wrap-up for Savings, customers were also provided energy efficiency information, tools and services to assist them to better manage their electricity consumption. The Company also participated in the promotion of three national energy efficiency campaigns spearheaded by Natural Resources Canada's Office of Energy Efficiency - EnerGuide for Housing, Switch to Cold and Energy Star.
Earnings for the year were $30.7 million compared to $31.1 million for 2004. The decrease in earnings was primarily related to a 0.5% decrease in customer electricity rates effective January 1, 2005, direct costs associated with an Early Retirement Program offered in the first quarter of 2005, higher amortization of capital assets and higher finance charges. These decreases were partially offset by higher electricity sales, higher interest revenue and increased revenue from pole rentals.
Operating cost per customer was $218, compared to $220 in 2004. "By seeking every opportunity to improve the efficiency of our business, we have reduced operating cost per customer by approximately 30% in the past 10 years," said Smith.
"The Company invested approximately $53 million in the electricity system in 2005 and through the use of strategic and timely maintenance, we are also extending the useful life of our assets, enhancing reliability and reducing operating costs. The Company will invest an additional $50 million in 2006 to further upgrade the electricity system and meet the demands of customer growth," added Smith.
During the year the Company was recognized by the Canadian Electricity Association with the President's Award of Excellence for Employee Safety for 2004. This was the first time that the Company received this safety award.
In November, The Power of Life Project partners launched You have the Power, a new cancer education and awareness program. "The focus of this new program is to promote the benefits of early detection and screening programs in the treatment of cervical, prostate, breast and colorectal cancers," said Smith.
In January 2006, the Company received an Order from the Newfoundland and Labrador Board of Commissioners of Public Utilities approving customer rates for 2006 and a range of rate of return on rate base of 8.50% to 8.86%, both of which are the same as that in effect for 2005.
With a customer base of over 227,000 accounts, Newfoundland Power is dedicated to providing the highest level of customer service and reliability of electricity in the most cost-efficient manner possible. For more information on Newfoundland Power's programs, services and community partnerships, please visit www.newfoundlandpower.com.
All the common shares of Newfoundland Power are owned by Fortis Inc., a diversified, international electric utility holding company with assets of approximately $4.1 billion and annual revenues of approximately $1.2 billion. The Common Shares, Series C First Preference Shares and Series E First Preference Shares of Fortis Inc. are traded on the Toronto Stock Exchange under the symbols FTS, FTS.PR.C and FTS.PR.E, respectively. Fortis Inc. information can be accessed at www.fortisinc.com.
Newfoundland Power may include forward-looking statements in this release. By their very nature, forward-looking statements are based on underlying assumptions and are subject to inherent risks and uncertainties surrounding future expectations generally. Such events include, but are not limited to, general economic, market and business conditions, regulatory developments, weather and competition. Newfoundland Power cautions readers that should certain events or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected.
FOR FURTHER INFORMATION PLEASE CONTACT:
Newfoundland Power Inc.
Director, Corporate Communications
(709) 737-2821 or (709) 682-1470 (Cellular)