KELOWNA, BRITISH COLUMBIA--(CCNMatthews - May 24, 2006) - Fortis Inc. (TSX:FTS) and FortisBC Inc. -
FortisBC Inc. today announced it has received approval from the British Columbia Utilities Commission (BCUC) for its 2006 revenue requirements and the implementation of a new performance based rate setting mechanism, which will determine revenue requirements for the years 2007 to 2008, and optionally 2009. The decision approves a negotiated settlement agreement between FortisBC and its stakeholders.
The terms of the agreement include the approval of a 5.9% rate increase for 2006, which has been in place as an interim increase since January 1, 2006. The decision also approves an increase to the composite depreciation rate of the Company's assets and a new methodology for the capitalization of overhead costs.
"This decision by the BCUC streamlines the regulatory process for establishing revenue requirements for the period 2007, 2008, and optionally 2009, enabling us to increase our focus on the management of the business and implementation of our significant capital program," said John Walker, President & CEO, FortisBC Inc. "The performance based mechanism provides an incentive that balances the interests of both our customers and the shareholder."
The previously approved $111.7 million capital plan for 2006 includes the expansion and upgrading of the transmission and distribution system in the South Okanagan and Kelowna areas, as well as the continuation of upgrades and life extension work on hydroelectric generation facilities on the Kootenay River.
The parties involved in the settlement process were: The British Columbia Old Age Pensioners Association, the Commercial Energy Consumers, The Interior Municipal Electricity Utilities, Natural Resources Industries and Hedley Improvement District, and individual registered intervenors.
FortisBC is an integrated electric utility operating in the southern interior of British Columbia, serving over 150,000 customers directly and indirectly. The utility has four hydroelectric generating plants with a combined capacity of 235 megawatts and over 6,400 kilometers of transmission and distribution power lines. FortisBC employs over 500 people in British Columbia and is an indirect wholly owned subsidiary of Fortis Inc. - primarily a diversified, international electric utility holding company based in St. John's, Newfoundland, with assets exceeding $4.3 billion and annual revenues of more than $1.4 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.
FortisBC 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. FortisBC cautions readers that should certain events or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. For additional information with respect to certain of these risks or factors, reference should be made to FortisBC's continuous disclosure materials filed from time to time with Canadian Securities Regulatory Authorities. FortisBC disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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