ST. JOHN'S, NEWFOUNDLAND and LABRADOR--(CCNMatthews - Aug. 28, 2006) - Fortis Inc. ("Fortis") (TSX:FTS) announced today that, through its wholly owned subsidiary, Fortis Energy (Bermuda) Ltd, it has acquired all of the outstanding shares of P.P.C. Limited ("PPC") and Atlantic Equipment and Power (Turks and Caicos) Limited ("Atlantic") from T.C. Energy Holdings Inc. The aggregate purchase price including assumed debt was approximately US$90,000,000.
Together, PPC and Atlantic serve almost 7,500 customers, or 80% of electricity customers in the Turks and Caicos Islands. PPC is the sole provider of electricity in Providenciales, North Caicos and Middle Caicos pursuant to an exclusive 50-year license that expires in 2037. Atlantic is the sole provider of electricity in South Caicos pursuant to an exclusive 50-year license that expires in 2036. The utilities have a combined diesel-fired generating capacity of approximately 35 megawatts ("MW") and meet a peak demand of approximately 20 MW.
Each utility is regulated under a traditional rate of return on rate base approach, with a fixed rate of return of 17.5% on a defined asset base. The combined defined asset base of the 2 utilities as at June 30, 2006 was approximately US$50,000,000.
"With well-established electric utility operations in Belize and Grand Cayman, Fortis has considerable experience meeting the electricity needs of growing communities in the Caribbean region," says Stan Marshall, President and Chief Executive Officer, Fortis Inc.
"The Turks and Caicos Islands is experiencing rapid growth in energy demand. Customers of PPC and Atlantic will benefit from the expertise of Fortis in delivering reliable electricity service," explains Marshall. "The acquisition is expected to be immediately accretive to earnings," he concludes.
Fortis is a diversified, international electric utility holding company with assets exceeding $4.3 billion and annual revenues of more than $1.4 billion. In addition to its holdings in the Turks and Caicos Islands, Fortis has holdings in regulated electric distribution utilities in Newfoundland, Prince Edward Island, Ontario, Alberta, British Columbia, Belize and Grand Cayman, Cayman Islands. It has non-regulated generation operations in Newfoundland, Ontario, British Columbia, upper New York State and Belize. Fortis also has investments in real estate and hotels through Fortis Properties Corporation, its wholly owned non-utility subsidiary.
The Common Shares, Series C First Preference Shares and Series E First Preference Shares of Fortis are traded on the Toronto Stock Exchange under the symbols FTS, FTS.PR.C and FTS.PR.E, respectively. Fortis information can be accessed at www.fortisinc.com.
Fortis includes forward-looking statements in this material. 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. Fortis 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 the Corporation's continuous disclosure materials filed from time to time with Canadian securities regulatory authorities. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
FOR FURTHER INFORMATION PLEASE CONTACT:
Mr. Barry Perry
Vice President Finance & Chief Financial Officer
(709) 737-5307 (FAX)