The Consumers' Waterheater Income Fund
TSX : CWI.UN

The Consumers' Waterheater Income Fund

August 14, 2009 09:05 ET

The Consumers' Waterheater Income Fund Provides an Update on its Sub-Metering Business

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2009) - The Consumers' Waterheater Income Fund (the "Fund") (TSX:CWI.UN) today announced that the Ontario Energy Board (the "OEB") issued a decision and order (the "Order") pursuant to its May 6, 2009 notice of proceeding authorizing "exempt distributors" (i.e., landlords) to conduct discretionary metering activities under the Electricity Act (Ontario) in respect of certain residential complexes and commercial buildings. According to the OEB, discretionary metering activities include the Fund's subsidiary, Stratacon Inc.'s, sub-metering activities which it provides to exempt distributors.

This Order is further to the OEB bulletin issued March 24, 2009 regarding the installation of smart sub-metering systems in certain residential complexes and is an interim solution by the OEB pending the introduction of a formal regulatory regime in Ontario.

The Order reflects the Ontario government's smart metering initiative and the Green Energy Act's vision to make Ontario a global leader in conservation by permitting smart sub-metering in residential and commercial buildings through licensed smart sub-metering providers, such as Stratacon, subject to satisfaction of certain conditions.

The Order requires residential landlords to obtain new consents from each of its sub-metered tenants in buildings where the sub-metering system was installed after November 3, 2005, regardless of whether consent has previously been obtained. Residential landlords are also required to meet other conditions such as conducting an independent energy audit, using a licensed sub-metering provider such as Stratacon and providing tenants with a comprehensive information package, including the amount of any smart sub-metering administrative charges, the specific amount of the rent reduction being offered to the customer and a detailed description of the methodology used to arrive at such reduction.

In commercial complexes, the only requirement for the provision of smart sub-metering by Stratacon is that the customers provide consent in writing, either before or after the Order, and Stratacon must comply with existing smart sub-metering code with certain revisions.

The Fund is in the process of considering the implications of the Order and its legal response to it; however, the requirement to obtain new consents may result in billing disruptions and a number of Stratacon's existing customers electing to not continue with smart sub-metering, which could have a material adverse impact on Stratacon's financial condition and results of operations. However, the Stratacon customers affected in the near term by the Order represent less than one (1) per cent of the Fund's overall customer base. The Order clarifies sub-metering in residential complexes and commercial buildings and reopens these markets.

About The Consumers' Waterheater Income Fund

The Fund owns a portfolio of approximately 1.4 million installed water heaters and other assets, rented primarily to residential customers in Ontario. The Fund also owns Stratacon Inc., a leading "smart" sub-metering company, with metering contracts for condominium and apartment suites in Alberta, Ontario and elsewhere in Canada.

Additional information regarding the Fund, including its current Annual Information Form is available on SEDAR at www.sedar.com. Additional information on the sub-metering business is available at www.stratacon.ca.

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