Newfoundland Power Inc.
TSX : FTS

Newfoundland Power Inc.

October 11, 2007 13:24 ET

Newfoundland Power Reduces Rate Request

ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(Marketwire - Oct. 11, 2007) - Newfoundland Power Inc. (TSX:FTS) today filed a revised 2008 rate application with the Newfoundland and Labrador Board of Commissioners of Public Utilities (the "PUB").

Newfoundland Power's revised application proposes an average increase to electricity rates of 2.8% for January 2008. This compares to an average increase of 5.3% proposed in the Company's May 2007 application.

The PUB approved an average decrease in electricity rates of 2.9% effective
July 1, 2007. If Newfoundland Power's revised application is approved by the PUB, electricity rates in January 2008 will, on average, be comparable with those in January 2007.

"While our revised application lessens the impact of a rate increase on our customers, we recognize that any rate increase is significant," said Earl Ludlow, President and Chief Executive Officer, Newfoundland Power Inc. "Therefore, we remain committed to managing our operations to help maintain stable electricity rates for our customers. We will also continue to help our customers reduce their energy usage and electricity bills through our Bright Ideas campaign."

The proposed January 2008 average rate increase of 2.8% is largely driven by higher depreciation costs.

The reduction in the rate request is primarily the result of recent negotiations between the Company and the Consumer Advocate, which were assisted by a PUB appointed facilitator. It has been agreed that certain changes to the Company's accounting practices for retirement costs, which were proposed in the May 2007 filing, should not proceed at this time. In addition, it has been agreed the Company's return on common equity for 2008 should be 8.95%.

Changes to January 2008 electricity rates are proposed to vary among customer categories. For commercial categories, the range will be from an average decrease of 1.2% to an average increase of 2.8%. For residential customers, an average increase of 3.9% is proposed. The range of rate changes proposed reflects a better matching of rates to the cost to serve each customer category.

If the revised application is approved by the PUB, Newfoundland Power's electricity rates for residential customers will remain the lowest in Atlantic Canada.

Newfoundland Power's revised application is subject to a full review by the PUB. A public hearing is scheduled to commence on October 22, 2007.

Visit www.newfoundlandpower.com for more information on ways to reduce your energy usage to help you better manage your electricity bill, or to review Newfoundland Power's revised application.



Electricity Rate Change Summary

------------------------------------------------------------------
Customer Category Approved Proposed Net change
July 1, 2007 January 1, 2008
------------------------------------------------------------------
Residential -2.9% 3.9% 1.0%
Commercial
2.1 0-10 kW -2.0% -1.2% -3.2%
2.2 10-100 kW (110 kVA) -2.7% -0.2% -2.9%
2.3 110-1000 kVA -3.2% 1.8% -1.4%
2.4 1000 kVA & Over -3.9% 2.8% -1.1%
Street Area Lighting -0.8% 2.8% 2.0%
------------------------------------------------------------------
Average Rate Change -2.9% 2.8% -0.1%
------------------------------------------------------------------

These reflect average rate changes by customer category. Actual rate
changes for individual customers will vary depending on individual
customer's usage of electricity.


With a customer base of over 230,000 accounts, Newfoundland Power is dedicated to providing the highest level of customer service and reliability of electricity in the most cost-efficient manner possible. All the common shares of Newfoundland Power are owned by Fortis Inc., the largest investor-owned distribution utility in Canada, which serves almost 2,000,000 gas and electric customers and has approximately $10 billion of assets. Its regulated holdings include a natural gas utility in British Columbia, Canada and electric utilities in five Canadian provinces and three Caribbean countries. Fortis Inc. owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns hotels and commercial real estate in Canada. Fortis Inc. shares are listed on the Toronto Stock Exchange and trade under the symbol FTS. Additional information can be accessed at www.fortisinc.com or www.sedar.com. For more information on Newfoundland Power's programs, services and community partnerships, please visit www.newfoundlandpower.com.

Newfoundland Power may include forward-looking statements in this release which reflect management's expectations regarding the Company's future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as "anticipate", "believe", "expects", "intend" and similar expressions have been used to identify the forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to the Company's management. By their very nature, forward-looking statements are based on underlying factors or assumptions which are subject to inherent risks and uncertainties surrounding future expectations generally. Such risk factors or assumptions include, but are not limited to, general economic, market and business conditions, regulatory developments, weather and competition. Newfoundland Power cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and undue reliance should not be placed on the forward-looking statements. For additional information with respect to certain of these risks or factors, reference should be made to Newfoundland Power's continuous disclosure materials filed from time to time with Canadian Securities Regulatory Authorities. Newfoundland Power disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Newfoundland Power Inc.
    Bob Pike, Manager, Corporate Services
    709-737-5674 or Cellular: 709-685-4242