The Consumers' Waterheater Income Fund
TSX : CWI.UN

The Consumers' Waterheater Income Fund

November 05, 2007 18:51 ET

The Consumers' Waterheater Income Fund Provides an Update to its Billing Arrangements

TORONTO, ONTARIO--(Marketwire - Nov. 5, 2007) -

NOT FOR RELEASE IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES.

The Consumers' Waterheater Income Fund (the "Fund") (TSX:CWI.UN) today announced that it received from Enbridge Gas Distribution Inc. ("EGD") a notice of termination of the existing trust arrangements relating to the Fund's billing and collecting activities that are undertaken on the EGD bill.

As described in further detail in the Fund's current Annual Information Form and its most recent Management's Discussion and Analysis ("MD&A"), both of which are available on SEDAR at www.sedar.com, the proceeds of collections of the Fund's billings that are on the EGD bill are currently deposited with CIBC Mellon Trust Company, as trustee, pursuant to a receivables trust agreement (the "Receivables Trust Agreement") with EGD and, among others, the Fund's servicer, Direct Energy Marketing Limited ("Direct Energy"). Pursuant to the terms of the Receivables Trust Agreement, EGD may terminate the trust arrangements on not less than 60 days notice. The notice received today reflects the termination of the Receivables Trust Agreement, effective January 1, 2008.

However, as described in the Fund's MD&A for the quarter ended September 30, 2007, the Fund, Direct Energy and EGD entered into a non-binding memorandum of understanding as of October 17, 2007 (the "MOU"), which, if implemented, would have the effect of, among other things, retaining trust arrangements that are substantially similar to the Receivables Trust Agreement. EGD has stated in its termination notice that it is EGD's intention and expectation to implement the arrangements set forth in the MOU, including the replacement trust arrangements, promptly so as to be operationally effective concurrently with the termination of the Receivables Trust Agreement.

Although the Fund expects to implement the MOU in accordance with its terms, as definitive agreements have yet to be entered into, there can be no assurance that replacement trust arrangements will be retained. Any failure to maintain such trust arrangements may have an adverse impact on the credit rating of the Fund's outstanding senior secured notes.

About The Consumers' Waterheater Income Fund

The Consumers' Waterheater Income Fund owns a portfolio of over 1.4 million installed water heaters and other assets, leased primarily to residential customers in Ontario. The asset base has been generating stable and growing cash flows since its inception in the late 1950s.

Additional information regarding The Consumers' Waterheater Income Fund, including its current Annual Information Form is available on SEDAR at www.sedar.com.

Forward-Looking Statements

This press release contains forward-looking statements relating to expected future events which reflect management's expectation regarding the Fund's growth, financial results and operating performance. Such forward-looking statements reflect management's current beliefs and are based on information available to them. Many factors could cause results to differ from the results discussed or implied in the forward-looking statements and these differences may be material. Although the forward-looking statements are based on what management believes to be reasonable assumptions, there are many risks and uncertainties that could affect the results discussed or implied in the forward looking statements. The Fund therefore cannot assure investors that actual results will be consistent with these forward-looking statements. The assumptions include but are not limited to: terminations, replacements, rental rates and service costs. These risks and uncertainties include, but are not limited to: billing arrangements, social or technical changes, regulatory changes, product faults, geographic concentration, competition, lack of written contracts and Income tax matters. A summary of these risks and uncertainties can be found in the Fund's most recently filed management's discussion and analysis and current annual information form, both of which can be found on SEDAR at www.sedar.com. The Fund is under no obligation (and expressly disclaims any such obligation) to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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