Toronto Hydro-Electric System Limited

Toronto Hydro-Electric System Limited
Toronto Hydro Corporation

Toronto Hydro Corporation

July 31, 2008 16:33 ET

Toronto Hydro-Electric System Announces Rate Decrease of 5.1%

TORONTO, ONTARIO--(Marketwire - July 31, 2008) - Toronto Hydro-Electric System Limited (Toronto Hydro), announced today that it has received approval from its regulator, the Ontario Energy Board (OEB), to change its electricity distribution rates charged to customers in the City of Toronto.

Effective August 1, 2008, a residential household in Toronto consuming 1,000 kilowatt hours (kWh) per month will see an overall average decrease on the total bill of approximately 5.1%. This amounts to about $5.90 per month, or $70.80 per year.

In August 2007, Toronto Hydro filed a multi-year rates application with the OEB that sought adjustments to cover the costs of capital spending to replace and refurbish large portions of the electricity distribution system in Toronto. The application also provided for the hiring of new electrical trades employees to replace skilled trades employees who will retire in the next several years.

This decision represents the first time a multi-year approval of Toronto Hydro's rates has been granted, and provides the foundation for the utility to carry out its future capital and workforce renewal plans, which are the most comprehensive in the history of the company.

This decision allows Toronto Hydro to increase its investment in capital works by $73 million in 2008 over 2006 capital expenditures.

In 2008 Toronto Hydro is able to completely offset the distribution rate increase that would have been necessary to carry out its capital and workforce renewal plans. This is possible because the company has fully recovered the costs it incurred related to the introduction of electricity retailing in the Ontario market and therefore are no longer reflected in the rates charged to customers.

Rates for 2009 will be established early next year.

Distribution rates cover the costs associated with delivering electricity from transformer stations to homes and businesses in Toronto. These include the costs of planning, installing and maintaining overhead and underground distribution lines, poles, cable chambers, meters, stations and transformers. Distribution rates account for about 28% of a residential customer's total electricity bill.

About Toronto Hydro Corporation

The Corporation is a holding company which through its wholly-owned subsidiaries:

- Toronto Hydro-Electric System Limited ("LDC") - distributes electricity;

- Toronto Hydro Energy Services Inc. - provides street lighting and expressway lighting services, and energy efficiency products and services, and;

The principal business of the Corporation is the distribution of electricity by LDC. LDC owns and operates an electricity distribution system that delivers electricity to approximately 683,000 customers located in the City of Toronto.

For more information, please visit the Web site at www.torontohydro.com.

Forward-Looking Information

Certain portions of this press release may constitute forward-looking information. Forward-looking information means disclosure regarding possible events, conditions or results that is based on assumptions about future economic conditions and courses of action or attributable to third parties. In some cases, forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "anticipate", "believe", "estimate", "predict", "potential", "continue", "plan" and similar expressions or the negative of these terms or other comparable terminology. Although the Corporation believes that it has a reasonable basis for the forward-looking information included in the press release, such information is subject to a number of risks, uncertainties and assumptions, that may cause actual events, conditions or results to differ materially from those contemplated by the forward-looking information. Some of the factors that could cause such differences include legislative or regulatory developments; financial market conditions, general economic conditions and the ratings assigned to the corporation or its affiliates or their debt securities by rating agencies. The corporation has no obligation nor any intention to update publicly or to revise any of the forward-looking information included in the press release after the date thereof, whether as a result of new information, future events or circumstances or otherwise.

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