Energy Savings Income Fund

Energy Savings Income Fund

March 11, 2005 15:33 ET

Energy Savings Re-enters the Ontario Small Business and Residential Electricity Market


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: ENERGY SAVINGS INCOME FUND

TSX SYMBOL: SIF.UN

MARCH 11, 2005 - 15:33 ET

Energy Savings Re-enters the Ontario Small Business
and Residential Electricity Market

TORONTO, ONTARIO--(CCNMatthews - March 11, 2005) - Energy Savings Income
Fund (TSX:SIF.UN) announced it will re-enter the Ontario small business
and residential electricity markets once the Ministry of Energy
specifies the date upon which new retail contracts will be effective
which is expected to be in April 2005. Today's announcement from the
Ontario Energy Board (OEB) makes it clear that these consumers will pay
a price more reflective of true market rates for their power. While the
price will be set by the OEB annually, the true price of power will be
paid by all users and any price increases will be made up in future
years.

Small consumers have been paying a subsidized capped price since
November 2002. As such, Energy Savings could not offer a competitive
fixed price alternative. Larger consumers have been subject to market
prices and Energy Savings has been actively marketing to these
customers, signing approximately 50,000 residential customer equivalents
("RCEs") over the first nine months of Fiscal 2005.

The result of these changes is a market that will be similar to the
Ontario gas market during the period up until the establishment of
quarterly price adjustments.

The Company expects to have its Ontario agents offering five year fixed
price contracts to all commercial customers beginning in April followed
by residential customers in the near future. Energy Savings currently
has approximately 250 active agents in the province and expects to
increase the size of its sales force based on this announcement.

Chair Rebecca MacDonald stated: "We are very pleased to be back with an
offering to all Ontario electricity users. Small business and
residential customers are our core market. We will offer them the
opportunity to budget predictably and protect themselves from volatility
in electricity prices. This is a good start toward the Province getting
to a competitive and integrated power market. Government needs to ensure
that an active wholesale market develops so that consumers continue to
have choices in how they purchase their electricity."

President Brennan Mulcahy stated: "Our marketing team is very excited
about this opportunity. We had considerable success signing customers
prior to the Eves' Government price cap. The one year smoothed price is
the same pricing regime under which the deregulated Ontario natural gas
market was built. We were very successful marketing gas in that
environment. While it is too early to predict the receptivity of
customers to our new offer, we expect to be in a position to provide
guidance on expected electricity customer additions at our Annual
Meeting in June."

The Fund

Energy Savings' business, which is conducted in Ontario, Manitoba,
Alberta, Quebec, British Columbia and Illinois, involves the sale of
natural gas to residential, small to mid-size commercial and small
industrial customers under long term, irrevocable fixed price contracts.
Energy Savings also supplies electricity to Ontario and Alberta
customers. By fixing the price of natural gas or electricity under its
fixed price contracts for a period of up to five years, Energy Savings'
customers offset their exposure to changes in the price of these
essential commodities. Energy Savings, which commenced business in July
of 1997, derives its margin or gross profit from the difference between
the fixed price at which it is able to sell the commodities to its
customers and the fixed price at which it purchases the matching volumes
from its suppliers.

Forward-Looking Statements

The Fund's press releases may contain forward-looking statements
including statements pertaining to customer revenues and margins,
customer additions and renewals, customer consumption levels,
distributable cash and treatment under governmental regulatory regimes.
These statements are based on current expectations that involve a number
of risks and uncertainties which could cause actual results to differ
from those anticipated. These risks include, but are not limited to,
levels of customer natural gas and electricity consumption, rates of
customer additions and renewals, fluctuations in natural gas and
electricity prices, changes in regulatory regimes and decisions by
regulatory authorities, competition and dependence on certain suppliers.
Additional information on these and other factors that could affect the
Fund's operations, financial results or distribution levels are included
in the Fund's annual information form and other reports on file with
Canadian securities regulatory authorities which can be accessed through
the SEDAR website at www.sedar.com or through the Fund's website at
www.esif.ca

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Energy Savings Income Fund
    Ms. Rebecca MacDonald
    Chair and Chief Executive Officer
    (416) 367-2872
    or
    Energy Savings Income Fund
    Mr. Ken Hartwick C.A.
    Chief Financial Officer
    (905) 795-3557
    www.esif.ca
    The Toronto Stock Exchange has neither approved nor disapproved of the
    contents of this release.