Horizon Utilities and Guelph Hydro sign Memorandum of Understanding for possible strategic partnership



    HAMILTON/ST. CATHARINES/GUELPH, ON, Aug. 9 /CNW/ - Guelph Hydro Electric
Systems Inc. (GHESI) and Horizon Utilities Corporation, two leading
electricity distribution companies in Ontario, have signed a Memorandum of
Understanding (MOU) to develop a business case for a strategic partnership.
    The business case will establish the terms and conditions that could
result in a formal strategic partnership agreement between the two companies.
The proposed agreement will then undergo an evaluation and approval process by
the respective shareholders and Municipal Councils.
    If agreement is reached by all parties, a single Electricity Distribution
Company will be formed to provide service to approximately 280,000 business
and residential customers in the communities of Hamilton, Guelph and St.
Catharines. Both companies are committed to maintaining their current high
quality delivery of service to customers.
    "Consumers are well aware that they will be impacted by any future energy
decisions that are made regarding electricity in Ontario," said Paul Truex,
Chair of Guelph Hydro Electric Systems Inc.
    "We believe this kind of partnership is the best way to reduce these
impacts for our customers and shareholder. We need to continue to add value to
our communities by creating a stronger, better resourced utility that provides
leadership in energy conservation."
    Art Stokman, President of GHESI, said that the three municipalities would
jointly own any proposed new company.
    "The partnership, if achieved, will result in savings through economies
of scale, competitive distribution rates, and a greater financial ability to
maintain and improve the respective electricity distribution systems," he
said.
    "GHESI and Horizon are both innovative, forward looking and community
focused utilities. Changing regulations and legislation continue to have a
serious impact on the sustainability of many electricity distribution
companies. I believe that if this partnership is achieved, it will further
reinforce the advantages that utility consolidation offers," said Max Cananzi,
President and CEO of Horizon Utilities Corporation.
    "Horizon Utilities and Guelph Hydro Electric Systems Inc. will combine
their best business practices into a single, efficient, electricity
distribution company. We hope that other utilities will recognize the benefits
that we provide to the community and will be interested in joining our
partnership."
    Robert Dolan, Chair of Horizon Utilities Corporation, stated: "The
proposed partnership is an important step by two very well respected
utilities. They are leading the way by being proactive and taking action to
deal with the current and future challenges facing the electricity industry."


    
                                 Fact Sheet

    Horizon Utilities Corporation
    -----------------------------
    BUSINESS:       The third largest municipally owned electricity
                    distribution company in Ontario.

    OWNERS:         Owned by Hamilton Utilities Corporation (78.9 %) and St.
                    Catharines Hydro Inc. (21.1 %).

    MISSION:        Committed to delivering safe, reliable and cost-effective
                    electricity distribution services, providing unparalleled
                    customer value, and helping to create a culture of energy
                    conservation in Ontario.
                    SAFE - 574,002 hours without a lost time incident in
                    2006.
                    RELIABLE - On average, customers who experienced an
                    outage in 2006 were only without power for 39 minutes.
                    COST EFFECTIVE - Provided customers with an average rate
                    decrease of 2.3% in 2006.
                    CUSTOMER VALUE - 84% of customers report being satisfied
                    with services.
                    ENERGY CONSERVATION - Energy conservation efforts saved
                    in excess of 29 million kWh in 2006, enough energy to
                    power 3,300 homes for one year and reduce peak demand by
                    2.25 MW.

    EMPLOYEES:      360 dedicated and highly skilled employees.

    CUSTOMERS:      Provides electricity and related utility services to over
                    231,000 residential and commercial customers in Hamilton
                    and St. Catharines.
                    -  Residential customers = 209,370
                    -  Commercial customers = 22,268
                    -  New residential and commercial customers connected in
                       2006 = 1,814

    CONSUMPTION:    Total electricity consumption by Horizon customers in
                    2006 = 5,5 GWh

    DEMAND:         Peak Load Averages
                    -  Annual daily = 712 MW
                    -  Winter = 829 MW (lights and electric
                       heating)
                    -  Summer = 1,125 MW (air conditioning)

    NETWORK:        Operates out of facilities in Hamilton, St. Catharines,
                    and Stoney Creek.
                    -  Size of service area (Hamilton and St. Catharines)
                       = 426 square kilometres
                    -  Total kilometres of overhead lines =
                       1,525 km
                    -  Total kilometres of underground cable =
                       1,733 km
                    -  Poles = 52,594
                    -  Pole-mounted transformers = 13,935
                    -  Pad-mounted/vault transformers = 9,524
                    -  Meters = 232,000
                    -  Smart meters = 7,300

    HEALTH AND SAFETY:
                    -  Number of hours without a lost time incident
                       = 574,002 in 2006
                    -  Recognized by the Electrical and Utilities Safety
                       Association for our excellent safety record
                    -  Recognized by Hamilton Healthy Living for our efforts
                       to create a healthy work environment
                    -  Achieved Level Two - Healthy Workplace certification
                       from the National Quality Institute in 2006

    ENERGY CONSERVATION:
                    Horizon Utilities Corporation is proud to be a founding
                    member of powerWISE(R), a brand created to promote energy
                    conservation and reduce the demand for electricity in
                    Ontario. powerWISE(R) is a joint initiative of the
                    Ontario Ministry of Energy and six of Ontario's largest
                    electricity distribution companies. For more information,
                    visit: www.powerWISE.ca.

    For more information about Horizon Utilities, visit:
www.horizonutilities.com
    Contact: Sandy Manners, Director of Corporate Communications
    Tel: 905-317-4707 - Email: sandy.manners@horizonutilities.com

    Photos available upon request.

                                                          Updated April 2007


                                 Fact Sheet

    Guelph Hydro Electric Systems Inc.
    ----------------------------------

    BUSINESS:       Municipally owned electricity distribution company in
                    Ontario.

    OWNERS:         Owned by Guelph Hydro Inc. (100.0 %).

    MISSION:        Our employees are dedicated to delivering electricity
                    reliably and safely while enhancing community comfort and
                    business profitability. We are committed to providing
                    value to our customers and shareholder.

                    RELIABLE SUPPLY - On average, customers who experienced
                    an outage in 2006 were only without power for 22 minutes.
                    COST EFFECTIVE - The average distribution rate increase
                    for residential customers in 2006 was 1.24%.
                    CUSTOMER VALUE - 89% of customers report being satisfied
                    with services in 2006.

    EMPLOYEES:      90 dedicated and highly skilled employees.

    CUSTOMERS:      Provides electricity and related utility services to over
                    46,000 residential and commercial customers in Guelph and
                    Rockwood.
                    -  Residential customers = 42,344
                    -  Commercial customers = 4,101
                    -  New residential and commercial customers connected in
                       2006 = 929

    CONSUMPTION:    Total electricity consumption by GHESI customers in 2006
                    = 1.6 GWh

    DEMAND:         Peak Load
                    -  Winter = 249 MW
                    -  Summer = 286 MW

    NETWORK:        Operates out of facilities in Guelph.
                    -  Size of service area (Guelph and Rockwood)
                       = 93 square kilometres
                    -  Total kilometres of overhead lines = 425 km
                    -  Total kilometres of underground cable =
                       577 km
                    -  Poles = 11,500
                    -  Pole-mounted transformers = 1,763
                    -  Pad-mounted/vault transformers = 3,537
                    -  Meters = 46,500
                    -  Smart meters = 250 in pilot project

    HEALTH AND SAFETY:
                    Number of hours without a lost time incident =
                    137,078 in 2006
                    Recognized by the Electrical and Utilities Safety
                    Association for our excellent safety record

    ENERGY CONSERVATION:
                    GHESI's energy conservation efforts saved almost
                    1.4 million kWh in 2006, enough energy to power 160 homes
                    for one year, and reduce peak demand by 540 kW.

                    GHESI's Conservation and Demand Management plan was
                    designed to provide an array of programs over a broad
                    cross-section of its customer base, to reinforce the
                    creation of a "conservation culture" through behavioural
                    change in al its customers. In 2006, GHESI was a key
                    supporter in the development of the City of Guelph's
                    innovative Community Energy Plan (CEP). GHESI and Guelph
                    Hydro Inc. are committed to seeing the CEP succeed to the
                    benefit of Guelph's residents, businesses and
                    environment.

    For more information about Guelph Hydro Electric Systems Inc., visit:
www.guelphhydro.com

    Contact: Art Stokman, President - Tel: 519-837-4715 - Email:
astokman@guelphhydro.com
    




For further information:

For further information: Art Stokman, President, Guelph Hydro Electric
Systems Inc., (519) 837-4715; Max Cananzi, President and CEO, Horizon
Utilities Corporation, (905) 317-4702

Organization Profile

HORIZON UTILITIES CORPORATION

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GUELPH HYDRO ELECTRIC SYSTEMS INC.

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