ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(CCNMatthews - May 1, 2007) - The British Columbia Utilities Commission ("BCUC") has approved the acquisition of all the issued and outstanding shares of Terasen Inc. ("Terasen") by Fortis Inc. (TSX:FTS).
On February 26, 2007, Fortis Inc. entered into an agreement to acquire Terasen from a wholly owned subsidiary of Kinder Morgan, Inc. (NYSE:KMI), a U.S. energy transportation, storage and distribution company based in Houston, Texas, for a purchase price of $3.7 billion, including the assumption of approximately $2.3 billion of debt. Terasen (formerly BC Gas) is a holding company headquartered in Vancouver, British Columbia operating two principal lines of business: natural gas distribution and petroleum transportation. The acquisition does not include the petroleum transportation assets of Kinder Morgan Canada (formerly Terasen Pipelines), which are comprised primarily of refined and crude oil pipelines.
The natural gas distribution business of Terasen, referred to as Terasen Gas, is the third largest gas distribution utility in Canada. Terasen Gas serves approximately 900,000 customers or 95% of natural gas customers in British Columbia. The Company owns and operates 44,100 kilometres of gas distribution pipelines and 4,300 kilometres of gas transmission pipelines. Its service territory includes the populous lower mainland, Vancouver Island, and the southern interior of the province. As of December 31, 2006, Terasen Gas had an aggregate of approximately $3.8 billion of assets, an aggregate rate base approaching $3.0 billion and approximately 1,200 employees.
"BCUC approval of our application is a significant step towards closing the transaction to acquire Terasen," says Stan Marshall, President and Chief Executive Officer, Fortis Inc. "Fortis expects closing of the transaction to occur this quarter."
The remaining significant closing condition is the requirement that Kinder Morgan, Inc. separate its petroleum transportation operations from Terasen Inc., leaving only the natural gas distribution business which is operated by Terasen Gas.
Fortis Inc. is principally a diversified international distribution utility holding company with assets of approximately $5.5 billion and annual revenues of approximately $1.5 billion. Fortis has holdings in regulated electric distribution utilities in Alberta, British Columbia, Newfoundland, Ontario, Prince Edward Island, Belize, Grand Cayman and the Turks and Caicos Islands. It has non-regulated generation operations in Belize, Ontario, Newfoundland, British Columbia and Upper New York State. Fortis also has investments in real estate and hotels through its wholly owned non-utility subsidiary.
The Common Shares; First Preference Shares, Series C; First Preference Shares, Series E; First Preference Shares, Series F and Subscription Receipts of Fortis are traded on the Toronto Stock Exchange under the symbols FTS, FTS.PR.C, FTS.PR.E, FTS.PR.F and FTS.R, respectively. Fortis information can be accessed at www.fortisinc.com or www.sedar.com.
Fortis includes forward-looking statements in this material which reflect management's expectations regarding the Corporation'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 Corporation's management. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking statements. These factors or assumptions are subject to inherent risks and uncertainties surrounding future expectations generally. Such risk factors or assumptions include, but are not limited to, regulation, completion of the acquisition of Terasen Gas, energy prices, general economic conditions, weather, derivatives and hedging, capital resources, loss of service area, licences and permits, environment, insurance, labour relations, human resources and liquidity risk. Fortis 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 the Corporation's continuous disclosure materials filed from time to time with Canadian securities regulatory authorities including those factors described under the heading "Business Risk Management" in the Management Discussion and Analysis for the year ended December 31, 2006 and in the Management Discussion and Analysis for the three months ended March 31, 2007. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
FOR FURTHER INFORMATION PLEASE CONTACT:
Barry V. Perry
Vice President Finance & Chief Financial Officer