Bangor Hydro Files Alternative Rate Plan with Maine Public Utilities Commission.

Business Editors & Energy Writers

BANGOR, Maine--(BUSINESS WIRE)--Oct. 18, 2001

Bangor Hydro-Electric Company today announced it has filed a proposal with the Maine Public Utilities Commission (MPUC) for an alternative rate plan (ARP) that would reduce the overall costs for electricity service for most customers by approximately 10% (or about $8 per month) for a typical residential customer assuming the plan is implemented on March 1, 2002. This plan would also provide rate stability for four years.

The ARP would accomplish this cost reduction by combining the expected increases in delivery service rates with reductions in the price of the standard offer service already announced by the MPUC. In addition to delivery service rates, Bangor Hydro's ARP proposal includes incentives to improve the efficiency and the service quality of power delivery services to Bangor Hydro's customers.

"Bangor Hydro's proposed alternative rate plan, together with recent reductions in the price for standard offer service, is intended to provide stability in the overall cost of electricity for four years. This is a critical concern for most of our customers," stated Carroll Lee, President and Chief Operating Officer of Bangor Hydro.

Lee added: "at the end of that time, we expect reductions in our charges for delivery service will be possible since a significant portion of the costs related to our pre-restructuring commitments will have been paid off."

As an alternative to this innovative ARP, Bangor Hydro has also filed notice of a traditional delivery service rate increase to be implemented by October 1, 2002. If pursued by the MPUC, this more conventional approach would result in higher delivery service rates which, when combined with the announced standard price decrease, would result in a reduction in the overall cost for most customers of approximately 8% or $7 per month.

Previously Bangor Hydro had proposed a plan that in addition to delivery service rates would have included the provision of standard offer service by Bangor Hydro for both residential and small and medium business customers - this would have resulted in an overall cost reduction of approximately 8 %. Though the MPUC order rejected Bangor Hydro's plan at the time, it also noted an appreciation of the effort to create an attractive alternative.

Bangor Hydro's last rate increase was 1.4% on June 1, 1999. Subsequently, its rates decreased by 2.1 % on March 1, 2000. Since then, Bangor Hydro's largest customer, Holtra-Chem ceased operations and several of its other large industrial customers have either reduced operations significantly or shut-down.

Bangor Hydro (www.bhe.com) is an electric utility wholly owned by Emera Inc. (EMA-TSE), a diversified energy and services company with 550,000 customers and $Cdn 3.4 billion in assets in northeast North America. Bangor Hydro serves a population of 192,000 in an area encompassing 5,275 square miles in eastern and east coastal Maine. Bangor Hydro is a member of the New England Power Pool and is interconnected with other New England utilities to the south and with the New Brunswick Power Corp. to the north. Visit Bangor Hydro at http://www.bhe.com. and Emera at http://www.emera.com.