Bangor Hydro suspends payment of common dividends.

BANGOR, Maine--(BUSINESS WIRE)--March 19, 1997--The Board of Directors of Bangor Hydro-Electric Company today did not declare a quarterly dividend on the company's common stock. The Board determined that the payment of common stock dividends is being suspended as a result of current financial pressures.

Regular quarterly dividends on Bangor Hydro's various series of preferred stock weer declared as follows:

  8.76% Preferred Stock                $2.19 per share
  7% Preferred Stock                   $1.75 per share
  4.25% Preferred Stock                $1.06 per share
  4% Preferred Stock                   $1.00 per share

Bangor Hydro cited the ongoing difficulties at the Maine Yankee nuclear generating planta s the primary reason for suspending common dividend payments. Bangor Hydro owns a 7 percent interest in Maine Yankee, which provides almost a quarter of the utility's power supply requirement when the plant is operating. Maine Yankee has experienced a series of problems, and is presently off-line until at least mid-summer. While the plant is out of service, Bangor Hydro must purchase replacement power at market prices, as well as continue to pay it's share of the fixed costs at Maine Yankee.

"We sincerely regret having to omit the payment of common dividends", said Robert S. Briggs, President and CEO. "But, as our stockholders know all too well, we've been dealing with challenging financial pressures for some time now. We have been making good progress, but we really needed Maine Yankee's excellent, low-cost track record to continue. Unfortunately, that's not happening right now." Bangor Hydro cited the lack of adequate earnings, the need to conserve cash and the need to manage the potential for being unable to comply with covenants in loan agreements with its lenders as the primary reasons for omitting the common dividend. The quarterly common dividend payment had previously been reduced, from $.33 to $.18, in the second quarter of 1995, and had been maintained at that level until today's decision.

Bangor Hydro has also sought an increase in its rates as part of its plan to address its financial condition. The utility has not had a rate increase in several years.

Bangor Hydro is an electric utility serving a population of about 195,000 in a service area of about 5,250 square miles in eastern and east central Maine. It is a member of the New England Power Pool, and is interconnected with other New England utilities to the south and with New Brunswick Power to the north. Bangor Hydro is listed on the NYSE under the symbol "BGR".

CONTACT: Bangor Hydro

Frederick S. Samp, 207/941-6653

Mathieu Poulin, 207/941-6626