Fortis Earns $39.2 Million in First Quarter.

ST. JOHN'S, Newfoundland And Labrador -- Fortis Inc. (TSX:FTS) reported earnings applicable to common shares of $39.2 million for the first quarter of 2005, almost double earnings of $20.3 million for the same quarter last year. Earnings per common share were $1.60, 37.9 per cent higher than earnings per common share of $1.16 for the first quarter last year.

Results this quarter include a $7.9 million after-tax gain resulting from the settlement of contractual matters between FortisOntario and Ontario Power Generation Inc.FortisOntario also signed the Niagara Exchange Agreement which details a transition plan for FortisOntario's water rights on the Niagara River which have been in place for almost 100 years and are scheduled to expire April 30, 2009.

The Corporation's earnings, excluding the impact of the settlement of contractual matters between FortisOntario and Ontario Power Generation Inc., although not a measure under generally accepted accounting principles, would have been $31.3 million in the first quarter, or $1.28 per common share, 10.3 per cent higher than earnings per common share of $1.16 for the first quarter last year. The earnings contributions from FortisAlberta and FortisBC, as well as timing of recognition of earnings at Newfoundland Power, primarily contributed to this increase. The increase in earnings per common share was constrained by lower hydroelectric production in Belize and the dilution created by the 1.74 million common share issuance on March 1, 2005.

"Overall, our Regulated Utilities contributed $36.4 million in earnings for the first quarter," says Stan Marshall, President and Chief Executive Officer, Fortis Inc. "All utilities in this segment delivered solid results."FortisAlberta and FortisBC, which were acquired on May 31, 2004, contributed $16.7 million to earnings this quarter.

Results for the Regulated Utilities segment also include $0.7 million in earnings associated with recovery of expenses relating to damages to Caribbean Utilities in Grand Cayman from Hurricane Ivan. "Overall, the earnings from Caribbean Utilities, inclusive of business interruption insurance, are returning to normal as the recovery efforts from Hurricane Ivan continue," says Marshall. More than 140 Fortis employees became directly involved in helping to restore electricity service to Caribbean Utilities' 21,000 customers in the aftermath of Hurricane Ivan.Caribbean Utilities reports that service has been restored to approximately 84 per cent of its customers and remaining customers will be connected as soon as they have re-established facilities to receive service.

The decrease in earnings of the Corporation's Non-regulated Generation segment, excluding the impact of the OPGI Settlement, was mainly due to the decline in hydroelectric production in Belize as a result of lower rainfall levels. The decrease was partially mitigated by higher hydroelectric production in central Newfoundland.

Fortis Properties' earnings grew to $1.5 million in the first quarter, up from $1.0 million in the same quarter last year.In February 2005, the Company acquired 3 Greenwood Inn-branded hotels in Edmonton, Calgary and Winnipeg for approximately $62.6 million. "Fortis Properties achieved a milestone this quarter with its expansion into western Canada," says Marshall."Consistent with the vision of Fortis and our long-term growth strategy, this investment is expected to be accretive to Fortis shareholders immediately. Over the longer term, it is expected to provide returns above those generated by our utility investments," he adds.

On March 1, 2005, Fortis issued 1,740,000 common shares of the Corporation for $74.65 per common share.The offering resulted in gross proceeds of $129.9 million which are being used to repay outstanding indebtedness and for general corporate purposes, including utility-based capital expenditures.

During the first quarter, consolidated utility capital expenditures reached $91 million. These expenditures were primarily focused on electrical infrastructure and were driven by FortisAlberta and FortisBC.The Corporation expects to spend more than $400 million in 2005 on its consolidated utility capital expenditure program.

"As we move through 2005, we continue to remain focused on serving our customers well while growing our business profitably and delivering good returns to our shareholders," concludes Marshall.

Fortis Inc.

Interim Management Discussion and Analysis

For the three months ended March 31, 2005

Dated May 5, 2005

The following analysis should be read in conjunction with the Fortis Inc. ("Fortis" or the "Corporation") interim unaudited consolidated financial statements for the three months ended March 31, 2005 and the Management Discussion and Analysis and audited consolidated financial statements for the year ended December 31, 2004 included in the Corporation's 2004 Annual Report. This material has been prepared in accordance with National Instrument 51-102 relating to Management Discussion and Analysis.

Fortis includes forward-looking statements in this material.By their very nature, forward-looking statements are based on underlying assumptions and are subject to inherent risks and uncertainties surrounding future expectations generally.Such events include, but are not limited to, general economic, market and business conditions, regulatory developments, weather and competition. Fortis cautions readers that should certain events or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected.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. 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.

Financial information in this release has been prepared in accordance with generally accepted accounting principles ("Canadian GAAP") and is presented in Canadian dollars unless otherwise specified.

--------------------------------------------------------------------
                        Financial Highlights (Unaudited)
                           Quarter Ended March 31st
--------------------------------------------------------------------
($millions, except per
 common share amounts)                            2005          2004
--------------------------------------------------------------------
Revenue and equity income                        381.8         250.8
--------------------------------------------------------------------
Cash flow from operations                         79.3          21.8
--------------------------------------------------------------------
Net earnings applicable to common shares          39.2          20.3
--------------------------------------------------------------------
Basic earnings per common share ($)               1.60          1.16
--------------------------------------------------------------------
Diluted earnings per common share ($)             1.45          1.12
--------------------------------------------------------------------

--------------------------------------------------------------------
                                 Segmented Net Earnings Contribution
--------------------------------------------------------------------
                                                  2005          2004
--------------------------------------------------------------------
Regulated Utilities - Canadian (1)                32.9          15.3
--------------------------------------------------------------------
Regulated Utilities - Caribbean (2)                3.5           3.0
--------------------------------------------------------------------
Non-regulated - Fortis Generation (3)             10.0           2.9
--------------------------------------------------------------------
Non-regulated - Fortis Properties                  1.5           1.0
--------------------------------------------------------------------
Corporate                                         (8.7)         (1.9)
--------------------------------------------------------------------
Net earnings applicable to common shares          39.2          20.3
--------------------------------------------------------------------

(1) Includes the operations of Newfoundland Power, Maritime Electric,
    FortisOntario (comprised of Canadian Niagara Power and Cornwall
    Electric), FortisAlberta and FortisBC.

(2) Includes the operations of Belize Electricity and the
    Corporation's 37.3 per cent equity investment in Caribbean
    Utilities Company, Ltd.
(3) Includes the operations of non-regulated generating assets in
    British Columbia, Ontario, central Newfoundland, Upper New York
    State and Belize.
--------------------------------------------------------------------

Net earnings for the first quarter were $39.2 million, or $1.60 per common share compared to $20.3 million, or $1.16 per common share in the first quarter of 2004.In the first quarter, Fortis reported a $7.9 million after-tax gain resulting from the settlement of contractual matters ("OPGI Settlement") between FortisOntario and Ontario Power Generation Inc. ("OPGI"). FortisOntario also signed the Niagara Exchange Agreement ("NEA") which assigns FortisOntario's water rights on the Niagara River to OPGI and facilitates the irrevocable exchange of 75 megawatts ("MW") of wholesale electric power supply to FortisOntario from OPGI until April 30, 2009 in exchange for FortisOntario's agreement not to seek renewal of the water entitlement at that time.

The Corporation's earnings excluding the impact of the OPGI Settlement, although not a measure under Canadian GAAP, would have been $31.3 million in the first quarter, or $1.28 per common share, 10.3 per cent higher than earnings per common share of $1.16 last year. Although the Corporation believes that it is useful supplemental information, readers should be cautioned that this information should not be confused with or used as an alternative for net earnings determined in accordance with Canadian GAAP.

The earnings contributions from FortisAlberta and FortisBC, as well as timing of recognition of earnings at Newfoundland Power, primarily contributed to this increase. Fortis also reported $0.7 million in earnings related to the recovery of hurricane-related expenses, associated with damages to Caribbean Utilities in Grand Cayman from Hurricane Ivan. Fortis Properties reported improved earnings over the same quarter last year. The increase in earnings per common share was constrained by lower hydroelectric production in Belize and the dilution created by the common share issuance on March 1, 2005.

REGULATED UTILITIES - CANADIAN(1)

--------------------------------------------------------------------
                   Regulated Utilities - Canadian
                  Financial Highlights (Unaudited)
                      Quarter Ended March 31st
--------------------------------------------------------------------
                                                       Earnings
--------------------------------------------------------------------
($millions)                                       2005          2004
--------------------------------------------------------------------
Newfoundland Power                                13.0          12.0
--------------------------------------------------------------------
Maritime Electric                                  2.1           2.0
--------------------------------------------------------------------
FortisOntario                                      1.1           1.3
--------------------------------------------------------------------
FortisAlberta(1)                                   7.8             -
--------------------------------------------------------------------
FortisBC(1)                                        8.9             -
--------------------------------------------------------------------
Earnings                                          32.9          15.3
--------------------------------------------------------------------

Earnings from Regulated Utilities in Canada were $32.9 million for
the first quarter compared to $15.3 million for the same quarter last
year.  The increase in quarterly earnings from Regulated Utilities in
Canada related to the acquisition of the utilities in western Canada
on May 31, 2004 and timing of recognition of earnings at Newfoundland
Power.


Newfoundland Power

--------------------------------------------------------------------
                               Newfoundland Power
                       Financial Highlights (Unaudited)
                             Quarter Ended March 31st
--------------------------------------------------------------------
                                                  2005          2004
--------------------------------------------------------------------
Electricity Sales (GWh)                          1,700         1,664
--------------------------------------------------------------------
($millions)
--------------------------------------------------------------------
Revenue                                          135.4         126.1
--------------------------------------------------------------------
Energy Supply Costs                               83.1          76.8
--------------------------------------------------------------------
Operating Expenses                                14.2          14.0
--------------------------------------------------------------------
Amortization                                      10.6           9.4

--------------------------------------------------------------------
Finance Charges                                    7.7           7.6
--------------------------------------------------------------------
Corporate Taxes                                    6.7           6.2
--------------------------------------------------------------------
Non-controlling Interest                           0.1           0.1
--------------------------------------------------------------------
Earnings                                          13.0          12.0
--------------------------------------------------------------------

(1)  Regulated Utilities in Canada include the operations of
     Newfoundland Power, Maritime Electric, FortisOntario (comprised
     of Canadian Niagara Power and Cornwall Electric), FortisAlberta
     and FortisBC. On May 31, 2004, Fortis completed the transaction
     to acquire Aquila, Inc.'s 2 utilities in western Canada (renamed
     FortisAlberta and FortisBC). Financial results for FortisAlberta
     and FortisBC are since June 1, 2004 only.

Newfoundland Power's earnings for the first quarter were $13.0 compared to $12.0 million for the same quarter last year. Effective January 1, 2005, the introduction of a new purchased power rate structure changed the basis upon which Newfoundland and Labrador Hydro ("Newfoundland Hydro") charges Newfoundland Power for purchased power.Earnings for the quarter were approximately $1.2 million higher compared to what earnings would have been under the prior rate structure.The $1.2 million increase in earnings, which represents the net after-tax impact of lower energy supply costs and amortization expense, is expected to fully reverse in the remainder of 2005 and result in lower earnings in the second and third quarters relative to the same periods in 2004.Had the prior purchase power rate structure been utilized in the current quarter, earnings applicable to common shares would have been $11.8 million compared to $12.0 million in the same quarter of 2004.

In addition to the change in the purchased power rate structure, increased electricity sales and revenue from pole attachments contributed to

higher earnings for the quarter which were more than offset by a 0.5 per cent rate decrease effective January 1, 2005 and increased amortization expense.

Electricity sales for the first quarter increased to 1,700 gigawatt hours ("GWh") from 1,664 GWh for the same quarter last year. Residential sales increased 2.2 per cent and commercial sales increased 1.9 per cent compared to the same quarter last year. The increase in residential electricity sales was primarily due to higher average usage levels and an increase in the number of customers. The increase in commercial sales was attributable to growth in the service sector of the economy and activity related to the White Rose offshore oil project.

Revenue for the first quarter was $135.4 million compared to $126.1 million for the same quarter last year. Effective July 1, 2004, electricity rates charged to customers increased by 5.4 per cent as a result of the flow-through of a 9.3 per cent increase in the rate charged by Newfoundland Hydro for purchased power.Both revenues and purchased power cost increased approximately $7.2 million as a result of this change with no earnings impact.

In addition to the $7.2 million impact noted above, increased electricity sales and pole attachment revenue contributed approximately $2.6 million and $0.2 million, respectively, to revenue growth.Partially offsetting this revenue growth was a decrease of $0.7 million due to a 0.5 per cent reduction in customer electricity rates, effective January 1, 2005.This rate reduction resulted from the operation of the automatic adjustment formula, which reduced Newfoundland Power's allowed rate of return on equity for the purpose of setting rates from 9.75 per cent in 2004 to 9.24 per cent in 2005.

Energy supply costs for the first quarter were $83.1 million compared to $76.8 million for the same quarter last year.In addition to the $7.2 million impact noted above, energy supply costs increased primarily as a result of increased electricity sales offset by a $2.3 million reduction associated with the change to the new purchased power rate structure.The reduction associated with the new purchased power rate structure is expected to fully reverse in 2005, resulting in higher purchased power costs in the second and third quarters relative to the same periods in 2004.

The new purchased power rate structure was the result of an order of the Newfoundland and Labrador Board of Commissioners of Public Utilities ("PUB") in 2004 and was designed to provide an incentive to Newfoundland Power to promote conservation and demand management and to reduce long-term electricity system costs.Approximately one quarter of annual purchased power costs are now incurred as a fixed charge recognized evenly throughout the year, whereas purchased power costs were previously entirely variable, based on the amount of electricity used by Newfoundland Power's customers.The change in the purchased power rate structure results in a portion of purchased power being incurred as a fixed charge based on maximum demand for the previous winter season.

Operating expenses for the first quarter increased $0.2 million over the same quarter last year. Continued focus on cost management and control has partially offset normal wage and inflationary  increases. During the quarter, 75 employees retired under a voluntary Early Retirement Program ("ERP").Pension costs of $10.8 million and retirement allowances of $1.7 million resulting from the ERP are being amortized over 10 years and 24 months, respectively, beginning April 2005.This accounting treatment was approved by the PUB in 2004.

Amortization for the first quarter increased $1.2 million over the same quarter last year primarily as a result of differences in timing of expense recognition. Annual amortization of capital assets  is allocated over the 4 quarters based on expected net margin. Changes in net margin as a result of electricity sales growth and the new purchased power rate structure resulted in a $0.8 million increase and amortization expense is expected to fully reverse in 2005, resulting in decreased amortization in later quarters.

Maritime Electric

--------------------------------------------------------------------
                                 Maritime Electric
                       Financial Highlights (Unaudited)
                             Quarter Ended March 31st
--------------------------------------------------------------------
                                                  2005          2004
--------------------------------------------------------------------
Electricity Sales (GWh)                            256           256
--------------------------------------------------------------------
($millions)
--------------------------------------------------------------------
Revenue                                           29.3          29.5
--------------------------------------------------------------------
Energy Supply Costs                               18.2          18.6
--------------------------------------------------------------------
Operating Expenses                                 3.0           3.0
--------------------------------------------------------------------
Amortization                                       2.4           2.3
--------------------------------------------------------------------
Finance Charges                                    2.2           2.2
--------------------------------------------------------------------
Corporate Taxes                                    1.4           1.4
--------------------------------------------------------------------
Earnings                                           2.1           2.0
--------------------------------------------------------------------

Maritime Electric's earnings for the first quarter were $2.1 million, comparable to the same quarter last year.

Electricity sales for the first quarter were 256 GWh, consistent with the same quarter last year.Residential sales were down 0.4 per cent while commercial sales increased 0.3 per cent compared to the same quarter last year.

Revenue for the first quarter was $29.3 million compared to $29.5 million for the same quarter last year.The decrease in revenue was associated with increased amortization of recoverable costs against revenue as permitted in the interim Order issued by the Island Regulatory and Appeals Commission on January 6, 2005. The interim Order allows Maritime Electric to establish an energy cost adjustment mechanism with application to the period commencing January 1, 2004 and to commence amortization of the $20.8 million in recoverable costs to December 31, 2003 with $1.5 million amortized in 2004 and a further $2.5 million to be amortized in 2005.

Energy supply costs were $18.2 million in the first quarter, down $0.4 million over the same quarter last year.The decrease in energy supply costs was a result of the expiration of the Emera contract, the avoidance of the use of on-Island peaking capacity and lower-than-anticipated curtailable energy costs compared to the same quarter last year.In the first quarter of 2005, Maritime Electric purchased the majority of its energy from New Brunswick Power Corporation ("NB Power") through several energy purchase agreements.

Maritime Electric is currently in the construction phase for a new $35 million 50-MW generating facility on Prince Edward Island. This facility, which can operate on light oil or natural gas, will address submarine cable loading issues and will reduce the Company's reliance on imported electricity.The targeted in-service date is late 2005.

The Government of Prince Edward Island changed its electricity legislation in 2003 which resulted in a reversion to traditional cost of service regulation from price cap regulation, effective January 1, 2004. Interim rates became effective January 1, 2004. Maritime Electric filed a General Rate Application ("GRA") in April 2004 requesting a 2 per cent increase in basic rates effective July 1, 2005 and the establishment of an appropriate capital structure and return on equity. Maritime Electric expects to receive a decision on its GRA in the second quarter of 2005.

FortisOntario

--------------------------------------------------------------------
                                 FortisOntario
                       Financial Highlights (Unaudited)
                             Quarter Ended March 31st
--------------------------------------------------------------------
                                                  2005          2004
--------------------------------------------------------------------
Electricity Sales (GWh)                            331           348
--------------------------------------------------------------------
($millions)
--------------------------------------------------------------------
Revenue                                           38.2          34.4
--------------------------------------------------------------------
Energy Supply Costs                               30.6          26.7
--------------------------------------------------------------------
Operating Expenses                                 3.1           3.1
--------------------------------------------------------------------
Amortization                                       1.3           1.2
--------------------------------------------------------------------
Finance Charges                                    1.3           1.3
--------------------------------------------------------------------
Corporate Taxes                                    0.8           0.8
--------------------------------------------------------------------
Earnings                                           1.1           1.3
--------------------------------------------------------------------

FortisOntario's earnings for the first quarter were $1.1 million compared to $1.3 million for the same quarter last year. The decrease in earnings was primarily attributable to lower electricity sales. Electricity sales for the first quarter were 331 GWh compared to 348 GWh for the same quarter last year.The decrease primarily related to lower average customer usage compared to the same quarter last year.

Revenue for the first quarter was $38.2 million compared to $34.4 million for the same quarter last year. The decline in electricity sales was more than offset by increases in Cornwall Electric rates effective July 2004 and the change in the cost of power component billed to Canadian Niagara Power's fixed-price customers effective March 1, 2004. The cost of power component changed from a fixed price of 4.3 cents per kilowatt hour ("kWh") to a two-tier pricing regime of 4.7 cents per kWh for the first 750 kWh and 5.5 cents per kWh for the balance. This change increased both revenue and energy supply costs; however, it did not impact earnings.

On December 9, 2002, the Government of Ontario enacted Bill 210, the Electricity Pricing, Conservation and Supply Act, 2002, which implemented a freeze on transmission and distribution rate increases until May 1, 2006. FortisOntario expects to file a general rate application in 2005 to set rates for 2006.

FortisAlberta(2)

--------------------------------------------------------------------
                              FortisAlberta
                    Financial Highlights (Unaudited)
                          Quarter Ended March 31st
--------------------------------------------------------------------
                                                  2005          2004
--------------------------------------------------------------------
Electricity Sales (GWh)                          3,685             -
--------------------------------------------------------------------
($millions)
--------------------------------------------------------------------
Revenue                                           58.6             -
--------------------------------------------------------------------
Operating Expenses                                26.9             -
--------------------------------------------------------------------
Amortization                                      13.9             -
--------------------------------------------------------------------
Finance Charges                                    6.0             -
--------------------------------------------------------------------
Corporate Taxes                                    4.0             -
--------------------------------------------------------------------
Earnings                                           7.8             -
--------------------------------------------------------------------

(2) On May 31, 2004, Fortis completed the transaction to acquire
   Aquila, Inc.'s 2 utilities in western Canada (renamed
   FortisAlberta and FortisBC). Financial results for FortisAlberta
   and FortisBC are since June 1, 2004 only.

On May 31, 2004, Fortis, through a wholly owned subsidiary, acquired all of the issued and outstanding shares of Aquila Networks Canada (Alberta) Ltd. (renamed "FortisAlberta").FortisAlberta owns and operates the electricity distribution system in a substantial portion of southern and central Alberta and distributes electricity to over 400,000 customers using approximately 103,000 kilometers of power lines. FortisAlberta is regulated by the Alberta Energy and Utilities Board ("AEUB") under traditional cost of service regulation.

While the financial results of Fortis include the financial results of FortisAlberta from the date of acquisition only, certain of FortisAlberta's comparative financial data for the quarter ended March 31, 2004 is provided below.

FortisAlberta's earnings for the first quarter were $7.8 million compared to $8.3 million for the same quarter last year. Higher operating and amortization costs were partially offset by lower finance charges. Finance charges for the first quarter were lower than the same quarter last year due to the repayment of higher cost loans upon close of the acquisition. These loans were replaced with lower cost public debt. Concurrent with the Company's purchase by Fortis on May 31, 2004, FortisAlberta borrowed $393 million on a short-term basis from a syndicate of Canadian chartered banks.These funds were used to repay amounts owed to the Company's former parent. The interest rate on the new debt was substantially less than the interest rate paid by FortisAlberta on the debt owed to its former parent.On October 25, 2004, FortisAlberta closed its $400 million public debenture offering equally divided between 5.33 per cent Senior Unsecured Debentures due October 31, 2014 and 6.22 per cent Senior Unsecured Debentures due October 31, 2034. The proceeds from this offering were used to repay FortisAlberta's short-term debt  previously noted.

On April 13, 2005, FortisAlberta filed an application with the AEUB to approve a Negotiated Settlement Agreement ("Settlement") dealing with all aspects of its 2005 Distribution Access Tariff Application ("Application"). If the Settlement is approved by the AEUB, there will be no need for a full-scale hearing process. The Settlement calls for a 2005 distribution revenue requirement of $215.4 million which translates into a 2.1 percent increase on base rates for 2005. In reaching this Settlement, FortisAlberta has agreed to a level of operating expense of $101.0 million and capital expenditures of $134.3 million. The AEUB approval is expected by the end of the second quarter of 2005, provided there are no material objections to the Application.

FortisBC(3)

--------------------------------------------------------------------
                                    FortisBC
                      Financial Highlights (Unaudited)
                         Quarter Ended March 31st
--------------------------------------------------------------------
                                                  2005          2004
--------------------------------------------------------------------
Electricity Sales (GWh)                            832             -
--------------------------------------------------------------------
($millions)
--------------------------------------------------------------------
Revenue                                           55.4             -
--------------------------------------------------------------------
Energy Supply Costs                               18.6             -
--------------------------------------------------------------------
Operating Expenses                                16.1             -
--------------------------------------------------------------------
Amortization                                       4.6             -
--------------------------------------------------------------------
Finance Charges                                    4.5             -
--------------------------------------------------------------------
Corporate Taxes                                    2.7             -
--------------------------------------------------------------------
Earnings                                           8.9             -
--------------------------------------------------------------------

(3)  On May 31, 2004, Fortis completed the transaction to acquire
     Aquila, Inc.'s 2 utilities in western Canada (renamed
     FortisAlberta and FortisBC).   Financial results for

     FortisAlberta and FortisBC are since June 1, 2004 only.

On May 31, 2004, Fortis, through a wholly owned subsidiary, acquired all of the issued and outstanding shares of Aquila Networks Canada (British Columbia) Ltd. (renamed "FortisBC").FortisBC is an integrated utility operating in the southern interior of British Columbia, serving directly and indirectly over 140,000 customers. FortisBC is regulated by the British Columbia Utilities Commission ("BCUC").

While the financial results of Fortis include the financial results of FortisBC from the date of acquisition only, certain of FortisBC's comparative financial data for the quarter ended March 31, 2004 is provided below.

Earnings for the first quarter were $8.9 million compared to $7.6 million for the same quarter last year. The increase in earnings primarily related to higher electricity revenue and lower finance charges, partially offset by increased operating and amortization expenses compared to the same quarter last year. Higher electricity revenue for the first quarter resulted from increased heating loads caused by cooler weather, customer growth of 3 per cent attributable to continued population growth in the Okanagan area and an interim rate increase of 3.7 per cent that was granted by the BCUC effective January 1, 2005.

Finance charges were lower than the same quarter last year despite increased borrowings in the first quarter 2005 to finance the Company's significant capital expenditure program.The reduction in finance charges was due to lower cost public debt.In late 2004, FortisBC issued $140 million of public debentures at an interest rate of 5.48 per cent.This debt primarily replaced debt owed to the previous shareholder which bore interest at a significantly higher interest rate.

FortisBC's revenue and rates are based on traditional cost of service regulation.However, the Company is also subject to a performance-based rate mechanism that is used in establishing annual rate adjustments. On April 26, 2004, the BCUC approved a 4.3 per cent rate increase, effective May 1, 2004. An interim rate increase of 3.6 per cent commenced on January 1, 2004. In November 2004, the Company applied to the BCUC for a 4.4 per cent rate increase effective January 1, 2005.An interim rate increase of 3.7 per cent was granted by the BCUC effective January 1, 2005. The Company has filed a revised application based on actual financial results for 2004. The revised application requests a rate increase of 4.1 per cent effective January 1, 2005.A hearing on the Company's application has been completed and a decision is expected during the second quarter of 2005.

REGULATED UTILITIES - CARIBBEAN(4)

--------------------------------------------------------------------
                      Regulated Utilities - Caribbean
                      Financial Highlights (Unaudited)
                          Quarter Ended March 31st
--------------------------------------------------------------------
                                                  2005          2004
--------------------------------------------------------------------
Average US Exchange Rate                          1.23          1.32
--------------------------------------------------------------------
($millions)
--------------------------------------------------------------------
Belize Electricity                                 1.0           1.1
--------------------------------------------------------------------
Caribbean Utilities - Equity Income                2.5           1.9
--------------------------------------------------------------------
Earnings                                           3.5           3.0
--------------------------------------------------------------------

For the first quarter of 2005, Regulated Utilities - Caribbean
reported earnings of $3.5 million compared to $3.0 million for the
same quarter last year.  The slight decrease in earnings from Belize
Electricity was offset by higher equity income from Caribbean
Utilities. The increase in equity income from Caribbean Utilities was
primarily related to the recovery of hurricane-related costs.
Overall, the earnings from Caribbean Utilities, inclusive of business
interruption insurance, are returning to normal as the recovery
efforts from Hurricane Ivan continue. Both the earnings from Belize
Electricity and Caribbean Utilities were also impacted by lower
foreign exchange rates compared to the same quarter last year.

Belize Electricity

--------------------------------------------------------------------
                               Belize Electricity
                       Financial Highlights (Unaudited)
                            Quarter Ended March 31st
                                                  2005          2004
--------------------------------------------------------------------
Electricity Sales (GWh)                             76            72
--------------------------------------------------------------------
($millions)
--------------------------------------------------------------------
Revenue                                           15.4          15.9
--------------------------------------------------------------------
Energy Supply Costs                                8.1           8.3
--------------------------------------------------------------------
Operating Expenses                                 2.8           3.0
--------------------------------------------------------------------
Amortization                                       1.6           1.6
--------------------------------------------------------------------
Finance Charges                                    1.4           1.4
--------------------------------------------------------------------
Foreign Exchange Gain                             (0.2)         (0.2)
--------------------------------------------------------------------
Corporate Taxes and Non-controlling Interest       0.7           0.7
--------------------------------------------------------------------
Earnings                                           1.0           1.1
--------------------------------------------------------------------

(4)  Regulated Utilities in the Caribbean include the operations of
     Belize Electricity and the Corporation's 37.3 per cent equity
     investment in Caribbean Utilities Company, Ltd.

Belize Electricity's earnings contribution for the first quarter was $1.0 million (BZ$1.5 million) compared to $1.1 million (BZ$1.7 million) for the same quarter last year. Excluding foreign exchange impacts, the decrease in quarterly earnings was primarily related to higher finance charges and amortization partially mitigated by higher electricity sales.

Electricity sales for the first quarter were 76 GWh, 5.6 per cent higher than the same quarter last year.The increased electricity sales in both the residential and commercial segments were driven by economic growth.

Revenue for the first quarter was $15.4 million (BZ$25.2 million) compared to $15.9 million (BZ$24.2 million) for the same quarter last year.Excluding foreign exchange impacts, revenue increased 4.1 per cent compared to the same quarter last year. The increase related to higher electricity sales and increased pole rental income, partially offset by a final reduction in electricity rates of BZ$0.01 per kWh implemented in July 2004. Rates have been reduced by BZ$0.05 per kWh, equal to the commitment provided by Fortis when it acquired Belize Electricity in October 1999.

Energy supply costs for the first quarter were $8.1 million (BZ$13.3 million) compared to $8.3 million (BZ$12.6 million) for the same quarter last year. The increase in energy supply costs was associated with higher electricity sales.

Operating expenses for the first quarter were $2.8 million (BZ$4.5 million) compared to $3.0 million (BZ$4.6 million) for the same quarter last year. Operating expenses are slightly lower compared to the same quarter last year reflecting management's focus on improving operating efficiencies and productivity.

Amortization expense for the first quarter was $1.6 million (BZ$2.7 million) compared $1.6 million (BZ$2.5 million) for the same quarter last year. Finance charges for the first quarter were $1.4 million (BZ$2.4 million) compared $1.4 million (BZ$2.1 million) for the same quarter last year. Excluding foreign exchange impacts, the increase in amortization expense and finance charges directly related to continued investments in Belize Electricity's capital program.

Belize Electricity is regulated by the Public Utilities Commission ("PUC") and electricity rates in Belize are comprised of 2 components. The first, Value Added Delivery, ("VAD"), is subject to price cap and the second is the cost of fuel and purchased power, including the variable cost of generation, which is a flow-through in customer rates. Belize Electricity filed its first full Tariff Application on March 2, 2005 to establish a new 4-year VAD tariff setting arrangement. On April 18, 2005, the PUC delivered its initial Decision on Tariff Application with respect to approval of regulated values, tariffs and other fees for the tariff period, July 1, 2005 through June 30, 2009.

Belize Electricity's Tariff Application proposed an increase in rates of approximately 14 per cent, inclusive of recovery of its rate stabilization account.This would result in an increase in rates in the first year of the tariff period from BZ$0.349 per kWh to BZ$0.40 per kWh.In its initial Decision, the PUC has approved an increase of 8.6 per cent resulting in rates of BZ$0.379 per kWh. Belize Electricity has filed a written objection on the initial Decision with the PUC which will initiate the PUC to appoint an independent consultant to review the initial Decision.

Caribbean Utilities

--------------------------------------------------------------------
                             Caribbean Utilities
                      Financial Highlights (Unaudited)
                          Quarter Ended March 31st
--------------------------------------------------------------------
($ millions)                                      2005          2004
--------------------------------------------------------------------
Equity Income                                      2.5           1.9
--------------------------------------------------------------------

Fortis accounts for its 37.3 per cent interest in Caribbean Utilities on an equity basis. Equity earnings are recorded on a lag basis and, therefore, the quarterly earnings noted above represent the Corporation's share of Caribbean Utilities' earnings for its third quarter ended January 31, 2005.

This quarter was Caribbean Utilities' first quarter post-Hurricane Ivan and the earnings improvement over the same quarter last year was primarily due to the recovery of fuel costs that were expensed following the hurricane. Caribbean Utilities and the Cayman Islands are continuing to recover from the impact of Hurricane Ivan. Approximately 3,400 customers, or 16 per cent of pre-Ivan customers, remain without electricity. These customers have not yet re-established facilities to receive such service. Approximately 88 MW of generation capacity have been recovered and another 7.5 MW will become available in May 2005, which will bring total generating capacity to 77 per cent of pre-Ivan capacity.

The economy on Grand Cayman is starting to recover from Hurricane Ivan. Although Caribbean Utilities has business interruption insurance, with a 24-month indemnity period, its long-term recovery is intrinsically tied to the recovery of the economy.

Caribbean Utilities has made a claim for its business interruption loss. Typically, the ultimate recovery under a business interruption policy is judgmental and subject to negotiations between the insured and the insurance company. Caribbean Utilities filed a claim for a business interruption loss of US$5 million for the third quarter and, under the terms of an interim agreement with the insurance adjustors and pending the finalization of the business interruption calculation methodology, the adjustors have accepted that the claim for the third quarter will not be less than US$4 million. Although Caribbean Utilities' claim of US$5 million of business interruption loss for the third quarter still stands, given the subjectivity as noted above, only $4 million has been recognized in the third quarter financial report of Caribbean Utilities.

Caribbean Utilities submitted a proposal to the Cayman Islands Government in July 2002 to extend its current License and replace the 15 per cent return on rate base mechanism for adjusting consumer rates with a price cap mechanism. The non-binding tentative agreement signed by Caribbean Utilities and the Government in June 2004 expired following Hurricane Ivan.The Government recently passed a new Electricity Regulatory Authority Bill (the "ERA Bill") which purports to establish a new regulatory and licensing regime for the electricity industry in the Cayman Islands. The Company is currently assessing the ERA Bill to determine its potential impact on Caribbean Utilities' contractual rights under its existing Licence with the Cayman Islands Government. The current Licence is still in effect and is scheduled to expire in January 2011.

NON-REGULATED - FORTIS GENERATION(5)

--------------------------------------------------------------------
                     Non-Regulated - Fortis Generation
                      Financial Highlights (Unaudited)
                           Quarter Ended March 31st
--------------------------------------------------------------------
Energy Sales (GWh)                                2005          2004
--------------------------------------------------------------------
Central Newfoundland                                35            19
--------------------------------------------------------------------
Ontario                                            184           186
--------------------------------------------------------------------
Belize                                               7            15
--------------------------------------------------------------------
British Columbia(5)                                  5             -
--------------------------------------------------------------------
Upper New York State                                17            15
--------------------------------------------------------------------
Total                                              248           235
--------------------------------------------------------------------

--------------------------------------------------------------------
($millions)                                       2005          2004
--------------------------------------------------------------------
Revenue                                           17.0          16.7

--------------------------------------------------------------------
Energy Supply Costs                                1.9           1.7

--------------------------------------------------------------------
Operating Expenses                                 4.8           4.2
--------------------------------------------------------------------
Amortization                                       2.6           2.5

--------------------------------------------------------------------
Finance Charges                                    3.9           3.8
--------------------------------------------------------------------
Gain on settlement of contractual matters        (10.0)            -
--------------------------------------------------------------------
Corporate Taxes                                    3.5           1.9
--------------------------------------------------------------------
Non-controlling Interest                           0.3          (0.3)
--------------------------------------------------------------------
Earnings                                          10.0           2.9

--------------------------------------------------------------------

(5)  Fortis Generation includes the operations of non-regulated
     generating assets in central Newfoundland, Ontario, British
     Columbia, Belize and Upper New York State. The British Columbia
     energy sales represent energy sales from the 16-MW run-of-river
     Walden hydroelectric power plant, which was acquired on May 31,
     2004 as part of FortisBC.

The earnings contribution from the Corporation's Non-regulated Generation segment for the first quarter was $10 million compared to $2.9 million for the same quarter last year. The increase in quarterly earnings was primarily due to a $7.9 million after-tax gain resulting from the OPGI Settlement between FortisOntario and OPGI. FortisOntario also signed the NEA which assigns FortisOntario's water rights on the Niagara River to OPGI and facilitates the irrevocable exchange of 75 MW of wholesale electric power supply to FortisOntario from OPGI until April 30, 2009 in exchange for FortisOntario's agreement not to seek renewal of the water entitlement at that time.

Excluding the impact of the OPGI Settlement, the earnings contribution from the Non-regulated Generation segment for the first quarter decreased by approximately $0.8 million. The decrease in earnings was primarily associated with lower hydroelectric production in Belize as a result of lower rainfall levels partially offset by higher hydroelectric production in central Newfoundland.

Generation revenue for the first quarter was $17 million compared to $16.7 million for the same quarter last year. The primary reason for the increase related to the increased production in central Newfoundland, partially offset by lower rainfall levels in Belize. The average market price in Ontario was $55.99 per megawatt hour, comparable to the same quarter last year.

Operating expenses for the first quarter were $4.8 million compared to $4.2 million last year. The increase related to operations of the 16-MW run-of-river Walden hydroelectric power  plant, which was acquired on May 31, 2004 as part of FortisBC, as well as increased business development costs in Ontario.

The Chalillo Project in Belize commenced construction in May 2003.The US$30 million development is an upstream storage and hydroelectric generating facility that is expected to increase average annual energy production from the Macal River by approximately 90 GWh. Construction of the dam is scheduled for completion by the end of June 2005 with the 7-MW unit at the dam site scheduled for completion by the end of 2005.

Operations in Upper New York State include the operations of the Dolgeville unit which went out of service late January 2005 as a result of flooding. The Dolgeville unit is expected to be operational late 2005 and operations are expected to be covered under business interruption insurance until that time.

NON-REGULATED - FORTIS PROPERTIES

--------------------------------------------------------------------
                    Non-Regulated - Fortis Properties
                     Financial Highlights (Unaudited)
                         Quarter Ended March 31st
--------------------------------------------------------------------
($millions)                                       2005          2004
--------------------------------------------------------------------
Real Estate Revenue                               13.2          13.0
--------------------------------------------------------------------
Hospitality Revenue                               19.8          17.2
--------------------------------------------------------------------
Total Revenue                                     33.0          30.2
--------------------------------------------------------------------
Operating Expenses                                22.8          21.3
--------------------------------------------------------------------
Amortization                                       2.6           2.3
--------------------------------------------------------------------
Finance Charges                                    4.9           4.7
--------------------------------------------------------------------
Corporate Taxes                                    1.2           0.9
--------------------------------------------------------------------
Earnings                                           1.5           1.0
--------------------------------------------------------------------

Fortis Properties' earnings for the first quarter were $1.5 million compared to $1.0 million for the same quarter last year. Higher earnings from operations, including contributions from the acquisition of 3 hotels in western Canada in February 2005, contributed to the increase.On February 1, 2005, Fortis Properties acquired 3 Greenwood Inn-branded hotels located in western Canada for $62.6 million.The acquisition expands the hospitality operations of Fortis Properties by approximately 650 rooms and 27,000 square feet of banquet space.

Real estate revenue for the first quarter was $13.2 million compared to $13.0 million for the same quarter last year. The occupancy level in the Real Estate Division was 95.1 per cent at March 31, 2005 compared to 94.7 per cent at March 31, 2004.

Hospitality revenue for the first quarter was $19.8 million compared to $17.2 million for the same quarter last year.Revenue per available room ("REVPAR") for the first quarter was $60.15 compared to $59.52 for the same quarter last year. The 1.1 per cent increase in REVPAR was attributable to an increase in average rate compared to the prior year.

The increase in operating expenses, amortization and finance charges for the first quarter primarily related to the hotel properties acquired in February 2005.

Fortis Properties has commenced an expansion of the Delta St. John's Hotel. The estimated $15 million expansion entails the addition of 128 rooms and approximately 5,000 square feet of meeting space. The expansion is scheduled for completion mid-2005. Fortis Properties has also commenced a $7 million expansion of the Holiday Inn Sarnia which is scheduled for completion late 2005. The revenue and earnings impact from the acquisition of hotels in western Canada in February 2005 as well as the expansion of the Delta St. John's Hotel are expected to provide the primary growth in 2005.

CORPORATE

--------------------------------------------------------------------
                                 Corporate
                   Financial Highlights (Unaudited)
                          Quarter Ended March 31st
--------------------------------------------------------------------
($millions)                                       2005          2004
--------------------------------------------------------------------
Total Revenue                                      2.6           2.0
--------------------------------------------------------------------
Operating Expenses                                 2.2           2.2
--------------------------------------------------------------------
Amortization                                       0.7           0.2
--------------------------------------------------------------------
Finance Charges                                    6.0           2.4
--------------------------------------------------------------------
Foreign Exchange Loss                              0.6             -

--------------------------------------------------------------------
Corporate Taxes                                   (2.3)         (2.9)
--------------------------------------------------------------------
Preference Share Dividends                         4.2           2.1
--------------------------------------------------------------------
Non-controlling Interest                          (0.1)         (0.1)
--------------------------------------------------------------------
Net Corporate Expenses                            (8.7)         (1.9)
--------------------------------------------------------------------

The Corporate segment captures a number of expense and revenue items not specifically related to any operating segment. Included in the Corporate segment are finance charges related to debt incurred directly by Fortis, including foreign exchange gains or losses, preference share dividends, other corporate expenses net of recoveries from subsidiaries, miscellaneous revenues and corporate income taxes.

Net corporate expenses for the first quarter totaled $8.7 million, $6.8 million higher than the same quarter last year. The increase primarily related to acquisition financing costs, including amortization of deferred financing costs, associated with the purchase of FortisAlberta and FortisBC on May 31, 2004. On January 29, 2004, Fortis issued 4.9 per cent First Preference Units which were subsequently converted to 4.9 per cent Series E First Preference Shares in the last half of 2004. On October 28, 2004, Fortis issued US$150 million of 10-year 5.74 per cent Senior Unsecured Notes due October 31, 2014. During the first quarter of 2005, Fortis also recorded a $0.4 million after-tax unrealized foreign exchange loss related to foreign currency exchange rate fluctuations associated with US$80 million of the Corporation's US-denominated long-term debt.

The net corporate expenses in the first quarter of 2004 were also positively impacted as Fortis recorded a $1.8 million corporate income tax recovery related to the tax benefit associated with non-capital losses.

CONSOLIDATED FINANCIAL POSITION

The following table outlines the significant changes in the
consolidated balance sheets between March 31, 2005 and December 31,
2004.

Balance Sheet Item         Increase            Explanation
                          (Decrease)
                          ($millions)
---------------------------------------------------------------------
Cash and cash equivalents     27.0     The increase primarily related
                                       to the $10 million OPGI
                                       settlement and the cash
                                       proceeds received from the
                                       issuance of common shares in
                                       March 2005 less issuance
                                       costs, repayment of short-term
                                       borrowings and advances to
                                       subsidiaries to support
                                       capital investments.

Accounts receivable           20.3     The increase primarily related
                                       to normal seasonal sales
                                       variances resulting from
                                       higher electricity sales
                                       during winter months, as well
                                       as timing of refunds to
                                       customers at FortisAlberta.

Utility capital assets        42.0     The increase related to $86.4
                                       million invested in
                                       electricity systems less
                                       contributions and amortization
                                       for the quarter.

Income producing properties   65.0     On February 1, 2005, Fortis
                                       Properties acquired 3 hotels
                                       located in western Canada for
                                       $62.6 million.  The remaining
                                       increase primarily related to
                                       the ongoing expansion of the
                                       Delta St. John's Hotel.

Short-term borrowings        (37.7)    The decrease primarily related
                                       to the repayment of short-term
                                       borrowings at the Corporate
                                       level with proceeds from the
                                       common share issuance,
                                       partially offset by higher
                                       borrowings at Newfoundland
                                       Power and FortisBC associated
                                       with the interim financing of
                                       capital projects.

Accounts payable, accruals
 and dividends payable        13.8     The increase primarily related
                                       to timing of income tax
                                       installments and interest
                                       payments, higher transmission
                                       cost accruals and timing of
                                       other vendor payments.

Long-term debt
 (including current portion)  23.7     In March 2005, Fortis
                                       Properties completed a long-
                                       term $29.6 million financing
                                       of the Edmonton and Calgary
                                       Greenwood Inns that were
                                       acquired on February 1, 2005.
                                       Belize Electricity and the
                                       Exploits Partnership also drew
                                       down approximately $0.7
                                       million and $0.1 million,
                                       respectively, on their
                                       existing facilities and the
                                       Corporation's US-denominated
                                       debt was translated at a
                                       higher foreign exchange rate
                                       at March 31, 2005 compared to
                                       December 31, 2004. These
                                       increases were partially
                                       offset by regular debt
                                       repayments during the quarter.

Shareholders' equity         154.9     The increase primarily related
                                       to the issuance of 1,740,000
                                       common shares of the
                                       Corporation which resulted in
                                       gross proceeds of $129.9
                                       million.  The remainder of the
                                       increase primarily related to
                                       the net earnings reported for
                                       the first quarter less common
                                       share dividends.



LIQUIDITY AND CAPITAL RESOURCES

The following table outlines the summary of cash flow.

---------------------------------------------------------------------
                             Fortis Inc.
                  Summary of Cash Flow (Unaudited)
                      Quarter Ended March 31st
---------------------------------------------------------------------
($millions)                                 2005                2004
---------------------------------------------------------------------
Cash, beginning of period                   37.2                65.1
---------------------------------------------------------------------
Cash provided by (used in)
---------------------------------------------------------------------
  Operating activities                      79.3                21.8
---------------------------------------------------------------------
  Investing activities                    (149.2)              (27.9)
---------------------------------------------------------------------
  Financing activities                      96.8               (14.5)
---------------------------------------------------------------------
  Foreign currency impact on
   cash balances                             0.1                 0.3
---------------------------------------------------------------------

Cash, end of period                         64.2                44.8
---------------------------------------------------------------------

Operating Activities:Cash flow from operations for the first quarter, after working capital adjustments, was $79.3 million, up $57.5 million from $21.8 million for the same quarter last year. Operating cash flow from FortisAlberta and FortisBC contributed $41.1 million to this increase. The remaining increase primarily related to the gain on the OPGI Settlement, increased earnings from Newfoundland Power and from higher hydroelectric production in central Newfoundland, partially mitigated by higher Corporate finance charges associated with the acquisition and lower hydroelectric production resulting from lower rainfall in Belize compared to the same quarter last year.

Investing Activities:Cash used in investing activities for the first quarter was $149.2 million, up $121.3 million compared to the same quarter last year. Utility capital expenditures of $91.4 million were up $64.7 million over the same quarter last year. The increase in utility capital expenditures primarily related to capital spending  at FortisAlberta and FortisBC. In addition, Maritime Electric is currently constructing a new $35 million 50-MW generating facility on Prince Edward Island and construction is continuing on the US$30 million Chalillo Project in Belize.

Capital expenditures of $67.4 million associated with income producing properties increased $66.1 million compared to the same quarter last year. On February 1, 2005, Fortis Properties acquired 3 hotels located in western Canada for $62.6 million and Fortis Properties is also continuing forward with the ongoing $15 million expansion of the Delta St. John's Hotel.

During the first quarter, approximately $10.9 million was received in contributions in aid of construction compared to $0.8 million for the same quarter last year. The increase related to contributions associated with FortisAlberta's and FortisBC's capital programs.

Financing Activities: Cash provided from financing activities in the first quarter was $96.8 million compared to cash used in financing activities of $14.5 million for the same quarter last year. The increase in cash from financing activities primarily related to the issuance of 1,740,000 common shares of the Corporation which resulted in net proceeds after issuance costs of $123.9 million. During the first quarter, Fortis Properties also completed a 5.1 per cent 5-year $29.6 million loan related to the financing of the Edmonton and Calgary Greenwood Inns that were acquired on February 1, 2005. Belize Electricity and the Exploits Partnership also drew down approximately $0.7 million and $0.1 million, respectively, on their existing facilities.

The remaining financing activities during the first quarter primarily related to change in short-term borrowings and regular repayment of long-term debt and payment of common share dividends.

Contractual Obligations: The consolidated contractual obligations
over the next 5 years and for periods thereafter are outlined in the
following table.

---------------------------------------------------------------------
                              Fortis Inc.
                 Contractual Obligations (Unaudited)
                      as at March 31st, 2005
---------------------------------------------------------------------
                                                             greater
                            less than                           than
($millions)           Total    1 year 1-3 years 4-5 years    5 years
---------------------------------------------------------------------
Long-term Debt      1,933.3      35.8     108.4     107.3    1,681.8
---------------------------------------------------------------------
Capital Lease
 Obligations            5.1       1.5       2.4       1.2          -
---------------------------------------------------------------------
Power Purchase
 Obligations
  FortisBC (1)      3,091.7      29.1     115.9      74.5    2,872.2
  FortisOntario (2)   360.2      21.4      63.7      45.5      229.6
  Maritime
   Electric (3)        20.3      17.6       2.7         -          -
---------------------------------------------------------------------
Capital Cost (4)      209.9      15.7      43.8      26.6      123.8
---------------------------------------------------------------------
Brilliant Terminal
 Station (BTS) (5)     67.0       1.8       4.7       4.7       55.8
---------------------------------------------------------------------
Joint-use Asset
 Agreements (6)        48.8       3.7       6.7       6.0       32.4
---------------------------------------------------------------------
Operating Lease
 Obligations (7)       35.8       6.4      13.5      10.6        5.3
---------------------------------------------------------------------
Office Lease -
 FortisBC (8)          22.7       0.9       2.8       2.7       16.3
---------------------------------------------------------------------
Other                   2.4       1.1       0.2       0.1        1.0
---------------------------------------------------------------------
Total               5,797.2     135.0     364.8     279.2    5,018.2
---------------------------------------------------------------------

(1) Power purchase obligations of FortisBC include the Brilliant
    Power Purchase Contract as well as Firm Power Purchase Contracts.
    On May 3, 1996, an Order was granted by the BCUC approving a 60-
    year power purchase contract for the output of the Brilliant
    hydroelectric plant located near Castlegar, BC.  The Brilliant
    plant is owned by the Brilliant Power Corporation ("BPC"), a
    corporation owned as to 50 per cent by each of the Columbia Power
    Corporation and the Columbia Basin Trust.  FortisBC operates and
    maintains the Brilliant plant for the BPC in return for a
    management fee.  The contract requires fixed monthly payments
    based on specified natural flow take-or-pay amounts of energy.
    The contract includes a market-related price adjustment after 30
    years of the 60-year term.  In addition, FortisBC has a long-term
    minimum-payment firm power purchase contract with BC Hydro.  This
    contract includes a take-or-pay provision based on a 5-year
    rolling nomination of capacity requirements.

(2) Power purchases for FortisOntario primarily include a long-term
    contract with Hydro Quebec Energy Marketing for the supply of
    electricity and capacity.  The contract provides approximately
    237 GWh of energy per year and up to 45 MW of capacity at any one
    time.  The contract, which expires December 31, 2019, provides
    approximately one-third of Cornwall Electric's load.

(3) Maritime Electric has one take-or-pay contract for the purchase
    of either capacity or energy. The obligation is subjected to
    force majeure provisions that impact the ability of the supplier
    to deliver or Maritime Electric to receive the energy contracted.
    This contract totals approximately $20 million through October
    2006.


(4) Maritime Electric has entitlement to approximately 6.7 per cent
    of the output from the NB Power Dalhousie Generating Station and
    approximately 4.7 per cent from the NB Power Point Lepreau
    Generating Station for the life of each unit. As part of its
    participation agreement, Maritime Electric is required to pay its
    share of the capital costs of these units.

(5) On July 15, 2003, the utility in B.C. began leasing the use of
    the BTS under a 30-year lease.  The lease provides that FortisBC
    will pay the Brilliant Joint Venture a charge related to the
    recovery of the capital cost of the BTS and related operating
    costs.

(6) FortisAlberta and an Alberta transmission provider have entered
    into a number of service agreements to ensure operational
    efficiencies are maintained through coordinated operations.  The
    agreements have minimum expiry terms of 20 years and are subject
    to extension based on mutually agreeable terms.

(7) Operating lease obligations include certain office, vehicle, and
    equipment leases as well as the lease of electricity distribution
    assets of Port Colborne Hydro Inc.

(8) Under a sale-leaseback agreement, on September 29, 1993, the
    utility in B.C. began leasing its Trail, BC office building for a
    term of 30 years. The terms of the agreement grant FortisBC
    repurchase options at year 20 and year 30 of the lease term.  On
    December 1, 2004, FortisBC also entered into a 5-year lease for
    the Kelowna head office.  The terms of the lease allow for
    termination without penalty after 3 years.
---------------------------------------------------------------------


CAPITAL RESOURCES

The Corporation's principal business of regulated electric utilities
requires Fortis to have ongoing access to capital to allow it to
build and maintain the electricity systems in its service
territories. In order to ensure access to capital is maintained, the
Corporation targets a long-term capital structure that includes a
minimum of 40 per cent equity and 60 per cent debt as well as
investment grade credit ratings. The Corporation targets the equity
component of its capital structure to consist of at least 75 per cent
common share equity. The capital structure of Fortis is presented in
the following table.

Capital Structure               March 31, 2005     December 31, 2004
---------------------------------------------------------------------
                          $ millions  Per cent  $ millions  Per cent

Total Debt (net of cash)     2,029.4      57.9     2,070.3      61.1
Equity Preference Shares       319.5       9.1       319.5       9.4
Shareholders' Equity         1,155.0      33.0     1,000.1      29.5
---------------------------------------------------------------------
Total                        3,503.9     100.0     3,389.9     100.0
---------------------------------------------------------------------

The improvement in the Corporation's capital structure is primarily
the result of the issuance of approximately 1.7 million common shares
of the Corporation for net after-tax proceeds of $126.1 million. The
proceeds are being used to repay outstanding short-term indebtedness
and for general corporate purposes, including capital expenditures.
The Corporation also reported net earnings less common share
dividends of $24.6 million for the first quarter of 2005.

As at March 31, 2005, the Corporation's credit ratings were as
follows:

   Standard & Poors ("S&P")                   BBB(+)
   Dominion Bond Rating Service ("DBRS")      BBB (high)

In December 2004, S&P confirmed its corporate credit rating on the
Corporation at BBB(+).  S&P is maintaining a negative outlook on
Fortis reflecting the Corporation's financial profile combined with
execution risks associated with a large capital expenditure program.
In January 2005, DBRS confirmed the rating on the Corporation's bonds
at BBB (high). Fortis will continue to update both S&P and DBRS on
the progress of the integration of FortisAlberta and FortisBC.

Capital Program: The Corporation's principal business of regulated
electric utilities is capital intensive. Utility capital expenditures
for 2005 are expected to be over $400 million, of which approximately
$91 million was spent in the first quarter of 2005.

The Corporation's utility capital assets are expected to grow at an
average annual rate of 6 per cent for the next 5 years. The
significant capital programs at FortisAlberta and FortisBC are the
primary drivers for this expected growth. The cash needed to complete
the capital programs is expected to be supplied by a combination of
long-term and short-term borrowings and internally generated funds.
Fortis does not anticipate any issues with accessing the required
capital.

Cash Flows: The Corporation's ability to service debt obligations as
well as dividends on its common and preference shares is dependent on
the financial results of the operating subsidiaries and the related
cash payments from these subsidiaries. Certain regulated subsidiaries
may be subject to restrictions which may limit their ability to
distribute cash to Fortis.

As outlined in the Fortis Inc. 2004 Annual Report, Belize Electricity
remains non-compliant with its debt service coverage ratio related to
its BZ$13.0 million loan with the International Bank for
Reconstruction and Development ("IBRD"). The IBRD has acknowledged
this non-compliance and has encouraged the Company to continue to
improve its debt service ratio. Fortis does not expect any change in
the regular debt repayment schedule relating to this loan.

The Walden Power Partnership ("WPP") was not in compliance with its
debt service ratio of 1.2 times as required by the loan covenant
related to a $6.9 million mortgage. Compliance with the debt service
covenant is required at the end of each fiscal year. Fortis does not
expect any change in the regular debt repayment schedule relating to
this mortgage.

The Corporation and its subsidiaries had consolidated authorized
lines of credit of $641.4 million of which $404.2 million was unused
at March 31, 2005. The following summary outlines the short-term
credit facilities by the Corporation's reporting segments.


Short-term Credit
 Facilities                Regulated      Fortis      Fortis
($millions)     Corporate  Utilities  Generation  Properties   Total
---------------------------------------------------------------------

Total short-term
 facilities         210.0      410.9         8.0        12.5   641.4
Utilized at
 March 31, 2005     (18.5)    (132.0)       (3.6)       (1.1) (155.2)
Letters of credit
 outstanding         (7.7)     (71.7)          -        (2.6)  (82.0)
---------------------------------------------------------------------
Short-term
 facilities
 available          183.8      207.2         4.4         8.8   404.2
---------------------------------------------------------------------

In January 2005, Fortis entered into a $50 million unsecured
revolving/non-revolving term credit facility for its general
corporate purposes, including acquisitions. Fortis also entered into
a $15 million demand facility.

In January 2005, Newfoundland Power cancelled its $110 million
uncommitted lines of credit and entered into a syndicated $100
million committed revolving term credit facility and a $20 million
uncommitted demand facility.

In January 2005, Maritime Electric entered into a $25 million non-
revolving unsecured short-term bridge financing, due January 2006, to
support the construction of the 50-MW generating facility.

OFF-BALANCE SHEET ARRANGEMENTS

Disclosure is required of all off-balance sheet arrangements such as
transactions, agreements or contractual arrangements with
unconsolidated entities, structured finance entities, special purpose
entities or variable interest entities that are reasonably likely to
materially affect liquidity or the availability of, or requirements
for, capital resources. The Corporation had no such off-balance sheet
arrangements as at March 31, 2005.

BUSINESS RISK MANAGEMENT

The Corporation's significant business risks are regulation, the
integration of FortisAlberta and FortisBC, use of derivative
instruments and hedging, energy prices, weather and general economic
conditions, loss of service territory, environmental, insurance,
labour relations and liquidity risks.  The geographic and regulatory
diversity of the Corporation's operations significantly mitigate any
single business risk. There were no material changes to the
Corporation's significant business risks during the quarter from
those disclosed in the 2004 Management Discussion and Analysis for
the year ended December 31, 2004.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Corporation's unaudited interim consolidated
financial statements in accordance with Canadian GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the period.
Estimates are based on historical experience, current conditions and
various other assumptions believed to be reasonable under the
circumstances. Changes in facts and circumstances may result in
revised estimates and actual results could differ from those
estimates. There were no material changes to the Corporation's
critical accounting estimates during the quarter from those disclosed
in the 2004 Management Discussion and Analysis for the year ended
December 31, 2004; however, interim financial statements necessarily
employ a greater use of estimates than the annual financial
statements.

QUARTERLY RESULTS

The following table sets forth unaudited quarterly information for
each of the 8 quarters ended June 30, 2003 through March 31, 2005.
This information has been obtained from the Corporation's unaudited
interim consolidated financial statements which, in the opinion of
management, have been prepared in accordance with Canadian GAAP and
as required by utility regulators. The timing of the recognition of
certain assets, liabilities, revenues and expenses as a result of
regulation may differ from that otherwise expected using Canadian
GAAP for non-regulated entities. These operating results are not
necessarily indicative of results for any future period and should
not be relied upon to predict future performance.

---------------------------------------------------------------------
                              Fortis Inc.
               Summary of Quarterly Results (Unaudited)
---------------------------------------------------------------------
Quarter Ended                                               Earnings
                                  Net Earnings                   per
                         Operating  applicable    Earnings    Common
                       Revenue and   to Common  per Common     Share
                     Equity Income      Shares       Share   Diluted
                           ($000's)    ($000's)   Basic ($)    ($)(1)
---------------------------------------------------------------------
March 31, 2005             381,789      39,196        1.60      1.45
---------------------------------------------------------------------
December 31, 2004          337,170      21,176        0.89      0.85
---------------------------------------------------------------------
September 30, 2004         303,653      25,452        1.07      1.00
---------------------------------------------------------------------
June 30, 2004              254,513      23,946        1.22      1.15
---------------------------------------------------------------------
March 31, 2004             250,793      20,281        1.16      1.12
---------------------------------------------------------------------
December 31, 2003          210,624      14,760        0.85      0.82
---------------------------------------------------------------------
September 30, 2003         191,445      18,114        1.05      0.99
---------------------------------------------------------------------
June 30, 2003              205,582      20,796        1.20      1.15
---------------------------------------------------------------------
(1) The diluted earnings per common share for 2003 have been restated
    to reflect the issuance of convertible preference shares in June
    2003.
---------------------------------------------------------------------
---------------------------------------------------------------------

A summary of the past 8 quarters reflects the Corporation's continued growth as well as the seasonality associated with its businesses. Most of the Corporation's utility investments produce their highest earnings in the first quarter. The June 2003 financial results were impacted by the 2003 General Rate Order at Newfoundland Power.From June 2004 through December 2004, financial results were impacted by the acquisition of FortisAlberta and FortisBC. The Corporation's non-utility investment, Fortis Properties, generally produces its highest earnings in the second and third quarters. Given the diversified group of companies, seasonality may vary.Each of the comparative quarterly earnings has increased as a result of both the Corporation's acquisition strategy as well as improved operating earnings at most subsidiaries.

March 2004/March 2005 - Net earnings for the first quarter were $39.2 million, or $1.60 per common share, compared to $20.3 million, or $1.16 per common share, in the first quarter of 2004.In the first quarter, Fortis reported a $7.9 million after-tax gain resulting from the OPGI Settlement between FortisOntario and OPGI.

The Corporation's earnings, excluding the impact of the OPGI settlement, although not a measure under Canadian GAAP, would have been $31.3 million in the first quarter, or $1.28 per common share, 10.3 per cent higher than earnings per common share of $1.16 last year. Although the Corporation believes that it is useful supplemental information, readers should be cautioned that this information should not be confused with or used as an alternative for net earnings determined in accordance with Canadian GAAP.

The earnings contributions from the acquisition of FortisAlberta and FortisBC, as well as timing of recognition of earnings at Newfoundland Power, primarily contributed to this increase. Fortis also reported $0.7 million in earnings related to the recovery of hurricane-related expenses, associated with damages to Caribbean Utilities in Grand Cayman from Hurricane Ivan. Fortis Properties also reported improved earnings over the same quarter last year. The increase in earnings per common share was constrained by lower hydroelectric production in Belize and the dilution created by the common share issuance in March 2005.

December 2003/December 2004 - For the quarter ended December 2004, earnings applicable to common shares were 43.5 per cent higher than the same quarter in 2003.Earnings per common share increased 4.7 per cent over the same quarter in 2003. The increase in earnings was primarily associated with the acquisition of FortisAlberta and FortisBC, as well as improved operating income at most subsidiaries. The increase in quarterly earnings was affected by Hurricane Ivan. In September 2004, Grand Cayman was struck by Hurricane Ivan, a Category V hurricane that significantly affected Caribbean Utilities' distribution system. Equity earnings of Caribbean Utilities are recorded on a lag basis and, therefore, the Corporation's portion of the uninsured hurricane-related costs, which approximate $8.2 million, reduced the Corporation's equity earnings from Caribbean Utilities for the first quarter of 2004.

The Corporation's first quarter earnings in 2004, excluding the impact of Hurricane Ivan, although not a measure under Canadian GAAP, would have been $29.4 million, $8.2 million higher than actual first quarter earnings of $21.2 million, or $1.23 per common share, 44.7 per cent higher than earnings per common share of $0.85 for the first quarter last year.The Corporation believes that it is useful supplemental information as it provides an indication of the results excluding the impact of the Hurricane Ivan. Readers should be cautioned, however, that this information should not be confused with or used as an alternative for net earnings determined in accordance with Canadian GAAP.

September 2003/September 2004 - For the quarter ended September 2004, earnings applicable to common shares were 40.5 per cent higher than the same quarter last year. Earnings per common share increased 1.9 per cent over the same quarter last year. The increase in earnings was primarily associated with the acquisition of FortisAlberta and FortisBC, as well as improved operating income at most subsidiaries. The increase was partially offset by lower production in Belize and timing of expenditures associated with production in Ontario.

June 2003/June 2004 - For the quarter ended June 2004, earnings applicable to common shares were 15.1 per cent higher than the same quarter in 2003.Earnings per common share increased 1.7 per cent over the same quarter in 2003. The increase in earnings was primarily associated with the acquisition of the utilities in western Canada, as well as improved operating income at most subsidiaries. In particular, operations in Belize delivered improved results due to increased production associated with higher rainfall levels.

PROPOSED ACQUISITION

On December 15, 2004, Fortis and Princeton Light and Power ("PLP") entered into an agreement in which Fortis will purchase all issued common and preferred shares of PLP. The PLP shareholders have the option of receiving cash or common shares of Fortis or a combination thereof. The closing of the transaction is subject to approval of securities authorities, final due diligence and regulatory approval by the BCUC. The specific purchase price will be adjusted depending on the time of closing but is expected to result in a premium over rate base of approximately 14 per cent. The regulated rate base of PLP, net of customer contributions, was approximately $6.4 million, as of March 31, 2005. On April 15, 2005, both PLP and Fortis filed applications with the BCUC seeking approval for the acquisition.

PLP is an electric utility that serves approximately 3,200 customers in Princeton, British Columbia and surrounding areas. PLP also provides utility service to customers of FortisBC in the Similkameen and Tulameen regions. PLP presently purchases its wholesale power from FortisBC under a long-term contract.

OUTLOOK

The Corporation's principal business of regulated electric utilities is capital intensive and Fortis expects that most of its capital expenditures for the next 5 years will relate primarily to FortisAlberta and FortisBC.Consolidated utility capital expenditures for 2005 are expected to be over $400 million.

Fortis also expects to focus its capital on funding further acquisitions of electric utility assets. Fortis will continue to pursue acquisition opportunities both in Canada and outside of Canada. Fortis will also pursue growth in its non-regulated businesses including hydroelectric generation, hotels and real estate.

OUTSTANDING SHARE DATA

At May 5, 2005, the Corporation had issued and outstanding 25,699,926 common shares, 5,000,000 Series C First Preference Shares, 7,993,500 Series E First Preference Shares and 6,500 Series D First Preference Shares.

Fortis Inc.
                   Consolidated Balance Sheets (Unaudited)
                              As at March 31
                              (in thousands)

                                       March 31      December 31
                                           2005             2004
---------------------------------------------------------------------
---------------------------------------------------------------------

ASSETS

Current assets
Cash and cash equivalents               $64,204          $37,203
Accounts receivable                     189,967          169,649
Other regulatory assets                  14,917           15,245
Materials and supplies                   29,812           30,235
Future income taxes                       4,590            4,204
---------------------------------------------------------------------
                                        303,490          256,536
---------------------------------------------------------------------

Corporate income tax deposit              6,949            6,949
Deferred charges                        152,231          152,320
Other regulatory assets                  46,264           45,309
Utility capital assets                2,389,101        2,347,067
Income producing properties             406,052          341,069
Investments                             163,860          163,769
Intangibles, net of amortization         17,534           18,455
Goodwill                                514,041          514,041
---------------------------------------------------------------------

                                     $3,999,522       $3,845,515
---------------------------------------------------------------------
---------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Short-term borrowings                  $155,196         $192,858
Accounts payable and accrued charges    282,860          270,055
Dividends payable                        16,012           14,997
Other regulatory liabilities             25,073           23,657
Current installments of long-term
 debt                                    37,336           36,062
---------------------------------------------------------------------
                                        516,477          537,629

Deferred credits                         36,901           37,347
Future income taxes                      32,191           34,771
Long-term debt                        1,901,082        1,878,639
Non-controlling interest                 38,366           37,487
Equity preference shares                319,530          319,530
---------------------------------------------------------------------
                                      2,844,547        2,845,403
---------------------------------------------------------------------

Shareholders' equity
Common shares                           805,063          675,215
Contributed surplus                       2,218            1,831
Equity portion of convertible
 debentures                               1,560            1,550
Foreign currency translation
 adjustment                             (15,432)         (15,497)
Retained earnings                       361,566          337,013
---------------------------------------------------------------------
                                      1,154,975        1,000,112
---------------------------------------------------------------------

                                     $3,999,522       $3,845,515
---------------------------------------------------------------------
---------------------------------------------------------------------

See accompanying notes to interim consolidated financial statements.



                             Fortis Inc.
            Consolidated Statements of Earnings (Unaudited)
                  For the three months ended March 31
                (in thousands, except per share amounts)

                                               Quarter Ended
                                           2005             2004
---------------------------------------------------------------------
---------------------------------------------------------------------

Operating revenues                     $379,278         $248,926
Equity income                             2,511            1,867
---------------------------------------------------------------------
                                        381,789          250,793
---------------------------------------------------------------------

Expenses
  Operating                             253,313          178,844
  Amortization                           40,176           19,432
---------------------------------------------------------------------
                                        293,489          198,276
---------------------------------------------------------------------

Operating income                         88,300           52,517

Finance charges (Note 7)                 35,898           21,250
Gain on settlement of contractual
 matters (Note 9)                       (10,000)               -
---------------------------------------------------------------------
                                         25,898           21,250
---------------------------------------------------------------------

Earnings before income taxes             62,402           31,267

Corporate income taxes                   18,202            8,490
---------------------------------------------------------------------

Net earnings before non-controlling
 interest and preference share
 dividends                               44,200           22,777

Non-controlling interest                    852              378
Preference share dividends                4,152            2,118
---------------------------------------------------------------------

Net earnings applicable to common
 shares                                 $39,196          $20,281
---------------------------------------------------------------------

Weighted average common shares
 outstanding                             24,501           17,446
---------------------------------------------------------------------

Earnings per common share
  Basic                                   $1.60            $1.16
  Diluted                                 $1.45            $1.12
---------------------------------------------------------------------
---------------------------------------------------------------------



       Consolidated Statements of Retained Earnings (Unaudited)
                 For the three months ended March 31
                           (in thousands)

                                           2005             2004
---------------------------------------------------------------------
---------------------------------------------------------------------

Balance at beginning of period         $337,013         $294,986

Net earnings applicable to common
 shares                                  39,196           20,281
---------------------------------------------------------------------
                                        376,209          315,267

Dividends on common shares              (14,643)          (9,445)
---------------------------------------------------------------------

Balance at end of period               $361,566         $305,822
---------------------------------------------------------------------
---------------------------------------------------------------------

See accompanying notes to interim consolidated financial statements.



                             Fortis Inc.
          Consolidated Statements of Cash Flows (Unaudited)
                 For the three months ended March 31
                           (in thousands)

                                               Quarter Ended
                                           2005             2004
---------------------------------------------------------------------
---------------------------------------------------------------------

Operating Activities
 Net earnings applicable to common
  shares                                $39,196          $20,281
  Items not affecting cash
  Amortization-capital assets, net of
   contributions in aid of construction  37,662           17,942
  Amortization-intangibles                  921              921
  Amortization-other                      1,593              569
  Future income taxes                    (1,189)          (2,860)
  Accrued employee future benefits         (501)            (481)
  Equity income, net of dividends           (56)             145
  Stock-based compensation                  387              148
  Unrealized foreign exchange loss
   (gain) on long-term debt                 397             (246)


  Non-controlling interest                  852              378
  Other                                    (113)          (1,739)
---------------------------------------------------------------------
                                         79,149           35,058
 Change in non-cash operating working
  capital                                   189          (13,236)
---------------------------------------------------------------------
                                         79,338           21,822
---------------------------------------------------------------------

Investing Activities
 Change in deferred charges and credits  (1,559)            (692)
 Purchase of utility capital assets     (91,371)         (26,693)
 Purchase of income producing
  properties                            (67,392)          (1,341)
 Contributions in aid of construction    10,877              777
 Proceeds on sale of utility capital
  assets                                    218                3

---------------------------------------------------------------------
                                       (149,227)         (27,946)
---------------------------------------------------------------------

Financing Activities
 Change in short-term borrowings        (37,658)         (49,870)
 Proceeds from long-term debt            30,396            6,014
 Repayment of long-term debt             (8,904)          (9,935)
 Advances from non-controlling interest     303              166
 Issue of preference shares                   -           44,936
 Issue of common shares                 127,688            4,068
 Dividends
  Common shares                         (14,643)          (9,445)
  Subsidiary dividends paid to
   non-controlling interest                (411)            (415)
---------------------------------------------------------------------
                                         96,771          (14,481)
---------------------------------------------------------------------

Effect of exchange rate changes on
 cash                                       119              320
---------------------------------------------------------------------

Change in cash and cash equivalents      27,001          (20,285)

Cash and cash equivalents, beginning
 of period                               37,203           65,094
---------------------------------------------------------------------

Cash and cash equivalents, end
 of period                              $64,204          $44,809
---------------------------------------------------------------------
---------------------------------------------------------------------

See accompanying notes to interim consolidated financial statements.



                              FORTIS INC.
          NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
              For the three months ended March 31, 2005
                              (Unaudited)
---------------------------------------------------------------------
---------------------------------------------------------------------

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

These interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles ("Canadian GAAP") for interim financial statements and do not include all of the disclosures normally found in the Fortis Inc. ("Fortis" or the "Corporation") annual consolidated financial statements.These interim consolidated financial statements should be read in conjunction with the Corporation's consolidated financial statements for the year ended December 31, 2004.Interim results will fluctuate due to the seasonal nature of electricity demand and water flows as well as the timing and recognition of regulatory decisions.Consequently, interim results are not necessarily indicative of annual results.

Fortis is principally a diversified, international electric utility holding company. The Corporation segments its utility operations by franchise area and, depending on regulatory requirements, by the nature of the assets. Fortis also holds investments in commercial real estate and hotel properties which are treated as a separate segment. The operating segments allow senior management to evaluate the operational performance and assess the overall contribution of each segment to the Corporation's long-term objectives.

The following summary briefly describes the operations included in each of the Corporation's operating and reportable segments.

Regulated Utilities - Canadian

The following summary describes the Corporation's interest in Regulated Utilities in Canada by subsidiary:

a. Newfoundland Power: Newfoundland Power is the principal distributor of electricity in Newfoundland.

b. Maritime Electric: Maritime Electric is the principal distributor of electricity on Prince Edward Island.

c. FortisOntario: FortisOntario provides an integrated electric utility service to customers in Fort Erie, Cornwall, Gananoque and Port Colborne in Ontario. FortisOntario includes the operations of Canadian Niagara Power Inc. ("Canadian Niagara Power") and Cornwall Street Railway, Light and Power Company, Limited ("Cornwall Electric"). Included in Canadian Niagara Power's accounts is the operations of the electricity distribution business of Port Colborne Hydro Inc., which has been leased from the City of Port Colborne under a 10-year lease agreement entered into in April 2002. FortisOntario also owns a 10 per cent interest in each of Westario Power and Rideau St. Lawrence, 2 regional electric distribution companies formed in 2000.

d. FortisAlberta: On May 31, 2004, Fortis, through its wholly owned subsidiaries, acquired all of the issued and outstanding shares of Aquila Networks Canada (Alberta) Ltd. (renamed "FortisAlberta"). FortisAlberta owns and operates the distribution system in a substantial portion of southern and central Alberta.

e. FortisBC: On May 31, 2004, Fortis, through its wholly owned subsidiaries, acquired all of the issued and outstanding shares of Aquila Networks Canada (British Columbia) Ltd. (renamed "FortisBC"). FortisBC is an integrated utility operating in the southern interior of British Columbia.Included with the FortisBC component of Regulated Utilities - Canadian segment are the non-regulated operating, maintenance and management services relating to the 450-megawatt ("MW") Waneta hydroelectric generating facility owned by Teck Cominco, the 145-MW Brilliant Hydroelectric Plant owned by Columbia Power Corporation and the Columbia Basin Trust ("CPC/CBT"), the 150-MW Arrow Lakes Hydroelectric Plant owned by CPC/CBT and the distribution system owned by the City of Kelowna.

Regulated Utilities - Caribbean

The following summary describes the Corporation's interest in Regulated Utilities in the Caribbean by subsidiary:

a. Belize Electricity: Belize Electricity is the principal distributor of electricity in Belize, Central America.The Corporation holds a 68 per cent controlling interest in the Company.

b. Caribbean Utilities: Caribbean Utilities is the sole provider of electricity on Grand Cayman, Cayman Islands. The Corporation's 37.3 per cent interest in the Company is accounted for on the equity basis of accounting.

Non-regulated - Fortis Generation

The following summary describes the Corporation's non-regulated generation assets by location:

a. Ontario: Operations include the 75-MW Rankine hydroelectric generating station at Niagara Falls, the 5-MW Cornwall District Heating cogeneration plant and 6 small hydroelectric generating stations in eastern Ontario with a combined capacity of 8 MW. Non-regulated generating operations in Ontario are conducted through FortisOntario Inc. and FortisOntario Generation Corporation.

b. Belize: Operations consist of the 25-MW Mollejon hydroelectric facility in Belize. All of its electricity output is sold to Belize Electricity under a 50-year Power Purchase Agreement. Hydroelectric generation operations in Belize are conducted through the Corporation's wholly owned indirect subsidiary, Belize Electric Company Limited ("BECOL"), under a Franchise Agreement with the Government of Belize.

c. Central Newfoundland: Through the Exploits River Hydro Partnership ("Exploits Partnership"), a partnership between the Corporation and Abitibi-Consolidated Company of Canada ("Abitibi-Consolidated"), 36 MW of additional capacity was developed and installed at 2 of Abitibi-Consolidated's hydroelectric plants in central Newfoundland. The Corporation holds a 51 per cent interest in the Exploits Partnership and Abitibi-Consolidated holds the remaining 49 per cent interest. The Exploits Partnership sells its output to Newfoundland and Labrador Hydro Corporation under a 25-year power purchase agreement.

d. Upper New York State: Includes the operations of 4 hydroelectric generating stations in Upper New York State with a combined capacity of 23 MW operating under a license from the U.S. Federal Energy Regulatory Commission.Hydroelectric generation operations in Upper New York State are conducted through the Corporation's wholly owned indirect subsidiary, FortisUS Energy Corporation.

e. British Columbia: Includes the 16-MW run-of-river Walden hydroelectric power plant near Lillooet, British Columbia. This plant sells its entire output to BC Hydro under a long-term contract. Hydroelectric generating operations in British Columbia are conducted through the Walden Power Partnership, a wholly owned subsidiary of FortisBC.

Non-regulated - Fortis Properties

Fortis Properties owns and operates hotels in 6 provinces in Canada and commercial real estate in Atlantic Canada.On February 1, 2005, Fortis Properties acquired 3 hotels in western Canada that have approximately 650 rooms and 27,000 square feet of banquet space.

Corporate

Corporate includes finance charges associated with corporate debt, dividends on preference securities, other corporate expenses net of recoveries from subsidiaries, interest and miscellaneous revenues and related income taxes.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These interim consolidated financial statements have been prepared in accordance with Canadian GAAP, including selected accounting treatments that differ from those used by entities not subject to rate regulation. The timing of the recognition of certain assets, liabilities, revenues and expenses, as a result of regulation, may differ from that otherwise expected using Canadian GAAP for entities not subject to rate regulation.These interim consolidated financial statements have been prepared following the same accounting policies and methods as those used in preparing the most recent annual financial statements.All amounts are presented in Canadian dollars unless otherwise stated.

3. USE OF ESTIMATES

The preparation of the Corporation's interim consolidated financial statements in accordance with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Estimates are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances. Changes in facts and circumstances may result in revised estimates and actual results could differ from those estimates. There were no material changes to the Corporation's critical accounting estimates during the quarter from those disclosed  in the 2004 Management Discussion and Analysis for the year ended December 31, 2004; however, interim financial statements necessarily employ a greater use of estimates than the annual financial statements.

4. EQUITY PREFERENCE SHARES

Authorized:
(a) an unlimited number of First Preference Shares, without nominal
    or par value; and
(b) an unlimited number of Second Preference Shares, without nominal
    or par value.


                            March 31, 2005         December 31, 2004
---------------------------------------------------------------------
                  Number of         Amount   Number of        Amount
                     Shares  (in thousands)     Shares (in thousands)
---------------------------------------------------------------------
Series C First
 Preference
 Shares           5,000,000       $122,992   5,000,000      $122,992
Series D First
 Preference
 Shares               6,500             38       6,500            38

Series E First
 Preference
 Shares           7,993,500        196,500   7,993,500       196,500
---------------------------------------------------------------------
                 13,000,000       $319,530  13,000,000      $319,530
---------------------------------------------------------------------
---------------------------------------------------------------------



5. CAPITAL STOCK

Authorized: an unlimited number of Common Shares without nominal or
par value:

                           March 31, 2005          December 31, 2004
---------------------------------------------------------------------
a)Issued and     Number of         Amount   Number of         Amount
 Outstanding        Shares  (in thousands)     Shares  (in thousands)
---------------------------------------------------------------------
Common Shares   25,687,520       $805,063  23,882,323       $675,215
---------------------------------------------------------------------


Common shares issued for cash during the period is as follows:

                                                       Quarter Ended
                                                      March 31, 2005
---------------------------------------------------------------------
                                          Number of           Amount
                                             Shares    (in thousands)
---------------------------------------------------------------------
Balance, beginning of period             23,882,323         $675,215
Public Offering                           1,740,000          126,072
Consumer Share Purchase Plan                  6,357              468
Dividend Reinvestment Plan                   11,390              839
Employee Share Purchase Plan                 18,178            1,340
Director and Executive Stock
 Option Plans                                29,272            1,129
---------------------------------------------------------------------
                                         25,687,520         $805,063
---------------------------------------------------------------------


On March 1, 2005, Fortis issued 1,740,000 common shares of the
Corporation at $74.65 per common share.  The common share issuance
resulted in gross proceeds of $129.9 million.  Net proceeds after
tax-effected issuance costs totalled $126.1 million. The proceeds of
the issuance were used to pay outstanding indebtedness and for
general corporate purposes.

At March 31, 2005, 1,696,448 common shares remained in the reserve
for issue under the terms of the above plans.

b) Earnings per Common Share

The Corporation calculates earnings per common share on the weighted
average number of common shares outstanding. The weighted average
common shares outstanding were 24,501,165 and 17,446,275 for the
quarters ended March 31, 2005 and 2004, respectively.  Diluted
earnings per common share are calculated using the treasury stock
method for options and the "if-converted" method for convertible
securities.

c) Stock Options

The Corporation is authorized to grant, to the directors of Fortis
and certain key employees of the Corporation and its subsidiaries,
options to purchase common shares of the Corporation. At March 31,
2005, the Corporation had the following stock-based compensation
plans: Executive Stock Option Plan, Directors' Stock Option Plan,
2002 Stock Option Plan and Employee Share Purchase Plan. The 2002
Stock Option Plan was adopted at the Annual and Special General
Meeting on May 15, 2002 to ultimately replace the Executive and
Directors' Stock Option Plans.  The Executive and Directors' Stock
Options Plans will cease to exist when all outstanding options are
exercised or expire in or before 2011.


                                                        Quarter Ended
                                                       March 31, 2005
---------------------------------------------------------------------
                                          Number of          Weighted
                                            Options     Average Price
---------------------------------------------------------------------
Outstanding at beginning of period          720,647            $50.28
Granted                                     195,995            $73.62
Exercised                                   (29,272)           $38.57
---------------------------------------------------------------------
Outstanding at end of period                887,370            $55.82
---------------------------------------------------------------------
---------------------------------------------------------------------



Details of stock options      Number of        Exercise        Expiry
 outstanding are as follows:    Options           Price          Date
---------------------------------------------------------------------
                                 15,000          $38.27          2006
                                122,837          $38.27          2011
                                166,874          $48.14          2012
                                178,562          $51.24          2013
                                181,562          $61.12          2014
                                  3,000          $60.91          2014
                                 23,540          $58.20          2014
                                195,995          $73.62          2015
---------------------------------------------------------------------
                                887,370
---------------------------------------------------------------------

Options vested at end of
 period                         272,591
---------------------------------------------------------------------


Stock-based Compensation

On March 1, 2005, the Corporation issued 195,995 options on common
shares under its 2002 Stock Option Plan at the 5-day average trading
price immediately preceding the date of grant of $73.62.  These
options vest evenly over a 4-year period on each anniversary of the
date of grant. The options expire 10 years after the date of grant.
The fair market value of each option granted was $10.98 per option.
The fair value was estimated on the date of grant using the Black-
Scholes fair value option-pricing model and the following
assumptions:

                                         March 1, 2005
-------------------------------------------------------
Dividend yield (%)                                3.44
Expected volatility (%)                           15.3
Risk-free interest rate (%)                       4.28
Weighted-average expected life (years)             7.5


The Corporation records compensation expense upon the issuance of
stock options under its Stock Option Plans. Using the fair value
method, the compensation expense is amortized over the 4-year vesting
period of the options granted. Upon exercise, the proceeds of the
options are credited to capital stock at the option price. Therefore,
an exercise of options below the current market price has a dilutive
effect on capital stock and shareholders' equity. Under the fair
value method, $0.4 million and $0.1 million were recorded as
compensation expense for the quarters ended March 31, 2005 and 2004,
respectively.

6. EMPLOYEE FUTURE BENEFITS

The Corporation provides pension arrangements and other post-
employment benefits to qualified employees through both defined
contribution and defined benefit arrangements. The cost of providing
the defined benefit arrangements for the quarter was $3.4 million
($2.3 million in first quarter 2004). The cost of providing the
defined contribution arrangements for the quarter was $0.8 million
($0.6 million in first quarter 2004).

7. FINANCE CHARGES

For the three months ended March
 31st (in thousands)                          2005              2004
---------------------------------------------------------------------
Amortization of debt and stock issue
 expenses                                      252               119
Interest    - long term debt                34,739            21,753
            - short-term                     1,990               609
Interest charged to construction            (1,190)             (620)
Interest earned                               (290)             (365)
Unrealized foreign exchange loss
 (gain) on long-term debt                      397              (246)
---------------------------------------------------------------------
                                           $35,898           $21,250
---------------------------------------------------------------------
---------------------------------------------------------------------

8. a) SEGMENTED INFORMATION

Information by reportable segment is as follows:

Quarter ended
(in thousands of dollars)       Regulated Utilities
---------------------------------------------------------------------
                   Mari-
                    time   Fortis  Fortis              Total    Total
March 31,   Nfld   Elec-    Onta-  Alber-  Fortis      Cana-   Carib-
 2005      Power    tric      rio      ta      BC       dian     bean
---------------------------------------------------------------------

Operating
 reven-
 ues     135,436  29,286   38,160  58,595  55,374    316,851   15,387
Equity
 income        -       -        -       -       -          -    2,511
Energy
 supply
 costs    83,098  18,143   30,624       -  18,555    150,420    8,134
Operating
 expenses 14,201   2,998    3,143  26,921  16,043     63,306    2,784
Amortiza-
 tion     10,587   2,399    1,243  13,846   4,635     32,710    1,612
---------------------------------------------------------------------
Operating
 income   27,550   5,746    3,150  17,828  16,141     70,415    5,368
Finance
 charges   7,692   2,214    1,288   5,970   4,541     21,705    1,240
Gain on
 settlement
 of
 contractual
 matters       -       -        -       -       -          -        -
Corporate
 income
 taxes     6,761    1,414     757   4,012   2,652     15,596      215
 Non-
 controlling
 interest    145        -       -       -       -        145      440
Preference
 share
 dividends     -        -       -       -       -          -        -
---------------------------------------------------------------------
Net Earnings
 (loss)   12,952    2,118   1,105   7,846   8,948     32,969    3,473
---------------------------------------------------------------------
---------------------------------------------------------------------
Goodwill       -   19,858  45,577 229,097 219,509    514,041        -
---------------------------------------------------------------------
Identifiable
 assets  803,388  244,649 121,308 623,279 599,542  2,392,166  198,643
---------------------------------------------------------------------
Equity
 investment
 assets        -        -       -       -       -          -  161,325
---------------------------------------------------------------------
Capital
 expendi-
 tures    14,540    8,958     944  33,825  22,927     81,194    2,463
---------------------------------------------------------------------


March 31,
 2004
---------------------------------------------------------------------

Operating
 reven-
 ues     126,138   29,529  34,441       -       -    190,108   15,933
Equity
 income        -        -       -       -       -          -    1,867
Energy
 supply
 costs    76,798   18,639  26,743       -       -    122,180    8,274
Operating
 expenses 13,971    2,966   3,131       -       -     20,068    3,050
Amortiza-
 tion      9,381    2,280   1,231       -       -     12,892    1,607
---------------------------------------------------------------------
Operating
 income   25,988    5,644   3,336       -       -     34,968    4,869
Finance
 charges   7,616    2,242   1,306       -       -     11,164    1,129
Corporate
 income
 taxes     6,246    1,371     744       -       -      8,361      212
Non-control-
 ling
 interest    147        -       1       -       -        148      525
Preference
 share
 dividends     -        -       -       -       -          -        -
---------------------------------------------------------------------
Net
 Earnings
 (loss)   11,979    2,031   1,285       -       -     15,295    3,003
---------------------------------------------------------------------
---------------------------------------------------------------------

Goodwill       -   19,858  45,577       -       -     65,435        -
---------------------------------------------------------------------

Identifiable
 assets  780,880  235,341 119,295       -       -  1,135,516  227,939
---------------------------------------------------------------------
Equity
 investment
 assets        -        -       -       -       -          -  165,090
---------------------------------------------------------------------
Capital
 expendi-
 tures    15,407    3,205   1,719       -       -     20,331    4,476
---------------------------------------------------------------------


                         Non-Regulated
            ---------------------------------
                          Fortis                             Inter-
March 31,                Proper-                 segment   Consoli-
 2005        Generation     ties  Corporate  elimination      dated
---------------------------------------------------------------------

Operating
 revenues        16,970   33,038      2,572       (5,540)   379,278
Equity income         -        -          -            -      2,511
Energy supply
 costs            1,860        -          -       (1,882)   158,532
Operating
 expenses         4,846   22,831      2,213       (1,199)    94,781
Amortization      2,555    2,600        699            -     40,176
---------------------------------------------------------------------
Operating
 income           7,709    7,607       (340)      (2,459)    88,300
Finance
 charges          3,875    4,924      6,613       (2,459)    35,898
Gain on
 settlement of
 contractual
 matters        (10,000)       -          -            -    (10,000)
Corporate
 income taxes     3,535    1,182     (2,326)           -     18,202
Non-controlling
 interest           308        -        (41)           -        852
Preference
 share
 dividends            -        -      4,152            -      4,152
---------------------------------------------------------------------
Net Earnings
 (loss)           9,991    1,501     (8,738)           -     39,196
---------------------------------------------------------------------
---------------------------------------------------------------------
Goodwill              -        -          -            -    514,041
---------------------------------------------------------------------
Identifiable
 assets         279,046  422,867     53,356      (21,922) 3,324,156
---------------------------------------------------------------------

Equity
 investment
 assets               -        -          -            -    161,325
---------------------------------------------------------------------
Capital
 expenditures     6,573   67,392      1,141            -    158,763
---------------------------------------------------------------------


March 31,
 2004
---------------------------------------------------------------------
Operating
 revenues        16,717   30,191      1,963       (5,986)   248,926
Equity income         -        -          -            -      1,867
Energy supply
 costs            1,677        -          -       (3,593)   128,538
Operating
 expenses         4,222   21,301      2,167         (502)    50,306
Amortization      2,468    2,315        150            -     19,432
---------------------------------------------------------------------
Operating
 income           8,350    6,575       (354)      (1,891)    52,517
Finance
 charges          3,774    4,658      2,416       (1,891)    21,250
Corporate
 income taxes     1,936      899     (2,918)           -      8,490
Non-controlling
 interest          (253)       -        (42)           -        378
Preference
 share
 dividends            -        -      2,118            -      2,118
---------------------------------------------------------------------
Net Earnings
 (loss)           2,893    1,018     (1,928)           -     20,281
---------------------------------------------------------------------
---------------------------------------------------------------------
Goodwill              -        -          -            -     65,435
---------------------------------------------------------------------
Identifiable
 assets         245,533  347,766     46,513      (20,172) 1,983,095
---------------------------------------------------------------------
Equity
 investment
 assets               -        -          -            -    165,090
---------------------------------------------------------------------
Capital
 expenditures       997    1,341        889            -     28,034
---------------------------------------------------------------------

8. b) Related Party Transactions

Related party transactions are in the normal course of operations and
are measured at the exchange amount, which is the amount of
consideration established and agreed to by the related parties.
Related party transactions primarily relate to the sale of energy
from BECOL to Belize Electricity and finance charges on inter-company
borrowings.

9. GAIN ON SETTLEMENT OF CONTRACTUAL MATTERS

In the first quarter, Fortis recorded a $7.9 million after-tax gain
($10 million pre-tax) resulting from the settlement of contractual
matters between FortisOntario and Ontario Power Generation Inc.

10. SHORT-TERM AND LONG-TERM DEBT

The Corporation and its subsidiaries had consolidated authorized
lines of credit of $641.4 million of which $404.2 million was unused
at March 31, 2005.

Fortis Properties completed a 5.1 per cent 5-year $29.6 million loan
related to the financing of the Edmonton and Calgary Greenwood Inns
that were acquired on February 1, 2005.

11. CONTINGENT LIABILITIES & COMMITMENTS

Contingent liabilities and commitments as of March 31, 2005 are
consistent with disclosures in the annual audited consolidated
financial statements for the year ended December 31, 2004.

12. SUBSEQUENT EVENTS

On April 4, 2005, Fortis Properties completed a 5.35 per cent 5-year
$12.3 million loan related to the Winnipeg Greenwood Inn which was

acquired on February 1, 2005.

On April 13, 2005, FortisAlberta filed an application with the
Alberta Energy and Utilities Board ("AEUB") to approve a Negotiated
Settlement Agreement ("Settlement") dealing with all aspects of its
2005 Distribution Access Tariff Application ("Application"). If the
Settlement is approved, there will be no need for a full-scale
hearing process. The Settlement calls for a 2005 distribution revenue
requirement of $215.4 million which translates to a 2.1 percent
increase on base rates for 2005. In reaching this Settlement,
FortisAlberta has agreed to a level of operating expense of $101
million and capital expenditures of $134.3 million. The AEUB approval
is expected by the end of the second quarter 2005, provided there are
no material objections to the Application.

13. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to comply with
current period's classifications.

CORPORATE INFORMATION

Fortis Inc. is primarily a diversified, international electric
utility holding company with assets of approximately $4.0 billion and
annual revenues of approximately $1.2 billion.  The Corporation holds
investments in regulated distribution utilities, non-regulated
generation operations and a non-utility company with investments in
real estate and hotels.  The Common Shares, Series C First Preference
Shares and Series E First Preference Shares of Fortis Inc. are traded
on the Toronto Stock Exchange under the symbols FTS, FTS.PR.C, and
FTS.PR.E, respectively.  Fortis Inc. information can be accessed at
www.fortisinc.com.

Share Transfer Agent and Registrar:
Computershare Trust Company of Canada
9th Floor, 100 University Avenue
Toronto, ON  M5J 2Y1
T: 514.982.7555 or 1.866.586.7638
F: 416.263.9394 or 1.888.453.0330
W: www.computershare.com
E: [e-mail]

For the quarter ended March 31, 2005, Fortis Inc. will be filing the
Internal Certification of Interim Filings during Transition Period
(Form 52-109FT2) on SEDAR. Additional information including the
Annual Information Form, Management Information Circular and Annual
Report are available on SEDAR at www.sedar.com.

FORTIS INC. (TSX:FTS)