Fortis Inc. and Abitibi-Consolidated Enter into $65 Million Hydroelectric Project.

Business Editors

ST. JOHN'S, Newfoundland--(BUSINESS WIRE)--June 13, 2001

Fortis Inc. (TSE:FTS) announced today it has entered into an agreement with Abitibi-Consolidated Inc. (TSE:A; NYSE:ABY) to develop additional capacity at Abitibi-Consolidated's hydroelectric plant at Grand Falls-Windsor and to redevelop the forestry company's hydroelectric plant at Bishops Falls, Newfoundland.

The project will cost $65 million and increase annual energy production from the two hydroelectric plants by approximately 30 per cent to 600 gigawatt hours (GWh).

"This project is in keeping with the strategy and expertise of Fortis with respect to small hydroelectric plants," says Stan Marshall, President and Chief Executive Office of Fortis Inc. "It will provide the Province with additional energy supply from existing resources."

Under the agreement, Central Newfoundland Energy Inc., (CNE), a non-regulated subsidiary of Fortis Inc., will hold a 51 per cent interest in the project and Abitibi-Consolidated will hold the remaining 49 per cent interest. Abitibi-Consolidated will continue to use the existing annual generation in its newsprint mill at Grand Falls-Windsor while the additional energy produced will be sold to Newfoundland and Labrador Hydro under a long-term, take-or-pay power purchase agreement to be finalized over the coming weeks.

"This type of partnership will benefit the Company, while remaining an off-balance sheet project," said Pierre G. Ct, Abitibi-Consolidated's Senior Vice-President, International Operations and Energy. "With Fortis Inc. as a quality local partner, we're confident that our objectives will be met." The project is expected to be completed in three years and will be financed primarily with non-recourse debt leaving Abitibi-Consolidated's debt levels and capital expenditure program unaffected. It will include the installation of a 27-megawatt unit at Grand Falls-Windsor and the replacement and modernization of nine small units at Bishops Falls. Provincial environmental approval has already been received.

Abitibi-Consolidated is a global leader in newsprint, uncoated groundwood papers and lumber with ownership interests in 28 paper mills in Canada, the U.S., the U.K. and Asia (including its interest in Pan Asia Paper) and in 22 sawmills, 2 remanufacturing facilities a market pulp mill and 8 recycling centres. Abitibi-Consolidated employs approximately 18,000 people and supplies products in nearly 100 countries.

Fortis Inc. is a diversified electric utility holding company with assets exceeding $1.5 billion and annual sales of $580 million. The Corporation has holdings in five electric utilities located in Newfoundland, Prince Edward Island, Ontario, Belize and the Cayman Islands. It also has two subsidiaries engaged in electrical generation in New York State and in Belize. Through its non-utility subsidiary, Fortis Properties, Fortis Inc. has investments in real estate and hotel operations.

FORWARD LOOKING STATEMENTS

This disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including: the impact of general economic conditions in the U.S. and Canada and in countries in which the Company and its subsidiaries currently do business; industry conditions, the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; fluctuations in the availability or costs of raw materials or electrical power; changes in existing forestry regulations or changes in how they are administered which could result in the loss of certain contractual or other rights or permits which are material to the Company's business; increased competition; the lack of availability of qualified personnel or management; the outcome of certain litigation; labour unrest; and fluctuation in foreign exchange or interest rates. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive therefrom. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.