IPL Energy Earnings Growth Continues, Increased Dividend Declared.

CALGARY, Alberta--(BUSINESS WIRE)--July 29, 1998--IPL Energy Inc. (NASDAQ:IPPIF) (TSE:IPL.) (ME:IPL.) today announced that its Board of Directors has declared a dividend of $0.575 per common share, payable September 1, 1998 to shareholders of record August 14, 1998. This represents an increase of $0.03 per common share, or 5.5 percent, from the prior dividend rate.

"The dividend increase reflects IPL Energy's strong underlying growth in earnings, resulting from the execution of the strategic direction first outlined early last year," said Brian F. MacNeill, President & Chief Executive Officer. "This continued earnings momentum is particularly notable given the influence of this year's extraordinarily warm winter weather, a good portion of which we expect to mitigate through various actions. Our focus continues to be on delivering superior returns to shareholders through earnings growth and a steadily increasing dividend."

IPL Energy also announced earnings of $209.8 million ($2.90per common share) for the six months ended June 30, 1998. This represents an 11 percent increase when compared with earnings of $188.7 million ($2.79 per common share) for the same period in 1997. Improved results from Energy Transportation and Corporate segments more than offset the impact of warm weather which reduced earnings from the Energy Distribution segment.

FINANCIAL

The Energy Transportation segment contributed $71.0 million to first half earnings, up from $57.9 million earned during the same period last year. The IPL System improved earnings through further operational and cost efficiencies achieved under incentive tolling as well as additional returns generated from system expansion and other capital programs outside of incentive tolling arrangements. In the United States, Lakehead Pipe Line Partners, L.P. also achieved higher throughput volumes, resulting in increased equity earnings and higher incentive allocations to IPL Energy. Finally, earnings from the Colombia pipeline increased, reflecting the higher investment level in 1998.

Earnings from the Energy Distribution segment totalled $141.3 million (1997 - $150.6 million) for the six months ended June 30, 1998. The segment results represent income from The Consumers' Gas Company Ltd., as well as earnings of approximately $22.9 million from the Noverco Inc. investment acquired in mid 1997.

First half earnings include the results of Consumers Gas for the period October 1997 through March 1998. The gas utility contribution to IPL Energy was $121.8 million, down $28.8 million from last year, reflecting both the impact of a lower allowed rate of return on equity and warmer weather throughout the heating season. For the first six months of the year, weather, as measured in degree days, was about 11 percent warmer than in 1997 and about 15 percent warmer than normal. Growth in the core franchise area continued with 43,000 new customers being added during the first half of the year, reflecting strong economic conditions and residential fuel conversions.

IPL Energy estimates that the 1998 impact of the warmer weather represents a potential reduction in earnings of approximately $40 million when compared to earnings expected under normal weather patterns. Through a variety of cost reduction initiatives, operational efficiencies and other corporate actions across the IPL Energy group of companies, management anticipates that the adverse effect of weather on 1998 earnings should be substantially mitigated with many of the initiatives already reflected in the current six months results.

In addition to lower corporate provisions as compared to the prior year, the Corporate segment results include one-time after tax gains of approximately $8 million relating to the sale of a non-strategic real estate property and the recovery of previously expensed assets held in trust under a financing arrangement.

For the three months ended June 30, 1998, the Corporation's earnings increased to $147.6 million ($2.04 per share) from $131.7 million ($1.95 per share) recorded during the same period last year. Reductions in earnings from Consumers Gas due to warm weather were more than offset by higher earnings from North American and Colombian pipeline operations, contributions from the investment in Noverco, as well as the impact of the Corporate gains noted above.

On June 30, 1998, Noverco exercised a warrant to purchase 1.5 million common shares of IPL Energy. The warrant was issued in August 1997, in connection with the acquisition by IPL Energy of a 32 percent interest in Noverco and the acquisition by Noverco of an 8 percent interest in IPL Energy. Upon settlement scheduled for November 13, 1998, IPL Energy will receive $76.5 million of proceeds while Noverco's common share interest in IPL Energy will increase to approximately 10 percent.

PROJECT UPDATE: ENERGY TRANSPORTATION LINE 9 FINAL CONSTRUCTION NOTICE RECEIVED

IPL Energy's existing 30 inch diameter Line 9 pipeline between Sarnia and Montreal will be reversed to transport crude oil from Montreal, Quebec to refineries located in Oakville, Nanticoke and Sarnia, Ontario. On July 16, refiners supporting the Line 9 Reversal Project issued the Final Construction Notice thereby allowing construction to commence immediately. The ultimate capacity of the 832 km line will be 240,000 barrels per day and the projected in service date for the reversed Line 9 is April 30, 1999.

TERRACE EXPANSION RECEIVES NEB APPROVAL

The Corporation received approval from the National Energy Board ("NEB") to proceed with Phase I of the Terrace Expansion project on June 9, 1998. Building on existing IPL and Lakehead pipeline systems, Phase I will provide an initial 95,000 barrels per day capacity increase by January 1999, rising to 170,000 barrels by the end of 1999. The estimated investment for Phase I is $610 million in Canada and U.S. $138 million in the United States. Subsequent phases are projected to provide the balance of the Terrace project's incremental capacity, including a heavy crude oil allocation of up to 520,000 barrels per day.

"NEB approval represents an important milestone for one of the most significant crude oil pipeline projects in Canadian history," said Mr. MacNeill. "The Terrace Expansion project has received widespread industry support and is a vital link in future Western Canadian heavy and synthetic crude expansion programs. This project builds upon the core strengths of our existing pipeline system and strategically positions IPL Energy for future pipeline expansion opportunities. At the same time, Western Canadian producers can continue with their own expansion plans, confident in the increased access to U.S. Midwest refinery markets that the Terrace Expansion project will provide."

WILD ROSE CONSTRUCTION ON SCHEDULE FOR EARLY 1999 COMPLETION TARGET

Construction continued on target on the $475 million, wholly owned Wild Rose Pipe Line project with $131.6 million spent as at the reporting date. The pipeline, which is scheduled for completion in the first quarter of 1999, is designed to provide transportation capacity of 570,000 barrels per day from the Athabasca and Cold Lake, Alberta regions, south to the Hardisty hub, where it will access the expanded IPL and Lakehead pipeline systems, further reinforcing the strategic North American market linkages IPL Energy continues to forge.

A 30 year shipping agreement with Suncor Energy Inc. will provide a base return on the initial investment in the pipeline, while laying the foundation for enhanced returns as the Corporation markets the additional capacity to other transportation customers.

ALLIANCE DECISION ANTICIPATED IN FALL OF 1998

The NEB reserved its decision regarding the Alliance Pipeline project on May 21, 1998 and a decision is expected this Fall. IPL Energy is a founding partner in the Alliance Pipeline project, and holds a 21 percent ownership position in the $3.6 billion natural gas pipeline project. This investment is a significant step forward in the Corporation's strategic plan to build a transcontinental transportation alternative for Western Canadian natural gas. The proposed pipeline will transport natural gas through 1,900 miles of pipeline from Fort Saint John, British Columbia to U.S. Midwest markets, including Chicago. During the quarter, the project secured U.S. $2.6 billion of non-recourse debt financing, providing the financial resources necessary to complete construction of the pipeline, subject to regulatory approval.

VECTOR CONTINUES ON SCHEDULE

The IPL Energy sponsored Vector Pipeline project, which starts from the terminus of the Northern Border and Alliance Pipelines, also continued on schedule. The project now expects to receive preliminary Federal Energy Regulatory Commission (FERC) approval in the Fall of 1998.

The U.S. $471 million pipeline will extend 344 miles from Chicago to Dawn, Ontario where it connects to existing and proposed pipeline systems to provide additional transportation linkages for Western Canadian natural gas producers.

MILLENNIUM IN-SERVICE DATE REVISED TO NOVEMBER 1, 2000

During the quarter, the Millennium Pipeline project announced a revised in-service date of November 1, 2000. In-service was originally scheduled for November 1999. The pipeline has requested a Preliminary Determination by FERC on non-environmental aspects of the project by September 30, 1998 with final approval by April 30, 1999.

Upon regulatory approval, IPL Energy has an option to acquire a 7.5 percent equity interest in the Millennium Pipeline from the Columbia Gas Transmission Corporation in exchange for a 7.5 percent interest in the Vector Pipeline, further supporting the Corporation's transcontinental gas transmission strategy.

ENERGY DISTRIBUTION CORNWALL ELECTRIC ACQUISITION PROCEEDING

The acquisition of Cornwall Electric is expected to close on July 31, 1998, having received all necessary approvals from the Ontario Municipal Board in late June. Cornwall Electric represents the first step in the Corporation's expansion into the Ontario municipal electricity distribution market, serving about 25,000 residential and business customers in Cornwall and surrounding areas. The acquisition is the first sale of a municipally-owned electric utility in Ontario to a natural gas distribution company in the private sector, representing a key step in IPL Energy's strategy to take advantage of the trend towards convergence of gas and electricity.

IPL Energy Inc. is a leader in energy delivery and services, operating the world's longest crude oil and liquids pipeline through the combined Interprovincial Pipe Line Inc. and Lakehead Pipe Line Partners, L.P. systems, and Canada's largest natural gas distribution company through The Consumers' Gas Company Ltd. which serves 1.4 million residential, commercial and industrial customers in south central and eastern Ontario, Quebec and Upper New York State. IPL Energy's common shares trade on the Toronto and Montreal stock exchanges in Canada under the symbol "IPL". In the United States, the shares trade on The NASDAQ National Market under "IPPIF". Lakehead's preference units trade on the New York Stock Exchange under "LHP". -O-

IPL ENERGY INC.
HIGHLIGHTS 1
                          Three months ended  Six months ended
                                June 30,         June 30,

(unaudited; Canadian dollars 1998     1997      1998     1997
 in millions, except
 per share amounts)
--------------------------------------------------------------
FINANCIAL 2
Earnings
  Energy Transportation     37.9     28.3       71.0     57.9
  Energy Distribution      105.7    114.3      141.3    150.6
  Corporate                  4.0    (10.9)      (2.5)   (19.8)
--------------------------------------------------------------
Consolidated Earnings      147.6    131.7      209.8    188.7
--------------------------------------------------------------
--------------------------------------------------------------
Operating Revenue

  Energy Transportation    133.1    125.5      259.7    251.9
  Energy Distribution      761.3    859.6    1,262.8  1,353.6
--------------------------------------------------------------
Consolidated Operating

   Revenue                 894.4    985.1    1,522.5  1,605.5
--------------------------------------------------------------
--------------------------------------------------------------
Capital Expenditures       211.4    119.2      402.5    215.6
Cash from Operating
 Activities                 32.8     34.0       83.7     27.1
Dividends                   40.5     34.9       80.9     69.7
Per Share Amounts
  Earnings                  2.04     1.95       2.90     2.79
  Cash from operating
   activities               0.46     0.51       1.16     0.40
  Dividends                0.545    0.515       1.09     1.03
Weighted Average Shares

 Outstanding (millions)                         72.3     67.6
--------------------------------------------------------------
OPERATING
ENERGY TRANSPORTATION 3

  Deliveries (thousands

   of barrels per day)    2,188     2,028      2,179    1,997
  Barrel miles (billions)   199       183        393      372
  Average haul (miles)      999       992        995    1,029
Energy Distribution
  Gas distribution volumes

  (billion cubic feet)      163       174        275      284
  Number of active
customers (thousands)     1,405     1,350      1,405    1,350

DEGREE DAY DEFICIENCY 4
     Actual               1,616     1,919      2,922    3,270
Forecast based on
  normal weather          2,027     1,968      3,435    3,316
     --------------------------------------------------------------
     1. Highlights of Energy Distribution reflect the results of The
     Consumers' Gas Company Ltd. and other gas distribution assets on
     a quarter lag basis of consolidation for the three and six months
     ended March 31, 1998 and 1997. Gas distribution earnings for the
     nine months ended June 30, 1998 were $114.7 million (1997 -
     $158.7 million) and will be included in the September 30, 1998
     consolidated IPL Energy results.

     2. Due to the seasonal nature of gas distribution operations, the
     amounts shown for the three and six month periods are not
     indicative of the results for the full fiscal year.

     3. Energy Transportation operating highlights include the statistics
     of the 16.6 percent owned portion of the mainline system located
     in the United States.

     4. Degree day deficiency is a measure of coldness which is
     indicative of volumetric requirements of natural gas utilized for
     heating purposes in all markets. It is calculated by accumulating
     from October 1 the total number of degrees each day by which the
     daily mean temperature falls below 18 degrees Celsius. The
     figures given are those accumulated in the Toronto area.


    CONTACT:  IPL Energy Inc.
               Byron Neiles, 403/231-5916
               403/231-4844  (FAX)
               [e-mail]
               http://www.iplenergy.com
               or
               IPL Energy Inc.
               Al Monaco, 403/231-3973
               403/231-4848 (FAX)
               800/481-2804 (Toll Free)
               [e-mail]