Nova Scotia Power and Devco Reach New Coal Deal.

SYDNEY, NOVA SCOTIA--(BUSINESS WIRE)--Sept. 11, 1995--Nova Scotia Power Inc. (TSE, ME: NSI/NSI.PR.A) Nova Scotia Power Inc. (NSPI) has announced that it has reached a new coal deal with its principal fuel supplier, the Cape Breton Development Corporation (DEVCO). The two companies have been in negotiations on the price of coal and other related issues for more than a year. Speaking at a news conference in Sydney, NS, today, NSPI President and CEO, Louis Comeau commented that reaching the agreement was not an easy process for either party and he called the negotiations very frustrating at times. "The breakthrough that ended the impasse came this summer and credit for that goes to my counterpart Joe Shannon," said Comeau. "His understanding of our needs, as DEVCO s largest customer, helped us find a workable compromise," he said.

Under the terms of the new agreement, DEVCO s price for the coal to be delivered to Nova Scotia Power will drop by 18 percent over the next three years. The agreement is retroactive to April 1, 1995 and covers the period to December 1999. Quantity was also a point of contention in the negotiations between the two companies. Under the new deal, 1.9 million tonnes of coal a year will be delivered to Nova Scotia Power's Lingan, Point Aconi and Point Tupper generating plants in Cape Breton. An additional 1.9 million tonnes of coal will be delivered to Trenton over the life of the agreement. NSPI can vary that amount by up to 10 per cent in any given year. DEVCO has also agreed to make quality improvements which will lead to reduced emissions from NSPI's generating facilities.

Comeau said, "From the start of negotiations we have been telling DEVCO that they needed to offer us prices that were more competitive and in line with market prices. We simply wanted to buy the right amount of coal at fair market prices. Our fuel bill accounts for 33 percent of our revenues, a figure that is out of sync with other thermal-based utilities in North America," said the NSPI President. This new agreement allows for the continuation of the contract between Nova Scotia Power and DEVCO. It also puts an end to DEVCO's legal action against NSPI.

Comeau called the agreement a major deal and said, "It represents in the range of $850 million worth of sales for DEVCO over a five year term. A deal of this size is not only important to our company and to DEVCO," said Comeau, "but it is also of great importance to the Nova Scotia economy."

Comeau called the deal a significant step in the right direction. "While the price cut is not as much as we wanted, we recognize this new deal is one that works for both companies." Comeau concluded by saying NSPI was happy to have the new deal and was looking forward to a future of closer cooperation and understanding between the two companies.

CONTACT: NSPI Public Affairs

Stephanie Ryan

902/428-6682 or 458-8843