$9 million to be Donated to Winter Warmth Fund Operated by United Way
TORONTO, ONTARIO--(CCNMatthews - July 20, 2006) - Enbridge Gas Distribution Inc., (TSX:ENB) (NYSE:ENB) a wholly owned subsidiary of Enbridge Inc., announced today that it has entered into a settlement agreement in a proposed class proceeding related to late payment penalties charged in the past by Enbridge Gas Distribution.
If the settlement agreement is approved by the Ontario Superior Court of Justice, Enbridge Gas Distribution will donate $9 million to the Winter Warmth Fund prior to the end of January 2007. Initially launched by Enbridge Gas Distribution, Toronto Hydro and the United Way in 2004, other Ontario natural gas and electric utilities have since joined the Winter Warmth Fund. The Winter Warmth Fund provides eligible low-income customers of participating utilities with financial assistance for the payment of their natural gas and electricity bills. The settlement will also require Enbridge Gas Distribution to make payments of approximately $10.2 million to class counsel on account of the plaintiff's legal fees and expenses and a payment to the Class Proceedings Fund, operated by the Law Foundation of Ontario, of approximately $2 million. The total amount to be paid by Enbridge Gas Distribution in connection with the settlement is $21.2 million. Enbridge Gas Distribution's agreement to settle the matter on this basis does not constitute any admission of liability on its part.
Enbridge Gas Distribution believes that the amounts to be donated to the Winter Warmth Fund will create a lasting legacy of valuable assistance to Enbridge Gas Distribution's most vulnerable low-income customers for many years to come.
In order to implement the proposed settlement, counsel for the plaintiff will bring a motion in the Ontario Superior Court of Justice (the "Court") for approval of the settlement, at which the proposed settlement will be considered. Enbridge Gas Distribution expects the motion to be heard by the Court in mid-August 2006. If approved by the Court, the settlement will be implemented on the basis described in this release. If the Court does not approve the settlement, the settlement agreement will become null and void, the proposed payments will not be made by Enbridge Gas Distribution and the litigation will likely continue.
Late payment penalty revenues are included in Enbridge Gas Distribution's estimate of revenues for the year and therefore accrue to the benefit of all customers, reducing the cost of providing distribution services. The Ontario Energy Board ("OEB") approves these estimates and resulting rates each year. Enbridge Gas Distribution intends to apply to the OEB for recovery of the proposed payments resulting from the settlement of this action.
Background:
On April 22, 2004, the Supreme Court of Canada released its decision in a case commenced against Enbridge Gas Distribution by a customer (Gordon Garland) with respect to late payment penalties. The Supreme Court of Canada determined that Enbridge Gas Distribution would be required to repay a portion of amounts paid to it as late payment penalties from April 1994. The total amount of late payment penalties billed between April 1994 and February 2002 (when Enbridge Gas Distribution's late payment penalty was revised) was approximately $74 million.
On February 1, 2002, Enbridge Gas Distribution changed its late payment penalty from a one-time five per cent charge to a one-time two per cent charge on current gas charges. These charges were made pursuant to rate orders issued by the OEB. Based on further direction from the OEB, Enbridge Gas Distribution's late payment penalty was changed again in October 2005 to a monthly time-based late payment penalty of 1.5 per cent of the outstanding balance on a customer's account.
Enbridge Gas Distribution has an almost 160-year history and is Canada's largest natural gas distribution company. Enbridge Gas Distribution is owned by Enbridge Inc., a Canadian-based company that is leader in energy transportation and distribution in North America and internationally. Enbridge provides distribution services to 1.8 million customers in the provinces of Ontario, Quebec and New Brunswick, and in New York State. Enbridge's common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the United States under the symbol ENB. Information about Enbridge is available on the Company's website at www.enbridge.com.
When used in this news release, the words "anticipate", "expect", "project", "believe", "estimate", "forecast" and similar expressions are intended to identify forward-looking statements, which include statements relating to pending and proposed projects. Such statements are subject to certain risks, uncertainties and assumptions pertaining to operating performance, regulatory parameters, weather and economic conditions and, in the case of pending and proposed projects, risks relating to design and construction, regulatory processes, obtaining financing and performance of other parties, including partners, contractors and suppliers.
For more information please contact:
Enbridge Gas Distribution Inc.
Lisa McCarney-Warus
Media
(416) 495-5662
Email: lisa.mccarney@enbridge.com
or
Enbridge Gas Distribution Inc.
Bob Rahn
Investment Community
(403) 231-7398
Email: bob.rahn@enbridge.com
Website: www.enbridge.com