Tillsonburg Hydro Inc.

1. Tillsonburg Hydro Inc. Update to Council Monday, April 24th, 2006 Presented by: Mark A. Renaud Chair – Tillsonburg Hydro Inc.

2. Rate changes – May 1st • Distribution cost increase – this money flows to operate Tillsonburg Hydro Inc. • Cost of basic power increase – this money flows to OPG – Ontario Power Generation to operate nuclear, coal, gas-fired, and hydro power plants • THI did not know that the province was going to layer on a base power increase simultaneously • Local portion of the bill that is going up 7% only represents about 20% of the entire bill

3. Why are local distribution rates going up? • First time that a province-wide rate setting exercise has been implemented – all electricity distribution companies are now on a level playing field – however they are owned • THI has lost money in every year from 1999 – 2004 due to artificially low local distribution rates • Bad provincial policy in the period of 1993 – 1999 forced the former PUC to reduce $1 million in working capital to zero • Need to invest in aging infrastructure & CDM

4. How does Tillsonburg’s new May 1st rate structure compare?*1,000 kwh residential customer profile

5. What Tillsonburg Hydro is doing to help you reduce your consumption: • Providing all hydro customers with coupons and offers • Replacing aging infrastructure on an ongoing basis • Keeping you informed of changes, programs and government initiatives • Implementing advanced metering technology to reduce cost and eliminate errors • In 2006, we will be implementing contests to find the oldest fridge, freezer and air conditioner = rewards for becoming efficient

6. What you can do to reduce your electricity bill: • Take advantage of our coupon programs • Get rid of those old fridges, chest freezers & window air conditioner units – they are energy pigs! • Use timers for lights, pool pumps • Use LED lighting where possible • Use programmable thermostats • Switch to compact fluorescent bulbs • Use photocell-equipped lamps for outdoor applications • Consult a certified/licensed energy audit consultant • Use microwave ovens instead of conventional oven

7. Removing Lake Lisgar transformer station Removing Forest Hill Industrial park transformer station Continuing to install advanced metering technology Maintaining MSA with Town of Tillsonburg to deliver value Working with our advocacy partner, EDA, to push for a stable regulatory environment Continuing education programs with all hydro users Working with ESWF – AIM Powergen Continue execution of due diligence report – Elecsar Ensuring a safety-conscious work environment Investing in training & development of our THI team Staging of work in conjunction with road, sewer and water projects What THI is doing in 2006 to improve efficiency & reduce costs

8. Summary: • Local distribution rate structure issue has been fixed – stability has been achieved • We will continue to work proactively at being a leader in efficient hydro distribution • Efficiency will be pursued day-in and day-out • We will work with you, our customer, to help you reduce your electricity consumption • We will ensure a safe work environment for our employees