NOTICE OF HEARING

APPLICATION NO. 1317233

AQUILA NETWORKS CANADA LTD. (ANCL) & AQUILA NETWORKS CANADA (ALBERTA) LTD. (ANCA)

TRANSFER OF ALL ISSUED SHARES OF ANCA FROM ANCL TO FORTIS ALBERTA HOLDINGS INC. (FORTIS ALBERTA)

APPLICATION NO. 1318425

FORTIS ALBERTA AND ANCA

REQUEST FOR APPROVAL OF CERTAIN FINANCING MATTERS

Take Notice that the Alberta Energy and Utilities Board (EUB) will hold a public hearing of Applications No. 1317233 and No. 1318425. The hearing will start on Tuesday, February 10, 2004 at 9:00 a.m. at the Calgary Offices of the EUB, Govier Hall, 2nd Floor, 640 - 5 Avenue SW, Calgary, Alberta. All interveners must be present at the commencement of the hearing to register their appearance.

Nature of the Applications

Application No. 1317233 (Share Transfer Application)

ANCL owns all of the issued shares of ANCA. Pursuant to a Share Purchase Agreement (SPA), dated September 15, 2003, between ANCL and Fortis Inc. (Fortis), as amended, it was agreed that the issued and outstanding shares of ANCA are to be sold by ANCL to Fortis or a wholly-owned subsidiary of Fortis, effective the Closing Date as defined in the SPA, and no later than June 30, 2004 (Transaction). On October 17, 2003, the SPA was assigned to Fortis Alberta, an indirect, wholly owned subsidiary of Fortis, which was incorporated under the provisions of the Alberta Business Corporations Act on October 6, 2003. Upon receipt of EUB approval, ANCA will transfer all of its issued and outstanding shares from ANCL to Fortis Alberta.

Pursuant to the Designation Regulation, AR 131/2000, ANCL and ANCA are designated as owners of a public utility to which Sections 101, 102, and 109 of the Public Utilities Board Act (PUB Act) apply. Therefore, EUB approval of the Transaction is required.

In particular, ANCL is seeking the following relief:

                  (i)            Approval of the disposition of the shares of ANCA, pursuant to Section 102 of the PUB Act and Paragraph (4) of EUB Order U2001-097; and

                (ii)            A direction, order, or decision from the EUB that the proceeds of the transactions contemplated by the SPA, in their entirety, are to be allocated to or otherwise accrue to ANCL as shareholder of ANCA.

ANCA is seeking the following relief:

                  (i)            Approval, pursuant to Section 102 of the PUB Act, to transfer 100% of its issued and outstanding shares from ANCL to Fortis Alberta;

                (ii)            A declaration, pursuant to Section 79(1)(c) of the PUB Act, that Section 101 of the PUB Act does not apply to ANCA in respect of the transactions to be taken under the SPA. In the alternative, pursuant to Section 101 of the PUB Act, approval of the transactions to be undertaken under the SPA in so far as such transactions may require EUB approval; and

               (iii)            A declaration, pursuant to Section 79(1)(c) of the PUB Act, that Section 109 of the PUB Act does not apply to ANCA in respect of any 'union' of ANCA with Fortis or any of its affiliates, to the extent that the purchase of the outstanding shares of ANCA by Fortis Alberta under the SPA may constitute a union under that Section. In the alternative, pursuant to Section 109 of the PUB Act, approval of the union of ANCA with Fortis or any of its affiliates by means of the purchase of the outstanding shares of ANCA by Fortis Alberta under the SPA in so far as such union may require EUB approval.

Application No. 1318425 (Financing Application)

In recognition that if the Share Transfer Application is approved (and Fortis Alberta becomes designated as an owner of a public utility to which Sections 101, 102, and 109 of the PUB Act apply), Fortis Alberta and ANCA have applied to the EUB for approval of certain financing matters.

The SPA contemplates that, upon closing of the Transaction, ANCA will repay its indebtedness to its affiliate corporations and to Credit Suisse First Boston (Indebtedness). To enable this repayment, Scotiabank has made available to Fortis Alberta, a non-revolving replacement credit facility in the maximum amount of $393 million (Debt Replacement Facility). If the Board approves the SPA, ANCA will accept an assignment of and assume liability for the Debt Replacement Facility, which it will use to pay out the Indebtedness. Fortis Alberta or ANCA, as its assignee, will have the option to extend the maturity date of the Debt Replacement Facility for two additional, one-year terms beyond the original one-year term. Consequently, EUB approval is required.

In connection with the Transaction and the acquisition of the shares of Aquila Networks Canada (British Columbia) Ltd., Scotiabank has made available to Fortis a non-revolving credit facility having a term of two years in the maximum amount of $860 million (Acquisition Facility). Fortis has also completed a public subscription receipt equity financing in the amount of $350 million. Proceeds from the subscription receipt equity financing and from the Acquisition Facility equal to the purchase price for the ANCA shares will be indirectly contributed to Fortis Alberta by way of subscription for common shares of Fortis Alberta, which requires EUB approval.

As part of the borrowing arrangements under the Acquisition Facility, Fortis is required, subject to receipt of any required regulatory approval, to have Fortis Alberta unconditionally guarantee all indebtedness, liabilities and obligations of Fortis to Scotiabank under the Acquisition Facility.

Specifically, Fortis Alberta and ANCA are seeking an Order of the Board, pursuant to Section 101(2)(a)(ii) of the PUB Act, approving the issuance of certain evidence of indebtedness by Fortis Alberta and ANCA.

In particular, Fortis Alberta is seeking:

                  (i)            An EUB Order, pursuant to Section 101(2)(a)(i) of the PUB Act, approving the issuance of certain of its shares; and

                (ii)            An EUB Order or other approval, pursuant to Section 101(2)(d)(i) of the PUB Act, insofar as is necessary, permitting Fortis Alberta to issue a guarantee in favour of Scotiabank.

Additional Information

To obtain additional information or a copy of the Sale Application contact:

Bryan Curtis

Vice-President Regulatory

Aquila Networks Canada (Alberta) Ltd.

#700, 801 7 Avenue SW

Calgary, Alberta  T2P 3P7

Phone:   (403) 514-4030

Fax:      (403) 514-5030

E-mail:  bryan.curtis@aquila.com

To obtain additional information or a copy of the Financing Application contact:

Copies of the Applications are available for viewing at the EUB's Calgary and Edmonton offices at the addresses indicated below:

For information about EUB procedures contact:

Utilities Branch, Calgary Office

Attention: Mike Asgar-Deen

Telephone:  (403) 297-8200

Email: mike.asgar-deen@gov.ab.ca

To Register as an Intervener

Any party wishing to register as an intervener should do so by November 14, 2003. A copy of your intervention, including your reasons for intervening, should be sent to the applicants c/o Mr. Bryan Curtis and c/o Mr. Jim Spinney or Ms. Bernette Ho, at the addresses shown above. Twelve (12) copies should also be sent to the attention of Mr. Mike Asgar-Deen, Application Officer, at the EUB's Calgary Office at the address noted above, and by email to the EUB Utilities Branch at EUB.UTL@gov.ab.ca.

In accordance with section 38 of the EUB Rules of Practice, all witnesses must give evidence under oath or affirmation.

Process and Schedule

The EUB has established the process and schedule set out below to deal with the Sale and Financing Applications. The Hearing date shown below may be advanced if no intervener evidence is filed and if there is no conflict with other scheduled regulatory proceedings.

Issued at Calgary, Alberta, on October 31, 2003.

ALBERTA ENERGY AND UTILITIES BOARD

Michael J. Bruni, Q.C., General Counsel