the Town of Fort Erie. Canadian Niagara Power owns  international transmission facilities, sells power into the wholesale energy markets in the United States and engages in retail energy consulting activities in Ontario. Fortis owns  a 50 per cent interest in Canadian Niagara Power with the remaining interest owned by National Grid USA. The Company signed a letter of intent with the  City of Port Colborne in July to lease the electricity distribution business of Port Colborne Hydro Inc. The lease agreement, the first of its kind in Ontario, is an innovative approach to Canadian Niagara Power’s strategy to grow its business in Ontario. Located on the north shore of Lake Erie at the entrance to the Welland Canal, Port Colborne Hydro Inc. serves approximately 9,000 customers in the City of Port Colborne. Under the terms of the $15.7 million, ten-year agreement, the Company will receive all revenues from Port Colborne Hydro Inc. in exchange for assuming responsibility for the operation of the business. The City of Port Colborne will receive lease payments from Canadian Niagara Power which will finance and own all capital additions and which will hold an option to purchase the business for fair market value at the end of the ten-year term. The operating lease will commence following the required approval of the OEB, expected early 2002.  The Company is seeking to further expand  its distribution business in Ontario by acquiring municipal electric utilities. As a result of previous sales and various municipal electric utility mergers, there are now less than 95 municipal electric utilities in Ontario. The operating lease between Canadian Niagara Power and the City of Port Colborne provides a 20 FORTIS Inc. 2OO1 Annual Report Canadian Niagara Power serves 15,000 customers in the Town of Fort Erie, Ontario. Canadian Niagara Power is one of only four investor- owned electric utilities operating in Ontario, a province where the electricity industry is dominated by Ontario Hydro successor companies. The Company operates the Rankine Generating Station in Niagara Falls, Ontario and transmits and distributes electricity to 15,000 customers in Canadian Niagara Power Operations Mardon J. Erbland, President and Chief Executive Officer (left), and Timothy B. Curtis, Vice President, Finance and Chief Financial Officer, Canadian Niagara Power Company, Limited (right)