FTS Fortis Inc

(TSX:FTS) - Nearly $50 million to fund customer and community benefits, plus a
one-year electric and natural gas customer delivery rate freeze, and customer
protections, including the continuation of Central Hudson Gas & Electric
Corporation ("Central Hudson") as a stand-alone utility company, are
cornerstones of a settlement of all issues among the signatories (the
"Settlement Agreement") filed with the New York State Public Service Commission
(the "Commission") regarding the acquisition of Central Hudson, the utility
subsidiary of CH Energy Group, Inc. ("CH Energy Group") (NYSE:CHG), by Fortis
Inc. ("Fortis") (TSX:FTS). Other signatory parties to the Settlement Agreement
are the Staff of the New York State Department of Public Service, Multiple
Intervenors and the Utility Intervention Unit of the New York State Department
of State. The Settlement Agreement indicates that the acquisition is in the
public interest pursuant to New York State Public Service Law, Section 70 and,
therefore, the aforementioned parties recommend approval of the Settlement
Agreement by the Commission. Support was also received from several counties for
the portions of the Settlement Agreement of relevance to the respective
counties' interests. Closing of the acquisition is now expected to take place
during the second quarter of 2013, subject to receiving approval from the
Commission. 


"This Settlement Agreement provides multiple and substantive benefits to our
customers and the communities we serve," said Steven V. Lant, Chairman of the
Board and President of CH Energy Group. "The proposed terms also retain
substantial autonomy for Central Hudson, allowing us to continue our mission of
serving our customers well, while providing opportunities to improve service
through a close association with the Fortis family of utility companies. We are
pleased and excited to have reached this step toward finalizing the transaction
with Fortis."


"Fortis worked closely with management of Central Hudson through this thorough
regulatory approval process and has gained increased knowledge about the
utility's operating philosophy and the regulatory oversight requirements in New
York State," said Stan Marshall, President and Chief Executive Officer, Fortis
Inc. "This Settlement Agreement will provide tangible benefits to Central
Hudson's customers and will strengthen the utility's ability to meet the energy
needs of its current and future customers." 


The Settlement Agreement will moderate future customer rate increases by
providing $35 million to cover expenses that normally would be recovered in
customer rates, for example significant restoration expenses related to
Superstorm Sandy, the October 2011 snowstorm and Tropical Storm Irene, and other
similar expenses. Also, under the terms of the Settlement Agreement, Central
Hudson customers will save a guaranteed $9.25 million over five years resulting
from the elimination of costs the utility now incurs as a public company.
Additionally, the Settlement Agreement requires that customer delivery rates be
frozen until July 1, 2014 and requires the establishment of a $5 million
Customer Benefit Fund for economic development and low-income assistance
programs for communities and residents of the Mid-Hudson Valley. 


Becoming part of the Fortis family of utilities, which currently serve more than
two million customers, will bring benefits to Central Hudson, explained Lant.
"Central Hudson will be in the position to benefit from shared experiences and
knowledge from other Fortis utility companies, as all of us seek to continuously
improve our operations," he said. "In addition, Fortis has greater access to
capital that will enhance Central Hudson's ability to make significant
investments in the electric and gas system to improve customer service and
system reliability, including those recommended in the Governor's Energy Highway
initiative." 


Central Hudson will continue to maintain its name and Poughkeepsie headquarters,
as well as all of its employees and the utility's substantial civic and
community presence in the Mid-Hudson Valley. The Settlement Agreement also
provides financial protections for CH Energy Group, Central Hudson and its
customers as part of the larger Fortis organization, and Central Hudson will
continue to have annual independent financial audits. Within one year, the Board
of Directors of Central Hudson will transition to a majority of independent
directors, increase members from the Hudson Valley and New York State, and
include representatives from Fortis.


"Fortis remains focused on closing the acquisition and providing the benefits to
Central Hudson customers as quickly as possible," concluded Marshall.


The definitive merger agreement was announced between CH Energy Group and Fortis
in February 2012. CH Energy Group shareholders approved the transaction in June
2012, and several other required regulatory approvals by U.S. federal agencies
were subsequently received. For more information and to view the Settlement
Agreement, visit www.CentralHudson.com or www.FortisInc.com.


About CH Energy Group 

CH Energy Group, Inc. is an energy delivery company headquartered in
Poughkeepsie, NY. Regulated transmission and distribution subsidiary Central
Hudson Gas & Electric Corporation serves approximately 300,000 electric and
about 75,000 natural gas customers in eight counties of New York State's
Mid-Hudson River Valley, delivering natural gas and electricity in a
2,600-square-mile service territory that extends north from the suburbs of
metropolitan New York City to the Capital District at Albany. CH Energy Group
also operates Central Hudson Enterprises Corporation (CHEC), a non-regulated
subsidiary composed primarily of Griffith Energy Services, which supplies
petroleum products and related services to approximately 56,000 customers in the
Mid Atlantic Region.


About Fortis 

Fortis Inc. is the largest investor-owned distribution utility in Canada,
serving more than 2 million gas and electricity customers. Its regulated
holdings include electric utilities in five Canadian provinces and two Caribbean
countries and a natural gas utility in British Columbia. It owns non-regulated
hydroelectric generation assets across Canada and in Belize & Upstate New York.
It also owns hotels and commercial real estate in Canada.


Fortis includes forward-looking information in this material within the meaning
of applicable securities laws in Canada ("forward-looking information"). The
purpose of the forward-looking information is to provide management's
expectations regarding the acquisition of CH Energy Group by Fortis and the
expected timing and benefits thereof, the Corporation's future growth, results
of operations, performance, business prospects and opportunities, and it may not
be appropriate for other purposes. All forward-looking information is given
pursuant to the safe harbour provisions of applicable Canadian securities
legislation. The words "anticipates", "believes", "budgets", "could",
"estimates", "expects", "forecasts", "intends", "may", "might", "plans",
"projects", "schedule", "should", "will", "would" and similar expressions are
often intended to identify forward-looking information, although not all
forward-looking information contains these identifying words. The
forward-looking information reflects management's current beliefs and is based
on assumptions developed using information currently available to the
Corporation's management. Although Fortis believes that the forward-looking
statements are based on information and assumptions which are current,
reasonable and complete, these statements are necessarily subject to a variety
of risks and uncertainties, including the ability to obtain New York State
Public Service Commission regulatory approval and to satisfy conditions to
closing and the ability to realize the expected benefits of the acquisition of
CH Energy Group by Fortis.  For additional information on risk factors that have
the potential to affect the Corporation, reference should be made to the
Corporation's continuous disclosure materials filed from time to time with
Canadian securities regulatory authorities and to the heading "Business Risk
Management" in the Corporation's annual and quarterly Management Discussion and
Analysis and the "Risk Factors" section of the Annual Information Form. Except
as required by law, the Corporation undertakes no obligation to revise or update
any forward-looking information as a result of new information, future events or
otherwise after the date hereof.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Mr. Barry Perry
Vice President Finance and Chief Financial Officer
Fortis Inc.
(709) 737-2822

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