HispanicBusiness

Favourable

--  An increase in customer electricity distribution rates, for the same    reason discussed above for the quarter--  Net transmission revenue of approximately $8.5 million recognized in    2012, for the same reason discussed above for the quarter--  Growth in the number of customers--  An increase in franchise fee revenue of approximately $4 million             Factors Contributing to Quarterly Earnings Variance

--  Rate base growth, due to continued investment in energy infrastructure,    which is being favourably impacted by growth in the number of customers--  Net transmission revenue of approximately $2 million recognized in the    fourth quarter of 2012, as a result of the distribution revenue    requirements decision received in April 2012--  The rate revenue reduction accrual during the fourth quarter of 2011,    reflecting the cumulative impact from January 1, 2011 of the decrease in    the allowed ROE for 2011              Factors Contributing to Annual Earnings Variance

--  Rate base growth, for the same reason discussed above for the quarter--  Net transmission revenue of approximately $8.5 million recognized in    2012, for the same reason discussed above for the quarter--  Lower-than-expected depreciation expense in 2012, mainly due to    construction projects being completed later in the year and lower AESO    transmission-related capital expenditures--  Lower-than-expected finance charges in 2012 associated with the timing    of debt issuances and associated interest rates on the debt

--  An approximate $1 million gain on the sale of property during the first    quarter of 2011

----------------------------------------------------------------------------Financial Highlights (Unaudited)                                Quarter                   AnnualPeriods Ended December 31     2012   2011  Variance    2012   2011  Variance--------------------------------------------------------------------------------------------------------------------------------------------------------Electricity Sales (GWh)        830    843       (13)  3,143  3,143         -Revenue ($ millions)            81     81         -     306    296        10Earnings ($ millions)           12     10         2      50     48         2--------------------------------------------------------------------------------------------------------------------------------------------------------(1)  Includes the regulated operations of FortisBC Inc. and operating,     maintenance and management services related to the Waneta, Brilliant     and Arrow Lakes hydroelectric generating plants and the electrical     utility assets owned by the City of Kelowna. Excludes the non-regulated     generation operations of FortisBC Inc.'s wholly owned partnership,     Walden Power Partnership.         Factor Contributing to Quarterly Electricity Sales Variance

--  Lower average consumption, due to warmer weather                Factors Contributing to Quarterly and Annual                              Revenue Variances

--  An overall increase in customer electricity rates, effective January 1,    2012, mainly due to ongoing investment in energy infrastructure and    forecasted certain higher expenses recoverable from customers as    reflected in the 2012/2013 revenue requirements decision received in    August 2012--  A 1.4% increase in customer electricity rates, effective June 1, 2011,    as a result of the flow through to customers of increased purchased    power costs charged to FortisBC Electric by BC Hydro, which increased    revenue for the year--  Higher pole-attachment revenue--  Higher wheeling revenue for the year--  Differences in the amount of PBR incentives refunded to customers period    over period