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<SEC-DOCUMENT>0000898080-03-000065.txt : 20030228
<SEC-HEADER>0000898080-03-000065.hdr.sgml : 20030228
<ACCEPTANCE-DATETIME>20030228164052
ACCESSION NUMBER:		0000898080-03-000065
CONFORMED SUBMISSION TYPE:	35-CERT
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20030228
EFFECTIVENESS DATE:		20030228

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			EMERA INC
		CENTRAL INDEX KEY:			0001127248
		IRS NUMBER:				868143132
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		35-CERT
		SEC ACT:		1935 Act
		SEC FILE NUMBER:	070-09787
		FILM NUMBER:		03587178

	BUSINESS ADDRESS:	
		STREET 1:		P O BOX 910 CORPORATE SECY GENERAL COUNS
		CITY:			HALIFORC

	MAIL ADDRESS:	
		STREET 1:		P O BOX 910 CORPORATE SECY GENERAL COUNS
		CITY:			HALIFORC
</SEC-HEADER>
<DOCUMENT>
<TYPE>35-CERT
<SEQUENCE>1
<FILENAME>form35cert.txt
<DESCRIPTION>RULE 24 CERTIFICATE
<TEXT>
                                                                File No. 70-9787

                       SECURITIES AND EXCHANGE COMMISSION

                           CERTIFICATE OF NOTIFICATION

                                    (Rule 24)

                                       By

                               EMERA INCORPORATED



     In accordance with the order of the Securities and Exchange Commission
dated October 1, 2001, Holding Co. Act Release No. 27445 (the "Order"), Emera
Inc. ("Emera") hereby submits its report for the period June 30, 2002 to
December 31, 2002 (the "reporting period"). The following is a listing of the
applicable reporting requirements contained in the Order together with the
response thereto. Unless otherwise defined herein, all capitalized terms in this
Certificate of Notification shall have the meaning set forth in the Order.

     In this report a currency conversion ratio of CDN $1.5796 : US $1.00 has
been used unless otherwise noted. The exchange rate is provided solely for
convenience and should not be taken to mean that the Canadian dollar amounts
have been, could have been, or could be converted to US dollars at the rate
indicated or at any other rate.

REPORTING REQUIREMENT NO. 1: For any sales of common stock by Emera during the
reporting period, the purchase price per share at the date of the agreement of
sale.

RESPONSE: On December 3, 2002, Emera issued an additional 9,500,000 common
shares. The purchase price was $16.40 per share.

REPORTING REQUIREMENT NO. 2: The total number of shares of Emera common stock
issued or issuable pursuant to options granted during the reporting period under
employee benefit plans and dividend reinvestment plans, including any employee
benefit plans or dividend reinvestment plans hereafter adopted.

RESPONSE: Emera has several share-based employee benefit plans, the Stock Option
Plan, Employee Share Purchase Plan and the Dividend Reinvestment Plan. During
the reporting period Emera issued 147,873.6327 shares under these plans.

There were 89,000 options granted during the reporting period.


                                        1
<PAGE>

REPORTING REQUIREMENT NO. 3: If Emera common stock has been transferred to a
seller of securities of a company being acquired, the number of shares so
issued, the value per share and whether the shares are restricted in the hands
of the acquirer.

RESPONSE: Not applicable.


                                        2
<PAGE>

REPORTING REQUIREMENT NO. 4: If a guarantee is issued during the reporting
period, the name of the guarantor, the name of the beneficiary of the guarantee
and the amount, terms and purpose of the guarantee.

RESPONSE: Guarantees issued and outstanding from June 30, 2002 - December 31,
2002 are set forth below.

<TABLE>
<CAPTION>
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
   Guarantor        Subsidiary        Beneficiary of          Amount of           Other Terms of Guarantee     Purpose of Guarantee
                                        Guarantee             Guarantee
                                                              $CDN/$US
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
<S>              <C>               <C>                   <C>                   <C>                           <C>
Emera Inc.       Emera Energy      Canadian Imperial     Unlimited by its      Dated July 12, 2002.          Counterparty credit
                 Inc. and Emera    Bank of Commerce      terms -$10,000,000                                  support for trading
                 Energy Services   ("CIBC")              (U.S.) estimated      Right of subrogation          purposes.
                 Inc.                                    potential exposure.   deferred until Beneficiary
                                                                               paid.

                                                                               Guarantee terminable on
                                                                               14 days notice by
                                                                               Guarantor.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Maritimes and         $2,500,000 (Cdn.)     Amended and Effective as of   Amendment to increase
                 Inc.              Northeast Pipeline,                         August 8, 2002.               amount of Guarantee,
[Amendment]                        Limited Partnership   [Increased by                                       add subsidiaries and
                 [Emera Energy                           amendment from $1     Additional subsidiaries       broaden transactions
                 Services Inc.                           million]              added by amendment - Emera    covered.
                 and Emera                                                     Energy Services Inc. and
                 Offshore Inc.]                                                Emera Offshore Inc.           Guarantees
                                                                                                             obligations of
                                                                               Guarantee broadened to        subsidiaries pursuant
                                                                               cover liabilities of          to gas transportation
                                                                               subsidiaries in respect to    agreements which may
                                                                               existing and ongoing          be entered pursuant
                                                                               agreements.                   to Maritimes &
                                                                                                             Northeast's NEB Gas
                                                                                                             Transportation Tariff.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Man Financial Inc.    Unlimited -           Dated August 19, 2002.        To guarantee
                 Services Inc.                           estimated potential                                 obligations created
                                                         exposure $1,500,000   Right of subrogation          by subsidiary
                                                         (U.S.)                deferred until Beneficiary    pursuant to a
                                                                               paid.                         brokerage account.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------


                                        3
<PAGE>

- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      New England Power     $2,500,000 (U.S.)     Dated August 23, 2002.        To entitle subsidiary
                 Services Inc.     Pool Participants                                                         to trade power on
                                                                               Debts of subsidiary to        open account under
                                   ISO New England,                            Guarantor subordinated to     the Restated NEPOOL
                                   Inc.                                        Beneficiary.                  Agreement, Restated
                                                                                                             NEPOOL Open Access
                                                                               Guarantee terminable on 30    Transmission Tariff
                                                                               days notice by Guarantor.     and the Systems
                                                                                                             Operator's tariffs.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      J. Aron and Company   Unlimited by its      Dated August 29, 2002.        Counterparty credit
                 Inc.                                    terms -$10,000,000                                  support for trading
                                                         (U.S.) estimated      Right of subrogation          purposes.
                 Emera Energy                            potential exposure    deferred until Beneficiary
                 Services Inc.                                                 paid.

                                                                               Guarantee terminable on 21
                                                                               days notice by Guarantor.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Algonquin Gas         $1,000,000 (U.S.)     Dated August 29, 2002.        Guarantee of
                 Inc.              Transmission                                                              subsidiaries' payment
                                   Company, East                               This Guarantee may be         obligations relating
                 Emera Energy      Tennessee Natural                           terminated by providing 14    to existing or future
                 Services Inc.     Gas Company, Egan                           days prior written notice.    Point-to-Point gas
                                   Hub Partners, L.P.,                                                       transportation
                                   Moss Bluff Hub                                                            agreements entered
                                   Partners, L.P., and                                                       into pursuant to the
                                   Texas Eastern                                                             Duke Transmission
                                   Transmission, L.P.                                                        Companies' FERC Gas
                                   (referred to as                                                           Transportation Tariff.
                                   "the Duke
                                   Transmission
                                   Companies")
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Independent           $2,157,557 (Cdn.)     Dated September 5, 2002.      Guarantee relates to
                 Inc.              Electricity Market                                                        Emera Energy becoming
                                   Operator ("IMO")                            Guarantee of Emera Energy's   a participant in
                                                                               payment obligations and       Ontario's electricity
                                                                               other liabilities owed to     market pursuant to
                                                                               the IMO.                      the Market Rules for
                                                                                                             the Ontario
                                                                               Emera may terminate the       Electricity Market.
                                                                               Guarantee by providing
                                                                               90 days prior
                                                                               written notice.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------


                                        4
<PAGE>

- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      New Brunswick Power   $10,000,000 (U.S.)    Dated September 5, 2002.      Counterparty credit
                 Inc.              Corporation                                                               support for trading
                                                                               Right of subrogation          purposes.
                 Emera Energy                                                  deferred until Beneficiary
                 Services Inc.                                                 paid.

                                                                               Emera may terminate this
                                                                               Guarantee upon the provision
                                                                               of 30 days prior written
                                                                               notice.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Iroquois Gas          $1,052,859 (U.S.)     Dated September 19, 2002.     Guarantee of
                 Inc.              Transmission                                                              subsidiaries payment
                                   System, L.P.                                This Guarantee may be         obligations arising
                 Emera Energy                                                  terminated by providing 14    from current or
                 Services Inc.                                                 days prior written notice.    future Point-to-Point
                                                                                                             gas transportation
                                                                                                             agreements entered
                                                                                                             pursuant to Iroquois'
                                                                                                             FERC Transmission
                                                                                                             Tariff.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      BP Products North     $500,000 (U.S.)       Dated November 6, 2002.       Counterparty credit
                 Inc.              America Inc.                                                              support for trading
                                                                               Emera may terminate the       purposes.
                 Emera Energy                                                  Guarantee by providing 14
                 Services Inc.                                                 days prior written notice.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Entergy - Koch        $5,000,000 (U.S.)     Dated November 7, 2002.       Counterparty credit
                 Inc.              Trading, LP                                                               support for trading
                                                                               Emera may terminate the       purposes.
                 Emera Energy                                                  Guarantee by providing 14
                 Services Inc.                                                 days prior written notice.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Coral Energy          $10,000,000 (U.S.)    Dated November 19, 2002.      Counterparty credit
                 Inc.              Holdings, L.P.                                                            support for trading
                                                                               Emera may terminate the       purposes.
                 Emera Energy      Coral Energy                                Guarantee by providing 14
                 Services Inc.     Resources, L.P.                             days prior written notice.

                                   Coral Energy
                                   Canada, Inc.

                                   Coral Canada U.S.
                                   Inc.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Sempra Energy         $10,000,000 (U.S.)    Dated November 20, 2002.      Counterparty credit
                 Inc.              Trading Corporation                                                       support for trading
                                                                               Emera may terminate the       purposes.
                 Emera Energy                                                  Guarantee by providing 14
                 Services Inc.                                                 days prior written notice.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------


                                        5
<PAGE>

- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Sprague Energy        $1,000,000 (U.S.)     Dated November 20, 2002.      Counterparty credit
                 Inc.              Corporation                                                               support for trading
                                                                               Guarantee may be terminated   purposes.
                 Emera Energy                                                  upon the provision of 14
                 Services Inc.                                                 days prior written notice.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
Emera Inc.       Emera Energy      Tennessee Gas         $2,000,000 (U.S.)     Dated December 23, 2002.      Counterparty credit
                 Inc.              Pipeline Company                                                          support for trading
                                                                               Guarantee may be terminated   purposes.
                 Emera Energy                                                  upon the provision of 14
                 Services Inc.                                                 days prior written notice.
- ---------------- ----------------- --------------------- --------------------- ----------------------------- -----------------------
</TABLE>


                                        6
<PAGE>

REPORTING REQUIREMENT NO. 5: The amount and terms of any financings consummated
by any Subsidiary Utility company that are not exempt under rule 52. In
addition, Emera will report to the Commission the lender, principal amount, term
and interest rate applicable to any loans between an associate company and BHE.
The report will also explain how the interest rate was determined, including the
benchmarking method that was used to establish the interest rate charged to BHE
in connection with the loan.

RESPONSE: BHE had borrowing activities during the reporting period under its
revolving and unsecured lines of credit as described in the table below.

  Date          Bank      Transaction     Amount $ (U.S.)     Rate     Maturity
07/01/02       Fleet         Borrow          2,000,000      4.75000%
07/01/02       Fleet         Borrow          1,000,000      4.75000%
07/09/02       Fleet       Repayment       (4,000,000)
07/31/02       Fleet       Repayment      (25,000,000)
07/31/02       Fleet         Borrow         15,000,000      2.56000%   08/30/02
07/31/02       Fleet         Borrow         10,000,000      2.56000%   09/30/02
07/31/02       Fleet         Borrow         10,000,000      2.56000%   10/31/02
07/31/02       Fleet         Borrow         10,000,000      2.58000%   01/31/03
08/01/02       Fleet         Borrow          6,500,000      4.75000%
08/07/02       Fleet         Repay         (1,000,000)
08/08/02       Fleet         Repay         (3,000,000)
08/09/02       Fleet         Repay         (1,000,000)
08/13/02       Fleet         Repay         (1,500,000)
08/20/02       Fleet         Borrow          1,000,000      4.75000%
08/29/02       Fleet         Repay         (1,000,000)
08/30/02       Fleet         Repay        (15,000,000)
08/30/02       Fleet         Borrow          5,000,000      2.57000%   09/30/02
08/30/02       Fleet         Borrow         10,000,000      2.56500%   02/28/03
09/03/02       Fleet         Borrow            500,000      4.75000%
09/03/02       Fleet         Borrow            500,000      4.75000%
09/09/02       Fleet         Repay         (1,000,000)
09/30/02       Fleet         Repay        (10,000,000)
09/30/02       Fleet         Repay         (5,000,000)
09/30/02       Fleet         Borrow          4,000,000      2.51625%   06/30/03
09/30/02       Fleet         Borrow          4,000,000      2.58000%   09/30/03
09/30/02       Fleet         Borrow            500,000      4.75000%


                                        7
<PAGE>

10/01/02       Fleet         Borrow          3,000,000      4.75000%
10/04/02       Fleet         Repay         (1,000,000)
10/07/02       Fleet         Repay         (1,500,000)
10/08/02       Fleet         Repay         (1,000,000)
10/31/02       Fleet         Repay        (10,000,000)
10/31/02       Fleet         Borrow          4,000,000      2.54000%   11/27/02
10/31/02       Fleet         Borrow          4,000,000      2.52000%   12/31/02
11/01/02       Fleet         Borrow          1,000,000      4.75000%
11/13/02       Fleet         Repay         (1,000,000)
11/27/02       Fleet         Repay         (4,000,000)
11/27/02       Fleet         Borrow          3,000,000      2.13000%   12/31/02
12/20/02       Fleet         Repay        (10,000,000)
12/20/02       Fleet         Repay        (10,000,000)
12/20/02       Fleet         Borrow          1,000,000       4.2500%
12/30/02       Fleet         Repay         (1,000,000)
12/31/02       Fleet         Repay         (4,000,000)
12/31/02       Fleet         Repay         (3,000,000)
12/31/02       Fleet         Borrow          3,000,000      2.16750%   01/31/03
12/31/02       Fleet         Borrow          3,000,000      2.15000%   03/31/03
12/31/02       Fleet         Borrow          2,000,000      2.23000%   12/31/03


REPORTING REQUIREMENT NO. 6: A listing of any securities issued by the
Intermediate Holding Companies during the reporting period, including principal
amount, interest rate, term, number of shares and aggregate proceeds, as
applicable, with the acquiring company identified.

RESPONSE: See Response 9 below for the terms of an intercompany note issued by
Emera US Holdings, Inc. to Emera. BHE Holdings, Inc. did not issue any
securities during the reporting period.

REPORTING REQUIREMENT NO. 7: The amount and terms of any short-term debt issued
by BHE and its subsidiaries.

RESPONSE: The amount and terms of short-term debt issued by BHE is stated in
response to Reporting Requirement 5. No BHE group company other than BHE issued
short-term debt during the reporting period.


                                        8
<PAGE>

REPORTING REQUIREMENT NO. 8: Emera's aggregate investment, as defined in rule
53, in EWGs and FUCOs as of the end of the reporting period stated in dollars
and as a percentage of Emera's consolidated retained earnings, and a description
of EWG and FUCO investments made during the reporting period.

RESPONSE:

a.   Emera's aggregate investment in Nova Scotia Power Inc. ("NSPI"), its FUCO
     subsidiary, as defined in rule 53 was CDN $1,053.6 million, US $667.8
     million, as of the end of the reporting period.*

b.   Emera has no EWG investments.

c.   Emera's aggregate investment in EWGs and FUCOs as of the end of the
     reporting period represents 318.5% of its consolidated retained earnings of
     CDN $328.9 million, US $209.7 million, as of December 31, 2002.

d.   As last reported to the Commission, Emera's aggregate investment in NSPI
     was US $613.3 million. The principal reason for the difference between that
     amount and the aggregate investment of US $667.8 million reported as of the
     end of the reporting period is Emera's acquisition of US $47.5 million of
     additional NSPI equity during the reporting period. Additionally, the
     weakening US dollar added to the increase.

*Emera has been translated as a self-sustaining foreign operation.


                                        9
<PAGE>

REPORTING REQUIREMENT NO. 9: The amount and terms of any nonexempt financing
consummated by a Nonutility Subsidiary during the reporting period.

RESPONSE:

<TABLE>
<CAPTION>
- --------------- -------------- ---------------- ------------------------- ---------- ----------- --------------------------------
Acquiring       Issuing        Security Type    Principal Amount          Interest   Term        Aggregate Proceeds
Company         Company                                                   Rate (%)
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
                                                $ CDN         $ US                               $ CDN            $ US
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
<S>             <C>            <C>              <C>           <C>         <C>        <C>         <C>              <C>
Emera           Scotia Power   Intercompany                    5,302,283    2.97%    2 years                        5,302,282.50
                US             Note
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
Emera           NSP Pipeline   Intercompany      (1,019,145)                5.50%     2 Years     (1,019,145.00)
                               Note
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
                               Intercompany
Emera           Emera Fuels    Note                (438,360)                 na       ---         (1,457,505.00)             ---
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
                               Intercompany
Emera           Strait Energy  Note                   34,818                 na       ---         (1,422,687.00)             ---
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
                Emera          Intercompany                                           9 Yrs
Emera           Offshore Inc.  Note                6,232,259                5.50%    11 mths        4,809,572.00
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
                               Intercompany
Emera           Emera Energy   Note                9,008,724                7.70%     5 Years      13,818,296.00
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
                                                                                     To Be
                                                                                     Paid Down
                Emera US       Intercompany                                          April
Emera           Holdings       Note                   53,785                5.00%    2003          13,872,081.00
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
Emera           Emera Energy   Intercompany                      500,000    7.70%     5 Years                       5,802,282.50
                US Sub #2      Note
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
Emera           Emera Energy   Intercompany                       57,700    2.99%     5 Years                       5,859,982.50
                US Sub #2      Note
- --------------- -------------- ---------------- ------------- ----------- ---------- ----------- ---------------- ---------------
</TABLE>


                                       10
<PAGE>

REPORTING REQUIREMENT NO. 10: A list of U-6B-2 forms filed with the Commission
during the reporting period, including the name of the filing entity and the
date of filing.

RESPONSE:  None.

REPORTING REQUIREMENT NO. 11: Consolidated balance sheets as of the end of the
reporting period and separate balance sheets as of the end of the reporting
period for each company, including Emera, that has engaged in jurisdictional
financial transactions during the reporting period.

RESPONSE: See Exhibit A for the financial statements of Emera. The financial
statements of BHE and the issuing companies identified in Item 9, above will be
filed by amendment.


                                       11
<PAGE>

REPORTING REQUIREMENT NO. 12: A table showing, as of the end of the reporting
period, the dollar and percentage components of the capital structure of Emera
on a consolidated basis, and each public-utility subsidiary.

RESPONSE:

As at December 31, 2002

<TABLE>
<CAPTION>
       Company            Type of capital      CDN $ (millions)     US $ (millions)       Percentage of
                                                                                              total
                                                                                          capitalization
- ----------------------------------------------------------------------------------------------------------
<S>                     <C>                    <C>                  <C>                   <C>
Emera                   Common stock*          1,332.0              842.5                 37.6%
(consolidated)          Non-controlling        267.5                169.6                 7.6%
                        interest****
                        Long-term debt**       1,621.7              1,028.0               45.9%
                        Short-term debt***     315.3                199.9                 8.9%
- ----------------------------------------------------------------------------------------------------------
                        Total                  3,536.5              2,240.0               100.0%
- ----------------------------------------------------------------------------------------------------------

BHE                     Common stock*          325.1                206.3                 54.4%
                        Preferred stock        7.5                  4.7                   1.2%
                        Long-term debt**       240.1                152.2                 40.1%
                        Short-term debt***     25.2                 16.0                  4.3%
- ----------------------------------------------------------------------------------------------------------
                        Total                  597.9                379.2                 100.0%
- ----------------------------------------------------------------------------------------------------------

MEPCO                   Common stock*          18.0                 11.4                  100.0%
                        Preferred stock
                        Long-term debt**
                        Short-term debt***
- ----------------------------------------------------------------------------------------------------------
                        Total                  18.0                 11.4                  100.0%
- ----------------------------------------------------------------------------------------------------------

Chester SVC             Common stock*
Partnership
                        Preferred stock
                        Long-term debt**       33.3                 21.1                  100.0%
                        Short-term debt***
- ----------------------------------------------------------------------------------------------------------
                        Total                  33.3                 21.1                  100.0%
- ----------------------------------------------------------------------------------------------------------
</TABLE>

Emera has been translated as a self-sustaining foreign operation.

* Common stock includes all line items in shareholder's equity (common shares,
retained earnings, contributed surplus, and foreign exchange translation
adjustment).


                                       12
<PAGE>

** Long-term debt includes both the long-term and short-term portions.

*** Short-term debt includes bank indebtedness and short-term notes payable.

**** Non-controlling interest includes the preferred stock of Nova Scotia Power
Inc. and Bangor Hydro-Electric Company.

REPORTING REQUIREMENT NO. 13: A retained earnings analysis of Emera on a
consolidated basis and for each public-utility subsidiary detailing gross
earnings, goodwill amortization, dividends paid out of capital surplus, and the
resulting capital account balances at the end of the reporting period.


                                       13
<PAGE>

RESPONSE:

For the period July 1 to December 31, 2002
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
                     Emera                    BHE                     MEPCO                    Chester SVC    Partnership
                     CDN $        US $        CDN $       US $        CDN $        US $        CDN $           US $
                     (millions)   (millions)  (millions)  (millions)  (millions)   (millions)  (millions)      (millions)
- ----------------------------------------------------------------------------------------------------------------------------
<S>                  <C>          <C>         <C>         <C>         <C>          <C>         <C>             <C>
Retained Earnings    336.8        214.8       7.3         4.6         3.5          2.2         -               -
- - Beginning of
Period
Net Income           40.3         25.7        11.7        7.7         0.5          0.3         -               -
- -------------------- ------------ ----------- ----------- ----------- ------------ ----------- --------------- -------------
Gross Retained       377.1        240.5       19.0        12.3        4.0          2.5         -               -
Earnings
Dividends Paid on    6.0          3.9         0.2         0.2         -            -           -               -
Preferred Stock
Dividends Paid on    42.2         26.9        9.4         6.0         -            -           -               -
Common Stock
Repurchase of        -            -           -           -           -            -           -               -
Common Stock
- -------------------- ------------ ----------- ----------- ----------- ------------ ----------- --------------- -------------
Retained Earnings
- - End of Period      328.9        209.7       9.4         6.1         4.0          2.5         -               -
- -------------------- ------------ ----------- ----------- ----------- ------------ ----------- --------------- -------------
Common Stock         1,000.2      638.7       57.7        36.8        1.4          0.9         -               -
Premium on Common    -            -           -           -           -            -           -               -
Stock
Other Paid-In        -            -           259.2       165.4       12.5         8.0         -               -
Capital
Unappropriated       328.9        209.7       9.4         6.1         4.0          2.5         -               -
Retained Earnings
Treasury Stock, At   -            -           -           -           -            -           -               -
Cost
Other
Comprehensive
Income               -            -           (3.2)       (2.0)       -            -           -               -
Translation
Adjustment           2.9          (5.9)       2.0         -           0.1          -           -               -
- -------------------- ------------ ----------- ----------- ----------- ------------ ----------- --------------- -------------
Total Common Equity  1,332.0      842.5       325.1       206.3       18.0         11.4        -               -
- -------------------- ------------ ----------- ----------- ----------- ------------ ----------- --------------- -------------
</TABLE>


                                       14
<PAGE>

Emera has been translated as a self-sustaining foreign operation. Opening equity
is as of June 30, 2002. Net income and dividends are translated at the average
exchange rates for the period.

REPORTING REQUIREMENT NO. 14: For any of BHE's borrowings from NSPI, a listing
of at least a minimum of three other sources of funds and their rates and terms;
in addition, a cost benefit rational as to why NSPI's funds were a better source
of funds than the other sources.

RESPONSE: There were no BHE borrowings from NSPI during the reporting period.

REPORTING REQUIREMENT NO. 15: The information required by Form U-9C-3 with
respect to companies acquired under the authorization discussed in section II,
B, supra [referring to the authorization to acquire certain energy-related
companies].

RESPONSE: Emera did not acquire interests in any companies under the
authorization discussed in section II, B, of the Order during the reporting
period.


                                       15
<PAGE>

                                    SIGNATURE

          Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this certificate of
notification in SEC File No. 70-9787 to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         Emera Incorporated

Date:February 28, 2003                   By:/s/ Richard J. Smith
     -----------------                      --------------------
                                         Richard J. Smith
                                         Corporate Secretary and General Counsel


                                       16
<PAGE>


                                  EXHIBIT INDEX



     Exhibit                       Description

        A           Emera Inc. Consolidated Financial Statements
                    for the year ended December 31, 2002.

        B           Statement Reconciling Emera's Canadian
                    GAAP Financial Statements as of and for
                    the year ended December 31, 2002 to U.S.
                    GAAP (to be filed by amendment).

        C           Audited Consolidated Financial Statements
                    of Bangor Hydro-Electric Company as of and
                    for the year ended December 31, 2002,
                    incorporated by reference to Form 10-K
                    filed by Bangor Hydro-Electric Company on
                    ___, 2003, SEC File No. 001-10922 (to be
                    filed by amendment).

        D           Balance Sheets and Income Statements of
                    Issuing Companies Identified in Item 9 (to
                    be filed by amendment).


                                       17

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>ex991.txt
<DESCRIPTION>EXHIBIT A
<TEXT>
Exhibit A















                                   EMERA INC.

                        Consolidated Financial Statements

                           December 31, 2002 and 2001


















                                MANAGEMENT REPORT


                                                                               1

<PAGE>

Management's Responsibility for Financial Reporting

The accompanying consolidated financial statements of Emera Inc. and the
information in this annual report are the responsibility of management and have
been approved by the Board of Directors ("Board").

The consolidated financial statements have been prepared by management in
accordance with Canadian generally accepted accounting principles. When
alternative accounting methods exist, management has chosen those it deems most
appropriate in the circumstances. Nova Scotia Power Inc. ("NSPI"), one of Emera
Inc.'s electric utilities and principal subsidiary, is regulated by the Nova
Scotia Utility and Review Board, which also examines and approves NSPI's
accounting policies and practices. Emera Inc.'s other utility, Bangor
Hydro-Electric Company ("Bangor Hydro"), is regulated by the Maine Public
Utilities Commission, which also examines and approves Bangor Hydro's accounting
policies and practices. In preparation of these consolidated statements,
estimates are sometimes necessary when transactions affecting the current
accounting period cannot be finalized with certainty until future periods.
Management believes that such estimates, which have been properly reflected in
the accompanying consolidated financial statements, are based on careful
judgements and are within reasonable limits of materiality. Management has
determined such amounts on a reasonable basis in order to ensure that the
consolidated financial statements are presented fairly in all material respects.
Management has prepared the financial information presented elsewhere in the
annual report and has ensured that it is consistent with that in the
consolidated financial statements.

Emera maintains systems of internal accounting and administrative controls of
high quality, consistent with reasonable cost. Such systems are designed to
provide reasonable assurance that the financial information is relevant,
reliable and accurate and that Emera's assets are appropriately accounted for
and adequately safeguarded.

The Board is responsible for ensuring that management fulfils its
responsibilities for financial reporting and is ultimately responsible for
reviewing and approving the consolidated financial statements. The Board carries
out this responsibility principally through its Audit Committee.

The Audit Committee is appointed by the Board, and its members are directors who
are not officers or employees of Emera Inc. The Committee meets periodically
with management, as well as with the internal auditors and with the external
auditors, to discuss internal controls over the financial reporting process,
auditing matters and financial reporting issues, to satisfy itself that each
party is properly discharging its responsibilities, and to review the annual
report, the consolidated financial statements and the external auditors' report.
The Audit Committee reports its findings to the Board for consideration when
approving the consolidated financial statements for issuance to the
shareholders. The Committee also considers, for review by the Board and approval
by the shareholders, the appointment of the external auditors.

The consolidated financial statements have been audited by Ernst & Young LLP,
the external auditors, in accordance with Canadian generally accepted auditing
standards on behalf of the shareholders. Ernst & Young LLP has full and free
access to the Audit Committee.

February 5, 2003
"David McD. Mann"                                      "Ronald E. Smith"
President and Chief Executive Officer                  Senior Vice-President
                                                       Chief Financial Officer



                                                                               2
<PAGE>

                                AUDITORS' REPORT

To the Shareholders of
Emera Inc.

We have audited the consolidated balance sheets of Emera Inc. as at December 31,
2002 and 2001, and the consolidated statements of earnings, retained earnings
and cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 2002 and 2001
and the results of its operations and its cash flows for the years then ended in
accordance with Canadian generally accepted accounting principles.

Halifax, Canada

February 5, 2003                                    "Ernst & Young LLP"
                                                    Chartered Accountants


                                                                               3
<PAGE>


Emera Inc.
Consolidated Statements of Earnings
Year Ended December 31
millions of dollars (except earnings per common share)

                                                         2002              2001
- --------------------------------------------------------------------------------
Revenue
     Electric                                        $1,135.5            $914.7
     Fuel oil                                            66.0              71.6
     Other                                               25.4              17.6
- --------------------------------------------------------------------------------
                                                     $1,226.9           1,003.9
- --------------------------------------------------------------------------------
Cost of operations
     Fuel for generation and power purchased            453.2             341.6
     Cost of fuel oil sold                               57.3              60.5
     Operating, maintenance and general                 291.9             194.7
     Grants in lieu of property taxes                    15.2              13.2
     Provincial capital tax                               7.3               7.6
     Depreciation                                       127.8             108.4
- --------------------------------------------------------------------------------
                                                        952.7             726.0
- --------------------------------------------------------------------------------
Earnings from operations                                274.2             277.9
Equity earnings (note 6)                                  7.0               9.6
Regulatory amortization                                (23.0)             (9.3)
Allowance for funds used during construction              4.9               5.5
- --------------------------------------------------------------------------------
Earnings before interest and income taxes               263.1             283.7
Interest (note 7)                                       145.4             122.7
Amortization of defeasance costs                         19.4              19.8
- --------------------------------------------------------------------------------
Earnings before income taxes                             98.3             141.2
Income tax (note 8)                                       4.1              14.8
- --------------------------------------------------------------------------------
Net earnings before non-controlling interest             94.2             126.4
Non-controlling interest (note 8 and 16)                 10.6              12.2
- --------------------------------------------------------------------------------
Net earnings applicable to common shares                $83.6            $114.2
- --------------------------------------------------------------------------------
Earnings per common share - basic (note 9)              $0.85             $1.20
- --------------------------------------------------------------------------------
Earnings per common share - diluted (note 9)            $0.84             $1.16
- --------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements


Emera Inc.
Consolidated Statements of Retained Earnings
Year Ended December 31
millions of dollars
                                                         2002              2001
- --------------------------------------------------------------------------------
Retained earnings at beginning of year                 $330.0            $296.8
Goodwill impairment (note 13)                           (0.3)                 -
Net earnings applicable to common shares                 83.6             114.2
- --------------------------------------------------------------------------------
                                                        413.3             411.0
Dividends                                                84.4              81.0
- --------------------------------------------------------------------------------
Retained earnings at end of year                       $328.9            $330.0
- --------------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements


                                                                               4
<PAGE>


Emera Inc.
Consolidated Balance Sheets
As at December 31
millions of dollars
                                     Assets
                                                         2002              2001
- --------------------------------------------------------------------------------
Current assets
   Cash and cash equivalents                            $28.5             $23.0
   Accounts receivable (note 10)                        156.3             131.0
   Income tax receivable                                 31.1              22.3
   Inventory                                            108.7             152.9
   Prepaid expenses                                       7.1               5.2
- --------------------------------------------------------------------------------
                                                        331.7             334.4
- --------------------------------------------------------------------------------
Deferred charges (note 11)                              436.2             485.5
- --------------------------------------------------------------------------------
Future income tax asset (note 8)                         26.4              11.2
- --------------------------------------------------------------------------------
Goodwill (note 13)                                      137.7             138.4
- --------------------------------------------------------------------------------
Investments (note 6)                                    112.2              98.6
- --------------------------------------------------------------------------------
Property, plant & equipment (note 12)                 2,776.4           2,766.8
Construction work in progress                            87.3             124.5
- --------------------------------------------------------------------------------
                                                      2,863.7           2,891.3
- --------------------------------------------------------------------------------
                                                     $3,907.9          $3,959.4
- --------------------------------------------------------------------------------

                      Liabilities and Shareholders' Equity
Current liabilities
   Current portion of long-term debt (note 14)         $203.9            $186.5
   Short-term debt (note 15)                            315.3             574.0
   Accounts payable and accrued charges                 175.1             175.1
   Dividends payable                                      3.3               3.3
- --------------------------------------------------------------------------------
                                                        697.6             938.9
- --------------------------------------------------------------------------------
Future income tax liability (note 8)                     87.2              85.1
- --------------------------------------------------------------------------------
Deferred credits (note 11)                              105.8             105.1
- --------------------------------------------------------------------------------
Long-term debt (note 14)                              1,417.8           1,381.4
- --------------------------------------------------------------------------------
Non-controlling interest (note 16)                      267.5             267.5
- --------------------------------------------------------------------------------
Shareholders' equity
   Common shares (note 17)                            1,000.2             845.4
   Foreign exchange translation adjustment (note 19)      2.9               6.0
   Retained earnings                                    328.9             330.0
- --------------------------------------------------------------------------------
                                                      1,332.0           1,181.4
- --------------------------------------------------------------------------------
                                                     $3,907.9          $3,959.4
- --------------------------------------------------------------- ----------------

Commitments (note 20)
Contingencies (note 8)

See accompanying notes to the consolidated financial statements

Approved on behalf of the Board of Directors


"Derek Oland"                                        "David McD. Mann"
Derek Oland, Chairman                                David McD. Mann, President
                                                     and Chief Executive Officer



                                       5
<PAGE>


Emera Inc.
Consolidated Statements of Cash Flows
Year Ended December 31
millions of dollars (except operating cash flow per common share)

                                                         2002           2001
- ------------------------------------------------------------------------------
Operating activities
Net earnings applicable to common shares                 $83.6         $114.2
Non-cash items
    Depreciation                                         127.8          108.4
    Amortization of deferred charges                      23.6           23.4
    Equity earnings                                      (7.0)          (9.6)
    Regulatory amortization                               23.0            9.3
    Allowance for funds used during construction         (4.9)          (5.5)
    Future income taxes                                 (13.1)          (1.8)
    Other                                                 23.0          (1.5)
- ------------------------------------------------------------------------------
Operating cash flow                                      256.0          236.9
Change in non-cash operating working capital               1.9         (91.8)
- ------------------------------------------------------------------------------
Net cash provided by operating activities                257.9          145.1
- ------------------------------------------------------------------------------
Financing activities
     Increase (reduction) of short-term debt           (151.8)          289.2
     Proceeds from issue of common shares                154.4          164.6
     Issue of preferred shares by NSPI                       -           10.9
     Issue of long-term debt                             121.2          170.0
     Retirements of long-term debt                     (186.5)        (125.6)
     Other financing activities                            4.3           10.3
- ------------------------------------------------------------------------------
Net cash (used in) provided by financing activities     (58.4)          519.4
- ------------------------------------------------------------------------------
Investing activities
     Property, plant and equipment                     (109.9)        (192.1)
     Proceeds on sale of fixed assets                     26.7            0.6
     Investments                                        (25.5)          (5.0)
     Acquisitions (note 3)                               (0.9)        (369.7)
- ------------------------------------------------------------------------------
Net cash used in investing activities                  (109.6)        (566.2)
- ------------------------------------------------------------------------------
Dividends on common shares                              (84.4)         (81.0)
- ------------------------------------------------------------------------------
Increase in cash and cash equivalents                      5.5           17.3
Cash and cash equivalents, beginning of year              23.0            5.7
- ------------------------------------------------------------------------------
Cash and cash equivalents, end of year                   $28.5          $23.0
- ------------------------------------------------------------------------------
Cash and cash equivalents consists of:
Cash                                                     $15.2          $11.4
Short-term investments                                    13.3           11.6
- ------------------------------------------------------------------------------
Cash and cash equivalents, end of year                   $28.5          $23.0
- ------------------------------------------------------------------------------
Operating cash flow per common share                     $2.59          $2.48
- ------------------------------------------------------------------------------
Supplemental disclosure of cash paid:
     Interest                                           $148.5         $117.4
     Income taxes                                         18.8           15.8
     Dividends on common shares                           84.4           80.4
- ------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements


                                                                               6
<PAGE>

Emera Inc.
Notes to the Consolidated Financial Statements

December 31, 2002 and 2001

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Emera Inc. ("Emera" or the Company), incorporated in the Province of Nova
Scotia, through its principal subsidiaries, Nova Scotia Power Inc. ("NSPI") and
Bangor Hydro-Electric Company ("Bangor Hydro"), is engaged in the production and
sale of electric energy, which is regulated by the Nova Scotia Utility and
Review Board ("UARB") and the Maine Public Utilities Commission ("MPUC"). Emera
follows Canadian generally accepted accounting principles ("GAAP"). NSPI's
accounting policies are subject to examination and approval by the UARB and are
similar to those being used by other companies in the electric utility industry
in Canada. Bangor Hydro's accounting policies are subject to examination and
approval by the MPUC and are similar to those being used by other companies in
the electric utility industry in Maine. The rate-regulated accounting policies
of NSPI and Bangor Hydro may differ from GAAP for non rate-regulated companies.
Where these differences are considered significant, disclosure of the policy has
been made in these notes to the consolidated financial statements.

     a.   Consolidation

          The consolidated financial statements include the accounts of Emera
          Inc. and its subsidiaries. Significant intercompany transactions and
          accounts have been eliminated.

     b.   Measurement Uncertainty

          The preparation of financial statements in accordance with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect the reported amounts of assets and
          liabilities at the date of the financial statements and the reported
          amounts of revenues and expenses during the reporting periods. Actual
          results may differ from these estimates.

     c.   Revenue Recognition

          The Company's revenue recognition policy is as follows:

          o  Electric: Revenues are recognized on the accrual basis, which
             includes an estimate of electricity consumed by customers in the
             year but billed subsequent to year-end.

          o  Fuel Oil: Revenues are recognized on delivery of product.

          o  Other: Revenues are recognized on the accrual basis, which
             includes an estimate for services performed and goods delivered
             during the year but billed subsequent to year-end. Unearned
             revenue is recorded as a deferred credit.

     d.   Allowance for Funds Used during Construction

          For the regulated electric business carried on by NSPI and Bangor
          Hydro, the Company provides for the cost of financing construction
          work in progress by including an allowance for funds used during
          construction ("AFUDC") as an addition to the cost of property
          constructed, using a weighted average cost-of-capital. The allowance
          will be charged to operations through depreciation over the service
          life of the related assets and recovered through future revenues.

     e.   Regulatory Amortization

          In accordance with the regulations of the UARB, significant assets of
          NSPI, which are not currently being used and are not expected to
          provide services to customers in the foreseeable


                                                                               7
<PAGE>

          future, are amortized over five years. In 2000 the UARB approved
          NSPI's request to amortize the Glace Bay generating station over 5
          years. The UARB has allowed NSPI flexibility in determining the annual
          amount to be written off in order to support rate stabilization. NSPI
          is required to make a submission to the UARB, on November 1 of each
          year, recommending the amount to be amortized for the year. Once the
          UARB has approved the submission, NSPI charges the approved amount to
          net earnings.

          In accordance with rate and accounting orders issued by the MPUC,
          Bangor Hydro has recorded regulatory assets and liabilities on its
          balance sheet. These regulatory assets and liabilities are being
          amortized over varying lives through charges to earnings.

     f.   Property, Plant and Equipment

          Property, plant and equipment are recorded at original cost, net of
          contributions in aid of construction. In accordance with its regulator
          approved accounting policies, when property, plant and equipment of
          NSPI and Bangor Hydro are replaced or retired, the original cost plus
          any removal costs incurred (net of salvage) are charged to accumulated
          depreciation. For the remainder of the Company, when property, plant
          and equipment are replaced or retired, any remaining net book value is
          charged to net earnings.

          Depreciation is determined by the straight-line method, based on the
          estimated remaining service lives of the depreciable assets in each
          category. The estimated average service lives for the major categories
          of plant in service are summarized as follows:

           Functions                          Average Service Life in Years
           ----------------------------------------------------------------
           Generation
             Thermal                                                    43
             Gas turbine                                                36
             Hydroelectric                                              77
             Wind turbine                                               20
           Transmission                                                 47
           Distribution                                                 33
           Offshore                               Unit of production basis
           Other                                                        14
           ----------------------------------------------------------------

          In accordance with the UARB, assets of NSPI, which are not currently
          being used, but will be useful in providing future service to
          customers, are not depreciated. Financing costs associated with assets
          not currently being used are deferred as incurred. Depreciation will
          occur when the asset goes into service. Significant costs in removing
          the asset from service may be deferred and amortized to earnings over
          a five-year period, subject to regulatory approval. Significant costs
          to return the asset to service are added to the capital cost of the
          asset.

     g.   Income taxes

          In accordance with ratemaking regulations established by the UARB,
          NSPI uses the taxes-payable method of accounting for income taxes.
          Bangor Hydro uses the future income tax method where allowed for
          ratemaking purposes. Emera's remaining subsidiaries follow the future
          income tax method of accounting for income taxes.

     h.   Employee Future Benefits

          Pension costs, and costs associated with non-pension post-retirement
          benefits such as health benefits to retirees and retirement awards,
          are actuarially determined using the projected benefit method prorated
          on services and management's best estimate assumptions. Pension fund
          asset values are calculated using market values at year-end. The
          expected return on pension assets is determined based on
          market-related values. The market-related values are determined in a
          rational and systematic manner so as to recognize asset gains and
          losses over a five-year period. Adjustments arising from plan
          amendments are amortized on a straight-line basis over the expected
          average remaining service period ("ARSP") of active employees. For any
          given year,


                                                                               8
<PAGE>

          when NSPI's net actuarial gain (loss), less the actuarial gain (loss)
          not yet included in the market-related value of plan assets, exceeds
          10% of the greater of the accrued benefit obligation and the
          market-related value of the plan assets, an amount equal to the excess
          divided by the ARSP is amortized. The difference between pension
          expense and pension funding is recorded as a deferred asset or credit
          on the balance sheet. For Bangor Hydro this excess is amortized on a
          straight-line basis over the expected average remaining service life
          of employees, in accordance with ratemaking purposes.

          During 2001 Emera introduced the option to its Canadian employees to
          participate in a defined contribution pension plan, in which the
          employees determined how to invest the funds. This choice did not
          include the option to transfer previous benefits from the defined
          benefit plan.

     i.   Stock-Based Compensation

          The Company has one stock-based compensation plan, which is a common
          share option plan for senior management of the Company. The Company
          accounts for its grants under this plan in accordance with the fair
          value based method of accounting for stock-based compensation.

     j.   Cash and Cash Equivalents

          Short-term investments, which consists of money market instruments
          with maturities of three months or less at an effective interest rate
          of 2.2% for 2002 (2001 - 4.3%), are considered to be cash equivalents
          and are recorded at cost, which approximates current market value.

     k.   Inventory

          Inventories of materials and supplies are valued at the lower of
          average cost and market. Coal and oil inventory is valued at the lower
          of cost, using the first-in, first-out method, and net realizable
          value.

     l.   Debt Financing and Defeasance Costs

          Financing costs pertaining to debt issues are amortized over the life
          of the related debt. The excess of the cost of defeasance investments
          over the face value of the related debt is deferred and amortized over
          the life of the defeased debt.

     m.   Costs to Terminate/Restructure Power Purchase Contracts

          Bangor Hydro has power purchase contracts, negotiated when oil prices
          were high, with several independent power producers known as small
          power production facilities. The cost of power from these facilities
          is more than Bangor Hydro would incur from other sources if it were
          not obligated under these contracts. Bangor Hydro has been attempting
          to alleviate the adverse impact of these high-cost contracts and in
          doing so has incurred costs to terminate or restructure certain of the
          contracts. The MPUC has allowed Bangor Hydro to defer these costs and
          recover them in rates. The annual amortization expense is
          approximately $32 million.

     n.   Seabrook Nuclear Project

          Bangor Hydro was a participant in the Seabrook nuclear project in
          Seabrook, New Hampshire. On December 31, 1984, Bangor Hydro had almost
          $87 million invested in Seabrook, but because the uncertainties
          arising out of the Seabrook Project were having an adverse impact on
          Bangor Hydro's financial condition, an agreement for the sale of
          Seabrook was reached in mid-1985 and was consummated in November 1986.
          In 1985 the MPUC issued an order disallowing recovery of certain
          Seabrook costs, but provided for the recovery through customer rates
          of 70% of Bangor Hydro's year-end 1984 investment in Seabrook Unit 1
          over 30 years. The annual amortization expense is approximately $3
          million.

                                                                               9
<PAGE>

     o.   Derivative Financial Instruments

          The Company uses various derivative financial instruments to hedge its
          exposure to foreign exchange, interest rate, and commodity price
          risks. These instruments are accounted for as hedges of anticipated
          transactions and, accordingly, gains and losses on these instruments
          are included in the measurement of the related hedged risk when
          realized.

          On occasion, non-hedging contracts are entered into and are
          marked-to-market at each reporting date.

     p.   Goodwill

          Effective January 1, 2002, in accordance with new accounting
          standards, the Company no longer amortizes goodwill. Instead, the
          Company evaluates the carrying value of goodwill for potential
          impairment through an annual review and analysis of fair market value.

          In accordance with the new standards for goodwill acquired after June
          30, 2001, Emera has not amortized the goodwill acquired on the
          acquisition of Bangor Hydro.

     q.   Long-Term Investments

          The Company accounts for certain investments, over which it maintains
          significant influence but not control, using the equity method,
          whereby the amount of the investment is adjusted annually for the
          company's pro-rata share of the income or loss of investment and
          reduced by the amount of any dividends received.

          Emera accounts for its investments in Maritimes & Northeast Pipeline,
          Maine Yankee Atomic Power Company, Maine Electric Power Company Inc.,
          and Greyhawk Natural Gas Storage using the equity method.

          Long-term investments over which Emera does not have significant
          influence are accounted for on the cost basis.

     r.   Deferred Gain on Asset Sale

          In 1999, Bangor Hydro completed a transaction for the sale of
          substantially all of its electric generating assets and certain
          transmission rights. Bangor Hydro realized a net gain on the sale,
          which was recorded as a deferred credit. As specified in its February
          2000 MPUC rate order, the deferred gain is being utilized over a
          70-month period to reduce electric rates. The annual amortization
          amounts are recognized in an uneven manner in order to levelize Bangor
          Hydro's revenue requirement.

     s.   Foreign Currency Translation

          Monetary assets and liabilities denominated in foreign currencies are
          converted to Canadian dollars at rates of exchange prevailing at the
          balance sheet date. The resulting differences between the translation
          at the original transaction date and the balance sheet date are
          charged to earnings.

          Assets and liabilities of self-sustaining foreign operations are
          translated using the exchange rates in effect at the balance sheet
          date and the results of operations at the average rates for the
          period. The resulting exchange gains and losses are deferred and
          included in a separate component of shareholders' equity.


                                                                              10
<PAGE>


2.   CHANGE IN ACCOUNTING POLICIES

          In 2002 the Company adopted the new accounting requirements for
          stock-based compensation. The Company has adopted the fair value based
          method of valuation for determining the amount of compensation expense
          to recognize. As discussed in note 17, the adoption of these new
          accounting requirements has resulted in an additional $0.4 million of
          compensation expense.

          In 2002 the Company adopted the new accounting requirements for
          goodwill and intangibles. Previously, the Company had amortized
          goodwill over 20 years. Under the new recommendations, goodwill is no
          longer amortized but is instead subjected to an annual impairment test
          with any resulting impairment charged to net earnings. As part of the
          new standards, the Company did not amortize goodwill on acquisitions
          completed after June 30, 2001. Accordingly, no goodwill acquired on
          the purchase of Bangor Hydro was amortized. As discussed in note 13,
          the resulting impact of the Company's initial transitional impairment
          test for January 1, 2002 was a charge to retained earnings of $0.3
          million.

          In 2002 the Company adopted the new provisions for classification of
          short-term debt obligations expected to be refinanced. Under the new
          standard, debt obligations, which are short-term, should be
          reclassified as long-term if the Company has the intention and the
          unencumbered ability to refinance the obligations for a period greater
          than one year. This assessment is performed by taking into account
          both the actual level of short-term debt at the end of the fiscal year
          and the forecasted levels of debt for the period to the end of the
          next fiscal year. The new provisions became effective on January 1,
          2002 and have been applied prospectively. As a result, as at December
          31, 2002, the Company has reclassified $120 million of debt from
          short-term to long-term.

          In 2002 NSPI changed its policy regarding employee future benefits to
          use market-related values instead of market values to calculate the
          expected return on its plan assets. The change entails recognizing
          changes in the actual fair value of the plan assets in a rational and
          systematic manner over a five-year period. The change has been applied
          retroactively but with no resulting material adjustments. The impact
          on the current year of changing this policy was to reduce the expense
          by $5.8 million.

          In 2001 the Company adopted the new accounting standards for diluted
          earnings per common share.

3.   ACQUISITIONS

     The acquisitions described below have been accounted for under the purchase
     method of accounting, and accordingly the results of operations since the
     dates of acquisition have been included in the consolidated statement of
     operations.

          2002
          During 2002 Emera Fuels acquired various fuel oil delivery companies
          for cash consideration of $0.9 million. The assets purchased consisted
          of property, plant and equipment ($0.3 million) and goodwill ($0.6
          million).


                                                                              11
<PAGE>

          2001
          In October 2001 the Company purchased 100% of the voting common shares
          of Bangor Hydro-Electric Company, an electric energy transmitter and
          distributor in central Maine. The following summarizes the transaction
          (in millions of $):

          Net Assets Acquired
          -------------------
          Net working capital                        ($0.7)
          Property, plant and equipment               373.0
          Investments                                  14.7
          Deferred charges                            205.7
          Goodwill                                    129.3
          Long-term debt                            (241.7)
          Short-term debt                             (9.4)
          Future income tax liability                (77.6)
          Deferred credits                           (69.3)
          Non-controlling interest                    (7.4)
                                                ------------

          Total cash consideration                   $316.6
                                                ------------

     In June 2001 the Company acquired an 8.4% interest in the Sable Offshore
     Energy Project offshore platforms and associated sub-sea field gathering
     lines for $53.1 million.

4.   SEGMENT INFORMATION

     The Company has three reportable segments: NSPI, Bangor Hydro, and Emera
     Energy. The Company evaluates performance based on earnings before interest
     and taxes. The accounting policies of the reportable segments are the same
     as those described in the summary of significant accounting policies.

     Reportable segments are determined based on Emera's operating activities.
     NSPI is engaged in the production and sale of electric energy in Nova
     Scotia; Bangor Hydro is engaged in the transmission and distribution of
     electric energy in central Maine; and Emera Energy includes the Company's
     activities in the transportation and distribution of natural gas and fuel
     oil products.

<TABLE>
<CAPTION>
                               NSPI              Bangor Hydro         Emera Energy           Other*              Total
- ------------------------------------------------------------------------------------------------------------------------------
millions of dollar        2002       2001       2002      2001       2002      2001      2002      2001      2002       2001
- ------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>        <C>         <C>        <C>       <C>       <C>       <C>       <C>      <C>        <C>
Revenues from
external customers       $865.8     $838.6     $263.6     $82.0      $93.1     $82.3      $4.4      $1.0   $1,226.9   $1,003.9
Depreciation              103.9       99.6       16.6       3.5        6.5       4.9       0.8       0.4      127.8      108.4
Cost of operations        637.9      577.6      195.0      61.8      121.6      81.1     (1.8)       5.5      952.7      726.0
Net inter-segment
revenues/ (expenses)        4.2       18.6      (1.0)         -     (17.9)    (18.4)      14.7     (0.2)          -          -
Equity earnings               -          -          -         -        7.0       9.6         -         -        7.0        9.6
Earnings before
interest and taxes        241.0      263.1       48.1      14.3     (20.1)      10.7     (5.9)     (4.4)      263.1      283.7
Segment assets          2,883.3    2,904.9      752.3     789.8      262.0     232.5      10.3      32.2    3,907.9    3,959.4
Total investing
activities*               104.6      111.8       15.8       9.9       30.7     112.6    (41.5)     331.9      109.6      566.2
Goodwill acquired             -          -          -         -        0.6         -         -     129.3        0.6      129.3
Goodwill impairment           -          -          -         -          -         -       0.3         -        0.3          -
loss
- ------------------------------------------------------------------------------------------------------------------------------
*Other consists of items related to corporate activities and other subsidiaries.
Other investing activities, for 2001, include the acquisition of Bangor Hydro.
</TABLE>


                                                                              12
<PAGE>

5.   EMPLOYEE FUTURE BENEFITS
     millions of dollars

Emera maintains contributory defined-benefit and defined-contribution pension
plans, which cover substantially all of its employees, and plans providing
non-pension benefits for its retirees. The details of these plans are outlined
below:

Nova Scotia Power
<TABLE>
<CAPTION>
                                                              2002                                   2001
                                               Defined-benefit      Non-pension       Defined-benefit      Non-pension
                                                   pension         benefits plans         pension           benefits
                                                    plans                                  Plans              plans
- -----------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                 <C>                <C>                   <C>
Assumptions
Discount rate                                            6.50%              6.50%               6.75%            6.75%
Long-term rate of return on plan assets                  7.50%                  -               8.00%                -
Rate of compensation increase                        3 to 5.5%          3 to 5.5%           3 to 5.5%        3 to 5.5%
Health care trend - current                                  -             10.00%                   -           11.00%
                  - ultimate                                 -              4.00%                   -            4.00%
- -----------------------------------------------------------------------------------------------------------------------
Accrued benefit obligations
Balance, January 1                                      $514.4              $35.1              $475.6            $33.1
Employer current service cost                              7.8                1.3                 7.4              1.1
Employee contributions                                     4.9                  -                 4.9                -
Interest cost                                             34.0                2.4                31.7              2.3
Actuarial loss (gain)                                     21.5              (3.7)                18.9              1.5
Benefits paid                                           (32.8)              (1.4)              (24.1)            (2.9)
- -----------------------------------------------------------------------------------------------------------------------
Balance, December 31                                    $549.8              $33.7              $514.4            $35.1
- -----------------------------------------------------------------------------------------------------------------------
Fair value of plan assets
Balance, January 1                                      $459.0                  -              $478.2                -
Employee contributions                                     4.9                  -                 4.9                -
Employer contributions                                     8.9                1.4                 8.9              2.9
Actual investment income                                (33.2)                  -               (8.9)                -
Benefits paid                                           (32.8)              (1.4)              (24.1)            (2.9)
- -----------------------------------------------------------------------------------------------------------------------
Balance, December 31                                    $406.8                  -              $459.0                -
- -----------------------------------------------------------------------------------------------------------------------
Plan deficit                                          ($143.0)            ($33.7)             ($55.4)          ($35.1)
Unamortized past service costs                             1.2                  -                 1.3                -
Unamortized actuarial losses                             181.1                0.4                90.4              4.2
Unamortized transitional obligation                        0.2               22.4                 0.2             24.6
- -----------------------------------------------------------------------------------------------------------------------
Accrued benefit asset (liability)                        $39.5            ($10.9)               $36.5           ($6.3)
- -----------------------------------------------------------------------------------------------------------------------
Expense
Current service costs                                     $7.8               $1.3                $7.4             $1.1
Interest on accrued benefits                              34.0                2.4                31.7              2.3
Less: expected return on plan assets                    (36.4)                  -              (37.9)                -
Amortization of actuarial losses                           0.5                0.1                   -                -
Amortization of transitional liability                       -                2.2                   -              2.2
Amortization of past service costs                         0.1                  -                 0.9                -
Change in valuation allowance                                -                  -               (8.1)                -
- -----------------------------------------------------------------------------------------------------------------------
Total Expense                                             $6.0               $6.0              ($6.0)             $5.6
- -----------------------------------------------------------------------------------------------------------------------

Defined-contribution plan
Employer expense                                          $0.6                  -                $0.3               -
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

The expected return on plan assets is determined based on the market-related
value of plan assets of $495.5 million at January 1, 2002, adjusted for interest
on certain cash flows during the year.


                                                                              13
<PAGE>

Bangor Hydro
<TABLE>
<CAPTION>
                                                              2002                                   2001
                                               Defined-benefit      Non-pension       Defined-benefit      Non-pension
                                                   pension         benefits plans         pension           benefits
                                                    plans                                  Plans              plans
- ------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                 <C>                <C>                  <C>
Assumptions
Discount rate                                            6.75%              6.75%               7.25%            7.25%
Long-term rate of return on plan assets                  8.00%              5.00%               9.00%            5.00%
Rate of compensation increase                            4.00%              4.00%               4.00%            4.00%
Health care trend - current                                  -              9.00%                   -            7.50%
                  - ultimate                                 -              5.00%                   -            5.00%
- ----------------------------------------------------------------------------------------------------------------------
Accrued benefit obligations
Balance, January 1/acquisition date                      $85.0              $43.8               $82.9            $42.6
Employer current service cost                              1.4                0.9                 0.6              0.3
Interest cost                                              6.2                3.2                 1.4              0.7
Actuarial loss (gain)                                      3.6                2.4               (0.1)            (0.1)
Benefits paid                                            (5.3)              (1.6)               (1.1)            (0.4)
Amendments                                                 3.2                  -                   -                -
Special termination charge                                 2.5                2.1                   -                -
Foreign currency translation adjustment                  (0.7)              (0.4)                 1.3              0.7
- ----------------------------------------------------------------------------------------------------------------------
Balance December 31                                      $95.9              $50.4               $85.0            $43.8
- ----------------------------------------------------------------------------------------------------------------------
Fair value of plan assets
Balance, January 1/acquisition date                      $66.0               $1.6               $62.1             $1.5
Employer contributions                                     0.2                1.4                   -              0.6
Retiree medical contributions                                -                0.1                   -                -
Actual investment income                                 (5.8)                  -                 4.0            (0.1)
Benefits paid                                            (5.3)              (1.6)               (1.1)            (0.4)
Foreign currency translation adjustment                  (0.7)                  -                 1.0                -
- ----------------------------------------------------------------------------------------------------------------------
Balance December 31                                      $54.4               $1.5               $66.0             $1.6
- ----------------------------------------------------------------------------------------------------------------------
Plan deficit                                           ($41.5)            ($48.9)             ($19.0)          ($42.2)
Unamortized past service costs                             6.0                  -                 3.1                -
Unamortized actuarial losses                              26.1               15.1                11.2             14.0
Unamortized transitional obligation                          -                7.9                   -              8.8
Unamortized special termination charge                     2.4                2.0                   -                -
- ----------------------------------------------------------------------------------------------------------------------
Accrued benefit liability                               ($7.0)            ($23.9)              ($4.7)          ($19.4)
- ----------------------------------------------------------------------------------------------------------------------
Expense
Employer current service costs                            $1.4               $0.9                $0.6             $0.3
Interest on accrued benefits                               6.2                3.2                 1.4              0.7
Less: expected return on plan assets                     (6.2)                  -               (1.7)                -
Amortization of actuarial losses                           0.3                  -                 0.1              0.2
Amortization of transitional liability                       -                0.8               (0.2)              0.2
(asset)
Amortization of past service costs                         0.7                1.0                 0.3                -
Amortization of special termination charge                 0.2                0.1                   -                -
- ----------------------------------------------------------------------------------------------------------------------
                                                          $2.6               $6.0                $0.5             $1.4
- ----------------------------------------------------------------------------------------------------------------------

Defined-contribution plan
Employer expense                                          $0.4                  -                $0.2                -
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

The expected return on plan assets is determined based on the market-related
value of plan assets of $80.9 million at January 1, 2002, adjusted for interest
on certain cash flows during the year.


                                                                              14
<PAGE>

6.   INVESTMENTS AND EQUITY EARNINGS

Investments are comprised of the following:

<TABLE>
<CAPTION>
millions of dollars                                 2002                                 2001
                                     Carrying value    Equity earnings    Carrying value    Equity earnings
- ------------------------------------------------------------------------------------------------------------
<S>                                  <C>               <C>                <C>               <C>
Equity accounted investments
Maritimes & Northeast Pipeline               $94.7                $9.1            $79.6               $10.0
Maine Yankee Atomic Power Company              6.4                   -              7.1                   -
Maine Electric Power Company Inc.              1.6                   -              1.4                   -
Greyhawk Natural Gas Storage                   2.5               (2.1)              3.5               (0.4)
Intragas Energy                                1.9                   -                -                   -
- ------------------------------------------------------------------------------------------------------------
Total equity investments                     107.1                 7.0             91.6                 9.6
Long-term portfolio investments                5.1                   -              7.0                   -
- ------------------------------------------------------------------------------------------------------------
                                            $112.2                $7.0            $98.6                $9.6
- ------------------------------------------------------------------------------------------------------------
</TABLE>

7.  INTEREST

Interest expense consists of the following:

millions of dollars                                            2002        2001
- -------------------------------------------------------------------------------
Interest on long-term debt                                   $118.4      $102.9
Interest on short-term debt                                    26.9        19.2
Amortization of debt financing                                  1.4         0.9
Foreign exchange losses                                         0.7         0.1
- -------------------------------------------------------------------------------
                                                              147.4       123.1
Less:
   Defeasance earnings and other interest income              (2.0)       (0.4)
- -------------------------------------------------------------------------------
                                                             $145.4      $122.7
- ------------------------------------------------------------------------------

8.  INCOME TAXES

The income tax provision differs from that computed using the statutory rates
for the following reasons:

<TABLE>
<CAPTION>
millions of dollars                           2002                  2001
- --------------------------------------------------------------------------------
Earnings before taxes                   $98.3                $141.2
- --------------------------------------------------------------------------------
<S>                                   <C>        <C>         <C>      <C>
Income taxes, at statutory rates         41.4        42.1%     62.3       44.1%
Unrecorded future income taxes on      (38.4)       (39.1)   (50.2)      (35.5)
  regulated earnings
Equity earnings not subject to tax      (3.9)        (4.0)    (4.2)       (3.0)
Foreign tax rate variance               (1.2)        (1.2)    (0.5)       (0.4)
Large Corporations Tax                    6.3          6.4      6.6         4.7
Other                                   (0.1)            -      0.8         0.6
- --------------------------------------------------------------------------------
                                          4.1         4.2%     14.8       10.5%
                                                 ----------           ----------
Income tax - current                     22.4                  14.5
- --------------------------------------------------------------------------------
Income tax - future                   ($18.3)                  $0.3
- --------------------------------------------------------------------------------
</TABLE>


                                                                              15
<PAGE>

The future income tax asset and liability comprise the following:

millions of dollars                                           2002         2001
- -------------------------------------------------------------------------------
Future income tax asset:
Tax loss carry forwards                                      $28.7       $11.0
Property, plant and equipment                                (4.9)           -
Deferred charges                                               2.2           -
Other                                                          0.4         0.2
- -------------------------------------------------------------------------------
                                                             $26.4       $11.2
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Future income tax liability:
Tax loss carryforwards                                      ($1.8)      ($0.9)
Deferred charges                                               9.1        26.7
Regulatory assets                                             11.4        13.5
Investments                                                    2.6         1.5
Property, plant and equipment                                 69.7        44.2
Financing                                                    (3.8)           -
Other                                                            -         0.1
- -------------------------------------------------------------------------------
                                                             $87.2       $85.1
- -------------------------------------------------------------------------------

NSPI filed income tax returns for previous years that increased the tax
depreciation (capital cost allowance) available to be deducted against the
Company's future taxable income. Those returns were reassessed by the Canada
Customs and Revenue Agency (CCRA), which disallowed the deductions claimed. A
notice of objection was filed with respect to the reassessments, and the issue
was litigated. In January 2002 NSPI received a favourable decision from the Tax
Court of Canada with respect to CCRA's reassessment of its corporate income tax
returns. CCRA appealed the decision to the Federal Court of Appeal which, in
January 2003, overturned the Tax Court ruling. NSPI is seeking leave to appeal
the decision to the Supreme Court of Canada.

Without the benefit of this additional deduction, it is estimated that the
Company's tax liability at December 31, 2002 would have been approximately $133
million. This potential tax liability has not been reflected in the financial
statements as on February 5, 2003 the UARB provided an accounting order
providing for deferral of any amount until the matter is finally settled. At
December 31, 2002, assuming that NSPI is successful in its appeal to the Supreme
Court, NSPI's unrecorded future income tax asset is approximately $283 million
(2001 - $320 million), a decrease of approximately $37 million (2001 - $80
million) from the previous year. The asset consists of deductible temporary
differences of $715 million (2001 - $760 million) and unused non-capital tax
losses of approximately $30 million (2001 - $32 million), which are expected to
expire as follows:

                 2003            $12.6 million
                 2004            $ 0.9 million
                 2008            $16.5 million

If NSPI is unsuccessful in appealing the January 2003 Federal Court's decision,
the unrecorded future income tax asset of NSPI would be approximately $65
million, consisting of deductible temporary differences of $171 million.


                                                                              16
<PAGE>

NON-CONTROLLING INTEREST

Non-controlling interest consists of NSPI and Bangor Hydro preferred share
dividends less a net recovery of income tax expense of $3.9 million (2001 - $2.0
million). The income tax recovery of $9.5 million in 2002 (2001 - $7.6 million)
is reflected as a reduction of preferred share dividends with an offsetting
increase in income tax expense.

<TABLE>
<CAPTION>
millions of dollars                                                               2002        2001
- ---------------------------------------------------------------------------------------------------
<S>                                                                              <C>         <C>
Preferred share dividend                                                         $14.5       $14.2
Part VI.1 tax on preferred share dividends                                         5.6         5.6
Part I tax recovery related to the Part VI.1 tax deduction - current year        (5.2)       (5.4)
Part I tax recovery related to the Part VI.1 tax deduction - prior years         (4.3)       (2.2)
- ---------------------------------------------------------------------------------------------------
                                                                                 $10.6       $12.2
- ---------------------------------------------------------------------------------------------------
</TABLE>

9.   DILUTED EARNINGS PER SHARE

     Basic earnings per share is diluted as follows:

<TABLE>
<CAPTION>
                                                                             2002
                                  -------------------------------------------------
                                   Net earnings   Weighted average common   EPS ($)
                                   ($ millions)       shares (millions)
- -----------------------------------------------------------------------------------
<S>                                    <C>                 <C>                <C>
Basic EPS                               $83.6               98.9              $0.85
Employee share plans                        -                0.1
- -----------------------------------------------------------------------------------
Diluted EPS                             $83.6               99.0              $0.84
- -----------------------------------------------------------------------------------

     Basic earnings per share is diluted as follows:

                                                                             2001
                                  -------------------------------------------------
                                   Net earnings   Weighted average common   EPS ($)
                                   ($ millions)   shares (millions)
- -----------------------------------------------------------------------------------
Basic EPS                              $114.2               95.5              $1.20
Employee share plans                        -                0.1
Series C preferred shares of NSPI         6.5                7.5
Series D preferred shares of NSPI         8.4                8.1
- -----------------------------------------------------------------------------------
Diluted EPS                            $129.1              111.2              $1.16
- -----------------------------------------------------------------------------------
</TABLE>

Senior management stock options, whose exercise price exceeded the average
market price for the period, were excluded from the above calculations because
they were anti-dilutive. Preferred shares in NSPI were excluded from the above
calculations for 2002 because they were anti-dilutive.

10.   ACCOUNTS RECEIVABLE SECURITIZATION

In February 2002, NSPI renewed an agreement with a third party to sell up to $88
million of high quality accounts receivables on a revolving basis. As part of
the agreement, NSPI continues to service all accounts receivables and retains an
interest in 10% of the accounts receivables sold, which has been recorded as a
deferred charge. This retained interest is measured at its carrying value, which
is substantially equal to its fair value. At December 31, 2002, net trade
receivables sold amounted to $75 million (2001 - $71 million).


                                                                              17
<PAGE>

11.  DEFERRED CHARGES AND CREDITS

Deferred charges and credits comprise the following:

millions of dollars                                               2002     2001
- --------------------------------------------------------------------------------
Deferred charges:
Unamortized debt financing and defeasance costs                 $215.6   $229.6
Costs to terminate/restructure purchased power contracts         114.7    146.6
Seabrook nuclear project                                          34.5     37.5
Accrued pension and non-pension benefit asset (note 5)            28.6     30.2
Deferred coal bed methane exploration costs                          -      5.5
Other                                                             42.8     36.1
- --------------------------------------------------------------------------------
                                                                $436.2   $485.5
- --------------------------------------------------------------------------------

Deferred credits:
Future site restoration liability                                $25.8    $24.4
Accrued pension and post-retirement benefit costs (note 5)        30.9     24.1
Deferred gain on asset sale                                       15.6     23.2
Unearned revenue                                                  12.4      0.2
Other                                                             21.1     33.2
- --------------------------------------------------------------------------------
                                                                $105.8   $105.1
- --------------------------------------------------------------------------------

12.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is comprised of the following:

                                                      2002
                           --------------------------------------------------
  millions of dollars               Cost       Accumulated               Net
                                              Depreciation        Book Value
  ---------------------------------------------------------------------------
  Generation
      Thermal                   $1,587.2            $581.8          $1,005.4
      Gas Turbine                   35.0              28.1               6.9
      Hydroelectric                354.9             114.9             240.0
      Wind Turbine                   3.2                 -               3.2
  Transmission                     661.5             261.1             400.4
  Distribution                   1,246.9             487.7             759.2
  Offshore                          67.8               7.8              60.0
  Other                            389.9              88.6             301.3
  ---------------------------------------------------------------------------
                                $4,346.4          $1,570.0          $2,776.4
  ---------------------------------------------------------------------------

                                                      2001
                           --------------------------------------------------
  millions of dollars               Cost       Accumulated               Net
                                              Depreciation        Book Value
  ---------------------------------------------------------------------------
  Generation
      Thermal                   $1,554.4            $548.5          $1,005.9
      Gas Turbine                   34.4              27.3               7.1
      Hydroelectric                351.7             111.0             240.7
  Transmission                     675.4             246.0             429.4
  Distribution                   1,223.9             457.9             766.0
  Offshore                          53.1               3.3              49.8
  Other                            348.5              80.6             267.9
  ---------------------------------------------------------------------------
                                $4,241.4          $1,474.6          $2,766.8
  ---------------------------------------------------------------------------

At December 31, 2002, the Glace Bay generating station had a net book value of
$27.0 million (2001 - $26.2 million). During the year NSPI amortized $1.0
million (2001 - $3.0 million) related to the plant, and capitalized $1.8 million
in AFUDC (2001 - $1.7 million) to the plant value.

During the year the Company recognized impairment of $6.4 million on assets
included in construction work in progress, a reflection of management's best
estimate of projected future cash flows on these assets.


                                                                              18
<PAGE>

13.  GOODWILL

The change in goodwill is due to the following:
(millions of $)                                              2002         2001
- -------------------------------------------------------------------------------
Balance, beginning of year                                 $138.4         $7.0
Acquired during the year                                      0.6        129.3
Impairment losses recognized                                (0.3)            -
Amortization                                                    -        (0.4)
Change in foreign exchange rate                             (1.0)          2.5
- -------------------------------------------------------------------------------
Balance, end of year                                       $137.7       $138.4
- -------------------------------------------------------------------------------

During the first quarter of 2002, the Company adopted the new accounting
recommendations for goodwill. Previously, the Company amortized goodwill over 20
years. Under the new recommendations, goodwill is no longer amortized but is
instead subjected to an annual impairment test with any resulting impairment
charged to earnings. The Company was also required to perform an initial
impairment test as of January 1, 2002, and to charge any impairment to opening
retained earnings.

As a result of its initial goodwill impairment tests, the Company determined
that goodwill impairment existed in one of its subsidiaries. The cause of the
impairment was lower estimates of future profitability and resulted in a charge
to retained earnings of $0.3 million.

In 2001 the Company adopted the new accounting requirements for goodwill in
relation to acquisitions completed after June 30, 2001. In accordance with the
new standards, goodwill acquired on the purchase of Bangor Hydro has not been
amortized.

Pro-forma net earnings applicable to common shares adjusted for the effect of
goodwill amortization prior to 2002 are:

- -------------------------------------------------------------------------------
(millions of dollars)                                           2002      2001
- -------------------------------------------------------------------------------
Net earnings applicable to common shares, as reported          $83.6    $114.2
Goodwill amortization                                              -       0.4
- -------------------------------------------------------------------------------
Net earnings applicable to common shares, adjusted             $83.6    $114.6
- -------------------------------------------------------------------------------

14.  LONG-TERM DEBT

Long-term debt includes the issues detailed below. All long-term debt
instruments are issued under trust indentures at fixed interest rates, and are
unsecured. Also included are certain bankers acceptances and commercial paper
where the Company has the intention and the unencumbered ability to refinance
the obligations for a period greater than one year.

<TABLE>
<CAPTION>
                               Effective Average
(millions of dollars)           Interest Rate %   Years of Maturity      2002      2001
- ------------------------------------------------------------------------------------------
<S>                                  <C>          <C>                <C>         <C>
Emera
Medium Term Notes                    6.000               2006          $100.0       $10.0
Private Placement                    6.297               2006            10.0        10.0
Bankers Acceptances                  2.980        One year renewable      9.0           -

NSPI
Medium Term Notes                    7.321           2002 - 2097        940.0     1,060.0
Debentures                           8.490           2003 - 2019        245.0       245.0
Commercial paper                     2.730        One year renewable    111.0           -


                                                                              19
<PAGE>

Bangor Hydro (issued and
payable in US$)
Medium Term Notes                    2.984             2002                 -         8.7
First Mortgage Bonds                 9.177         2002 - 2022          102.6       135.4
Financing Authority of Maine         7.030             2005              87.4       113.9
Municipal Review Committee           5.000             2008              18.5        21.1
Senior unsecured note                6.090             2012              31.6           -
Less: Sinking Funds                                                    (33.4)      (36.2)
- -----------------------------------------------------------------------------------------
                                                                      1,621.7     1,567.9
Less: Amount due within one year                                        203.9       186.5
- -----------------------------------------------------------------------------------------
                                                                     $1,417.8    $1,381.4
- -----------------------------------------------------------------------------------------


Repayments of long-term debt are due as follows:

millions of dollars
- -----------------------------------------------------------------------------------------
Year of Maturity                                                         2002        2001
- -----------------------------------------------------------------------------------------
One year renewable                                                     $120.0           -
2002                                                                        -      $186.5
2003                                                                    203.9       204.0
2004                                                                    172.0       172.3
2005                                                                    103.2       134.7
2006                                                                    153.6        63.7
2007                                                                      4.1           -
Greater than 5 years                                                    864.9       806.7
- -----------------------------------------------------------------------------------------
                                                                     $1,621.7    $1,567.9
- -----------------------------------------------------------------------------------------
</TABLE>

15.  SHORT-TERM DEBT

Short-term debt consists of commercial paper of $115.6 million (2001 - $219.2
million), bankers' acceptances of $128.0 million (2001 - $300.3 million), and
LIBOR loans of $27.1 million (2001 - $25.6 million) issued against lines of
credit. Commercial paper, bankers' acceptances and LIBOR loans bear interest at
prevailing market rates, which on December 31, 2002, averaged 2.88%, 3.36% and
2.02% respectively (2001 - 2.96%, 2.88% and 2.52%). The operating line of credit
consists of advances of $19.4 million (2001 - $16.2 million), which when drawn
upon, bears interest at the prime rate, which on December 31, 2002, was 4.5%
(2001 - 4.00%). The short-term debt in NSPI and Emera is unsecured. Also, Bangor
Hydro has a revolving credit loan agreement of $25.2 million (2001 - $12.7
million) that bears interest of 2.4% (2001 - 4.40%). This revolving credit loan
is secured by a First Mortgage Bond.


                                                                              20
<PAGE>

16.  NON-CONTROLLING INTEREST

The non-controlling interest represents preferred shares that are held in Nova
Scotia Power Inc. and Bangor Hydro-Electric Company.

AUTHORIZED:

Nova Scotia Power

Unlimited number of First Preferred Shares, issuable in series.

Unlimited number Second Preferred Shares, issuable in series.

Bangor Hydro

600,000 non-participating, cumulative preferred shares, par value US$100 per
share, redeemable at the option of the issuer.

ISSUED AND OUTSTANDING:
                                                                      Preferred
                                                       Millions of        Share
millions of dollars                                         Shares      Capital
- --------------------------------------------------------------------------------
January 1, 2001                                              10.40       $249.1
Converted Series B First Preferred Shares                   (0.58)            -
Issued Series C First Preferred Shares                        0.58         10.9
Preferred shares issued by Bangor Hydro                       0.05          7.5
  prior to acquisition
- --------------------------------------------------------------------------------
December 31, 2001                                            10.45       $267.5
- --------------------------------------------------------------------------------
December 31, 2002                                            10.45       $267.5
- --------------------------------------------------------------------------------

Nova Scotia Power

Series B Preferred Shares and Series C Purchase Warrants

On March 8, 1999, NSPI issued 5,000,000 First Preferred Share Units at a price
of $6.25 per Unit. Each unit consisted of one non-detachable cumulative,
redeemable First Preferred Share, Series B and a Warrant to purchase one
cumulative, redeemable First Preferred Share, Series C for cash consideration of
$18.75. On October 1, 2000, unit holders exercised 4,417,116 Series C purchase
warrants and Series B preferred shares, and converted them to Series C First
Preferred Shares. Virtually all of the remaining Series C purchase warrants and
Series B preferred shares were exercised on either January 1 or April 1, 2001
with a cash payment of $18.75. The remaining 1,305 Series B preferred shares,
which had not been converted to Series C, were cancelled in the second quarter
of 2002 and each shareholder received their original investment.

Series C Preferred Shares

Each Preferred Share Series C is entitled to a $1.225 per share per annum fixed
cumulative preferential dividend, as and when declared by the Board of
Directors, which will accrue from the date of issue and be payable quarterly on
the first day of January, April, July and September of each year. On or after
April 1, 2009, NSPI may redeem for cash the Preferred Share Series C, in whole
at any time or in part from time to time at $25.00 per share plus accrued and
unpaid dividends.

Series D Preferred Shares

On October 31, 2000, NSPI issued 5,400,000 First Preferred Shares for a price of
$25 per share. Each share is entitled to a fixed cumulative cash dividend of
$1.475 per share per annum, as and when declared by the Board of Directors.
These dividends will accrue from the date of issue and will be payable quarterly
on the fifteenth day of January, April, July, and October of each year. On or
after October 15, 2015, NSPI may redeem for cash the Preferred Share Series D,
in whole at any time, at $25 per share plus accrued and unpaid dividend.


                                                                              21
<PAGE>

Bangor Hydro

The preferred shares issued by Bangor Hydro consist of three separate issues:

|X|  25,000 non-callable 7% preferred shares
|X|  4,840 callable 4.25% preferred shares
|X|  17,500 Series A callable 4% preferred shares

17.  COMMON SHARES

AUTHORIZED:

Unlimited number of non-par value Common Shares.

<TABLE>
<CAPTION>
ISSUED AND OUTSTANDING:
millions of dollars                                             Millions    Common Share
                                                                   of          Capital
                                                                 Shares
- --------------------------------------------------------------------------------------
<S>                                                              <C>         <C>
January 1, 2001                                                   87.35        $680.8
New common share issue                                            10.35         160.0
Issued for cash under purchase plans                               0.25           4.0
Options exercised under senior management stock option plan        0.05           0.6
- --------------------------------------------------------------------------------------
December 31, 2001                                                 98.00        $845.4
New common share issue                                             9.50         149.5
Issued for cash under purchase plans                               0.28           4.6
Options exercised under senior management stock option plan        0.02           0.3
Stock-based compensation                                              -           0.4
- --------------------------------------------------------------------------------------
December 31, 2002                                                107.80      $1,000.2
- --------------------------------------------------------------------------------------
</TABLE>

DIVIDEND REINVESTMENT AND EMPLOYEE COMMON SHARE PURCHASE PLANS

The Company has a Common Shareholder Dividend Reinvestment Plan and an Employee
Common Share Purchase Plan, which provide an opportunity for shareholders and
Company employees to reinvest dividends and employees to make cash contributions
for the purpose of purchasing common shares.

STOCK-BASED COMPENSATION PLAN

The Company has a common share option plan that grants options to senior
management of the Company for a maximum term of ten years. The option price for
these shares is the closing market price of the shares on the day before the
option is granted.

All options granted to date are exercisable on a graduated basis with up to 25
percent of options exercisable on the first anniversary date and in further 25
percent increments on each of the second, third and fourth anniversaries of the
grant. If an option is not exercised within ten years, it expires and the
optionee loses all rights thereunder. The holder of the option has no rights as
a shareholder until the option is exercised and shares have been issued. The
maximum number of such shares optioned to anyone cannot exceed one percent of
the issued and outstanding common shares on the date the option is granted.

If, before the expiry of an option in accordance with its terms, the optionee
ceases to be an eligible person due to retirement or a change of responsibility
at the Company's request, such option may, subject to the terms thereof and any
other terms of the plan, be exercised at anytime within the 24 months following
the date the optionee retires, but in any case prior to the expiry of the option
in accordance with its terms.

If, before the expiry of an option in accordance with its terms, the optionee
ceases to be an eligible person due to employment termination for just cause,
resignation or death, such option may, subject to the terms thereof and any
other terms of the plan, be exercised at anytime within the six months following
the date the optionee is terminated, resigns, or dies, as applicable, but in any
case prior to the expiry of the option in accordance with its terms.


                                                                              22
<PAGE>

<TABLE>
<CAPTION>
                                              2002                             2001
                                ---------------------------------------------------------------
                                                      Weighted                        Weighted
                                  Shares under         average     Share under         average
                                        option  exercise price          Option  exercise price
- ------------------------------------------------------------------------------- ---------------
<S>                                  <C>                <C>           <C>               <C>
Outstanding, beginning of year         770,150          $15.61         620,000          $15.21
Granted                                550,100          $16.65         256,400          $16.79
Exercised                             (22,500)          $13.00        (51,250)          $13.53
Expired                               (10,000)          $19.30        (55,000)          $18.50
- -----------------------------------------------------------------------------------------------
Outstanding, end of year             1,287,750          $16.07         770,150          $15.61
Exercisable, end of year               497,825          $15.52         306,250          $15.06
- -----------------------------------------------------------------------------------------------
</TABLE>

The weighted average contractual life of options outstanding at December 31,
2002 is 7.0 years (2001 - 7.5 years). The range of exercise prices for the
options outstanding at December 31, 2002 is $11.25 to $19.30 (2001 - $11.25 to
$19.30).

The Company is using the fair value based method to measure the compensation
expense related to this plan, and has recorded $0.4 million of compensation
expense related to new awards granted since the inception of the new stock-based
compensation recommendations on January 1, 2002.

The fair value of each option is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions used for the grants:

       December 31                  2002
       Dividend yield               5.31%
       Expected volatility          15.8%
       Risk-free interest rate      5.03%
       Expected life                7 years

18.  FINANCIAL INSTRUMENTS

Financial instruments include the following:
<TABLE>
<CAPTION>
                                                            2002                            2001
                                              -------------------------------------------------------------------
millions of dollars                               Carrying amount   Fair Value    Carrying amount     Fair value
- -----------------------------------------------------------------------------------------------------------------
<S>                                                      <C>          <C>                <C>            <C>
Long-term debt                                           $1,621.7     $1,796.9           $1,567.9       $1,706.9
Short-term debt                                             315.3        316.8              574.0          560.0
Derivative financial instruments (hedges)
     Interest rate swaps                                      0.9          9.0              (0.1)           12.0
     Interest rate caps and collars                             -          0.8                1.1            0.4
     Natural gas swaps                                                   (1.7)                  -              -
     Natural gas caps and collars                             2.1        (1.5)                0.2          (0.2)
     Oil swaps                                                  -        (8.0)                  -            2.3
     Foreign exchange contracts                                 -        (1.7)                  -          (5.4)

Derivative financial instruments (non-hedges)                 0.6          0.6                  -              -
- ------------------------------------------------------------------------------- ---------------------------------
</TABLE>

LONG-TERM DEBT AND SHORT-TERM DEBT

The fair value of Emera's long-term and short-term debt is estimated based on
the quoted market prices for the same or similar issues, or on the current rates
offered to Emera, for debt of the same remaining maturities.


                                                                              23
<PAGE>

DERIVATIVE FINANCIAL INSTRUMENTS

The fair value of derivative financial instruments is estimated by obtaining
prevailing market rates from investment dealers.

Interest Rates

The Company enters into interest rate hedging contracts that convert the
interest characteristics of outstanding short-term debt from a floating to a
fixed rate basis. Interest rate swap contracts converting floating interest on
$320 million over 2003 to 2005 (2001 - $414.0 million over 2002 and 2003) to a
weighted average fixed interest rate of 5.68% (2001 - 5.30%) were outstanding at
December 31, 2002.

Interest rate caps and collars are used to insure against extreme movements in
interest rates on floating debt. Interest rate collar contracts covering $20
million (2001 - $20 million) at average fixed interest rates in a range from
5.35% to 5.75% (2001 - 5.35% to 5.75%), and interest rate cap contracts covering
$nil (2001 - $70 million) at weighted average fixed interest rates of nil (2001
- - 6.71%) were outstanding at December 31, 2002.

Commodity Prices

The Company purchased natural gas option contracts and entered into natural gas
swap contracts in 2002 to limit exposure to fluctuations in natural gas prices.
As at December 31, 2002, the Company had hedged substantially all natural gas
purchases and sales for 2003.

The Company enters into oil swap and option contracts to limit exposure to
fluctuations in world prices of heavy fuel oil. As at December 31, 2002, the
Company had entered into oil swap contracts that fix the price of approximately
70% of 2003 requirements along with a portion of 2004 requirements.

The Company also entered into option contracts for the physical delivery of
natural gas and coal.

On occasion the Company purchases non-hedging derivative financial instruments
whose value is marked-to-market at each reporting date. On December 31, 2002 the
Company held natural gas and oil futures, and electric power swap contracts,
which were marked-to-market.

Foreign Exchange

Emera enters into foreign exchange forward, option, and swap contracts to limit
exposure to currency rate fluctuations. Currency forwards are used to fix the
Canadian dollar cost to acquire U.S. dollars, reducing exposure to currency rate
fluctuations. Forward contracts to buy U.S. $79 million over 2003 and 2004 (2001
- - US $120 million for 2002) at a weighted average rate of CAD $1.5516 (2001 -
CAD $1.5392), and to sell $nil (2001 - US $35 million for 2002) at an average
rate of $nil (2001 - CAD $1.5797) were outstanding at December 31, 2002. There
were also option contracts to sell U.S. $110 million over 2003 to 2007 (2001 -
US $55 million over 2002 to 2005) at rates in a range stretching from CAD
$1.5600 in 2003 to $1.6703 in 2007 (2001 - range of CAD $1.5500 in 2002 to
$1.6075 in 2005) outstanding at December 31, 2002.

Other

Bangor Hydro entered into a weather temperature contract that limits revenue
losses from the impact of warmer weather during the winter heating season. At
December 31, 2002, the Company limited a significant portion of the exposure for
part of the fourth quarter of 2002 and the first quarter of 2003.


                                                                              24
<PAGE>

Risk Management

Interest rate risk
The Company makes use of various financial instruments to hedge against interest
rate risk, as discussed above. Additionally, the Company uses diversification as
a strategy. It maintains a portfolio of debt instruments which includes
short-term instruments and long-term instruments with staggered maturities. The
Company also deals with several counterparties so as to mitigate interest rate
concentration risk.

Credit risk
The Company is exposed to credit risk with respect to amounts receivable from
customers. Credit assessments are conducted with respect to, and deposits are
requested from, many new customers. The Company also maintains provisions for
potential credit losses, which are assessed on a regular basis. With respect to
customers outside of the sphere of electric customers, counterparty
creditworthiness is assessed through reports of credit rating agencies or other
available financial information.

19.  FOREIGN EXCHANGE TRANSLATION ADJUSTMENT

millions of $                                                  2002       2001
- -------------------------------------------------------------------------------
Balance, beginning of year                                     $6.0          -
Effect of exchange rate changes                               (3.1)       $6.0
- -------------------------------------------------------------------------------
Balance, end of year                                           $2.9       $6.0
- -------------------------------------------------------------------------------

20.  COMMITMENTS

Emera had the following significant commitments at December 31, 2002:
     o    NSPI has an annual requirement to purchase approximately $15 million
          of electricity from independent power producers for each of the next
          twenty-five years.
     o    NSPI is required to purchase approximately 60 million cubic feet of
          natural gas per day for the next eight years, and an additional 4
          million cubic feet per day, at the option of the supplier, for five
          years.
     o    NSPI has commitments to purchase approximately 65,000 mmbtu per day of
          transportation capacity on the Maritimes and Northeast Pipeline for
          periods ranging from nine to nineteen years at an approximate cost of
          $16 million per year.
     o    Bangor Hydro has various contracts committing it to purchase annually
          approximately $28 million of electricity for fifteen years from
          independent power producers.
     o    NSPI is responsible for managing a portfolio of approximately $1.2
          billion of defeasance securities held in trust. The defeasance
          securities must provide the principal and interest streams of the
          related defeased debt. Approximately 69%, or $0.8 billion, of the
          defeasance portfolio consists of investments in the related debt,
          eliminating all risk associated with this portion of the portfolio.

21.  COMPARATIVE INFORMATION

Certain of the comparative figures have been reclassified to conform to the
financial statement presentation adopted for 2002.


                                                                              25
<PAGE>


<TABLE>
<CAPTION>
    OPERATING STATISTICS

    FIVE-YEAR SUMMARY
    Year Ended December 31                    2002          2001         2000          1999         1998
    ------------------------------------------------------------------------------------------------------
<S>                                         <C>           <C>          <C>           <C>         <C>
    Electric energy sales (GWh)
       Residential                           4,401.6       3,901.7      3,632.1       3,494.6     3,377.9
       Commercial                            3,401.8       2,862.3      2,661.9       2,582.8     2,485.9
       Industrial                            4,225.9       3,952.5      3,917.2       3,834.8     3,423.7
       Other                                 1,641.8         654.1        445.0         453.2       484.4
    ------------------------------------------------------------------------------------------------------
    Total electric energy sales             13,671.1      11,370.6     10,656.2      10,365.4     9,771.9
    ------------------------------------------------------------------------------------------------------
    Sources of energy (GWh)
    Thermal - coal                           8,861.6       8,854.8      8,863.7       7,816.0     7,015.0
                    - oil                      289.2         690.8      1,347.8       1,870.9     2,358.3
                   - natural gas             1,578.7       1,129.1         43.8             -           -
    Hydro                                    1,108.7         692.2        881.2         980.7       890.9
    Wind                                         0.3             -            -             -           -
    Purchases                                2,765.9         776.6        295.2         411.3       242.0
    ------------------------------------------------------------------------------------------------------
    Total generation and purchases          14,604.4      12,143.5     11,431.7      11,078.9    10,506.2
    Losses and internal use                    933.3         772.9        775.5         713.5       734.3
    ------------------------------------------------------------------------------------------------------
    Total electric energy sold              13,671.1      11,370.6     10,656.2      10,365.4     9,771.9
    ------------------------------------------------------------------------------------------------------
    Electric customers
       Residential                           501,233       492,256      400,653       397,406     394,012
       Commercial                             47,914        46,974       32,186        31,753      31,942
       Industrial                              2,325         2,292        2,194         2,118       2,096
       Other                                  11,663        10,932        7,073         6,760       6,343
    ------------------------------------------------------------------------------------------------------
    Total electric customers                 563,135       552,454      442,016       438,037     434,393
    ------------------------------------------------------------------------------------------------------
    Capacity
    Generating nameplate capacity (MW)
       Coal Fired                              1,272         1,272        1,272         1,272       1,272
       Dual Fired                                250           250          250             -           -
       Heavy Fuel Oil-Fired                      100           100          100           350         350
       Gas Turbine                               201           201          180           180         180
       Hydroelectric                             381           381          381           381         381
       Wind Turbine                                1             -            -             -           -
    Independent power producers                   66            66           25            25          25
    ------------------------------------------------------------------------------------------------------
                                               2,271         2,270        2,208         2,208       2,208
    ------------------------------------------------------------------------------------------------------
    Total number of employees                  2,557         2,666        2,134         1,912       1,954
    ------------------------------------------------------------------------------------------------------
    km of transmission lines                   6,138         6,134        5,250         5,250       5,250
    ------------------------------------------------------------------------------------------------------
    km of distribution lines                  31,344        31,968       24,000        24,000      23,711
    ------------------------------------------------------------------------------------------------------
</TABLE>


                                                                              26
<PAGE>


    CONSOLIDATED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
    FIVE YEAR SUMMARY
    Years Ended December 31 (millions of dollars)        2002        2001        2000       1999        1998
    -----------------------------------------------------------------------------------------------------------
<S>                                                    <C>         <C>         <C>        <C>         <C>
    Statement of Earnings Information
    Revenue                                            $1,226.9    $1,003.9      $896.5     $816.6      $773.1
    -----------------------------------------------------------------------------------------------------------
    Cost of operations
       Fuel for generation and power purchased            453.2       341.6       273.9      267.5       257.3
       Cost of fuel oil sold                               57.3        60.5        67.7       15.3        14.0
       Operating, maintenance and general                 291.9       194.7       168.0      155.5       142.5
       Grants in lieu of property taxes                    15.2        13.2        11.0        8.9         5.5
       Provincial capital tax                               7.3         7.6         7.2        7.1         6.7
       Depreciation                                       127.8       108.4        98.3       94.8        91.3
    -----------------------------------------------------------------------------------------------------------
                                                          952.7       726.0       626.1      549.1       517.3
    -----------------------------------------------------------------------------------------------------------
    Earnings from operations                              274.2       277.9       270.4      267.5       255.8
    Regulatory amortization                              (23.0)       (9.3)      (19.0)     (23.1)      (16.7)
    Allowance for funds used during construction            4.9         5.5         4.8        4.8         3.8
    Equity earnings                                         7.0         9.6         6.0        5.3           -
    -----------------------------------------------------------------------------------------------------------
    Earnings before interest and income taxes             263.1       283.7       262.2      254.5       242.9
    Interest                                              145.4       122.7       115.6      116.5       112.2
    Amortization of defeasance costs                       19.4        19.8        19.8       20.0        20.5
    -----------------------------------------------------------------------------------------------------------
    Earnings before income taxes                           98.3       141.2       126.8      118.0       110.2
    Income tax                                              4.1        14.8        12.5        6.3        13.6
    -----------------------------------------------------------------------------------------------------------
    Net earnings before non-controlling interest           94.2       126.4       114.3      111.7        96.6
    Non-controlling interest                               10.6        12.2         9.9       11.3        11.2
    -----------------------------------------------------------------------------------------------------------
    Net earnings applicable to common shares               83.6       114.2       104.4      100.4        85.4
    Common dividends                                       84.4        81.0        73.2       72.2        71.1
    -----------------------------------------------------------------------------------------------------------
    Earnings retained for use in Company                 ($0.8)       $33.2       $31.2      $28.2       $14.3
    -----------------------------------------------------------------------------------------------------------
    Cost of fuel for generation - coal                   $229.6      $202.9      $186.3     $184.3      $164.8
                                - oil                      20.6        40.3        60.5       58.2        76.2
                                - natural gas              62.5        35.4         5.9          -           -
    Power purchased                                       140.5        63.0        21.2       25.0        16.3
    -----------------------------------------------------------------------------------------------------------
    Total cost of fuel for generation
      and power purchased                                $453.2      $341.6      $273.9     $267.5      $257.3
    -----------------------------------------------------------------------------------------------------------
    Balance Sheet Information
    Current asset                                        $331.7      $334.4      $196.6     $149.2      $108.3
    Other assets                                          600.3       635.1       313.2      335.2       361.4
    Investments                                           112.2        98.6        67.0       54.7        30.5
    Property, plant and equipment                       2,863.7     2,891.3     2,374.2    2,362.8     2,333.9
    -----------------------------------------------------------------------------------------------------------
    Total assets                                       $3,907.9    $3,959.4    $2,951.0   $2,901.9    $2,834.1
    -----------------------------------------------------------------------------------------------------------
    Current liabilities                                  $697.6      $938.9      $541.3     $448.5      $621.6
    Other liabilities                                     193.0       190.2        28.0       19.3        17.6
    Long-term debt                                      1,417.8     1,381.4     1,155.0    1,260.5     1,083.7
    Non-controlling interest                              267.5       267.5       249.1      231.3       200.0
    Common shares                                       1,000.2       845.4       680.8      676.5       672.5
    Foreign currency translation adjustment                 2.9         6.0           -          -           -
    Retained earnings                                     328.9       330.0       296.8      265.8       238.7
    -----------------------------------------------------------------------------------------------------------
    Total equity and liabilities                       $3,907.9    $3,959.4    $2,951.0   $2,901.9    $2,834.1
    -----------------------------------------------------------------------------------------------------------
    Investing activities                                 $109.6      $566.2      $126.1     $144.0      $162.6
    -----------------------------------------------------------------------------------------------------------
    Statement of Cash flow information
    Operating cash flow                                  $256.0      $236.9      $231.1     $226.5      $219.2
    -----------------------------------------------------------------------------------------------------------
    Financial ratios ($ per share)
    Earnings per share                                    $0.85       $1.20       $1.20      $1.16       $0.99
    Operating cash flow per share                          2.59        2.48        2.65       2.60        2.53
    -----------------------------------------------------------------------------------------------------------
</TABLE>


                                                                              27

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
