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Nova Scotia Power's Tax Appeal Dismissed by Supreme Court Of Canada

June 11, 2004 (Halifax, NS): The Supreme Court of Canada today dismissed Nova Scotia Power Inc.'s (NSPI) appeal to allow approximately $150 million in income tax deductions the company claimed between 1998 and 2002. Nova Scotia Power is a wholly owned subsidiary of Emera Inc. (TSX:EMA)

The issue arose when NSPI filed income tax returns to claim deductions related to the capitalization of interest on assets constructed by its predecessor, Nova Scotia Power Corporation (NSPC). The Canada Revenue Agency (CRA) disallowed the deductions claimed. NSPI successfully pursued the issue through the Tax Court of Canada. The Federal Court overturned the Tax Court decision. NSPI then appealed the Federal Court decision to the Supreme Court of Canada, which issued its ruling today.

In order to avoid incurring non-deductible interest charges in the event its appeal was unsuccessful, NSPI deposited the balance owing with CRA in 2003. The company's regulator provided an accounting order allowing NSPI to defer the amount while the matter was before the Supreme Court. In light of today's Supreme Court ruling, NSPI will be amending its May 28, 2004 rate application to provide for amortization of the amount over a reasonable time period.

About Emera Inc.

Emera Inc. (EMA-TSX) is a diversified energy and services company, with 570,000 customers and $4.0 billion in assets. The company has two wholly-owned regulated electric utility subsidiaries, Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Nova Scotia Power supplies over 95% of the electric generation, transmission and distribution in Nova Scotia. Bangor Hydro provides electricity transmission and distribution service to 110,000 customers in eastern Maine. It is a member of the New England Power Pool, and is interconnected with the other New England utilities to the south and with New Brunswick Power to the north. In addition, Emera Energy incorporates Emera's 12.9% interest in the Maritimes & Northeast Pipeline, which delivers Sable natural gas to markets in Maritime Canada and the northeastern United States; and Emera Energy Services, Emera Fuels, and Emera's business development activities.