DBRS Confirms Consumers’ Waterheater Income Fund and Operating Trust and Removes from Under Review

DBRS has today confirmed the Stability Rating of The Consumers’ Waterheater Income Fund (Consumers’ or the Fund) at STA-2 (middle) and the Debt Rating for The Consumers’ Waterheater Operating Trust (the Operating Trust) at AAA with a Stable trend. This follows the execution of an Open Bill Access (OBA) and Collection Services Agreement; a Proceeds Transfer, Servicing and Trust Agreement (TA); as well as a Transition Agreement between Enbridge Gas Distribution Inc. (EGD) and Direct Energy Marketing Limited (Direct Energy), the Fund’s servicer, among other relevant parties.

The recently executed billing and trust arrangements become effective on March 10, 2008 and extend through June 30, 2009. The OBA and new TA will have an automatic renewal on one-year terms unless either EGD or Direct Energy terminates the agreement by giving not less than six months notice of non-renewal.

Today’s action resolves the Under Review with Developing Implications status that was placed on Consumers’ and the Operating Trust’s ratings on November 7, 2007. At that time, EGD provided a notice of termination of previous trust arrangements that related to the Fund’s billing and collection activities that were undertaken on the EGD bill. EGD’s notice of termination was driven by the approved settlement agreement of the Ontario Energy Board (OEB) in February 2007 relating to an interim solution for open access to the EGD bill.

DBRS believes that the new TA and related documents contain structural protections substantially similar to the previous TA, including providing the Fund with bankruptcy remoteness from EGD, which is a key credit consideration supporting the AAA rating assigned to the Operating Trust notes.