Strong US dollar helps Canadian parent of GMP and VGS

Vermont Business Magazine Green Mountain Power and Vermont Gas Systems have made a significant contribution to the profits of its Canadian parent company this fiscal year.Valener Inc(Valener) (TSX: VNR), the public investment vehicle in GazMétro Limited Partnership (GazMétro), announcedtoday its financial results for the third quarter of fiscal 2015. Gaz Metro, based in Montreal, is the parent company of Green Mountain Power and Vermont Gas. GMP and VGS contributed nearly a third to Gaz Metro's net income so far this year. The increase in the value of the US dollar was an important factor in the Vermont operations' positive results.

"Net income fromVermontenergy distribution activities totalled$8.3million in the third quarter offiscal 2015 and$46.4million in the first nine months, year-over-year increases of$0.3million and$3.9million, respectively (see full report below).

"These increases were mainly due to a favourable exchange rate impact from the appreciating USdollar against the Canadian dollar; the impact of GMP's higher rate base resulting, among other factors, from additional investments in VermontTranscoLLC (transmission company); and an increase in return-generating non-rate-base investments in VGS's system development project. These favourable items were partly offset by a reduction in GMP's revenues, attributable, among other factors, to lower consumption related to energy efficiency measures and to consumption variances between peak and off-peak periods."

Valener recorded normalized operating cash flows(1)of$12.4million, or$0.32per common share, compared to$11.6million and$0.31per common share, in the third quarter of fiscal 2014, a$0.01or 3.2% increase per common share. After nine months, normalized operating cash flows totalled $38.1million, or$1.00per common share, up$0.26per common share or 35.1% compared to the same nine-month period last fiscal year. The nine-month increase is a result, among other factors, of the first distribution received, in February2015, from Seigneurie de Beaupré WindFarms2and3, representing$4.7million or$0.12per common share for Valener.

"The first nine months of the fiscal year were marked by GazMétro's solid results and the excellent performance turned in by the Seigneurie de Beaupré wind farms, high-quality investments that generate solid, predictable distributions.It's with great confidence that Valener is reaffirming its annual dividend growth target of 4% for the next three fiscal years,"saidPierre Monahan, Chairman of Valener's board of directors.

Valener also announced that its Board of Directors has declared a quarterly dividend of$0.26per common share for the quarter ending September30,2015. The dividend is payable onOctober 15, 2015to common shareholders of record at the close of business on September30,2015.

The Board of Directors also declared a quarterly dividend of$0.271875per Series A preferred share, for the period ofJuly 16, 2015toOctober 15, 2015, payable on October15,2015 to preferred shareholders of record at the close of business on October8,2015.

Both dividends are designated as eligible dividends for Canadian tax purposes.

As usual at the start of the summer period, when heating needs are at their lowest, Valener recorded a recurring net loss attributable to common shareholders in the third quarter of fiscal 2015. However, the loss was only$0.1million or$0.00per common share compared to a recurring net loss of$1.7million or$0.04per common share for the same period last fiscal year. After nine months, Valener's recurring net income attributable to common shareholders totalled$50.3million or$1.32per common share, up$7.1million or$0.18per common share year over year. Overall, these results are up 16.4% year over year.

Summary of GazMétro's financial results

"Of note this quarter was the Régie de l'énergie's decision to maintain our 8.90% rate of return for the next two fiscal years.This decision will help us preserve our financial integrity and attract additional capital at reasonable conditions,"explainedSophie Brochu, President and Chief Executive Officer of GazMétro.

For the first nine months of fiscal 2015, GazMétro recorded net income attributable to Partners of $213.1million, up$8.1million or 4.0% from the same period last fiscal year. This increase came mainly from favourable contributions by the Energy Distribution and Energy Production segments.

As is usual at the start of the summer period, GazMétro recorded a net loss. For the third quarter of fiscal 2015, this loss stood at$3.2million, which is comparable to the loss recorded for last fiscal year's third quarter.

Highlights for the first nine months – Valener and GazMétro

Seigneurie de Beaupré Wind Farms

Wind Farms2and3 generated 220,493 megawatthours (MWh) during the third quarter of fiscal 2015 and 736,459 MWh during the first nine months, year-over-year increases of 36,052MWh or 19.5% and of 274,797 MWh or 59.5%, respectively. These increases were essentially driven by favourable wind conditions and by the fact that these wind farms started commercial operations at the end of the first quarter of fiscal 2014.

The wind farms generated operating cash flows of$23.0million in the third quarter of fiscal 2015 and of$51.5million in the first nine months. A first distribution of$19.1million was paid in February2015, with Valener and GazMétro receiving$4.7million and$4.9million, respectively. Another distribution is expected to be paid during the fourth quarter of fiscal 2015.

WindFarm4 generated 55,265 MWh during the third quarter of fiscal 2015 and 137,310 MWh since it began commercial operations onDecember 1, 2014. It generated operating cash flows of$4.5million in the third quarter of fiscal 2015 and of$3.6million in the first nine months. A first distribution will likely be paid to Valener and GazMétro during the fourth quarter of fiscal 2015.

Highlights for the first nine months – GazMétro

Quebecactivities

Natural gas distribution inQuebec(GazMétro-QDA)

InMay 2015, the Régie de l'énergie (Régie) approved the renewal, for fiscal years 2016 and 2017, of the 8.90% rate of return on deemed common equity that it had authorized for fiscal years 2013 to 2015.

Liquefied natural gas

GazMétro is continuing to market the LNG available at its Montreal-East liquefaction plant (LSR plant), the capacity of which is expected to triple by the end of 2016. During the third quarter of fiscal 2015, GazMétro, through one of its subsidiaries, delivered 3.6million cubic metres, bringing the total for the current fiscal year to 19.6million cubic metres compared to 6.0million cubic metres in the same nine-month period last year, an increase that contributed favourably to net income.

GazMétro and its subsidiaries have entered into an agreement in principle with Hydro-Québec Distribution to supply, build and operate an LNG storage, treatment and regasification site near the TransCanada Energy (TCE) power plant in Bécancour, the goal being to supply the natural gas required to generate electricity in peak winter periods. InJune 2015, the project notice was submitted toQuebec'sMinistry of Sustainable Development, Environment and the Fight Against Climate Change, and the environmental assessment and review process will proceed in the coming months such that the required authorization certificate is obtained.

InMay 2015, Hydro-Québec Distribution filed an application with the Régie seeking approval to use LNG from the LSR plant to meet peak demand for electricity starting in winter 2018. This innovative solution will transform the TCE power plant in Bécancour, which has not produced electricity for several years now, into a strategic tool for meeting the needs of Quebecers during very cold spells by supplying it with LNG for the equivalent of approximately 100 hours a year.

U.S. activities

Greater efficiency inVermontelectricity distribution operations

During the first nine months of fiscal 2015, Green Mountain Power (GMP) continued, as planned, to merge its operations with those of Central Vermont Public Service (CVPS) such that it and its customers may continue to benefit from the resulting efficiencies and synergies.

For fiscal 2015, GMP has already reached theUS$8.0million in synergy savings attributable to its customers. Additional savings will be realized and retained by GMP, according to the sharing mechanism.

Development project for the natural gas distribution system inVermont

The Vermont Gas Systems, Inc. (VGS) system development project consists of extending natural gas distribution service by 66 km to the communities ofVergennesandMiddleburyinAddison County.

InDecember 2014, VGS submitted a project cost update to the Vermont Public Service Board (VPSB) showing that the estimated costs now stand atUS$153.6million. The VPSB held hearings inJune 2015to review the cost estimate and to reconfirm the Certificate of Public Good. A decision is expected later this fall. At this time, the project is expected to come into service towards the end of 2016. The project continues to be viewed as a beneficial solution for theState of Vermontand to enjoy the support of the government agencies. Aside from the environmental advantages, natural gas remains a competitive energy source compared to other sources of fossil fuel. As atJune 30, 2015,US$66.5million had been invested in the project.

GazMétro's financial results

Performance by the Energy Distribution segment

For the third quarter of fiscal 2015, GazMétro-QDA's net loss stood at$12.3million, a$1.7million higher loss than that of last fiscal year's third quarter. It stems mainly from a timing difference between the revenue recognition profile and that of costs, as anticipated in the 2015 rate case, which is expected to reverse at the end of fiscal 2015, partly offset by lower financial expenses.

After nine months, GazMétro-QDA's net income totalled$154.9million, down$1.4million from the same nine-month period in fiscal 2014. This decrease was mainly due to the same reasons as those provided above.

For the third quarter and first nine months of fiscal 2015, GazMétro-QDA's net income was up$0.8million and$1.9million, respectively, compared to the forecasts in the 2015 rate case.

Net income fromVermontenergy distribution activities totalled$8.3million in the third quarter of
fiscal 2015 and$46.4million in the first nine months, year-over-year increases of$0.3million and$3.9million, respectively.

These increases were mainly due to a favourable exchange rate impact from the appreciating U.S. dollar against the Canadian dollar; the impact of GMP's higher rate base resulting, among other factors, from additional investments in VermontTranscoLLC; and an increase in return-generating non-rate-base investments in VGS's system development project. These favourable items were partly offset by a reduction in GMP's revenues, attributable, among other factors, to lower consumption related to energy efficiency measures and to consumption variances between peak and off-peak periods.

Performance by the other segments

Net income from theNatural Gas Transportation segmenttotalled$2.6million for the third quarter of fiscal 2015 and$13.1million for the first nine months, down$0.2million and unchanged, respectively, from the same periods last year. The higher share in the earnings, net of income taxes, of Portland Natural Gas Transmission System (PNGTS), reflecting an increase in transported volumes resulting from the signing of new short-term contracts and from higher demand due to colder temperatures, was cancelled out by the unfavourable impact of theFebruary 2015decision on PNGTS's rates made by the Federal Energy Regulatory Commission.

TheEnergy Production segmentconsists of the non-regulated energy production business of windfarms2and3 and windfarm4, which are jointly owned by GazMétro, Valener and Boralex Inc. on the private lands of the Seigneurie de Beaupré.

The net income from this segment totalled$0.3million for the third quarter of fiscal 2015 and$2.7million for the first nine months, year-over-year increases of$0.6million and$2.2million, respectively. These increases were driven by favourable wind conditions, by higher revenues generated by wind farms 2 and 3, which were put into service at the end of the first quarter of fiscal 2014, and by the start-up of windfarm4 inDecember 2014.

TheEnergy Services, Storage and Other segmentrecorded a net loss of$0.2million for the third quarter of fiscal 2015 and net income of$1.5million for the first nine months, representing favourable changes of$1.2million and$3.3million, respectively, compared to the same periods last year. These increases were mainly driven by higher net income from GazMétro LNG 2013 LP owing to the performance of short-term LNG supply contracts and by greater profitability at Climatisation et Chauffage Urbains de Montréal, s.e.c. given a drop in its supply costs.

Conference call

Valener will hold a conference call with financial analysts today at2:00 pm (Eastern Time)to discuss its results and those of GazMétro for the third quarter endedJune 30, 2015.

The call will be broadcast live and is accessible by dialling647-427-7450or toll-free1-888-231-8191. For 30 days afterward, a rebroadcast will be accessible by dialling 416-849-0833 or toll-free
1-855-859-2056 (access code: 82254871). It will also be available via webcast on Valener's website in theEvents and Presentationspage of the Investors section and can be heard during the 90 days following the initial call.

Overview of Valener

Valener is a widely held public company that serves as the investment vehicle in GazMétro. Through its investment in GazMétro, Valener offers its shareholders a solid investment in a diversified and largely regulated energy portfolio inQuebecandVermont. As a strategic partner, Valener, on one hand, contributes to GazMétro's growth, and on the other hand invests in wind power production inQuebectogether with GazMétro. Valener favours energy sources and uses that are innovative, clean, competitive and profitable. Valener's common and preferred shares are listed on the Toronto Stock Exchange under the "VNR" symbol for common shares and under the "VNR.PR.A" symbol for Series A preferred shares.www.valener.com

Overview of GazMétro

With more than$6 billionin assets, GazMétro is a leading energy provider. It is the largest natural gas distribution company inQuebec, where its network of over 10,000 km of underground pipelines serves over 300 municipalities and more than 195,000 customers. GazMétro is also present inVermont, producing electricity and distributing electricity and natural gas to meet the needs of more than 305,000 customers. GazMétro is actively involved in the development and operation of innovative, promising energy projects, including natural gas as fuel and liquefied natural gas as a replacement to higher emission-producing energies, the production of wind power, and the development of biomethane. GazMétro is a major energy sector player that takes the lead in responding to the needs of its customers, regions and municipalities, local organizations and communities while also satisfying the expectations of its Partners (GazMétro inc. and Valener) and employees.www.gazmetro.com

Cautionary note regarding forward-looking statements

This press release may contain forward-looking information within the meaning of applicable securities laws.Such forward-looking information reflects the intentions, plans, expectations and opinions of the management of GazMétro inc. (GMi), in its capacity as General Partner of GazMétro, acting as manager of Valener (the management of the manager), and is based on information currently available to the management of the manager and assumptions about future events. Forward-looking statements can often be identified by words such as "plans," "expects," "estimates," "seeks," "targets," "forecasts," "intends," "anticipates" or "believes" or similar expressions, including the negative and conjugated forms of these words. Forward-looking statements involve known and unknown risks and uncertainties and other factors beyond the control of the management of the manager. A number of factors could cause the actual results of Valener or of GazMétro to differ significantly from historical results or current expectations, as described in the forward-looking statements, including but not limited to the general nature of the aforementioned, terms of decisions rendered by regulatory agencies, uncertainty on whether GazMétro will obtain approvals from regulatory agencies and interested parties to carry out all of its business activities and the socio-economic risks associated with those activities, the competitiveness of natural gas in relation to other energy sources in the context of falling global oil prices, the reliability or costs of natural gas supply and electricity supply, the integrity of the natural gas and electricity distribution systems, the evolution and profitability of Seigneurie de Beaupré Wind Farms 2 and 3 General Partnership (Wind Farms 2 and 3) and Seigneurie de Beaupré Wind Farm4 General Partnership (Wind Farm 4) and other development projects, the ability for Valener to generate sufficient cash to support its anticipated target annual dividend growth rate on its common shares, the ability to complete attractive acquisitions and the related financing and integration aspects, the ability to complete new development projects, the ability to secure future financing, general economic conditions, exchange rate and interest rate fluctuations, weather conditions and other factors described in the Risk Factors Relating to Valener section and in the Risk Factors Relating to GazMétro section of Valener's Management's Discussion and Analysis for the fiscal year endedSeptember 30, 2014and in Valener's and GazMétro's disclosure filings. Although the forward-looking statements contained herein are based on what the management of the manager believes to be reasonable assumptions, in particular assumptions to the effect that no unforeseen changes in the legislative and regulatory framework of energy markets inQuebecand in the New England states will occur; that the applications filed with the regulatory agencies will be approved as submitted; that natural gas prices will remain competitive; that the supply of natural gas and electricity will be maintained or will be available at competitive costs; that no significant event occurring outside the ordinary course of business, such as a natural disaster or other calamity, will occur; that GazMétro will be able to continue distributing substantially all of its net income (excluding non-recurring items); that Wind Farms 2 and 3 and Wind Farm 4 will be able to make distribution payments to their partners; that Valener will be able to generate sufficient cash to support its anticipated target annual dividend growth rate on its common shares; that GMP will be able to continue to quickly and effectively integrate CVPS's operations; that liquidity needs for GazMétro's development projects will be obtained through a combination of operating cash flows, borrowings on credit facilities, capital injections from Partners, and issuances of debt securities; and that the subsidiaries will obtain the required authorizations and funds needed to finance their development projects; in addition to the other assumptions described in Valener's Management's Discussion and Analysis for the quarter endedJune 30, 2015, the management of the manager cannot assure investors that actual results will be consistent with these forward- looking statements. These forward-looking statements are made as of this date, and the management of the manager assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws. These statements do not reflect the potential impact of any unusual item or any business combination or other transaction that may be announced or that may occur after the date hereof. Readers are cautioned to not place undue reliance on these forward-looking statements.

SOURCE MONTREAL,Aug. 7, 2015/CNW Telbec/ -Valener Inc.