An End of An Era; UI Finalizes Sale of Power Plants Today.

NEW HAVEN, Conn.--(BUSINESS WIRE)--April 16, 1999--

The United Illuminating Company today completed the $272 million sale of its two generating stations to Wisvest-Connecticut, LLC, a division of Wisconsin Energy of Milwaukee, marking an end to UI's 100 years in the power generation business.

Top executives from UI and Wisvest today signed documents to complete the sale of the 466-megawatt New Haven Harbor Station and 590-megawatt Bridgeport Harbor Station.

Although the closing is bittersweet for many employees, UI President, Chairman and Chief Executive Officer Nat Woodson noted the action is also the beginning of a new era for the New Haven-based electric utility.

"This sale represents an important step toward a new competitive marketplace in the region," said Woodson. "It now allows us to focus our energies on our strength as a reliable, customer-driven deliverer of energy services."

He also praised the employees, who are leaving UI to work for Wisvest. "These employees have contributed greatly to UI's success over the past number of years. Speaking for other UI employees, we wish them well in their new careers," said Woodson.

In May 1998, UI announced intentions to sell its fossil-fueled generation assets in a four-month long, two-stage bidding process to comply with Connecticut's electric restructuring law.

Under the law, Connecticut utilities must divest these assets by either selling them outright; or winning a bid for them in an auction, then transferring them into an unregulated subsidiary.

Given UI's small generation portfolio and the risks associated in an industry that is being dominated by large regional or national companies operating a commodity-type business, UI chose to focus on expanding its transmission and distribution business and its unregulated subsidiaries.

UI plans to use the sale proceeds to pay down debt. The sale also will help the company achieve the 10% rate reduction mandated under Connecticut's electric restructuring law.

As part of the sale, Wisvest agreed to preserve UI's current collective bargaining contract, offering jobs to the 143 union employees at New Haven Harbor Station and Bridgeport Harbor Station. Of this number, 118 have accepted positions with Wisvest; while the remainder has opted to stay with UI.

Wisvest also offered employment to most of the plants' 56 management and non-union employees. Of this number, 14 either have declined offers or didn't receive offers. So far, more than half of these management employees have been placed in full-time or special assignment positions within UI; while others will given severance packages if they can't be placed.

UI is a New Haven-based utility that delivers electricity and energy-related services to more than 313,000 customers in 17 municipalities in the Greater New Haven and Greater Bridgeport areas. UI's World Wide Web address is www.uinet.com and it is traded on the New York Stock Exchange under the symbol UIL.