Dominion, UI Sign $600 Million Power Supply
Agreement
New Contract
Replaces Enron Supply Deal
RICHMOND, Va., and NEW HAVEN, Conn., January 3, 2002 – Dominion
(NYSE: D) and The United Illuminating Company (UI), a subsidiary of UIL Holdings
Corp. (NYSE: UIL), jointly announced today a $600 million power supply agreement
under which Dominion will provide 100 percent of UI’s power needs for the next
two years.
The two companies reached the agreement Friday after Enron
declared bankruptcy and UI terminated its contract with Enron for supply of
the power. UI, headquartered in New Haven, provides electricity to about 318,000
retail residential, commercial and industrial customers in southern Connecticut,
with a peak demand of about 1,200 megawatts.
Thos. E. Capps, chairman, president and chief executive officer
of Dominion, said:
“Today’s transaction strengthens our competitive position
in a growing market with steadily expanding demand. With this agreement alone,
Dominion will supply a full 5 percent of New England’s demand for electric power.
“The agreement is also consistent with our strategy
of using Dominion’s considerable physical assets to provide efficient energy
supplies in varying markets while delivering value to our shareholders.”
Anthony J. Vallillo, president of UI, said:
“Our agreement with Dominion allows us to continue
providing our standard offer customers with reliable, uninterrupted energy at
current rates. This contract removes Enron as our supplier and replaces them
with Dominion. This change to Dominion will be transparent to our customers.
There will be no change in customer rates for the remainder of the standard
offer period due to this change and, as before, we will continue to operate
and service the UI transmission and distribution system that brings electricity
to our customers.”
Under the agreement to supply UI’s full power requirements,
which became effective January 1 and runs through the end of 2003, Dominion
will provide about half the contracted power from its Millstone Nuclear Station
in New London, Conn., and the balance through a combination of owned and purchased
generation. The transaction also includes an agreement by Dominion to provide
power for certain of UI’s special supply contracts with commercial and industrial
customers, which runs through the end of 2008.
Dominion, headquartered in Richmond, Va., is one of
the nation’s largest producers of energy, with a production capability of more
than 3 trillion British thermal units (Btu’s) of energy per day. Its 22,000-megawatt
generation portfolio is expected to grow to more than 26,000 megawatts by 2005.
In addition to its more than 4.6 trillion cubic feet equivalent of natural gas
reserves and more than 460 billion cubic feet equivalent of annual production,
Dominion also owns and operates 7,600 miles of natural gas transmission pipeline
with a delivery capability of 6.3 billion cubic feet per day.
The company also operates the nation’s largest underground
natural gas storage system with more than 950 billion cubic feet of storage
capacity. Dominion serves nearly 4 million retail natural gas and electric customers
in five states, and owns a managing equity interest in Dominion Fiber Ventures
LLC. For more information about Dominion, visit the company’s web site at www.dom.com.
The United Illuminating Company is a new Haven, Connecticut,
based regional distribution utility that provides electricity and energy related
services to more than 318,000 customers in municipalities in the Greater New
Haven and Greater Bridgeport Connecticut areas. UI’s web address is http://www.uinet.com
and the company is traded on the New York Stock Exchange under the symbol UIL.
