• The three subsidiaries – Connecticut Natural Gas (CNG), Southern Connecticut Gas (SCG) and Berkshire Gas Company (BGC) – were sold by IBERDROLA USA to UIL Holdings 
• The proceeds will be used to finance a major infrastructure project in Maine, which will benefit the interconnection between the U.S. and Canada
• In line with the Group’s strategic focus on networks, IBERDROLA USA is also undertaking infrastructure improvements in New York state

FOR IMMEDIATE RELEASE

 ROCHESTER, NY – November 17, 2010 – IBERDROLA USA Inc. today completed the sale of two natural gas distribution companies in Connecticut and one in Massachusetts to UIL Holdings Corporation, in a transaction valued at approximately $1.25 billion after price adjustments.

The equity value received is approximately $918 million, an increase after working capital adjustments over the $885 million announced in May 2010, and net of the companies’ aggregate debt.

The sale of the three subsidiaries – Connecticut Natural Gas Corporation (CNG), The Southern Connecticut Gas Company (SCG) and The Berkshire Gas Company (BGC) – was completed having obtained all the required regulatory approvals and having met the remaining conditions to which the transaction was subject.

The companies distribute approximately 56.5 billion cubic feet of natural gas per year to nearly 369,000 customers in Connecticut and Massachusetts, and have a combined workforce of around 800 employees.

The sale forms part of IBERDROLA’s non-core asset divestment program, the goal of which is to maintain the financial strength of the Group, optimize its capital structure and deliver the rhythm of investment pledged to the markets.

The transaction follows others announced in 2010 by IBERDROLA, including the pending sale of the Seneca Lake gas storage facility in New York, 15.68% of the share capital of Dublin-based Petroceltic International plc, 2.7% of the share capital of Portuguese energy group EDP, and all its indirect shareholding interests in a number of Guatemalan companies.

The proceeds will be used to finance the major infrastructure project that IBERDROLA USA, through its Central Maine Power subsidiary, is building in Maine, known as the Maine Power Reliability Program (MPRP). This project, benefiting electricity distribution in Massachusetts, New Hampshire and Maine, and the interconnection between Maine and Canada, involves an investment of around $1.4 billion and will consist of around 500 miles of new and upgraded electricity transmission lines that will cross 75 towns and villages.

The project will support the development of new renewable energy resources and help ensure long-term reliability for customers by increasing the capacity and efficiency of the New England transmission grid. The MPRP, which will be completed in 2015, will support an average of 2,000 jobs annually during the five-year construction phase, with a peak of over 3,000 jobs, and contribute significantly to the Maine economy. The project is the largest energy infrastructure project in the state’s history, and the first upgrade of its electricity grid in 40 years.

The Maine project is consistent with two of the Group’s main strategic objectives, those of a progressively more international business profile and of providing improved quality of service in its operating markets by upgrading and expanding transmission and distribution networks.

In this respect, IBERDROLA USA is also undertaking infrastructure investments in New York, where its New York State Electric & Gas (NYSEG) subsidiary has installed a new substation, built a new 115-kilovolt (kv) line and rebuilt an existing 115-kv line near Ithaca, with an estimated investment of $73 million.

NYSEG is also building a new 115-kv line and two substations in the Corning, NY area, with an investment of $55 million. The project will help meet growing demand in the area including the global headquarters of multinational company Corning, Inc.

 
About Iberdrola USA: Iberdrola USA, a subsidiary of global energy leader Iberdrola, S.A., is an energy services and delivery company serving about 2.7 million customers throughout upstate New York and New England. For more information about Iberdrola USA, visit www.iberdrolausa.com.

Media Contact: Dan Hucko
Daniel_Hucko@iberdrolausa.com
 585.724.8825