January 3, 2002

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.

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