In 2005, we filed an application with the Connecticut Department of Public Utility Control (DPUC) requesting an increase in our electricity distribution rate. Our request had merit. We had not had a distribution rate increase in 10 years, and we were able to demonstrate that we needed to address three main issues: increased operating costs, employee attrition and an aging electric distribution infrastructure. The DPUC modified our rate request and issued a final decision on January 27, 2006. The terms of the final decision will provide us with distribution revenue predictability for the next four years.

The demonstrated support and partnership of our entire workforce was evident as we cleared the way to make a long-term investment in transmission infrastructure. In 2005, we successfully negotiated an unprecedented six-year contract with our union employees, Local 470-1 of the Utility Workers Union of America, AFL-CIO. The outcome was favorable to both the company and our employees. This agreement provides the long-term stability and predictable costs for an important element of our operating expenses.

THE NON-UTILITY BUSINESSES

With the exception of its New Jersey-based operating subsidiary, Xcelecom did so well this year that it produced the strongest performance in its history. Unfortunately, the company's profitability was adversely affected by project write-downs in the New Jersey operation, making for a frustrating year overall. We have addressed the problems associated with the New Jersey business, and the management team at Xcelecom continues to strive to enhance the business, improve performance and incorporate best practices for safety, risk and project management in all of its subsidiaries. We remain focused on the operations with an eye on value.

Consistent with our utility investment decision, we have worked hard to turn our minority interests into available cash. These included our ownership interest in Cross-Sound Cable Company LLC, an important merchant transmission line that connects Connecticut to Long Island, N.Y., through Long Island Sound; and Bridgeport Energy LLC, a 520 megawatt, gas-fired, combined-cycle, electric generating facility.

In 2005, we entered into an agreement to sell our 25 percent ownership interest in Cross-Sound Cable to Babcock & Brown Infrastructure Ltd. for approximately $53 million. The sale was completed on February 27, 2006.

We were also successful in negotiating a sale of our 33.3 percent ownership interest in Bridgeport Energy to the majority owner of the merchant power plant for $71 million. We've received approval from the FERC on this sale and anticipate closing in first quarter 2006.

The net proceeds from these sales will provide us with one more aspect of certainty: the financial flexibility needed to execute our strategy.