If 2008 was dedicated to change, 2009 saw the results of immense changes. The beginning of the year had the capital markets in total disarray, with little ability tfor companies to finance during the first quarter. Your management team successfully navigated the changing markets in early 2009 by refusing to issue new equity at an unacceptable price.

Short selling had pushed the price of UIL stock to a level below its book value. We elected to significantly reduce the capital spending of our utility – The United Illuminating Company (UI). While some political officials criticized this action, especially since the levels of capital spending had been approved earlier in the year by the Connecticut Department of Public Utility Control (DPUC) in UI’s rate case decision, it was necessary to conserve cash and avoid any possibility of not meeting the covenants required in our debt agreements.

Ultimately UIL issued additional equity at a price above book value, and UIL stock closed the year up over 33% from the issuance price of $21.00 per share. Upon the completion of the equity financing, we reinstituted the full two year capital spending plan that had been approved by the DPUC.

We had a very successful year in 2009 with net income increasing nearly 13% in a difficult economic environment. Whether the recession that started in December 2007 is really over will be determined by the economists. With unemployment still around 10% we have seen a flattening of the downward trend but not a recovery at this point. We will manage our operations in 2010 conservatively to mitigate the risks of further deterioration of the economy, but will be prepared to take advantage of an upturn in the economic situation in the US.

UIL’s leadership in developing new peaking generation resources for our customers was recognized in 2008 when the DPUC awarded our GenConn joint venture with NRG Energy the right to build and operate 400 megawatts (MW) of peaking generation under a cost of service mechanism. The opportunity, however, is not without its challenges. This $470 million project required financing at a time when the credit markets were in the worst shape in recent memory. Yet our staunch resolve in maintaining our investment grade credit rating and the cost of service approach with a firm contract paved the way to a successful financing. This resulted in GenConn being recognized as the North American project financing deal of the year.