Susan Allen - VP, IR Jim Torgerson - President and CEO Rich Nicholas - EVP and CFO

Caroline Bone - Deutsche Bank Andrew Weisel - Macquarie Capital Christopher Ellinghaus - Williams Capital Steve Fleishman - Wolfe Trahan Kit Konolige - BGC

Welcome to the UIL Holdings First Quarter 2014 Earnings Conference Call. I will now turn over to your host, Susan Allen.

Thank you, Debbie, and good morning to everyone. Thank you for joining us to discuss UIL Holdings' first quarter 2014 earnings results. I am Susan Allen, Vice President of Investor Relations. Participating on the call today is Jim Torgerson, UIL's President and Chief Executive Officer; and Rich Nicholas, UIL's Executive Vice President and Chief Financial Officer. If you do not have a copy of our press release or presentation for today's call, they are on our website at www.uil.com. During today's call, we will make various forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Significant factors that could cause results to differ from those anticipated, are described in our earnings release and our filings with the SEC. With that said, I will turn the call over to Jim Torgerson.

Thanks Susan and good morning everybody and welcome. First off, I want to start out saying, we really had a very good quarter in the first quarter of 2014. Our earnings were $62.4 million or $1.09 a diluted share. Income was up 20% compared to the same period in 2013, and that does exclude the after-tax acquisition related expenses regarding the Philadelphia Gas Works. Including the after-tax acquisition related expenses, $6.9 million or it was about $0.12 a share, the net income would be $55.5 million, which is 7% higher and $0.97 per diluted share. Now keep in mind, we also had an increased number of shares, about 11.5% over the same period from last year. The gas distribution net income was up $7.5 million, but I want to emphasize, this was just not all from weather. Weather obviously was colder by 13.3%, but Connecticut Natural Gas, actually we had decoupling that kicked in on January 9, and then we had weather insurance for Southern Connecticut Gas and Berkshire, and we recognized a payment on net insurance, below the line of $1.9 million. So we do get benefit from weather, no doubt, but it's not as extensive as you might believe, because of the nature of the weather. The other two pieces that added to the earnings for gas, were the normalized use per customer was up, that added about $2.5 million of margin. Customer growth added another $2.3 million in margin in the quarter-over-quarter. So we are seeing the benefits of the additional customers, and then actually they did use a little more, it looks like in the quarter. So there also was an offsetting item, which Rich will talk about on tax item, that was positive in the quarter, and its going to phase out over the year. We did add a little over 3,500 new gas heating customers in the first quarter, that's 22% of this year's goal of 16,000. We are on track to meet the full year goal, and the winter, having a positive effect on earnings, had effective effect on customer additions, simply because we couldn't get in there to work, putting pipe in the ground. The ground was frozen, snow covered for the entire first quarter pretty much, so really couldn't get things going as quickly as we would have liked. But we are optimistic and we believe we are on track for the full year. I am going to page four of our presentation; and you know the strategic initiatives we have. One is growth through the investment in electric and gas infrastructure. We also have growth through the addition of the new natural gas heating customers, which is strongly supported by legislation in Connecticut. We are pursuing investment opportunities in renewable generation and some other projects. The construction for this renewal project is expected to begin in 2014. Now this is a project of the -- we can build up to 10 megawatts of renewable generation. We have 7.2 megawatts right now, that we are implementing. Two-thirds of that is in Bridgeport, it was a fuel cell -- some solar and then a fuel cell in New Haven. We are also still working to identify synergy opportunities across all of our operating companies and leveraging our internal systems that would support all the enterprises, and this is mainly our SAP system that we have put in place, and went live January 1. Now that we have it live, we want to look at what we can squeeze out of that system, how much more functionality we can derive, and then what savings we can get across the works; and then, obviously the Philadelphia Gas Works operations acquisition which we announced early in March, after signing the agreement. Let me go through on page 5, some of the benefits to that, and the overall transaction. We are actually acquiring the assets and certain liabilities of the Philadelphia Gas Works. The total consideration is $1.86 billion. We will be acquiring the PGW operations on a cash free and debt free basis. And UIL intends to issue long term and equity, or in combination with equity like securities in amounts that would be consistent with mixing [ph]. Sure, we are maintaining on investment grade credit rating, and those would primarily [ph] fund the transaction. Obviously any equity like securities, other than the straight common, would improve the accretion profile that we outlined previously. And we have a secured $1.9 billion committed facility, bridge facility, to support the transaction. The process right now is, the approvals that are needed -- they don't want to -- this City Council, and we have met with most of the members, the Pennsylvania Public Utility Commission has to -- we have to obtain their approval. We met with four out of the five commissioners there. No shareholder vote is required in the -- we would expect to close in the first quarter of 2015. Now the growth opportunities from this -- the opportunity to drive the long term growth through infrastructure investments, we have obviously the cast iron replacement, which we would like to work with the City and the PUC to be able to expand and move that along on a quicker pace, than its currently being done. There are some LNG opportunities along with the Philadelphia Energy Hubs that's being contemplated and worked on by a number of individuals in Philadelphia, and we think the LNG facilities could lend strong support to that, and perhaps an expansion of those LNG facilities. And also with the opportunities, potentially to bring more Marcellus gas into Philadelphia, and hopefully the ability to may be even invest in some of the pipeline expansions that could be occurring there. And if we can bring more Marcellus gas in there, it'd be a benefit to the consumers in Philadelphia, by reducing their costs, and we are seeing lower prices for Marcellus gas than elsewhere, when we buy, perhaps the Gulf Coast. We also see increased operational diversification and improving our business profile, and obviously, the overall profitability. We are going to leverage our business expertise, our processes, IT, the back office, the infrastructure. When you think about it, we have HR, we have accounting and finance, we have IT, supply chain, all of those are back office activities that we would then leverage across all of the companies. And it does provide regulatory diversification away from the Connecticut and Massachusetts by adding in Pennsylvania. Increased financial flexibility and scale, and we do fully intend to maintaining our investment grade credit rating, and hopefully, as you will see why issuing our equity will improve the liquidity. We said that the earnings per share should be neutral in near term, and till the rate case gets approved, which we believe would go in effect in 2018 that would be accretive. Again, issuing common equity in the current capital relation proportion would be the one that would -- to have that earnings neutral, if we do something highly different with other equity, [indiscernible] securities that could add to the accretion. The approvals -- the Philadelphia City Council, we need their approval and the Pennsylvania Public Utility Commission; an ordinance has been sent to the City Council, has not yet been introduced. City Council has hired a concentric from Boston. Two things they are looking at; one, what are the alternatives of sale and looking at what could the City do, what could PGW do alone, and then also looking at, is this the valuation that we have put forth, is that the best that could be attained, and when we look at it obviously with 33 initial participants in an auction process, you'd have to believe that their valuation is at the top of the range. But the city wants to look at -- the City Council wants to look at what options are there, which is very valid and its something that we need to do. So once the ordinance does get introduced, then it needs to be approved by a majority vote of City Council. We will be making a joint application with the City to the Pennsylvania Public Commission, requesting an issuance of a certificate of public convenience to the UIL subsidiary that will be actually buying the assets and certain liabilities, acquiring those. And at the same time, filing an application for total [ph] financing as that operating company [indiscernible]. Now turning back to our existing operations, we have our long term forecast, a 10-year forecast. You can see we are anticipating spending about $4.2 billion over the next 10 years. $1.5 billion in electric distribution, that does include the renewable generation project. We also have electric transmission, nearly $600 million and $1.8 billion in gas distribution. Now gas distribution, part of that is obviously gas growth, that's the big component of it. But also, we are replacing cast iron and bare steel in the Connecticut and Massachusetts service areas, and we are spending about $30 million today, we intend on growing that to about $50 million over the next couple of years. And when we look at the UILs, they are naturally systems that are utilized by all operating companies and enhancing current systems, adding the systems so, and then they are utilized by all operating companies. On page 9, we have our projected rate base growth, and you can see overall, the compound annual growth rate is 8.3%, growing to $3.2 billion by 2018. Gas distribution is growing at about 7.5%, electric transmission 6% and electric distribution nearly 11%. We have also added a category for the renewables, which you can see layered in on top. When we actually -- we do look at it from an earnings, it ends up flowing into the -- or will into the electric distribution area. But right now, we want to show it separately. And then we have our GenConn project and no the UIL Corporate investments which act as rate base and for the corporate investments, we have a capital charge that goes back to our operating companies, that reflects the return on equity with each one of those we get. Turning to our gas heating customers; we are still very bullish on the growth there. It has been going extremely well. We added over 3,500 new households and businesses in the first quarter, which was 22% of our goal of 16,000 conversions this year. For the prior three years, we had set an initial target of 30,000 to 35,000 and we got within that range, close to the top end of 34,427. So did pretty well in the first three years, and now our goals are just moving up, as we go forward; and you can see how on the chart, the target for this year, we were anticipating a little slower buildup than we experienced in 2013, really because we had a lot of projects in the pipeline when we entered at the beginning of the year, that got completed early on in 2013, plus we had weather that was obviously normal for that year. This year it was a lot colder, so we got a little slower start. So we are still pretty much on track, for what our original targets had been. And when you look at the longer term on page 11, you can see that we are ramping up towards about 16,000 and most of it is Connecticut, I think its about 1,500 or actually in Massachusetts, of that 16,000 and then growing as we move forward, under the comprehensive energy strategy, and we believe the Berkshire component is going to remain fairly constant over that time horizon. But you can see, that we will end up with -- assuming we hit our targets, a little over 200,000 additional gas heating customers by 2023. Like to move to page 12 with a regulatory update. The gas distribution rate case for CNG was finalized at the end of January. We also had a -- as part of that decision, we were to provide a private letter ruling -- or requested a private letter ruling, relating to the 338(h)(10) impacts on rate making. We did provide that draft to the Public Utility Regulatory Authority Connecticut in March, as required under the decision. We haven't received back from PURA yet, any comments from them, and we [indiscernible] to get that letter to the IRS, once we get their comments. In early March, the Connecticut Office of Consumer Counsel filed an appeal of the PURA CNG rate case decision. They are appealing the decision to require CNG to seek private letter ruling from the IRS, rather than simply offsetting the rate base. They also claim that PURA exceeded their authority in approving their cast iron bare steel replacement program tracker. We do not agree with that obviously, and CNG is reviewing the appeal and will respond at the appropriate time. PURA is also investing in its tree trimming practices at our Connecticut Utility Company, mainly -- really the UI distribution company. Technical meeting with them at the end of March, to investigate the vegetation management plans, and to coordinate future project with local officials, how the process may be improved. So we have been doing that. The process we have is to coordinate with the towns to get permission from all private land owners before we trim or take down trees, and we have actually been fairly successful. 91% of the customers who have gone to on private lands, have approved our plans to either remove trees or to trim them. But there is towns, particularly Hampden and New Haven in particular, that want to see some more activity with the towns, before we actually more forward with them, and the trees were being removed. The FERC ROE complaint that's still in process and we are waiting for the final decision. We still expect it some time this year, but we haven't -- we really don't have an update as to when that might occur. The legislature, the session ended last night at midnight, and it is an election this year for legislators and for the Governor, so keep that in mind, when you think about what transpired -- Governor Malloy, he is running for reelections. Republicans, there are several people in the mix running for the nomination which will occur this summer. There is some legislation that got proposed and acted on. There is no electric consumer bill of rights which passed in the senate and the house. Some tree trimming ratifications. Also on lost and unaccounted for gas, be a PURA report that if gas lost and unaccountable or exceeded 3%, that PURA would then look into it a little further, investigate it, and then some technical changes to the comprehensive energy strategy. This one really related to using the non-firm margins we derived from off-system sales and capacity release. It hasn't been applied as a reduction in rate base for -- when we had new customers, by expanding the system. That got changed, to where it goes back to the first 50% of non-firm margin, goes back to customers as it had and the PGA. Then the balance can be utilized. We can utilize it over the entire state, so $15 million can be utilized and the [indiscernible] is about $10 million. To offset contributions in aid of construction now, which will help in jobs where we are expanding and extending maintenance into previously unserved areas. So it’s a big change, and which we believe is going to be very positive for us, and when we look at expanding the mains and moving into other areas. So with those comments, I am going to turn it over to Rich Nicholas, who can talk about the financial analytics. So Rich?

Thank you, Jim, and good morning everyone. Thanks for joining us today. I am on slide 14 of the presentation, where we provide in a tabular form, the results. Then on slides 15 to 17, go through the narrative associated with those results. As Jim mentioned, consolidated net income, up over 20% compared to the first quarter of 2013, excluding the transaction related costs from PGW operations acquisition, and that's also an $0.08 per share increase and the per share count obviously includes the equity issuance we did last September -- October of 2013. Even including the after tax related expenses of almost $7 million, for things like due diligence and financial advisory, legal advisory, as well as fees associated with establishing the $1.9 million bridge loan. Net income was up over 7%, compared to the first quarter of last year. Looking at the operating segments, electric distribution and other, which includes our GenConn operations, was a slight decrease of $400,000 of net income quarter-over-quarter, and that really was driven by the results of GenConn, which were as anticipated, coming out of the establishment of the revenue requirements for GenConn for this year. A realignment of the capital structure at GenConn, to be allowed 50-50. The debt and equity as a result of our refinancing in the fall of last year. So GenConn, right on track. And our average distribution, return on equity for the 12 months ending March 31, was 8.66%. And if you were to exclude the regulatory write-offs that came out of ULI's rate case last year, that ROE would be 9.89%. Turning to electric transmission; just a slight decrease there of $100,000 of net income quarter-over-quarter, and that was the result of lower allowance for funds used during construction, as a result of lower construction work in process, compared to 2014 to 2013. Overall, transmission return is tracking around 12.2%. Looking at the gas distribution business, really seeing the benefit of the customer conversions, as well as the cold weather during the first quarter of this year, compared to last year. On a weighted average basis, 13.3% colder than normal; and as you could see, on slide 16 at the bottom, just the straight weather impact on gross margin, almost $7.7 million, but that's offset by the $1.9 million we paid out in weather insurance. But good moves up on both normalized user per customer of $2.5 million in margin and customers, both contributing $2.3 million of improved margin. As a result, our preliminary return on equities for Connecticut companies, SCG, right in the 9.5% range, and CNG slightly above 9.5%. Adjusting for weather in the first quarter, it brings us down into the mid 8s and high 8s for SCG and CNG respectively. In the corporate component, our costs for the first quarter of 2014, $6.1 million. But that does include the $6.9 million of the transaction related costs that I mentioned earlier. If you exclude those transaction related costs, there was actually an improvement of $3.6 million of net income at corporate compared to last year, primarily due to an adjustment to reflect our full year expected effective tax rate, and because our gas companies have a higher effective tax rate than the electric company and the gas company earnings are much higher in the first quarter, due to the winter weather. We pick up that adjustment to true up the full year in the corporate component. As Jim mentioned earlier, that variance will reveries itself over the year, as the earnings come in from UI, primarily in the summer months. And so, if we were to look at our debt maturities and liquidity on slide 18; coming out with the quarter, we would -- no usage on our revolver, except for $4 million for letters of credit, and that's a $4 million revolver. We also had a $136 million of cash on hand. Very limited debt maturities coming up over the next couple of years, and then in 2017, we had $90 million of maturities coming at us. We also, from a liquidity standpoint have the bridge loan to backstop the acquisition financing. We successfully syndicated that shortly after the announcement on March 3rd of the acquisition, and we will look to update during the year, as we progress through the PGW process on our permitted financing plan. Moving to slide 19; we did reaffirm our 2014 earnings guidance of $2.15 to $2.35 for the total UIL Holdings, excluding any costs or other impacts of the PGW acquisition that might come in during the year. So now I will hand it back to our operator Debbie, for the Q&A session.

(Operator Instructions) We do have a few questions in queue. The first question comes from Caroline Bone with Deutsche Bank. Your line is live. Caroline Bone - Deutsche Bank: Hi. Good morning.

Good morning. Caroline Bone - Deutsche Bank: I was just wondering if you could talk a little bit more about the approval process at the City Council, particularly with regard to this consultant support, and whether that would be made public before the vote on the ordinance?

The process right now, City Council hired this firm, Concentric, they are doing their analysis now. The initial thought was it would probably be roughly a six to eight week process. But that remains to be seen, how long it's going to take. City Council have the report, and then one of the City Council members will have to introduce legislate, other than the ordinance that would allow for the sale. That has not been done yet, and we -- hopefully that will happen in the not too distant future, and they will introduce the ordinance. And then the City Council will have a couple of readings of the ordinance, and they will take into account, obviously the report that comes from the consultant and then look to load on the ordinance at some point. Timing hasn't been a [indiscernible], that's really in the hands of City Council, as to how long that may take, and -- that's really the process right now. You don't see really anything else at this point, and they are asking a lot of questions, the consultant of various people, and doing there and getting their information, so that they can put their report together. Caroline Bone - Deutsche Bank: And so do you think we will actually be able to see that report, when its done before -- I guess, gets discussed?

I don't know. I would expect it, since its going to be involved in the City Council process, I would expect it can [ph], but I really don't know the answer to that. It depends if City Council does make it public. Caroline Bone - Deutsche Bank: Okay. And then just separately, looks like you guys had a great start to the year. I was just wondering, how you were thinking about earnings guidance, and why not may be narrow it or raise it?

Sure. When we put our initial guidance out with our year end earnings, we already had experienced the January weather and we knew that CNG was decoupled after January 9th. So we had taken some of that into account when we established the guidance [indiscernible]. Caroline Bone - Deutsche Bank: Okay, great. That's very helpful. Thanks.

Caroline, one other thing I'd add with the City Council process; we do anticipate that we'd be able to participate in the process, by putting in testimony, than having to testify at a City Council appearing. So I think, we will have -- we believe we will have direct involvement there as well. Caroline Bone - Deutsche Bank: Okay, that's good to know. Thanks.

The next question comes from Andrew Weisel with Macquarie Capital. Your line is live. Andrew Weisel - Macquarie Capital: Thanks. Good morning everyone. I was hoping you could elaborate a little bit more on the electric transmission and distribution segments, each of them were down, not by much, but given the distribution rate case and the rate base growth at both businesses, with the ROE strong. Were there any sort of headwinds that maybe you could point out?

On the distribution side, the decrease, as I mentioned was really due to GenConn, so flat excluding GenConn, but that reflects current expenditure levels, O&M levels, that came in during the quarter. So not a real significant change, excluding the GenConn piece. And transmission, again, is really timing around what's going into plant under construction. Last year, much higher levels, and also on the distribution side, that was where we included the CTA component, and even though it was small last year, it was positive earnings and that is not there going forward, CTA has been fully amortized. Andrew Weisel - Macquarie Capital: Okay. So it sounds like it was in line with your expectations for the full year, right?

Yes. Andrew Weisel - Macquarie Capital: Okay. Next, just a couple quick ones on Philadelphia. You mentioned the pipeline opportunity from Marcellus gas. Any sense of how big those investments could be and how soon we might see updates, whether that might come before or after the deal might close?

No, I don't have an update on that; because really its being able to try to participate in the pipeline expansion. The pipelines are going to want to do that and is there going to be an opportunity to have an equity position in the pipeline expansion. So that's probably down the road, but we do see the -- we think, there should be opportunities to bring Marcellus gas in there, and -- but its going to require more pipelines, and access directly into Philadelphia, which they don't have as much today, as I think they want for the future. Our role would be to try to work with the pipelines, and then if we are working with them, assuming we can close the transaction, then work the pipelines to bring the gas in than we really would like to be able to be a participant, an equity participant there. But I have no dollar amount in mind or what it would take or even if that's going to happen. So just, its an opportunity and its really the opportunity to lower the cost of gas to the consumers in Philadelphia by using gas from Pennsylvania. So we think that could be an opportunity there. Andrew Weisel - Macquarie Capital: Okay, great. Then you mentioned your base case for the breakeven earnings from the deal, is that you will use regular equity. When might you have an update on alternatives that could make the deal more accretive?

Well as we progress through the year, I will get through some of the approval processes, see how the capital markets are acting. We are actually also seeing interest rates come back down a little bit, from where we thought it would be earlier in the year. So we will give you an update, as we progress through the year. Andrew Weisel - Macquarie Capital: Okay. Then lastly, there was a bunch of media articles about the unions not being terribly happy with the offer and wanting may be some more concessions or commitments than what you have initially offered. Any sort of high level thoughts on how those conversations are going?

We are obviously going to be talking to the union, and working with them. We had plans that we had put into our initial analysis, that we think we can end up being -- getting a satisfactory result. But obviously, we got to work with the union and keep talking to them; and that's going to happen over some period of time. So I am optimistic we will come to some reasonable accommodation with the union. Andrew Weisel - Macquarie Capital: Okay. Very good, thanks a lot. I will hop back in the line.

Our next question comes from Chris Ellinghaus with Williams Capital. Your line is live. Christopher Ellinghaus - Williams Capital: Hey guys, how are you?

Good Chris.

Good. Christopher Ellinghaus - Williams Capital: Rich, can we assume that the $3.6 million swing in corporate was basically all that tax adjustment?

About $3 million of it was. Christopher Ellinghaus - Williams Capital: Okay. And so we will see other normalization as the year progresses?

That's correct. Christopher Ellinghaus - Williams Capital: Okay. What did you see in electric usage for the quarter?

Total, we are actually up, I think just around a percent year-over-year. But as you know, will be coupled at UIL. Christopher Ellinghaus - Williams Capital: Okay. And just so I understand this, you were saying that the weather benefit from the 13% above normal was $7.7 million benefit to margin, but I think you said $1.9 million went to the weather insurance costs?

That's correct. Christopher Ellinghaus - Williams Capital: Okay. And lastly, is there a reason in terms of timing? I think there is a statutory limitation on the City Council for evaluation. Is that what's leading them not to introduce the ordinance?

No. I don't believe there is a limitation on the time. Christopher Ellinghaus - Williams Capital: Okay. So is there any reason not to introduce it, while they are doing due diligence?

Well, a councilperson has to introduce it, so that means they want to see some things from the consultant, before that happens. Then the other part is they are dealing with the budget right now. So they got to get that taken care of.

Chris its Rich again, just to follow-up, check my notes. Electric usage was actually up 1.7% year-over-year on a normalized basis. Christopher Ellinghaus - Williams Capital: All right. Thanks guys.

Our next question comes from Steve Fleishman with Wolfe Research. Your line is live. Steve Fleishman - Wolfe Trahan: Hi, good morning.

Good morning. Steve Fleishman - Wolfe Trahan: Hey Jim. Just a question on the -- could you just maybe run through the 338(h)(10) issue and just make sure I understand where that stands and what is PURA actually deciding on that?

What they did in the rate case, was they accepted the rate base that we had put forth, which incorporated the 338(h)(10) write-up. So it wrote up the rate base, because when we took that election and eliminated the accumulated deferred income taxes, which is a reduction to rate base. So that's got eliminated, so rate base was higher, and they accepted that with the provision that they want, because they wanted to see if they put in a credit of some sort, to offset the impact of that to customers. Would that be a normalization violation under the IRS rules; we testified and we had our tax experts testify that it would be. They wanted us to then seek a private letter ruling from the IRS to say that, if they put in a credit of some sort to offset the increase in rate base, that there would be a normalization violation. So that's really the issue and we said it would be and that it would not benefit consumers, for us to not being able to use accelerated depreciation going forward, which would be the result of a normalization violation. Steve Fleishman - Wolfe Trahan: Okay. And then the draft that you put in is what exactly?

That's the request that would go to the IRS. Steve Fleishman - Wolfe Trahan: Okay.

To answer their question. Steve Fleishman - Wolfe Trahan: Got you.

And the commission wanted to review it, before we sent it in. Steve Fleishman - Wolfe Trahan: Got you. Got you. Great. Thanks for clarifying that. And then, secondly, just with respect to this consultant report that the City Council is doing, what has the consultant been directed to, to actually opine on here? Are they just opining on whether the deal is in the interest of the City and -- simple as that, or is there some specific things that they are supposed to kind of come out with a view on?

My understanding is that you have two aspects. One is to look at the sizes, what alternatives could there be for PGW and the City. So whatever that would entail, besides selling it. Are there any other alternatives? Then you know, they are looking at this energy hub and they are trying to figure out, how much could PGW do on their own? What limitations they have on capital? So I think they got to factor on a number of things. Then the other one is the valuation, the dollars we are going to be paying as a -- is it the right price, and really as I said, with 33 participants in the auction process, and we are at the top end of the range, that Lazard had even looked at, would say that it probably is. But that's the other part of the -- the process they are going through. Steve Fleishman - Wolfe Trahan: Okay. And just may be at an overall level, have the process and reactions that you have seen so far, pretty much what you expected in doing this transaction?

The transaction, you know, we knew there was going to be a lot of debate and that the City Council was going to look very seriously at it, as they should, because that is their role; and so, not totally unexpected and the process -- we have been in meeting with City Council members individually and talking to them and they seem to be open to looking at this and taking a very hard look at what makes the most sense for the city of Philadelphia. So not a whole lot different than where we expect to go. Steve Fleishman - Wolfe Trahan: Thank you.

Sure.

Our next question comes from Kit Konolige with BGC. Your line is live. Kit Konolige - BGC: Good morning guys.

Hey Kit. Kit Konolige - BGC: So just to again follow-on; Philadelphia, obviously a big part of the story now. In your view, is there any likelihood that the passage of an ordinance by the City Council becomes a bargaining situation, where they come back to you and ask you for a higher price or more concessions, that kind of thing? Or would you expect that someone will introduce an ordinance, with specifically the terms of your deal and that you will see an up or down vote shortly?

Hard to say if they are going to do anything additional. I don't anticipate anything on the price, clearly. I mean, we put in our best price and that's what was accepted by the city, under their RFP process which they have and its very prescriptive. They could ask for other concessions they are working with the City in certain areas, which obviously, you can do -- and my expectation is that its -- someone will introduce the ordinance, that the administration sent over. Now they may get tweaked along the way a little bit, but I would expect its more along the lines of the ordinance that the city has put together. Kit Konolige - BGC: Right. And are there City Council members who are already on record as opposing or supporting the deal?

There is one for sure who is opposed to the deal, and she happens to be the chair of the Philadelphia Gas Commission, Marian Tasco; she said she is against this, just philosophically. Others seem to be more open. Some, they made statements, but now you go and meet with them, and they seem to be open. And when you really look at it from the standpoint of all the other bidders that were made; we not only had the highest price, we also had the highest number of employees that we would retain, and working with the city on the low income and senior citizen programs. We had said we'd keep those. And then we wouldn't lay anybody off for three years. So I mean, when you take it all in context, there is a whole package they have to now look at, and so I think -- yeah, there is one, that I know for sure that has to bear [ph] against it, so far other than -- where its 16, its going to be 17. Kit Konolige - BGC: Okay. And then finally, on a different topic. On the electric load growth in the first quarter, 1.7% that was. Is that a higher weather adjusted rate than you had been expecting and how much credence should we put in that number? I know some of the other companies have expressed some hesitation about endorsing their weather adjustment algorithm, given the extreme weather?

That's always a challenge with the weather and extremes.

Our non-normalized growth was just over 4% for the first quarter. So weather normalized at 1.7. Better than we had been experiencing of late, but its not a huge number.

I would put it with a grain of salt right now, because I think its kind of -- we did have a very cold weather, to say that that's going to be the same going forward, I'd hesitate on that. And secondly, we are decoupled anyway. So from an earnings standpoint, its not going to change anything for us. But when you look at the economy, is saying the economy is doing better, I think more of it was the weather than anything else. Kit Konolige - BGC: Okay, very helpful. Thank you.

Sure.

Our last question comes from Andrew Weisel with Macquarie Capital. Your line is live. Andrew Weisel - Macquarie Capital: Thanks for taking the follow-up. First question on the CNG rate case would be OCC appeal. What's the timing of the next step? Is there a schedule?

No, there's no schedule that's been put out. They have filed their appeal. We need to file our response to that, which I think -- I am not even sure when its due. Its probably in the not too distant future. Usually you get, what, 60 days to respond, I think. That's off the [indiscernible], I am not sure, its 60 days. So my expectation is, that it would be, in the not too distant future, we would respond, and then -- it will be in the court. So its going to be court's determination as to what the schedule would be. Andrew Weisel - Macquarie Capital: Okay. Next, you mentioned that the gas usage per account is improving. Is that balanced by sub? I am obviously asking, because CNG is decoupling. So they wouldn't benefit on that side?

Yeah, the normalized use per customer, I think we had overall, I am not sure we have the details by entity, to the extent. As you said, CNG is decoupled. So to the extent that it goes -- it improves, then that goes back to customer, in effect. But for SCG and Berkshire, its not -- and SCG actually has more customers than CNG, if I remember right. SCG probably has 185,000, 186,000; and CNG about 160,000 customers. So you get a slightly more benefit. Andrew Weisel - Macquarie Capital: Okay. And then lastly, this is a reminder of one thing; noticed that goal for gas conversion is up by 200. Is that just sort of rounding to 16,000 for the year, or was that meant to be a more optimistic outlook?

I think we just rounded it up, to make it 16,000.

Andrew, just looking at some of the details. The use per customer was fairly balanced between SCG and CNG. Andrew Weisel - Macquarie Capital: Okay great. Thanks again.

There are no further questions in queue.

Okay. If there are no further questions, then I want to thank everyone for participating today. And if you have further questions, obviously, you can call Sue and Michelle, and discuss it with them, or obviously Rich and I too, if you want to. So thank you again, and we will be seeing you all soon.

This concludes today's teleconference. You may now disconnect your lines.