RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2011

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

(H)  RELATED PARTY TRANSACTIONS

UI is a 50-50 joint venturer with NRG in GCE Holding LLC, whose wholly owned subsidiary, GenConn, was chosen by PURA to build and operate new peaking generation plants to help address Connecticut's need for power generation during the heaviest load periods.  GenConn executed a promissory note (the Loan) with UI under which UI advanced up to an aggregate principal amount of $48.5 million to fund GenConn's construction and other cash needs until permanent financing was arranged.  In connection with the EBL obtained by UI and the project financing obtained by GenConn on April 27, 2009, all outstanding balances on the Loan were replaced by a new promissory note, the balance of which was converted to an equity investment in July 2011.  See Note (B) “Capitalization – Long-Term Debt” for further discussion regarding the EBL.  Additionally, $1.2 million and $2.8 million of interest income related to the promissory note are included in “Other Income and (Deductions), net” in the accompanying Consolidated Statements of Income, for the nine month periods ended September 30, 2011 and 2010, respectively, which is offset by the interest expense incurred by UI under the EBL.  For the three month periods ended September 30, 2011 and 2010, such interest income was $0.2 million and $1.0 million, respectively.

A director of UIL Holdings holds a beneficial interest in the building located at 157 Church Street, New Haven, Connecticut, where UI leases office space.UI's lease payments for this office space for the nine month periods ended September 30, 2011 and 2010 totaled $7.0 million and $7.8 million, respectively.  For the three month periods ended September 30, 2011 and 2010, such lease payments totaled $2.0 million and $2.6 million, respectively.