Duquesne Light Holdings and a consortium led by Macquarie Infrastructure Partners and Diversified Utility and Energy Trusts have entered into a definitive merger agreement.

Under the terms of the agreement, the Macquarie Consortium will acquire all of the outstanding shares of Duquesne Light Holdings for $20.00 per share in cash, representing a 21.7% premium based on Duquesne Light Holdings' closing share price on July 3, 2006.

Duquesne Light Holdings' headquarters will remain in Pittsburgh and the companies will maintain Duquesne Light's commitment to service, reliability and community involvement. The transaction has been approved by the Board of Directors of Duquesne Light Holdings and the members of the Macquarie Consortium.

The Macquarie Consortium plans to retain Morgan O'Brien in his current role as chief executive officer. Macquarie will honor the current collective bargaining agreement in place for Duquesne Light's represented employees, as well as existing wage and benefit packages for non-represented employees.

"A significant part of our attraction to Duquesne Light is the high quality of its existing management and employees," said Christopher J. Leslie, chief executive officer of Macquarie Infrastructure Partners. "We look forward to those same people continuing to play an essential role at Duquesne Light, and to working closely with Morgan O'Brien and the other members of the Duquesne Light management team to continue driving the company's success."

A key priority of the Macquarie Consortium is to ensure that Duquesne Light continues to provide high levels of service and reliability to customers throughout Allegheny and Beaver counties.

"Duquesne Light has made a significant commitment to improve the electric infrastructure of the region, in order to maintain the levels of service and reliability customers have come to expect," said O'Brien. "Over the long- term, Macquarie is committed to funding necessary maintenance and upgrades to the company's electric infrastructure."

The transaction is subject to customary closing conditions, including the approval of Duquesne Light's shareholders and various regulatory agencies, including the Pennsylvania Public Utility Commission (PAPUC) and the Federal Energy Regulatory Commission (FERC). The companies anticipate completing the transaction in the first quarter of 2007.

Lehman Brothers has provided a fairness opinion regarding the transaction to Duquesne Light's Board of Directors.

Macquarie Securities (USA) Inc. acted as financial advisor to the Macquarie Consortium in connection with the transaction.