EXHIBIT 10.32


                            UIL HOLDINGS CORPORATION
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                             NON-EMPLOYEE DIRECTORS
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                        CHANGE IN CONTROL SEVERANCE PLAN
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                                    ARTICLE I

                                 PURPOSE OF PLAN

         1.1  The purpose of The UIL Holdings Corporation Non-Employee Directors
Change  in  Control   Severance   Plan  (the   "Corporation"   and  the  "Plan,"
respectively)  is to  provide  the  non-employee  directors  of the  Corporation
("Directors")  with appropriate  assurances of continued income for a reasonable
period of time in the event that the  individual's  service as a director of the
Corporation (or a successor to the Corporation,  whether direct or indirect,  by
purchase,  merger,  consolidation  or otherwise -- a "Successor")  is terminated
under  any  of the  circumstances  described  herein,  thereby  encouraging  the
continued  attention and dedication of the Directors to the continued success of
the Corporation.

                                   ARTICLE II

                          ELIGIBILITY FOR PARTICIPATION

         2.1  All Directors shall, during the term of their service on the Board
of Directors  of the  Corporation  (the  "Board") be covered by the Plan (each a
"Participant").   The  Secretary  of  the  Corporation  shall  provide  to  each
Participant a copy of the Plan.

                                   ARTICLE III

                                      TERM

         3.1  Except under the circumstances described in Section 3.3 below, the
Board (or the governing body of its Successor) may, at any time and from time to
time,  modify or amend, in whole or in part, any or all of the provisions of the
Plan, or suspend or terminate it entirely.

         3.2  Except under the circumstances described in Section 3.3 below, the
Board (or the  governing  body of its  Successor),  may, at any time, by written
notice to any  Participant,  terminate the  participation of such Participant in
the Plan or amend the Plan so as to impair the rights of such Participant in the
Plan.


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         3.3  Termination  or  suspension  of the Plan,  or  termination  of any
Participant's  participation  in the  Plan,  or any  amendment  of the Plan that
impairs  the  rights  of any  Participant,  occurring  on or after the date of a
Change in Control,  as that term is defined herein,  shall not take effect until
the date of the Annual  Meeting of the  Shareowners of the  Corporation  (or its
Successor) next following the date of such Change in Control.

                                   ARTICLE IV

                            ELIGIBILITY FOR BENEFITS

         4.1  For  the  purpose of the Plan, Change in Control shall mean any of
the following events:

                  (a)  any merger or consolidation  of the  Corporation  (or its
Successor)  with any corporate  shareholder  or group of corporate  shareholders
holding twenty-five percent (.25) or more of the Common Stock of the Corporation
(or its Successor) or with any other corporation or group of corporations  which
is, or after such merger or  consolidation  would be, or be  affiliated  with, a
shareholder owning at least twenty-five percent (.25) of the Common Stock of the
Corporation (or its Successor); or

                  (b)  any sale, lease, exchange, mortgage,  pledge, transfer or
other  disposition to or with any shareholder or group of  shareholders  holding
twenty-five percent (.25) or more of the Common Stock of the Corporation (or its
Successor),  or any affiliate of such shareholder or group of  shareholders,  of
any assets of the Corporation (or its Successor) having an aggregate fair market
value of $50 million or more; or

                  (c)  the  issuance  or  sale  by   the  Corporation   (or  its
Successor)  of any  securities  of the  Corporation  (or its  Successor)  to any
shareholder or group of shareholders  holding  twenty-five percent (.25) or more
of the Common Stock of the Corporation  (or its Successor),  or to any affiliate
of such shareholder or group of shareholders, in exchange for cash securities or
other  consideration  having an  aggregate  fair market  value of $50 million or
more; or

                  (d)   the implementation  of any  plan  or  proposal  for  the
liquidation or dissolution of the Corporation (or its Successor)  proposed by or
on  behalf  of  any  shareholder  or  group  of  shareholders  owning  at  least
twenty-five  percent  (.25)  of the  Common  Stock  of the  Corporation  (or its
Successor), or any affiliates of such shareholder or group of shareholders; or

                  (e)  any reclassification  of securities  (including a reverse
stock split), or  recapitalization  of the Corporation (or its Successor) or any
other  transaction which has the effect,  directly or indirectly,  of increasing
the proportionate share of outstanding shares of any class of equity securities,
or securities convertible into any equity securities, of the Corporation (or its
Successor),  which is directly or indirectly  owned by a shareholder or group of
shareholders  owning at least  twenty-five  percent (.25) of the



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Common Stock of the  Corporation  (or its  Successor),  or any affiliate of such
shareholder or group of shareholders.

         The Board may, from time to time, by affirmative  vote of not less than
a majority  of the  entire  membership  of the Board,  at a meeting of the Board
called and held for the purpose,  modify the phrase "twenty-five  percent (.25)"
in one or more of (a),  (b),  (c), (d) and/or (e) above to a lesser  percentage,
but not less than twenty-percent (.20).

         4.2  The benefits described in Article V hereof shall become payable to
a Participant:

                  (a)  in the event  that,  after a Change in  Control  has been
approved by all  necessary  shareowner,  creditor and  regulatory  actions,  the
Participant's service as a Director is terminated,  involuntarily and other than
by a judicial  proceeding  pursuant to Section 33-743 of the General  Statues of
Connecticut  (Revision  of 1958) on the  effective  date of the Plan and as that
statute may be amended  from time to time  ("Statutory  Removal"),  prior to the
date of the Change in Control; or

                  (b)  if the Participant's service as a Director is  terminated
on the date of a Change  in  Control  or on the date of any  termination  of the
Corporation (or its Successor's) existence; or

                  (c)  if the Participant's service as a Director is terminated,
involuntarily  and other  than by  Statutory  Removal,  following  the date of a
Change in Control and prior to the date of the Annual Meeting of the Shareowners
of the  Corporation  (or a  Successor)  next  following  the date of a Change in
Control.

         4.3  In no event shall the voluntary resignation of a Participant  give
rise to any benefits under the Plan.

                                    ARTICLE V

                                    BENEFITS

         5.1  In the event of a termination  covered by Section  4.2 above,  the
Corporation  (or its Successor)  shall pay such  Participant  within thirty (30)
days a lump sum  amount  equal to such  Participant's  Total  Remuneration.  For
purposes  of  the  Plan,  Total   Remuneration  is  defined  as  the  sum  of  a
Participant's  annual  retainer  fee,  plus, if the  Participant  is a Committee
Chairperson,  the  annual  fee  payable  to such  Participant  for  service as a
Chairperson,  plus an amount  equal to the  product of the fee  payable for each
meeting of the Board attended by the Participant multiplied by ten, each of said
fees as in effect  immediately  prior to the  termination  of the  Participant's
service.



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                                   ARTICLE VI

                                   PROVISIONS

         6.1  If any Participant receiving benefits under Article V of this Plan
should die while any amounts  are still  payable to him or her  thereunder,  all
such amounts shall be paid to the Participant's designated beneficiary or, if no
designation has been made, to his or her spouse,  if any, and if none, to his or
her  children  then  living,  if any,  in equal  payments,  and if none,  to the
Participant's personal representatives.

         6.2  In the event that a  Participant  institutes  any legal  action to
enforce his or her rights  under the Plan,  and  provided  that he or she is the
prevailing  party,  such  Participant  shall be  entitled  to  recover  from the
Corporation (or its Successor) any actual and documented expenses for reasonable
attorney's fees and disbursements incurred by him or her.

         6.3  Any dispute or controversy arising under or in connection with the
Plan shall be settled exclusively by arbitration in New Haven,  Connecticut,  in
accordance  with  the  rules of the  American  Arbitration  Association  then in
effect; and judgment may be entered on the arbitration award in any court having
jurisdiction.

         6.4  Any  notice  or  other communication pursuant to the Plan intended
for a  Participant  shall be deemed  given  when  personally  delivered  to such
Participant or sent to such Participant by registered or certified mail,  return
receipt requested,  at such Participant's residence address as it appears on the
records of the Corporation (or its Successor),  or at such other address as such
Participant shall have specified by notice to the Corporation (or its Successor)
in the manner herein provided. Any notice or other communication pursuant to the
Plan intended for the Corporation (or its Successor)  shall be deemed given when
personally  delivered to the Secretary or Assistant Secretary of the Corporation
(or its  Successor),  or sent to the  attention  of the  Secretary  or Assistant
Secretary by registered or certified  mail,  return  receipt  requested,  at its
headquarters  at 157 Church  Street,  New Haven,  Connecticut,  or at such other
address as the Corporation (or its Successor)  shall have specified by notice to
all of the Participants in the manner herein provided.

         6.5  A  Participant  may  not  assign,  anticipate,  transfer,  pledge,
hypothecate  or alienate in any manner any interest  arising under the Plan, nor
shall any such interest be subject to attachment,  bankruptcy  proceedings or to
any other legal  processes  or to the  interference  or control of  creditors or
others.

         6.6  In the event any  provision of the Plan,  if challenged,  would be
declared invalid,  illegal or  unenforceable,  such provision shall be construed
and  enforced  as if it had been more  narrowly  drawn so as not to be  illegal,
invalid or unenforceable,  and the validity,  legality and enforceability of the
remaining provisions shall not be affected or impaired thereby.


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