AGR Avangrid Inc

The following key metrics reflect our financial performance during 2016. We manage and measure our business performance with a significant focus on Adjusted Net Income, Adjusted EPS, Adjusted EBITDA and Adjusted Gross Margin. We use these non-GAAP financial measures, in addition to U.S. GAAP measures, to establish operating budgets and operational goals to manage and monitor our business, evaluate our operating and financial performance and to compare such performance to prior periods and to the performance of our competitors. We believe that presenting such non-GAAP financial measures is useful because such measures can be used to analyze and

compare profitability between companies and industries since it eliminates the impact of financing and certain non-cash charges. In addition, we present non-GAAP financial measures because they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance. See Annex A to this proxy statement for a discussion of Adjusted Net Income, Adjusted EPS, Adjusted EBITDA and Adjusted Gross Margin as well as a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.

Strong earnings performance

4Q ’16 Net Income $207M ($0.67/share)

Full Year ’16 Net Income $630M ($2.04/share)

Executing on our strategic plan

Capital investments up 64% to $1.9B

Integration efforts well under way

Capital Expenditures

The compensation, nominating and corporate governance committee works to ensure that the design of our executive compensation program is focused on long-term shareholder value creation, emphasizes pay for performance and does not encourage imprudent short-term risks. The compensation, nominating and corporate

governance committee will use the “say on pay” vote as a guidepost for shareholder sentiment, along with continued shareholder outreach, and believes it is critical to maintain and continually develop our compensation program to promote ongoing shareholder engagement, communication and transparency.

We encourage you to read the more detailed description of our compensation program in “Compensation Discussion and Analysis” beginning on page 28 before voting on Proposal Three: Advisory Vote to Approve Named Executive Officer Compensation (“Say on Pay”).

Sustainability is firmly entrenched in the values and principles that guide our board of directors and we believe respect for people, safety, communities and the environment are key priorities for our business success. The company’s commitment to sustainability is articulated in five basic principles of conduct set forth in the Iberdrola, S.A. Sustainability Policy, which has been adopted by our board of directors and is available at www.avangrid.com :

We encourage you to read the company’s Sustainability Report for 2016 (available at www.avangrid.com ) in which you can find more information regarding the company’s economic, social, and environmental goals and achievements during 2016.

As part of the company’s commitment to corporate governance, we have established a robust engagement program to discuss and obtain feedback from our shareholders on our corporate governance and executive compensation practices and the board’s role in oversight of critical issues to the company. During 2016, the company reached out to shareholders holding approximately 92 percent of our shares to discuss, among other issues,

board structure, director independence and executive compensation, and regularly provided feedback to the board on these discussions. The board carefully considered shareholder feedback in acting on matters of corporate governance and executive compensation. A more complete discussion of our shareholder engagement program is included on page 25.

Our board of directors has nominated the following 14 candidates to serve on the board. We have a declassified board, which means that all directors are voted on every year at the annual meeting of shareholders. If any director is unable to stand for election, our board of directors may reduce the number of directors or designate a substitute. In that case, shares represented by proxies may be voted for a substitute director. We do not expect that any nominee will be unavailable or unable to serve. The compensation, nominating and corporate governance committee has recommended the following current directors as nominees for director and the board of directors has approved their nomination for election.

It is intended that proxies will be voted for the nominees set forth herein. Under our bylaws, assuming a quorum is present at the annual meeting, the election of directors shall be decided by a plurality of the votes cast at the annual meeting in person or by proxy by the holders of shares entitled to vote therein. This means that the 14

nominees receiving the highest numbers of “ FOR ” votes at the Annual Meeting by the holders of shares of our common stock will be elected as directors.

Set forth on the following pages is each nominee’s name, his or her age, the date first elected as a director of the company, and a brief summary of the nominee’s business experience, including the nominee’s particular experience, qualifications, attributes or skills that led the board to conclude that the nominee should continue to serve as a director. Each nominee has indicated he or she will stand for election and will serve as a director if elected. Messrs. Torgerson, Chase and Lahey were selected to serve as directors pursuant to the shareholder agreement dated December 16, 2015, between the company and Iberdrola, S.A. (the “Shareholder Agreement”). See the section entitled “Certain Relationships and Related Party Transactions—The Shareholder Agreement” for additional information beginning on page 66.

Board Recommendation

After review of the individual qualifications and experience of each of our director nominees and his or her contributions to the board, our board of directors has determined unanimously to recommend that shareholders vote “ FOR ” the election of all of our director nominees.

Director Age and Tenure

Following the 2016 annual meeting of shareholders, the board sought to recruit additional board members whose qualifications align with the needs of the board in light of the major risks and issues facing the company as well as its long-term strategy. As such, in July 2016 the chairman of the board of directors recommended that the size of the board be increased from 12 to 14 and that Felipe de Jesús Calderón Hinojosa and Elizabeth Timm be appointed to fill the vacancies created. Effective July 14, 2016, the board

voted to elect President Calderón and Ms. Timm as directors of the company. In connection with the election of the new directors, Carol L. Folt resigned as a member and the chair of the unaffiliated committee and President Calderón was appointed to serve as a member and the chair of the unaffiliated committee. Ms. Timm was appointed to serve on the audit and compliance committee.

The board has approved a set of corporate governance guidelines in accordance with rules of the New York Stock Exchange (the “NYSE”). These guidelines set forth the key policies relating to corporate governance, including director qualification standards, director responsibilities and director compensation. The board has also approved a code of business conduct and ethics in accordance with rules of the NYSE and the SEC applicable to all directors, officers and employees including the chief executive officer, the principal financial and accounting officer and other senior financial officers. The code is intended to provide guidance to directors and management to assure compliance with law and promote ethical behavior. Copies of the company’s corporate governance guidelines and its code of business conduct and ethics may be found on the company’s website at www.avangrid.com . Any amendment to the code, or any waivers of its requirements, will be disclosed on the company’s website.

The board oversees the management of the company and its business with a view to enhancing the long-term value

of the company for its shareholders. The company’s corporate governance system is inspired by and based on a commitment to ethical principles, transparency and leadership in the application of best practices in good governance and is designed to be a working structure for principled actions, effective decision-making and appropriate monitoring of both compliance and performance. The company’s by-laws, the corporate polices, the internal corporate governance rules and the other internal codes and procedures approved or adopted by the board form the framework of governance of the company. The company’s corporate governance system is periodically reviewed by the board, and is subject to modification from time to time. The company’s corporate governance system reflects the main principles that make up the corporate governance system of Iberdrola, S.A., which owns 81.5% of the outstanding shares of Avangrid common stock, subject to certain exceptions, additions, and modifications required for publicly-listed companies in the United States.

The company’s bylaws and corporate governance guidelines allow the flexibility to separate or consolidate the positions of chairman of the board and chief executive officer. The board currently believes that separating the roles of chairman and chief executive officer allows for better alignment of corporate governance with shareholder interests and aids in the board’s oversight of management

and the board’s ability to carry out its roles and responsibilities on behalf of the shareholders. The board also believes that the separation of the roles of chairman and chief executive officer allows the chief executive officer to focus more of his time and energy on operating and managing the company and leverages the chairman’s experience in the energy industry.

Due to the company’s status as a controlled company, the company relies on exemptions from the rules of the NYSE that would otherwise require that our board of directors be comprised of a majority of “independent” directors as defined under the rules of the NYSE. The company is also required to have an “independent” audit committee under the NYSE’s listed company requirements. See the section entitled “Corporate Governance System—Audit and Compliance Committee” for additional information.

The board has undertaken a review of the independence of each director. Based on information provided by each director concerning their background, employment and affiliations, including family relationships, the board has determined that each of Mmes. Folt and Timm and

Messrs. Calderón, Elías Ayub, Lahey, and Solomont do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the rules of the NYSE. In making these determinations, the board considered the current and prior relationships that each non-employee director has with the company and all other facts and circumstances the board deemed relevant in determining their independence, including the beneficial ownership of the company’s securities by each non-employee director, and the transactions involving them described in the section entitled “Certain Relationships and Related Party Transactions” beginning on page 67.

The company is a “controlled company” within the meaning of the rules of the NYSE because Iberdrola, S.A. owns more than 50% of the company’s outstanding shares of common stock. Consequently, the company is not required to comply with certain of the NYSE listed

company requirements, such as the requirement to have a majority of “independent” directors on the company’s board of directors, or the requirement to have compensation and nominating/corporate governance committees comprised of “independent” directors.

During 2016, the board held seven meetings. Each director attended at least 75 percent of the meetings of the board of directors and the committees on which he or she served during 2016. It is our policy to schedule board and committee meetings to coincide with the annual meeting of shareholders, and directors are expected to attend the annual meeting of shareholders. All directors attended our 2016 Annual Meeting.

Our board has the authority to appoint committees to perform certain management and administration functions. The board has an audit and compliance committee, compensation, nominating and corporate governance committee, executive committee and unaffiliated committee. The composition and responsibilities of the committees are described below. Members will serve on committees until their resignation or until otherwise determined by the board of directors.

The compensation, nominating and corporate governance committee, which is comprised of a majority of independent directors, was formed by the board of directors in October 2016. Because the company is a “controlled company” under the rules of the NYSE, the board of directors had determined that it was appropriate to not have a committee responsible for executive compensation and corporate governance matters before the formation of the compensation, nominating and corporate governance committee. During 2016, the board of directors relied on an independent compensation forum, comprised of only independent directors, to make certain decisions regarding executive compensation.

The following table identifies the current membership of the audit and compliance, compensation, nominating and corporate governance, executive and the unaffiliated committees:

The audit and compliance committee oversees the company’s accounting and financial reporting process and the audit of the company’s financial statements and assists the board in monitoring the company’s financial systems and the company’s legal and regulatory compliance. The audit and compliance committee operates under a written charter adopted by the board in accordance with applicable rules of the NYSE and the SEC, which is available on the company’s website at www.avangrid.com . As stated in the charter, the audit and compliance committee’s principal responsibility is to provide assistance to the board of directors in fulfilling its oversight responsibility to the shareholders, the investment community and others relating to:

Mmes. Folt and Timm and Mr. Lahey served on the audit and compliance committee during 2016, with Mr. Solomont serving as the Chair. Mr. Rebollo Liceaga served on the audit and compliance committee until his resignation on November 11, 2016. Mr. Lahey resigned from the audit and compliance committee on March 16, 2017. All members of the audit and compliance committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the NYSE. In addition, the board has determined that Ms. Timm is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933 (the “Securities Act”) and has the requisite financial experience as defined by the NYSE corporate governance rules.

The board has determined that each of the current members of the Audit and Compliance Committee are “independent” as defined under the NYSE listing standards and under Rule 10A-3(b)(1) of the Exchange Act of 1934, as amended (the “Exchange Act”). Mr. Rebollo Liceaga, who served as a member of the committee until November 11, 2016, is not “independent” as defined under the NYSE listing standards and as defined in Rule 10A-3(b)(1) of the Exchange Act.

Pursuant to the NYSE rules, the company is permitted to phase in its independent audit and compliance committee by requiring one independent member at the time of listing, a majority of independent members within 90 days of the effectiveness of the company’s registration statement and a fully independent committee within one year of the effectiveness of the registration statement. Prior to Mr. Rebollo Liceaga’s resignation the board determined that the fact that the audit and compliance committee was made up in the majority but not entirely of independent directors did not materially adversely affect the ability of our audit and compliance committee to act independently and to satisfy the other requirements of the SEC and NYSE.

The audit and compliance committee held eight meetings during 2016. A copy of Report of the Audit and Compliance Committee is on page 58.

Executive Committee

The executive committee is a standing committee that has and may exercise all the powers of the board when the full board is not in session, to the extent permitted by applicable law and provided that any of the authorities assigned to the audit and compliance committee or the unaffiliated may not be so delegated. The executive committee held four meetings during 2016.

Unaffiliated Committee

The unaffiliated committee was established in accordance with the Shareholder Agreement and has responsibilities designated therein, including, without limitation the responsibility for reviewing and approving all transactions entered into between the company and Iberdrola, S.A., or

its affiliates and ensuring that they are entered into on arms’ length basis.

Mr. Elías Ayub and Mr. Chase served on the unaffiliated committee during 2016, with Ms. Folt serving as the Chair until her resignation from the committee on July 15, 2016, and Mr. Calderón Hinojosa serving as Chair since July 15, 2016. The unaffiliated committee is comprised solely of “independent” directors; provided, however, that Mr. Chase, for so long as he is a director, is permitted to serve as a member of the unaffiliated committee irrespective of whether he qualifies as an “independent” director (as that term is defined under the rules of the NYSE). See the section entitled “Certain Relationships and Related Party Transactions—The Shareholder Agreement” for additional information. The unaffiliated committee held three meetings during 2016.

Initially following the consummation of the merger with UIL, the board determined that it was in the best interests of the company to have any executive incentive plans, including equity incentive plans, reviewed and approved by at least two outside directors who are members of the independent compensation forum. In addition, the board appointed an alternate member entitled to participate fully in any meeting in replacement of any member absent from that meeting. The board, having reviewed the relationships that were known to exist between the company and Messrs. Solomont, Lahey and Elías Ayub, determined that Messrs. Solomont, Lahey and Elías Ayub are “non-employee directors” for the purposes of Rule 16b-3 under the Exchange Act and are “outside directors” for the purposes of Section 162(m) of the Internal Revenue Code, as amended (the “Code”). The independent compensation forum was responsible for reviewing and recommending the approval to the full board of all executive incentive and equity incentive plans.

On October 15, 2016, after engagement with shareholders and careful consideration, the board determined that it was in the best interests of the company to establish a compensation, nominating and corporate governance committee. The board appointed Messrs. Galán and Lahey to serve as members of the compensation, nominating and corporate governance committee, with Mr. Elías Ayub serving as the Chair. Messrs. Elías Ayub and Lahey are “independent” as defined under the NYSE listing standards. The company relies on the controlled company exemption from the rules of the NYSE that would otherwise require the committee be comprised of solely “independent” directors as defined under the rules of the NYSE.

The compensation, nominating and corporate governance committee operates under a written charter adopted by the board in accordance with applicable NYSE charter requirements for both compensation and nomination/corporate governance committees, which is available on the company’s website at www.avangrid.com . As stated in its charter, the compensation, nominating and corporate governance committee’s principal responsibility is to provide assistance to the board of directors in fulfilling its oversight responsibility with respect to executive compensation, the director nomination process and procedures, developing and maintaining the company’s corporate governance system, and any related matters required by federal securities laws. Specifically, the compensation, nominating and corporate governance committee is responsible for, among other things:

To the extent the board and compensation, nominating and corporate governance committee deem appropriate, executive compensation matters relating to or governed by Section 162(m) of the Code or Rule 16b-3 of the Exchange Act, are delegated to a subcommittee of the compensation, nominating and corporate governance committee comprised entirely of two or more directors who qualify as “outside directors” within the meaning of Section 162(m) of the Code and “non-employee directors” within the meaning of Rule 16b-3 of the Exchange Act (the “compensation subcommittee”). Messrs. Elías Ayub and Lahey currently serve on the compensation subcommittee. The compensation subcommittee serves to (i) establish, administer, approve and certify (for the purposes of Section 162(m) of the Code) performance goals for employee compensation awards and (ii) review and approve (for purposes of Rule 16b-3 of the Exchange Act) compensation grants and awards by the company of its securities to an officer or director of the company. Prior to the payment of any compensation awarded by the compensation subcommittee, all compensation decisions by the compensation subcommittee are subject to ratification from the full board.

The compensation, nominating and corporate governance committee also reviews and discusses with management the Compensation Discussion and Analysis required by the SEC to be included in our proxy statement.

The independent compensation forum held three meetings and the compensation, nominating and corporate governance committee held one meeting during 2016.

The independent compensation forum retained Aon Hewitt to serve as its compensation consultant in 2016 to provide counsel and advice on executive and non-employee director compensation matters. Aon Hewitt provided the independent compensation forum, and later the compensation, nominating and corporate governance committee as its successor, and the company’s

management, information about peer groups against which performance and pay should be examined, financial metrics to be used to assess the company’s relative performance, competitive long-term incentive practices in the marketplace, and compensation levels relative to market practice. Aon Hewitt received $134,500 in fees in 2016 for services related to determining or recommending the amount or form of executive and non-employee director compensation. Separately, management engaged Aon Hewitt to perform unrelated services and Aon Hewitt was paid approximately $2.9 million for these services, which included actuarial, pension administration, and health and welfare benefits administration and other consulting services. The independent compensation forum was informed about these services, but its formal approval was not requested. A copy of the compensation, nominating and corporate governance committee report is on page 58.

To ensure that Aon Hewitt’s consulting services remain independent and objective: (i) at least annually, Aon Hewitt conducts a review of its performance; and (ii) Aon Hewitt’s fees are not linked to the size of the company’s executive compensation. The compensation, nominating and corporate governance committee has reviewed the independence of Aon Hewitt, including the “independence” factors contained in Section 303A.05 of the NYSE Listed Company Manual, and determined that Aon Hewitt is independent and the services provided by Aon Hewitt do not raise any conflicts of interest.

The Chief Executive Officer and the Senior Vice President—Human Resources & Corporate Administration make recommendations regarding compensation of the executive officers (other than for the Chief Executive Officer) based on competitive market data, internal pay equity, responsibilities and performance. The independent compensation forum made all final determinations regarding executive officer compensation, including salary, bonus targets, equity awards, and related performance goals during 2016. For more information on how executive compensation decisions are made, see the section entitled “Executive Compensation—Compensation Discussion and Analysis” beginning on page 28 below.

In keeping with international best practices, the company engaged PricewaterhouseCoopers Asesores de Negocio, S.L. (“PwC”) as an external advisor to assess its corporate governance practices. PwC also performs a similar assessment of the corporate governance practices of Iberdrola, S.A. and its other subsidiaries. The objective of this assessment is a review of and any recommended improvements to the operations of the board and the audit and compliance committee. PwC reviewed the company’s internal standards and practices and noted (i) full compliance for the board with 50 assessment indicators, of which 38 relate to the analysis of compliance with internal

regulations and 12 relate to the monitoring of trends in corporate governance and (ii) full compliance for the audit and compliance committee with 18 assessment indicators, of which 16 relate to the analysis of compliance with internal regulations and two relate to the monitoring of trends in corporate governance. PwC made a similar assessment of the company’s principal subsidiary governing bodies, the Networks board of directors and audit and compliance committee and the Renewables board of directors, and concluding that the company and its principal subsidiary governance bodies were each in full compliance with all internal regulations.

The board conducts an annual assessment of the performance of the board and its committees. The purpose of this evaluation is to identify ways to enhance the effectiveness of the board, its committees and the directors. The evaluation process includes completion by directors of an anonymous questionnaire to solicit candid feedback and gather additional suggestions for improvement. The responses and comments of the

directors are then compiled and presented to the chairman of the board of directors and, beginning for 2016, the compensation, nominating and corporate governance committee. The chairman of the board of directors and the chair of the compensation, nominating and corporate governance committee then presents the results of the assessments to the board for discussion and action.

In the normal course of its business, the company is exposed to a variety of risks, including political and regulatory risks and credit and investment risks. In connection with the board’s oversight function, the board oversees the company’s policies and procedures for managing risk. The audit and compliance committee of the board of directors has been delegated primary responsibility for oversight of the company’s risk management practices and reports to the board. The audit and compliance committee reviews the company’s risk assessment and regulatory compliance through the

company’s compliance division and chief compliance officer. See the section entitled “Corporate Governance System—Audit and Compliance Committee” for additional information.

In addition, the company conducts risk assessments to determine the extent, if any, to which the company’s compensation programs and practices may create incentives for excessive risk-taking. For a discussion of these assessments, see the section entitled “Compensation Discussion and Analysis—Compensation and Risk.”

During 2016, the entire board participated in the consideration of nominees for director. On October 14, 2016, the board established a compensation, nominating and corporate governance committee, which, among other things, is responsible for recommending to the board nominees, including any nominees recommended by shareholders, for director at each year’s annual meeting of shareholders and, when vacancies occur, names of individuals who would make suitable directors of the company. The compensation, nominating and corporate governance committee may engage an external search firm or a third party from time to time to assist it in identifying and evaluating director-nominee candidates, in addition to current members of the board standing for reelection.

Our criteria for directors are discussed in our corporate governance guidelines and our compensation, nominating and corporate governance committee charter, copies of which are available on our website at www.avangrid.com . Consistent with these guidelines, the compensation, nominating and corporate governance committee ensures that the nominees are qualified with relevant expertise, competence, experience, and training. All of the nominees must also have the time and commitment to meet their responsibilities as members of the board of directors.

The compensation, nominating and corporate governance committee has no specific policy on diversity. However, the board recognizes the benefit of having directors who reflect differing individual attributes to contribute to the board’s discussion, evaluation and decision-making and considers diversity of knowledge, experience, origin, nationality, and gender. In the board’s annual performance evaluations conducted by the board and its committees, the board from time to time considers whether the members of the board reflect such diversity and whether such diversity contributes to a constructive and collegial environment.

Shareholders wishing to suggest potential candidates for membership on the board may address such information, in writing, to our Senior Vice President—General Counsel and Secretary; Chief Compliance Officer at the mailing address set forth on page 25 of this proxy statement. The communication must identify the writer as a shareholder of the company and provide sufficient detail for the board to consider the individual’s qualifications. Nominees proposed by the company’s shareholders are evaluated and considered in the same manner as nominees recommended by any other source.

Any shareholder or interested party who wishes to communicate or request a meeting with members of the board of directors or with only non-management directors or any specified individual director may do so by writing to:

R. Scott Mahoney

Senior Vice President—General Counsel and Secretary; Chief Compliance Officer

Avangrid, Inc.

157 Church Street

New Haven, Connecticut 06506

All communications received in accordance with these procedures will be reviewed by our Senior Vice President—General Counsel and Secretary; Chief Compliance Officer who will, in consultation with our Chairman of the Board, determine whether the subject matter of the communication should be brought to the attention of the non-management directors, the full board, or one or more of its committees, as well as whether any response to the communication is appropriate. Any such response will be made only in accordance with applicable law and regulations relating to the disclosure of information.

As part of our efforts to continuously improve our governance system, we launched an investor outreach program in 2016 to enable management and the board to understand the issues that matter most to our shareholders and address them effectively. In 2016, we reached out to holders of approximately 92 percent of the company’s outstanding shares throughout the year. Our discussions with shareholders during the 2016 corporate governance engagement program focused on the structure of our corporate governance system, executive compensation, the skills of our directors, and the board’s role in oversight of

critical issues for the company. The board carefully considered shareholder feedback and took a number of actions to enhance the company’s corporate governance system. These actions included the addition of two new independent directors, the elimination of the evergreen provision in the Omnibus Incentive Plan, the board’s renewed commitment to no tax gross-up provisions in new executive employment contracts, the establishment of the compensation, nominating and corporate governance committee, and the proposal to implement a majority voting standard uncontested director elections.