EVERGREEN UTILITIES AND HIGH INCOME FUND



Dear Shareholder:

         Pursuant to your request, enclosed for your consideration are the Offer
to Purchase dated December 20, 2004 of Evergreen Utilities and High Income Fund
(the "Fund") and the related Letter of Transmittal pursuant to which the Fund is
offering to purchase up to 5% or, in the aggregate, 575,250 shares of its issued
and outstanding common shares, no par value (the "Shares"), for cash at a price
equal to their net asset value ("NAV") determined as of the close of the regular
trading session of the New York Stock Exchange ("NYSE") on January 25, 2005,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated December 20, 2004 and the related Letter of Transmittal (which together
with any amendments or supplements thereto collectively constitute the "Offer").
THE OFFER EXPIRES AT 5:00 P.M. EASTERN TIME ON JANUARY 24, 2005, UNLESS EXTENDED
(THE "EXPIRATION DATE"). If the Offer is extended beyond January 24, 2005, the
purchase price for Shares will be their NAV determined as of the close of the
regular trading session of the NYSE on the date after the new Expiration Date,
as extended.

         Neither the Fund nor its Board of Trustees nor Evergreen Investment
Management Company, LLC (the Fund's investment adviser) is making any
recommendation to any holder of Shares as to whether to tender Shares. Each
Shareholder is urged to consult the Shareholder's own investment and tax
advisors before deciding whether to tender Shares. If, after considering the
Offer to Purchase and Letter of Transmittal, you wish to tender your Shares
pursuant to the Offer, if you are the record owner of Shares, you should follow
the instructions contained in the Offer to Purchase and Letter of Transmittal,
and, if the Shares are held of record in the name of a broker, dealer,
commercial bank, trust company or other nominee, you should contact that firm to
effect the tender for you.

         Your attention is called to the following:

         1. Unless extended, the Offer expires at 5:00 p.m. Eastern Time on
         January 24, 2005 and withdrawal rights expire at 5:00 P.M. Eastern Time
         on January 24, 2005.

         2. The Offer is subject to certain conditions set forth in the Offer to
         Purchase. Under certain circumstances, the Fund will not be required to
         accept for payment, purchase or pay for any Shares tendered, and the
         Fund may also amend, extend or terminate the Offer.

         3. A Shareholder wishing to accept the Offer must tender, or cause the
         tender of, at least 20% of the Shares owned by the Shareholder and
         attributed to the Shareholder for federal income tax purposes under
         Section 318 of the Internal Revenue Code of 1986, as amended, as of the
         date of purchase of Shares pursuant to the Offer. Shareholders should
         consult their tax advisors as to the application of the constructive
         ownership rules of Section 318.

         4. If more than 575,250 Shares are duly tendered (and not timely
         withdrawn), the Fund will purchase Shares from tendering Shareholders,
         in accordance with the terms and subject to the conditions specified in
         the Offer to Purchase, on a pro rata basis in accordance with the
         number of Shares duly tendered by each Stockholder during the period
         the Offer is open (and not timely withdrawn), unless the Fund
         determines not to purchase any Shares. However, the Fund will accept
         all Shares tendered by any Shareholder who owns, beneficially or of
         record, an aggregate of not more than 99 Shares and who tenders all
         such Shares by means of the Letter of Transmittal tendered by or on
         behalf of that Shareholder.


         5. A broker, dealer, commercial bank, trust company or other nominee
         may charge a fee for processing transactions on behalf of a
         Shareholder. Tendering Shareholders are not obligated to pay brokerage
         commissions or, subject to Instruction 6 of the Letter of Transmittal,
         transfer taxes on the purchase of Shares by the Fund pursuant to the
         Offer.

         The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the Offer or its
acceptance would violate the laws of such jurisdiction. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of the
Fund by one or more registered brokers or dealers licensed under the laws of
that jurisdiction.

         Should you have any other questions concerning the enclosed material,
please contact your broker, dealer, commercial bank, trust company or other
nominee, or call the Depositary at the number indicated in the Offer to
Purchase.

                                Very truly yours,

                    EVERGREEN UTILITIES AND HIGH INCOME FUND