PSC Authorizes Merger of KeySpan and National Grid

PSC Authorizes Merger of KeySpan and National Grid

The New York State Public Service Commission (Commission) today authorized the stock acquisition of KeySpan Corporation and its affiliates by National Grid plc. The Commission’s authorization, subject to conditions, makes some revenue requirement determinations for KeySpan Energy Delivery New York and KeySpan Energy Delivery Long Island, but did not authorize any changes in rates at this time. Such changes will be determined later this year.

“The joint proposals with conditions that have been presented by the advisory staff have been crafted with the primary intent to build in critically important protections for ratepayers in Brooklyn, Long Island and upstate New York,” said Commission Chairwoman Patricia L. Acampora. “Let there be no doubt that it is our intent to ensure ratepayers will positively benefit from this merger, and that we must ensure that ratepayers at the end of this process end up with an improved energy system and related services. What we have done today will provide ratepayers substantial benefits and additional reliability safeguards. I am also gratified that the executive packages to KeySpan officials will be borne strictly by shareholders, and not ratepayers. The decision to approve the merger with conditions as set forth by advisory staff will help ensure just and reasonable rates and result in reliable service for the foreseeable future for millions of ratepayers in New York State.”

The Commission’s authorization offers net present value savings to New York State customers of approximately $700 million over a 10-year period. The savings include about $494 million for KeySpan customers on Long Island and New York City, about $100 million in savings for National Grid’s upstate customers, and $93 million for the customers of the Long Island Power Authority.

As part of the proceeding, the Commission heard from more than 60 organizations and individuals as interested parties in the agency’s proceedings as well as hundreds of members of the public at the 13 public statement hearings in Long Island, New York City and the Capital Region. Many of their comments have resulted in additional conditions to enhance ratepayer benefits, ensure greater financial strength of the merged entity, and create greater transparency.

The Commission order, with conditions, in authorizing the merger in Case 06-M-0878, when issued, will be available on the Commission’s Web site at www.dps.state.ny.us by accessing the Commission’s File Room section of the homepage. Many libraries offer free Internet access. Commission orders can also be obtained from the Files Office, 14th floor, Three Empire State Plaza, Albany, NY 12223 (518-474-2500).