National Grid - KeySpan Merger Gains FERC Approval

Business Wire, Oct 23, 2006

WESTBOROUGH, Mass. and BROOKLYN, N.Y. -- National Grid (LSE: NG NYSE: NGG) and KeySpan Corp. (NYSE: KSE) are pleased that the US Federal Energy Regulatory Commission (FERC) has voted to approve their merger application. In its order, dated October 20, 2006, FERC noted KeySpan's ownership of generating plants located in New York City and Long Island and stated that "the combination of the electric generation resources is not likely to harm competition in any relevant energy market."

On February 27, 2006, National Grid and KeySpan announced an agreement for National Grid to acquire KeySpan for $7.3 billion and the assumption of approximately $4.5 billion of debt.

The FERC order is another step in the process of gaining regulatory approval for the transaction. In July, it was determined the transaction raised no issues of national security to warrant an investigation and was granted an early termination of the waiting period required under anti-trust laws. Also in July, a filing requesting approval of the merger was made with the New York State Public Service Commission, and National Grid shareholders voted to approve the acquisition. In August, KeySpan shareholders approved the merger and a filing requesting approval of the merger was made with the New Hampshire Public Utilities Commission.

About National Grid:

National Grid is an international energy delivery business with principal activities in the regulated electricity and natural gas industries. In the U.S., National Grid distributes electricity to approximately 3.4 customers in Massachusetts, New Hampshire, New York and Rhode Island and natural gas to approximately 814,000 customers in New York and Rhode Island.

KeySpan will be National Grid's fifth US acquisition. Previously, it had acquired New England Electric System and Eastern Utilities Associates (2000), Niagara Mohawk (2002), and the Rhode Island gas distribution business of Southern Union Company (2006).

The company owns the high-voltage electricity transmission network in England and Wales and operates the system across Great Britain. It also owns and operates the high-pressure gas transmission system in Britain and, through its natural gas distribution business serves over 11 million meters in homes and businesses in Britain. In addition, it has a number of businesses operating in related areas such as LNG importation, wireless infrastructure for broadcast and telecommunications, property, metering and interconnectors. For more information, visit National Grid's web site at www.nationalgrid.com.

About KeySpan:

A member of the Standard & Poor's 500 Index, KeySpan Corporation (NYSE:KSE) is the fifth largest distributor of natural gas in the United States and the largest in the Northeast, operating regulated gas utilities in New York, Massachusetts and New Hampshire that serve 2.6 million customers. These customer-focused businesses are complemented by a portfolio of service companies that offer energy-related products, services, and solutions to homes and businesses. KeySpan is also the largest electric generator in New York State, with approximately 6,650 megawatts of generating capacity that provides power to 1.1 million customers of the Long Island Power Authority (LIPA) on Long Island and supplies approximately 25 percent of New York City's capacity needs. KeySpan also operates LIPA's transmission and distribution system under contract to LIPA. In addition to these assets, KeySpan has strategic investments in pipeline transportation, distribution, storage, and production. KeySpan has headquarters in Brooklyn, New England, and Long Island. For more information, visit KeySpan's web site at www.keyspanenergy.com.