August 11, 2006
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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The following communication is being distributed to all KeySpan Corporation
and National Grid employees:
Integration Update National Grid KeySpan
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Volume 1 Issue XIV August 2006
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August 11, 2006
National Grid-KeySpan Merger Provides New Savings
and Expanded Resources To New Hampshire Customers
In a filing with the New Hampshire Public Utilities Commission filed
yesterday, KeySpan and National Grid proposed a plan for the merged companies
to provide customer savings and be better positioned to serve customers by
operating efficiently, managing energy supply costs and providing greater
resources to KeySpan's New Hampshire customers.
The merged companies will provide benefits to customers by reducing costs
through combining resources and by more comprehensively managing a large gas
supply portfolio.
The proposal calls for National Grid resources and expertise to complement
KeySpan's existing strengths. Benefits that come from combining the companies
include:
o More than $12.5 million over 10 years in direct savings to New
Hampshire customers from business operations efficiencies.
o Annual gas supply management customer savings of more than $1.1
million.
o Freezing KeySpan's current delivery rates, which were last increased
in 1990, for at least 12 months from the time of closing.
Anticipating a 2007 closing, the proposal would extend KeySpan's
delivery rate freeze into 2008. The price customers pay for actual
natural gas supplies will continue to fluctuate with market
conditions and be passed through without markup.
o Avoiding costs that would otherwise have to be incurred
to upgrade existing billing and information systems.
o Continuation of KeySpan's service standards with a commitment to update
the standards at the time of KeySpan's next rate filing.
Yesterday's filing is another step in the process of gaining regulatory
approval for the transaction. In May, National Grid and KeySpan filed for
approval of the merger from the U.S. Federal Energy Regulatory Commission. In
July, the transaction gained clearance on its filings in compliance with
federal antitrust and foreign investment requirements. Also in July, a filing
requesting approval of the merger was made with the New York Public Service
Commission, and National Grid shareholders approved the acquisition.
Additional Information and Where to Find It
In connection with the proposed merger, the Company has filed a definitive
proxy statement with the Securities and Exchange Commission. BEFORE MAKING ANY
VOTING OR INVESTMENT DECISION, THE COMPANY STOCKHOLDERS ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. The definitive proxy statement is also available free of
charge at the Securities and Exchange Commission's website, www.sec.gov, and
stockholders of the Company are also able to obtain additional copies of the
definitive proxy statement free of charge by directing their requests to
KeySpan Corporation One MetroTech Center, Brooklyn, New York 1120-3850.
The Company and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from its stockholders in
connection with the proposed merger. Information concerning the interests of
the Company's participants in the solicitation is set forth in the Company's
proxy statements and Annual Reports on Form 10-K, previously filed with the
Securities and Exchange Commission, and in the definitive proxy statement
relating to the merger.