National Grid and KeySpan Corp. have announced that the U.S. Federal Energy Regulatory Commission has voted to approve their merger application. In its order, dated Oct. 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 Feb. 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.
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.
KeySpan operates Long Island Power Authority’s transmission and distribution system under contract to LIPA. In addition to these assets. KeySpan has headquarters in Brooklyn, New England, and Long Island, New York.