National Grid has reached agreement in principle with the staff of the New Hampshire Public Utilities Commission and Office of Consumer Advocate in New Hampshire on the acquisition of KeySpan Corp.
Highlights of the settlement follow:
Electric Delivery Benefits:
- A $2.2 million distribution rate reduction for electric customers that will be provided in two phases on July 1, 2007 and Jan. 1, 2008. Once the two phases are implemented, it will equate to a distribution rate decrease of about 9%. This will reduce the total monthly bill of a typical 500 kWh residential customer by about 2.6%;
- A five-year electric distribution rate plan that limits future electric distribution rate increases;
- A reliability enhancement plan that calls for the company to implement an aggressive program to improve its infrastructure to enhance reliability, with modest rate adjustments for investments in the system under the plan;
- A sharing mechanism that provides an incentive for the company to maximize merger-related savings by allowing the company to retain savings up to a specified earnings threshold and share the balance with customers above the threshold during the five year plan; and
- The establishment of a Storm Reserve Fund intended to mitigate the potential economic impacts of major storms affecting National Grid’s customers and service territory.
After the settlement documents are finalized, they will be filed with the New Hampshire PUC, likely in mid-May, along with testimony from the company and the PUC staff. The agreement must then be approved by the New Hampshire PUC.
Hearings on the settlement are expected to occur during the last week of May.
The proposed National Grid-KeySpan merger was announced on Feb. 27, 2006, and since then has received numerous approvals and clearances. The companies’ request for approval of the merger from the New York State Public Service Commission is pending.