NG News National Grid Completes Acquisition of New England Gas Rhode Island Assets
WESTBOROUGH, Mass.--(BUSINESS WIRE)--Aug. 24, 2006--National Grid (LSE: NG.L NYSE: NGG) today completed the acquisition of the Rhode Island assets of New England Gas Company from Southern Union Company. The deal, valued at $575 million, was first announced on February 16, 2006.
With the purchase, National Grid will add New England Gas' 245,000 natural gas customers in 33 communities to the more than 477,000 electric customers the company already serves in 38 of the 39 cities and towns in the Ocean State.
"This transaction is an expression of our commitment to Rhode Island and New England," said Michael E. Jesanis, president and chief executive office of National Grid. "It's also a natural fit as we expand our core energy delivery business."
While the transition will be transparent for the most part, Rhode Island customers of New England Gas will see some immediate changes as a result of the new ownership. Signs and truck decals are being changed, customers will receive separate electric and natural gas bills under the National Grid name and employee uniforms will reflect the move to National Grid.
"One thing that will remain is the quality of service natural gas customers have received from the employees of New England Gas," said Jesanis. All New England Gas employees who were not offered jobs with that company's Massachusetts operation were offered employment by National Grid.
Jesanis added, "We also know that our Rhode Island natural gas customers will benefit from National Grid's natural gas experience in serving 11 million homes and businesses in the United Kingdom and more than 565,000 customers in upstate New York."
National Grid also said that along with Southern Union it had signed an agreement with the State of Rhode Island relating to a dispute between the state and Southern Union regarding responsibility for the clean-up of contamination in a neighborhood in Tiverton, Rhode Island. If Southern Union is found liable for the clean up, and if the state is unable to recover the clean-up costs from Southern Union, National Grid agreed to fund the first $13 million of the clean-up. The Tiverton site is not among the assets and liabilities National Grid is acquiring from Southern Union.
The acquisition was approved by the Rhode Island Division of Public Utilities and Carriers on July 25, 2006 and received clearance under the federal Hart-Scott-Rodino Act.
National Grid has also announced it plans to purchase KeySpan Corporation of Brooklyn, N.Y. That company provides natural gas service to 2.6 million customers in Massachusetts, New Hampshire and New York, manages the electric distribution system for the Long Island (NY) Power Authority, which provides electricity to 1.1 million customers on Long island, and is the largest electric generating company in New York State. Completion of that acquisition in 2007 will make National Grid the third largest energy utility in the United States including the assets under management for the Long Island Power Authority.
National Grid, through the transmission and distribution of electricity and natural gas, serves close to 4 million customers across 29,000 square miles of Massachusetts, New Hampshire, New York and Rhode Island.
