Thursday, March 8, 2007

National Grid Offers Concessions in Pursuit Of Keyspan

But What About the Ducklings? carries an analysis of the moves England's National Grid Plc is making in its bid to win New York State approval for its purchase of KeySpan Corp (once called Brooklyn Union Gas, with headquarters at MetroTech -- and a window full of ducklings every spring).

Among the concessions offered: National Grid says it will share merger savings with natural-gas customers (for three years) and spend $1.4 billion upgrading its Niagara Mohawk utility, blamed for an unusually high number of blackouts. Debt at National Grid would rise $11.4 billion to finance the purchase, an amount that threatens its credit rating unless the state agrees to "unreasonably high rates'' for gas customers, reports Bloomberg.

"Staff's testimony appears to consist largely of a series of speculative assertions about 'worst case' possible outcomes,'' KeySpan Chief Executive Office Robert Catell said in written testimony, adding that the merger will moderate rate hikes that would otherwise hit 11 percent.

The Public Service Commission is expected to rule on the merger this summer.

Update: The Times reports that the former top spokesman of KeySpan claims in a federal lawsuit that he was improperly fired four years ago as punishment for alerting executives to allegations of accounting irregularities involving hundreds of millions of dollars. See story here.

(Duckling photo courtesy of Gamenerd under Creative Commons license.)

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