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Company and service area Calendar 2006 Customer Base Fiscal 2006 Financial information
(approximately) (before intercompany eliminations)
($’s in 000’s)
Nantucket Electric Company
Electricity distribution company 12,000 customers on Operating Revenue: $ 21,820
serving Nantucket Island Nantucket Island Operating Profit: 2,778
Net Income: 993
Total Assets: 110,659
New England Power Company
Electricity transmission company Principally the New England Operating Revenue: $ 675,931
serving Massachusetts, Rhode electricity distribution affiliates: Operating Profit: 84,925
Island and New Hampshire Massachusetts Electric Company, Net Income: 76,363
The Narragansett Electric Company, Total Assets: 2,457,579
Granite State Electric Company
and Nantucket Electric Company
National Grid Wireless
Holdings, Inc.
Telecommunications infrastructure Comprised of the following entities: Operating Revenue: $ 51,145
companies providing services in National Grid Wireless Holdings, Inc., Operating Profit: 4,479
the northeastern United States NEES Communications, Inc., Net Income: 4,124
region from New England to Virginia. National Grid Communications, Inc., Total Assets: 267,905
and National Grid Wireless
Services, Inc.
Announced acquisitions
In February 2006, the Company entered into two agreements to significantly expand operations
in the northeastern United States. These two agreements comprise the proposed acquisition of
KeySpan Corporation (KeySpan) for $7.3 billion together with the assumption of approximately
$4.5 billion of debt and the acquisition from Southern Union Company of its Rhode Island gas
distribution network for cash consideration of $498 million and assumed debt of $77 million.
Both businesses have a history of performing under incentive-based rate plans, which provide
substantial benefits to customers and shareholders.
KeySpan is the fifth largest distributor of natural gas in the United States and the largest in the
northeastern United States, serving 2.6 million customers in New York, Massachusetts and New
Hampshire. KeySpan also operates an electricity transmission and distribution network serving
1.1 million customers in New York under a long-term contract with the Long Island Power
Authority. KeySpan’s other interests include 6.7 GW of generation capacity, together with a
small portfolio of non-regulated energy-related services and strategic investments in certain
gas pipeline, storage and liquefied natural gas assets.
The proposed acquisition of KeySpan is subject to approvals from federal and state regulatory
authorities, the Company’s shareholders and KeySpan’s shareholders, and is planned to be
completed in 2007. Of these approvals, National Grid has cleared regulatory reviews by the
Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act and by the
Committee on Foreign Investment in the United States under the Defense Production Act. The
proposed acquisition was approved by National Grid’s shareholders on July 31, 2006 and by
Keyspan’s shareholders on August 17, 2006.
Southern Union Company’s Rhode Island gas distribution business serves approximately 245,000
customers through a distribution network of over 3,000 miles of mains. The network substantially
overlaps the Company’s existing electricity distribution service area in Rhode Island. The rates for
the Rhode Island gas distribution business are set by the same state regulators that set the
Company’s electricity distribution rates in Rhode Island.
The acquisition of the Rhode Island gas distribution network closed on August 24, 2006.
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National Grid USA / Annual Report