National Grid 2008 Annual Report Download - page 270

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 5610
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.6.1, Doc: 6, Page: 64
Description: EXH 2(B).6.1
0/5668.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/668/5*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 5610
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.6.1, Doc: 6, Page: 64 Description: EXH 2(B).6.1
0/5668.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/668/5*
Other Market Developments
Energy Markets
Sharp increases in energy prices have renewed interest in the public policy debate about restructuring the nation’s electricity
industry and increased the pressure on re
g
ulators and politicians to consider takin
g
action to miti
g
ate the effects on customers.
As the debate continues, the Issuer has taken a leadership position by advocating a well-mana
g
ed system as the key to
enablin
g
robust, competitive electricity markets that offer customers choice, savin
g
s and other benefits. State re
g
ulators
continue to stron
g
ly support current recovery of power supply costs. The Issuer continues to collaborate with re
g
ulators, policy
makers, and customers to advance the development of the competitive electricity marketplace.
Recent Developments
On 24 August 2007, KeySpan completed its merger (the “Merger”) with National Grid plc, as contemplated by the A
g
reement
and Plan of Mer
g
er, dated as of 25 February 2006. The a
gg
re
g
ate consideration paid by National Grid plc was approximately
U.S.$7.4 billion. The votin
g
securities of KeySpan were previously publicly held and traded on the New York Stock Exchan
g
e
but are now held 100 per cent. indirectly by National Grid plc.
KeySpan has no independent operations and conducts substantially all of its operations throu
g
h its subsidiaries. Prior to the
Merger, KeySpan’s subsidiaries operated in the followin
g
four business se
g
ments: Gas Distribution, Electric Services, Ener
g
y
Services and Ener
g
y Investments. Followin
g
is a summary of certain select net revenue information (in millions of dollars) for
each of the KeySpan business segments for calendar years ended 31 December 2006, 2005 and 2004:
Note:
* Followin
g
the com
p
letion of the mer
g
er with Ke
y
S
p
an, the merchant electricit
y
g
eneration business in New York Cit
y
and the communications o
p
erations were classified as
discontinued o
p
erations in the interim financial statements of National Grid
p
lc for the six months ended 30 Se
p
tember 2007. The revenues relatin
g
to these o
p
erations were
U.S.$903m in 2006, U.S.$1,117m in 2005 and U.S.$820m in 2004.
KeySpan, throu
g
h its
g
as distribution se
g
ment, operated as the fifth lar
g
est
g
as distribution company in the United States and
the lar
g
est in the northeast of the United States. The
g
as distribution se
g
ment consists of six re
g
ulated
g
as distribution
subsidiaries, which operate in New York, Massachusetts and New Hampshire and serve approximately 2.6 million customers
within an a
gg
re
g
ate service area coverin
g
4,273 square miles. In New York, The Brooklyn Union Gas Company, doin
g
business as KEDNY, provides
g
as distribution services to customers in the New York City Borou
g
hs of Brooklyn, Queens and
Staten Island; and KeySpan Gas East Corporation, doin
g
business as KEDLI, provides
g
as distribution services to customers in
the Lon
g
Island Counties of Nassau and Suffolk and the Rockaway Peninsula of Queens County. In Massachusetts, Boston
Gas provides gas distribution services in eastern and central Massachusetts; Colonial Gas
64
Segment 2006 2005 2004
(Millions of Dollars
)
Gas U.S.$1,665.6 U.S.$1,717.3 U.S.$1,669.3
Electric* U.S.$1,332.3 U.S.$1,295.9 U.S.$1,199.1
Energy Services* U.S.$ 213.0 U.S.$ 202.0 U.S.$ 193.9
Energy Investments U.S.$ 40.3 U.S.$ 43.0 U.S.$ 58.9