Rate Settlement in Rhode Island for NEES and EUA
National Grid Group PLC
26 January 2000
LONG-TERM, INCENTIVE-BASED RATE SETTLEMENT IN RHODE
ISLAND FOR NEES AND EUA
The National Grid Group plc ('National Grid') announces
that New England Electric System ('NEES') and Eastern
Utilities Associates ('EUA') have agreed a rate plan in
Rhode Island that provides incentives for NEES's and
EUA's electricity distribution operations in that State.
The agreement requires the approval of the Rhode Island
Public Utilities Commission.
David Jones, Group Chief Executive of National Grid
commented:
'We are delighted that we have reached this agreement in
Rhode Island. In concept, the settlement agreement is
similar to the Massachusetts rate plan in that it
provides a long-term framework, which enables NEES and
EUA's efficiency gains to benefit both customers and
shareholders and enables our business to undertake the
most effective long-term planning.
'The settlement is the result of the foresight of the
Rhode Island state officials and customer bodies who have
supported it and builds on the success of the operations
of NEES and EUA in that state.'
National Grid and NEES announced on 14 December 1998
that, subject to the required approvals, National Grid
would acquire all the outstanding shares of NEES, valued
at $3.2bn.
The text of the announcement made today by NEES:
RHODE ISLAND'S ELECTRIC CUSTOMERS TO RECEIVE $100 MILLION
IN RATE SAVINGS OVER FIVE YEARS
Attorney General, Department of Public Utilities and
Carriers, and U.S. Navy reach agreement with NEES/EUA
on merger
New England Electric System (NEES, the parent of
Narragansett Electric Company) and Eastern Utilities
Associates (EUA, the parent company of Blackstone Valley
Electric and Newport Electric) today announced a
settlement agreement that guarantees the state's 454,000
electric customers $100 million in total savings through
2004.
The agreement gives customers $13 million per year in
immediate rate relief, provides additional savings
through a five-year rate freeze, and doubles the number
of low-income customers eligible for discounted rates.
The settlement includes an incentive-based plan that
allows customers and the company to share in the savings
created by the merger. The settlement also includes
standards to ensure that strong service quality is
maintained, and provides resources for environmental
remediation.
'We are delighted to have reached this broad-based
settlement, and look forward to presenting it to the
Commission,' noted Narragansett Electric Company
President and Chief Executive Officer Lawrence J. Reilly.
'We are grateful for the efforts of all the parties
involved, who have devoted much time to ensuring that
Rhode Island's electric customers receive the best
service at the lowest possible rates.'
The rate plan will be implemented after the agreement has
been approved by the Rhode Island Public Utilities
Commission, once all required regulatory approvals for
the merger have been obtained, and when metering and
billing systems are ready to administer the settlement
agreement's new rates.
NEES is targeting a March completion of its merger with
EUA, and will complete the mergers of the operating
companies as soon thereafter as possible.
The Federal Energy Regulatory Commission has approved the
merger. The Massachusetts Department of
Telecommunications and Energy, the Securities and
Exchange Commission, and the Nuclear Regulatory
Commission also must sign off on the merger.
The announcement comes two months after a settlement
agreement on the merger was reached in Massachusetts with
the state's Attorney General, the Division of Energy
Resources, the Associated Industries of Massachusetts,
and The Energy Consortium. EUA serves customers in
Massachusetts through its subsidiary, Eastern Edison
Company.
In February, 1999, NEES and EUA announced their
intentions to merge. The new entity will serve 1.6
million customers in 228 New England communities.
Narragansett Electric will serve Rhode Island's electric
customers. Massachusetts Electric Company, a NEES
subsidiary, will serve customers of the combined
utilities in that state. NEES also services Granite
State Electric Company customers in New Hampshire, and
Nantucket Electric Company customers on the Massachusetts
island.
In December, 1998, NEES announced that it will merge with
National Grid Group plc (LSE, NYSE: NGG), the world's
largest independent transmission company, based in
Coventry, England. Upon completion of that merger, NEES
will become a wholly owned subsidiary of National Grid
Group. The NEES/EUA merger is not contingent upon the
NEES/National Grid merger closing.
Both NEES (NYSE:NES), headquartered in Westborough,
Mass., and EUA (NYSE: EUA), based in West Bridgewater,
Mass., are public-utility holding companies.
Contact
National Grid +44 (0) 171 620 9191
Investor Relations
Jill Sherratt (mobile: 0468 490 807)
Diane Boddy
Liz Ross-Roberts
Citigate Dewe Rogerson +44 (0) 171 638 9571
Anthony Carlisle (mobile: 0973 611 888)
Sue Pemberton
Duncan Murray
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