New Hampshire customers who buy their natural gas from Key Span may soon be writing checks to a London-based firm. National Grid, an energy company that provides electricity in England and Wales, has agreed to buy Key Span for more than seven billion dollars. The acquisition deal must be approved by stockholders and regulators, but if it goes through, it will create the third largest energy delivery company in the United States.
New Hampshire Public Radio's Jon Greenberg has more.
National Grid is no newcomer to the American energy market. It already owns electric and gas companies in New York, Massachusetts and other New England states and has nearly 4 million customers. This latest announcement comes only slightly more than a week after the British firm said it plans to buy the largest natural gas distributor in Rhode Island.
Jackie Barry, a spokesperson for National Grid says expanding the firm's investments in natural gas makes a lot of sense.
CUT NAT GRID
Company officials say the merger will lead to a loss of jobs but they expect to cut their work force through attrition and voluntary buy-outs. Overall, they aim to cut some 200 million dollars in back-office expenses.
Key Span serves about 75-thousand natural gas customers in New Hampshire – roughly along the I-93 corridor between Concord and the Massachusetts border.
Steven Frink with the state's Public Utilities Commission says he doesn't expect the merger to lead to a rate increase. Gas bills have gone up but that's due to the rising price of the natural gas itself, not the profit the gas company is allowed to keep for delivering the gas to homes. Key Span hasn't asked for a rate hike in six years. Frink says the logic behind the merger would make it even more difficult to say higher bills are needed.
CUT FRINK At first there will be a lot of costs and then there will be the re-organization which you might not recognize the benefits of that right away, but you kind of need to let things settle down and see where you stand before you come forward. If you do a bunch of cutting, there's a bunch of savings, maybe they don't have an argument as to why they would need a rate increase.
Frink says if there is a downside to the prospective sale of Key Span, it's that it continues the trend that puts customer service centers further away from their customers. Former PUC commissioner, Nancy Brockway, says the increasing size of utility companies raises another concern for her. Brockway worries that when companies operate in many states, it's tougher for regulators in any one state to get a handle on its operations. She says the challenge is even greater for small states such as New Hampshire.
CUT BROCKWAY If you're regulating a company .. pulled along
The road toward National Grid's acquisition of Key Span will have its share of twists and turns. Assuming both sets of stockholders approve the deal, it will be reviewed by officials on both sides of the Atlantic, as well as regulators in the northeastern states where the companies do business.
For New Hampshire Public Radio, I'm Jon Greenberg
