Moving a large step closer to completion, the merger plan between Niagara Mohawk Holdings Inc. and National Grid Group plc. received approval from the New York Public Service Commission. The union is expected to result in Niagara Mohawk Power Corp.’s electricity customers saving about $1 billion over the next 10 years, compared with rates projected without the merger.

Under the agreement, which was first announced in September 2000 (see NGI, Sept. 11, 2000), National Grid agreed to buy Niagara Mohawk for $8.9 billion in cash, stock and assumed debt. National Grid agreed to pay $19 per share for the utility, about 47% more than its closing price on Aug. 31, 2000. The merger must still receive approval from the Securities and Exchange Commission under the Public Utility Holding Company Act.

“Today’s PSC approval brings us another step closer to reducing and stabilizing energy delivery costs and enhancing our economic development commitment in the communities we serve,” said William E. Davis, Niagara Mohawk’s CEO. “We are looking forward to delivering the benefits that our combined companies can bring upstate New York.”

Under the merger plan, the new combined company has vowed to adhere to the following:

Niagara Mohawk and National Grid said they hope to complete the merger early next year. Syracuse, NY-based Niagara Mohawk Holdings Inc. is an investor-owned energy services company that provides electricity to more than 1.5 million customers across 24,000 square miles of upstate New York. The company also delivers natural gas to more than 540,000 customers over 4,500 square miles of eastern, central and northern New York.

National Grid USA includes local electric companies Massachusetts Electric, Narragansett Electric, Granite State Electric, Nantucket Electric and a substantial transmission business. Its parent company, UK-based National Grid Group plc, builds, owns, and operates electric and telecommunications networks around the world.

©Copyright 2001 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.