Brooklyn, NY-based KeySpan Corp. said Monday that it is negotiating with a labor union representing more than 3,000 workers at the energy company and its affiliates to address their concerns over potential job losses stemming from the proposed $11.8 billion merger of KeySpan and the United Kingdom’s National Grid

“KeySpan continues to negotiate in good faith with the union to come up with a plan that benefits all parties involved,” said company spokeswoman Karen Young. At least two locals (1049 and 1381) of the International Brotherhood of Electrical Workers (IBEW) have signaled that they will oppose the proposed National Grid-KeySpan merger unless the companies are more up-front about the planned job cuts.

Local 1049, which represents electrical linemen and other physical workers, already has filed for “intervenor” status with the New York Public Service Commission to block National Grid’s bid for KeySpan, said Robert Shand, assistant business manager for IBEW Local 1049. “We have some very large concerns” with respect to potential job losses as a result of the KeySpan buyout, he noted.

National Grid has said it plans to carry out a 10% reduction in the work force company-wide, Shand told NGI.

National Grid and KeySpan announced the agreement to merge in February (see Daily GPI, Feb. 28). National Grid will pay $42 per share in cash in a transaction valued at approximately $7.3 billion, with an enterprise value of $11.8 billion. National Grid’s shareholders approved the deal in late July. KeySpan stockholders are scheduled to vote on the merger this Thursday.

The transaction, National Grid’s fifth U.S. acquisition, creates the third largest energy delivery utility in the United States, with electricity and gas businesses serving nearly eight million customers in the New York state and New England regions.

KeySpan is the fifth largest distributor of natural gas in the United States and the largest in the Northeast, operating regulated gas utilities in New York, Massachusetts and New Hampshire that serve 2.6 million customers. The company also is the largest electric generator in New York state, serving the 1.1 million Long Island Power Authority (LIPA) customers and operating LIPA’s transmission and distribution system under contract. KeySapn serves about 25% of the power needs of New York City.

In addition, KeySpan owns 20.4% of Iroquois Gas Transmission, has a 50% interest in the proposed Islander East pipeline and owns a 20% interest in Millennium Pipeline. It has interests in New York area gas storage facilities as well.

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