Islander East receives final FERC approval

BOSTON and NEW YORK, Sept. 26, 2002 — The Federal Energy Regulatory Commission (FERC) recently issued Islander East Pipeline Co., L.L.C. (Islander East) a certificate of public convenience and necessity authorizing the construction, operation and maintenance of approximately 50 miles of interstate natural gas pipeline facilities in Connecticut and Long Island, N.Y.

Islander East is an equally owned, limited-liability company formed between the subsidiaries of KeySpan Corp. and Duke Energy. A companion project filed by Algonquin Gas Transmission Co., a unit of Duke Energy, also received a certificate from FERC to upgrade 13 miles of existing pipeline and construct a new compressor station in Cheshire, Conn.

In issuing the certificate, FERC concluded that the project meets the test of public convenience and necessity in that it will benefit the public interest by increasing the reliability and flexibility of the interstate pipeline grid. Previously, FERC released an environmental report that determined construction and operation of the project would have minimal adverse impact on the environment.

“FERC approval is based on the critical need for new natural gas infrastructure in the Northeast to meet increased natural gas consumption for heating load and electric generation,” said Robert B. Evans, president and chief executive officer of Duke Energy Gas Transmission. “We have every confidence that Islander East will contribute significantly toward meeting this demand while improving reliability to New York and Connecticut consumers. We appreciate FERC’s thorough review of the project and will continue to work with FERC staff and other federal and state regulatory agencies to ensure the project is constructed in a safe and environmentally responsible manner.”

“Islander East will bring to Connecticut and New York an abundant new supply of natural gas not previously available, right to our own backyard,” said Robert B. Catell, chairman and chief executive officer of KeySpan. “Off- shore Nova Scotia gas will provide a secure new supply of North American energy to our area. The environmental benefits of natural gas in heating and power generation delivered by Islander East will benefit the environment and air quality of the entire region.”

Demand for natural gas in the northeastern United States is growing at a greater rate than in other regions of the country. Islander East will help meet the demand by delivering up to 260,000 dekatherms per day of natural gas from basins located off the coast of eastern Canada, initially to markets serving residential and business customers on Long Island. Additionally, the project will strengthen the pipeline infrastructure in Connecticut providing increased access to service and enhanced reliability for consumers in the state.

“Clearly, FERC recognizes Islander East’s important role in ensuring the energy future of our region,” said Catell. “Islander East will increase the capacity of the interstate transmission system as well as the volumes of natural gas coming into Connecticut and New York. This additional security of supply will allow us to deliver natural gas more efficiently and economically to homes, businesses and industrial facilities such as gas-fired electric generating plants.”

A member of the S&P 500, KeySpan Corporation (NYSE: KSE – News) is the largest distributor of natural gas in the Northeast, with 2.5 million gas customers and more than 12,000 employees.

KeySpan is also the largest investor-owned electric generator in New York State and operates Long Island’s electric system under contract with the Long Island Power Authority for its 1.1 million customers. With headquarters in Brooklyn, Boston and Long Island, KeySpan also manages a portfolio of service companies.

They include: KeySpan Energy Delivery, the group of regulated natural gas utilities; KeySpan Home Energy Services, a full-service energy company for residential and small commercial customers; and KeySpan Business Solutions, a full-service energy company for business customers. KeySpan also has strategic investments in natural gas exploration and production, pipeline transportation, distribution and storage, as well as Canadian gas processing and fiber-optic cable. For more information about the company, visit KeySpan’s Web site at: .

Houston-based Duke Energy Gas Transmission is a North American specialist in developing energy infrastructure and connecting major natural gas supply basins to growing markets. The company’s natural gas operations include more than 18,900 miles of interstate transmission pipeline and 240 billion cubic feet of storage capacity in Canada and the United States. More information on DEGT can be found at .

Duke Energy is a diversified multinational energy company with an integrated network of energy assets and expertise. The company manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses – meeting the energy needs of customers throughout North America and in key markets around the world. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 100 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: .

Source: Duke Energy


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