NRC Approves NEES/National Grid Merger; L. JosephCallan, Philip Sharp Named to Oversee...

WESTBOROUGH, Mass.--(BUSINESS WIRE)--Dec. 13, 1999--

The U.S. Nuclear Regulatory Commission (NRC) has approved the proposed merger between New England Electric System (NEES) and National Grid Group plc, NEES President and Chief Executive Officer Rick Sergel announced today.

"The

The approval was required because NEES subsidiary New England Power Company (NEP) owns minority interests in six nuclear power plants.

NEP today also announced the creation of a special Nuclear Committee on its board, and named two new directors - both leaders in the U.S. electric power industry - who will serve on it. They are:

-- L. Joseph Callan, former NRC executive director for operations, who will serve as committee chair, and

-- Philip Sharp, former U.S. congressman and currently a lecturer in public policy at Harvard University's John F. Kennedy School of Government.

(Note: Profiles of the new board members follow this news release.)

The Nuclear Committee will oversee all matters regarding the operation and finance of NEP's nuclear ownership interests, including the company's divestiture strategy for those investments. NEP is actively pursuing divestiture of its nuclear interests as required by its restructuring agreements in Massachusetts, Rhode Island, and New Hampshire. The new directorships will be effective upon closure of the NEES/National Grid merger.

NEP President Peter Flynn said, "At this time of historic change in New England's electricity industry, we are particularly gratified to add the considerable nuclear industry expertise of Joe Callan and Phil Sharp to the NEP board." He added, "We are confident that under their leadership, NEP's nuclear interests will continue to be managed in the best interests of our customers."

The $3.2 billion merger between NEES and National Grid was announced on December 14, 1998. It has been approved or received support from several state and federal regulatory agencies. A final approval is required from the Securities and Exchange Commission. The merger is expected to close by early 2000.

NEES (NYSE:NES) is a public utility holding company based in Westborough, Mass. NEES's local electric companies serve approximately 1.3 million customers in Massachusetts, New Hampshire, and Rhode Island. New England Power, a NEES company, has minority ownership interests in six New England nuclear power plants, three of which, Connecticut Yankee, Maine Yankee, and Yankee Atomic, are permanently retired. The active units in which NEP has an interest are Millstone 3, Seabrook, and Vermont Yankee. On November 17, the owners of Vermont Yankee signed a purchase and sale agreement with AmerGen Energy Company for the plant. NEP also operates transmission facilities in Massachusetts, New Hampshire, Rhode Island, and Vermont.

National Grid (LSE, NYSE:NGG), headquartered in Coventry, England, is the world's largest independent electricity transmission company, and owner and operator of the England and Wales high-voltage transmission network, including interconnectors with Scotland and France.

PROFILES:

NEW MEMBERS OF THE BOARD OF DIRECTORS,

NEW ENGLAND POWER COMPANY

L. Joseph Callan

Callan has more than 28 years of experience in the nuclear power field, including 19 years with the U.S. Nuclear Regulatory Commission (NRC). He joined the NRC in 1979 as a resident inspector, and during his career subsequently held various regional and national positions, including Executive Director for Operations and Region IV Administrator. Since his retirement from the NRC in 1998, Callan has served on the offsite safety review committees of several nuclear power plants.

Prior to joining the NRC, Callan served for 10 years in the U. S. Navy Nuclear Power Program. A member of the Advisory Council for the Institute of Nuclear Power Operations, Callan is active in International Atomic Energy Agency activities.

He holds a B.S. from the U.S. Naval Academy, and has done graduate study in nuclear engineering at North Carolina State University.

Philip Sharp

A former ten-term U.S. congressman, Sharp spearheaded the drive to restructure the electricity industry. As chairman of the House Subcommittee on Energy and Power, he played a leadership role in such key legislation as the Clean Air Act Amendments of 1990 and the Energy Policy Act of 1992.

Today, Sharp is a lecturer in public policy at Harvard University's John F. Kennedy School of Government, where he teaches a course on the politics of restructuring the electric utility industry.

Sharp is a member of the U.S. Secretary of Energy Advisory Board, and recently chaired its task force on electric system reliability. He is associated with the Harvard Electricity Policy Group, and serves on the Senior Advisory Board of the Harvard Institute of Politics. He also co-chairs the Keystone Center's Energy Board, and is a director of the Energy Foundation, Cinergy Corporation, and Proton Energy Company.

A graduate of Georgetown University's School of Foreign Service, Sharp also holds a Ph.D. from Georgetown, as well as honorary degrees from DePauw University and Ball State University.