Islander East will transport significant volumes of natural gas, including supplies from major new basins off the coast of eastern Canada, initially to markets in Long Island where demand for the cleaner-burning fuel continues to grow well above the national average. 

Islander East, an equally owned, limited liability company formed between the subsidiaries of KeySpan Corp. and Duke Energy, is proposing to construct approximately 50 miles of interstate natural gas pipeline. A companion project filed by Algonquin Gas Transmission Co., a unit of Duke Energy, was included in the positive FEIS from FERC. Algonquin is proposing to upgrade 13 miles of existing pipeline and construct a new compressor station in Cheshire, Conn.

“The completion of this environmental report is a significant step toward receiving final federal approval,” said Robert B. Evans, president and chief executive officer of Duke Energy Gas Transmission. “Islander East appreciates the efforts of the FERC staff in issuing the FEIS in a timely manner. We will continue to work with FERC as well as other federal and state agencies to ensure the project is constructed in full compliance with governmental regulations and procedures as well as our own stringent environmental standards.”

FERC issued a Preliminary Determination in December 2001 that stated the project was in the public convenience and necessity subject to its environmental review. Now in the FEIS, FERC’s environmental staff determined that construction and operation of the project would have minimal adverse environmental impact.

FERC environmental staff issued its report following a thorough and complete environmental review of the project and alternatives that included input from federal, state and municipal agencies; landowners; interested parties; and the public. While the FEIS identified a routing alternative to Islander East, the FEIS also acknowledged that other factors will be considered by the commissioners including reliability competition and response to the market.

Demand for natural gas is growing at a greater rate in the northeastern United States than other regions of the country. The Islander East and Algonquin projects will help meet that demand by delivering up to 260,000 dekatherms per day of natural gas to residential and commercial customers on Long Island, while strengthening the natural gas infrastructure in Connecticut, enhancing reliability and service opportunities for Connecticut consumers.

“Islander East continues to make progress and this positive FEIS brings us one step closer to meeting the growing demand for new energy in Connecticut and New York,” said Robert B. Catell, chairman and chief executive officer of KeySpan. “As the demand for natural gas in the Northeast continues to outpace other regions of the country, the delivery of efficient and cost-effective eastern Canadian natural gas to the region will enhance the security of supply for our residential and industrial customers by bringing an additional source of natural gas to Long Island. Islander East will also secure the fuel necessary to power new and existing gas-fired electric generating facilities.” 

A member of the S&P 500, KeySpan Corporation (NYSE: KSE) 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: http://www.keyspanenergy.com.

Houston-based Duke Energy Gas Transmission is a North American leader 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 http://www.degt.duke-energy.com.

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: www.duke-energy.com.