UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                 AMENDMENT NO. 1

                                  ANNUAL REPORT
                         PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

                   For the fiscal year ended December 31, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
             For the transition period from __________ to _________

                         Commission file number 1-14161

                               KEYSPAN CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

            NEW YORK                                    11-3431358
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)

One MetroTech Center, Brooklyn, New York                      11201
175 East Old Country Road, Hicksville, New York               11801
(Address of Principal Executive Offices)                    (Zip Code)


                            (718) 403-1000 (Brooklyn)
                           (516) 755-6650 (Hicksville)
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class                    Name of Each Exchange on Which Registered
-------------------                    -----------------------------------------
Common Stock, $.01 par value                    New York Stock Exchange
                                                Pacific Stock Exchange

          Securities registered pursuant to Section 12(g) of the Act:
                                      None
                                (Title of Class)

Indicate by check mark if the  registrant is a well known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act.
                                                              Yes[X]      No[ ]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act.
                                                              Yes[X]      No[ ]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                                              Yes[X]      No[ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K (ss.  229.405 of this chapter) is not contained  herein,  and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
                                                              Yes[ ]      No[X]

Indicate by check mark whether the registrant is a large accelerated filer, or a
non-accelerated filler.

Large accelerated filer [X]   Accelerated filer [ ]   Non-accelerated filer [ ]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Act).                                       Yes[X]      No[ ]

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates  (174,404,797  shares) of the  registrant  was  $7,002,352,599.55
based on the closing price of the New York Stock  Exchange on April 24, 2006, of
$40.15 per share.

As of April 24, 2006,  there were 174,960,377  shares of common stock,  $.01 par
value, outstanding.


<PAGE>


                                EXPLANATORY NOTE

This Amendment No. 1 to the KeySpan  Corporation  ("KeySpan")  Form 10-K for the
year ended  December  31,  2005 (the "2005 10-K  Amendment")  is being  filed to
include certain  information  required in Part III, Items 10, 11, 12 and 13 that
we intended to incorporate by reference  from our 2006 Proxy  Statement.  We are
filing this 2005 10-K Amendment to include such information since our 2006 Proxy
Statement  will not be filed  within the  requisite  time period  allowing  such
incorporation by reference.


                                    PART III
                                    --------

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..............2
ITEM 11.  EXECUTIVE COMPENSATION..........................................9
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT AND RELATED STOCKHOLDER MATTERS.....................16
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................18
ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.........................22
ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES........................23













                                       1


<PAGE>


ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors of KeySpan

The  following  individuals  were  elected as  directors  of KeySpan at our last
annual meeting of shareholders held on May 20, 2005, to hold such position for a
one year term or until  his or her  successor  is duly  elected  or  chosen  and
qualified:

Robert B. Catell - Age 69 - Director since May 1998

Chairman and Chief  Executive  Officer of KeySpan  Corporation  since July 1998.
Joined  KeySpan's  subsidiary,  The Brooklyn Union Gas Company,  in 1958 and was
elected  Assistant Vice President in 1974,  Vice President in 1977,  Senior Vice
President in 1981 and Executive Vice President in 1984. Elected Brooklyn Union's
Chief Operating  Officer in 1986 and President in 1990.  Served as President and
Chief  Executive  Officer from 1991 to 1996.  He was then  elected  Chairman and
Chief   Executive   Officer  in  1996  and  held  such   position   through  the
transformation  of Brooklyn  Union to KeySpan.  He served as President and Chief
Operating  Officer  of  KeySpan  from May 1998  through  July  1998 and was then
elected as the Chairman in July 1998.  Serves on the boards of Alberta Northeast
Gas,  Ltd.,  Edison  Electric  Institute,  New York State  Energy  Research  and
Development Authority,  the Business Council of New York State, Inc. and the New
York City Partnership, and as Chairman of the Long Island Association. Served on
the board of J & W Seligman through November 2005. Mr. Catell also serves on the
board of directors of The Houston Exploration  Company (NYSE:THX),  Independence
Community Bank (NASDAQ:ICBC) and Keyera Energy Management Ltd. (TSX:KEY.UN).

Andrea S. Christensen - Age 66 - Director since January 2001

Special  Counsel  to the law firm of Kaye  Scholer  LLP since  January  1, 2005.
Previously  was a partner of Kaye  Scholer LLP since  1976.  Joined that firm in
1968 and previously was an associate with the law firm of Kelley, Drye & Warren.
Adjunct Professor at New York University School of Law from 1984 to 1994. Member
of the Association of the Bar of the City of New York,  American Bar Association
and International Society for Labor Law and Social Security.  Former Chairperson
of New York County Lawyers Association Committee on Labor Relations. Served as a
director  of  Brooklyn  Union from 1980 to 2000,  and the  American  Arbitration
Association  from 1988 to 1999.  Serves as a Member of the board of Inwood House
since 2000.

Robert J. Fani - Age 52 - Director since January 2005

President and Chief  Operating  Officer of KeySpan  since  October 2003.  Joined
KeySpan's subsidiary, The Brooklyn Union in 1976 and has since held a variety of
management  positions in distribution,  engineering,  planning,  marketing,  and
business development. Elected Vice President in 1992 and promoted to Senior Vice
President of Marketing and Sales in 1997 and was  responsible for all marketing,
sales, rate and regulation activities.  In September 1999, he became Senior Vice
President for Gas  Operations  and was promoted to Executive  Vice President for
Strategic  Services in February 2000 and then to President of the KeySpan Energy



                                       2
<PAGE>


Services  and Supply  Group in 2001  until  assuming  his  current  position  as
President  and  Chief  Operating   Officer.   Former  Director  of  The  Houston
Exploration Company (NYSE:THX) and serves as a director of the New York Building
Congress,  the City College of New York,  Stony Brook  University and the Energy
Partnership  of Long Island.  He is also a member of the Society of Gas Lighters
and sits on the Board of the Gas Technology Institute.

Alan H. Fishman - Age 60 - Director since May 1998

President, Chief Executive Officer and a director of Independence Community Bank
Corp. (NASDAQ:ICBC), the parent savings and loan holding company of Independence
Community  Bank,  since March 2001.  Joined  Chemical Bank in 1969,  named Chief
Financial  Officer in 1979 and elected  Senior Vice  President  responsible  for
worldwide  investment  banking  activities in 1983. Joined Neuberger & Berman in
1988  and  was  responsible  for  an  investment  partnership.  Joined  American
International  Group,  Inc. in 1989 as Senior Vice President of AIG.  Joined the
firm of Adler & Shaykin in 1990 as a Managing  Partner.  Former Managing Partner
and founder of Columbia Financial  Partners,  L.P. in 1992.  President and Chief
Executive  Officer of  ContiFinancial  Corporation from July 1999 to March 2001.
Chairman of the Brooklyn Academy of Music and the Brooklyn Navy Yard.

James R. Jones - Age 66 - Director since May 1998

Co-Chairman and Chief Executive Officer of Manatt Jones Global  Strategies,  LLP
since October 2001 and Chairman of GlobeRanger Corporation since September 1999.
Senior Counsel to the law firm of Manatt, Phelps & Phillips, LLP from March 1999
to present.  Retired as President of Warnaco,  Inc. - International  Division in
1998.  Director of Anheuser Busch (NYSE:BUD) since 1998 and Kansas City Southern
(NYSE:KSU)  since 1997.  White House Staff,  Special  Assistant and Appointments
Secretary  from 1965 to 1969 and  Congressman  from  Oklahoma from 1973 to 1987.
Partner in the law firm of Dickstein  Shapiro  Morin & Oshinsky LLP from 1987 to
1989.  Chairman and Chief Executive  Officer of the American Stock Exchange from
1989 to 1993. Served as United States Ambassador to Mexico from 1993 to 1997.

James L. Larocca - Age 62 - Director since January 2001

Distinguished  Professor of Public Policy and former Dean of the College at Long
Island  University's  Southampton  Graduate  Campus since April 2000 and Adjunct
Professor of Public Policy at Hofstra  University since January 1999.  Practiced
law with the firm of Cullen and Dykman  immediately  prior to his appointment to
Southampton  College.  Served in the cabinets of two New York State governors as
Commissioner  of  Transportation,  Commissioner  of Energy,  Director of Federal
Affairs,  Trustee of the New York Power  Authority  and  Chairman  of the Energy
Research and Development  Authority.  Served as the President of the Long Island
Association from 1985 to 1993.  Served as a director of Brooklyn Union from 1992
to 1993 and from 1995 to 2000.  Former  director of European  American  Bank and
ContiFinancial  Corporation.  Current  director  and past  Chairman  of the Long
Island Nature Conservancy.


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<PAGE>


Gloria C. Larson - Age 55 - Director since June 2003

Partner and Co-chair of the Government  Practices Group at the law firm of Foley
Hoag LLP.  Has held  senior  positions  within the  federal  government  and the
Commonwealth of Massachusetts government, including serving as the Massachusetts
Secretary of Economic Affairs,  Deputy Director of Consumer Protection and legal
counsel  for  the  Federal  Trade   Commission.   Current   Chairperson  of  the
Massachusetts  Convention Center Authority since 1998. Director of RSA Security,
Inc.  (NASDAQ:RSAS) and Unum Provident Corp.  (NYSE:UNM).  Serves as a member of
the Rose F. Kennedy Greenway  Conservancy board, as well as several Boston-based
not-for-profit    organizations,    including   the   Massachusetts   Technology
Collaborative,  Greater Boston Chamber of Commerce and the Massachusetts Women's
Forum.  Serves as Chair of the New England  Council's  e-commerce  privacy  task
force and is the Co-Chair of the board of directors of MassINC.

Stephen W. McKessy - Age 68 - Director since May 1998

Elected as the Lead Director of KeySpan effective January 1, 2006. Retired
partner of PricewaterhouseCoopers. Served in various management and leadership
positions at PricewaterhouseCoopers from 1960 to 1997. Serves as a director of
The Houston Exploration Company (NYSE:THX), and the Boy Scouts of America.
Member of the board of advisors of St. John's University College of Business
Administration, past president and current member of the board of governors of
the Silver Spring Country Club, and member of the Property Owners Association at
SailFish Point, Florida.

Edward D. Miller - Age 65 - Director since May 1998

Served as a member of the  supervisory  board and  senior  advisor  to the Chief
Executive Officer of AXA Group from June 2001 to April 2003. Served as President
and Chief Executive Officer of AXA Financial,  Inc. from August 1997 through May
2001.  Chairman and Chief  Executive  Officer of The  Equitable  Life  Assurance
Society, the principal insurance subsidiary of AXA Financial,  Inc., from August
1997  through May 2001.  Served as Senior Vice  Chairman of The Chase  Manhattan
Bank from 1996  through  1997.  Serves as a member of the board of  directors of
American Express Company (NYSE:AXP), Topps Company,  Incorporated (NASDAQ:TOPP),
and Korn/Ferry International (NYSE:KFY). Member of the board of governors of the
United Way of Tri-State and Chairman of the board of directors of Phoenix House.
Trustee of the Inner-City Scholarship Fund, the New York City Police Foundation,
Pace  University  and the New York Blood  Center.  Chairman of the New York City
Partnership's Security and Risk Management Task Force.

Vikki L. Pryor - Age 52 - Director since March 2004

President and Chief Executive Officer of SBLI USA Mutual Life Insurance Company,
Inc. and its family of companies since 1999.  Served as Senior Vice President of
Oxford  Health Plans from June 1998 to January  1999.  Served in various  Senior
Vice  President  and Vice  President  positions  at Blue  Cross  Blue  Shield of
Massachusetts  from 1993 to 1997.  Served as Director and in a variety of senior
level positions at Allstate Life Insurance  Company from 1986 to 1992. Served in
various positions  including acting assistant district counsel,  senior attorney


                                       4
<PAGE>


and  associate in the Office of Chief Counsel of the Internal  Revenue  Service,
Chicago  office,  from 1978 to 1986.  Served on the boards of the Life Insurance
Council of New York (LICONY),  New Jersey Chamber of Commerce,  UST  Corporation
and the  Pension  Reserves  Investment  Management  board.  Serves on the Dean's
Advisory  Council of the  University at Buffalo Law School.  Ms. Pryor is also a
member of the board of the New York City  Partnership and serves on the board of
River Source Funds, a mutual fund company.

Audit Committee

The Audit Committee provides oversight with respect to the quality and integrity
of our financial statements;  compliance with legal and regulatory requirements;
the independent  auditor's  qualifications and independence;  the performance of
our internal audit function and independent  auditors,  our business  practices,
risk assessment and risk management,  and the preparation of the Audit Committee
report  required to be included in our annual proxy  statement.  Pursuant to the
rules of New York Stock Exchange  ("NYSE") all members of the Audit Committee of
our board of directors  are  independent  directors.  Our board of directors has
determined that Mr. Fishman and Ms. Pryor meet the  qualifications  of an "audit
committee  financial  expert,"  as that  term is  defined  by the  rules  of the
Securities and Exchange Commission ("SEC"). In addition,  our board of directors
has determined that Mr. Fishman,  Mr. McKessy and Ms. Pryor have  "accounting or
related financial  management  expertise," in accordance with the NYSE corporate
governance  standards rules,  section 303A.07.  Each of the members of the Audit
Committee  is  financially  literate,  in  accordance  with the  NYSE  corporate
governance standards rules, section 303A.07. None of the Audit Committee members
simultaneously  serves  on the  audit  committees  of  more  than  three  public
companies.  The Audit  Committee is composed of five  independent  directors and
operates under a written charter  adopted by our board of directors,  as amended
and restated as of January 26, 2006; and can be found on the Investor  Relations
section  of our  website  at  http://www.keyspanenergy.com  or  directly  at our
corporate  governance website  (http://governance.keyspanenergy.com).  The Audit
Committee is comprised of Mr. Fishman, Ms. Christensen, Mr. Larocca, Mr. McKessy
and Ms. Pryor.

Director Independence

Pursuant  to our  Corporate  Governance  Guidelines,  which  can be found on the
Investor  Relations  section of our website at  http://www.keyspanenergy.com  or
directly        on        our        corporate         governance        website
(http://governance.keyspanenergy.com),  our board undertook a review of director
independence.  As a result of this review,  our board  affirmatively  determined
that all of the directors are  independent  under the standards set forth in the
Corporate  Governance  Guidelines,  and the  relevant  NYSE  and SEC  rules  and
regulations,  with the  exception  of Robert B.  Catell and Robert J. Fani.  Mr.
Catell can not be deemed independent under the Corporate  Governance  Guidelines
or applicable rules and regulations because he serves as Chief Executive Officer
of the Corporation.  Mr. Fani can not be deemed  independent under the Corporate
Governance  Guidelines or applicable rules and regulations  because he serves as
Chief Operating Officer and President of the Corporation.


                                       5
<PAGE>


The basis for our  board's  determination  that the  independent  directors  are
indeed  independent is set forth in our Corporate  Governance  Guidelines and is
set forth, in relevant part, below:

     At all times, a majority of the directors  shall be  independent  directors
     under  the  rules of the NYSE  and the  Sarbanes-Oxley  Act of 2002 and the
     regulations   promulgated   thereunder.   The  following   guidelines   are
     established  to  assist  our board in  determining  the  independence  of a
     director:

     a.   A director will not be considered independent if, within the preceding
          three  years:  (i) the  director was employed by KeySpan or one of its
          subsidiaries;  (ii) an  immediate  family  member of the  director was
          employed by KeySpan as an officer;  (iii) the director  received  more
          than $100,000 in direct compensation from KeySpan or its subsidiaries,
          other than for board service or pension or deferred compensation; (vi)
          an immediate family member of the director received more than $100,000
          in direct  compensation from KeySpan or its  subsidiaries,  other than
          for  Board  service  or  pension  or  deferred  compensation;  (v) the
          director  was employed by or  affiliated  with  KeySpan's  independent
          auditor;  (vi) an immediate family member of the director was employed
          by KeySpan's  independent auditor;  (vii) the director was employed as
          an  executive  officer  of  another  company  where  any of  KeySpan's
          officers serve on that company's compensation  committee; or (viii) an
          immediate  family  member of the director was employed as an executive
          officer of another  company where any of KeySpan's  officers  serve on
          that company's compensation committee;

     b.   A director will not be considered  independent if: (i) the director or
          an  immediate  family  member of the director  currently  serves as an
          executive  officer of another  company that does business with KeySpan
          and the  annual  sales to, or  purchases  from,  KeySpan in any of the
          preceding  three  years,  exceeds  the  greater  of $1  million or two
          percent of the annual consolidated gross revenues of the company; (ii)
          the  director  is an  executive  officer of another  company  which is
          indebted to KeySpan,  or to which  KeySpan is indebted,  and the total
          amount of either  company's  indebtedness to the other is greater than
          one percent of the total consolidated  assets of the company he or she
          serves as an executive  officer;  and (iii) if a director serves as an
          officer,  director  or  trustee  of a  tax  exempt  organization,  and
          KeySpan's  charitable  contributions  to the  organization are greater
          than  $1  million  or  two  percent  of  that   organization's   total
          consolidated  gross  revenues.  The Board  will  annually  review  all
          commercial and charitable relationships of the directors.



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<PAGE>


          For  relationships  not covered by the  guidelines in  subsection  (b)
          above,  the  determination  of whether the relationship is material or
          not, and therefore  whether the director  would be independent or not,
          shall be made by the directors who satisfy the independence guidelines
          set forth in subsections (a) and (b) above. For example, if a director
          is the chief  executive  officer of a company that purchases  products
          and  services  from KeySpan that are not more than two percent of that
          company's annual revenues,  the independent directors could determine,
          after  considering all of the relevant  circumstances,  whether such a
          relationship  was  material or  immaterial,  and whether the  director
          would therefore be considered independent.

          KeySpan will not make any personal  loans or  extensions  of credit to
          directors or officers.

Our directors  complete and submit an annual director  questionnaire to identify
and assess  relationships  so that the entire Board can  determine  independence
under  these  standards.  The  directors  also  complete  and  submit  an annual
statement  that  they are in  compliance  with our  Corporate  Policy  Statement
Concerning   Ethical   Business  Conduct  and  our  Corporate  Policy  Statement
Concerning Affiliate  Transactions.  In addition, in 2006, the directors adopted
and will now annually  certify  that they have,  and continue to agree to comply
with, the KeySpan Corporation Board Of Directors Code of Ethics which sets forth
standards of  diligence,  loyalty,  good faith and the avoidance of conflicts of
interests for the directors.

Compliance with Section 16(a) of the Exchange Act

Section  16(a) of the  Exchange  Act  requires  KeySpan's  directors,  executive
officers and persons who own more than ten percent  (10%) of a registered  class
of  KeySpan's  equity  securities  to file  with  the  SEC  initial  reports  of
beneficial  ownership and reports of changes in  beneficial  ownership of common
stock and other equity securities of KeySpan. Executive officers,  directors and
greater than ten percent (10%)  shareholders  are required by SEC  regulation to
furnish KeySpan with copies of all Section 16(a) forms that they file.

To KeySpan's knowledge,  based solely on review of information  furnished to us,
reports filed  through  KeySpan and  representations  that no other reports were
required,  all Section 16(a) filing  requirements  applicable to our  directors,
executive  officers and greater than ten percent  (10%)  beneficial  owners were
complied with during the  twelve-month  period ended  December 31, 2005,  except
that a Form 4 Report was filed late to disclose a transaction  by John J. Haran,
an  executive  officer of us, in which Mr. Haran  transferred  shares out of the
KeySpan 401(k) plan to another investment.


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<PAGE>


Codes of Ethics

We  adopted  a code of  ethics  applicable  to our  directors,  a code of ethics
applicable to our senior  financial  officers,  and an ethical  business conduct
statement applicable to all of our directors,  officers and employees. Our codes
of ethics,  ethical business conduct statement,  corporate governance guidelines
and committee  charters can each be found on the Investor  Relations  section of
our  website,  (http://www.keyspanenergy.com)  or directly at the  Corporation's
corporate governance website (http://governance.keyspanenergy.com),  and provide
information  on the  framework  and high  standards  set by us  relating  to our
corporate  governance.  Additionally,  these documents are available in print to
any stockholder requesting a copy. The codes of ethics, ethical business conduct
statement,  corporate governance guidelines and committee charters have all been
approved by the board of directors  and are vital to securing the  confidence of
our  stockholders,   customers,  employees,  governmental  authorities  and  the
investment community.







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<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

Director Compensation

The directors receive the following compensation:

     o    Non-employee directors:

               $43,500 annual retainer;
               $2,000 committee meeting fee;
               $5,000 committee chairman retainer;
               $10,000 audit committee chairman retainer;
               $10,000 Lead Director retainer; and
               $64,000 in common stock equivalents granted under the
               Directors' Deferred Compensation Plan.

     o    Employee directors:

               Receive no additional compensation for serving on the
               Board or its committees.

Directors' Deferred Compensation Plans

The board of directors has adopted Directors'  Deferred  Compensation Plans (pre
2005  and post  2004  plans)  to  directly  align  the  non-employee  directors'
financial  interest  with those of the  shareholders.  The  Directors'  Deferred
Compensation  Plans provide all  non-employee  directors with the opportunity to
defer any portion of their cash compensation received as directors,  in exchange
for common  stock  equivalents  or into a deferred  cash  account.  Common stock
equivalents  are valued by  utilizing  the average of the high and low price per
share of our common stock on the first trading day of the quarter  following the
quarter in which contributions are received.  Dividends are paid on common stock
equivalents in additional  common stock  equivalents  in the same  proportion as
dividends  paid on common  stock.  Compensation  not deferred and  exchanged for
common stock equivalents may be deferred into a cash account bearing interest at
the  prime  rate.  Additionally,  a  director  may  elect to  invest  his or her
compensation  by  participating  in the  KeySpan  Investor  Program (a  dividend
reinvestment  plan).  Upon  retirement,  death or  termination  of  service as a
director,  all amounts in a director's  common stock  equivalent  account and/or
cash account  shall,  at the director's  election,  (i) be paid in a lump sum in
cash; (ii) be deferred for up to five years;  and/or (iii) be paid in the number
of annual  installments,  up to ten,  specified  by the  director.  Our  current
non-employee  directors are not entitled to benefits under any of our retirement
plan.

In addition,  directors  are  required to own shares of our stock (i.e.,  common
stock,  deferred stock units and/or common stock equivalents) with a value equal
to five times the directors'  annual retainer within five years of being elected
to our board of directors.


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<PAGE>


Executive Officers Compensation

Summary Compensation Table

The following table presents the annual compensation paid to the Chief Executive
Officer and the four other most highly compensated  executive  officers,  or the
"named executive officers".

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                        Annual Compensation                        Long-Term Compensation
------------------------------------------------------------------------------------------------------------------------------------
                                                              Other
                                                              Annual    Restricted                           LTIP
                                                              Comp-       Stock               Shares          Pay-      All Other
                                 Salary        Bonus         ensation     Awards            Underlying        out     Compensation
    Name                Year      ($)          ($)(1)          ($)         ($)                Options         ($)          ($)
------------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>    <C>         <C>             <C>             <C>             <C>                 <C>   <C>
Robert B. Catell        2005   1,073,500   1,047,343(2)    186,135(3)      0(4)                  0             0     127,070(5)(6)
Chairman & Chief        2004   1,032,231   1,056,938(7)    171,574(8)      0               225,100(9)          0     132,893(10)(11)
Executive Officer       2003     938,000   1,089,056(12)   165,489(13)     0               208,800(14)(15)     0     136,105(16)(17)
------------------------------------------------------------------------------------------------------------------------------------
Robert J. Fani          2005     729,807     545,573(2)    164,949(3)      0(4)            125,800(18)         0     62,553(5)(6)
President & Chief       2004     618,269     452,485(7)    134,336(8)      0                95,600(9)          0     51,878(10)(11)
Operating Officer       2003     450,000     307,958(12)   129,377(13)     0                69,500(14)(15)     0     35,807(16)(17)
------------------------------------------------------------------------------------------------------------------------------------
Wallace P. Parker Jr.   2005     585,576     361,902(2)    148,660(3)      0(4)             88,600(18)         0     46,750(5)(6)
President, KeySpan      2004     546,152     386,515(7)    147,752(8)      0                74,700(9)          0     47,417(10)(11)
Energy Delivery and     2003     450,000     348,288(12)   139,314(13)     0                69,500(14)         0     43,448(16)(17)
KeySpan Services
------------------------------------------------------------------------------------------------------------------------------------
Steven L. Zelkowitz     2005     542,230     372,768(2)    136,672(3)      0(4)             88,600(18)         0     42,990(5)(6)
President, Energy       2004     469,884     323,180(7)    136,880(8)      0                59,600(9)          0     41,198(10)(11)
Assets and Supply       2003     392,000     278,750(12)    40,914(13)     0                43,300(14)         0     36,225(16)(17)
Group
------------------------------------------------------------------------------------------------------------------------------------
Gerald Luterman         2005     462,153     462,355(2)    13,350(3)       196,250(4)(19)   54,800(18)         0     42,870(5)(6)
Executive Vice          2004     419,231     248,559(7)    13,628(8)       0                41,500(9)          0     30,763(10)(11)
President & CFO         2003     375,000     387,496(12)   9,009(13)       0                43,300(14)(15)     0     28,899(16)(17)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Bonus  awards paid each year are  attributable  to  performance  during the
     previous year.

(2)  Bonus awards paid in 2005 include  amounts  deferred by the named executive
     officers  into the  Officers'  Deferred  Stock Unit Plan as follows:  R. B.
     Catell - $523,672;  R. J. Fani - $272,787;  W. P. Parker Jr. - $180,951; S.
     L. Zelkowitz - $186,384; and G. Luterman - $104,942.

(3)  The amounts  include the value of a chauffeured car for commutation and all
     other  perquisites  in the  following  respective  amounts:  R. B. Catell -
     $163,175,  $22,960;  R. J. Fani -  $149,746,  $15,203;  W. P.  Parker Jr. -
     $128,005,  $20,655; S. L. Zelkowitz - $126,277,  $10,395; and G. Luterman -
     $10,450  and  $2,900  for a  leased  vehicle  and  all  other  perquisites,
     respectively.

(4)  As of December 31, 2005, the aggregate value of the restricted stock awards
     and number of restricted stock awards  previously  awarded and held by each
     of the named  executive  officers are as follows:  R. B. Catell - $570,183;
     15,976  shares;  R. J. Fani - $183,339;  5,137  shares;  W. P. Parker Jr. -
     $183,339;  5,137 shares; S. L. Zelkowitz - $125,664;  3,521 shares;  and G.
     Luterman - $310,645;  8,704 shares.  The aggregate  restricted stock values
     are based on the closing price per share of $35.69 at December 31, 2005.

(5)  Amounts are also  comprised  of the value of a 20% match  provided by us in
     2005 on amounts payable under our Corporate Annual  Incentive  Compensation
     and Gain Sharing Plan but deferred by the named executive officers into the
     Officers' Deferred Stock Unit Plan. The amounts attributable to each of the
     named  executive  officers are as follows:  R. B. Catell - $104,734;  R. J.
     Fani - $54,557; W. P. Parker Jr. - $36,190;  S.L. Zelkowitz - $32,277;  and
     G. Luterman - $20,988.


                                       10
<PAGE>

(6)  The amounts are also comprised of the cost of life insurance paid by us and
     allocated  to  the  named  executive  officers  for  income  tax  reporting
     purposes.  The amounts attributable to each of the named executive officers
     during 2005 with respect to the cost of life insurance paid are as follows:
     R. B. Catell - $22,336; R. J. Fani - $7,996; W. P. Parker Jr. - $10,560; S.
     L. Zelkowitz - $10,713; and G. Luterman - $21,882.

(7)  Bonus awards paid in 2004 include  amounts  deferred by the named executive
     officers  into the  Officers'  Deferred  Stock Unit Plan as follows:  R. B.
     Catell - $528,469;  R. J. Fani - $226,242;  W. P. Parker Jr. - $193,257; S.
     L. Zelkowitz - $161,590; and G. Luterman - $74,567.

(8)  The amounts  include the value of a chauffeured car for commutation and all
     other  perquisites  in the  following  respective  amounts:  R. B. Catell -
     $149,437,  $22,137;  R. J. Fani -  $125,145,  $9,191;  W. P.  Parker  Jr. -
     $133,832, $13,920; S. L. Zelkowitz - $124,074, - $12,806; and G. Luterman -
     $10,728  and  $2,900  for a  leased  vehicle  and  all  other  perquisites,
     respectively.

(9)  The amounts are comprised of stock options granted on March 10, 2004, based
     on the closing price as of such date.  The options shall vest pro-rata over
     a 5 year period with a 10 year exercise  period.  Vesting may accelerate in
     the third year based upon achievement of certain goals.

(10) The amounts are also comprised of the cost of life insurance paid by us and
     allocated  to  the  named  executive  officers  for  income  tax  reporting
     purposes.  The amounts attributable to each of the named executive officers
     during 2004 with respect to the cost of life insurance paid are as follows:
     R. B.  Catell - $27,200;  R. J. Fani - $6,630;  W. P.  Parker Jr. - $8,766;
     S.L. Zelkowitz - $8,880; and G. Luterman - $15,850.

(11) Amounts are also  comprised  of the value of a 20% match  provided by us in
     2004 on amounts payable under our Corporate Annual  Incentive  Compensation
     and Gain Sharing Plan but deferred by the named executive officers into the
     Officers' Deferred Stock Unit Plan. The amounts attributable to each of the
     named  executive  officers are as follows:  R. B. Catell - $105,693;  R. J.
     Fani - $45,248; W. P. Parker Jr. - $38,651;  S.L. Zelkowitz - $32,318;  and
     G. Luterman - $14,913.

(12) Bonus awards paid in 2003 include  amounts  deferred by the named executive
     officers  into the  Officers'  Deferred  Stock Unit Plan as follows:  R. B.
     Catell - $544,528;  R. J. Fani - $153,978;  W. P. Parker Jr. - $174,144; S.
     L. Zelkowitz - $139,375; and G. Luterman - $71,873.

(13) The amounts  include the value of a chauffeured car for commutation and all
     other  perquisites  in the  following  respective  amounts:  R. B. Catell -
     $141,939,  $23,550;  R. J. Fani -  $118,092,  $11,285;  W. P.  Parker Jr. -
     $124,451,  - $14,863; S. L. Zelkowitz - $31,497,  $9,417; and G. Luterman -
     $7,814  and  $1,195  for  a  leased  vehicle  and  all  other  perquisites,
     respectively.

(14) The amounts are comprised of stock options granted on March 5, 2003,  based
     on the closing  price as of March 5, 2003.  The options shall vest pro-rata
     over a 5 year  period with a 10 year  exercise  period from the date of the
     grant.  Vesting  would  have  accelerated  in the  third  year  based  upon
     achievement  of  certain  goals,  however  such goals were not met and such
     acceleration did not occur.

(15) The named executive  officer also received 2,000 stock options on September
     22, 2003 and 2,000 shares of  restricted  stock on November 7, 2003 granted
     by The Houston  Exploration  Company (a former  subsidiary) as compensation
     for such person's service as a director of The Houston Exploration Company.

(16) Amounts  are  comprised  of the  cost  of  life  insurance  paid  by us and
     allocated  to  the  named  executive  officers  for  income  tax  reporting
     purposes.  The amounts attributable to each of the named executive officers
     during 2003 are as follows: R. B. Catell - $27,200; R. J. Fani - $5,012; W.
     P. Parker Jr. - $8,620; S.L. Zelkowitz - $8,350; and G. Luterman - $14,524.

(17) Amounts are also  comprised  of the value of a 20% match  provided by us in
     2003 on amounts payable under our Corporate Annual  Incentive  Compensation
     and Gain Sharing Plan but deferred by the named executive officers into the
     Officers' Deferred Stock Unit Plan. The amounts attributable to each of the
     named  executive  officers are as follows:  R. B. Catell - $108,905;  R. J.
     Fani - $30,795; W. P. Parker Jr. - $34,828;  S.L. Zelkowitz - $27,875;  and
     G. Luterman - $14,375.

(18) The amounts are  comprised of stock  options  granted on February 24, 2005,
     based on the closing price as of such date. The options shall vest pro-rata
     over a 5 year period with a 10 year exercise period. Vesting may accelerate
     in the third year based upon achievement of certain goals.

(19) On February 24, 2005, Mr. Luterman was granted a special  recognition award
     of 5,000 shares of restricted  stock.  The restricted  stock has a two year
     restriction  period,  including all dividends paid on the restricted stock.
     The  value is based on the  closing  price per share of $39.25 on the grant
     date.

                                       11
<PAGE>


Stock Option Grants in Last Calendar Year

The following table provides  information on stock option grants during 2005 for
the named executive  officers and the grant date present value of such officers'
unexercised options at December 31, 2005:

<TABLE>
<CAPTION>
------------------ -------------------------- -------------------- ----------------- -------------------------- -------------------
                                                    Percent of
                          Number of                   Total                                                         Grant Date
                         Securities                  Number of           Option                                       Present
                         Underlying                   Options           Exercise                                     Value of
                           Options                  Granted to           Price             Expiration               Options(2)
   Name                   Granted(1)                Employees          ($/Share)             Date                      ($)
------------------ -------------------------- -------------------- ----------------- -------------------------- -------------------
<S>                                 <C>                    <C>               <C>                    <C>                   <C>
R.B. Catell                                -                   -                  -                          -                   -
------------------ -------------------------- -------------------- ----------------- -------------------------- -------------------
R.J. Fani                            125,800                8.67%             39.25                  2/23/2015             585,000
------------------ -------------------------- -------------------- ----------------- -------------------------- -------------------
W.P. Parker Jr.                       88,600                6.10%             39.25                  2/23/2015             412,000
------------------ -------------------------- -------------------- ----------------- -------------------------- -------------------
S.L. Zelkowitz                        88,600                6.10%             39.25                  2/23/2015             412,000
------------------ -------------------------- -------------------- ----------------- -------------------------- -------------------
G. Luterman                           54,800                3.78%             39.25                  2/23/2015             255,000
------------------ -------------------------- -------------------- ----------------- -------------------------- -------------------
</TABLE>

(1)  Options  vest  ratably  over a five-year  period  with the first  one-fifth
     having  vested on  February  24,  2006  (accelerated  vesting in third year
     applies upon achievement of certain prescribed goals).

(2)  Options have been valued using the binomial  methodology adapted to reflect
     the specific provisions of the Long Term Performance Incentive Compensation
     Plan and related assumptions regarding exercisability. The values shown are
     theoretical  and do not  necessarily  reflect the actual values that may be
     realized  upon the future  exercise of the  options.  Any actual value will
     result to the extent that the market  value of the common stock at a future
     date exceeds the exercise price.  Assumptions for modeling are based on the
     dividend yield, risk-free rate of return, standard deviation of prices over
     a  relevant  period  as of the  grant  date and the  expected  lives of the
     options.

Stock Option Exercises Table

The following table provides information on aggregated stock option exercises in
2005 and fiscal year end option values for the named executive officers:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                      Shares         Value          Number of Securities Underlying                       Value of In-The-Money
                     Acquired      Realized      Unexercised Options at Fiscal Year End                Options at Fiscal Year End
                        on           ($)                                                                          ($)
     Name            Exercise
------------------------------------------------------------------------------------------------------------------------------------
                                                Exercisable   Unexercisable       Total     Exercisable   Unexercisable     Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>           <C>          <C>                <C>        <C>           <C>                <C>       <C>
R.B. Catell             -              -         1,915,141          507,560    2,422,701     13,718,280         863,035   14,581,316
------------------------------------------------------------------------------------------------------------------------------------
R.J. Fani               -              -           311,814          307,620      619,434      1,802,602         282,633    2,085,235
------------------------------------------------------------------------------------------------------------------------------------
W. P. Parker Jr.        -              -           363,701          253,700      617,401      2,052,187         282,633    2,334,820
------------------------------------------------------------------------------------------------------------------------------------
S. L. Zelkowitz       55,667        843,769        201,440          207,060      408,500      1,195,309         184,858    1,380,167
------------------------------------------------------------------------------------------------------------------------------------
G. Luterman             -              -           221,287          158,780      380,067      1,154,837         184,858    1,339,695
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       12
<PAGE>



Long-Term Incentive Plans - Awards in Last Calendar Year

The following  table provides  information on the long term  performance  awards
granted to each named  executive  officer  during 2005.  Performance is measured
over a three  year  period  and  potential  payouts  shall be linked to  certain
performance  levels.  At threshold,  50% of the number of shares granted will be
awarded.  At target,  100% of the number of shares  granted will be awarded.  At
maximum, 150% of the number of shares granted will be awarded. Performance below
threshold will result in forfeiture of the award.  The  performance  share award
amounts have been valued using the binomial  methodology  (described above) at a
value of $35.98 per share.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                    Estimated Future Payouts Under Non-
                                                                                           Stock Price-Based Plans
--------------------------------- ----------------- -----------------------------------------------------------------------------
                                   Number           Performance
                                   of Shares,       Or Other Period
                                   Units Or         Until
                                   Other            Maturation or
    Name                           Rights           Payout                     Threshold            Target            Maximum

--------------------------------- ----------------- -------------------------- -------------------- ----------------- -----------
<S>                              <C>               <C>                        <C>                  <C>               <C>
Robert B. Catell                  80,700            1/01/05 -                  40,350               80,700            121,050
Chairman & Chief                                    12/31/07
Executive Officer
--------------------------------- ----------------- -------------------------- -------------------- ----------------- -----------
Robert J. Fani                    16,300            1/01/05 -                  8,150                16,300            24,450
President & Chief                                   12/31/07
Operating Officer
--------------------------------- ----------------- -------------------------- -------------------- ----------------- -----------
Wallace P. Parker Jr.             11,400            1/01/05 -                  5,700                11,400            17,100
President, KeySpan                                  12/31/07
Energy Delivery and
KeySpan Services Inc.
--------------------------------- ----------------- -------------------------- -------------------- ----------------- -----------
Steven L. Zelkowitz               11,400            1/01/05 -                  5,700                11,400            17,100
President, Energy Assets                            12/31/07
and Supply
Group
--------------------------------- ----------------- -------------------------- -------------------- ----------------- -----------
Gerald Luterman                   7,100             1/01/05 -                  3,550                7,100             10,650
Executive Vice                                      12/31/07
President & Chief
Financial Officer
--------------------------------- ----------------- -------------------------- -------------------- ----------------- -----------
</TABLE>



                                       13
<PAGE>


Compensation Under Retirement Plans

Our  retirement  plan provides  retirement  benefits  based upon the  individual
participant's years of service and final average annual compensation (as defined
below). The following table sets forth the estimated annual retirement  benefits
(exclusive of social security  payments) payable to the named executive officers
in  the  specified  compensation  and  years-of-service   categories,   assuming
continued  active  service until normal  retirement  age and that our retirement
plan is in effect at such time.

<TABLE>
<CAPTION>
                                                                  Benefits ($)
                                                               Years of Service
                   -----------------------------------------------------------------------------------------------------------------
Remuneration          15           20           25             30             35               40             45             50
------------
    ($)
                   ---------     ----------   -----------    ------------   ------------    ------------   ------------   ----------
<S>                <C>           <C>          <C>            <C>            <C>             <C>            <C>            <C>
275,000. . . .      61,875        82,500       103,125        123,750        144,375         165,000        185,625        206,250
350,000. . . .      75,750        105,000      131,250        157,500        183,750         210,000        236,500        262,500
425,000. . . .      95,625        127,500      159,375        191,250        223,125         255,000        286,875        318,750
500,000. . . .      112,500       150,000      187,500        225,000        262,500         300,000        337,500        375,000
575,000. . . .      129,375       172,500      215,625        258,750        301,875         345,000        388,125        431,250
650,000. . . .      146,250       195,000      243,750        292,500        341,250         390,000        438,750        487,500
725,000. . . .      163,125       217,500      271,875        326,250        380,625         435,000        489,375        543,750
800,000. . . .      180,000       240,000      300,000        360,000        420,000         480,000        540,000        600,000
875,000. . . .      196,875       262,500      328,125        393,750        459,375         525,000        590,625        656,250
950,000. . . .      213,750       285,000      356,250        427,500        498,750         570,000        641,250        712,500
1,025,000. . .      230,625       307,500      384,375        461,250        538,125         615,000        691,875        768,750
1,100,000. . .      247,500       330,000      412,500        495,000        577,500         660,000        742,500        825,000
1,175,000. . .      264,375       352,500      440,625        528,750        616,875         705,000        793,125        881,250
1,250,000. . .      281,250       375,000      468,750        562,500        656,250         750,000        843,750        937,500
1,325,000. . .      298,125       397,500      496,875        596,250        695,625         795,000        894,375        993,750
1,400,000. . .      315,000       420,000      525,000        630,000        735,000         840,000        945,000        1,050,000
1,475,000. . .      331,875       442,500      553,125        663,750        774,375         885,000        995,625        1,106,250
1,550,000. . .      348,750       465,000      581,250        697,500        813,750         930,000        1,046,250      1,162,500
1,625,000. . .      365,625       487,500      609,375        731,250        853,125         975,000        1,096,875      1,218,750
1,700,000. . .      382,500       510,000      637,500        765,000        892,500         1,020,000      1,147,500      1,275,000
1,775,000. . .      399,375       532,500      665,625        798,750        931,875         1,065,000      1,198,125      1,331,250
1,850,000. . .      416,250       555,000      693,750        832,500        971,250         1,110,000      1,248,750      1,387,500
1,925,000. . .      433,125       577,500      721,875        866,250        1,010,625       1,155,000      1,299,375      1,443,750
2,000,000. . .      450,000       600,000      750,000        900,000        1,050,000       1,200,000      1,350,000      1,500,000
</TABLE>

For purposes of the retirement  plan, the final average annual  compensation  is
the average  annual  compensation  for the  highest  five  consecutive  years of
earnings  during the last ten years of credited  service.  The annual salary and
bonus for the year 2005 for the named  executive  officers is  indicated  in the
Annual Compensation  columns of the Summary  Compensation Table. For purposes of
determining the pension for Mr. Catell pursuant to his employment agreement, the
final average  annual  compensation  will be based upon 65% of his highest three
years  earnings  (excluding any earnings from LTIP) offset by 50% of his primary
social security benefit.


                                       14
<PAGE>



Currently, Robert.B. Catell, our Chairman and Chief Executive Officer, is age 69
and has 48 years of service. Pursuant to his employment agreement, upon a change
of  control  his  employment  period  shall be  extended  for a two year  period
following  the change of control.  The number of years of  credited  service for
each of the other named executive officers based on continued service with us to
age 65, normal retirement age, will be as follows:  R. J. Fani - 43 years, W. P.
Parker Jr. - 44 years,  S.L.  Zelkowitz - 18 years,  and G. Luterman - 11 years.
Pursuant to the Supplemental  Retirement  agreements  described below in Item 13
under the caption  "Employment  Agreements"  both Mr. Zelkowitz and Mr. Luterman
will receive certain additional retirement benefits in excess to the amounts set
forth above.

The   Internal   Revenue  Code  limits  the  annual   compensation   taken  into
consideration  for, and the maximum  annual  retirement  benefits  payable to, a
participant  under our retirement plan. For 2005, these limits were $210,000 and
$170,000,  respectively.  Annual retirement benefits  attributable to amounts in
excess of these limits are  provided  for under our excess  benefit plan and not
under our  retirement  plan.  For 2006,  these limits are $220,000 and $175,000,
respectively.

Compensation Committee Interlocks and Insider Participation

Neither Ms. Larson nor Messrs. Jones,  Larocca,  McKessy and Miller, the current
members of the Compensation and Management Development Committee,  is an officer
or employee, or former officer or employee, of us or any of our subsidiaries. No
interlocking   relationship   exists   between  the  members  of  our  board  or
Compensation and Management  Development Committee and the board of directors or
compensation  committee  of any  other  company,  nor has any such  interlocking
relationship existed in the past.









                                       15
<PAGE>



ITEM 12.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners

As of April 3,  2006,  there  were no  beneficial  owners of more than 5% of our
common stock.

Security Ownership of Management

The following table sets forth  information as of April 3, 2006, with respect to
the number of shares of common stock  beneficially owned (including vested stock
options),  common stock equivalents  and/or deferred stock units and performance
shares credited to each director, each named executive officer and all directors
and executive officers as a group.

<TABLE>
<CAPTION>
------------------------- ----------------------------------------------------------------------------------------------------------
       Name of                  Amount and Nature of                Common Stock            Performance             Percent of
     Beneficial                Beneficial Ownership of             Equivalents or            Shares(3)              Outstanding
       Owner                  Common Stock (including              Deferred Stock                                     Common
                               Vested Stock Options)(1)                Units(2)                                        Stock
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
<S>                                     <C>                                   <C>                   <C>               <C>
R. B. Catell                             2,320,539(4)(5)(6)                    85,162                112,980           1.4%
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
A. S. Christensen                            8,603(4)(5)(6)                    16,916                      0            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
R. J. Fani                                 432,331(4)(5)(6)                    31,914                 68,940            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
A. H. Fishman                               12,864(4)(5)(6)                    23,987                      0            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
J. R. Jones                                 11,177(4)(5)(6)                    13,148                      0            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
J. L. Larocca                               14,275(4)(5)(6)                    14,423                      0            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
G. C. Larson                                         531(5)                     7,505                      0            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
G. Luterman                                295,828(4)(5)(6)                    16,379                 31,410            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
S. W. McKessy                               10,538(4)(5)(6)                    20,294                      0            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
E. D. Miller                                20,776(4)(5)(6)                    30,117                      0            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
W. P. Parker Jr.                           458,558(4)(5)(6)                    32,143                 46,430            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
V. L. Pryor                                               0                     5,101                      0            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
S. L. Zelkowitz                            285,663(4)(5)(6)                    27,959                 47,440            **
------------------------- ---------------------------------- ------------------------- ---------------------- ----------------------
All directors and
executives as a
group, including                              5,358,951                       440,641                544,335            4.0%
those named
above, a total of
28 persons.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

**   Less than 1%.

(1)  Beneficial  ownership of common stock includes holdings in KeySpan's 401(k)
     Plan,  Employee  Discount Stock Purchase Plan,  Dividend  Reinvestment Plan
     and/or in other stock accounts,  as well as issued and  outstanding  vested
     stock  options.  Such stock  options  give the holder the right to purchase
     underlying  shares of common  stock at the  respective  exercise  price per
     share of the option.  All such stock  options  were  granted at an exercise
     price equal to the closing price of our common stock on the respective date
     of grant.

(2)  Includes common stock equivalents or deferred stock units. The term "common
     stock equivalents"  refers to units of value which track the performance of
     common stock.  Such units do not possess voting rights and have been issued
     pursuant to the Directors' Deferred  Compensation Plans. The term "deferred


                                       16
<PAGE>


     stock units" also refers to units of value which track the  performance  of
     common stock.  Such units do not possess voting rights and have been issued
     pursuant to the Officers' Deferred Stock Unit Plans.

(3)  Performance  shares have been granted with a three-year  performance period
     with a  threshold,  target and  maximum  performance  level.  At  threshold
     performance, 50% of the award shall be earned; at target, 100% of the award
     shall be earned;  and at maximum,  150% of the award  shall be earned.  The
     number of shares set forth above  assumes the target  level of  performance
     with a 100% payout.

(4)  Includes  shares of common  stock held in KeySpan's  401(k) Plan,  Employee
     Discount Stock Purchase Plan,  Dividend  Reinvestment  Plan and/or in other
     stock accounts in the following  amounts:  Mr. Catell - 89,119 shares;  Ms.
     Christensen - 4,233 shares;  Mr. Fani - 17,495 shares;  Mr. Fishman - 3,894
     shares;  Mr. Jones - 2,207 shares; Mr. Larocca - 5,305 shares; Mr. Luterman
     - 9,406 shares; Mr. McKessy - 1,568 shares; Mr. Miller - 11,806 shares; Mr.
     Parker - 20,455 shares and Mr. Zelkowitz - 13,957 shares.

(5)  Includes shares of restricted stock in the following amounts:  Mr. Catell -
     101,699 shares;  Ms.  Christensen - 1,070 shares;  Mr. Fani - 5,202 shares;
     Mr. Fishman - 1,070 shares;  Mr. Jones - 1,070 shares;  Mr. Larocca - 1,070
     shares; Ms. Larson - 531 shares; Mr. Luterman - 8,815 shares; Mr. McKessy -
     1,070 shares;  Mr. Miller - 1,070 shares; Mr. Parker - 5,202 shares and Mr.
     Zelkowitz - 3,566.

(6)  Includes vested stock options that are currently exercisable. The number of
     vested stock options held are as follows:  Mr. Catell - 2,129,721  options;
     Ms. Christensen - 3,300 options;  Mr. Fani - 409,634 options; Mr. Fishman -
     7,900 options;  Mr. Jones - 7,900 options; Mr. Larocca - 7,900 options; Mr.
     Luterman - 277,607 options; Mr. McKessy - 7,900 options; Mr. Miller - 7,900
     options; Mr. Parker - 432,901 options and Mr. Zelkowitz - 268,140 options.









                                       17
<PAGE>



ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Directors and Officers Liability Insurance and Indemnity

We have director and officer,  or "D&O"  liability  insurance for the purpose of
reimbursing  us  when  we have  indemnified  our  directors  and  officers.  D&O
liability  insurance also provides  direct payment to our directors and officers
under   certain   circumstances   when   we   have   not   previously   provided
indemnification.  We also have  liability  insurance  which  provides  fiduciary
coverage for us, our directors, officers and employees for any alleged breach of
fiduciary  duty under the  Employee  Retirement  Income  Security  Act.  Our D&O
liability  insurance  was  purchased  from  Associated  Electric & Gas Insurance
Services,  Energy Insurance  Mutual,  Zurich American,  Hartford,  Starr Excess,
Quanta and Liberty Mutual for a one year period  commencing on May 28, 2005 at a
cost  of   $3,277,035.   Fiduciary   liability   insurance   from  the  American
International  Group,  CHUBB,  Zurich American and Energy Insurance Mutual for a
one year period commencing on August 26, 2005 at a cost of $666,552.  We plan to
renew both programs upon expiration.

Transactions with Management and Others

Employment Agreements

In September  1998, we entered into an employment  agreement  with Mr. Robert B.
Catell  relating to his services as Chairman and Chief  Executive  Officer which
was amended on February 24, 2000 and June 26, 2002 (the "1998  Agreement").  The
1998  Agreement  covered the period  beginning July 31, 1998 and ending July 31,
2005.

Effective  January  1,  2005,  we  entered  into  a  new  agreement  (the  "2005
Agreement"),  which  supersedes  the 1998  Agreement,  relating to Mr.  Catell's
service as Chairman and Chief Executive Officer. The 2005 Agreement provides for
Mr. Catell's continued employment until July 31, 2006. However,  this employment
term will be extended until two years following the consummation of a "change of
control"  (as  defined in the 2005  Agreement),  if we enter  into a  definitive
agreement  that,  if  consummated,  would  result in a change of control and the
change of control  occurs.  This provision has been triggered as a result of the
definitive agreement of merger between National Grid plc and KeySpan. The period
from the execution of the  definitive  agreement  until two years  following the
consummation of the change of control is the "protection  period". Mr. Catell is
not a participant in the Senior Executive Change of Control  Severance Plan (the
"Change of Control Plan") described below.

In addition to his base salary, annual and long-term incentive  compensation and
other  employee  benefits,  Mr.  Catell is entitled to a  "supplemental  pension
benefit" which was  previously  provided for in the 1998 Agreement and continued
under the 2005 Agreement.  The supplemental  pension benefit is determined based
upon actual  base salary and actual  annual  incentives  paid.  In the event the
annual incentive target is decreased,  Mr. Catell's supplemental pension benefit
under the 2005 Agreement will be determined based upon the highest annual target
level approved by our board during his employment.


                                       18
<PAGE>


Mr.  Catell's  employment  agreement also provides for severance  benefits to be
paid to him in the event his  employment is  terminated  without cause or if Mr.
Catell terminates his employment for good reason.  The severance  benefits to be
provided  during the  severance  period (as defined  below) would  include:  (a)
payment to Mr.  Catell in a single lump sum of (i) all accrued  obligations  and
(ii) the aggregate  amount of salary and annual incentive  compensation  that he
would have received had he remained  employed  through the end of the employment
period; (b) continued accrual of Supplemental Executive Retirement Plan benefits
(as  provided  in  the  2005  Agreement)  during  the  severance   period;   (c)
continuation of all other employee benefits;  and (d) acceleration of vesting of
all equity  awards,  as if he had remained  employed by us during the  severance
period.  If Mr.  Catell's  employment is  terminated,  the  severance  period is
defined to mean the period from the date of  termination  through the end of the
employment period.

If Mr. Catell voluntarily terminates his employment, other than for good reason,
we shall pay the accrued  obligations  to Mr. Catell and he shall be entitled to
his supplemental  pension benefit.  If Mr. Catell is terminated without cause or
resigns  for good  reason  during the  Protection  Period,  Mr.  Catell  will be
provided with severance at a multiple of two times base salary and annual bonus,
continued benefits and additional supplement pension benefit accrual for the two
year period following his  termination.  Mr. Catell may resign for any reason in
the thirteenth month following a change of control with severance  benefits.  In
the event that any payments Mr. Catell receives from us or otherwise are subject
to a  parachute  excise  tax,  then Mr.  Catell  will be  entitled to a gross-up
payment in order to put him in the same after-tax position he would have been in
without the imposition of the excise tax.

We have entered into a  supplemental  retirement  agreement  with Mr.  Zelkowitz
dated as of July 1, 2002.  The agreement  provides one year of credited  service
for each year  worked,  up to a maximum  of ten  years,  in the  calculation  of
pension benefits.  The maximum  enhancement would provide an incremental benefit
of 15% of the  executive's  final five-year  average  earnings under the current
pension plan formula.  In addition,  at retirement,  Mr.  Zelkowitz will receive
paid  medical  and dental  coverage  at the same level in effect at  retirement,
which will be grossed up for federal and state taxes.  Mr. Zelkowitz must remain
employed  through  December  2006 in order to fully  vest in this  benefit.  For
retirement  prior to this date,  the benefit will vest pro-rata over a five-year
period or 20% per year.  If there is a  change-in-control,  termination  without
cause, or if Mr. Zelkowitz  resigns for good reason,  then the five-year vesting
requirement  will be  waived  and Mr.  Zelkowitz  will  immediately  vest in all
additional service provided for in this agreement.

We have also entered into a supplemental  retirement agreement with Mr. Luterman
dated as of July 1, 2002.. The agreement provides that Mr. Luterman will receive
an  annual   supplemental   retirement  amount  determined  by  multiplying  Mr.
Luterman's  qualified and non-qualified  pension accruals at age 62 by 35%. This
annual  supplemental  amount will be  aggregated  with his actual  qualified and
non-qualified   pension  benefit  at  his  retirement  date.  In  addition,   at
retirement,  Mr.  Luterman will receive paid medical and dental  coverage at the
same level in effect at  retirement,  which will be grossed up for  federal  and
state taxes.  Mr.  Luterman's  interest in this benefit  fully vested as of June
2005.


                                       19
<PAGE>


On March  24,  2006,  KeySpan  entered  into an  additional  agreement  with Mr.
Luterman to provide him with  separation  benefits at his current level of three
times base  salary,  plus his  highest  annual  bonus  pursuant to the Change of
Control Plan without regard to his age as of any date of termination.

Senior Executive Change of Control Severance Plan

As of  February  23,  2006,  with  the  exception  of Mr.  Catell,  45  officers
participate  in the Change of Control  Plan.  The  Change of  Control  Plan,  as
amended,  provides for the payment of severance and other  benefits upon certain
qualifying  terminations of such executives within two (2) years of a "change of
control" (as defined in the Change of Control Plan). The protection period under
the  Change  of  Control  Plan  commences  upon  the date  that we enter  into a
definitive  agreement,   the  transaction   contemplated  by  which  will,  when
consummated, constitute a change of control under the Change of Control Plan and
will continue for a period of two years after the  effective  date of the actual
change of control.  Upon the signing of the  definitive  merger  agreement  with
National Grid, the protection  period went into effect on February 25, 2006. The
benefits payable under the Change of Control Plan generally  provide for (i) the
payment of the executive's base salary and compensation  previously  deferred by
the  executive,  all  through  the date of  termination;  (ii) the payment of an
amount equal to three times an executive's  base salary and highest annual bonus
for any  president,  any executive  vice president and any senior vice president
and two times an  executive's  base  salary and highest  annual  bonus for other
officers; (iii) the payment of amounts under retirement plan formulas, including
the applicable two to three year period;  and (iv) the  continuation  of certain
other benefits for a period of two to three years  depending on the  executive's
position with us. On October 29, 2003, our board of directors  authorized a five
year extension of the Change of Control Plan. The Change of Control Plan expires
October 30,  2008,  unless  extended  for an  additional  period by our board of
directors;  provided that,  following a change of control, the Change of Control
Plan shall continue  until after all the  executives who become  entitled to any
payments thereunder shall have received such payments in full.






                                       20
<PAGE>



Change of Control/Severance Agreements

The following  table shows the amount of potential cash severance (not including
potential  gross-up payments for "golden parachute" excise taxes) payable to our
current  executive  officers  pursuant to the Change of Control  Plan, or in the
case of Mr. Catell,  his 2005 Agreement as a result of the acquisition by merger
of us by National  Grid.  The table also shows the  estimated  present  value of
continuing  coverage  for the  benefits  under our group  health,  dental,  life
insurance and retirement  plans.  The amounts  indicated are payable only in the
event the named executive officers are not retained upon a change of control and
their employment is terminated and are based on a pro forma  termination date of
April 1, 2006. Mr. Catell has agreed to serve as Deputy Chairman of the board of
National  Grid plc and  Executive  Chairman of National  Grid USA for a two-year
period.  Assuming he serves in such  capacities for such period,  he will not be
entitled to receive the payments listed below.  Likewise, in the event the other
named executive officers continue their employment beyond a two-year  protection
period, they also will not be entitled to receive the payments listed below.

<TABLE>
<CAPTION>
                                 Potential Cash        Pro-Rated          Estimated PV       Estimated PV of
  Executive Officers               Severance             Bonus             of Welfare           Retirement
                                   Payment(1)          Payment(2)          Benefits(3)          Benefits(4)
<S>                               <C>                    <C>                  <C>               <C>
Robert B. Catell(5)           $    5,080,000         $    466,667        $     22,396       $    2,052,233
Robert J. Fani                $    4,569,525         $    247,058        $     32,691       $    3,902,482
Wallace P. Parker Jr.         $    3,525,271         $    183,363        $     32,691       $    2,474,294
Steven L. Zelkowitz           $    3,414,387         $    171,043        $     32,691       $    2,604,495
Gerald Luterman               $    2,628,844         $    129,427        $     32,691       $      616,122
</TABLE>

(1)  Cash  severance  benefit is a lump sum  payment  based on the  annual  base
     salary  prior to  termination  plus the  highest  annual  bonus  times  the
     severance  multiple.  Highest annual bonus is defined as the greater of the
     bonus most  recently  paid prior to the change of control or the average of
     the three prior years.  The severance  multiple for Mr. Catell  pursuant to
     his employment agreement is two times while all other officers listed above
     have a multiple of three times. In addition to the cash severance  payments
     indicated  in the table  above,  the  executive  officers  are  entitled to
     receive  additional  cash gross-up  payments to eliminate the effect on any
     "golden parachute" excise taxes that may be imposed on the executives under
     Sections  280G and 4999 of the Internal  Revenue  Code.  The amount of such
     gross-up  payments  (if any)  will  depend on each  executive's  individual
     circumstances,   including   factors  such  as  the   executive's   average
     compensation  over the five calendar years  preceding the change of control
     date and the extent to which any potential  "parachute payments" constitute
     reasonable  compensation for services rendered prior to or after the change
     in control date.  All other  federal,  state and local income taxes will be
     paid by the individual.


(2)  Reflects the  pro-rated  amount of the highest  annual bonus for the period
     January 1, 2006 through the pro forma date of termination April 1, 2006.


(3)  Includes the cost of continuation of employee coverage for medical,  dental
     and life insurance during the severance period.


(4)  Represents  the net present  value of the  increase in the annual  lifetime
     pension annuity attributed to the added service and compensation associated
     with the severance period.


                                       21


<PAGE>


(5)  Mr.  Catell's  severance  benefits are provided  pursuant to his employment
     agreement  dated January 1, 2005.  Mr.  Catell is not a participant  in the
     Senior Executive Change of Control Severance Plan.


ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table provides information on the aggregate fees for services
performed by Deloitte & Touche LLP ("Deloitte & Touche"), the member firms of
Deloitte & Touche Tohmatsu, and their respective affiliates for the years ended
December 31, 2005 and December 31, 2004:

                                        2005                           2004
                                        ----                           ----

Audit Fees (a)                     $   3,682,325                  $  4,172,682
Audit-Related Fees (b)                    88,000                        80,000
Tax Fees (c)                             385,522                       848,453
All Other Fees (d)                        50,121                             0
                                   -------------                 -------------
Total                              $   4,205,968                  $  5,101,135

(a)  In 2005,  audit  fees  include  base  fees  for the  annual  and  statutory
     financial  statement  audits,  audit of  internal  control  over  financial
     reporting,  and quarterly reviews of $3,212,089;  $185,498 for fees related
     to financings and fees for consultations on financial  accounting standards
     as part of the audit of $284,738. In 2004, audit fees include base fees for
     the annual and  statutory  financial  statement  audits,  audit of internal
     control over  financial  reporting,  and quarterly  reviews of  $3,796,756;
     $19,970  for fees  related  to  financings  and fees for  consultations  on
     financial accounting standards as part of the audit of $355,956.

(b)  Audit-related fees include benefit plan audits

(c)  Fees for tax services  billed in 2005 and 2004 consisted of tax compliance,
     tax  consultation  services  and  property  tax  assistance.  Fees  for tax
     compliance  services  totaled  $313,738  and  $458,050  in 2005  and  2004,
     respectively.  Tax compliance  services include services such as assistance
     with federal, state and local income tax returns. Fees for tax consultation
     services totaled $71,784 and $390,403 in 2005 and 2004, respectively.

(d)  Other fees include training.

In accordance with the Audit Committee  Charter and the rules and regulations of
the SEC,  the Audit  Committee  reviews the scope of the audit and  approves the
nature  and cost of all  services  provided  by  Deloitte  &  Touche.  The Audit
Committee has reviewed the nature and scope of the services provided by Deloitte
& Touche and considers  such to have been  compatible  with the  maintenance  of
Deloitte & Touche's independence throughout its service to KeySpan.

The  Audit  Committee  has also  determined  that the  scope of  services  to be
provided  by  Deloitte & Touche in 2006 will  generally  be limited to audit and
audit related  services and tax services.  The Audit  Committee  will  expressly
approve the provision of any services by Deloitte & Touche  outside the scope of
the  foregoing  services.  Although it is the intent of the Audit  Committee  to
pre-approve  all  non-audit  services to be  provided by Deloitte & Touche,  any
inadvertent  failure to do so will not be deemed a breach of the Audit Committee
charter if: (i) the aggregate amount of all such non-audit  services provided to
the  Corporation  constitutes  not more than five percent of the total amount of
revenues paid by the  Corporation to its auditor during the fiscal year in which
the non-audit  services are provided;  (ii) such services were not recognized by


                                       22
<PAGE>


the  Corporation  at the time of the  engagement to be non-audit  services;  and
(iii) such  services are promptly  brought to the attention of the Committee and
approved  prior to the  completion of the audit by the Committee or its Chairman
pursuant to delegated authority.













                                       23


<PAGE>


ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(b)  Exhibits

Exhibits  listed  below  which  have been  filed  with the SEC  pursuant  to the
Securities Act of 1933, as amended,  or the Securities  Exchange Act of 1934, as
amended,  and which  were  filed as noted  below,  are  hereby  incorporated  by
reference  and  made a part of this  report  with the  same  effect  as if filed
herewith.

31.1*     Certification of the Chairman and Chief Executive  Officer pursuant to
          Section 302 of the Sarbanes-Oxley Act of 2002


31.2*     Certification  of the Executive  Vice  President  and Chief  Financial
          Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*     Certification of the Chairman and Chief Executive  Officer pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002


32.2*     Certification  of the Executive  Vice  President  and Chief  Financial
          Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* filed herewith








                                       24
<PAGE>



                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



      KEYSPAN CORPORATION

      (Registrant)



      Signature:                                            Date:

      By: /s/Gerald Luterman                                April 28, 2006
          ------------------
      Gerald Luterman
      Executive Vice President
      and Chief Financial Officer



     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.



      Signatures:                                           Date:

      By: /s/Robert B. Catell                               April 28, 2006
          -------------------
      Robert B. Catell
      Chairman of the Board of Directors
      and Chief Executive Officer



      By: /s/Gerald Luterman                                April 28, 2006
          ------------------
      Gerald Luterman
      Executive Vice President and
      Chief Financial Officer



      By: /s/Theresa A. Balog                               April 28, 2006
          -------------------
      Theresa A. Balog
      Vice President and
      Chief Accounting Officer



                                       25