KEYSPAN CORPORATION

                         CORPORATE GOVERNANCE GUIDELINES
                    (Amended and Restated September 26, 2002)

BOARD OF DIRECTORS

Size and Composition of the Board
---------------------------------

The Board shall consist of a number of directors  such that the  Corporation  is
effectively managed. The number of directors shall be fixed from time to time by
the Board and  recorded  in the  minutes  of the  Corporation.  The Board  shall
consist of a majority  of members  who are deemed to be  independent.  The Chief
Executive Officer will also be a member of the Board.

Director Independence
---------------------

The  independence  of directors  shall be  determined  by the Board of Directors
under the rules of the New York Stock Exchange, Inc. and the Sarbanes-Oxley Act.
The directors shall complete and submit an annual  statement on Ethical Business
Conduct to identify and assess  relationships  they may have with third  parties
(including vendors,  service providers,  competitors,  etc.) that may impact the
Corporation and could be construed as compromising the director's independence.

Board Membership of Former Executive Officers
---------------------------------------------

The Board of  Directors  shall not, as a general  rule,  have  former  executive
employees  serving on the Board.  It is assumed that  retiring  executives  will
tender  their   resignations   as  officers  and   directors,   if   applicable,
simultaneously. The Board may, at its discretion, invite a retiring executive to
remain a director.  To be considered  "independent," the retiring executive must
satisfy the "cooling-off" period required by the New York Stock Exchange, Inc.

Board Performance Evaluation
----------------------------

The Board shall  annually  review its  performance.  The Board shall measure its
results against  appropriate  criteria defined by the Board, in conjunction with
the  recommendations  of the C&N Committee.  As part of this review, the outside
directors may meet independently to assess the Board's performance.

Director Compensation Review
----------------------------

The Corporate  Secretary  shall  prepare,  annually,  a  comprehensive  industry
analysis of director's compensation and benefits and submit such findings to the
Chief Executive Officer for review, who will then submit a recommendation to the
Compensation   and   Nominating   Committee  for  review  and   approval.   Such
recommendation  will then be forwarded to the full Board for  consideration  and
formal vote.

Board Membership Criteria
-------------------------

The Compensation and Nominating  Committee and the Chief Executive Officer shall
be responsible for determining the qualifications of director  candidates in the
context of the current composition of the Board.

New Director Candidates Selection
---------------------------------

It shall be the  responsibility  of the Chief  Executive  Officer in conjunction
with the  Compensation  &  Nominating  Committee  to  recommend  to the Board of
Directors  nominees  to fill  Board  vacancies  and to  replace  retiring  Board
members. The Board of Directors shall elect candidates to the Board.
Invitations to Director Candidates
----------------------------------

An invitation  to join the Board shall be  communicated  by the Chief  Executive
Officer on behalf of the entire Board.

Director's Change in Present Job Responsibilities
-------------------------------------------------

Individual directors who experience changes in employment, careers, affiliations
with  organizations or other matters,  which may affect the Corporation,  have a
duty to advise the Board of such  changes or  appointment,  as  applicable.  The
specific   circumstances  will  be  assessed  to  determine  if  the  director's
resignation from the Board should be requested.

Retirement Age
--------------

As a general rule,  directors  shall retire on the date of the annual meeting of
shareholders following the date of their 70th birthday.

Term Limits
-----------

There  shall  be no term  limits  for  directors,  who  may  serve  until  their
retirement  age.  The  Compensation   and  Nominating   Committee  will  propose
candidates for election or re-election at the annual meeting of shareholders.  A
review of each  director's  service on the Board will be conducted prior to such
nomination.

Director Contact with the Corporation's Constituencies
------------------------------------------------------

Communications  with  parties  external to the  Corporation  (including  but not
limited to shareholders,  accountants,  the media, attorneys,  vendors,  service
providers,  etc.) shall be the  responsibility of the Chief Executive Officer or
delegated  by the  Chief  Executive  Officer  to  the  appropriate  area  of the
Corporation. The directors will be consulted from time to time for their advice,
as the Chief Executive Officer so determines.


MEETINGS OF THE BOARD OF DIRECTORS

Selection of Meeting Agenda Items
---------------------------------

The Chairman and Chief  Executive  Officer  shall  establish  the agenda for the
Board meetings. Any director may request inclusion of an item on the agenda. The
Chairman and Chief  Executive  Officer may annually  distribute to the Board the
proposed  agenda items,  along with the schedule of meetings,  for the following
year.

Advance Distribution of Board Meeting Materials
-----------------------------------------------

The  Corporate  Secretary  shall  distribute  to  the  directors  all  materials
necessary to conduct an effective meeting of the Board of Directors prior to the
meeting.

Regular Attendance of Non-Directors at Board Meetings
-----------------------------------------------------

At the  invitation  and approval of the Chief  Executive  Officer or a director,
other non-directors, may attend or give presentations before the Board.

Strategy Sessions
-----------------

The Board of Directors shall meet annually,  generally at an off-site  location,
to review with  executive  management the  Corporation's  strategic plan and its
long range goals and direction.

Executive Sessions
------------------

The outside directors and the Chief Executive Officer shall convene in executive
session  as often as is  appropriate,  usually  as part of  regularly  scheduled
meetings of the Board of Directors.  Executive  sessions may be requested by the
outside  directors,  as well as the Chief Executive  Officer.  In addition,  the
outside directors of the Board shall meet at least quarterly,  without the Chief
Executive  Officer  or any other  inside  director,  to  discuss  any  matter or
recommend any action as the directors  shall deem advisable  consistent with the
powers of the full  Board.  Members of the  Executive  Committee  shall serve as
presiding directors of these meetings on a rotating basis.


COMMITTEES OF THE BOARD OF DIRECTORS

Number of Committees
--------------------

The Board of  Directors  shall  designate  one or more Board  committees,  as is
necessary. There are four committees: the Executive, the Audit, the Compensation
and Nominating, and the Corporate Responsibility and Governance Committees.

Committee Meeting Frequency and Length
--------------------------------------

The committee chairman, in consultation with committee members,  shall determine
the  frequency  and  length of  committee  meetings.  There will be at least two
Compensation and Nominating Committee meetings, one Corporate Responsibility and
Governance  Committee  meeting and four Audit Committee  meetings held annually.
The Executive Committee shall convene on an as-needed-basis.

Committee Meeting Agendas
-------------------------

The Chairman and Chief Executive  Officer shall issue a schedule of meetings and
schedule  suggested  agenda items, as requested by the Board of Directors or any
Committee member.

Committee Member Assignments and Rotation
-----------------------------------------

Committee chairmen and Committee members shall rotate periodically, unless there
are reasons to retain  such  Committee  chairmen  and  Committee  members on the
specific  committee.  Committee  appointments  shall be made at a meeting of the
Board of  Directors  as soon as  practicable  following  the  annual  meeting of
shareholders.


OFFICERS

Chairman and Chief Executive Officer Selection
----------------------------------------------

The Board of Directors  shall select an  individual or  individuals  to hold the
positions of Chairman and the Chief Executive Officer,  as stated in the By-Laws
of the Corporation.

Chief Executive Officer Evaluation
----------------------------------

The Board shall annually review the performance of the Chief Executive  Officer,
in Executive Session, and establish a specific set of performance objectives for
the Chief Executive Officer.  These should include concerns of the shareholders,
employees and customers.

Management Development and Succession Planning
----------------------------------------------

The Chief  Executive  Officer shall review  annually the performance of officers
and discuss  their future  potential  with the Board of Directors as part of the
Corporation's  program  for  the  management  development  of its  officers  and
succession planning.


Board Access to Senior Management
---------------------------------

The Directors shall have access to the Corporation's management. For non-routine
contact on Board agenda items, the Board members will inform the Chief Executive
Officer of their need for contact with management on special matters.