National Grid PLC NG. Statement re Ofgem's initial proposal headlines

  National Grid PLC (NG.) - Statement re Ofgem's initial proposal headlines

RNS Number : 7079H
National Grid PLC
16 July 2012






16 July 2012

                                      

                              National Grid plc

   RIIO price control initial proposal headlines announced for UK regulated
                                  businesses



As part of the  process for agreeing new  UK gas and electricity  transmission 
(RIIO-T1) and UK gas distribution  price controls (RIIO-GD1), Ofgem has  today 
published high level details of its initial proposals.



National Grid's  business plans  for the  eight years  from April  2013  drive 
significant investment in  essential UK infrastructure  projects for the  long 
term benefit of  consumers. These  investments are  necessary for  maintaining 
safety and  reliability, and  for helping  the UK  grow and  transition to  an 
affordable low carbon energy system. Ensuring appropriate incentives,  returns 
and funding over this period is critical to the successful outcome of the RIIO
process.



Full details of the initial  proposals will be published  by Ofgem on 27  July 
2012. However, it  is already  clear that  there are  several important  areas 
where  Ofgem's   proposals   differ   substantially   from   National   Grid's 
comprehensive  business  plan  submissions  for  both  transmission  and   gas 
distribution. While the information currently available is limited, we believe
that these initial proposals will not appropriately incentivise the  essential 
investments necessary to provide safe,  reliable networks for the UK  consumer 
and avoid delays to the achievement of the UK's environmental targets.



In particular, the financing packages proposed do not, on either a  standalone 
basis or in comparison with other regulatory outcomes, adequately reflect  the 
increased scale  of investment  and implicit  risk associated  with the  major 
investment required in the  coming years to build  the energy system that  our 
customers will need  in the  future, whether in  transmission or  distribution 
infrastructure. We intend to highlight these areas and present further support
for our position in response to the proposals.



In order to provide  an opportunity for investors  and analysts to  understand 
the Company's perspective on the initial proposals in more detail we intend to
host a webinar on  2 August 2012,  details of which will  be published in  due 
course.



                                      

CONTACTS

National Grid:

Investors
John Dawson     +44 20 7004 3170 +44 7810 831944 (m)
Andy Mead       +44 20 7004 3166 +44 7752 890787 (m)
George Laskaris +1 718 403 2526  +1 917 375 0989 (m)
Victoria Davies +44 20 7004 3171 +44 7771 973 447 (m)
Tom Hull        +44 20 7004 3172 +44 7890 534833 (m)
Media
Isobel Rowley   +44 1926 655 275 +44 7917 211116 (m)


Brunswick
Tom Burns       +44 20 7404 5959

CAUTIONARY STATEMENT

This announcement contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These statements include information with respect to
National Grid's financial condition, its results of operations and businesses,
strategy, plans and objectives. Words such as 'anticipates', 'expects',
'should', 'intends', 'plans', 'believes', 'outlook', 'seeks', 'estimates',
'targets', 'may', 'will', 'continue', 'project' and similar expressions, as
well as statements in the future tense, identify forward-looking statements.
These forward-looking statements are not guarantees of National Grid's future
performance and are subject to assumptions, risks and uncertainties that could
cause actual future results to differ materially from those expressed in or
implied by such forward-looking statements. Many of these assumptions, risks
and uncertainties relate to factors that are beyond National Grid's ability to
control or estimate precisely, such as changes in laws or regulations and
decisions by governmental bodies or regulators (including the new RIIO
approach in the UK); breaches of, or changes in, environmental, climate change
and health and safety laws or regulations, including breaches arising from the
potentially harmful nature of its activities; network failure or interruption,
the inability to carry out critical non network operations and damage to
infrastructure, due to adverse weather conditions including the result of
climate change or due to unauthorised access to or deliberate breaches of our
IT systems or otherwise; performance against regulatory targets and standards
and against National Grid's peers with the aim of delivering stakeholder
expectations regarding costs and efficiency savings, including those related
to investment programmes, restructuring and internal transformation projects;
and customers and counterparties failing to perform their obligations to the
Company. Other factors that could cause actual results to differ materially
from those described in this announcement include fluctuations in exchange
rates, interest rates and commodity price indices; restrictions in National
Grid's borrowing and debt arrangements, funding costs and access to financing;
regulatory requirements for the Company to maintain financial resources in
certain parts of its business and restrictions on some subsidiaries'
transactions, such as paying dividends, lending or levying charges; inflation;
the funding requirements of its pension schemes and other post-retirement
benefit schemes; the loss of key personnel or the ability to attract, train or
retain qualified personnel and any disputes arising with its employees or the
breach of laws or regulations by its employees; and incorrect or unforeseen
assumptions or conclusions (including financial and tax impacts and other
unanticipated effects) relating to business development activity, including
assumptions in connection with joint ventures. The effects of these factors
are difficult to predict. For further details regarding these and other
assumptions, risks and uncertainties please read the Business Review section
including the 'Risk factors' on pages 41 to 43 of National Grid's latest
Annual Report and Accounts. In addition new factors emerge from time to time
and National Grid cannot assess the potential impact of any such factor on its
activities or the extent to which any factor, or combination of factors, may
cause actual future results to differ materially from those contained in any
forward-looking statement. Except as may be required by law or regulation,
National Grid undertakes no obligation to update any of its forward-looking
statements, which speak only as of the date of this announcement. The content
of any website references herein do not form part of this announcement.











 







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END


STRLIFIRDEIRLIF -0- Jul/16/2012 06:10 GMT
 
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