Acquisition of NEES Receives Regulatory Approval

National Grid Group PLC
16 March 2000



National Grid acquisition of NEES receives final regulatory
approval

The National Grid Group plc ('National  Grid') today
announced that it has received approval from the US
Securities and Exchange Commission ('SEC') for its
proposed acquisition of New England Electric System
('NEES'). This was the final regulatory approval
required and the acquisition is now expected to close in
approximately one week.

Under the terms of the acquisition, National Grid will
acquire each NEES share for approximately $54.21, valuing
the equity of NEES at $3.217 billion. The acquisition
will be financed by a combination of National Grid's
internal resources and medium term debt facilities put in
place specifically for the acquisition.

Following closing of the acquisition, NEES will become a
wholly owned subsidiary of National Grid and will be
renamed National Grid USA. National Grid USA's company
headquarters will remain in Massachusetts.

Rick Sergel, NEES President and Chief Executive Officer,
will, following completion, join the Board of National
Grid as an Executive Director with responsibility for
North  America.  He will also become President and Chief
Executive Officer of National Grid USA. In addition Paul
Joskow, who has been a Non-executive Director of NEES
since 1987, will join the Board of National Grid as a Non-executive Director. 
He is a professor of economics and management at the Massachusetts Institute
of Technology.

David Jones, Group Chief Executive of National Grid said 'We
have now cleared the final regulatory hurdle and are
delighted that the merger will go ahead. The
acquisition of NEES is a major step in the
development of the Group. The immediate task now is to
implement our integration plans, building upon the
excellent working relationships forged over the last
year. We expect to complete the acquisition of EUA
soon and I am confident that we will see
substantial progress during this year as we start
delivering on our North American growth strategy.'
     
Regulatory approvals for rate plans in Massachusetts and
Rhode Island

NEES and EUA announced earlier this week that they had
received regulatory approvals for the rate settlements
they have submitted for their distribution operations in
Massachusetts and Rhode Island. On 15 March 2000 the Massachusetts
Department of Telecommunications and Energy 
approved the rate plan agreement proposed by NEES, EUA
and other parties in November 1999. This followed the
approval on 14 March 2000 by the Rhode Island Public
Utilities Commission of the rate plan proposed in
January.


Contacts

National Grid             [phone] 
Jill Sherratt             mobile:[phone] 
Diane Boddy
             
Citigate Dewe Rogerson    [phone] 
Anthony Carlisle          mobile:[phone] 
Sue Pemberton
Duncan Murray


Notes to Editors

1.The merger with NEES was announced on 14
  December 1998 and has been approved by the
  shareholders of both companies, the US
  Federal Energy Regulatory Commission and the
  Nuclear Regulatory Commission. It has also
  been cleared under the Hart Scott
  Rodino Antitrust Improvements Act and
  Exon Florio and has received regulatory
  clearance from five US State regulatory
  authorities.
  
2.SEC approval was required because
  NEES is a registered public utility holding
  company and regulated as such by the SEC.
  Any change of ownership of a registered
  public utility holding company therefore
  requires approval by the SEC.
  National Grid's acquisition of NEES
  represents the first time that a foreign
  utility company has ever submitted an
  application to the SEC for the acquisition
  of a registered public utility holding
  company.
  
3.On 1 February 1999, NEES announced its
  intention to acquire Eastern Utilities
  Associates, a contiguous electric utility
  based in Massachusetts for $634 million. NEES
  and National Grid are expecting to complete
  this acquisition in the near future.