Publication of updated RIIO-GD1 business 2013-2021

RNS Number : 1981D

National Grid PLC

11 May 2012

 



11 May 2012      

National Grid plc

Publication of updated RIIO-GD1 business plans for 2013-2021

As part of the process for agreeing new UK Gas Distribution price controls (RIIO-GD1), National Grid has submitted to Ofgem updated business plans for its four UK networks covering the period April 2013 to March 2021.

The updated business plans reflect extensive stakeholder engagement and Ofgem's initial comments. The plans represent National Grid's realistic assessment of the investment and financial framework required to deliver a safe and reliable network alongside quality service and value for money for the customer while safeguarding the interests of future generations.

Much of the feedback received was supportive of the December plans and, as a result, the update is very much in line with the original submission. The main areas of change concern proposed treatment of streetworks permitting costs and the financing package.

The plans recommend a broadly unchanged baseline total capital and operating investment of around £13.2bn over eight years, including £5.1bn of replacement expenditure.

In its submission, National Grid has set out updated financial proposals to accompany the business plans. These retain the proposed allowed cost of equity of 7.2%, increase the proposed gearing ratio to 60% for three of the four networks and propose consistent transitional arrangements for repex capitalisation across all four networks. For the London network, the proposed gearing level of 55% reflects the differing risk profile and higher RAV growth during the period.

If the business plans were to be adopted in all aspects for the next price control the net impact by the end of the eight year period would be an increase in real terms on a typical household bill of around £8 across National Grid's networks, less than £1 p.a. In addition, the plans would see regulated asset value rise by 4% p.a. on average over the period.

National Grid is publishing these updated business plans today (11 May 2012). The business plans will be available from www.talkingnetworksngd.com  

 

CONTACTS

National Grid:

Investors                                                                                                                                                                    

John Dawson	[phone]	[phone] (m)
George Laskaris	[phone]	[phone] (m)
Andy Mead	[phone]	[phone] (m)
Iwan Hughes Tom Hull	[phone] [phone]	[phone] (m) [phone] (m)

Media                                                                                                                                                                          

Chris Mostyn	[phone]	[phone] (m)
Gemma Stokes	[phone]	[phone] (m)

Brunswick Tom Burns Tom Batchelar

[phone]

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', 'intends', 'plans', 'believes', '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; 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 impact of Hurricane Irene and other storms; 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; National Grid's status as a holding company with no revenue generating operations of its own; inflation; seasonal fluctuations; 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; accounting standards, rules and interpretations, including changes of law and accounting standards and other factors that may affect National Grid's effective rate of tax; and incorrect or unforeseen assumptions or conclusions relating to business development activity. For a more detailed description of some of these assumptions, risks and uncertainties, together with any other risk factors, please see National Grid's filings with and submissions to the US Securities and Exchange Commission (the 'SEC') (and in particular the 'Risk factors' and 'Operating and Financial Review' sections in our most recent Annual Report on Form 20-F). The effects of these factors are difficult to predict. 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 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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