Statement re Ofgem's Proposal

National Grid Group PLC
7 February 2002

                   National Grid Accepts Ofgem's Proposal for

                       System Operator Incentives Scheme


National Grid Company has today accepted Ofgem's final proposal for the
incentive scheme for 2002/03.

The proposal is based on substantially rolling over the existing scheme for one
year and is based on a target for external System Operator costs of £460
million. If costs for the year outturn below this level, National Grid is
eligible to receive 60 per cent of the benefits, up to a maximum profit of £60
million. If costs are above the target, National Grid is exposed to 50 per cent
of the losses, up to a maximum loss on the scheme of £45 million.

Further details of the proposal are available on the Ofgem website at
www.ofgem.gov.uk/public/pub2002.htm

Acceptance of the final proposal is subject to agreement between National Grid
and Ofgem on the detailed amendments to the Transmission Licence needed to bring
these proposals into force.





ENQUIRIES:

National Grid:

Investors

Marcy Reed [phone] [phone](m)

Terry McCormick [phone] [phone](m)

Louise Clamp [phone] [phone](m)



Media

Ross Hayman [phone]

Stewart Larque [phone]

Chris Mostyn [phone]







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