Trading Statement

National Grid Transco PLC
24 March 2005


24 March 2005


               National Grid Transco close period trading update
                        for the year ended 31 March 2005

                   Earnings growth in line with expectations

National Grid Transco plc (the 'Group') is today issuing its trading update
prior to entering its close period on 1 April 2005 and the announcement of its
preliminary results on 19 May 2005.

The Group continues to trade in line with expectations, with both underlying
profit before tax* and underlying earnings* expected to be ahead of last year.
This is despite the year-on-year impact of the weaker dollar, which is expected
to amount to around £20 million at the earnings level.

At constant currency, Group underlying operating profit* is also expected to be
ahead of last year. The Group's US Distribution business has continued to
perform well and expects to achieve its target to reduce controllable costs by
20% in real terms over the 3 years ended March 2005. In the UK, the Group has
also benefited from the new connections charging reform ('Plugs') in UK
Transmission and the contribution from Crown Castle UK (CCUK), which was
acquired by the Group during the year. These factors have more than offset the
expected reduction in profits in the UK Distribution business resulting from the
planned higher level of UK gas main replacement expenditure ('repex') and the
year-on-year reduction in gas transportation prices exacerbated by reduced
volumes due to warmer than normal weather. Repex is now expected to amount to
around £470m for the full year.

Net debt at 31 March 2005 is expected to be around £13.5 billion, which is
higher than last year primarily due to the cost of the CCUK acquisition (£1.1
billion), partially offset by the weaker dollar. The Group will achieve a lower
interest charge this year despite an increase in interest rates over the period
and the higher level of net debt.

The effective tax rate on underlying profit before tax* is anticipated to be
similar to last year's rate.

UK Gas Distribution network sales and return of value

The process to obtain the required regulatory approvals relating to the proposed
sale of four of the Group's UK gas distribution networks remains on track and
completion is expected towards the end of the second calendar quarter of 2005.
It is proposed that the £2.0 billion return of value to shareholders from the
proceeds of these sales will be achieved by way of a B share scheme. The scheme
is to be combined with a consolidation of the Group's ordinary shares and will
allow shareholders to opt to receive the return as either income or capital.

It is expected that the Extraordinary General Meeting seeking shareholder
approval of the B share scheme will be held on the same day as the Annual
General Meeting, 25 July 2005, with the return of value following during August.

* Excluding exceptional items and goodwill amortisation

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. Because these forward-looking statements are subject to assumptions,
risks and uncertainties, actual future results may differ materially from those
expressed in or implied by such statements. Many of these assumptions, risks and
uncertainties relate to factors that are beyond National Grid Transco's ability
to control or estimate precisely, such as delays in obtaining or adverse
conditions contained in regulatory approvals, competition and industry
restructuring, changes in economic conditions, currency fluctuations, changes in
interest and tax rates, changes in energy market prices, changes in historical
weather patterns, changes in laws, regulations or regulatory policies,
developments in legal or public policy doctrines, the impact of changes to
accounting standards, technological developments, the failure to retain key
management, the availability of new acquisition opportunities or the timing and
success of future acquisition opportunities. Other factors that could cause
actual results to differ materially from those described in this announcement
include the ability to continue to integrate the US and UK businesses acquired
by or merged with the Group, the failure for any reason to achieve reductions in
costs or to achieve operational efficiencies, unseasonable weather impacting on
demand for electricity and gas, the behaviour of UK electricity market
participants on system balancing, the timing of amendments in prices to shippers
in the UK gas market, the performance of National Grid Transco's pension schemes
and the regulatory treatment of pension costs, the impact of the proposed
disposal by National Grid Transco of four of its UK gas distribution networks
and any adverse consequences arising from outages on or otherwise affecting
energy networks owned and/or operated by National Grid Transco.

For a more detailed description of these assumptions, risks and uncertainties,
together with any other risk factors, please see National Grid Transco's filings
with the United States Securities and Exchange Commission (and in particular the
'Risk Factors' and 'Operating and Financial Review' sections filed with its most
recent annual report on Form 20F). Recipients are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date of
this announcement. National Grid Transco does not undertake any obligation to
release publicly any revisions to these forward-looking statements to reflect
events or circumstances after the date of this announcement.

Contacts

Investors
Alexandra Lewis   [phone]   [phone](m)
David Campbell    [phone]   [phone](m)
Richard Smith     [phone]   [phone](m)
Bob Seega (US)    [phone]

Media
Clive Hawkins     [phone]   [phone](m)

Citigate Dewe Rogerson                  [phone]
Anthony Carlisle                        [phone](m)



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