US Rate Agreement with NEES & EUA

National Grid Group PLC
30 November 1999



THE NATIONAL GRID GROUP plc

NEES AND EUA REACH LONG-TERM, INCENTIVE-BASED RATE
SETTLEMENT IN MASSACHUSETTS


The National Grid Group plc ('National Grid') announces that
New England Electric System ('NEES') and Eastern Utilities
Associates ('EUA') have reached an agreement with the
Massachusetts Attorney General and customer bodies of
Massachusetts that provides incentive based regulation for
NEES's and EUA's electricity distribution operations in
Massachusetts within a long term framework.

David Jones, Group Chief Executive of National Grid
commented:

'This settlement is a major step forward in incentive based
regulation in the Northeast USA.  It establishes a clear 20-
year framework, which enables NEES and EUA's efficiency
gains to benefit both customers and shareholders and enables
our business to undertake the most effective long-term
planning.  This delivers on one of the key upsides we saw
when we announced our acquisition.

'The settlement is a tribute to the NEES management and
their track record and to the forward looking nature of the
state officials and customer bodies who have supported it.'

National Grid and NEES announced on 14 December 1998 that,
subject to the required approvals, National Grid would
acquire all the outstanding shares of NEES, valued at
$3.2bn. We expect to complete the acquisition by early 2000.


The text of the announcement by Massachusetts Attorney
General, Tom Reilly

RATE AGREEMENT REACHED IN UTILITY MERGER

NEES and Eastern Utilities agreement with Attorney General,
DOER and customer groups provides for millions in immediate
rate reductions

BOSTON - Attorney General Tom Reilly today announced an
agreement with New England Electric Systems (NEES, the
parent of Massachusetts Electric Company) and Eastern
Utilities Associates (EUA, the parent of Eastern Edison
Company) on a plan that will result in a rate reduction for
Massachusetts consumers.

Joining AG Reilly were the Division of Energy Resources,
Associated Industries of Massachusetts (AIM) and The Energy
Consortium, a group of large customers including industrial
companies as well as universities and hospitals.

'This agreement is good news for customers because it
requires that they share immediately in the savings
resulting from the merger,' said Attorney General Reilly.
'Consumers should benefit from utility mergers.  This
agreement requires that consumers benefit right from the
start and ensures that the companies' customers also share
in any future trend to reduce utility rates.'

The agreement calls for more than $70 million in savings for
customers beyond the customer savings expected as a result
of Eastern Edison's customers switching to Massachusetts
Electric Rates under the company's rate consolidation plan.
Today's agreement includes and immediate $10 million annual
reduction in distribution rates for the combined companies
and for rates to remain frozen through February 28, 2005.
The agreement includes measures to offset adverse rate
impacts to certain Eastern Edison customers when they are
transferred to Massachusetts Electric distribution rates.
From March 1, 2005 through December 31, 2009, the settlement
provides for distribution rates to be indexed based on the
regional average.

Under the agreement, savings the company achieves during the
first ten years will be shared between customers and
investors over the next ten years.  The agreement also
contains a comprehensive service quality plan that rewards
or penalises the company for its performance in the areas of
reliability, customer satisfaction and safety.

The agreement was filed today with the Department of
Telecommunications and Energy, which must approve the plan
before it is finalised.  At that time, customers of the
combined company will be served by Massachusetts Electric.

Massachusetts Electric Company serves 147 communities
throughout the state.  Edison serves customers in 24
communities in southeastern Massachusetts, including
Brockton and Fall River.


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