National Grid 2008 Annual Report Download - page 168

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 17891
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.5.1, Doc: 4, Page: 72
Description: EXH 2(B).5.1
0/1551.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/551/1*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 17891
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.5.1, Doc: 4, Page: 72 Description: EXH 2(B).5.1
0/1551.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/551/1*
the U.K. National Grid Property Limited is responsible for the management of all National Grid’s major occupied property in the
U.K. and the management, clean-up and disposal of surplus properties (lar
g
ely comprisin
g
former
g
as works). Fulcrum
Connections Limited provides
g
as connections and associated desi
g
n services on behalf of
g
as distribution networks in the
U.K.
Regulatory environment
National Grid’s securities are listed on the London Stock Exchan
g
e and on the New York Stock Exchan
g
e and, as a
consequence, National Grid is subject to re
g
ulation by the Financial Services Authority in the U.K., and by the Securities and
Exchange Commission (“SEC”) in the U.S.
National Grid operates in a hi
g
hly re
g
ulated environment, which means that
g
ood relationships with economic and safety
re
g
ulators, in addition to its other stakeholders, are essential because they set the frameworks within which its businesses
operate.
Transmission
U.K. electricity and gas transmission
In the U.K., electricity transmission is regulated under the Electricity Act 1989 (the “Electricity Act”), under which NGET is
licensed to participate in the transmission of electricity. This license permits NGET to act both as an owner of electricity
transmission assets in England and Wales, and to act as Great Britain’s System Operator (separate and unrelated companies
are licensed to own electricity transmission assets in Scotland).
Gas transportation is regulated under the Gas Act 1986 (the “Gas Act”), under which National Grid Gas plc (“NGG”), a
subsidiary of National Grid, is licensed to transport
g
as. NGG holds two
g
as transporter licences, one in respect of its national
transmission system and one in respect of the four gas distribution networks which it owns and operates.
National Grid’s participation in the operation of the Anglo-French electricity interconnector is also re
g
ulated by an interconnector
licence granted under the Electricity Act.
Supervision of NGET’s and NGG’s compliance with these Acts and licences is conducted by the Gas and Electricity Markets
Authority (“GEMA”), through its executive arm, the Office of Gas and Electricity Markets (“Ofgem”).
U.S. electricity transmission
The transmission activities of each of National Grid’s U.S. public utilities is re
g
ulated by the relevant state utility commission in
the states in which it operates (includin
g
New York, Massachusetts, Rhode Island, Vermont, and New Hampshire) and by the
Federal Energy Regulatory Commission (“FERC”).
In relation to electricity transmission, the FERC, amon
g
st other thin
g
s, sets service standards for the transmission business of
these U.S. public utilities, approves reliability standards set by the North American Electric Reliability Council (“NERC”) (an
industry self re
g
ulatory body), determines the potential levels of return on re
g
ulated transmission service and approves
wholesale electricity market rules. Althou
g
h FERC has sitin
g
authority over transmission lines in certain limited circumstances,
the sitin
g
of transmission lines, as well as the ultimate recovery of transmission rates from retail customers is principally
regulated by the relevant state utility commission (in addition to the other matters regulated by these commissions).
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