National Grid 2008 Annual Report Download - page 169

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 49562
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: 73
Description: EXH 2(B).5.1
0/2552.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/552/2*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 49562
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: 73 Description: EXH 2(B).5.1
0/2552.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/552/2*
Gas Distribution
U.K. gas distribution
As stated above in relation to electricity and
g
as transmission, in the U.K.,
g
as distribution is re
g
ulated under the Gas Act,
under which NGG is licensed to transport
g
as. NGG is the holder of a sin
g
le
g
as distribution transporter licence which
authorises it to operate the four distribution networks that it owns, althou
g
h each of these networks has its own separate price
control.
As with its U.K. electricity and gas transmission activities, supervision of National Grid’s compliance with the relevant le
g
islation
and the
g
as transporter licence applicable to the distribution networks which it owns is the responsibility of GEMA actin
g
through Ofgem.
U.S. gas distribution
The U.S. gas distribution activities of two of National Grid’s U.S. public utilities, Nia
g
ara Mohawk Power Corporation and The
Narragansett Electric Company, are regulated by the relevant state utility commission in the states in which these operate.
In relation to
g
as distribution, the U.S. state utility commissions, amon
g
st other thin
g
s, set distribution service standards for the
jurisdictional U.S. public utilities, set retail rates for end use customers, and determine the public utility company’s potential
levels of return on distribution service.
Electricity Distribution
The U.S. electricity distribution activities of each of National Grid’s U.S. public utilities are re
g
ulated by the relevant state utility
commission in the states in which these operate.
As with
g
as distribution, the U.S. state utility commissions, amon
g
st other thin
g
s, set distribution service standards, retail rates
for end use customers and determine the potential levels of return on distribution service. However, FERC re
g
ulates wholesale
electricity sales by National Grid’s U.S. public utilities, to the extent that any sales are made.
U.S. stranded cost recoveries
The recovery of historical investments and costs under commodity contracts followin
g
industry restructurin
g
in New En
g
land
and New York is done pursuant to applicable state le
g
islation and approvals from the utility commissions in the states in which
National Grid operates.
Other
National Grid Metering Limited is regulated by Ofgem and is subject to price controls imposed through National Grid’s
g
as
transporter licences. Grain LNG has been
g
ranted exemptions by Of
g
em from the provisions of the Gas Act which would
otherwise re
g
ulate the terms on which it would have had to offer third parties access to phases 1, 2 and 3 of the project.
Generally, however, National Grid’s other businesses tend to be affected to a lesser extent or only indirectly by related
regulatory regimes.
Regulatory developments
Transmission
U.K. electricity and gas transmission
National Grid’s U.K. electricity and
g
as transmission businesses are subject to re
g
ulation of their revenues (otherwise known as
price controls) under their respective transmission licences. The
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