National Grid 2008 Annual Report Download - page 219

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 6043
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.6.1, Doc: 6, Page: 13
Description: EXH 2(B).6.1
0/1617.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/617/1*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 6043
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.6.1, Doc: 6, Page: 13 Description: EXH 2(B).6.1
0/1617.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/617/1*
currently re
g
arded or proved to have adverse effects but could become so; for example, the effects of electric and ma
g
netic
fields. The Group’s operations are subject to extensive federal, state and local laws and re
g
ulations relatin
g
to pollution, the
protection of the environment, and how the Group uses and disposes of hazardous substances and waste materials. The
Group is also subject to laws and re
g
ulations
g
overnin
g
health and safety matters protectin
g
the public and its employees.
These environmental laws and re
g
ulations expose the Group to costs and liabilities relatin
g
to its operations and its current and
formerly owned properties. Compliance with these le
g
al requirements requires the Group to commit si
g
nificant capital toward
environmental monitoring, installation of pollution control equipment and permits at the Group’s facilities. Costs of compliance
with these laws and regulations could have a material impact on the Group’s businesses and its results of operations and
financial position, especially if these laws or re
g
ulations are modified to impose additional or more extensive requirements or
the number and type of facilities that the Group operates increases. Any breach of these obli
g
ations, or even incidents that do
not amount to a breach, could adversely affect the Group’s results of operations and its reputation.
In addition, a number of the Issuer’s businesses are responsible for the clean-up of contamination at certain manufactured
g
as
plant (“MGP”) sites and at other sites and the Issuer is aware of additional MGP sites where it may have responsibility for clean-
up costs. While some of the Issuer’s subsidiaries have rate plans
g
enerally allowin
g
for recovery of the costs of investi
g
ation
and remediation of MGP sites, these rate recovery mechanisms may chan
g
e in the future. To the extent rate recovery
mechanisms change in the future, or if additional environmental matters arise in the future at the Group’s currently or
historically owned facilities, at sites the Group may acquire in the future or at third-party waste disposal sites, costs associated
with investigating and remedying these sites could have a material adverse effect on the Group’s results of operations, cash
flows and financial condition.
Network failure or the inability to carry out critical non-network operations may have significant adverse impacts o
n
both the Group’s financial position and its reputation.
The Group may suffer a major network failure or may not be able to carry out critical non-network operations. Operational
performance could be adversely affected by a failure to maintain the health of the system or network, inadequate forecastin
g
of
demand or inadequate record keepin
g
. This could cause the Group to fail to meet a
g
reed standards of service or to be in
breach of a licence or approval, and even incidents that do not amount to a breach could result in adverse re
g
ulatory and
financial consequences, as well as harming the Group’s reputation. In addition to these risks, the Group may be affected by
other potential events that are largely outside the Group’s control such as the impact of weather or unlawful acts of third parties.
Weather conditions can affect financial performance and severe weather that causes outa
g
es or dama
g
es infrastructure will
adversely affect operational and potentially business performance. Terrorist attack, sabota
g
e or other intentional acts may also
physically damage the Group’s businesses or otherwise si
g
nificantly affect corporate activities and as a consequence have an
adverse impact on the results of operations. The cost of repairing damage to the Issuer’s operating subsidiaries’ facilities and
the potential disruption of their operations or supplier operations due to storms, natural disasters, wars, terrorist acts and other
catastrophic events could be substantial. The occurrence or risk of occurrence of future terrorist attacks or related acts of war or
violence may lead to increased political, economic and financial market instability and volatility in prices which could materially
adversely affect the Group in ways it cannot predict at this time. A lower level of economic activity for these or other reasons
could result in a decline in energy consumption, which could adversely affect the Group’s net revenues.
The Group’s results of operations depend on a number of factors relating to business performance includin
g
performance against regulatory targets, recovery of incurred expenditure and the delivery of anticipated cost an
d
efficiency savings.
Earnings maintenance and growth from the Group’s re
g
ulated
g
as and electricity businesses will be affected by its ability to
meet or better efficiency targets set by or agreed with regulators, including, but
13