National Grid 2008 Annual Report Download - page 265

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 22051
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: 59
Description: EXH 2(B).6.1
0/1663.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/663/1*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 22051
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: 59 Description: EXH 2(B).6.1
0/1663.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/663/1*
Regulatory Environment
The securities of the Issuer’s London based parent, National Grid plc, are listed on the London Stock Exchan
g
e plc and on the
New York Stock Exchan
g
e and, as a consequence, both National Grid plc and National Grid USA, are subject to re
g
ulation by
the Financial Services Authority in the UK and by the Securities and Exchange Commission (“SEC”) in the U.S. However,
because the Issuer, as a public utility holdin
g
company with federal and state re
g
ulated subsidiaries, operates in a hi
g
hly
re
g
ulated environment,
g
ood relationships with economic and safety re
g
ulators, in addition to other stakeholders, are essential
because this establishes the framework within which the Issuer’s businesses operate.
U.S. electricity transmission
The transmission activities of each of the Issuer’s public utilities is re
g
ulated by the relevant state utility commission in the
states in which the Issuer operates (includin
g
New York, Massachusetts, Rhode Island, Vermont, and New Hampshire) and by
the FERC.
In relation to electricity transmission, the FERC, amon
g
st other thin
g
s, sets service standards for the transmission business of
the Issuer’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).
U.S. Gas Distribution
The Issuer’s gas distribution activities through the Issuer’s various operatin
g
subsidiaries, includin
g
Nia
g
ara Mohawk Power
Corporation, The Narra
g
ansett Electric Issuer, as well as those entities recently acquired throu
g
h the acquisition of KeySpan,
includin
g
The Boston Gas Issuer, The Essex Gas Issuer, the Colonial Gas Issuer, Ener
g
yNorth Natural Gas, Inc., The Brooklyn
Union Gas Issuer d/b/a KeySpan Ener
g
y Delivery New York and KeySpan Gas East Corporation d/b/a KeySpan Ener
g
y
Delivery Lon
g
Island, are re
g
ulated by the relevant state utility commissions in the states in which each such subsidiary
operates.
In relation to National Grid USA’s
g
as distribution activities, the various state utility commissions, amon
g
st other thin
g
s, set
distribution service standards for the jurisdictional public utilities, set retail rates for end use customers, and determine the
public utility potential levels of return on distribution service.
U.S. Electricity Distribution
The electricity distribution activities through the Issuer’s various operatin
g
subsidiaries are re
g
ulated by the relevant state utility
commission in the states in which the Issuer operates.
As with the Issuer’s
g
as distribution activity, the various state utility commissions, amon
g
st other thin
g
s: (i) set distribution
service standards and retail rates for end use customers; and (ii) determine the potential levels of return on distribution service.
However, FERC regulates wholesale electricity sales by us, to the extent that any sales are made.
The following is a brief overview of the description of the various rate plans in effect in the various states in which the Issuer’s
subsidiaries operate:
59