National Grid 2014 Annual Report Download - page 19

Strategic Report Corporate Governance Financial Statements Additional Information
System operator
As system operator (SO) for England and
Wales, we coordinate and direct electricity
flows onto and over the transmission
system, balancing generation supply and
user demand. Where necessary, we pay
sources of supply and demand to
increase or decrease their generation
orusage.
We have the same role for the two high
voltage electricity transmission networks
in Scotland and we have been appointed
as system operator for the offshore
electricity transmission regime.
Our charges for SO services in the UK
aresubject to a price control approved
byOfgem. System users pay us for
connection, for using the system and
balancing services.
As electricity transmission system
operator, our price control includes
incentives to minimise the costs and
associated risks of balancing the system
through buying and selling energy, as well
as procuring balancing services from
industry participants.
In the US, similar services are provided
byindependent system operators.
99.99999%
Electricity transmission
reliability in England and Wales
Transmission systems generally
include overhead lines, underground
cables and substations. They connect
generation and interconnectors to the
distribution system.
We own and operate the transmission
network in England and Wales. We
operate but do not own the Scottish
networks.
In the US, we jointly own and operate
transmission facilities spanning
upstate New York, Massachusetts,
New Hampshire, Rhode Island
andVermont.
3
US states in which
we distribute electricity
The supply of electricity involves
buying electricity and selling it on to
customers. It also involves customer
services, billing and the collection of
customer accounts.
We do not sell electricity to
consumers in the UK.
With the exception of residential gas
customers in Rhode Island, all our
customers can select a competitive
supplier for the supply component
of electricity and gas utility services.
Where customers choose National
Grid, they pay us for distribution and
electricity costs. Where they choose
to buy electricity from third parties,
they pay us for distribution only
andpay the third-party supplier
forthe electricity.
Our base charges for electricity
supply are calculated to recover
thepurchased power costs.
3.4 million
US electricity customers
Distribution systems carry lower
voltages than transmission systems
over networks of overhead lines,
underground cables and substations.
They take over the role of transporting
electricity from the transmission
network, and deliver it to consumers
at a voltage they can use.
We do not own or operate electricity
distribution networks in the UK.
In the US, our distribution networks
serve around 3.4 million customers
inupstate New York, Massachusetts
and Rhode Island.
Transmission Distribution Supply
For more information on how we make money from our
regulated assets see page 20
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