National Grid 2014 Annual Report Download - page 7

Strategic Report Corporate Governance Financial Statements Additional Information
produced, they have necessitated significant
additional cost.
Overall, the business remains on track to
successfully conclude the programme during 2014,
with expected costs unchanged from the guidance
provided last year.
We have focused on improving our end-to-end
operating processes throughout the year. This has
involved using hard facts and data to identify and
prioritise areas for improvement, as well as
harnessing ideas to help find more efficient ways
ofworking to meet our stakeholders’ needs.
An area we know we can improve is customer
service. We saw some good results such as
reduced complaints in the UK and our scores for
UKGas Transmission, as well as increases in three
out of our four US customer satisfaction scores.
However, we know that we are not fully meeting our
customers’ expectations for our gas connections
process in the UK and US. We will stay focused on
getting this right.
In the US, we supply gas and electricity to
customers who have chosen us as their supplier.
Our regulatory agreements allow us to recover the
costs we incur when we buy gas and electricity.
During 2013/14 we saw an increase in complaints
about higher energy bills – a consequence of the
colder weather affecting commodity costs during
the winter.
Energy prices have been the subject of a continued
high-profile debate in the UK. At National Grid, we
believe transparency is crucial, explaining to
customers the breakdown of the bill they receive.
Inthe UK, we are investing significantly in our UK
networks, but the impact of network costs on bills
will remain flat in real terms over the RIIO period
(2013/14 – 2020/21), based on the forecast revenues
derived from Ofgem’s Final Proposals for RIIO.
In terms of our UK network upgrade plans, we are
pleased with progress on the London Power Tunnels
project and have now started site works on the
HVDC link connecting Scotland and England.
Thisjoint venture with SP Transmission will support
the export of low carbon Scottish generation.
In the US, our Brooklyn/Queens Interconnect project
will connect our existing natural gas distribution
systems in Brooklyn and Queens, which will ensure
greater reliability and safety, provide additional
capacity and meet future energy needs for
customers. This is the first new gas pipeline
tobeinstalled in the area in 50years.
We are determined to embed sustainability
byseeking to combine innovation, engagement
andefficiency – an example of which was a trial
inthe UK, working with manufacturers, construction
partners and our procurement teams to
re-manufacture aluminium overhead line conductors.
People
I was really pleased to see that the results of our
2014 employee opinion survey, completed by 78%
of our employees, included an engagement score
of71% – an increase of eight percentage points
overthe previous survey and our highest
engagement score since we started conducting
Group-wide employee opinion surveys.
I was also pleased to attend a series of celebrations
to mark 40 years’ service for more than 300 of our
employees in both the UK and US. I am delighted
thatso many of our people have forged productive
and committed careers at National Grid that have
spanned such a long time. Yet at the same time,
itserves as a reminder about the scale of the
challenge we have in our industry to make sure we
have enough people with the skills and experience
we need in the future.
It is a significant challenge on both sides of the
Atlantic. In the UK, for example, around 89,000
people are needed annually to meet demand in the
UK’s engineering sector over the next decade. Yet
only around 51,000 are joining the profession each
year. In the US, by 2018, STEM occupations will
account for about 1.1 million new jobs and 1.3 million
replacement positions due to STEM workers leaving
the workforce.
To help address this shortage, National Grid is
running, or is involved with, a number of
programmes and initiatives in the UK and US aimed
at encouraging young people to study STEM
subjects – you can read more about these initiatives
on page 40.
Our priorities for next year
• Safety – build on our strong UK performance
andfocus our efforts on delivering consistent
world-class safety performance across the
organisation;
• Customer-focused execution – in the UK,
continue our strong start to RIIO; underpin energy
security through our interconnector and
infrastructure investment strategy. In the US,
complete stabilisation of our enterprise resource
system; perform strongly against our current
regulatory rate plans while shaping the future; and
• Stakeholders – continue to engage with our
stakeholders in the US, UK and EU to
understandtheir changing energy needs and
toshape energy policy.
Steve Holliday
Principal operations
pages 29 – 39
People
pages 40 – 41
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