National Grid 2015 Annual Report Download - page 196

Additional Information
Definitions and glossary of terms continued
regulatory asset value (RAV)
The value ascribed by Ofgem to the capital employed in the
relevant licensed business. It is an estimate of the initial market
value of the regulated asset base at privatisation, plus subsequent
allowed additions at historical cost, less the deduction of annual
regulatory depreciation. Deductions are also made to reflect the
value realised from the disposal of certain assets that formed part
of the regulatory asset base. It is also indexed to the RPI to allow
forthe effects of inflation.
return on capital employed (RoCE)
The return on capital employed metric is designed to give an
alternative comparison between the UK and US businesses
showing the overall return on capital provided by both debt and
equity. The calculation reflects regulatory treatments of costs.
return on equity (RoE)
A performance metric measuring returns from the investment of
shareholders’ funds. It is a financial ratio of a measure of earnings
divided by an equity base.
revenue decoupling
Revenue decoupling is the term given to the elimination of the
dependency of a utility’s revenue on the volume of gas or electricity
transported. The purpose of decoupling is to eliminate the
disincentive a utility otherwise has to encourage energy efficiency
programmes.
RIIO
The revised regulatory framework issued by Ofgem which was
implemented in the eight year price controls which started on
1April 2013.
RIPUC
The Rhode Island Public Utilities Commission.
route length
The route length of an electricity transmission line is the
geographical distance from the start tower to the end tower.
Inmost cases in the UK, and in many cases in the US, the
transmission line consists of a double circuit for additional reliability.
In such cases, the circuit length is twice the route length.
RPI
The UK retail price index as published by the Office for
NationalStatistics.
S
Scope 1 greenhouse gas emissions
Scope 1 emissions are direct greenhouse gas emissions that
occurfrom sources that are owned or controlled by the Company,
for example, emissions from combustion in owned or controlled
boilers, furnaces, vehicles, etc.
Scope 2 greenhouse gas emissions
Scope 2 emissions are greenhouse gas emissions from the
generation of purchased electricity consumed by the Company.
Purchased electricity is defined as electricity that is purchased
orotherwise brought into the organisational boundary of the
Company. Scope 2 emissions physically occur at the facility where
electricity is generated.
N
National Grid Metering (NGM)
National Grid Metering Limited, National Grid’s UK regulated
metering business.
New England
The term refers to a region within the northeastern US that includes
the states of Connecticut, Maine, Massachusetts, New Hampshire,
Rhode Island and Vermont. National Grid’s New England operations
are primarily in the states of Massachusetts and Rhode Island.
northeastern US
The northeastern region of the US, comprising the states of
Connecticut, Maine, Massachusetts, New Hampshire, New Jersey,
New York, Pennsylvania, Rhode Island and Vermont.
NYPSC
The New York Public Service Commission.
O
Ofgem
The UK Office of Gas and Electricity Markets, part of the UK Gas
and Electricity Markets Authority (GEMA), which regulates the
energy markets in the UK.
ordinary shares
Voting shares entitling the holder to part ownership of a company.
Also known as common stock. National Grid’s ordinary shares
have a nominal value of 1117∕43 pence.
P
price control
The mechanism by which Ofgem sets restrictions on the amounts
of revenue we are allowed to collect from customers in our UK
businesses. The allowed revenues are intended to cover efficiently
incurred operational expenditure, capital expenditure and financing
costs, including a return on equity invested.
PSA
The 15 year power supply agreement with LIPA which came into
effect on 28 May 2013, under which the Company supplies
electricity to communities and businesses across Long Island.
R
rate base
The base investment on which the utility is authorised to earn
acash return. It includes the original cost of facilities, minus
depreciation, an allowance for working capital and other accounts.
rate plan
The term given to the mechanism by which a US utility regulator sets
terms and conditions for utility service including, in particular, tariffs
and rate schedules. The term can mean a multi-year plan that is
approved for a specified period, or an order approving tariffs and rate
schedules that remain in effect until changed as a result of future
regulatory proceedings. Such proceedings can be commenced
through a filing by the utility or on the regulator’s own initiative.
regulated controllable operating costs
Total operating costs under IFRS less depreciation and certain
regulatory costs where, under our regulatory agreements,
mechanisms are in place to recover such costs in current
orfutureperiods.
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