National Grid plc is a British multinational electricity and gas utility company headquartered in London, England. Its principal activities are in Great Britain, where it owns and operates electricity and natural gas transmission networks, and in the Northeastern United States, where as well as operating transmission networks, the company produces and supplies electricity and gas, providing both to customers in New York and Massachusetts. National Grid plc is one of the largest investor-owned utility companies in the world; it has a primary listing on the London Stock Exchange where it is a constituent of the FTSE 100 Index, and a secondary listing in the form of its American depositary receipts on the New York Stock Exchange.
History
Background (CEGB before 1990)
Before 1990, both the generation and transmission activities in England and Wales were under the responsibility of the Central Electricity Generating Board (CEGB). The present electricity market in the United Kingdom was built upon the breakup of the CEGB into four separate companies in the 1990s. Its generation (or upstream) activities were transferred to three generating companies — PowerGen, National Power, and Nuclear Electric (later British Energy, eventually EDF Energy)—and its transmission (or downstream) activities to the National Grid Company.
National Grid and acquisitions (1990–1999) In 1990, the transmission activities of the CEGB were transferred to the National Grid Company plc, which was owned by the twelve regional electricity companies (RECs) through a holding company, National Grid Group plc. The company was first listed on the London Stock Exchange in December 1995.
Expansion and consolidation (2000–2015) With the beginning of the new millennium, National Grid pursued mergers and international acquisitions. In March 2000, National Grid Group acquired United States companies New England Electric System and Eastern Utilities Associates. In January 2002, National Grid Group acquired Niagara Mohawk Power Corporation, a New York State utility. In October 2002, National Grid Group merged with Lattice Group, owner of the Transco gas distribution business (Lattice had demerged from BG Group in 2000). National Grid Group changed its name to National Grid Transco plc. It sold the telecoms business 186K Ltd. which was acquired as part of the merger with Lattice Group for a nominal £1 to Hutchison Whampoa in December 2002. In 2004, the company was found liable for a gas explosion in Transco plc v HM Advocate and subsequently fined £15 million. In August 2004, National Grid Transco agreed to sell four of its regional gas distribution networks for a total cash consideration of £5.8 billion. NGT kept ownership of four other distribution networks, which make up almost half of Great Britain's gas distribution network. In July 2005, National Grid Transco was renamed National Grid plc. On 26 July 2005, National Grid Company was renamed National Grid Electricity Transmission plc, and on 10 October 2005, Transco was renamed National Grid Gas plc. In February 2006, National Grid announced that it had agreed to buy KeySpan Corporation, a gas distributor and electricity producer in the United States, for $7.3bn (£4.1bn) in cash. Around the same time, National Grid also announced the acquisition of New England Gas Company, a Rhode Island subsidiary of Southern Union Company. The acquisitions of the two natural gas delivery companies doubled the size of National Grid's American subsidiary, creating the second largest utility in the United States with more than 8 million customers. The acquisition of KeySpan was completed on 24 August 2007, following government and regulatory approval and endorsement by the shareholders of the two companies. In May 2007, National Grid formed a joint venture with the Dutch transmission operator TenneT for a 260-kilometre (160 mi) 1,000 MW BritNed DC link between the Isle of Grain in Kent and Maasvlakte, near Rotterdam. The installation of the first section of cable link started on 11 September 2009, and the entire 260 km (160 mi) cable was completed in October 2010. The interconnection became operational on 1 April 2011, and by January 2012, electricity flow had mostly been from the Netherlands to the United Kingdom. The BritNed interconnection would serve as a vital link for the foreseeable European super grid project. In the spring of 2011, National Grid sold off its services in New Hampshire, after their request to increase gas and electric rates was denied.
2015–2021 In November 2015, it was announced that Steve Holliday, the CEO for ten years, would step down in March 2016 and that John Pettigrew, its executive director who joined National Grid in 1991, would succeed him. In June 2016, the Energy Select Committee argued that the company faced too many conflicts of interest, particularly with regard to its ownership of international interconnectors. The committee proposed that the company should be split up. In December 2016, National Grid agreed to sell a 61 per cent stake in its gas distribution business to a consortium of Macquarie Infrastructure and Real Assets, Allianz Capital Partners, Hermes Investment Management, CIC Capital Corporation, Qatar Investment Authority, Dalmore Capital and Amber Infrastructure Limited, with a further 14% stake under negotiation. The sale was completed on 31 March 2017, following clearance by the European Commission, and the resulting company was named Cadent Gas. National Grid disposed of its remaining 39% holding in Cadent Gas in June 2019. In July 2019, National Grid's Electricity System Operator arm, separately from its Electricity Transmission arm, announced its intent to join the Powering Past Coal Alliance, furthering its goal of becoming a zero carbon electricity system by 2025. At the time of its announcement, National Grid was the largest energy company based in the United Kingdom to join the alliance, according to publicly available financial figures of 2018. Later in the year, the company moved ownership of its operations in the United Kingdom to Luxembourg and Hong Kong, to protect itself from Labour's nationalisation plans. A spokesman said, "Labour's proposals for state ownership of National Grid would be highly detrimental to millions of ordinary people who either hold shares in the company or through their pension funds." The Labour Party said the "rip off" move showed the grid needed to be in public hands.
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