Member Article

National Grid profits ride the storm

National grid plc has announced a 15% rise in pretax profits in the aftermath of superstorm Sandy, which hit the East Coast of America two weeks ago.

The company said it expects to incur restoration expenses of no more than £100m as a result of the hurricane which devastated the city of New York with damage and flooding.

National Grid said it was following recommendations from its review of restoration processes made after two storms in 2011.

Chief Executive, Steve Holliday, said: “Our teams in the US responded in a timely, safe and effective way to restore service to our customers and limit disruption caused by ‘Superstorm’ Sandy.”

Objectives to recover damaged areas in Upstate New York, Rhode Island and Massachusetts have been met or exceeded, and the firm said it would not suffer too much as a result of costs, although profit rises dropped from 21% to 15% including storm costs.

Capital investment rose by 23% to £1.8bn in the last six months after significant rises in investment in the company’s UK Transmission business.

The organisation also announced that processes to conform with Ofgem’s recently introduced RIIO model (Revenue= Incentives + Innovation + Outputs) were in their final stages.

Ofgem’s regulations hope to create a transparent framework that provides consumers with good value for money, and offers stakeholders timely incentives.

The RIIO model also aims to enable National Grid’s networks to finance the infrastructure needed to bolster and uplight the UK economy.

Mr Holliday continued: “In the UK, as we work through the final stages of Ofgem’s RIIO process, our focus is on successfully implementing a number of RIIO readiness initiatives, led by the ongoing development of our new UK operating model.

“I am pleased with the progress we made in the first half of the year: operating our networks safely and reliably and delivering a record level of investment.

“This good first half year performance reflects increased net regulated revenues driven by our growing asset base and tight control over operating cost growth. Increased investment in both our UK and US operations is in line with our forecast.”

This was posted in Bdaily's Members' News section by Miranda Dobson .