National Grid (NG)

NATIONAL GRID (NG)

[Alison is dressed as God with a long white beard and kaftan]
Voice:
And God said, let there be light…
[Alison points her finger and a low energy light bulb slowly splutters into life]
Alison:
(Sighs) Things just aren’t the same since they invented the low energy light bulb.

Main:
Behind every electric light and every gas ring in the UK stands National Grid - one of those rare companies which actually does what it says on the tin.
It owns and maintains the complex transmission lines – the grid which connects Britain’s homes and businesses to power.
The company’s distribution network delivers gas to 11 million UK customers.
It also distributes electricity to 3.3 million people in the northeast of the US and gas to half a million customers in upstate New York.
Investors got a shock last year, though, – ouch – when National Grid unveiled a deeply discounted rights issue to raise £3.2 billion.
The money is funding a £19 billion investment programme to deliver an energy supply that’s more secure and has a smaller carbon footprint.
The government is committed to cutting carbon emissions by 80% by 2050 and National Grid’s daunting task is to upgrade our ageing power supply assets.
Renewable energy is very much on the agenda and part of the money being invested by the company - £3.6 billion alone this year - will ensure green energy supplies can get to consumers.
In this industry, the regulatory environment can sometimes prove a headache, although it can also provide much needed visibility.
National Grid has just submitted its business plans to regulator Ofgem to agree price controls for April 2013 to March 2021.
Management believes the new regulatory regime will provide significant growth opportunities.
Meanwhile full year profits for 2011 were healthy, if not electrifying, up 20% to £2.4 billion.
Net debt has also fallen to £18.7 billion following the rights issue.
And, while the US business has been disappointing, National Grid is on track to generate savings there of £125 million by March 2012.
Utilities are known for their healthy dividend yields and National Grid is no exception.
Analysts forecast a yield of 6.6% for 2012, which should provide income-seeking investors with a pleasant buzz.
Now that’s what I call cooking with gas.