National Grid PLC Black Start Contracts (8435H)
August 23 2016 - 2:00AM
UK Regulatory
TIDMNG.
RNS Number : 8435H
National Grid PLC
23 August 2016
23 August 2016
Black Start Contracts
Ofgem has announced its response to the Proposed Income
Adjusting Event filed by National Grid in May 2016 for the recovery
of up to GBP113 million of additional costs in order to contract
Black Start capability with Drax and Fiddler's Ferry and meet its
obligations across the country.
The result of Ofgem's decision is that National Grid will
recover GBP95 million of the additional costs, and the Group's
exposure is limited to a maximum of GBP18 million. This reflects
full recovery of the Fiddler's Ferry contract and recovery of 70%
of the Drax contract, after applying the sharing mechanism.
National Grid is disappointed with Ofgem's decision regarding
the Drax contract as it believes the costs could not have been
reasonably foreseen.
In 2015/16 the Balancing Services Incentive Scheme (BSIS)
contributed GBP27 million in profit before tax, and the GBP18
million impact will be set against any BSIS out performance in the
current year.
CONTACTS
Investors:
+44 (0)20
Aarti Singhal 7004 3170
Media
+44 (0)19
Gemma Stokes 2665 5272
+44 (0)20
Sean Kemp 7004 3149
Brunswick
+44 (0)20
Tom Burns 7404 5959
+44 (0)20
Mike Smith 7396 3540
CAUTIONARY STATEMENT
This announcement contains certain statements that are neither
reported financial results nor other historical information. These
statements are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These
statements include information with respect to National Grid's
financial condition, its results of operations and businesses,
strategy, plans and objectives. Words such as 'anticipates',
'expects', 'should', 'intends', 'plans', 'believes', 'outlook',
'seeks', 'estimates', 'targets', 'may', 'will', 'continue',
'project' and similar expressions, as well as statements in the
future tense, identify forward-looking statements. These
forward-looking statements are not guarantees of National Grid's
future performance and are subject to assumptions, risks and
uncertainties that could cause actual future results to differ
materially from those expressed in or implied by such
forward-looking statements. Many of these assumptions, risks and
uncertainties relate to factors that are beyond National Grid's
ability to control or estimate precisely, such as changes in laws
or regulations, announcements from and decisions by governmental
bodies or regulators (including the timeliness of consents for
construction projects); the timing of construction and delivery by
third parties of new generation projects requiring connection;
breaches of, or changes in, environmental, climate change and
health and safety laws or regulations, including breaches or other
incidents arising from the potentially harmful nature of its
activities; network failure or interruption, the inability to carry
out critical non network operations and damage to infrastructure,
due to adverse weather conditions including the impact of major
storms as well as the results of climate change, due to
counterparties being unable to deliver physical commodities, or due
to the failure of or unauthorised access to or deliberate breaches
of National Grid's IT systems and supporting technology;
performance against regulatory targets and standards and against
National Grid's peers with the aim of delivering stakeholder
expectations regarding costs and efficiency savings, including
those related to investment programmes and internal transformation
and remediation plans; and customers and counterparties (including
financial institutions) failing to perform their obligations to the
Company. Other factors that could cause actual results to differ
materially from those described in this announcement include
fluctuations in exchange rates, interest rates and commodity price
indices; restrictions and conditions (including filing
requirements) in National Grid's borrowing and debt arrangements,
funding costs and access to financing; regulatory requirements for
the Company to maintain financial resources in certain parts of its
business and restrictions on some subsidiaries' transactions such
as paying dividends, lending or levying charges; inflation or
deflation; the delayed timing of recoveries and payments in
National Grid's regulated businesses and whether aspects of its
activities are contestable; the funding requirements and
performance of National Grid's pension schemes and other
post-retirement benefit schemes; the failure to attract, train or
retain employees with the necessary competencies, including
leadership skills, and any significant disputes arising with the
National Grid's employees or the breach of laws or regulations by
its employees; and the failure to respond to market developments,
including competition for onshore transmission, the treats and
opportunities presented by emerging technology, development
activities relating to changes in the energy mix and the
integration of distributed energy resources, and the need to grow
the Company's business to deliver its strategy, as well as
incorrect or unforeseen assumptions or conclusions (including
unanticipated costs and liabilities) relating to business
development activity, including assumptions in connection with
joint ventures. For further details regarding these and other
assumptions, risks and uncertainties that may impact National Grid,
please read the Strategic Report section and the 'Risk factors' on
pages 183 to 186 of National Grid's most recent Annual Report and
Accounts. In addition, new factors emerge from time to time and
National Grid cannot assess the potential impact of any such factor
on its activities or the extent to which any factor, or combination
of factors, may cause actual future results to differ materially
from those contained in any forward-looking statement. Except as
may be required by law or regulation, the Company undertakes no
obligation to update any of its forward-looking statements, which
speak only as of the date of this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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