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After several months of careful review, the National Grid executive team introduced in November a strategy aimed at making National Grid a more focused, more integrated and more financially disciplined company. The new strategy will position the company for further growth.

“We’re not talking about a major change,” said new Chief Executive Steve Holliday. “The strategy reinforces our focus on gas and electricity; it is a natural evolution. We need to bring greater clarity to what National Grid stands for and what we are here to do. Our future lies in electricity and gas activities in the U.K. and U.S. markets. These core activities are where we can best continue to create value.”

This tighter focus includes National Grid demerging or spinning off the Wireless operations and selling Basslink in Australia.

After the close of the KeySpan deal, National Grid will be roughly half in the U.K. and half in the U.S., and will be roughly half electricity and half gas.

“All of National Grid’s lines of business – gas distribution, electricity distribution and generation, electricity transmission, and nonregulated and business development – will have a strong representation in the U.S.,” explained Cheryl LaFleur, acting head of Electricity Distribution. “We look forward to a tighter integration of processes and systems across the lines of business – U.S. and U.K. – to allow us to learn from each other and better serve our customers.”

In becoming more integrated, National Grid will organize around lines of business, with a strong local presence to manage customer and community needs.

“Providing safe, efficient, reliable and responsible service to customers continues to be our primary concern wherever we operate,” stressed LaFleur.

The strategy will focus on opportunities to grow through investment in infrastructure, acquiring new customers, efficiency savings and through acquisitions. To achieve these growth objectives, National Grid will foster a high-performance culture with strong financial discipline and clear performance targets.

The following individuals will make up National Grid’s executive team. (See PDF version for full listing)

SIDE BAR 1

Key Elements of National Grid’s New Corporate Strategy

• Business focus on gas and electricity
• Grow existing businesses organically
• Continue to grow through acquisition
• Geographic focus on U.K. and U.S.
• Demerge Wireless operations and exit Basslink
• Operate under global lines of business with locally managed customer functions
• Foster a high-performance culture
• Maintain an efficient financial balance sheet

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Managing Change: Resilience Training Offered to Employees

National Grid and KeySpan are committed to helping employees deal with the changes that will occur over the next several months as preparations for combining the two companies post-merger continue.

“To help employees manage personal needs, as well as to help our managers help their employees through the various changes and uncertainties, we’ve partnered with Lee Hecht Harrison, a global leader in career management, to conduct resilience seminars,” said Ruth Bramson, senior vice president, Human Resources. “The half-day programs – one for all employees and another specifically for managers – will demonstrate the importance of resilience in today’s changing world and provide employees and managers with ideas for specific actions they might take to enhance their coping strategies and effectiveness.”

Employees who participate in the program will learn how to take time out for themselves, how to develop an action plan for dealing with change, and will have the opportunity to talk with others and share their experiences.

The voluntary program will be offered in early 2007. More information will be provided once the seminar dates are scheduled.