National Grid Share Discussion Threads

[redartbmud] 02/8/2018 08:10

Only part of the scenario.
They have very large borrowings.
In the UK regulated business, to fund capital expenditure and large ongoing maintenance programmes, the have a capital formula that allows a margin over the cost of borrowing, so they are 'protected' against interest rate movements.
The US regulator also makes allowances for energy supply companies to build and run the network.

[atlantic57] 02/8/2018 07:45

Is it to simplistic to consider rising interest rates are effecting Ng

[redartbmud] 01/8/2018 21:10

Make no mistake, the Regulator, on direct instruction from the Government, "has his foot on the neck of" NG. As Obama said about BP.
They are pushing on with the Hinkley-Seabank project (HSB)without agreed terms because they have no choice but to deliver ion the contract, however the Regulator will decide them retrospectively. How can an honest business operate like that.
Utilities are now devalued off balance sheet assets of Government.

[encarter] 01/8/2018 20:09

Market crash looming with Brexit. Any excuse to pillage the market. Time to go to cash imho.

[beckers2008] 01/8/2018 19:29

timmy11,

Slowly but very surely they are selling out of the UK and have been for at least 2 years now, by that I mean the minimum investment required to keep the regulator happy. It is commonly known that UK provides 3 - 5% and USA 7 - 9% return on investment, that is why at least 60% and growing of NG. business is in the USA, every spare £ is being invested in the USA.
Not sure why the Ofgem announcement was any surprise, they what NG. to work for them.
NG, will only do the bare regulated minimum and don't be surprised if they don't tender for the other parts, much bigger fish to fry in USA!

[doggle] 01/8/2018 16:48

HI uty - Yeh I dont usually go in for but after seeing this I also agree with Newbank- What an arrogant pillock! Typical just pass the buck to the other guys instead of answering straight questions
The guy who did raise it slightly at the end of his question about flogging the gas business and asked if the US lockout situation was anything to do with the recent share price drop - All he said was NO - thats it! Of course it is - And probably the main reason at the Mo! Last month we were having a nice ride upwards when they announced the UK redundancies and looked like - Great they are scaling down in the UK and concentrating on the US as a Marx Brothers hedge - But think about it - Now the Politicians are getting involved in the dispute and as soon as it becomes common knowledge that NG is actually A British Company that is dictating to American workers that they can whistle for their healthcare - Ooops

[timmy11] 01/8/2018 15:55

ng should sell out of u.k. and invest all proceeds in the u.s.a

[newbank] 01/8/2018 14:09

Uty,

Gershon, the Chairman looks arrogant and is dismissive to any suggestions. Makes you wonder what he gets paid for and why he gets a bonus.

You don't need any political issues to destroy the share price, just keep on employing this lot.

Ask yourself a question about how forward looking and proactive the National Grid Board are.

Andrew Bonfield, stated that he was leaving months ago and they haven't got anywhere nearer to replacing him.

Complacency is the name of the game with our Board now, they turn up show their face and get paid irrespective of performance.

[utyinv] 01/8/2018 13:39

doggle,

Nope! Have a look at the webcast on the NG site.

[utyinv] 01/8/2018 12:37

Someone is forcing this lower. Probably due to the terrible AGM.

They talk about how great the Company has done over the last year, what projects have come on line and how rosy the future is yet the share price falls. Isn’t the AGM for shareholder interests? What are Shareholders generally interested in? Answer, How their investments are doing and the prospects for the future. Yet during the whole presentation they failed to correlate how these great capital investment projects will create a greater return in both capital and dividend income.

If you own a factory and decide to invest by expanding you do not do so to keep the status quo. You expect bigger profits. Yet in National Grids case the share price falls. So there are questions that need addressing, and unless investors get an inflation busting return then investment is better channelled elsewhere.

[bountyhunter] 30/7/2018 22:31

"The Digital Risk & Security (DR&S) department are a critical department in National Grid that ensures all systems remain safe and secure. As cyber security is a fast growing area, the team are constantly working to prevent cyber-attacks on our critical systems, be that in house or working with other companies and governments. The team lead the cyber-security and risk management for all gas and electric transmission in UK and beyond."

[bountyhunter] 30/7/2018 22:27

I would have thought that NG could well be a special case given it's unique position re the country's energy infrastructure.

I'm pretty sure that alarm bells would ring in Government if for example a Russian company were to put in a bid for the National Grid.

[m100] 30/7/2018 22:23

I can't see 'the government' being bothered at all about the ultimate ownership of anything. The separation of sys ops is just one more step on the path to the ownership model long adopted by the DNO's, water companies and the gas networks.

[bountyhunter] 30/7/2018 20:52

Would the government stand by and allow that to happen? It could be seen as a threat to National Security if ownership of NG was to go abroad.

[m100] 30/7/2018 20:19

"Ofgem estimates the price controls will save customers over 5.0 billion pounds"

Circa 350TWh of electricity supplied per annum, retailing at upwards of 10p /kWh, i.e. it's around a 35 billion pound market

It all depends who OFGEM actually consider 'consumers' but presumably the £5bn is over a five year control period so £1bn/annum is a 2.8% 'saving' or for someone using say 3000kWh per annum, maybe 10 quid off their bills

Now lets look at the breakdown of an electricity bill



Wholesale costs 36.30%
Network costs 27.59%
Environmental and social obligation costs 14.79%
Other direct costs 1.19%
Operating costs 16.46%
Supplier pre-tax margin -1.09%
VAT 4.76%

But it's clearly alright by OFGEM if the NG shareholders get screwed by £1bn per annum as long as we're all paying that 14.79% as a massive subsidy (over £161/MWh)to operators of intermittent undispatchable wind turbines and over £500/MWh to early solar panel installers

Plus everyone. regardless of if they have smart meters fitted or not, will pay via increased charges on their bills over the coming years some £400/household and that according to the latest announcement will somehow 'save' us all £11 per annum.

Other than disconnecting and going offgrid there is no way to opt-out of any of these charges.

One thing I regret is topping up my holding with the special divi, I certainly won't be using either the scrip or divi reinvest in future. In recent times I get the feeling someone really desperately wants NG at a rock bottom price so it is ripe for a takeover by a teachers pension fund or a Sovereign Wealth Fund.

[bountyhunter] 30/7/2018 20:12

Agree entirely UI.

[utyinv] 30/7/2018 18:49

Bounty,

I wish NG wouldn’t just roll over to the whims of OFGEM all the time.

They should say let someone else take the risk and hassle for the paultry reward on offer. Reward < Risk on this project.

NG is not a Charity.

[bountyhunter] 30/7/2018 18:22

exactly, especially when restricted to a 3-5% cost of equity range in a rising interest rate environment

[whitestone] 30/7/2018 15:18

See your point but isn’t the future threat the thing though?

“The regulator said it will extend the scope for opening up network upgrades to competition in the next price-control period, and will subject network companies' spending plans to open hearings.”

Who else potentially will carry out these upgrades. Indeed who would want to….

[bountyhunter] 30/7/2018 13:19

>> Ofgem said it has confirmed that National Grid can build the grid upgrade to connect the new Hinkley Point C nuclear power station in Somerset, England.

That's very nice of them, they would be stuck if they didn't say that! It's not as if they had a cheaper option or indeed any other option.

[whitestone] 30/7/2018 11:22

Is the share price drop due to this confirmation of the 3-5% cost of equity range?

Since this was already known and little movement expected, I would have thought, this does seem a bit OTT…






“Ofgem Confirms Price Controls; Approves National Grid's Nuclear-Plant Upgrade

30/07/2018 8:06am
Dow Jones News

By Adam Clark

The U.K.'s energy regulator Ofgem said Monday that it has confirmed its proposed price controls for energy networks from 2021 onward, and that it has approved National Grid PLC's (NG.LN) upgrade plans for the Hinkley Point C nuclear power station.

Ofgem said there is no change to the proposed 3% to 5% cost of equity range, which represents the amount companies can pay their shareholders. The cost of equity is currently set at 6% to 7%. However, Ofgem said the default length of the price controls from 2021 will be five years, compared with eight years currently. Ofgem estimates the price controls will save customers over 5.0 billion pounds ($6.56 billion).

The regulator said it will extend the scope for opening up network upgrades to competition in the next price-control period, and will subject network companies' spending plans to open hearings.

Ofgem said it has confirmed that National Grid can build the grid upgrade to connect the new Hinkley Point C nuclear power station in Somerset, England. However, Ofgem said it will set the revenue which National Grid can earn from the upgrade, based in part on its experience of competition for offshore wind-farm tenders.

National Grid said in response that the decision doesn't affect its plans for the upgrade. National Grid said the project is expected to cost a total of GBP650 million, with the majority of the spending incurred in the price-control period from April 2021 onward.”

[dr biotech] 30/7/2018 09:36

Doesn’t actually say what the unions are demanding or that NG is not allowed to benefit from the tax cut etc. Interesting post though

[bountyhunter] 26/7/2018 22:33

I don't agree with your views for reasons I've already explained so I'll leave it at that, other than to say that the NG share price is low at the moment as with other utilities for political reasons already discussed at length on this thread.