National Grid Share Discussion Threads

[mark1000] 07/12/2020 02:51

I think the share price has been hit by the perfect storm the pending OFGEM decision gives a huge amount of uncertainty and the market hates uncertainty. The Covid vacine has lifted most boats with a number of blue chips offering dividends over 6% with them not only being maintainable but also with decent growth prospects in a post Covid world. The rarity of NG in a pre-vacine world for being one of the few Companies able not only to pay large dividends but to grow them has gone. On top of this the exchange rate has moved 5% to 10% against the USD to Gbp making the earnings lower in GBP translation. I also read an article that said OFGEM wanted to fine NG 200M for sending them a below standard Business plan but because of a Cap on fines they could only fine 90M (approx). I believe the article said NG are appealing but clearly there seems a poisonous relationship and adds another reason why the shares seem quite high risk when their appeal should be relatively low risk. Reports covering the forced break up of NG forced the Fool into advising folk to sell NG in the last few days having been a firm supporter of the share. As I said its been a perfect storm the shares fallen 10% made worse by the market going up 10%.

Things could recover quickly a half decent settlement and a clear out of the OFGEM staff may be Rob Hull could be good with an EMU hand puppet or am I getting confused with someone else.

[dickiehh] 05/12/2020 19:43

Ofgem decision is this week, Tuesday. Be interesting to see if they blink knowing that CMA threat is very real

[newbank] 05/12/2020 17:27

Its all a bit clandestine with Ofgem too.

Rob Hull who works for OFGEM on National Grid's review is an ex National Grid senior manager who failed to get a top position in National Grid. Now works for OFGEM in helping to screw National Grid. Do some research, his departure from National Grid makes a clear correlation to the stance he takes on anything that affects National Grid. I wouldn't have thought an ex employee would have been allowed to work on the deliberations of National Grid's review, especially when it could be construed that his opinions might be affected by his view of leaving National Grid.

[newbank] 05/12/2020 17:17

Uty,

Your characterisation of Gershon is absolutely spot on. He has utter contempt for Investors and Business, but that doesn't stop him getting freebee shares from National Grid.
Absolute hypocrite. He has refused to consider suggestions that would benefit Shareholders, customers and the company as a whole.

Not going till after the next AGM I am afraid, long enough to cause so much damage that Grid might not be able to recover. Gershon or should I say Sir Peter Gershon, has been offered sweeteners working for the Government as a special advisor.

[utyinv] 05/12/2020 16:46

Beckers2008,

I have (although this year’s AGM was a virtual one).

In answer to your question, re: OFGEM and actions demanded by shareholders if OFGEM refuses to compromise; JP certainly does. It’s been spelt out to him in clear language, challenge in court and if then if not successful sell to overseas companies and see what victory Ofgem are faced with if NG ( a good well run company ) is replaced with say the Chinese.

The biggest obstacle to NG standing up for a level playing field has been Peter Gershon (Chairman), thank goodness he is leaving, but not soon enough.

He is an extremely arrogant little man.

[beckers2008] 05/12/2020 15:16

Long term holder here and disappointed with share price action over the last few years, but the divi is good!
I haven't managed to get to any of the AGM's as out of the country for most of the year, has anyone on this BB attended and if so does JP realise the strength of feeling regarding OFGEM and the desire to sell the affected UK business?
If NG. did 'get out of OFGEM's clutches then the share price would move significantly higher imo.

[mark1000] 05/12/2020 11:29

Thanks Newbank post 7508

[lennonsalive] 04/12/2020 23:16

Yup, it's always been the same threat with OFGEM. NG. Isn't a charity, it's a profit making business

[utyinv] 04/12/2020 18:06

That 16:30hrs drop is becoming a norm clearly indicating someone is trying to manipulate the markets, probably Yanks.

Would love it if Ofgem’s final decision catches some of the hedging shysters out. Failing that, NG coming good on their intention to take Ofgem to court if Ofgem don’t relent on their draconian proposals made last summer.

Analysts are saying that the U.K. stock is grossly undervalued. This is the epitome of the uneven business playing field Ofgem's takes on how they expect the utility businesses to operate, expecting NG to be happy with a ROE of 3%, despite the risks of borrowing and all other risks etc. This in contrast to the 9% the US regulator allows. BTW the US regulator in the US north east are Democrat based.

Ofgem even have the cheek to suggest that profits from the USA business should subsidise the U.K. business. NG is NOT a charity and yes joe public say they weren’t responsible for Covid-19 and neither the fault of Government, but it certainly ain’t the fault of NG, so stop expecting NG to be a charity.

Too many people fail to appreciate the fact that whilst many of the U.K. workforce were at home receiving 80-100% of pay, furloughed, the Engineers at NG were working 24/7 as essential workers.

Too many people fail to appreciate the fact that when they switch the light switch on or switch the gas on, the energy is there keeping us in light and keeping us warm. They only fully appreciate the service when there is a threat of it not being there.

Nothing in life is free.

[newbank] 04/12/2020 17:26

Mark1000,

if I am not mistaken I think it is 21st Dec or there about. Happy to be corrected.

[mark1000] 03/12/2020 16:15

can anyone tell me the date of the OFGEM decision I seem to recall mid December but can anyone be more precise?

[mirandaj] 30/11/2020 14:24

U.K. regulator Ofgem said Monday that it has awarded five gas-and-power network innovation projects with 57.6 million pounds ($76.7 million).

The price-winners include two projects by National Grid PLC to test the introduction of hydrogen in the company's gas transmission network, and to upgrade electricity-transmission towers to carry more power and avoid the construction of new lines. The hydrogen test facility received GBP9.1 million and the project to increase line voltage was awarded GBP8.1 million.

Scotland Gas Networks, UK Power Networks and Electricity North West are the other companies that were also awarded.

"[The projects] will play a vital role as part of [the U.K.] government's ambitions for climate action and a green economic recovery, supporting jobs, growth and decarbonization across the whole country," David Smith, chief executive of the Energy Networks Association, said.

Ofgem said it will introduce further innovation funding as part of the RIIO-2 price control framework, which will run from 2021 through to 2026. A final decision on RIIO-2 is expected in December.

[pander45] 29/11/2020 20:29

Oh and anything in the 800s worth a top up imho.

[pander45] 29/11/2020 20:27

There's nothing to get worried about here as NG hold the better hand of cards, plain and simple. Hence the robust challenge to Ofgem. Questor article is a lightweight so I won't be losing sleep over that.

[utyinv] 29/11/2020 18:31

NG share price always falls after the interim ex-divi date. Let’s see the price when it approaches May. I may be wrong, but I expect that if Ofgem don’t come back to NG to make the next price control (RIIO II) more workable then NG will not only challenge this in court but also make moves to sell the U.K. business and Boris’s multi Billion pound green energy ambition could be put at risk. Final deliberation from Ofgem should be published in December.

[utyinv] 29/11/2020 18:11

Unastubbs,

Questor is trying to ramp a fund and stand by its decision to sell NG.

There is no mention of the fact that 51% of the business is outside U.K’s regulatory control. No mention that the unlicensed business includes Geronimo a company that will exploit new energy business in the US inc electric car charging.
No mention of the fact that NG hold 50% of all interconnections to the U.K.
No mention that NG has already considered and hasn’t discounted it in the future, to sell the U.K. business.

I will be surprised to learn if Ofgem do not change from their draconian initial proposal in July to something more acceptable.
NG has already ring-fenced the SO under a different business stream with its own BoDs. Talks are ongoing between the Gov and NG to provide sweeteners if this part of NG was brought under Gov control.Only a small step between hiving off this business which brings in very little profit but much attention whenever there is the prospect of a Labour Gov.
National Grid are also in the energy storage business and removing the SO from the parent company will remove any Criticism that NGSO favour NG above other competitors.
Its fair to mention also that the original article written in Questor was written by Mould an investment manager who works for AJBell. Does he have an agenda, I wonder?

[unastubbs] 28/11/2020 17:05

27 Nov 2020

Questor says: sell National Grid, buy Gore Street Energy Storage

National Grid had seemed the perfect income stock: its customers have no choice but to use its infrastructure and the stable revenue streams that result should likewise result in stable dividends for us.

That’s the theory. In reality the firm is subject to outside forces such as regulators and politicians. Neither put the needs of income investors at the top of their priority list.

Grid is heavily controlled in terms of the returns it is allowed to make and there are fears that a new regime to be announced by regulators next month will give it even less room for manoeuvre.

The danger, Questor believes, is that too strict a regime will lead to either an imminent dividend cut (very bad) or a more rapid rise in the company’s debts as it maintains a divi unsupported by its profits (hardly less bad in the long term).

We have therefore decided to bite the bullet before the new regulatory regime is announced and sell Grid now, even at the price of a 17pc loss. What will replace it?

National Grid is, as we said, a monopoly so there are no similar London-listed stocks we can buy; neither in all probability would we want to. But we have found something that is also part of the electricity supply network – indeed it is a supplier to National Grid itself – but avoids, we think, the risk of regulatory interference.

This stock is the Gore Street Energy Storage Fund, whose assets are, in essence, hi-tech batteries that can store large amounts of electrical energy.

It enters into contracts, via auction, with National Grid and its Irish equivalent; under these contracts it helps the grids to balance supply and demand by storing excess electricity generated elsewhere or by supplying it when there is not enough being provided by other generators. These contracts reap regular fixed sums irrespective of how much Gore Street’s assets are used by the grids.

It could also make money opportunistically by buying electricity when it’s cheap, perhaps at night, and selling it at a profit later when demand is higher. However, all of its money is currently made from those contracts with the grids, which are of course a more reliable source, not least because some last six years.

The fund has been growing steadily since it listed in May 2018 – it started with two energy storage units and now has 14 – and the potential is clear: the supply of electricity to the grid is becoming more unpredictable as more is generated by sun and wind, and less by coal and gas, while demand for electricity is also becoming more unpredictable because of the rise of electric vehicles.

The need for dedicated “bufferingR21; services along the lines of Gore Street’s is clear and seems only likely to grow as renewables and electric vehicles alike become more prevalent.

Currently the fund focuses on Britain and Ireland but is pursuing further opportunities in Western Europe and America. Its pipeline of planned expansion will almost triple the storage capacity of its assets. It is able to borrow or “gear” up to 15pc of its asset value but has not used any gearing so far.

The fund targets a dividend of at least 7p a share. It hit the target in the full year to March and is off to a good start in the current year with a 2p payment last month. At the current share price of 106p, a 7p divi represents a yield of 6.6pc. As this is higher than Grid’s current yield of 5.5pc, our portfolio will get an income boost from the switch.

In detail, our stake in Grid is worth £19,100. Reinvesting that sum in Gore Street will get us 18,019 shares, which if we get the 7p divi will mean annual income of £1,261. In the past year Grid has paid 49p in divis, or a total of £1,062 on our stake.

This boost comes despite the fact that Gore Street trades at a premium of 10.2pc to its most recent net asset value of 96.2p. We will tolerate this premium in view of the generous income and the dividend resilience we expect.

[minerve 2] 27/11/2020 16:43

UtyINV

"I take on board your view which I respect. BTW politically, I am more Centre, if that makes any sense."

I actually see myself slightly right of centre but other posters on ADVFN like to label me otherwise.

At least we agree we want a better outcome for NG from the regulator.

Currently not holding NG but may add soon.

Keep safe. :)

[minerve 2] 27/11/2020 16:37

Sept

Care to expand a bit on your opinion? Why is it "looney-left"?

[septimus quaid] 27/11/2020 16:24

Minerve 2, only to say you're missing the point a bit because most of your electric bill is made up of generation costs and that really is in loony-left territory.

[utyinv] 27/11/2020 16:02

Minerve 2


I take on board your view which I respect. BTW politically, I am more Centre, if that makes any sense.

Thanks for your best wishes regarding having a good weekend, I hope you have a good weekend too👍

[minerve 2] 27/11/2020 15:07

UtyINV

Poor post for you, I'm afraid.

You have no proof of what is driving Ofgem and you are letting your biased political opinions cloud your judgement.

All because people want to be seen to be 'playing fair' to all stakeholders doesn't make them communists or fully-fledged socialists. Perhaps people just want to be 'fair' and want to make sure there is full accountability in all that we do.

As a consumer, if I am going to pay a utility bill, I would like to think that it isn't going to go into the back pocket of a few individuals like it has been for some of the water utilities for decades. I would like to think that some of that money is reinvested properly in infrastructure.

Let Ofgem do their job. If they come back with a poor offer then as investors, and as a company, we can choose whether that fits in with our expectations. If it doesn't, we move on.

You are almost completely forgetting that not only are we investors, we are also consumers and taxpayers, and so are the rest of your family. As investors we are not a charity, but equally neither are consumers nor are tax-payers.

Have a good weekend.

[1carus] 27/11/2020 13:58

Sell it and list in america might be nice!

[utyinv] 26/11/2020 18:25

These are oversold IMO

Too many analysts spouting about a subject matter that has no basis other than to justify their ‘Short’.

I would happily get rid of the SO element, as it only brings in £70 mil of profit out of the £2.2 billion across the group. Having the SO is a liability too. Any Mal-Op can result in a fine up to 10% of turnover (£1billion).

Gov has said they would pay shareholders handsomely to bring the SO under Gov control. Let em have it I say.

Once NG are free of any threat like this they will rocket.

If Ofgem threaten NG with draconian price controls, NG should challenge them in the courts. If they lose, they should wash their hands of the U.K. business and sell up. NG is not a Charity they are a well run Private Company. See what the U.K. will get if the Chinese own it

Too many at Ofgem are bitter socialists. This is clearly evident when listening to comments where some have said in 1990 a utility paid shareholders a bonus. To comment about something that occurred 30 years ago (it wasn’t NG), speaks volumes of the bitterness that some old gits have because they missed out on the privatisation era.

What happened 30 years ago with Powergen is nothing to do with NG and we live in a different world today and if Ofgem can’t see it NG should concentrate on businesses that operates outside Ofgem’s regulatory control.

NG is NOT a charity and if joe public want a reliable energy system that comes at a cost. Nothing in life is free.

[minerve 2] 26/11/2020 11:51

I agree. Let the fools get on with it. You can't do good business with bad people.