It's not gridlock but a lock on the Grid that is a good thing for National Grid. It is the sole owner and operator of the electricity transmission system in England and Wales. It transmits electricity through about 4,500 miles of overhead and underground lines to distribution utilities serving more than 52 million people. National Grid also operates the UK natural gas transmission and distribution system (serving 11 million homes and businesses) through its National Grid Gas subsidiary. However, it is the company's Northeastern US gas distribution and power generation, transmission, and distribution operations, led by National Grid USA, that bring in the bulk of the company's revenues.
In the US the company distributes power to about 3.3 million customers in Massachusetts, New Hampshire, New York, and Rhode Island, and natural gas to 3.4 million clients in those states. It also manages the electricity distribution network in Long Island.
The company's long-term strategy is to focus on large-scale power and gas systems in the UK and the US and to better integrate its various operations. In 2010 a National Grid and TenneT joint venture began laying the first section of a high-voltage cable that will link the power grids in the UK and the Netherlands, bolstering power supply in both countries. The project, due for completion by 2012, will help the companies meet environmental goals by facilitating power flows from low-carbon generation plants.
With an eye on meeting ambitious European Union goals for carbon emission reductions, in 2009 National Grid released a report that by 2020 half of the UK's heating needs could be provided by biogas (converted from sewage and injected into the national gas distribution system), compensating for a decline in North Sea gas supply. In 2010 the company had one renewable gas plant under development in the US and two in the UK.
The company reported a major jump in revenues and income in 2010, primarily driven by a rebounding economy (prompting increased demand for power and gas) and by improved rates in the US market. Revenues grew by 40% in 2011 and net income by 30%, thanks to strong demand and higher prices in the UK and increased rates in the US.
In 2011 National Grid announced plans to save $200 million in a restructuring of its US operations, including cutting 1,200 jobs. Late in 2011 the company sold the Seneca-Upshur Petroleum subsidiary for approximately $152 million. The deal is a further move to return to core business operations in gas and electricity distribution. That year it also agreed to sell its non-regulated metering business in the UK (Onstream), to Macquarie Bank for about $440 million.