Metering

November 2012
® National Grid provides metering services to gas suppliers
including the provision and maintenance of domestic and nondomestic gas meters through its subsidiary, National Grid
Metering
® We own approximately 15 million gas meters throughout
Great Britain
® The prices National Grid can charge for certain metering services
are capped by Ofgem, with price caps adjusted each year with
inflation
® Regulated meter asset population gradually declining due to
competition
Metering
Investor Relations | National Grid
Metering
National Grid is the largest owner of domestic gas meters in
the UK optimising our portfolio and operations to maximise the
cash generation potential of our asset base.
Our metering asset base includes:
® Over 13m domestic credit meters
® 1.4m domestic prepayment meters
® 0.4m non domestic meters
Our activities
Our activities broadly cover the following areas:
® Asset procurement and logistics management
® Meter installation and maintenance
Regulated metering charges
® Exchange and removal
® Customer service provision
We provide metering services to all GB gas suppliers. These
include meter provision and maintenance, and ad hoc services
including engineer hire and meter removals.
Under our licence, we have an obligation to offer certain
metering services to all gas suppliers. The prices for some of
these services are capped by Ofgem. Charges for other
services are uncapped, but regulated through a nondiscrimination clause in our licence.
Maximum prices for certain National Grid Metering services
were set in March 2002 and increased each year with RPI
inflation. Prices are set at 1 April each year based on the
previous year’s prices and average year on year inflation from
the previous June to November:
£ per annum or per job
Provide, install and maintain domestic credit meter
Provide, install and maintain prepayment meter
Domestic credit to prepayment meter exchange
Daily meter (DM) reading
2012/13
16.07p.a.
37.49p.a.
£65.73
£485.77
Metering Contracts
We currently offer two types of domestic metering contracts:
New and replacement metering service agreement (N&R
MSA) contracts
Covering meters that have been installed since 2004 in
properties supplied by a supplier who is party to a New &
Replacement metering contracts.
Regulated contracts
Covering 12 million meters installed before 2004 plus any
installed since 2004 which are not governed by N&R MSA
Number of domestic meters
Rental charged at tariff cap rates
Early termination charges on removal
National Grid Metering conducted a price consultation in
Autum 2012 and will make proposals to Ofgem in December
2012 for revised tariff caps.
More information on our metering charges can be found at:
http://www.nationalgrid.com/uk/Metering/Publications/Metering+Charges/
N&R MSA contract
Regulated contract
3 million
Lower rates apply
Yes
12 million
Yes
No
Throughout 2012 National Grid has continued to engage gas suppliers in commercial discussions on a new alternative Legacy
MSA contract offering a discounted rental. Ofgem confirmed that this revised form of contract with early termination charges
complies with competition law.
Metering
Performance in 2011/12
Key financials
£m
2009/10
2010/11
2011/12
Total revenues
328
310
320
Operating profit (excluding exceptional items)
148
136
162
Depreciation
102
105
94
Capital expenditure
65
54
48
Closing number of domestic meters (millions)
16
15
15
Metering operating profit in 2011/12
benefited from the switch to higher priced
regulatory contracts for the majority of our
meters.
The rate of decline of the meter
population decreased, supporting
increased cash flow generation.
Capital investment principally related to
customer requested exchanges, and the
replacement of faulty or inaccurate
meters.
Smart metering
The Department for Energy and Climate Change has mandated that suppliers should provide smart meters to all domestic gas and
electricity customers by end 2019
® National Grid’s domestic gas meters are not suitable for conversion to DECC’s proposed smart functionality
® We have no smart meter offering for domestic customers at the current time
® We have no licence obligation to provide smart meters
As a result our domestic meter population would be expected to reduce as these traditional meters are replaced with smart meters
New & Replacement MSA meters replaced early as part of smart roll out would be subject to an early termination charge to
suppliers.
The price control review takes into account the anticipated early replacement of domestic meters and recognises the accelerated
depreciation.
National Grid owned a separate, competitive gas and electricity metering business, Onstream. This business included a smart
meter solution. Onstream was sold in 2011.
Our aim is to deliver a high quality, value for money service to our customers
Further information
John Dawson
Director of Investor Relations
T +44 (0)20 7004 3170
M +44 (0)7810 831944
[email protected]
Andy Mead
Senior Investor Relations Officer
T +44 (0)20 7004 3166
M +44 (0)7752 890787
[email protected]
Iwan Hughes
Investor Relations Officer, UK
T +44 (0)20 7004 3169
M +44 (0)7900 405898
[email protected]
George Laskaris
US Investor Relations Director
T +1 718 403 2526
M +1 917 375 0989
[email protected]
Victoria Davies
Investor Relations Officer, UK
T +44 (0)20 7004 3171
M +44 (0)7771 973447
[email protected]
Tom Hull
Investor Relations Analyst
T +44 (0)20 7004 3172
M +44 (0)7890 534833
[email protected]
National Grid plc
1 –3 Strand
London WC2N 5EH
United Kingdom
www.nationalgrid.com