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Non–regulated Businesses and other

Performance during the year

About the business

Our Non-regulated Businesses and other operations are located in the UK. For reporting purposes, they are not treated as a segment, but are instead reported within other activities.

The external and regulatory environments in which our Non-regulated Businesses and other operations operate are described in External market environment and Regulation, our business drivers are described in Business drivers and our objectives and strategy are set out in Objectives and strategy. Further information relevant to an understanding of our Non-regulated Businesses and other operations is included below:

Metering	National Grid Metering and OnStream provide installation, maintenance and meter reading services to gas and electricity suppliers in the regulated and unregulated markets. Our metering businesses provide services on behalf of gas suppliers for an asset base of over 20 million domestic, industrial and commercial meters.
Grain LNG	National Grid Grain LNG is the first new liquefied natural gas (LNG) import terminal constructed in the UK for some 30 years, involving planned investment of approximately £522 million for Phases I and II.
Property	National Grid Property is responsible for managing all our major occupied properties in the UK, and for the management, clean up and disposal of surplus properties, largely comprising former gas works.
Advantica	Advantica is a consultancy providing engineering and software services to enhance safety in the gas, oil, electricity and water sectors, primarily in the UK, US and the Middle East.
Fulcrum Connections	Fulcrum Connections is the leading provider of gas connections and associated design services operating across Great Britain.
Corporate activities	This includes corporate overheads that are not borne by individual businesses, and expenditure incurred on business development.

The majority of our Non-regulated Businesses and other operations either operate in markets related to those of our principal businesses or provide support to our own businesses.

With the exception of National Grid Metering, our Non-regulated Businesses and other operations are only indirectly affected by the relevant regulatory regimes. National Grid Metering is regulated by Ofgem as it was the incumbent provider of meters to gas suppliers and retains a large share of the legacy installed base of gas meters in Great Britain. It is subject to price controls, although the pricing for the majority of meters is instead specified by long-term contracts which provide gas suppliers with the flexibility to replace our meters while reducing the risk of asset stranding.

OnStream is a participant in the competitive market that now exists in the provision of new meters to gas and electricity suppliers who wish to install or replace meters as required.

Grain LNG has been granted exemptions by Ofgem from the regulated third party access provisions for both Phase I and Phase II of the development. These exemptions introduced certain obligations to put in place effective measures to allow third parties to access unused capacity and are similar in nature to those in place at other new gas supply infrastructure projects in the UK.

Further information on the principal business drivers for our Non-regulated Businesses and other operations includes the following:

Multi-year contractual arrangements	The majority of National Grid Metering’s domestic meters are covered by long-term contracts with gas suppliers. OnStream has a five year contract with Centrica for the provision of gas and electricity meters. Phase I of Grain LNG is underpinned by a longterm contract with BP/Sonatrach. Similarly, Phase II, currently under construction, is underpinned by longterm contracts signed with Centrica, Gaz de France and Sonatrach.
Competition	OnStream, Advantica and Fulcrum Connections operate in competitive markets and their revenues are therefore determined by how successful they are in obtaining business from customers.
Capital investment	We are investing to grow our metering businesses and in infrastructure projects such as Grain LNG.
Efficiency	Efficiency in delivering capital programmes and in operating our businesses and corporate activities results in driving improved financial performance.

Non-regulated Businesses

Map showing locations of National Grid metering and OnStream operations throughout the UK as well as Grain LNG and the main property sites.

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