We operate within regulated markets and as a result we must ensure our businesses remain compliant with those regulatory and other legal obligations. To manage these risks, we maintain good relationships with our regulators and actively participate in consultations to shaping regulatory environment.

Highlights of 2007

Business Separation Training

A training programme was developed to provide online training to employees on how business separation applies to them. The programme has been integrated into our Academy online system to allow us to monitor training rates more effectively.

Licence Investigation

A successful outcome was reached following the Ofgem investigation into our compliance with its licence obligations in relation to the provision of point of connection information. This information sets out the point at which connections can be made to the distribution network operated by a distribution network operator and the costs associated with making that connection. It was alleged that we were discriminating in the provision of this information.

Whilst Ofgem found that previously we were in breach of its licence obligations, Ofgem accepted that this was the result of safety considerations and not commercial motives. Ofgem also acknowledged that the current policy was fully compliant with the licence requirements and recognised our full co-operation with the investigation. Therefore Ofgem did not consider that it was right to make any financial penalty.

Ofgem's acknowledgement that the current policy is compliant with the licence requirements and the recognition of our full co-operation with its investigation was a fair reflection of the good working relationships enjoyed by ourselves, Ofgem and the independent distribution network operators in its areas. We look forward to building on those relationships in the future.

Successful Competition Commission Appeal

The Competition Commission upheld our appeal against Ofgem's decision to implement a Uniform Network Code Modification. Ofgem had required National Grid to bring forward the proposal as a condition of its sale of four gas distribution networks. The proposal would have radically changed the terms for access to the gas transmission system.

The proposal was widely opposed by gas shippers, generators and other affected customers as well as gas storage and interconnector operators. We felt strongly that money should not be wasted on this unnecessary change and that it was not legitimate for Ofgem to require this reform against a backdrop of near universal opposition from a diverse range of stakeholders. The case was the first to be heard under a new Modification Appeals Procedure introduced in the Energy Act 2004.

Regulation and compliance quote We maintain good relationships with our regulators and actively participate in consultations to shaping regulatory environment.