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National Grid understands anger after Superstorm Sandy blackouts

Source: Thomson Reuters Foundation - Thu, 15 Nov 2012 11:50 GMT
Author: Reuters
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* H1 pretax profit 1.15 bln stg vs 953 mln stg last yr

* Restoration costs outside LIPA not to cross 100 mln stg

* Company working to restore all services

* Interim dividend raised 4 percent to 14.49 pence

* Shares down 0.4 percent to 691.5 pence

By Brenton Cordeiro

Nov 15 (Reuters) - Britain's National Grid Plc said it could understand the anger of thousands of U.S. customers still in the dark after Superstorm Sandy and was working to restore all its services on the east coast.

"If you've not had your lights on for two weeks and your home's been destroyed, you're pretty angry," Chief Executive Steve Holliday said on a conference call.

"This damage is extraordinary. So any one of us can completely understand the anger of people, the frustration, the fact that many lives have been destroyed," Holliday said.

National Grid's contract with the Long Island Power Authority (LIPA) to run the day-to-day operations of its electric utility business has put it in the news after more than 90 percent of LIPA's 1.1 million customers lost power due to Sandy.

Some customers are yet to have power restored more than two weeks after the hurricane battered the U.S. east coast.

The company said it continued to work with LIPA to restore services where flood damage and other factors have limited the ability to restore services.

Restoration costs outside the LIPA service area, covering upstate New York, Rhode Island and Massachusetts, were not expected to exceed 100 million pounds (${esc.dollar}158 million).

But that figure is only part of its total possible costs and could anyway rise if claims or actions were brought against National Grid for any delay restoring power.

"We have just completed restoration efforts and we are moving into actual permanent repairs, and our focus has really been on getting the system back up and running," Finance Director Andrew Bonfield said on the call.

"We are not really worried dealing with the finance costs today, we will deal with them in the future."

LONG WAY TO GO

National Grid and LIPA have been hit with a class action lawsuit over allegedly handling power outages negligently.

"The action has only just started so I think we need to wait, there is a long long way to go before any liability associated with that," Bonfield said.

National Grid, which has been running LIPA's transmission and distribution system since buying original operator Keystone in 2007, lost the operating contract for LIPA to New Jersey power company Public Service Enterprise Group Inc last October and is set to hand operations over in 2014.

"Despite clarity on the region outside of Long Island, there will remain some uncertainty over the full extent of the repair costs," Citi analyst Andrew Simms wrote in a note.

Hurricane Irene, which struck the same region in the United States last year, had also hurt National Grid in the first half of last year. The company had recorded 71 million pounds in costs associated with the hurricane during that period.

Britain's biggest energy distributor, which provides gas and electricity transmission and distribution services in Britain and the United States, said pretax profit from continuing operations rose to 1.15 billion pounds in the six months through September.

Profit was boosted by its British transmission business, where operating profit rose 18 percent to 712 million pounds.

Full-year capital expenditure was expected to be between 3.5 billion pounds and 3.8 billion, reflecting increased investment in the British transmission business.

The interim dividend was raised 4 percent to 14.49 pence.

National Grid shares were down 0.4 percent to 691.5 pence at 1003 GMT.

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