National Grid has ploughed a record of almost £2bn into its booming US-based business this year as increasing political pressure raises questions over the multinational’s future in the UK.
The energy network provider spent nearly £1.6bn growing its regulated US business over the first six months of the year, and also invested £200m into its US-based renewables company Geronimo.
Over the same period, National Grid spent less than £650m running the gas and electricity networks in the UK, where policymakers are squeezing energy company profits and proposals to renationalise utilities have won public support.
The London-listed company has built its US presence in recent years amid growing calls for UK utilities to be renationalised. It distributes gas and electricity to businesses and homes in New York, Rhode Island and Massachusetts.
John Pettigrew, National Grid’s chief executive, said the record spending was in response to strong demand from north-eastern US states to transform their energy system to run on renewables. There was also healthy investor appetite for infrastructure projects, he said.
The US business helped drive National Grid’s underlying operating profits to £1.3bn for the first half of the year. In the UK, profits from its electricity networks rose by 5% to £583m, while profits from its gas grid business fell by more than a quarter to £66m. In the US, underlying operating profits rose 16% from the year before to £525m.
National Grid has had disputes with regulators on both sides of the Atlantic in 2019. The company is under investigation for its role in Britain’s biggest blackout in a decade after 1 million people in England were left without electricity in August. The inquiry has piled pressure on National Grid in the run-up to the general election, which could lead to renationalisation of energy networks if the Labour party comes to power.
National Grid’s long-running gas dispute with regulators in the US peaked this week after the New York governor, Andrew Cuomo, threatened to strip the company of its licence to operate in parts of the city.
The company has refused to connect new customers to the gas grid in Brooklyn, Queens and parts of Long Island after regulators ruled out a $1bn (£776m) gas pipeline for the city.
Pettrigrew said National Grid had been working tirelessly to solve the dispute since it made the difficult decision to put a moratorium on new gas connections. He said he was confident the company could deliver a solution to the regulatory impasse within days.
