Beware the “vision” and “values” of National Grid plc
20 November 2010
What stirring news it has been that the National Grid has performed spectacularly well this year, posting a mind-boggling 45 per cent increase in its pre-tax profits for the first six months of this year. The impression in some quarters has been that it as if a great British institution – the National Health, say, or the National Trust – has defied the recession for the greater good of the nation.
Sadly, this is a neat marketing con. National Grid UK is a private company. It is as money-minded and expansionist as any vast and powerful corporation could be. The company likes to boast, in standard corporate-speak, of its brand – “We’ve got our vision. We’ve got our values. And now we’ve got a brand position that pulls it all together” etc etc etc – but it behaves in the normal, sharp-elbowed fashion of big business.
Its vision would appear to include nifty footwork over expenses. A couple of months ago the attorney-general of Massachusetts alleged that private executive costs, including the transportation of a pet cat, were being heaped on consumers. As the Daily Telegraph reported:
“Liberty Consulting Group, which is based in Pennsylvania, will examine how National Grid accounts for expatriate costs.The UK company faced public anger over its operation in Massachusetts, where it serves almost one million customers.
It announced it wanted to put up rates by just over $100m and then faced criticism when the state’s attorney general, Martha Coakley, alleged that expenses National Grid was trying to pass on to customers included a $35,700 tuition bill for an executive’s children and $1,200 for shipping a wine collection and a pet cat.”
As for values, there was the small matter two years ago of a £41.6 million fine by Ofgem for “a serious breach of competition law. As the Ofgem chairman Sir John Mogg put it:
“National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers.”
All this is significant because the National Grid cannily plays up to the illusion that it is beneficent national institution by repeatedly urging the government to reform the energy market and electricity generation on the grounds of national interest, energy security and climate change.
A vast programme of pylon-building is being planned – developments which would change the face of the landscape forever. When the argument is put in favour of underground cabling, the answer is always the same: it is too expensive.
When National Grid plc next pleads poverty, it is worth remembering that this is the company which between January and June 2010 made a pre-tax profit of a cool £938 million.