National Grid press release:
WALTHAM, Mass., January 31, 2011 -– National Grid (LSE:NG; NYSE:NGG) today committed to improve its U.S. performance by announcing a sweeping business restructure that will create a more locally focused organization led by regional presidents responsible for understanding and meeting the needs of customers, communities and regulators in each state or jurisdiction where the company operates.
The new structure also will enable National Grid to streamline many customer-facing processes and procedures, thereby improving customers’ interactions with the company while maintaining safe and reliable service.
National Grid’s new U.S. structure will transition to a more state-focused management from the existing global line-of-business organization, established in 2007, and aligned to the company’s three core international businesses: electricity distribution and generation, natural gas distribution, and electricity and gas transmission.
In the new structure, Tom King, president, National Grid U.S., will assume responsibility for all U.S. business segments.
New regional presidents have also been appointed for Massachusetts, New York, Rhode Island/New Hampshire, and for managing the company’s relationships with the Federal Energy Regulatory Commission, and with Long Island Power Authority (LIPA) where National Grid manages the electricity transmission and distribution system on Long Island on behalf of LIPA.
The new regional presidents are: Marcy Reed, Massachusetts; Kenneth Daly, New York; Timothy Horan, Rhode Island/New Hampshire; John Bruckner, Long Island; and Peter Flynn, FERC Regulated Businesses. Biographies of these executives are included at the end of this document.
The regional Presidents will assume responsibility for their respective jurisdictions and deliver focused regional business plans that respond to their stakeholders’ expectations and needs. They will work closely with other U.S. senior managers across National Grid responsible for operations, network strategy, customer service, regulatory affairs and areas such as fleet, property and materials.
“We are fundamentally changing the way we run our U.S. business to better serve our customers, meet our regulatory obligations and improve our financial performance,” King said. “We are creating a more efficient, locally focused organization that can live within the financial means allowed by our regulators. King continued, “By driving our operational and customer-facing functions to serve the needs of our unique U.S. jurisdictions, we expect to deliver to our customers and regulators the benefits of a business that is local in focus and global in scope.”
National Grid is expects to reduce its costs by approximately $200 million with the new structure, primarily through the reduction of approximately 1,200 positions in the U.S.
“The decision to reduce our U.S. workforce is a very difficult one,” King commented. “But we must ensure we are working within our financial means and focusing on the things that really matter to our customers and regulators.” He concluded, “Right now, we are using more resources than our revenues can support, and that is simply no longer sustainable.”
The new organization takes effect in April. The staffing process will occur during the next several months and will be completed this summer. Employees not selected for a position will be eligible for a severance package.
National Grid is an international energy delivery company. In the U.S., National Grid delivers electricity to approximately 3.3 million customers in Massachusetts, New Hampshire, New York and Rhode Island, and manages the electricity network on Long Island under an agreement with the Long Island Power Authority (LIPA). It is the largest distributor of natural gas in the northeastern U.S., serving approximately 3.4 million customers in Massachusetts, New Hampshire, New York and Rhode Island. National Grid also owns over 4,000 megawatts of contracted electricity generation that provides power to over one million LIPA customers.