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U.K. energy regulator Ofgem proposed Wednesday to reduce return on equity allowances for Britain's electricity distribution companies for the 2023-28 regulatory period to 4.75% from 6%-6.4% for the current five-year period, which ends next year, and a weighted average cost of capital allowance of 3.26% for most companies.
The regulator proposed a total spending package of £20.9B (~$25.5B), including £2.7B in upfront funding, to be split across the six applicable companies, including National Grid's (NYSE:NGG) Western Power Distribution, which it acquired last year.
National Grid (NGG) shares closed +1% in London on Wednesday, and are up by roughly the same percentage in U.S. trading.
The other five U.K. distributors are Electricity North West, UK Power Networks, Northern Powergrid, SP Energy Networks and Scottish & Southern Electricity Networks.
RBC utilities analyst John Musk said he regards the proposals as a slight positive for the companies, as expectations were for similar total expenditure and return on equity of ~4.6%.
Ofgem said it is "proposing tough efficiency targets for the networks along with a sharp reduction in their allowed rate of return, meaning less of consumers' money goes to company profits," adding that most consumers could see a small drop in network charges.
The regulator will hold consultations on the proposed plan until August 25 with a final decision to be confirmed in December.
National Grid (NGG) is a "solid utility but [with] limited upside," Retirement Pot writes in a bearish analysis newly published on Seeking Alpha.
MNny, The windfall tax will not apply here.Imv investors see this company as a bond proxy and as bond prices fall this falls . simple really.
profit taking i bought at 810 and sold at 1210 plus had some dividends so for a ft100 stock that is good enough for me nothing keeps rising forever.
Any idea why sp has dropped this much? The windfall tax will be on all energy Co's but this keeps dropping
National Grid
NG.
Share Price 7 Day 1 Year
11.21 -8.6% 16.7%
Now 20% undervalued
The stock has been flat over the last 90 days.
The fair value is estimated to be UK£14.10, however this is not to be taken as a buy recommendation but rather should be used as a guide only.
Revenue has grown by 5.5% over the last 3 years. Earnings per share has grown by 9.3%.
For the next 3 years, revenue is forecast to grow by 1.1% per annum. Earnings is also forecast to grow by 3.8% per annum over the same time period.
View Company Report
we know that a drop of a pound + is a bit much
Ex dividend today
THIS has dropped a bit to much now, going below a joke
Great results - already priced in?
Denby, I used the term 'the control room' as i thought you were unfamiliar with the business .
Ref compensation I believe I have read a comment from JP saying the business will be suitably compensated.
You would expect that the company would receive some financial compensation for the nationalised division.
My interpretation is that NG are glad to be relieved of the responsibilities in brought and are free to pursue their new strategies and business acquired in the Midlands.
if the govt goes ahead with this what effect will it have on our s.p ?
Taverham ,
THE control room that is the wrong statement as there is 3 control rooms so if one gets boomed or sabotaged ANOTHER control center in this country I have worked in all 3 centers :-)
Denby, the bit being hived off is the 'system operator part' i.e the control room, the assets are remaining within grid - no big deal.
looks like we are going to be bought by the government Boris to report to morrow said on sky what about us and our shares ??
https://www.nationalgrid.com/gt-announcement
Thoughts?
£9.6bn seems like a good price, circa $13bn which seems higher than initially thought/forecast.
Sale of St. William share of joint venture with Berkeley Group.
This would appear to boost the coffers to the tune of £270m from now till 2025, and a further £270m upto 2031.
Small potatos in the scheme of things, and they probably have a home for the funds in mind.
Its holding fairly steady considering, I'm glad to hold this type of stock in my portfolio in times like these.
... is looking a bit like Nessie.
And I am sure this is a positive thing...
I understand Gemany now categorizes gas as green. Possibly because of the hydrogen technology moving at a pace.
Or possibly because a lot of their power stations burn lignite.
https://www.theguardian.com/world/ng-interactive/2020/jun/01/climate-protesters-german-village-coal-still-king
1200p is coming. Another week of this is all we need. Putin will double down, again.
...to generate all that electricity you'll still need gas fired power stations...
...and gas can/will be supplemented by hydrogen...
...if you completely replace gas, the equivalent requirement for electricity generation will be ~4x what it is now...
...so we can't ditch gas just yet....;-)
Is This a good thing?
Gas hobs are being fazed out for electric induction hobs.
Central heating boilers are also starting to be fazed out with induction heating starting to become more popular.
In 10 years what will we actually want Natural gas for?
I dont know but long term why do we even want it.
DYOR
If mc quarry is buying up billions worth of NGG assets , then how come the share price is staying flat?
It seems like GSK have the same experience.. no big rise in the sp.
Is this inertia down to a lack of ability of the BoD to do anything? Or is it the rule that the UK institutions just sit by and wait for a competing better offer to arrive ?