Business Context and Reporting Period
Company: National Grid plc
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Date: March 2, 2026
Context: The filing announces an extended and upgraded 5-year Financial Framework through FY31 and confirms the acceptance of the RIIO-T3 regulatory price control for the UK Electricity Transmission business (April 2026 to March 2031).
Key Financial Metrics and Investment Plan
- Cumulative Capital Investment: At least £70 billion by FY31.
- Asset Growth: Group asset growth CAGR of approximately 10%, with total assets expected to reach around £115 billion by FY31.
- Earnings Growth: Upgraded underlying earnings per share (EPS) CAGR of 8-10% from an FY26 baseline.
- Dividend Policy: Aim to grow the dividend per share in line with UK CPIH.
- Balance Sheet: Maintained at credit metrics consistent with the current Group rating, supported by significant hybrid capacity.
- Investment Split (Estimated):
- UK Electricity Transmission: c. £31 billion
- New York Regulated: c. £17 billion
- New England Regulated: c. £12 billion
- UK Electricity Distribution: c. £9 billion
- National Grid Ventures: c. £1 billion
Material Changes and Regulatory Developments
- Investment Increase: The new investment plan represents a 70% increase relative to the prior 5-year period. This includes a doubling of investment into UK electricity networks and an almost 50% increase in US gas and electricity networks.
- RIIO-T3 Acceptance: National Grid has accepted the RIIO-T3 price control arrangements proposed by Ofgem. This framework is expected to enable an overall return on equity above 9% for the UK Electricity Transmission business.
- Operational Drivers: Investment is driven by decarbonisation, energy security, accelerating demand from data centres and AI, and industrial electrification.
Guidance, Outlook, and Risks
- FY26 Performance: Remains in line with expectations.
- FY27 Outlook: Underlying EPS growth is expected to be 13-15%, reflecting higher allowed revenue as the company transitions from RIIO-T2 to RIIO-T3.
- Assumptions: Guidance is based on an assumed USD FX rate of $1.35:£1, long-run UK CPIH and US CPI/interest rate assumptions, and a scrip uptake of 25%.
- Risks and Contingencies:
- Regulatory decisions in the UK and US (price controls and rate cases).
- Timing of third-party generation projects and connection delays.
- Climate change impacts, including adverse weather and network failure.
- IT system reliability and cybersecurity threats.
- Fluctuations in exchange rates, interest rates, and commodity prices.
- Pension scheme funding requirements.
Investor Verification Checklist
- Verify the specific regulatory approval status of the RIIO-T3 price control and its impact on allowed revenue.
- Confirm the actual capital expenditure deployment rates against the £70 billion target in upcoming quarterly reports.
- Monitor the realization of the 13-15% underlying EPS growth for FY27.
- Assess the impact of the assumed $1.35:£1 FX rate on reported earnings if actual rates diverge significantly.
- Review progress on the doubling of UK electricity network investment and the 50% increase in US network investment.