Trading Statement

National Grid Group PLC
26 March 2001

National Grid pre-close period trading update for the year ending 31 March
2001

Continued good performance

National Grid Group plc (National Grid) is today starting its usual analyst
briefings ahead of the close period prior to the announcement of results for
the year ending 31 March 2001. The following information will be provided:

Highlights

  * UK transmission operating profits in line with expectations and another
    strong operating performance from the US in line with the first half.
  * Intelig's performance improved: National Grid's share of its operating
    losses for the second half is expected to be less than £55 million.
  * Post-tax exceptional profits for the year expected to be £426 million.
  * The exceptional profits will enable an increase in the cash component of
    the consideration for Niagara Mohawk.

Operating profits of Group undertakings

  * The UK transmission business has continued to trade in line with
    expectations. National Grid USA has maintained the strong level of
    performance it achieved in the first half of the year. As a result, full
    year operating profits for these two businesses are expected to be
    approximately double the operating profits for the first half.

Share of joint ventures' operating results

  * National Grid's share of Intelig's operating losses for the second half
    is expected to be less than £55 million, reflecting the positive actions
    taken during the second half of the year. We expect a further significant
    reduction in Intelig's operating losses in 2001/02, as this year will
    benefit fully from the changes made in recent months and increasing levels
    of data sales.
  * National Grid's share of operating losses of its other start-up telecoms
    ventures (Energis Polska, Silica Networks and Manquehue net) is expected
    to be approximately £6 million for the full year.

Net interest expense

  * Net interest expense for the second half will be about 55 per cent
    higher than the first half, due to:
  * higher average net debt in the second half
  * the benefit in the first half of a £17 million gain on closing out
    sterling fixed-interest rate swaps originally entered into as hedges for
    sterling borrowings
  * the inclusion in the second half of approximately £21 million of losses
    arising from the valuation at maturity of dollar interest rate swaptions
    which provide an economic hedge of dollar borrowings but do not qualify as
    hedges for accounting purposes.

Tax charge

  * As announced at the interim results, the effective tax rate for the year
    on the profit before tax, excluding exceptional items, is expected to be
    26 per cent. The tax charge determined at this rate will be reduced by the
    release of £20 million of tax provisions in respect of prior year
    computations.

Exceptional profits

  * The full year results are expected to include post-tax exceptional
    profits of approximately £426 million net (including £229 million from the
    first half), comprising:
  * profits of £222 million, before and after tax, arising from reductions
    in the Group's interest in Energis, primarily as a result of a placing of
    shares by Energis in September 2000 and the acquisition by Energis of a
    majority stake in Ision in January 2001
  * net profits of £20 million, before and after tax, on the disposal of
    four of National Grid's Market Services businesses
  * US integration costs of £46 million (£50 million before tax)
  * tax credits of £230 million, arising from the realisation of capital
    losses for tax purposes as a result of Group restructurings.

Niagara Mohawk acquisition

  * Approvals have now been received from the Federal Trade Commission and
    Department of Justice under Hart-Scott-Rodino and the New Hampshire Public
    Utilities Commission. We expect to receive all regulatory approvals for
    the acquisition by late 2001.
  * The positive impact of the exceptional profits described above on our
    shareholders' equity, and therefore on our SEC equity capitalisation
    ratio, will enable us to increase the cash component of the consideration
    for the acquisition, should Niagara Mohawk shareholders elect for more
    than the minimum cash provided for in the merger agreement.

Preliminary results

The results for the year ending 31 March 2001 will be announced on 22 May
2001.



Contact

National Grid Group 44 207 312 5781

Stephen Box, Group Finance Director

Jill Sherratt, Investor Relations mobile [phone]

Terry McCormick, Investor Relations mobile [phone]

Karen Shih, Investor Relations US 1 508 389 3176

Susan Stevens, Corporate Affairs mobile [phone]



Citigate Dewe Rogerson 44 207 638 9571

Anthony Carlisle mobile [phone]

Duncan Murray

Sue Pemberton