Trading Statement

National Grid Group PLC
4 October 2001

               National Grid Group close period trading update

                  for the six months ended 30 September 2001

National Grid Group plc (National Grid) is today issuing its normal close
period trading statement prior to the announcement of its interim financial
results on Tuesday 20 November 2001.

Key Points:


  * UK and US electricity businesses performing in line with expectations

  * Niagara Mohawk acquisition on track

  * Latin American telecoms businesses impacted by market conditions

Electricity

All of National Grid's electricity businesses are performing in line with
expectations. In the UK, transmission price-controlled revenues will be
slightly higher than last year reflecting the effect of the new price control
which commenced on 1 April this year. Controllable costs will be some 3 per
cent lower than last year in real terms. As expected, income from the UK
interconnectors will be significantly lower following the introduction of the
capacity auction arrangements for the French interconnector.

In the US, revenues are in line with expectations, as are reductions in
controllable costs. Improvements in distribution operating profits will be
offset by lower profits from stranded cost recovery due to a one-off rate
settlement benefit last year of £12 million.

Niagara Mohawk

We are making good progress on receiving regulatory approvals and planning the
integration for the acquisition of Niagara Mohawk, which is on schedule for
completion shortly after this calendar year end.

Telecommunications

Intelig is expected to deliver strong operating performance with sales up over
30 per cent compared to the first half of last year. Our share of operating
losses will be down significantly to under £30 million, with further
improvements expected in the second half. However, the completion of permanent
vendor financing is proving very difficult. In Argentina, Silica launched
services into a very challenging economic climate. Against this background,
the Company is reviewing its options for these ventures with its partners.

Other items

Net debt levels are flat compared with year end. Net interest costs will be
approximately £70 million higher than the corresponding period last year
largely as a result of our share of higher interest costs within our joint
ventures, principally Intelig (£40 million), and a one-off interest benefit
included last year (£17 million).

 Stephen Box

Stephen Box, Group Finance Director, recently underwent surgery and is now
convalescing. During Stephen's recuperation, Michael Jesanis, Chief Operating
Officer (and previously Chief Financial Officer) of National Grid USA, has
temporarily relocated to London to support Stephen.

Contacts

National Grid Group [phone]

Michael Jesanis

Investor Relations

Marcy Reed      [phone]   [phone](m)

Terry McCormick [phone]   [phone](m)

Karen Shih [phone]

Corporate Affairs

Sue Stevens      [phone]   [phone](m)

Clive Hawkins    [phone]      [phone](m)

Citigate Dewe Rogerson  [phone]

Anthony Carlisle [phone](m)