Modification of National Grid Gas plc National Transmission System’s gas transporter licence to add dormant back stop meter provider of last resort obligations

Publication date
6th July 2016
Information types
Policy areas

On 10 November 2015 National Grid plc (NG) announced the commencement of a process for the intended sale of a majority stake in its gas distribution network (GDN) business. The first stage of this process (referred to as hive across) is for National Grid Gas (NGG) to transfer its gas distribution assets and licence to a wholly owned subsidiary company of NG (NewCo).

We have decided to modify National Grid Gas (NGG)’s gas transporter licence held in respect of the National Transmission System (NTS) to include dormant back stop meter provider of last resort (BMPOLR) obligations. This follows our statutory consultation on proposed new standard special conditions and special conditions in NGG (NTS)’s gas transporter licence.

These obligations will provide us with the power to maintain certain obligations on NGG in the event that the transfer of assets and licence to a subsidiary company of NG were to occur. Such a transfer is anticipated in preparation for National Grid’s proposed sale of a majority of the shares in that new company. The relevant obligations will ensure NGG remains the BMPOLR, an obligation which it currently has through its distribution licence.

The changes will take effect on 1 September 2016 subject to any appeal of our decision to modify NGG (NTS)’s gas transporter licence.

Should NGG (DN) receive the relevant consents to transfer its gas distribution business from NGG (DN) to a subsidiary company of NG in preparation of a majority share sale, we will issue a direction to activate the BMPOLR obligations in NGG (NTS)’s gas transporter licence after it is in effect.