DIRECTORS’ REMUNERATION IN RESPECT OF SERVICE STANDARDS

2007/2008 AND 2008/2009

NATIONAL GRID ELECTRICITY TRANSMISSION plc

National Grid Electricity Transmission plc is required to give a statement disclosing whether the remuneration of the directors of the company is linked to service standards and, if so, the nature of the linkage.

Directors’ remuneration consists of:

·        Basic salary

·        Performance related annual bonus

·        Long term incentives

·        Pension and other benefits.

Whilst there is no direct link to performance against service standards with basic salary, long term incentives, pension and other benefits, the performance against service standards is reviewed before annual bonuses are decided.

2007/2008

For the year 1 April 2007 to 31 March 2008, the directors of National Grid Electricity Transmission plc were as follows:

Andy Chapman

Malcolm Cooper (appointed 13 July 2007)

Mark Fairbairn (appointed 13 July 2007)

Steve Holliday (resigned 13 July 2007)

Steve Lucas (resigned 13 July 2007)

Nick Winser

For the year 1 April 2007 – 31 March 2008, the Remuneration Committee reserved the right to adjust the annual bonuses of executive directors of National Grid plc, in the light of any significant deterioration in the high levels of service standards set by National Grid Electricity Transmission plc.  Directors of National Grid Electricity Transmission plc during the year who are executive directors of National Grid plc were Mark Fairbairn, Nick Winser, Steve Holliday and Steve Lucas.  This mechanism took the form of an override depending on the nature and extent of any failures to maintain standards in respect of system security and availability.

No adjustments to bonuses of executive directors of National Grid plc were considered necessary by the Remuneration Committee for the performance achieved by National Grid Electricity Transmission plc during that year. Consequently, no adjustments were made to the bonuses of directors of National Grid Electricity Transmission plc who were not executive directors of National Grid plc.

2008/2009

Directors for the current year are unchanged from the previous year, as follows:

Andy Chapman

Malcolm Cooper

Mark Fairbairn

Nick Winser

For the year, 1 April 2008 – 31 March 2009, the Remuneration Committee will review the service standards performance achieved, reserving the right to make adjustments to the bonuses of the executive directors of National Grid plc who are also directors of National Grid Electricity Transmission plc.  They are Mark Fairbairn and Nick Winser. Adjustments to the bonus of Andy Chapman and Malcom Cooper will be considered in the light of the Remuneration Committee’s decisions.

In addition, Nick Winser, the director with operational accountability for system reliability and safety, has overriding personal objectives relating to MWh lost and loss of supply incidents.