National Grid buys WPD for £7.8bn, will sell natural gas business

The deal to buy Western Power Distribution (WPD) also includes the sale of Rhode Island utility the Narragansett Electric Company (NECO) to PPL for £2.7bn.

WPD currently distributes electricity to around 7.9 million Britons in the Midlands, South West and Wales, covering an area over 55,500 square kilometres and employing over 6,500 staff. It does not directly sell electricity to end users.

While WPD is estimated to be worth around £14.4bn, it has around £6.6bn in debt that National Grid will also take on.

WPD was formed in 1998 following the demerger of the South Western Electricity Board, which itself was created in 1990 as part of the privatisation push from the Thatcher government.

National Grid, which supplies gas and electricity to millions of customers, said the two deals would increase the proportion of its assets in electricity to from 60 to 70 per cent.

“When we look at the long term, we believe that the pivot that we are making today will enable us to take a much bigger role in the current energy transition,” National Grid chief executive John Pettigrew told a news briefing.

At the same time his firm is planning to sell a majority stake in National Grid Gas, which owns the national gas transmission system, later this year.

“These transactions will be transformational for our UK portfolio,” Pettigrew said

“The acquisition of WPD is a one-off opportunity to acquire a significant scale position in UK electricity distribution.

“Our vision for National Grid remains unchanged, to be at the heart of a clean, fair and affordable energy future.

“With increased exposure to the UK’s electricity sector, these transactions enhance our role in the progress towards net zero, underpinning our core ambition which is to enable the energy transition for all.”

National Grid said it would maintain the WPD headquarters located in Bristol.