National Grid Provides Interim Statement For period April 1-July 28, Guidance Unchanged

HIGHLIGHTS • Solid operational and financial performance during the period • UK: Good progress developing UK business to deliver outperformance under RIIO • US: Positive start to the year with all outstanding rate plan settlements now approved Steve Holliday, Chief Executive, said: “Our businesses have started the year well. In the UK, our focus has been on embedding developments in our business model to enable performance improvements under the new agreed RIIO framework. Alongside changes to our organisational model and wider cost saving initiatives, we have also developed our approach to investment and efficiency, to drive improved execution and help us to deliver the performance expected of us. In the US, our team continues to focus on improving customer service and returns by securing the benefits of the recent rate filings while focusing on resolving issues related to the SAP implementation started last year. As a result, we are maintaining our outlook for 2013/14, reflecting the expected delivery of another year of solid operating and financial performance.” BUSINESS UPDATE Growth and Investment In line with guidance for the current year given in May 2013, National Grid expects to invest in the region of £3.6bn to £3.9bn in its businesses in 2013/14. This level of investment is consistent with National Grid's expectation of growing regulated assets by around 6% per annum over the next few years, while maintaining a secure and well financed balance sheet. In the regulated UK Transmission and Distribution businesses capital investment for 2013/14 is expected to be in line with 2012/13 levels. Major activities underway include the London Power Tunnels project and further progress on planning for the western high voltage direct current (HVDC) link with Scotland. In the US, investment continues at a steady level, in line with the updated medium term guidance of around £1.3bn to £1.4bn ($2bn) per annum, focused on the improvement and renewal of existing infrastructure, the delivery of improved service, selected transmission investments and connection of new customers. Major projects include the c. $800m New England East West System transmission project, now approximately 65% complete. Regulatory Developments In the UK, in July, Ofgem, the energy regulator, issued its licence modification notice implementing a new Balancing Services Incentive Scheme for National Grid's UK electricity transmission operations. This scheme is proposed to run for 2 years from 1 April 2013 with a 25% company share of above or below target performance and an annual cap and collar on National Grid's profit under the scheme of plus or minus £25m. National Grid believes that these revised arrangements provide a reasonable opportunity to earn additional revenues at the same time as reducing costs for customers through incentivised performance. More widely, the new UK Energy Bill including Electricity Market Reform (EMR) continues its passage through Parliament and is expected to include new roles for National Grid as the EMR delivery body which will include managing the capacity mechanism alongside its existing system operator responsibilities. National Grid has also issued a consultation on two new balancing services that could provide additional reserves to support the operation of the system in the event of an uncertain security of supply outlook. These new responsibilities are not expected to have any material impact on National Grid's financial performance. In the US, during May and June the business received regulatory approvals for a new rate settlement for its downstate New York gas business (KEDNY) and a new Power Service Agreement with the Long Island Power Authority for its Long Island Generation business, regulated by the Federal Energy Regulation Commission (FERC). Now that these settlements have both been approved, there are no outstanding rate case filings at this time. FINANCIAL UPDATE There have been no material changes to the financial position of the Company during the period. National Grid has a strong balance sheet, underpinned by regulatory revenues, which is key to its ability to secure the required long-term funding for both the UK and the US businesses. Interest cover, gearing and other financial metrics remain within comfortable ranges to sustain the Group's strong credit ratings in the medium term and support the policy of growing the dividend at least in line with RPI inflation for the foreseeable future. TECHNICAL GUIDANCE Technical guidance is largely unchanged from that included in the full year results statement of 16 May 2013. Work to complete the US financial system and process implementation has been more complex than expected and the business is continuing to incur costs associated with operating manual processes while system issues are resolved. As a result taking into account delays to date and current planned actions during the next few months, implementation costs in 2013/14 are now expected to be of a similar order of magnitude to those in 2012/13. The impact of these cost increases are expected to be offset by stronger than expected performance in the UK and US businesses including increased revenues from the French Interconnector in the UK Transmission business driven by higher power price differentials between the UK and the Continent. 1