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Registered number: 02906593 (England and Wales)
Northern Powergrid (Northeast) plc
Annual Report and Consolidated Financial Statements
for the Year Ended 31 December 2024

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Northern Powergrid (Northeast) plc
Contents
Company Information 1
Strategic Report 2 to 20
Directors' Report 21 to 25
Independent Auditor's Report 26 to 32
Consolidated Income Statement 33
Consolidated Statement of Comprehensive Income 34
Consolidated Statement of Financial Position 35 to 36
Company Statement of Financial Position 37 to 38
Consolidated Statement of Changes in Equity 39
Company Statement of Changes in Equity 40
Consolidated Statement of Cash Flows 41
Company Statement of Cash Flows 42
Notes to the Financial Statements 43 to 93
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Northern Powergrid (Northeast) plc
Company Information
Directors
A P Jones
A J Maclennan
P A Jones
A R Marshall
P C Taylor
T H France
Company Secretary
J C Riley
Registered office
Lloyds Court
78 Grey Street
Newcastle upon Tyne
Tyne and Wear
NE1 6AF
Registered Number
02906593 (England and Wales)
Statutory Auditor
KPMG LLP
110 Quayside House
Newcastle upon Tyne
NE1 3DX
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024
The directors present the annual report and financial statements for the year ended 31 December 2024 of Northern
Powergrid (Northeast) plc (the "Company"), which have been drawn up and presented in accordance with the Companies
Act 2006.
BUSINESS MODEL
The Company is part of the Northern Powergrid Holdings Company and its subsidiaries group of companies (the
“Northern Powergrid Group”) and is an authorised distributor under the Electricity Act 1989 holds a licence granted by the
Secretary of State. In addition, the Company owns all of the shares of Northern Electric Finance plc (together, the
“Group”), a company that acts as the issuer of long-term debt securities. As the Company is the largest contributor to the
Group in terms of revenue, the Strategic Report concentrates on the performance and progress of the Company throughout
the reporting year.
As a distribution network operator ("DNO"), the Company is regulated by the Office of Gas and Electricity Markets
(“Ofgem”), which in turn, is governed by the Gas and Electricity Markets Authority (“GEMA”). Ofgem requires the
DNOs to operate within a regulatory framework known as a price control, the purpose of which is to protect the interests
of end consumers by setting an upper limit on the amount the DNOs can charge for the use of their networks. On 31 March
2024, the Company completed the first year of the RIIO-ED2 price control, which became effective on 1 April 2023, and
will conclude on 31 March 2028 (the “ED2 period”).
The principal activity of the Company is the distribution of electricity to approximately 1.6 million customers connected to
its electricity distribution network (the “Network”) within its distribution services area in the northeast of England, which
extends from North Northumberland, south to York and west to the Pennines. The Network includes over 42,000
kilometres of overhead and underground cables and over 28,000 substations. Electricity is received from National Grid's
transmission system and from generators connected directly to the Network, and then distributed at voltages of up to 132
kilovolts.
Revenue generated by the Company is primarily controlled by a distribution price control formula which is set out in the
electricity distribution licence. The price control formula does not directly constrain profits from year-to-year but is a
control on revenue that operates independently of a significant portion of the Company’s costs. Allowed revenue is
recovered from electricity suppliers via the application of Distribution use of System charges. These charges account for
approximately 8% of the electricity end users' overall electricity bill. The Company’s opening base allowed revenue
(excluding the effects of incentive schemes, volume or legislative driven adjustment mechanisms, any contract liabilities
("deferred revenues") from the prior price control, and real price effects) has been set and therefore provides the Company
with some stability in terms of its income during the ED2 period. Opening base allowed revenues increased in line with
inflation (as measured by CPI-H).
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
STRATEGY
In common with the Northern Powergrid Group, the Company operates a strategy based on six core principles (the "Core
Principles"), which comprise Financial Strength, Customer Service, Operational Excellence, Employee Commitment,
Environmental Respect and Regulatory Integrity. The Core Principles (which are applied by the Northern Powergrid
Group’s parent company, Berkshire Hathaway Energy Company ("Berkshire Hathaway Energy"), set out the basis on
which the Company generates shareholder value over the longer-term and defines the standards by which the Northern
Powergrid Group holds itself accountable. Each Core Principle is defined by a strategic objective which is linked to the
commitments made in the Company’s business plan (available via the Northern Powergrid Group website) for the ED2
period (the “Business Plan”). The directors refer to the values established by the Core Principles and the commitments
contained within the Business Plan when considering the consequence of decisions they make.
The delivery of the Business Plan is supported by an annual business plan (the “Annual Plan”) which is submitted to the
Northern Powergrid Group’s shareholder each financial year and is designed to phase progress towards the achievement of
each commitment over the ED2 period. This ensures that the deliverables in both plans can be measured effectively by
using a mix of financial and non-financial Key Performance Indicators (“KPIs”).
The Strategic Report focuses on each Core Principle and the performance of the associated KPIs throughout the year in
order to provide a summary of the success in achieving each strategic objective, progress made against certain Business
Plan commitments and performance in relation to the Annual Plan.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
FINANCIAL STRENGTH
Strategic objective
: Strong finances that enable improvement and growth.
KPI
2024
£000
As restated
2023
£000
Operating profit (million) 264.1 166.0
Net cash from operating activities (million) 622.2 521.4
Net cash used in investing activities (million) 587.2 460.1
Credit Score (Standard and Poor's) A A
Business Plan commitment:
To build on the strong financial base by delivering embedded efficiencies equivalent to 11%
of forecast total expenditure.
Performance during the year:
The Group continued to maintain good control in respect of both its capital and operating
costs by effectively managing the financial risks that could have had an adverse impact on its business. At the end of
year-one of the ED2 period, the Company’s and Northern Powergrid (Yorkshire) plc’s (its “affiliate”) expenditure was 9%
higher than the prior Regulatory year, but 20% (£100.6 million) below phased total expenditure (totex) allowances.
Consequently, a number of work programmes were re-phased in support of achieving the 11% efficiency savings.
Revenue:
The Group's revenue at £536.4 million was £100.7 million higher than the prior year (2023 Restated: £435.7
million) primarily due to an increase in tariffs (average tariff 45% higher than 2023 tariffs), driven by increased revenue
allowances because of high inflation.
Operating profit and position at the year-end:
The Group's operating profit of £264.1 million was £98.1 million higher
than the previous year (2023: £166.0 million), primarily reflecting higher revenue detailed above and a fall in Supplier of
Last Resort payments amounting to £21.0 million.
The statement of financial position shows that, as at 31 December 2024 the Group had total equity of £1,198.6 million
(2023: £1,320.7 million). The decrease in equity is primarily down to the issue of a £300.0 million dividend paid during
the financial year, see Note 28.
Finance costs and investments:
Finance costs net of investment income at £28.4 million was £8.0 million higher than the
prior year (2023: £20.4 million) mainly reflecting lower finance income relating to the intercompany loans.
Cash flow:
The Company aims to collect from customers and pay suppliers within contracted terms. Any surplus cash
held is remitted to Yorkshire Electricity Group plc ("YEG"), a company in the Northern Powergrid Group, and invested
accordingly, generating a market rate of return for the Company. Movements in cash flows were as follows:
Cash flow from operating activities at £622.2 million was £100.8 million higher than the previous year, reflecting higher
revenue from customers.
The net cash used in investing activities at £587.2 million was £127.1 million higher than the previous year, reflecting
higher purchases of plant, property and equipment and intangible assets.
The net cash outflow from financing activities at £35.0 million was £27.9 million lower than the £62.9 million in the
previous year due primarily to movement on intercompany loans.
Pensions:
The Company is a participating employer in the Northern Powergrid Group of the Electricity Supply Pension
Scheme (the "DB Scheme"), a defined benefit scheme. The Company also participates in the Northern Powergrid Pension
Scheme, which is a defined contribution scheme.
Insurance:
As part of its insurance and risk strategy, the Northern Powergrid Group has in place insurance policies, which
cover risks associated with employees, third party motor and public liability.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
CUSTOMER SERVICE
Strategic objective
: Delivering exceptional customer service.
KPI 2024 2023
Broad Measure of Customer Satisfaction (“BMCS”)
91% 89.3%
BMCS Rank (Out of 14)
9 12
BMCS Power Cuts
89.5% 88.6%
BMCS General Enquiries
94.8% 94.2%
BMCS Connections
90.3% 87.7%
Business plan commitments
: To provide a reliable, better communicated and faster customer service offering through a
range of channels to suit stakeholder needs.
Performance during the year
: In respect of BMCS performance, an independent market research company carried out
telephone surveys with the Company’s customers to find out how satisfied they were with services related to unplanned or
planned power cuts, quotations and subsequent connections, and general enquiries. An increase was recorded in overall
satisfaction scores at 91.0% compared to the prior year (89.3%), resulting in the BMCS rank improving to 9 out of 14.
To further enhance the service provided to customers, initiatives from the Company’s customer service improvement plan
were implemented, including enhancing management routines for connections processes and reviewing the consistency of
customer communications across all channels. In addition, the proactive on-site support offered to customers impacted by
power cuts lasting more than four hours was refined.
Whilst overall performance has continued to improve, it is acknowledged that as the other DNOs also continue to invest in
customer service, even making incremental improvements in the BMCS ranking is challenging. Regardless, the Company
will strive to continue to achieve its Business Plan commitments during the ED2 period by continuing to focus on the ways
it can improve the service it provides to its customers.
Activity scheduled in support of this includes the development of guidance to highlight expectations when it comes to
managing key scenarios and customer interactions, increased focus on areas of poor Network performance, and a review of
the extra care support provided to the most vulnerable customers.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Connections to the network
Business Plan commitment
: To deliver a cost-effective, efficient and personalised service for all connections customers,
with smarter, more flexible solutions that support the connection of low carbon technologies onto the Network in support
of the transition to net zero.
Performance during the year
: End-to-end lead time improvement continued to be challenging due to the increase in
connections volumes arising from low carbon technology uptake and additional applications. However, improvements in
small works, such as the new quotation system (reducing time to quote by 54%) and increased operational delivery
capacity (reducing time to deliver by 24%) allowed the Company to manage volumes whilst maintaining customer
satisfaction (90.3%).
For major connections, transmission network connection delays continued to pose a significant issue. Consequently, much
of the focus has been on industry reform to align with the Government’s Clean Power 2030 (CP30) Action Plan. The
Company held customer webinars in collaboration with National Grid Electricity Transmission and National Grid ESO, to
provide updates on the changes and the implementation improvements. In support, the availability and timeliness of
information for customers was improved through a Project Progression portal, an online self-service tool that allows
customers to view the progress of their project.
In terms of accelerating connections, 85 eligible customers were issued accelerated offers as part of the technical limits
initiative, reducing the average connection date by six years.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Corporate Responsibility
Business Plan commitment
: To build effective relationships with stakeholders, especially those customers who are
vulnerable and hard to reach.
Performance during the year
: The Company continued to undertake engagement activity on the development and
delivery of the Distribution System Operator (“DSO”) plan, as well as supporting multiple stakeholders with their own
decarbonisation planning. Alongside, the four Business Plan Engagement Groups continued to oversee engagement in the
areas of resilience, meeting consumer needs, energy futures and our people, our communities.
The ongoing energy crisis and economic uncertainty continued to exacerbate the challenges facing vulnerable customers.
As a result, the Company and its affiliate grew the provision of their energy advice services to support 20,000 customers in
fuel poverty and a further 5,000 with support to increase the energy efficiency of their homes.
Additional support activity from the Company and its affiliate included a donation to Community Action Northumberland
to sponsor their Warm Hubs programme, the Net Zero Community Energy Fund provided grant funding to nine
organisations totalling £50,000, and the Company established the Community Energy Team to support community energy
groups. Alongside, the Company and all funded partners routinely promoted Priority Services Membership and shared
energy efficiency materials and winter preparedness information to customers.
OPERATIONAL EXCELLENCE
Strategic objective
: High-quality, efficient operators running a smart reliable energy system.
2023/24 2022/23
KPI Actual Target Actual Target
Customer minutes lost 49.5 <42.0 44.0 <50.9
Customer interruptions 48.6 <47.7 46.9 <58.6
2024 2023
Network investment (million) £231.9 £192.7
High voltage restoration time (minutes) 64.1 62.1
Business Plan commitment
: To achieve 12% fewer unplanned power cuts and reduce the average length of unplanned
power cuts by 25%.
Performance during the year
: CML and CI are the KPIs set by Ofgem to measure (on a regulatory year basis) the quality
of supply and system performance. CML measures the average number of supply minutes lost for every connected
customer due to both planned and unplanned power cuts that last for three minutes or longer. CI measures the average
number of supply interruptions per every 100 connected customers due to planned and unplanned power cuts that last for
three minutes or longer. Performance was below target for CI and CML due to adverse weather conditions. Consequently,
the duration of the Company’s (together with its affiliate) power cuts increased by 6.4%.
From a high voltage restoration perspective, the Company averaged 60.2 minutes (2023: 62.1 minutes), after allowing for
severe weather incidents and other exemptions, which represented a decline from the prior year.
The Company invested £231.9 million during the year through its approved Network investment strategy (2023: £192.7
million), which was designed to improve Network performance and increase resilience. Various major projects were
undertaken to reinforce the primary Network, refurbish transformers, rebuild overhead lines, replace oil-filled cables,
change deteriorated poles, replace switchgear and install and commission new remote-control points.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Further network enhancements included the continued roll-out of the automatic power restoration system on the high
voltage network. At low voltage, the implementation of next generation technology devices continued with the addition of
sensors and monitoring which detect developing faults so that they can be proactively managed. Alongside, proposals were
submitted to Ofgem as part of the Storm Arwen re-opener to fund the upgrading the Network to enhance its resilience. The
Company and its affiliate achieved a successful outcome for 12 projects.
Looking ahead to 2025, initiatives will be implemented as part of the Network Performance Improvement Plan, including
the continuation of the risk-based vegetation management programme, the installation of fault management devices on the
low voltage Network and further developing the operational incident response model.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
EMPLOYEE COMMITMENT
Strategic objective
: High-performing people doing rewarding jobs in a safe and secure workplace.
2024 2023
KPI Actual Target Actual Target
Northern Powergrid Group occupational safety and
health administration ("OSHA") 0.41 0.09 0.43 0.09
Preventable vehicle accidents (PVAs) 7 11 8 10
Lost time accidents 1 - 1 -
Contractor OSHA incidents 2 3 1 3
Medical treatment accidents 2 1 2 1
Operational incidents 2 3 3 3
Northern Powergrid Group absence rate 3.3% 3.4%
Health and Safety
Business Plan commitment
: To maintain industry leading safety performance and achieve a 50% reduction in contractor
accident rates.
Performance during the year
: In common with the Berkshire Hathaway Energy group, the Northern Powergrid Group
measures its safety performance using the OSHA rate, which is a measure used to capture safety incidents down to minor
levels of medical treatment. The Northern Powergrid Group failed to meet its target of 0.09 having achieved an OSHA rate
of 0.41 (2023: 0.43), which equated to 11 recordable incidents against a goal of two or fewer. PVA performance did show
signs of improvement with 7 recorded against a target of 10 or fewer. In terms of the Business Plan commitment, the
number of contractor OSHA incidents increased year-on-year, leading to a number of improvement actions being initiated.
Whilst the majority of incidents were minor in nature (insect bites and slow reversing accidents), the year-on-year decline
reinforced the importance of the Company’s health and safety performance improvement plan which covered colleague
safety, contractor safety, health and well-being and public safety. Accordingly, initiatives undertaken and planned for 2025
included the continuation of driver training, commissioning a safety climate survey, the mobilisation of an assurance
programme on high -risk activities, leveraging data from the vehicle telematics system and providing an independent
employee assistance service, which is a confidential, self-referral counselling and information service to assist with
personal or work-related problems and access to services including counselling and physiotherapy referrals.
During the year, the Company successfully completed two external surveillance visits on its ISO 45001 accreditation for
its occupational health and safety management system.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Employees
Business Plan commitment
: High-performing people doing rewarding jobs in a safe and secure workplace.
Performance during the year
: Focus remained on building capacity by increasing the intake of apprentices and
engineers, as well as enhancing working arrangements to ensure seamless customer support. This included adapting agile
working, focusing on the retention and attraction of talent, improving wellbeing and cultivating a healthy workplace, and
establishing working groups with the trade unions to foster stronger relationships.
Employee development continued via the CORE programme, designed to develop leadership and management skills, in
addition to leadership apprenticeships and an approach to identifying and developing individual contributors. Routine
training also continued in key areas such as customer service, cyber security and management development. The Company
also introduced a Core Leadership Expectations 360 programme for senior leaders to identify their specific areas of
improvement.
During the year, 89 new recruits (2023: 77) joined the Company and Northern Powergrid (Yorkshire) plc’s workforce
renewal programme. At 31 December 2024, the Company had 1,511 employees (2023: 1,384).
The Northern Powergrid Group’s gender pay gap report can be found via the Northern Powergrid Group’s corporate
website.
Employee engagement
The board and senior management team continue to keep employees and trade union representatives informed of and
involved as appropriate in developments that may impact them now or in the future. Consultation for collectively
bargained employees is agreed with trade union representatives in the form of a constitutional framework. In addition, the
Company utilises focus groups and colleague panels to consult on improvements and changes.
In support of this process, the Director of People and Change routinely reports to the board and the Health and Safety
Committee to ensure that the views of employees are considered and to facilitate the discussion of and any subsequent
decision making in respect of employee related concerns or issues.
During the year, the President and Chief Executive Officer, members of the board and members of the senior management
team provided regular updates on financial, organisational, safety and customer service performance. The executive
directors engaged directly with employees during operational and office-based site visits and induction events.
Communication with employees was delivered via various channels including text messages and virtual meetings,
alongside regular briefings, line manager conversations, meetings with trade union representatives and utilising the
Northern Powergrid Group's intranet.
The Berkshire Hathaway Energy code of business conduct ("Code of Conduct")
The Northern Powergrid Group has adopted the Code of Conduct, which details the commitment to ethics and compliance
with the law, provides reporting mechanisms for known or suspected ethical or legal violations, and establishes minimum
standards of behaviour expected of all employees. In support of this, a "speaking up" process is in place enabling all
employees to raise concerns of unethical acts, malpractice or impropriety (including bribery or corruption), and an
anonymous help line operated by an independent company is also available. All colleagues complete an annual online
training programme covering the requirements of the Code of Conduct. This also requires all employees to declare any
conflicts of interest and unspent criminal convictions.
Employment of disabled persons
The Company’s policy is to provide all protected groups, including disabled people, with equality at work in respect of
employment, training, career development and promotion, having regard to their aptitudes and abilities. Should any
member of staff become disabled during their employment, reasonable adjustments will be made, wherever possible.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
ENVIRONMENTAL RESPECT
Strategic objective:
Leaders in environmental respect and low carbon technologies
2024 2023
KPI Actual Target Actual Target
Total oil/fluid lost (litres) 6,108 <10,073 8,823 <10,387
SF6 gas discharges (kg) 21.40 <11.8 7.45 <12.25
Environmental incidents 1 <3 - <3
KWh energy consumed 20,325,432 20,160,750
Business carbon footprint Tonnes Per km² Tonnes Per km²
Fleet fuel use 2,020 0.14 1,931 0.13
Other (including fugitive emissions) 477 0.03 321 0.02
Total scope 1
2,497
0.17
2,252
0.15
Building electrcity use 946 0.07 775 0.05
Substation electricity use 1,735 0.12 1,706 0.12
Total scope 2
2,682
0.18
2,481
0.17
Business fuel use 1,217 0.08 1,070 0.07
Contractor emissions 395 0.03 309 0.65
Total scope 3
1,612
0.11
1,379
0.72
Total carbon footprint (tonnes) 6,791 0.46 6,112 1.04
Notes:
KWh energy consumed relates to depot energy and fleet fuel usage.
The chosen business carbon footprint intensity ratio is based on the Company’s licence area which equals 14,394km
2
The methodology adopted to calculate energy and business carbon footprint data is aligned with international standards, those required by Defra and
BEIS and is audited annually and certified through the Certified Emissions Measurement and Reduction Scheme for compliance with ISO 14064-1:2006.
*Contractor emissions are based on fuel usage and is the best available information at the time of publishing.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Business Plan commitment
: To minimise carbon emissions, pollution and waste and, where possible, seek to enhance the
local environments in which we operate.
Performance during the year
: The Company remains committed to using natural resources wisely and protecting the
environment for the benefit of future generations. This commitment is set out in the Environmental RESPECT
(Responsibility, Efficiency, Stewardship, Performance, Evaluation, Communication and Training) Policy, which is
delivered via the Environmental Action Plan and its twelve impact areas (including scope 1, 2 and 3 emissions, SF6 losses,
visual amenity, biodiversity and waste).
The Company’s overall business carbon footprint, scope 1 and 2 emissions (excluding losses) increased to 5,179 tonnes
during the year as a result of increased SF6 losses and other emissions. Whilst the Company and its affiliate reduced their
scope 1 and 2 emissions during ED1 and into the ED2 period, the current rate is slightly above the science-based target set
to achieve net zero, indicating that further action is required to reduce emissions.
Improvement initiatives include reducing emissions from the operational fleet by replacing diesel vehicles with Ultra Low
and Zero Emission Vehicles, exploring new technologies such as hydrogen fuel cells, using alternative, renewable fuels,
and enhancing energy efficiency by upgrading facilities at operational sites.
In relation to scope 3 emissions, the Company is working in partnership with the Supply Chain Sustainability School and
has adopted their carbon calculator to measure supply chain scope 3 emissions, thereby providing the basis to develop a
reduction strategy during 2025. In addition, the Company continues to work with other DNOs to ensure expertise and
learnings and a consistent methodology are shared.
The volume of SF6 losses (21.4kg) increased year-on-year due to a number of significant leaks. In response, the Company
continues its operational routines, responses to leaks and due to the work with the DNOs via the Energy Networks
Association (“ENA”), to share best practice and trial innovative new SF6-free technologies.
During the year, the total amount of fluid loss from the Network was 6,108 litres, which was significantly favourable to the
target of 10,078 litres. To continue to minimise losses, the Company is committed to replacing 3,400km of cable during
the ED2 period, and will pursue the use of perfluorocarbon tracer (to locate leaks) and self-healing technology.
To adhere to the requirement to identify and remove or remediate non-compliant equipment which may contain
Polychlorinated biphenyls (“PCBs”) by 31 December 2025, the Company and its affiliate have worked in collaboration
with the Environment Agency and ENA to develop a statistical model to determine which pole mounted transformers are
non-compliant. The process will be a priority throughout 2025, as approximately 5,900 transformers may be replaced.
In respect of the Company’s wider environmental impact, plans have been developed to achieve zero waste to landfill by
2035 and to divert 90% of waste from all of the Company’s operations by 2028. The Company’s Network operations are
the largest source of waste generation, with waste arising from excavations and other operations representing 97% of all of
the waste generated in 2024. Steps taken to enhance performance in this area include the recycling of materials, with the
Company planning to recycle and reuse 85% of total materials by 2028 including the increased volume produced as a
result of delivering Network investment plans and decarbonisation objectives.
Issues relating to the assessment and classification (as hazardous or non-hazardous) of material arising from unplanned
utility excavations, prior to transport from site and disposal, pose a significant challenge to the Company’s objective to
reduce waste to landfill. The utilities industry is currently working with Streetworks UK and the Environment Agency to
develop and implement a new industry-wide risk-based approach to managing such waste to combat these issues.
From a supply chain perspective, the Company will continue to work with suppliers to reduce packaging and ensure
environmentally friendly alternatives are used where possible. In support, an embodied carbon model will be used to aid
investment decisions including the sourcing of raw materials. At office locations, the use of waste segregation facilities
will be increased, and office supplies will wherever possible be low carbon, plastic free and fully recyclable or reusable.
The impact of the Company’s operations is mitigated where possible through a range of biodiversity, natural capital and
visual amenity programmes. This includes fulfilling the duty to seek to enhance designated areas such as National Parks,
as well as improving biodiversity at 200 sites throughout the ED2 period.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
At this time, the Company has no plans to use carbon offsetting to achieve its targets in the ED2 period. The focus remains
on reducing physical carbon emissions, on the basis that additional investment in the Network to enable decarbonisation
offers much better value to customers. However, at an initiative level, where ad-hoc opportunities exist, the Company may
pursue these.
From an environmental compliance perspective, the Company operates a United Kingdom Accreditation Service scheme
for environmental management and is certified to standard ISO 14001:2015 which is designed to enhance environmental
performance, fulfil compliance obligations and achieve environmental objectives, all of which contribute to the
achievement of the Company’s KPIs. The Company’s carbon footprint reporting framework is certified under the Certified
Emissions Measurement and Reduction Scheme for compliance with ISO 14064-1:2006.
To date, the Company’s performance against a number of stretching KPIs to reduce carbon usage and minimise the effects
of the Company on stakeholders and the environment has been largely positive. However, it is acknowledged that
becoming carbon neutral by 2040, and working with suppliers and partners to accomplish this, is not without its challenges
and risks. Accordingly, the Company will continue to evolve its ambitions and enhance the implementation of
environmental plans throughout the ED2 Period. The phased targets associated with waste to landfill, recycling, noise
pollution and biodiversity and additional descriptions of all key measures can be found in annex 1.4 of the Business Plan, a
copy of which can be found via the Northern Powergrid Group’s website (our business plan).
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Environmental Sustainability
Strategic focus:
Enable growth in customers connecting low carbon technologies and support pathways to net zero.
Performance during the year:
As the country takes action to reduce carbon emissions in line with the net zero target by
2050, the way in which electricity is produced and used is expected to have a substantial impact on the Network over time.
Accordingly, the Company continues to implement its DSO strategy, and act as a key facilitator in the country’s net zero
transition by placing decarbonisation at the heart of its investment and actions.
As the volume and total capacity of decentralised energy generation grows and given the greater range of load and
generation technologies now connected to the Network, the Company continued to develop and action innovative solutions
that will reduce the need for traditional and potentially expensive reinforcement.
In the past year, the Company engaged with the market for flexibility by tendering for flexibility services on the low
voltage and high voltage Network. Under these contracts, customers change their energy consumption and generation
patterns as an alternative to the Company carrying out Network reinforcements, thereby facilitating a more efficient and
greener Network. And to better understand how to prepare the Network for the future needs of its customers and the
potential pathways to net zero, the Company published its updated Distribution Future Energy Scenarios (available via the
Northern Powergrid Group’s corporate website).
From an innovation perspective, the Company runs a portfolio of projects in the priority areas of customer vulnerability,
resilience, and decarbonisation. Following the establishment of the Community DSO project in 2023, which was designed
to deliver trials of smart local energy systems to explore how consumer energy resources and flexibility can be utilised in
communities, a £3.2 million trial was awarded to a consortium of companies testing approaches to local balancing in an
Energy Community in Barnsley, South Yorkshire over an 18-month period.
Decarbonisation continues to be more central to the Company’s strategy, and the way in which the Company contributes
more broadly to the evolution of the energy industry and the stakeholders with whom it interacts. The Company has been
progressive in its ambition to reduce its own business carbon footprint. However, there is a greater opportunity to
contribute to decarbonisation by facilitating regional decarbonisation and investing in people, processes and systems in
order to actively manage the Network and to optimise the use of assets and generated energy in the region.
In delivering its Business Plan commitments, the Company continually engages stakeholders on its DSO Strategy to
achieve a number of outcomes and benefits including enabling open energy data sharing, transforming the way decisions
and plans are made, supporting the development of new flexible energy markets, increasing customer and Network
flexibility and facilitating a whole system energy system. The Company’s Energy Systems directorate centralises
responsibility for delivering DSO plans including major connections to the Network.
In conjunction with this activity, and with the support of the Independent Stakeholder Group (“ISG”), the Company has
operated its DSO Review Panel (“DRP”) for the purpose of making its decisions transparent and to allow the independent
members to comment on and challenge the Company’s major investment decisions.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
REGULATORY INTEGRITY
Strategic objective
: Trustworthy, fair and balanced.
KPI:
Completion of a quarterly regulatory compliance affirmation process.
Business Plan commitment:
To manage the Company's business to the highest behavioural standards and adhere to a
policy of strict compliance with all relevant standards, legislation and regulatory conditions.
Performance during the year
: In order to assure compliance with distribution licence and other regulatory obligations,
the Company operates a regulatory compliance affirmation process. Responsible managers are required to review
compliance with approximately 3,300 obligations on a quarterly basis and report on any identified non-compliances or
perceived risks which are then addressed by members of the senior management team. To minimise the risk of the
Company breaching its licence conditions and other statutory requirements (which could lead to financial penalties), the
board reviews the outcomes of each exercise. Each quarterly regulatory compliance affirmation process was completed
satisfactorily during the year.
The Company submitted its annual Data Assurance Report to Ofgem in March 2025, which included risk assessments of
the regulatory returns to be submitted during the Regulatory Year ahead (April 2025 to March 2026), together with a
report detailing the assurance work carried out in the Regulatory Year ended 31 March 2025.
On 6 November 2024, Ofgem initiated the process for determining the arrangements for the next electricity distribution
price control period, which will begin on 1 April 2028, by issuing a consultation on the framework for ED3. Ofgem
envisages that ED3 will have a critical role in the path to achieving net zero by 2050, which could involve a significant
change in the level of network investment. In that respect, Ofgem has stated that it will aim to keep the costs of the
infrastructure needed for net zero as low as possible through maintaining a low cost of capital and driving further
efficiency. The Company submitted its response to the consultation on 15 January 2025 and the process will culminate
with Ofgem expected to issue its Draft Determinations in June 2027 and its Final Determinations in December 2027.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
PRINCIPAL RISKS AND UNCERTAINTIES
The Northern Powergrid Group operates a structured and disciplined approach to the management of risk as part of its
overall risk management policy and in support of its financial reporting practices. A system is in place to facilitate the
identification of new and emerging opportunities and risks, including those associated with the achievement of the
Northern Powergrid Group’s strategic objectives and Core Principles. This includes regular reviews of the macro
environment as well as risks that arise from within functional business areas.
Once identified, key risks and their respective controls and mitigation plans are continually assessed and formally
reviewed on a quarterly basis by the Risk Advisory Board ("RAB") in order that they are managed to an acceptable level
in accordance with the Northern Powergrid Group’s risk appetite. The Northern Powergrid Group’s risk appetite is
determined by a process based on risks, issues and consequences. The level of tolerance varies in accordance with the
pursuit of objectives and with caution or acceptance adopted depending on whether risks can be influenced or mitigated
fully, partly or not at all. The RAB routinely reports its findings to the board to ensure the directors are sufficiently
appraised of the risk exposure associated with the pursuit of the Company’s long-term strategy.
The risk management programme includes regular reviews of the crisis management, disaster recovery and major incident
plans. To determine the level of disaster preparedness and responsiveness against threats to business continuity, risk
management plans and processes are periodically tested. This self-evaluation approach is reinforced by Berkshire
Hathaway Energy, which benchmarks risk management activities across its business units and shares significant lessons
learned. The business continuity and disaster recovery plans are tested regularly to ensure that as required, operational
performance can remain resilient and employees are able to perform their duties safely.
Principal Risks
During the year, 'Customer Service' was added as a risk and two risks were renamed to ‘enabling the energy transition’
(from transmission connection delays) and ‘regulatory framework’ (from the outcome of the regulatory price control). No
other notable changes have taken place. The Northern Powergrid Group’s principal risks are not ranked or prioritised in
any particular order. Given their sensitivity and ever-changing nature, the board has elected not to disclose the risk appetite
associated with each risk.
Cyber Security
Unauthorised access or compromise of the Information Technology or Operational Technology networks, resulting in loss
of network control and availability. Unauthorised access or loss of large volumes of data or sensitive data.
Mitigation
Robust cyber security risk mitigation programme is in place.
Accreditation under the ISO 27001 Information Security standard for operational, customer, employee and financial
information.
Compliant to the Network Information Security Directive and the Basic Cyber Assessment Frameworks.
Compliance with the Centre for Internet Security Critical Security Controls.
Regulatory and policy positioning
Decisions taken resulting in negative impacts to our business model.
Mitigation
Continued dialogue and engagement with Ofgem.
Active involvement in consultations on price controls.
Robust budgetary and financial position.
Optimising price control reopener mechanisms.
Network resilience
Loss of the Network due to significant weather events, targeted physical attack or catastrophic asset failure resulting in
sustained or widespread loss of essential supply.
Mitigation
Major incident and crisis management policies, plans and governance arrangements in place.
An industry mutual aid agreement exists.
Grid resilience programme and audits.
Vulnerable site protocols.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Safety
Fatality or serious harm caused to an employee or a third party.
Mitigation
Overseen by the Health and Safety Committee.
Safety Health and Improvement Plan and associated policies and procedures.
Health and safety training, enhanced audit programme and inspection regimes are in place.
ISO45001 safety management system in place.
Environment and climate protection
Failure to prevent network assets from having a significant negative impact on the environment.
Mitigation
Programme to reduce fluid loss, business carbon footprint and remove assets containing PCBs.
Environment improvement plan, Environment Action Plan and science-based targets.
Path to carbon neutrality by 2040.
Incident response, waste management and habitat protection programmes.
ISO14001 environmental management system in place.
Resource availability
Access to and availability of skilled resource resulting in an inability to deliver work programmes.
Mitigation
Mix of direct labour and contracted resource is used.
Workforce renewal programmes in place to recruit and retain employees.
Ongoing training and development builds internal capability.
Employee engagement, health and well-being initiatives in place.
Good relationships with trade unions representatives.
Enabling the energy transition
The Network either becomes, or is perceived to have become, an obstacle to decarbonisation and energy transition.
Mitigation
Overseen by a steering group.
Change programme in place to improve customer connection lead times and customer communication.
Part of an industry work programme through the ENA.
Policy team engages and with Government and Ofgem.
Stakeholder engagement programme scrutinised by the ISG and DRP.
Customer Service
Loss of repuation, financial penalties.
Mitigation
Customer service improvement plan.
Engagement with the ISG and DRP.
Industry collaboration.
Relationship with customer support partners and organisations.
Power of 10 (out of 10) initiative.
Employee training and development.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Efficiency and output performance
Failure to maintain cost and output performance competitiveness in the industry.
Mitigation
Robust business planning process.
Robust financial controls in place.
Monthly executive business performance review.
Comprehensive “Efficient Output Delivery” programme.
Financial risks
The exposure to interest rate, tax, liquidity and treasury risks.
Mitigation
Financed by long-term borrowings at fixed rates and access to short-term borrowing facilities at floating rates.
As at 31 December 2024, 100% of the Company's long-term borrowings were at fixed rates and the average maturity for
these borrowings was 14 years.
Financial covenant monitoring is in place.
Internal Control
The Group's internal control environment exists to support the financial reporting process, including regular reporting, a
series of operational and financial policies, investigations undertaken by internal audit and a stringent process for ensuring
the implementation of internal audit recommendations. In addition, the Company utilises comprehensive business planning
procedures, regularly reviews KPIs to assess progress towards its goals, and the internal audit function provides
independent scrutiny. Financial controls include centralised treasury operations and established procedures for the
planning, approving and monitoring of major capital expenditure.
The RAB monitors the effectiveness of internal controls and reports on its findings to the board and Berkshire Hathaway
Energy. As part of the statutory reporting process, the Company’s external auditor reviews and tests a sample of internal
controls and reports their findings and recommendations for improvements to the board.
Controls which are applicable to financial decisions are governed via a schedule of delegations of authority which are
approved by the board (and applies to the Northern Powergrid Group) for the purpose of enabling the senior management
team to make decisions up to certain financial limits, above which point the decision making reverts to the directors. These
limits reflect the board’s level of risk appetite and are reviewed regularly.
In accordance with Berkshire Hathaway Energy’s requirements to comply with the Sarbanes-Oxley Act, the Company
undertakes a quarterly risk control assessment confirming that the effectiveness of the system of internal controls have
been reviewed during the year. A self-certification process is in place, in support of this review, requiring certain senior
managers to confirm that the system of internal control in their area of the business is operating effectively. Consequently,
the directors believe that a robust system of risk assessment and management is in place.
The Northern Powergrid Group does not have a specific human rights policy. However, in accordance with the Core
Principles, it remains fully committed to operating ethically and responsibly and with fairness and integrity. This is
implemented through its policies and procedures, which are applicable to all stakeholder groups and encompasses
employees’ health, safety and welfare, dealings with customers (particularly those who are vulnerable), the impact of the
Northern Powergrid Group on the environment and the contribution to sustainability.
To ensure that the Northern Powergrid Group maintains the highest level of ethical standards in the conduct of its business,
Berkshire Hathaway Energy's Code of Conduct has been adopted (See ‘Employees’). The Northern Powergrid Group has
robust procedures in place to meet the requirements of the Bribery Act 2010 for which every employee must undertake
annual training.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Section 172(1) statement
Decision-making at the Board
All matters which under the Company’s governance arrangements are reserved for decision by the directors are presented
at board meetings. Directors are briefed on any potential impacts and risks for customers, and other stakeholders and how
they are to be managed. The directors take these factors into account before making decisions, which together they believe
are in the best interests of the Company and its member.
Long-term sustainability
As referenced throughout the Strategic Report, the Company’s business model is to make sufficient profit in order to
invest in the Network thereby, ensuring the integrity of the electricity supply for its customers. To achieve this objective,
the Company delivers its service to fulfil the needs of the stakeholders with whom it interacts and in doing so, ensures all
business relationships are conducted in an open and transparent manner. Consequently, fostering business relationships is a
prerequisite of the activity performed by the Company in the pursuit of its goals and the long-term sustainability of the
Company is at the forefront of decision-making.
The Company’s policy in respect of engaging with stakeholders is governed by the Core Principles and the Code of
Conduct. The Core Principle of ‘Regulatory Integrity’ defines the Northern Powergrid Group’s commitment to comply
with all laws wherever it does business and the expectation that all employees (including directors) manage their activities
in a manner that is compliant with all standards, regulations and corporate policies. In addition, the Code of Conduct
requires adherence to the highest level of ethical conduct and fair dealings with all customers, suppliers and competitors.
Employees
As detailed in ‘Employee Commitment’, the Company works hard to ensure the health and safety of employees and to
provide them with opportunities for advancement alongside fair terms whilst remunerating appropriately. Activities
undertaken by the board in the year included reviewing health and safety performance, monitoring key appointment
changes and reviewing the Company’s gender pay gap report.
Customers
Customers, whether they are domestic or commercial, are the primary stakeholder group served by the Company and
therefore the services offered are all tailored to provide a benefit or enhance an experience. During the year, the board
regularly reviewed performance levels, closely monitored the response in respect of major storms and associated Network
resilience and engaged with the Chair of the ISG. Further detail of the Company’s relationship with customers and the
support programmes provided is discussed in ‘Customer Service’.
Producers and suppliers
The Company works closely with its supply chain and has measures in place to ensure the treatment of all supplies is fair
and equitable. Relations with suppliers is managed using a supplier registration system which supports a robust and
transparent procurement process and ensures strict compliance with the prevention of slavery and human trafficking. As a
consequence, the system allows the Company to make informed decisions which align with its values when awarding
contracts. When considering suppliers, the board advocates prompt payment practices, which are reviewed regularly by the
internal audit function, and the implementation of procedures to reduce the risk of modern slavery in supply chains - as set
out in the Company’s annual modern slavery statement (available via the Northern Powegrid Group website).
Financial stakeholders
Financial information is routinely made available to financial stakeholders, including relationship banks and bondholders.
Directors engage with stakeholders when entering into new financial arrangements. During the year, the board approved an
interim dividend, the annual, interim and Regulatory accounts and the tax strategy and met representatives from the
Company’s external auditor.
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Northern Powergrid (Northeast) plc
Strategic Report for the Year Ended 31 December 2024 (continued)
Community and environment
Each director is required to take all reasonable steps to minimise any detrimental impact the Company’s operations may
have on the environment (see ‘Environmental Respect’). The Company provides a range of charitable and community
activities to support customers with fuel poverty and safety around electricity (‘Corporate Responsibility’). During the
year, the directors routinely reviewed environmental performance and made decisions pursuant to Environmental Respect.
Regulator
The Company is in regular dialogue with Ofgem concerning new policy development and emerging risks or opportunities
within the sector. As outlined in ‘Regulatory Integrity’, to meet its licence conditions, the Company and the directors
provide regular reporting to Ofgem (including the annual regulatory certificates and Regulatory Accounts), contribute to
various regulatory consultations and monitor regulatory compliance. Given the implications on the Company’s long-term
strategy, the relationship with Ofgem and the evolving ED3 framework were regular items on the board agenda throughout
the year.
Acting fairly as between the Company’s owners
The Company has one class of ordinary shares which are all held by YEG, a company in the Northern Powergrid Group.
During the year the directors declared an interim dividend and approved the Business Plan. As outlined in ‘Strategy’, the
Northern Powergrid Group is owned by Berkshire Hathaway Energy. Further details of the shareholder relationship is set
out in the ‘Corporate Governance Statement’.
Non-financial and sustainability information statement
In accordance with Section 414CA(7) of the Companies Act 2006, the directors have elected to set out the information
required by Section 414CB (1) to (6) in the group annual report and audited consolidated financial statements of Northern
Powergrid Holdings Company, a copy of which, will be published on the Northern Powergrid Group's corporate website.
Approved by the Board on 11 June 2025 and signed on its behalf by:
.........................................
A P Jones
Director
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Northern Powergrid (Northeast) plc
Directors' Report for the Year Ended 31 December 2024
The directors present their report together with the auditor's report and the financial statements for the year ended 31
December 2024.
Dividends
During the year, an interim dividend of £300.0 million was paid (2023: £31.4 million). The directors recommend that no
final dividend be paid in respect of the year (2023: £nil).
An interim dividend of £160.0 million was paid in February 2025.
The Company's dividend policy is that dividends will be paid only after having due regard to available distributable
reserves, available liquid funds and the financial resources and facilities needed to enable the Company to carry on its
business for at least the next year, with the Company’s long-term prospects and viability in mind. In addition, the level of
dividends is set to maintain sufficient equity in the Northern Powergrid Group so as not to jeopardise any investment grade
credit ratings. These strict parameters align with the conditions set out in the distribution licence and are considered
carefully by the board so as to ensure that the payment of any dividend does not cause the Company to breach any licence
obligations in the future.
Directors of the Company
The directors, who held office during the year and up to the date of signing, were as follows:
A J Maclennan
A P Jones
A R Marshall
P A Jones
P C Taylor
T H France
During the year none of the directors had an interest in any contract which was material to the business of the Company;
and up to the date of approval of the Report of the Directors, an indemnity contained in the Company's Articles of
Association was in force for the benefit of the directors of the Company and as directors of associated companies, which
was a qualifying indemnity provision for the purposes of the Companies Act 2006.
Future Developments
The financial position of the Company, as at 31 December 2024, is shown in the statement of financial position. With the
exception of the aforementioned £160 million dividend, there have been no significant events since the year end. The
directors intend that the Company will continue to implement the Business Plan during the remainder the ED2 period, and
by delivering the strategic objectives linked to the Core Principles, the Company will continue to develop its business by
efficiently investing in the Network and improving the quality of supply and service provided to customers. The Company
intends to continue to embrace the role of DSO by expanding its energy systems operations in order to allow its Network
to form a key part of a whole energy system, which fosters flexibility and facilitates decarbonisation.
Research and Development
The Group supports a programme of research that is expected to contribute to higher standards of performance and a more
cost-effective operation of its business. During the year, the Company invested £0.9 million (2023: £2.0 million) (Note 5
to the financial statements) in its research and development activities.
Financial Instruments
Details of financial risks are included in the Principal Risks and Uncertainties in the Strategic Report and Note 29 to the
financial statements.
As at 31 December 2024 and during the year it was the Group's policy not to hold any derivative financial instruments.
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Northern Powergrid (Northeast) plc
Directors' Report for the Year Ended 31 December 2024 (continued)
Stakeholder engagement and environmental disclosures
In accordance with Paragraphs 10, 11 and 15 of Schedule 7 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, details concerning the employment of disabled persons, the relationship and
engagement with employees and those with whom the Company does business, in addition to information concerning
greenhouse gas emissions can be found in the Section 172 Statement and the Strategic Report (Environmental Respect and
Employee Commitment).
CORPORATE GOVERNANCE STATEMENT
The directors have elected to apply the exemption set out in Section 1B.1.6R of the Disclosure and Transparency Rules
(“DTR”). See ‘Principal risks and uncertainty’ and ‘Internal control’ in the Strategic Report for details of internal control
and risk management systems.
Additional information concerning the Corporate Governance arrangements applicable to the Company, are set out in the
Annual Report and Accounts of Northern Electric plc.
In respect of the Company’s diversity policy, all appointments are based on merit with due regard for diversity, inclusion
and equal opportunity. The Northern Powergrid Group does not set diversity targets.
Audit Committee
The board of Northern Powergrid Holdings Company has established an audit committee for the Northern Powergrid
Group under delegated terms of reference which carries out the functions required by DTR 7.1.3 R.
Committee members:
M Knowles - Independent member
J Reynolds - Non-executive Director (Chair)
A P Jones, Finance Director
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Northern Powergrid (Northeast) plc
Directors' Report for the Year Ended 31 December 2024 (continued)
STATEMENT OF DIRECTORS RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent Company financial statements for each financial year.
Under that law they are required to prepare the Group financial statements in accordance with UK-adopted international
accounting standards and applicable law and have elected to prepare the parent Company financial statements on the same
basis.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and parent Company and of their profit or loss for that period. In
preparing each of the Group and parent Company financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable, relevant and reliable;
state whether they have been prepared in accordance with UK-adopted international accounting standards;
assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to
cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent Company
and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for
such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report, Directors’ Report,
and Corporate Governance Statement that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule (“DTR”) 4.1.16R, the financial statements will form part
of the annual financial report prepared under DTR 4.1.17R and 4.1.18R. The auditor’s report on these financial statements
provides no assurance over whether the annual financial report has been prepared in accordance with those requirements.
Responsibility statement of the directors in respect of the annual financial report
We confirm that to the best of our knowledge:
the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the
consolidation taken as a whole; and
the strategic report includes a fair review of the development and performance of the business and the position of the
issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks
and uncertainties that they face.
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Northern Powergrid (Northeast) plc
Directors' Report for the Year Ended 31 December 2024 (continued)
Going Concern
A review of the Company's business activities during the year, together with details regarding its future development,
performance and position, its objectives, policies and processes for managing its capital, its financial risk management
objectives and details of its exposures to trading risk, credit risk and liquidity risk are set out in the Strategic Report, the
Directors' Report and the appropriate notes to the financial statements.
The directors have responsibility over performing a going concern assessment and when considering continuing to adopt
the going concern basis in preparing the annual reports and financial statements, they have considered a number of factors,
including:
The Company is a stable electricity distribution business operating an essential public service and is regulated by
GEMA. In carrying out its functions, GEMA has a statutory duty under the Electricity Act 1989 to have regard to
the need to secure that licence holders are able to finance the activities, which are the subject of obligations under
Part 1 of the Electricity Act 1989 (including the obligations imposed by the electricity distribution licence) or by
the Utilities Act 2000;
The Company is profitable with strong underlying cash flows;
The cash flow forecasts indicate that, in both the base and reasonably possible downside scenario, the Company
will require funding through the intercompany current account mechanism to meet its liabilities as they fall due for
at least 12 months from the approval of the financial statements, the going concern assessment period;
Northern Powergrid Holdings Company, being the ultimate UK parent company, has indicated its intention to
continue to make available such funds as are needed by the Company through the intercompany current account
mechanism;
The Company is financed by long-term borrowings with an average maturity of 24 years and has access to
short-term committed borrowing facilities of £119 million provided by Barclays Bank plc, Lloyds Bank plc, HSBC
UK Bank plc and Royal Bank of Canada;
The Company benefits from strong investment-grade credit ratings and has access to a range of financing options
including the capital markets.
Consideration was also given to the obligations contained in the Company's and Northern Powergrid (Yorkshire)
plc's distribution licences to provide Ofgem with annual certificates, confirming that the directors have a reasonable
expectation that the Company and Northern Powergrid (Yorkshire) plc will have sufficient financial and operational
resources available for the continuation of business for a period of at least 12 months. The board determined any
material variations to the assumptions used when providing those certificates were unlikely within the eight-year
period or beyond.
Consequently, after making their assessment, the directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence and meet its liabilities as they fall due for at least 12 months from the date of
approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the annual
report and financial statements.
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Northern Powergrid (Northeast) plc
Directors' Report for the Year Ended 31 December 2024 (continued)
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant
audit information and to establish that the Company's auditor is aware of that information. The directors confirm that there
is no relevant information that they know of and of which they know the auditor is unaware. This confirmation is given
and should be interpreted in accordance with the provisions of s418 of the companies Act 2006.
Reappointment of auditor
KPMG will continue in office in accordance with the provisions in Section 487 of the Companies Act 2006 and has
indicated its willingness to do so.
Approved by the Board on 11 June 2025 and signed on its behalf by:
.........................................
A P Jones
Director
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Northern Powergrid (Northeast) plc
Independent Auditor's Report to the Members of Northern Powergrid (Northeast) plc
1 Our opinion is unmodified
We have audited the financial statements of Northern Powergrid (Northeast) Plc (“the Company”) for the year ended 31
December 2024 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the
Consolidated Statement of Cash Flows, the parent Company Statement of Financial Position, the parent Company
Statement of Changes in Equity, the parent Company Statement of Cash Flows, and the related notes, including the
accounting policies in note 2.
In our opinion:
the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31
December 2024 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
the parent Company financial statements have been properly prepared in accordance with UK-adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and
appropriate basis for our opinion. Our audit opinion is consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on 18th September 2024. The period of total
uninterrupted engagement is for the one financial year ended 31 December 2024. We have fulfilled our ethical
responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including
the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that standard
were provided.
2 Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the
financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in
the audit; and directing the efforts of the engagement team. We summarise below the key audit matters, in decreasing
order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address those
matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and
our results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial
statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not
provide a separate opinion on these matters.
The split of total costs between operating and capital expenditure and the assessment of what is directly
attributable to Property, Plant and Equipment
Expenditure allocated to property, plant and equipment: £58.6m
Refer to page 45 (critical accounting estimates and judgements) and pages 43-93 (accounting policies and financial
disclosures).
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Northern Powergrid (Northeast) plc
Independent Auditor's Report to the Members of Northern Powergrid (Northeast) plc
(continued)
The risk (Group and parent Company) - Accounting Treatment
The Group and Company undertake major capital projects, including enhancements to the distribution network.
The determination of costs as capital or operating expenditure, in line with IAS 16 Property, Plant and Equipment, depends
on the ability to distinguish between enhancement and maintenance works. Under IAS 16, expenditure is capitalised when
it is probable that the future economic benefits associated with the item will flow to the entity where such expenditure
enhances or increases capacity of the network.
We determined that there is an elevated level of judgement involved in determining the costs to be capitalised or expensed,
and an elevated level of estimation uncertainty involved, with a potential range of reasonable outcomes greater than our
materiality for the financial statements as a whole.
Our response
We performed the tests below rather than seeking to rely on any of the Group and Company’s controls because the nature
of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described.
Our procedures included:
Accounting analysis
: Assessment of the Group and Company’s capitalisation policy for compliance with IAS 16;
Test of details
: critically assessed the capital nature of a sample of additions against the capitalisation policy;
Methodology implementation:
assessed the mathematical accuracy of the model used to calculate the level of expenditure
capitalised, for a sample of costs capitalised;
Test of details:
challenged the Group and Company on the selection and application of methods and performed sensitivity
analysis on the percentage of indirect expenditure that is capitalised, based on our understanding of the business and the
nature of the costs; and
Assess transparency:
assessed the adequacy of the Group’s and Company’s disclosures with respect to its capitalisation
policy, including the judgement involved in determining whether expenditure is capital in nature and the estimation
involved in setting the capitalisation rate of 41.8%,
Our Results:
We found the Group’s and Company’s capitalisation of expenditure to be acceptable
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Northern Powergrid (Northeast) plc
Independent Auditor's Report to the Members of Northern Powergrid (Northeast) plc
(continued)
3 Our application of materiality and an overview of the scope of our audit
Our application of materiality
Materiality for the Group financial statements as a whole was set at £6.6m, determined with reference to a benchmark of
Group profit before tax, normalised by averaging over the last three years due to fluctuations in the business cycle, of
£173.4m, of which it represents 3.8%.
Materiality for the parent Company financial statements as a whole was set at £6.2m determined with reference to a
benchmark of the parent Company’s profit before tax, normalised by averaging over the last three years due to fluctuations
in the business cycle, of £173.4m, of which it represents 3.6%.
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a
lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material amount across the financial statements as a whole.
Performance materiality was set at 65% of materiality for the financial statements as a whole, which equates to £4.3m for
the Group and £4.0m for the parent Company. We applied this percentage in our determination of performance materiality
based on our understanding of the control environment obtained as part of our first year audit, and our understanding of the
level of identified misstatements during the prior period.
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £0.3m in
addition to other identified misstatements that warranted reporting on qualitative grounds.
Overview of the scope of our audit
We performed risk assessment procedures to determine which of the Group’s components are likely to include risks of
material misstatement to the Group financial statements and which procedures to perform at these components to address
those risks.
In total, we identified 2 components, having considered our evaluation of the Group’s operational and legal structure, and
our ability to perform audit procedures centrally. Of those, we identified 1 quantitatively significant component which
contained the largest percentages of either total revenue or total assets of the Group, for which we performed audit
procedures.
Additionally, having considered qualitative and quantitative factors, we selected 1 component with accounts contributing
to the specific RMMs of the Group financial statements.
Accordingly, we performed audit procedures on 2 components, including the audit of the parent Company.
We set the component materialities, ranging from £2.4m to £6.2m, having regard to the mix of size and risk profile of the
Group across the components.
Our audit procedures covered 100% of Group revenue. We performed audit procedures in relation to components that
accounted for 100% of Group profit before tax, and 100% of Group total assets.
The scope of the audit work performed was predominately substantive as we placed limited reliance upon the Group’s
internal control over financial reporting.
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Northern Powergrid (Northeast) plc
Independent Auditor's Report to the Members of Northern Powergrid (Northeast) plc
(continued)
4 Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the
Group or the Company or to cease their operations, and as they have concluded that the Group’s and the Company’s
financial position means that this is realistic. They have also concluded that there are no material uncertainties that could
have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of
the financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to
its business model and analysed how those risks might affect the Group and parent Company’s financial resources or
ability to continue operations over the going concern period. The risks that we considered most likely to adversely affect
the Group and parent Company’s available financial resources over this period are refinancing risks, uncertainties around
inflationary rises in operating costs and regulatory price control outcomes.
We considered whether these risks could plausibly affect the liquidity or covenant compliance in the going concern period
by comparing severe, but plausible downside scenarios that could arise from these risks individually and collectively
against the level of available financial resources and covenants thresholds indicated by the Group’s financial forecasts.
Given the purpose of the Group, and since the entity is reliant on financial support from its intermediate parent Company,
Northern Powergrid Holdings Company, we assessed the risk that this support would not be available. Our procedures on
going concern also included:
Inspecting letters received by the directors indicating the intermediate parent Company’s intention to provide this
support;
Inspecting and critically assessing the internally provided cash flow projections over the going concern assessment
period for the wider group, and the level of available financial resources indicated by those financial projections to assess
the ability of the intermediate parent Company to make scheduled repayments to the Group, including repayments in line
with the Group’s external debt obligations; and
Assessing the business reasons why the intermediate parent Company may or may not choose to provide this support.
We also assessed the completeness of the going concern disclosure.
Our conclusions based on this work:
we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements
is appropriate;
we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events
or conditions that, individually or collectively, may cast significant doubt on the Group’s or Company's ability to continue
as a going concern for the going concern period; and
We found the going concern disclosure in Note 2 to be acceptable.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee
that the Group or the Company will continue in operation.
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Northern Powergrid (Northeast) plc
Independent Auditor's Report to the Members of Northern Powergrid (Northeast) plc
(continued)
5 Fraud and breaches of laws and regulations - ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate
an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures
included:
Enquiring of directors, the audit committee, and internal audit, and inspection of policy documentation as to the Group’s
high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s
channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
Reading Board minutes and attending Group audit committee meetings.
Considering remuneration incentive schemes and performance targets for management and directors.
Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud
throughout the audit.
As required by auditing standards, and taking into account possible pressures to meet profit targets and our overall
knowledge of the control environment, we perform procedures to address the risk of management override of controls, in
particular the risk that Group management may be in a position to make inappropriate accounting entries and the risk of
bias in accounting estimates and judgements such as the overhead capitalisation assumption. On this audit we do not
believe there is a fraud risk related to revenue recognition because the lack of material judgement or estimation and, due to
the nature of the industry, the Group operates in a stable, regulated market where the energy volumes are monitored and
supplied by an independent third party. We did not identify any additional fraud risks.
We performed procedures including:
Identifying journal entries to test at the Group level and components based on risk criteria and comparing the identified
entries to supporting documentation. These included unusual postings to revenue, cash, loans and borrowings, property
plant and equipment, and legal expenses.
Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial
statements from our general commercial and sector experience, through discussion with the directors and other
management (as required by auditing standards), and from inspection of the Group’s regulatory and legal correspondence
and discussed with the directors and other management the policies and procedures regarding compliance with laws and
regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including
the entity’s procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any indications of
non-compliance throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial
reporting legislation (including related companies’ legislation), distributable profits legislation, taxation legislation, and
regulatory requirements governing distribution revenue and we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statement items.
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Northern Powergrid (Northeast) plc
Independent Auditor's Report to the Members of Northern Powergrid (Northeast) plc
(continued)
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have
a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or
litigation or the loss of the Group’s license to operate. We identified the following areas as those most likely to have such
an effect: health and safety, data protection laws, anti-bribery, employment law, environmental, Ofgem regulations and
certain aspects of company legislation recognising the nature of the Group’s activities and its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to
enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if
a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect
that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in accordance
with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed
to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to
detect non-compliance with all laws and regulations.
6 We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not
express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements
audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit
knowledge. Based solely on that work we have not identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
we have not identified material misstatements in the strategic report and the directors’ report;
in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006.
7 We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
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Northern Powergrid (Northeast) plc
Independent Auditor's Report to the Members of Northern Powergrid (Northeast) plc
(continued)
8 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 23, the directors are responsible for: the preparation of the
financial statements including being satisfied that they give a true and fair view; such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error; assessing the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the
Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report prepared under Disclosure
Guidance and Transparency Rule 4.1.17R and 4.1.18R. This auditor's report provides no assurance over whether the
annual financial report has been prepared in accordance with those requirements
9 The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters
we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our
audit work, for this report, or for the opinions we have formed.
Andrew Williamson (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
319 St Vincent Street,
Glasgow
G2 5AS
11 June 2025
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Northern Powergrid (Northeast) plc
Consolidated Income Statement for the Year Ended 31 December 2024
Note
2024
£ 000
(As restated)
2023
£ 000
Revenue
4 536,365 435,747
Cost of sales (21,458) (42,503)
Gross profit
514,907 393,244
Distribution costs
(155,755) (144,055)
Administrative expenses (95,045) (83,183)
Operating profit
6 264,107 166,006
Profit on disposal of property, plant and equipment
5 71 79
Finance income
7 5,110 13,282
Finance costs
7
(33,475) (33,712)
Profit before tax
235,813 145,655
Income tax expense
11
(57,937) (32,045)
Profit for the year
177,876 113,610
Profit attributable to:
Owners of the Company
177,876 113,610
Further detail of prior year adjustments affecting the Income Statement can be found in Note 3.
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2024
2024
£ 000
2023
£ 000
Profit for the year from continuing operations 177,876 113,610
Total comprehensive income for the year
177,876 113,610
Total comprehensive income attributable to:
Owners of the Company
177,876 113,610
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
(Registration number: 02906593)
Consolidated Statement of Financial Position as at 31 December 2024
Note
31 December
2024
£ 000
(As restated)
31 December
2023
£ 000
Assets
Non-current assets
Property, plant and equipment
12 3,084,584 2,949,201
Right of use assets
13 20,884 22,128
Intangible assets
14
54,177 50,605
3,159,645 3,021,934
Current assets
Inventories
16 28,544 29,277
Trade and other receivables
17 127,842 345,798
Cash and cash equivalents
18
- 23
156,386 375,098
Total assets
3,316,031 3,397,032
Equity and liabilities
Equity
Share capital
19 (200,000) (200,000)
Retained earnings (996,747) (1,118,871)
Equity attributable to owners of the company (1,196,747) (1,318,871)
Non-current liabilities
Long-term lease liabilities
22 (17,019) (17,754)
Loans and borrowings
21 (1,057,728) (1,057,393)
Provisions
23 - (55)
Trade and other payables
24 (6,549) -
Deferred revenue from customer contracts
25 (693,395) (672,734)
Deferred tax liabilities
11
(143,466) (134,271)
(1,918,157) (1,882,207)
Current liabilities
Current portion of long-term lease liabilities
22 (4,765) (5,055)
Trade and other payables
24 (136,922) (132,082)
Loans and borrowings
21 (19,285) (21,922)
Current tax liability
11 (6,412) (5,162)
Deferred revenue from customer contracts
25 (32,181) (30,219)
Provisions
23
(1,562) (1,514)
(201,127) (195,954)
Total liabilities (2,119,284) (2,078,161)
Total equity and liabilities
(3,316,031) (3,397,032)
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
(Registration number: 02906593)
Consolidated Statement of Financial Position as at 31 December 2024 (continued)
Further detail of prior year adjustments affecting the Statement of Financial Position can be found in Note 3.
Approved by the Board on 11 June 2025 and signed on its behalf by:
.........................................
A P Jones
Director
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
(Registration number: 02906593)
Company Statement of Financial Position as at 31 December 2024
Note
31 December
2024
£ 000
(As restated)
31 December
2023
£ 000
Assets
Non-current assets
Property, plant and equipment
12 3,084,584 2,949,201
Right of use assets
13 20,884 22,128
Intangible assets
14 54,177 50,605
Investments in subsidiaries, joint ventures and associates
15
50 50
3,159,695 3,021,984
Current assets
Inventories
16 29,603 29,277
Trade and other receivables
17 125,259 349,356
Cash and cash equivalents
18
- 23
154,862 378,656
Total assets
3,314,557 3,400,640
Equity and liabilities
Equity
Share capital
19 (200,000) (200,000)
Retained earnings (998,590) (1,120,678)
Total equity (1,198,590) (1,320,678)
Non-current liabilities
Long-term lease liabilities
22 (17,019) (17,754)
Loans and borrowings
21 (1,057,725) (1,057,389)
Provisions
23 - (55)
Trade and other payables
24 (6,549) -
Deferred revenue from customer contracts
25 (693,395) (672,734)
Deferred tax liabilities
11
(143,466) (134,271)
(1,918,154) (1,882,203)
Current liabilities
Current portion of long-term lease liabilities
22 (4,765) (5,055)
Trade and other payables
24 (136,922) (132,082)
Loans and borrowings
21 (15,971) (23,733)
Income tax liability
11 (6,412) (5,156)
Deferred revenue from customer contracts
25 (32,181) (30,219)
Provisions
23
(1,562) (1,514)
(197,813) (197,759)
Total liabilities (2,115,967) (2,079,962)
Total equity and liabilities
(3,314,557) (3,400,640)
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
(Registration number: 02906593)
Company Statement of Financial Position as at 31 December 2024 (continued)
Further detail of prior year adjustments affecting the Statement of Financial Position can be found in Note 3.
The Directors have taken the exemption offered under section 408 of the Act from publishing a separate statement of profit
or loss. The Company reported a profit for the financial year ended 31 December 2024 of £177.9 million (2023: £113.6
million)
Approved by the Board on 11 June 2025 and signed on its behalf by:
.........................................
A P Jones
Director
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2024
Share capital
£ 000
Retained
earnings
£ 000
Total
£ 000
At 1 January 2024
200,000 1,118,871 1,318,871
Profit for the year - 177,876 177,876
Total comprehensive income
- 177,876 177,876
Dividends - (300,000) (300,000)
At 31 December 2024
200,000 996,747 1,196,747
Share capital
£ 000
Retained
earnings
£ 000
Total
£ 000
At 1 January 2023
200,000 1,036,661 1,236,661
Profit for the year - 113,610 113,610
Total comprehensive income
- 113,610 113,610
Dividends - (31,400) (31,400)
At 31 December 2023
200,000 1,118,871 1,318,871
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
Company Statement of Changes in Equity for the Year Ended 31 December 2024
Share capital
£ 000
Retained
earnings
£ 000
Total
£ 000
At 1 January 2024
200,000 1,120,678 1,320,678
Profit for the year - 177,912 177,912
Total comprehensive income
- 177,912 177,912
Dividends - (300,000) (300,000)
At 31 December 2024
200,000 998,590 1,198,590
Share capital
£ 000
Retained
earnings
£ 000
Total
£ 000
At 1 January 2023
200,000 1,038,447 1,238,447
Profit for the year - 113,631 113,631
Total comprehensive income
- 113,631 113,631
Dividends - (31,400) (31,400)
At 31 December 2023
200,000 1,120,678 1,320,678
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
Consolidated Statement of Cash Flows for the Year Ended 31 December 2024
2024
£ 000
(As restated)
2023
£ 000
Cash flows from operating activities
Cash receipts from customers
622,223 521,353
Net cash from operating activities
622,223 521,353
Cash flows from investing activities
Transfers to intercompany accounts
(587,249) (460,128)
Net cash flows used in investing activities
(587,249) (460,128)
Cash flows from financing activities
Interest paid
(32,286) (28,206)
Repayment of short-term borrowings (2,711) (34,692)
Net cash flows (used in)/from financing activities
(34,997) (62,898)
Net decrease in cash and cash equivalents
(23) (1,673)
Opening cash and cash equivalents
23 1,696
Closing cash and cash equivalents
- 23
Further detail can be found under 'Restatement of Cash Flow Statement' in Note 3.
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
Company Statement of Cash Flows for the Year Ended 31 December 2024
2024
£ 000
(As restated)
2023
£ 000
Cash flows from operating activities
Cash receipts from customers
622,223 521,153
Net cash from operating activities
622,223 521,153
Cash flows from investing activities
Transfers to intercompany accounts
(599,452) (472,331)
Net cash flows used in investing activities
(599,452) (472,331)
Cash flows from financing activities
Interest paid
(20,083) (20,125)
Repayment of short-term borrowings (2,711) (30,571)
Net cash flows (used in)/from financing activities
(22,794) (50,696)
Net decrease in cash and cash equivalents
(23) (1,873)
Opening cash and cash equivalents
23 1,919
Closing cash and cash equivalents
- 23
Further detail can be found under 'Restatement of Cash Flow Statement' in Note 3.
The notes on pages 43 to 93 form an integral part of these financial statements.
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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024
1 General information
The company is a public company limited by share capital, incorporated in England and Wales and domiciled in
United
Kingdom.

The address of its registered office is Lloyds Court, 78 Grey Street, Newcastle upon Tyne, NE1 6AF.
These financial statements were authorised for issue by the Board on 10 June 2025.



2 Accounting policies
Statement of compliance
The financial statements have been prepared in accordance with United Kingdom adopted international accounts standards
as issued by the IASB.

Summary of material accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with adopted IFRSs and under historical cost accounting rules.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Group's accounting policies.
The Group financial statements incorporate the Accounts of the Company and its wholly owned subsidiary, Northern
Electric Finance plc. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

2 Accounting policies (continued)
Going concern
A review of the Company's business activities during the year, together with details regarding its future development,
performance and position, its objectives, policies and processes for managing its capital, its financial risk management
objectives and details of its exposures to trading risk, credit risk and liquidity risk are set out in the Strategic Report, the
Directors' Report and the appropriate notes to the financial statements.
The directors have responsibility over performing a going concern assessment and when considering continuing to adopt
the going concern basis in preparing the annual reports and financial statements, they have considered a number of factors,
including:
The Company is a stable electricity distribution business operating an essential public service and is regulated by
GEMA. In carrying out its functions, GEMA has a statutory duty under the Electricity Act 1989 to have regard to
the need to secure that licence holders are able to finance the activities, which are the subject of obligations under
Part 1 of the Electricity Act 1989 (including the obligations imposed by the electricity distribution licence) or by
the Utilities Act 2000;
The Company is profitable with strong underlying cash flows;
The cash flow forecasts indicate that, in both the base and reasonably possible downside scenario, the Company
will require funding through the intercompany current account mechanism to meet its liabilities as they fall due for
at least 12 months from the approval of the financial statements, the going concern assessment period;
Northern Powergrid Holdings Company, being the ultimate UK parent company, has indicated its intention to
continue to make available such funds as are needed by the Company through the intercompany current account
mechanism;
The Company is financed by long-term borrowings with an average maturity of 24 years and has access to
short-term committed borrowing facilities of £119 million provided by Barclays Bank plc, Lloyds Bank plc, HSBC
UK Bank plc and Royal Bank of Canada;
The Company benefits from strong investment-grade credit ratings and has access to a range of financing options
including the capital markets.
Consideration was also given to the obligations contained in the Company's and Northern Powergrid (Yorkshire)
plc's distribution licences to provide Ofgem with annual certificates, confirming that the directors have a reasonable
expectation that the Company and Northern Powergrid (Yorkshire) plc will have sufficient financial and operational
resources available for the continuation of business for a period of at least 12 months. The board determined any
material variations to the assumptions used when providing those certificates were unlikely within the eight-year
period or beyond.
Consequently, after making their assessment, the directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence and meet its liabilities as they fall due for at least 12 months from the date of
approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the annual
report and financial statements.


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

2 Accounting policies (continued)

Judgements, estimation and uncertainties
Management may be required to make a number of judgements and assumptions regarding the future and about other
sources of estimation uncertainity at the end of the reporting period that may have a significant risk of resulting in a
material adjustment to the reported amounts of assets and liabilites within the next financial year.
Key sources of estimation uncertainty
Useful lives of property, plant and equipment
The useful economic lives of distribution system assets and other network related facilities, which principally comprise
distribution equipment and other technical installations, are estimated based on management experience. When
management identifies that actual useful economic lives differ materially from the estimates used, they are adjusted
prospectively. This estimation uncertainty creates a risk of a material adjustment to the asset lives, and therefore the
depreciation charge in the next financial year. The depreciation charge on these distribution system assets for the year
is£100.1m. Income for connections is recognised over the useful life of the associated distribution system asset, the
amount recognised in the financial year was £31.5m.
Additionally, consideration has been given to any estimates over the longer-term which should be disclosed to allow for an
understanding of the financial statements. The Company has no estimates of this nature to disclose.
The following are the critical judgements, that the directors have made in the process of applying the Northern Powergrid
Group's accounting policies and that have the most significant effect on amounts recognised in the consolidated financial
statements:
The split of total costs between operating and capital expenditure and the assessment of what is directly attributable to
property, plant and equipment.
The allocation of expenditure to property, plant and equipment which results in higher capital expenditure and a reduction
in operating costs. Costs are capitalised where it is probable that future economic benefits associated with the asset will
flow to the enterprise; and the cost of the item can be reliably measured.
The allocation of expenditure to capital is derived from a detailed analysis of the costs and their relevant cost drivers,
which is reviewed on an annual basis. This portion of costs that are capitalised is an estimation, however there has been no
change in the methodology since the prior year.
The amount of expenditure capitalised in the year was £58.6 million out of total costs of £140.3 million (2023: £49.6
million out of a total cost of £118.7 million), this is a capitalisation rate of 41.8% (2023: 41.8%).



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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

2 Accounting policies (continued)

Changes in accounting policy
New standards, interpretations and amendments effective
Effective for periods beginning on 1 January 2024:
- Amendments to IAS 1: Classification of Liabilities as Current or Non-current
- Amendments to IFRS 16: Lease Liability on a Sale and Leaseback
- Amendments to IAS 7 and IFRS 7: Supplier Finance Agreements
The Directors have considered the new accounting standards issued that are not yet applicable and have noted no material
changes are likely to arise.


Revenue recognition
Recognition
The group earns revenue from the provision of services relating to distribution which is recognised by the following
means:
- Distribution use of system income is primarily recognised on a per unit (volumetric i.e. kWh and capacity (kVA)) and
fixed (per 'customer' per day) basis;
- Customer contributions income for connections is over the life of the corresponding distribution system asset;
- Intercompany recharges for services provided are based on costs incurred; and
- Other revenue includes assessment and design fees and disconnections from the network, these are recognised by
reference to the proportion of total costs of providing the service.
Revenue is recognised in the accounting period when the services are rendered at an amount that reflects the consideration
to which the entity expects to be entitled in exchange for fulfilling its performance obligations to customers.
Any under/over-recovery in the regulatory year is trued up in subsequent years’ revenue allowances in line with the
regulatory framework. Hence, no accounting adjustments are made for under/over-recoveries in the year that they arise as
they are contingent on future events. Due to the nature of the national electricity settlements processes billed revenue
includes the reconciliations of data for prior periods. Invoices are raised one month in arrears and typically settles within
the month.
The principles in IFRS are applied to revenue recognition criteria using the following 5 step model:
1. Identify the contracts with the customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognise revenue when or as the entity satisfies its performance obligations

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
2 Accounting policies (continued)
Fee arrangements
Below are details of fee arrangements and how these are measured and recognised, for revenue from the provision of
services:
For regulated fees the revenue for the service is recognised on the basis of agreed charging methodologies on a per
GWh basis.
For fixed fee arrangements from services revenue is recognised based on the stage of completion and performance
obligations met for actual services provided as a proportion of the total fixed fee agreed in the contract.
For fee for service (time) revenue is recognised by time performed on the contract to the year end date using
contractual rates specified in the contract.
The main performance obligations in contracts consist of the provision of a distribution network to electricity suppliers.
For these contracts, through the distribution and connection use of system agreement (DCUSA) the delivery of
performance obligations are measured at the balance sheet date, primarily recognised on a per unit (volumetric i.e. kWh
and capacity (kVA)) and fixed (per 'customer' per day) basis;
Research and development
Expenditure on research and development activities are recognised in the income statement as an expense is incurred.
Funding received towards research and development activities is recorded as a liability on the balance sheet and credited to
the profit and loss account on a systematic basis over the periods in which the Group recognises as expenses the related
costs for which the grants are intended to compensate.
Finance income and costs policy
Interest income or expense is recognised using the effective interest method. The effective interest method is the rate that
exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the
gross carrying amount of the financial asset to the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the
financial asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets
that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective
interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of
interest income reverts to the gross basis.

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
2 Accounting policies (continued)
Tax
The tax expense for the period comprises current and deferred tax.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively
enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred
income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and are reduced to the extent that is no
longer probable that the related tax benefit will be realised. Any such reduction is reversed when the probability of future
taxable profits improve.
Property, plant and equipment
Property, plant and equipment is stated in the statement of financial position at cost, less any subsequent accumulated
depreciation and subsequent accumulated impairment losses.
The cost of property, plant and equipment includes directly attributable incremental costs incurred in their acquisition and
installation along with costs from transfer of inventories used in capital projects. Overheads are allocated to property, plant
and equipment which are derived from a detailed analysis of operating costs.
Assets in the course of construction are carried at cost, less any recognised impairment loss. Costs include professional
fees, and, for qualifying assets, borrowing costs capitalised in accordance with the Company's accounting policy. Such
assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended
use. Depreciation on these assets, on the same basis as other assets, commences when the assets are commissioned and
ready for use.
Adopted assets and associated contributions are recorded upon completion where such assets are adopted by the Company
under a Deed of Gift adoption agreement.
Assets are derecognised when they are disposed of or replaced using the cost of replacement as an estimate of the cost of
the original asset at the time it was acquired or constructed; the difference between cost and net book value is charged in
the statement of profit or loss. For other assets disposed of where sales proceeds are received, the profit or loss on disposal
is recognised in other gains in the statement of profit or loss.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their
estimated useful lives. Depreciation is recognised on a straight line basis as follows:

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)





2 Accounting policies (continued)
Asset Class Depreciation Rate
Distribution system;
- Generation assets 15 years
- Metering equipment up to 5 years
- Information Technology equipment up to 10 years
- Land not depreciated
- Other system assets 45 years
Buildings;
- Freehold up to 60 years
- Leasehold lower of lease period or 60 years
Non-operational land not depreciated
Furniture, fittings and equipment up to 10 years



Intangible assets
An internally generated intangible asset arising from development is recognised if the conditions set out in IAS 38 relating
to the recognition of intangible assets are met. The amount initially recognised for internally-generated intangible asset is
the sum of expenditure incurred from the date when the intangible asset first meets the recognition criteria.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their
expected useful economic life as follows:
Asset class Amortisation method and rate
Software development costs up to 10 years

Derecognition
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal.
Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal
proceeds and the carrying amount of the asset, are recognised in the profit or loss when the asset is derecognised.


Investments in subsidiaries
Investments in subsidiaries are accounted for at cost less impairment. Where the recoverable amount is estimated to be less
than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is
recognised immediately in profit or loss.

Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Trade receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of business. If collection
is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current
assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at the transaction price. They are subsequently measured at transaction price, less
provision for impairment. The Company applies the simplified model for the calculation of expected credit losses which
may result in a provision for impairment.


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)





2 Accounting policies (continued)
Inventories
Inventory is not held for sale, consists primarily of spare parts and expected to be consumed in the normal course of
operating and maintaining the network assets. Cost is determined using an average cost basis.
Cost includes all directly attributable costs incurred in bringing the inventories to their present location and condition.

Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal
operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade payables are recognised initially at the transaction price and subsequently measured at amortised cost using the
effective interest method.

Borrowings
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date, the right to defer settlement must have substance and exist at the
reporting date. The terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of
equity instruments do not affect its classification as current or non-current.

Intercompany Short-term loans (Current Accounts)
The Northern Powergrid group operates a central treasury function operated through its subsidiary Yorkshire Electricity
Group plc. As a result, every company within the Northern Powergrid group has a relationship with Yorkshire Electricity
Group plc as either an intercompany debtor or creditor.
Interest periods are for a duration of one month, and the interest is applied to an intercompany debtor balance on the last
day of the preceding month at the compounded reference rate (currently SONIA) applicable under the most recent
revolving facility agreement to which Northern Powergrid Holdings Company is a party.
Monthly interest is applied to an intercompany creditor balance on the last day of the preceding month at the aggregate of
the compounded reference rate (currently SONIA) and the margin (currently 0.2%) applicable under the most recent
revolving facility agreement to which Northern Powergrid Holdings Company is a party.
The intercompany debtor or creditor balance will be repaid at the end of each month, or if still required will be rolled over
monthly.

Provisions
Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it is
probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the
obligation.
Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the reporting
date and are discounted to present value where the effect is material.


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)




2 Accounting policies (continued)
Leases
The Group applies IFRS 16 to all leases (except as noted below) which include buildings, land and fleet vehicles. The
right-of-use assets are initially measured at the amount of the lease liability plus any initial direct costs incurred by the
lessee, discounted at the rate implicit in the lease if that can be readily determined. If that rate cannot be readily
determined, the lessee shall use their incremental borrowing rate.
The Group has taken practical expedients as per below:
- For short-term leases (lease term of 12 months or less) and leases of low-value assets less than £5k (which includes
personal computers, small items of office furniture and telephones), the Company has opted to recognise a lease expense
on a straight-line basis as permitted by IFRS 16. This expense is presented within ‘administrative expenses’ in the
Statement of Profit or Loss.
- Applies the implicit rate in the lease, and uses the IBR when this isn't readily available.
The weighted average lessee's incremental borrowing rate is applied to determine the present value of the lease liabilities
during the current period was 5.5% in comparison to the incremental borrowing rate used in 2023 of 2.33%.
The Group recognises deprecation of right-of-use assets (within administration expenses) and interest on lease liabilities
(within finance costs) in the Statement of Profit and Loss. Within the Statement of cash flow, the Company separates the
total amount of cash paid between the principal portion and the interest, both of which are presented within financing
activities.
Right-of-use assets are depreciated over the shorter of the useful life of the asset or the lease term. For information
regarding the depreciation charge per class of asset and carrying value, please refer to Note 12 Right of use assets.


Impairment of non-financial assets
At the balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where the asset does
not generate cash flows that are independent from other assets, the group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Where the recoverable amount is estimated to be less than its carrying amount, the carrying amount of the asset is reduced
to its recoverable amount. An impairment loss is recognised immediately in profit or loss.


Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources
received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of
money is material, the initial measurement is on a present value basis.

Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the company’s financial statements in
the period in which the dividends are approved by the company’s shareholders.


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)



2 Accounting policies (continued)
Defined benefit pension obligation
The Group contributes to the Northern Powergrid Group of the Electricity Supply Pension Scheme (the "DB Scheme"), a
defined benefit scheme that shares risk between various entities under common control. There is no contractual agreement
or stated policy for charging the net defined benefit cost for the plan as a whole to individual group entities and
accordingly the Group financial statements account for the Northern Powergrid Group of the ESPS as if it were a defined
contribution scheme, full disclosure of the DB Scheme can be found in the accounts of Northern Electric plc.
Contributions to the Northern Powergrid Group of the ESPS are charged to the statement of profit or loss or capitalised as
part of property, plant and equipment. Contributions are agreed through agreement between the Trustees of the DB
Scheme and the Northern Powergrid Group. The capital costs of ex-gratia and supplementary pensions are normally
charged to the statement of profit or loss in the period in which they are granted.
The Group also participates in a defined contribution scheme. Contributions payable to the defined contribution scheme
are charged to the statement of profit or loss in the year. Differences between contributions payable in the year and
contributions actually paid are shown as either accruals or prepayments in the statement of financial position.



Financial instruments
Initial recognition
Financial assets and financial liabilities comprise all assets and liabilities reflected in the statement of financial position,
although excluding property, plant and equipment, investment properties, intangible assets, deferred tax assets,
prepayments, deferred tax liabilities and employee benefits plan.
The group recognises financial assets and financial liabilities in the statement of financial position when, and only when,
the group becomes party to the contractual provisions of the financial instrument.
Financial assets are initially recognised at fair value. Financial liabilities are initially recognised at fair value, representing
the proceeds received net of premiums, discounts and transaction costs that are directly attributable to the financial
liability.
Subsequent to initial measurement, financial assets and financial liabilities are measured at amortised cost.
Financial assets at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions:-
· the assets are held within a business model whose objective is to hold assets in order to collect contractual cash flows;
and
· the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Financial liabilities at amortised cost
All financial liabilities are measured at amortised cost using the effective interest rate method.
Derecognition
Financial assets
The Group derecognises a financial asset when;
- the contractual rights to the cash flows from the financial asset expire,
- it transfers the right to receive the contractual cash flows in a transaction in which substantially all of the risks and
rewards of ownership of the financial asset are transferred; or
- the group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control
of the financial asset.
On derecognition of a financial asset, the difference between the carrying amount of the asset and the sum of the
consideration received is recognised as a gain or loss in the profit or loss.





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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)




2 Accounting policies (continued)


Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire.

Modification of financial assets and financial liabilities
Financial assets
If the terms of a financial asset are modified, the Group evaluates whether the cash flows of the modified asset are
substantially different. If the cash flows are substantially different, then the contractual rights to the cash flows from the
original financial asset are deemed to expire. In this case the original financial asset is derecognised and a new financial
asset is recognised at either amortised cost or fair value.
If the cash flows are not substantially different, then the modification does not result in derecognition of the financial asset.
In this case, the group recalculates the gross carrying amount of the financial asset and recognises the amount arising from
adjusting the gross carrying amount as a modification gain or loss in the statement of income.
Financial liabilities
If the terms of a financial liabilities are modified, the Group evaluates whether the cash flows of the modified asset are
substantially different. If the cash flows are substantially different, then the contractual obligations from the cash flows
from the original financial liabilities are deemed to expire. In this case the original financial liabilities are derecognised
and new financial liabilities are recognised at either amortised cost or fair value.
If the cash flows are not substantially different, then the modification does not result in derecognition of the financial
liabilities. In this case, the group recalculates the gross carrying amount of the financial liabilities and recognises the
amount arising from adjusting the gross carrying amount as a modification gain or loss in the statement of income.





Impairment of financial assets
For trade receivables, the Group applies the simplified approach, which requires expected lifetime losses to be recognised
from initial recognition of the receivables.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk
characteristics and the days past due. Accrued income relates to unbilled income recognised as a receivable for units
transferred over the network but not yet invoiced at the end of the year. Invoices are raised one month in arrears and are
typically settled within one month. The Group has therefore concluded that the expected loss rates for trade receivables are
a reasonable approximation of the loss rates for the contract assets.
The expected loss rates are based on the payment profiles of sales over a period of 36 month before 31 December 2024 and
the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect
current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the
receivables. The company has identified GDP growth in the UK to be the most relevant factor, and accordingly adjusts the
historical loss rates based on expected changes to this.
Definition of default
The Group considers the following as constituting an event of default for internal credit risk management purposes as
historical experience indicates that financial assets that meet either of the following criteria are not recoverable:
when there is a breach of financial covenants by the debtor; and
information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its
creditors, including the Group, in full.



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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
3 Prior period adjustments
Adopted assets
The Financial Statements have been restated to incorporate the impact of under reporting of the value of distributions
network assets adopted from other parties.
Distribution network assets are on occasions constructed by other parties who then transfer them to the Group. At the date
of transfer the value of property, plant and equipment is increased with an equal increase in the value of deferred revenue.
The assets are depreciated in line with the depreciation policy for those assets with a similar release of the deferred
revenue. It was discovered during the year that not all adopted assets had been captured in the Financial Statements.
This had no impact on prior years’ profits or net assets, however impacts the constituent parts of the previously reported
figures in the Income Statement and the Statement of Financial Position. The impact on the Consolidated Income
and the Statement of Financial Position for the Group and Company is shown below:
Consolidated Income Statement:
2023
(As restated)
£'000
2023
(Previous)
£'000
Difference
£'000
Revenue
(435,747) (435,693)
(54)
Distribution costs
144,055
144
,001
54
Profit for the year
(291,692) (291,692)
-
Statement of Financial Position (Consolidated and Company):
31 Dec 2023
(As restated)
£ 000
31 Dec 2023
(Previous)
£ 000
Difference
£ 000
Property, plant and equipment
2,949,201
2,9
44,354
4,847
Deferred revenue non-current
(672,734)
(668,067)
(
4,667)
Deferred revenue current
(30,219)
(30,
039)
(180)
Total
2,246,248
2,246,248
-
01 Jan 2023
(As restated)
£ 000
01 Jan 2023
(Previous)
£ 000
Difference
£ 000
Property, plant and equipment
2,851,910
2,849
,504
2,406
Deferred revenue non-current
(654,829)
(652,476)
(2,
353)
Deferred revenue current
(29,379)
(29,326)
(53)
Total
2,167,702
2,167,702
-

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
3 Prior period adjustments (continued)
Restatement of Cash Flow Statement
During the current year, the Group reflected on the presentation of cash inflows and outflows in the cash flow statement. In
the prior year the cash flow statement showed cash flows flowing through the Group and Company's bank account
together with transactions made by other entities within the wider Northern Powergrid Group on its behalf and recorded
in the inter-company current account. The Group and Company's cash flow statement should have only shown the cash
flows flowing through its bank account. The comparatives have been restated accordingly.
The prior year cash flow statement for the Group and Company were presented using the indirect method, which
reconciled profit before tax to net cash flows from operating activities by adjusting for non-cash items and changes in
working capital. The restatement involves presenting cash flows from operating activities using the direct method, which
shows major classes of gross cash receipts and gross cash payments.
The impact on the operating, investing and financing cash flows is as follows:
Consolidated Cash Flow Statement:
2023
(As restated)
£000
2023
(Previous)
£000
Difference
£000
Operating
521,353 293,347
228,006
Investing
(460,128) (187,065)
(273,063)
Financing (62,898) (382,385)
319,487
Net cash flow
(1,673) (276,103)
274,430
Company Cash Flow Statement:
2023
(As restated)
£000
2023
(Previous)
£000
Difference
£000
Operating
521,153 293,156
227,997
Investing
(472,331) (187,090)
(285,241)
Financing (50,696) (380,572)
329,876
Net cash flow
(1,874) (274,506)
272,632
The reason for all changes relates to amounts paid for or received by other entities within the wider Northern Powergrid
Group on the Group and Company's behalf. These are settled through the inter company current account mechanism
which was previously included as cash flows. Non cash investing and financing activities were previously disclosed in the
Statement of Cash Flows, these are now disclosed in Note 31. This also impacts the reconciliations of liabilities
arising from financing activities in Note 27.
Related parties:
During the preparation of the current year's financial statements, it was identified that certain related party balances were
either inaccurate or omitted from the prior year's related party note. These have been corrected in the current year's
Statutory Accounts. This restatement has no impact on the primary financial statements. More details can be found in Note
30.

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
4 Revenue
The analysis of the Group's revenue for the year from continuing operations is as follows:
2024
£ 000
(As restated)
2023
£ 000
Distribution use of system revenue
467,040 365,988
Work for related parties
30,678 31,316
Connections revenue
31,481 30,017
Other revenue 7,166 8,426
536,365 435,747
Other revenue includes assessment and design fees and disconnections from the network.
Revenue is recognised over the life of the corresponding item of PPE against which the contribution was received.
Further detail of prior year adjustments affecting Revenue in the Income Statement can be found in Note 3.
Segmental Analysis
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components
of the Company that are regularly reviewed by the President and Chief Executive Officer, who is the Chief Operating
Decision Maker, of the Northern Powergrid Group in order to allocate resources to these segments and to assess their
performance.
In practice, the President and Chief Executive Officer allocates resources and assesses performance based upon the
aggregate results of the Company and Northern Powergrid (Yorkshire) plc, another distribution network operator in the
Northern Powergrid Group. As there is only one operating segment, this constructs the segmental reporting note in full.
Revenue, profit before tax and net assets are attributable to electricity distribution. Revenue is all in respect of sales to
United Kingdom customers and all Non-Current assets are held in the United Kingdom.


5 Other gains and losses
The analysis of the Group's other gains and losses for the year is as follows:
2024
£ 000
2023
£ 000
Gain on disposal of property, plant and equipment
71 79

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

6 Operating profit
Arrived at after charging/(crediting)
2024
£ 000
(As restated)
2023
£ 000
Depreciation expense
103,841 99,853
Depreciation on right of use assets
5,455 5,373
Amortisation expense
11,336 11,195
Research and development expenses
866 2,031
Connections revenue
(31,481) (30,017)
Loss allowance on trade and other receivables
587 675

Amortisation expense is included within administration costs in the consolidated income statement on page 35.
Further detail of prior year adjustments affecting Operating Profit in the Income Statement can be found in Note 3.






7 Finance income and costs
2024
£ 000
2023
£ 000
Finance income
Other finance income measured at amortised cost
5,110 13,282
Finance costs
Interest on bank overdrafts and borrowings
(33,009) (33,235)
Interest paid to group undertakings
(400) (99)
Interest expense on leases
(823) (781)
Borrowing costs included in cost of qualifying asset 757 403
Total finance costs (33,475) (33,712)
Net finance costs
(28,365) (20,430)
Borrowing costs included in the cost of qualifying assets during the year arose on the general borrowing pool and are
calculated by applying a capitalisation rate of 3.23% (2023: 3.02%) to expenditure on such assets.






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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
8 Staff costs
The aggregate payroll costs for the Group and Company (including directors' remuneration) were as follows:
2024
£ 000
2023
£ 000
Salaries
77,219 67,670
Social security costs
8,683 7,423
Defined benefit pension costs
5,605 5,929
Defined contribution pension costs
6,481 5,048
97,989 86,070
Less capitalised to plant, property and equipment (58,182) (49,029)
39,807 37,041

A proportion of the Company's employees are members of the DB Scheme, most of the remaining employees are members
of The Northern Powergrid Scheme (a defined contribution pension scheme).

The monthly average number of persons employed by the Group and Company (including directors) during the year,
analysed by category was as follows:
2024
No.
2023
No.
Technical
415 393
Industrial
490 478
Administration
373 320
Other departments 173 152
1,451 1,343


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
9 Directors and other key management personnel remuneration
The directors remuneration for the year was paid by a related party company, Northern Electric plc, and recharged.
The directors' remuneration for the year was as follows:
2024
£ 000
2023
£ 000
Short-term employee benefits
625 590
Post-retirement benefits - defined contribution
10 9
Other long-term benefits - 283
635 882
During the year the number of directors who were receiving benefits and share incentives was as follows:
2024
No.
2023
No.
Accruing benefits under defined benefit pension scheme
- -
Accruing benefits under money purchase pension scheme
6 4
In respect of the highest paid director:
2024
£ 000
2023
£ 000
Short-term employee benefits
322 287
Long-term benefits - 195
322 482
The directors and key personnel are remunerated for the services to the Northern Powergrid Group. The figures above
represent the share of the costs borne by the Group.
In respect of key management personnel:
2024
£ 000
2023
£ 000
Short-term employee benefits
695 580
Post-retirement benefits - defined benefit
36 23
Post-retirement benefits - defined contribution
99 108
Other long-term benefits 60 131
890 842
Total directors and key personnel:

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
9 Directors and other key management personnel remuneration (continued)
2024
£ 000
2023
£ 000
Short-term benefits
1,320 1,170
Post-retirement benefits - defined benefit
36 23
Post-retirement benefits - defined contribution
109 117
Long-term benefits 60 414
1,525 1,724
Other key personnel includes a number of senior functional managers who, whilst not board directors, have authority and
responsibility for planning, directing and controlling activities of the Group.

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
10 Auditors' remuneration
2024
£ 000
2023
£ 000
Fees payable to the auditor for audit of the Company's annual accounts
211 198
Fees payable to the auditor for audit of the Company's subsidiaries
27 21
Audit related assurance services - 69
238 288
Other services relate to non-statutory audit services including regulatory reporting and bond issuance.

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

11 Income tax
Tax charged/(credited) in the income statement
2024
£ 000
2023
£ 000
Current taxation
UK corporation tax
51,202 32,550
UK corporation tax adjustment to prior periods (2,460) (1,261)
48,742 31,289
Deferred taxation
Arising from origination and reversal of temporary differences
6,899 1,236
Deferred tax adjustment to prior periods 2,296 (480)
Total deferred taxation 9,195 756
Tax expense in the income statement
57,937 32,045
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2023 - lower than the
standard rate of corporation tax in the UK) of 25% (2023 - 23.5%).
The differences are reconciled below:
2024
£ 000
2023
£ 000
Profit before tax
235,813 145,655
Corporation tax at standard rate
58,966 34,259
Decrease in current tax from adjustment for prior periods
(2,460) (1,261)
Decrease from effect of expenses not deductible in determining tax loss
(1,211) (893)
Deferred tax expense/(credit) from unrecognised temporary difference from a prior
period
2,296 (480)
Deferred tax expense relating to changes in tax rates or laws
- 369
Other tax effects for reconciliation between accounting profit and tax expense 346 51
Total tax charge
57,937 32,045
Finance Act 2024 confirmed that the corporation tax rate will remain at 25% from 1 April 2024 as previously enacted.
Deferred tax balances are therefore measured at 25% at 31 December 2024.
There is no uncertainty over the acceptable income tax treatment. Should any uncertainties arise the Company will apply
adopted amendments to IFRIC 23.
Increases in the tax adjustments are largely to do with enhanced capital allowances.


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

11 Income tax (continued)
Deferred tax
Group
Deferred tax movement during the year:
At 1 January
2024
£ 000
Recognised in
income
£ 000
At
31 December
2024
£ 000
Accelerated tax depreciation 135,833 8,735 144,568
Other items (1,562) 460 (1,102)
Net tax liabilities
134,271 9,195 143,466
Deferred tax movement during the prior year:
At 1 January
2023
£ 000
Recognised in
income
£ 000
At
31 December
2023
£ 000
Accelerated tax depreciation 134,965 868 135,833
Other items (1,450) (112) (1,562)
Net tax liabilities
133,515 756 134,271
Other items comprises provisions and employee expenses deductible for tax on a paid basis and claims for hold over relief.


Company
Deferred tax movement during the year:
At 1 January
2024
£ 000
Recognised in
income
£ 000
At
31 December
2024
£ 000
Accelerated tax depreciation 135,833 8,735 144,568
Other (1,562) 460 (1,102)
Net tax liabilities
134,271 9,195 143,466
Deferred tax movement during the prior year:
At 1 January
2023
£ 000
Recognised in
income
£ 000
At
31 December
2023
£ 000
Accelerated tax depreciation 134,965 868 135,833
Other (1,450) (112) (1,562)
Net tax liabilities
133,515 756 134,271

Other comprises provisions and employee expenses deductible for tax on a paid basis and claims for hold over relief.


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
Page 64

12 Property, plant and equipment
Group and Company
Non -
Operational
Land and
buildings
£000
(As restated)
Distribution
system
£000
Furniture,
fittings and
equipment
£000
(As restated)
Total
£000
Cost or valuation
At 1 January 2023
4,191
3,851,574
57,118
3,912,883
Prior period adjustment
-
2,417
-
2,417
At 1 January 2023 (restated)
4,191
3,853,991
57,118
3,915,300
Additions (restated)
-
192,680
4,463
197,143
Disposals
-
(8,184)
(116) (8,300)
At 31 December 2023 (restated)
4,191
4,038,487
61,465
4,104,143
At 1 January 2024
4,191
4,038,487
61,465
4,104,143
Additions
-
231,863
7,361
239,224
Disposals
-
(10,221)
-
(10,221)
At 31 December 2024
4,191
4,260,129
68,826
4,333,146
Depreciation
At 1 January 2023
3,658
1,011,338
48,383
1,063,379
Prior year adjustment
-
11
-
11
At 1 January 2023 (restated)
3,658
1,011,349
48,383
1,063,390
Charge for year (restated)
246
96,586
3,021
99,853
Eliminated on disposal
- (8,184)
(116)
(8,300)
At 31 December 2023 (restated)
3,904
1,099,750
51,288
1,154,942
At 1 January 2024
3,904
1,099,750
51,288
1,154,942
Charge for the year
148
100,139
3,554
103,841
Eliminated on disposal
-
(10,221)
-
(10,221)
At 31 December 2024
4,052
1,189,668
54,842
1,248,562
Carrying amount
At 31 December 2023 (restated)
287
2,938,737
10,177
2,949,201
At 31 December 2024
139
3,070,461
13,984
3,084,584
Accelerated depreciation on asset disposals is included within the depreciation charge within the year.
Further detail of prior year adjustments affecting the Statement of Financial Position can be found in Note 3.



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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
12 Property, plant and equipment (continued)
Assets in the Course of Construction
Distribution
system
£ 000
Furniture,
fittings and
equipment
£ 000
Total
£ 000
Cost or valuation
At 1 January 2023
167,998
-
167,998
Additions
192,954
2,197 19
5,150
Commissioned
(176,653)
(2,
197)
(178,850)
At 31 December 2023
184,298
-
1
84,298
At 1 January 2024
184,298
-
184,298
Additions
226,593
6,858
233,451
Commissioned
(223,024)
(6,858)
(229,882)
At 3
1 December
2024
187,867
-
187,867
Contractual commitments for the acquisition of property, plant and equipment
31 December
2024
£ 000
31 December
2023
£ 000
Distribution system 35,543 33,834



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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

13 Right of use assets
Group and Company
Fleet
£ 000
Property
£ 000
Land
£ 000
Total
£ 000
Cost or valuation
At 1 January 2023
15,610 1,337 18,608 35,555
Additions
1,762 - - 1,762
Disposals (864) - - (864)
At 31 December 2023 16,508 1,337 18,608 36,453

At 1 January 2024
16,508 1,337 18,608 36,453
Additions
2,457 1,754 - 4,211
Disposals (2,387) (254) - (2,641)
At 31 December 2024 16,578 2,837 18,608 38,023
Depreciation
At 1 January 2023
7,479 792 1,545 9,816
Charge for year
2,726 199 2,448 5,373
Eliminated on disposal (864) - - (864)
At 31 December 2023 9,341 991 3,993 14,325

At 1 January 2024
9,341 991 3,993 14,325
Charge for the year
2,696 311 2,448 5,455
Eliminated on disposal (2,387) (254) - (2,641)
At 31 December 2024 9,650 1,048 6,441 17,139
Carrying amount
At 31 December 2023
7,167 346 14,615 22,128
At 31 December 2024
6,928 1,789 12,167 20,884


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)


14 Intangible assets
Group and Company
Internally
generated
software
development
costs
£ 000
Cost or valuation
At 1 January 2023
139,797
Additions 14,444
At 31 December 2023 154,241

At 1 January 2024
154,241
Additions 14,908
At 31 December 2024 169,149
Amortisation
At 1 January 2023
92,441
Amortisation charge 11,195
At 31 December 2023 103,636

At 1 January 2024
103,636
Amortisation charge 11,336
At 31 December 2024 114,972
Carrying amount
At 31 December 2023
50,605
At 31 December 2024
54,177

During the year the amount of contractual commitments for the acquisition of intangible assets amounted to £5.2 million
(2023: £4.1 million).
The majority of the costs classified under intangible assets relate to the development and implementation of IT software
systems. These systems are integral to the Company's operations, enhancing efficiency and supporting the management of
our energy distribution network.


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
15 Investments

Summary of the Company investments
31 December
2024
£ 000
31 December
2023
£ 000
Investments in subsidiaries
50 50
Subsidiaries £ 000
Cost
At 1 January 2023 50
At 31 December 2023
50
At 1 January 2024 50
At 31 December 2024
50
Provision
Carrying amount
At 31 December 2024
50
At 1 January 2023
50

Group subsidiaries
Details of the Group subsidiaries as at 31 December 2024 are as follows:
Name of subsidiary Principal activity Registered office
Proportion of
ownership interest
and voting rights
held
2024 2023
Northern Electric Finance plc Finance company Lloyds Court, 78 Grey Street,
Newcastle upon Tyne, NE1
6AF
England and Wales
100% 100%
All subsidiaries are included within consolidation.
All above investments are held as ordinary shares.


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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
15 Investments (continued)
Group associates
Details of the Group associates as at 31 December 2024 are as follows:
Name of associate Principal activity Registered office
Proportion of
ownership interest
and voting rights
held
2024 2023
ElectraLink Limited Data transfer network
operator
Northumberland House,
303-306 Holborn, WC1V 7JZ,
England and Wales
6.2% 6.2%
DCUSA Limited Governance of
Distribution Connection
and Use of System
Agreement
Northumberland House,
303-306 Holborn, WC1V 7JZ,
England and Wales
1.69% 1.69%
Smart Energy Code Company Ltd Governance of smart
metering energy
agreement
8 Fenchurch Place, London,
EC3M 4AJ
0.32% 0.32%
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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
16 Inventories
Group Company
31 December
2024
£ 000
31 December
2023
£ 000
31 December
2024
£ 000
31 December
2023
£ 000
Inventory
28,544 28,670 28,544 28,670
Work in progress - 607 - 607
28,544 29,277 28,544 29,277
Work in progress that was included within inventories in 2023 is now included in trade receivables 2024. This relates to
recoverable amounts from third parties from damages to our network that have not yet been billed. See note 17.
17 Trade and other receivables
Group Company
31 December
2024
£ 000
31 December
2023
£ 000
31 December
2024
£ 000
31 December
2023
£ 000
Distribution use of system receivables and
accrued income*
75,264 59,298 75,264 59,298
Trade receivables
3,128 8,113 3,128 8,113
Provision for impairment of trade
receivables (3,383) (6,174) (3,383) (6,174)
Net trade receivables
75,009 61,237 75,009 61,237
Receivables from related parties
46,945 279,533 45,421 283,091
Prepayments 5,888 5,028 5,888 5,028
127,842 345,798 126,318 349,356
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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
17 Trade and other receivables (continued)
* Accrued income in 2024 was £43.7m (2023: £32.4m)
More information on receivables from related parties can be found within the accounting policies section under
intercompany short-term loans as well as Note 30.
Trade receivables now includes work in progress that was previously included within inventories. This relates to
recoverable amounts from third parties from damages to our network that have not yet been billed to customers.
The average credit period on receivables is 30 days. Interest is charged on overdue distribution use of system receivables.
There has been no change in the estimation techniques or significant assumptions made during the current reporting
period.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty
and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into
bankruptcy proceedings, or when the trade receivables are over two years past due, whichever occurs earlier. None of the
trade receivables that have been written off is subject to enforcement activities.
Accrued income relates to unbilled income recognised as a receivable for units transferred over the network but not yet
invoiced at the end of the year. Invoices are raised one month in arrears and are typically settled within one month.
Movement in the loss allowance
31 December
2024
£ 000
31 December
2023
£ 000
At 1 January
6,174 5,619
Amounts utilised/written off in the year
(3,368) (120)
Amounts recognised in the statement of profit or loss 577 675
At 31 December
3,383 6,174
The loss allowance is made on amount due net of VAT which would be recoverable from His Majesty's Revenue and
Customs when the debt is written off. Subject to certain conditions mentioned below, losses arising in relation to
distribution use of system debts will be recovered through an increase in future allowed income.
Included in the allowance for doubtful debts are specific trade receivables, with a balance of £1.6 million (2023: £4.6
million), which have been placed in administration. The impairment represents the difference between the carrying amount
of the specific trade receivable and the present value of the expected liquidation dividend.
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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
17 Trade and other receivables (continued)
Distribution Use of System Receivables
The customers served by the Group’s distribution network are supplied predominantly by a number of electricity supply
businesses (circa 110) with the E.ON group accounting for approximately 16.2% of distribution revenues in 2024 (2023:
18.1%) and British Gas plc accounting for approximately 13.5% of distribution revenues in 2024 (2023: 14.5%). Ofgem
under Code Governance arrangements, set out a framework known as Credit Cover within the Distribution Connection and
Use of System Agreement (DCUSA), which sets credit limits for each supply business based on its credit rating (taken
from a credit agency). If no score is available, then they can build up their credit limit through good payment history. In
addition, suppliers can provide other forms of collateral to cover their value at risk (measured as being equivalent to 45
days usage) or if their credit rating alone is not sufficient to cover their value at risk. Acceptable collateral typically is
provided in the form of a parent company guarantee, letter of credit, cash or an escrow account. Included within other
payables are customer cash deposits of which there was £2.5m as at 31st December 2024 (2023: £7.1m), due to an
repayment in the deposit held of £4.7m relating to Octopus Energy Ltd.
Provided the Group has implemented credit control, billing and collection processes in line with Ofgem’s best practice
guidelines and can demonstrate compliance with the guidelines or is able to satisfactorily explain departure from the
guidelines, any bad debt losses arising from supplier default will be recovered through an increase in future years allowed
income. Included in the Group's use of system (“UoS”) receivables are 0 debtors with a carrying value of £nil, which have
been placed into administration and have therefore been provided in full at the year-end (2023: £3.0m).
Other Trade Receivables
In determining the recoverability of other trade receivables, the Company considers any change in the credit quality of
other trade receivables from the date credit was initially granted up to the reporting date. The concentration of credit risk,
other than in relation to DUoS receivables, is limited due to the customer base being large and unrelated. Accordingly, the
directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.
There has been no significant change in the gross amounts of trade receivables that has affected the estimation of loss
allowance.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group
compares the risk of a default occurring on a financial instrument at the reporting date with the risk of a default occurring
on the financial instrument at the date of initial recognition. In making this assessment the Group considers historical
experience as well as forward-looking information that is available without undue cost or effort. Forward-looking
information includes the future prospects of the industries in which the Group's debtors operate obtained from economic
expert reports, financial analysts, government bodies, relevant think-tanks and other similar organisations. In particular the
following information is taken into account when assessing whether credit risk has increased significantly since initial
recognition:
existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant
decrease in the debtor's ability to meet its debt obligations;
an actual or expected significant deterioration in the operating results of the debtor;
significant increases in credit risk on other financial instruments of the same debtor; and
an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor
that results in a significant decrease in the debtor's ability to meet its debt obligations.
Sales of goods and services comprise all income streams which are not classified as DUoS income. Examples of
non-DUoS income streams would be service alterations/disconnections, assessment and design fees, and recovery of
amounts for damage caused by third parties to the distribution system. The average credit period on sales of goods and
services is 30 days. Interest is not generally charged on the trade receivables paid after the due date.
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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
18 Cash and cash equivalents
Group Company
31 December
2024
£ 000
31 December
2023
£ 000
31 December
2024
£ 000
31 December
2023
£ 000
Cash at bank
- 23 - 23
19 Share capital
Allotted, called up and fully paid shares
31 December
2024
31 December
2023
No. 000 £ 000 No. 000 £ 000
Ordinary Share Capital of £1 each
200,000 200,000 200,000 200,000
The Company has 300 million shares authorised for issue. The Company has one class of ordinary shares which carries no
right to fixed income.
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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
20 Reserves
Group
Retained
earnings
£ 000
At 1 January 2024
1,118,871
Profit for the year 177,876
Total comprehensive income
177,876
Dividends (300,000)
At 31 December 2024
996,747
Retained
earnings
£ 000
At 1 January 2023
1,036,661
Profit for the year
113,610
Total comprehensive income
113,610
Dividends (31,400)
At 31 December 2023
1,118,871
Company
Retained
earnings
£ 000
At 1 January 2024
1,120,678
Profit for the year 177,912
Total comprehensive income
177,912
Dividends (300,000)
At 31 December 2024
998,590
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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
20 Reserves (continued)
Retained
earnings
£ 000
At 1 January 2023
1,038,447
Profit for the year 113,631
Total comprehensive income
113,631
Dividends (31,400)
At 31 December 2023
1,120,678
21 Loans and borrowings
Group Company
31 December
2024
£ 000
31 December
2023
£ 000
31 December
2024
£ 000
31 December
2023
£ 000
Non-current loans and borrowings
1,057,728 1,057,393 1,057,725 1,057,389
Current loans and borrowings
19,285 21,922 15,971 23,733
1,077,013 1,079,315 1,073,696 1,081,122
Group
Book value Fair value
31 December
2024
£ 000
31 December
2023
£ 000
31 December
2024
£ 000
31 December
2023
£ 000
Short-term loan
80 2,716 80 2,716
European Investment Bank 2027 2.564%
120,128 120,128 111,524 111,677
Northern Electric Finance plc 2035 5.125%
153,647 153,550 150,467 158,526
Northern Electric Finance plc 2049 2.75%
150,225 150,161 92,098 106,192
Northern Powergrid (Northeast) plc 2052 - 3.25%
355,096 355,018 233,823 272,362
Northern Powergrid (Northeast) plc 2062 - 1.875% 297,837 297,742 132,772 159,538
1,077,013 1,079,315 720,764 811,011
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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
21 Loans and borrowings (continued)
Company
Book value Fair value
31 December
2024
£ 000
31 December
2023
£ 000
31 December
2024
£ 000
31 December
2023
£ 000
Short-term loan
80 2,716 80 2,716
European Investment Bank 2027 - 2.564%
120,128 120,128 111,524 111,677
Northern Electric Finance plc 2035 5.125%
50,399 50,302 50,199 52,855
Northern Electric Finance plc 2037 - 5.125%
99,884 105,009 95,088 105,784
Northern Electric Finance plc 2049 - 2.75%
150,271 150,207 93,078 107,300
Northern Powergrid (Northeast) plc 2052 3.25%
355,096 355,018 233,823 272,362
Northern Powergrid (Northeast) plc 2062 1.875% 297,838 297,742 132,772 159,538
1,073,696 1,081,122 716,564 812,232
The fair value of liabilities held at amortised cost, is set out above and based on Level 1 inputs.
The fair value of the bonds is determined with reference to quoted market prices. The directors' estimates of the fair value
of bank loans and internal borrowings are determined in accordance with generally accepted pricing models based on
discounted cash flow analysis using prices from observable current market transactions or dealer quotes for similar
instruments. The fair value of short-term borrowings is equal to their book value. All loans are non-secured and are
denominated in sterling.
The Company's exposure to market and liquidity risk in respect of loans and borrowings is disclosed in financial risk
review Note 29.
Information on the new bond issuance during the year can be found in the financial strength section of the strategic report.
Page 76

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
22 Lease Liabilities
Group and Company
Lease commitments
Leases primarily relate to the hire of fleet vehicles from Vehicle Lease and Service Ltd and the rental of operational and
non operational land and buildings. The vehicle leases have terms between 2 and 7 years. The company does not have the
option to purchase the vehicles at the end of the lease term.
The operational land lease are between 10 and 999 years, but in the majority are between 20 and 60 years. As the leases
are regarded as a business tenancy, the Company has the option to renew the lease under the 1954 Landlord and Tenant
Act unless a landlord is to redevelop or has grounds to recover land as prescribed under the Act, and may acquire the
freehold at any time by agreement. The Company also has the ability to compulsory purchase the freehold.
Maturity analysis - contractual undiscounted cash flows:
31 December
2024
£ 000
31 December
2023
£ 000
Within one year
5,539 5,741
In two to five years
15,711 16,250
In over five years
3,285
3,287
Total undiscounted lease payments 24,535
25,278
Impact of discounting (2,751) (2,468)
Total lease liability
21,784 22,809
The total cash outflow for leases during the year was £6.0m (2023: £5.9m), of which £0.8m (2023: £0.7m) relates to
interest and £5.2m (2023: £5.2m) relates to the repayment of principal.
23 Provisions
Group and Company
Legal
proceedings
£ 000
Other
provisions
£ 000
Total
£ 000
At 1 January 2024
1,057 512 1,569
Additional provisions
1,676 268 1,944
Provisions used (1,679) (272) (1,951)
At 31 December 2024
1,054 508 1,562
Page 77

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
23 Provisions (continued)
Legal proceedings: Provision has been made to cover costs arising from utility damages, public liability, and motoring
legal proceedings. Settlement is expected substantially within 12 months.
The provisions are not discounted on the grounds of materiality. The impact of discounting is immaterial to the financial
statements, as the effect on the present value of the provision is not significant enough to influence the economic decisions
of users of the financial statements. Therefore, the provisions are presented at their nominal value.
Other: Primarily consists of a provision for future safe disposal of transformers which contain oil contaminated with
Polychlorinated Biphenyls (PCBs), and for an amount to cover claims made under Section 74 of the New Road and Street
Works Act 1991. Costs are expected to be incurred over the next 15 years for PCB claims and in the next year for all
others.
24 Trade and other payables
Group Company
31 December
2024
£ 000
31 December
2023
£ 000
31 December
2024
£ 000
31 December
2023
£ 000
Current liabilities
Trade payables
16,181 4,749 16,181 4,749
Accrued expenses
30,847 36,528 30,847 36,528
Social security and other taxes
13,144 8,165 13,144 8,165
Other payables
4,573 4,340 4,573 4,340
Payments on account 72,177 78,300 72,177 78,300
136,922 132,082 136,922 132,082
Non-current liabilities
Payment on accounts
6,549 - 6,549 -
Non-current liabilities
6,549 - 6,549 -
Payments on account are primarily advanced customer contributions for which no associated distribution asset has been
constructed or yet to be completed.
The Group's and Company's exposure to market and liquidity risks, including maturity analysis, related to trade and other
payables is disclosed in Note 29 "Financial Risk Review".
Included within the Payment on Account line is innovation funding received from the National Energy System Operator
(NESO) for the Community DSO project of £10.5m (2023: £8.8m). The funding will be released over a period of time
until 2028. This funding was successfully bid for and is aimed at supporting the development and implementation of a
decentralised system operator model within the community. The performance obligations associated with this funding
include the establishment of infrastructure, engagement with local stakeholders and reporting on project progress and
outcomes across the industry. Based on the latest project schedule, £3.9m has been classified as current and £6.6m as
non-current as at the reporting date. For the comparative year, the total amount was incorrectly included in current
payments on account. As the Directors do not consider the effect on the prior period financial statements to be material,
this has not been adjusted. The related income recognised in the current year was £1.5m (2023: £0.5m).
Page 78

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

25 Contract Liabilities (Deferred Revenue)
Group and Company
31 December
2024
£ 000
(As restated)
31 December
2023
£ 000
Opening balance
702,953 681,802
Prior year restatement - 2,406
Revised opening balance
702,953 684,208
Additions (prior year restated)
54,105 48,761
Amortisation (prior year restated) (31,482) (30,017)
Closing balance
725,576 702,953
31 December
2024
£ 000
(As restated)
31 December
2023
£ 000
Current
32,181 30,219
Non-current 693,395 672,734
725,576 702,953
Contract liabilities (deferred revenue) are deferred customer contributions payments for distribution system assets where
work has commenced or is completed. The Group's policy is to credit the customer contribution to revenue on a
straight-line basis, in line with the useful life of the associated distribution system asset. More details on the restatement
can be found in Note 3.


26 Dividends
31 December
2024
31 December
2023
£ 000 £ 000
Interim dividend of 150p (2023 - 15.7p) per ordinary share
300,000 31,400
An interim dividend of £160.0 million was paid during Feb 2025 via an intercompany transfer.

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
27 Reconciliation of liabilities arising from financing activities
Group
Non-cash
changes
At 1 January
2024
£ 000
Financing
cash flows
£ 000
New finance
leases
£ 000
Other
changes
£ 000
At 31
December
2024
£ 000
Borrowings
1,079,315
(34,997)
-
32,695
1,077,013
Lease liabilities
22,809
- (1,025)
-
21,784
1,102,124
(34,997)
(1,025)
32,695
1,098,797
(As restated)
Non-cash
changes
At 1 January
2023
£ 000
Financing
cash flows
£ 000
New finance
leases
£ 000
Other
changes
£ 000
At 31
December
2023
£ 000
Borrowings
1,111,332 (62,898)
-
30,881
1,079,315
Lease liabilities
22,809
- (3,401)
-
26,210
1,137,542
(62,898)
(3,401)
30,881
1,102,124

Company
Non-cash
changes
At 1 January
2024
£ 000
Financing
cash flows
£ 000
New finance
leases
£ 000
Other
changes
£ 000
At 31
December
2024
£ 000
Borrowings
Lease liabilities
(As restated)
Non-cash
changes
At 1 January
2023
£ 000
Financing
cash flows
£ 000
New finance
leases
£ 000
Other
changes
£ 000
At 31
December
2023
£ 000
Borrowings
Lease liabilities
Other charges relate to amortisation of financing fees, discounts and new leases entered into which are non cash. For more
detail on the restatement refer to Note 3.

Page 80
1,081,122 (22,794
) 1,073,696
22,809 (1,025) - 21,784
1,103,931 1,095,480
-
(22,794)
-
1
5,368
15,368
(1,025)
1,108,013 (50,696) 1,081,122
26,210 - 22,809
1,134,223 1,103,931
-
(50,696)
-
(3,401)
(3,401)
23,805
23,805

Graphics
Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
28 Classification of financial assets and financial liabilities
Group
The classification of financial assets and financial liabilities by accounting categorisation for the period ended 31
December 2024 was as follows:
Financial assets
at amortised
cost
£ 000
Financial
liabilities at
amortised cost
£ 000
Assets
Current assets
Trade and other receivables
81,390
-
Total assets
81,390
-
Liabilities
Non-current liabilities
Long term lease liabilities
- (17,019)
Loans and borrowings - (1,057,728)
- (1,074,747)
Current liabilities
Current portion of long term lease liabilities
- (4,765)
Trade and other payables
- (130,308)
Loans and borrowings - (19,285)
- (154,358)
Total liabilities
- (1,229,105)

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
28 Classification of financial assets and financial liabilities (continued)
The classification of financial assets and financial liabilities by accounting categorisation for the period ended 31
December 2023 was as follows:
Financial assets
at amortised
cost
£ 000
Financial
liabilities at
amortised cost
£ 000
Assets
Current assets
Trade and other receivables
345,787 -
Cash and cash equivalents 23 -
345,810 -
Total assets
345,810 -
Liabilities
Non-current liabilities
Long term lease liabilities
- (17,754)
Loans and borrowings - (1,057,393)
- (1,075,147)
Current liabilities
Current portion of long term lease liabilities
- (5,055)
Trade and other payables
- (123,916)
Loans and borrowings - (21,922)
- (150,893)
Total liabilities
- (1,226,040)
Fair values are derived from level 1 inputs.

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
28 Classification of financial assets and financial liabilities (continued)

Company
The classification of financial assets and financial liabilities by accounting categorisation for the period ended 31
December 2024 was as follows:
Financial assets
at amortised
cost
£ 000
Financial
liabilities at
amortised cost
£ 000
Assets
Current assets
Trade and other receivables -
Total assets
-
Liabilities
Non-current liabilities
Long term lease liabilities
- (17,019)
Loans and borrowings - (1,057,725)
- (1,074,744)
Current liabilities
Current portion of long term lease liabilities
- (4,765)
Trade and other payables
- (130,308)
Loans and borrowings - (15,971)
- (151,044)
Total liabilities
- (1,225,788)
Page 83
81,390
81,390

Graphics
Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
28 Classification of financial assets and financial liabilities (continued)
The classification of financial assets and financial liabilities by accounting categorisation for the period ended 31
December 2023 was as follows:
Financial assets
at amortised
cost
£ 000
Financial
liabilities at
amortised cost
£ 000
Assets
Current assets
Trade and other receivables
349,345 -
Cash and cash equivalents 23 -
349,368 -
Total assets
349,368 -
Liabilities
Non-current liabilities
Long term lease liabilities
- (17,754)
Loans and borrowings - (1,057,389)
- (1,075,143)
Current liabilities
Current portion of long term lease liabilities
- (5,055)
Trade and other payables
- (123,916)
Loans and borrowings - (23,733)
- (152,704)
Total liabilities
- (1,227,847)
Page 84

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)


29 Financial risk review
This note presents information about the Group’s exposure to financial risks and the Group’s management of capital.
Capital Management
The covenants associated with the 2035 bonds issued by Northern Electric Finance plc, a wholly-owned subsidiary of the
Company, include restrictions on the issuance of new indebtedness and the making of distributions dependent on the scale
of the ratio of Senior Total Net Debt to Regulatory Asset Value (“RAV”). The Senior Total Net Debt to RAV restriction is
65% and 75% respectively. The definition of Senior Total Net Debt excludes any subordinated debt and any debt incurred
on a non-recourse basis. In addition, it excludes interest payable, any fair value adjustments and unamortised issue costs.
The Company's Senior Total Net Debt as of 31 December 2024 totalled £1,070.0m. Using the RAV value as of March
2025, as outlined by Ofgem in its ED2 price control financial model published in January 2025, and adjusting for the
effects of movements in the value of the CPIH Index gives an approximation for the RAV value as at 31 March 2025 of
£2,065.1m. The Senior Total Net Debt to RAV ratio for the Company is therefore estimated at 51.8% (2023: 54.2%).
During the year all obligations under the various debt convents have been complied with.

Credit risk
The Group's definition of credit risk is Credit risk refers to the risk that a counterparty will default on its contractual
obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy
counterparties. The Group's exposure and the credit ratings of its counterparties are continuously monitored and the
aggregate value of transactions concluded is spread amongst approved counterparties. The carrying amount of financial
assets recorded in the financial statements, which is net of impairment losses, represents the Group's maximum exposure to
credit risk as no collateral or other credit enhancements are held.
The risk is mitigated by the group by The Group's income is primarily generated from use of system revenue from
electricity suppliers; suppliers are credit checked by independent ratings agencies. Impaired income from DUoS will be
recovered in future periods through system charges and is therefore of no material risk to the Group.
Group
2024 Notes
Gross carrying
amount
£ 000
Loss allowance
£ 000
Net carrying
amount
£ 000
Trade and other receivables
17
131,225 (3,383) 127,842
2023
Trade and other receivables
17
351,972 (6,174) 345,798


Company
2024 Notes
Gross carrying
amount
£ 000
Loss allowance
£ 000
Net carrying
amount
£ 000
Trade and other receivables
17
129,701 (3,383) 126,318
Equity investments at cost
50 - 50
Page 85

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)


29 Financial risk review (continued)

2023
Trade and other receivables
17 355,530 (6,174) 349,356
Equity investments at cost
50 - 50
For DUoS trade receivables the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at
lifetime ECL. The Group determines the expected credit losses on these items by using a provision matrix, estimated based
on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current
conditions and estimates of future economic conditions. Accordingly, the credit risk profile of these assets is presented
based on their past due status in terms of the provision matrix.
The carrying amount of the Group's financial assets disclosed in Note 28 best represents their respective maximum
exposure to credit risk. The Group holds no collateral over any of these balances.

Liquidity risk
Ultimate responsibility of liquidity risk management rests with the board of directors, which has established an appropriate
liquidity risk management framework for the management of the Group's short, medium, and long-term funding and
liquidity management requirements. The Group manages liquidity by maintaining adequate reserves, banking facilities and
reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity
profiles of financial assets and liabilities
The Company has access to a £100 million revolving credit facility provided by Barclays Bank plc, Lloyds Bank plc,
HSBC UK Bank plc and Royal Bank of Canada. The Company entered into a new Facility Agreement in December 2021
for a period of three years, with two 1 year extension options. During the year the Company exercised the second
extension option which extended the termination date to December 2026. In addition, the Company has access to further
short-term borrowing facilities provided by YEG and to a £19 million overdraft facility provided by Lloyds Bank plc,
which is reviewed annually, these borrowings are repayable on demand.
At 31 December 2024, the Group had available £119.0m (2023: £116.3m) of undrawn committed borrowing facilities in
respect of which all conditions precedent had been met.


Page 86

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

29 Financial risk review (continued)
Maturity analysis for financial liabilities and financial assets
The following table sets out the remaining contractual maturities of the group’s financial liabilities and financial assets by
type.
Group
2024
Non-derivative liabilities
Less than 3
month
£ 000
3 months - 1
year
£ 000
1-5 years
£ 000
More than 5
years
£ 000
Total
£ 000
Non-interest bearing
94,907 - - - 94,907
Variable Interest Rate Liabilities
80 - - - 80
Fixed Interest Rate Liabilities - 31,889 241,404 1,525,875 1,799,168
Total
94,987 31,889 241,404 1,525,875 1,894,155
2023
Non-derivative liabilities
Less than 3
month
£ 000
3 months - 1
year
£ 000
1-5 years
£ 000
More than 5
years
£ 000
Total
£ 000
Non-interest bearing
87,389 - - - 87,389
Variable Interest Rate Liabilities
2,717 - - - 2,717
Fixed Interest Rate Liabilities
- 31,889 244,480 1,554,688 1,831,057
Total
90,106 31,889 244,480 1,554,688 1,921,163


Company
2024
Non-derivative liabilities
Less than 3
month
£ 000
3 months - 1
year
£ 000
1-5 years
£ 000
More than 5
years
£ 000
Total
£ 000
Non-interest bearing
94,907 - - - 94,907
Variable interest rate liabilities
80 - - - 80
Fixed interest rate liabilities - 31,964 241,704 1,537,625 1,811,293
Total
94,987 31,964 241,704 1,537,625 1,906,280
Page 87

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
29 Financial risk review (continued)

2023
Non-derivative liabilities
Less than 3
month
£ 000
3 months - 1
year
£ 000
1-5 years
£ 000
More than 5
years
£ 000
Total
£ 000
Non-interest bearing
87,389 - - - 87,389
Variable interest rate liabilities
2,717 - - - 2,717
Fixed interest rate liabilities 5,125 31,964 244,780 1,566,513 1,848,382
Total
95,231 31,964 244,780 1,566,513 1,938,488

Market risk
The Group's definition of market risk is Market risk is the risk of loss arising from movements in market variables such as
interest rates, exchange rates and commodity prices. Risks are mitigated by utilising appropriate risk management
products. The group manage this by The Group's policy on interest rate risk is designed to limit the Group's exposure to
floating interest rates. Consistent with this policy, at 31 December 2024 the Group had 99% (2023: 99%) of net debt at
fixed rates. Short-term loans and inter-company short term loans is charged at a floating rate of interest based on Sonia
plus a margin of 0.20% plus a credit adjustment spread, thus exposing the Group to cash flow interest rate risk. A 1%
movement in interest rates would subject the Group to an approximate change in interest costs of £0.1m per year. This is
considered an acceptable level of risk. All other loans are at fixed interest rates and expose the Group to fair value interest
rate risk. .



30 Related party transactions
Summary of transactions with joint ventures
Vehicle Lease and Service Limited is a joint venture of Northern Electric plc and provides vehicle fleet and servicing for
the Northern Powergrid Group. Income constitutes recharges for use of management personnel and purchases are lease and
servicing payments for fleet vehicles.

Summary of transactions with other related parties
Other subsidiaries of the Northern Powergrid Group. Included within these amounts are:
- Integrated Utility Services and Integrated Utility Services (Eire) that provide engineering contracting resource;
- Northern Powergrid (Yorkshire) plc that provides and receives mutual support through use of staff and resources which
are then recharged;
- Northern Powergrid Metering that is recharged for the use of staff;
- Northern Electric Finance Limited that provides loan financing;
- Northern Powergrid Holdings Company that provides loan financing; and
- Yorkshire Electricity Group plc that operates the group intercompany treasury account.
- CE Gas Limited

Page 88

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
30 Related party transactions (continued)
Income and receivables from related parties - Group
2024
Sales to
related
parties
£ 000
Purchases
from related
party
£ 000
Finance
costs/(interest
recevied)
£ 000
Amounts
owed from
related party
£ 000
Dividends
paid
to/(from)
£ 000
Northern Powergrid (Yorkshire) Plc
29,861 12,387 (809) (33) -
Northern Powergrid Metering
Limited
43 - - - -
Integrated Utility Services Limtied
(registered in Eire)
- 1,970 - 152 -
Integrated Utility Services Limited
338 8,350 - 1,002 -
Northern Electric Plc
9 5,261 - (38) 300,000
Vehicle Lease and Service Limited
61 4,894 - (210) -
CE Gas Limited
283 - - - -
Northern Powergrid Holdings
Company
476 - - - -
Yorkshire Electricity Group - - (3,931) - -
31,071 32,862 (4,740) 873 300,000
2023 (As restated)
Sales to
related
parties
£ 000
Purchases
from related
party
£ 000
Finance
costs/(interest
received)
£ 000
Amounts
owed from
related party
£ 000
Dividends
paid
to/(from)
£ 000
Northern Powergrid (Yorkshire) Plc
31,153 14,415
(786)
-
-
Northern Powergrid Metering
Limited
37 -
--
-
Integrated Utility Services Limtied
(registered in Eire)
-
2,159
-
636
-
Integrated Utility Services Limited
370
5,479
-
799
-
Northern Electric Plc
12
5,010
-
-
31,400
Vehicle and Lease Services Limited
37
5,132 -
-
-
CE Gas Limited
4
- - - -
Northern Powergrid Holdings
Company
-
- - - -
Yorkshire Electricity Group
-
- (12,380)
-
-
31,614
32,195
(13,166)
1,434
31,400
As explained in Note 3, the comparatives have been restated. The main changes relate to the inclusion of th
e dividend
payment (£31.4m) to Northern Electric Plc and the finance income from Yorkshire Electricity Group (£12.4m).

Page 89

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
30 Related party transactions (continued)
Income and receivables from related parties - Company
Sales to
related
parties
£ 000
Purchases
from related
party
£ 000
Finance
costs/(interest
recevied)
£ 000
Amounts
owed from
related party
£ 000
Dividends
paid
to/(from)
£ 000
Sales to
related
parties
£ 000
Purchases
from related
party
£ 000
Finance
costs/(interest
received)
£ 000
Amounts
owed from
related party
£ 000
Dividends
paid
to/(from)
£ 000
2024
Northern Powergrid (Yorkshire) Plc
Northern Powergrid Metering
Limited
Integrated Utility Services Limtied
(registered in Eire)
Integrated Utility Services Limited
Northern Electric Plc
Vehicle Lease and Service Limited
CE Gas Limited
Northern Powergrid Holdings
Company
NEFL
Yorkshire Electricity Group
2023 (As restated)
Northern Powergrid (Yorkshire) Plc
Northern Powergrid Metering
Limited
Integrated Utility Services Limtied
(registered in Eire)
Integrated Utility Services Limited
Northern Electric Plc
Vehicle and Lease Services Limited
CE Gas Limited
Northern Powergrid Holdings
Yorkshire Electricity Group
Page 90
29,861 12,387 (809) (33) -
43 - - - -
- -
338 -
9 300,000
61
1,970
8,350
5,261
4,894
- 152
- 1,002
- (38)
- (210) -
283 - - - -
476 - - - -
- - 12,439 130 -
- - (3,931) - -
31,071 32,862
7,699
1,003 300,000
31,153 14,415
(786)
-
37 - -
-
- -
(12,380)
636 -
370 -
12 31,400
37
- 2,159
6,953
5,010
5,132
- 799
- -
- - -
4 - - - -
- -
12,434
130 -
- -
-
- -
31,614 32,195
(732)
1,565
31,400
As explained in Note 3, the comparatives have been restated. The main changes relate to the inclusion of the dividend
payment (£31.4m) to Northern Electric Plc.

Graphics
Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
30 Related party transactions (continued)
Loans (to)/from related parties - Group
2024
Other related
parties
£ 000
At start of period
(279,533)
Net movement 232,579
At end of period
(46,954)
2023
Other related
parties
£ 000
At start of period
(274,429)
Net movement (5,104)
At end of period
(279,533)

Loans (to)/from related parties - Company
2024
Subsidiary
£ 000
Other related
parties
£ 000
At start of period
305,518 (283,091)
Net movement
- 237,670
Interest paid (4,964) -
At end of period
300,554 (45,421)
2023
Subsidiary
£ 000
Other related
parties
£ 000
At start of period
300,366 (272,832)
Net movement - (10,259)
Net Interest
22,104 -
Interest paid (16,952) -
At end of period
305,518 (283,091)
More information on the intercompany balances can be found in the accounting policies note under the intercompany
short-term loans section.
Page 91

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31 Non-cash investing and financing activities
The following items were settled by other entities within the Northern Powergrid Group through the intercompany current
account mechanism.
Group 2024 2023
£000 £000
Non-cash investing activities
Acquisitions of property plant and equipment (232,354) (185,982)
Proceeds from sale of property plant and equipment 71 79
Acquisition of intangible assets (14,908) (14,444)
Interest received 5,110 13,282
Advance of intercompany loan / repayments recevied on intercompany loan 237,048 (279,781)
Total non-cash in investing activities (5,033) (466,846)
Non-cash financing activities
Movement in short-term borrowings 78 (1,718)
Interest expense on leases (823) (781)
Interest paid (619) (644)
Payments to lease creditors (5,236) (5,163)
Dividends paid (300,000) (31,400)
Total non-cash in financing activities (306,600) (39,706)
Company 2024 2023
£000 £000
Non-cash investing activities
Acquisitions of property plant and equipment (232,354) (185,982)
Proceeds from sale of property plant and equipment 71 79
Acquisition of intangible assets (14,908) (14,444)
Interest received 5,082 13,257
Advance of intercompany loan / repayments recevied on intercompany loan 242,351 (283,091)
Total non-cash in investing activities 242 (470,181)
Non-cash financing activities
Movement in short-term borrowings 100 (1,718)
Interest expense on leases (823) (781)
Interest paid (17,819) (7,723)
Payments to lease creditors (5,236) (5,163)
Dividends paid (300,000) (31,400)
Total non-cash in financing activities (323,778) (46,785)
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Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
Northern Powergrid (Northeast) plc

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Northern Powergrid (Northeast) plc
Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)
32 Parent and ultimate controlling party
The Company's immediate parent is Northern Electric plc.
The ultimate parent is Berkshire Hathaway, Inc. These financial statements are available upon request from 3555 Farnam
Street, Omaha, Nebraska 68131
The ultimate controlling party is Berkshire Hathaway, Inc.
Relationship between entity and parents
The parent of the largest group in which these financial statements are consolidated is Berkshire Hathaway, Inc,
incorporated in United States.
The address of Berkshire Hathaway, Inc is:
3555 Farnam Street, Omaha, Nebraska 68131
The parent of the smallest group in which these financial statements are consolidated is Northern Electric plc, incorporated
in United Kingdom.
The address of Northern Electric plc is:
Lloyds Court, 78 Grey Street, Newcastle upon Tyne, NE1 6AF
33 Subsequent Events
An interim dividend of £160.0 million was paid in February 2025.

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Northern Powergrid (Northeast) plc
Unaudited Pro Forma Supplementary Group Cash Flows
2024
£ 000
2023
£ 000
Cash flows from/(used in) operating activities
Profit for the year
177,876 113,610
Depreciation and amortisation
115,176 111,048
Depreciation on right of use assets
5,455 5,373
Amortisation of deferred revenue
(31,481) (30,017)
Profit on disposal of property plant and equipment
(71) (79)
Finance income
(5,110) (13,282)
Finance costs
33,475 33,712
Income tax expense 57,937 32,045
353,257 252,410
Increase in inventories
(326) (3,871)
Increase in trade and other receivables
(17,746) (2,217)
Increase in trade and other payables
2,004 16,486
Decrease in provisions (7) (83)
Cash generated from operations
337,182 262,725
Receipt of customer contributions
56,917 57,008
Income taxes paid (47,492) (26,386)
Net cash flow from operating activities 346,607 293,347
Cash flows from/(used in) in investing activities
Acquisitions of property plant and equipment
(232,354) (185,982)
Proceeds from sale of property plant and equipment
71 79
Acquisition of intangible assets
(14,908) (14,444)
Interest received 5,110 13,282
Net cash flows used in investing activities (242,081) (187,065)
Cash flows from/(used in) in financing activities
Movement in intercompany loans
237,048 (279,781)
Movement in short-term borrowing
(2,633) (32,289)
Repayment of lease liabilities
(5,236) (5,163)
Interest expense on leases
(823) (781)
Interest paid
(32,905) (32,971)
Dividends paid (300,000) (31,400)
Net cash flow (used in)/from financing activities (104,549) (382,385)
Net decrease in cash and cash equivalents
(23) (276,103)
Cash and cash equivalents at 1 January 23 276,126
Cash and cash equivalents at 31 December
- 23
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The p
roforma supplementary statement of cash flows above shows the amounts settled by Yorkshire Electricity Group Plc
on behalf of the Group as if they were cash inflows and outflows of the Group.