The UK's largest listed energy utility, National Grid (NG), could shock investors tomorrow as it is expected to provide more detail on the clear-up bill after Superstorm Sandy. Angelos Anastasiou, director of utility research at broker Seymour Pierce, said: "A billion dollars is not beyond the bounds of reason, it could be that much". Investors Chronicle was awaiting a response from National Grid at the time of going to press.
National Grid has refrained from detailing costs out of respect for those in the disaster-struck areas trying to rebuild their lives; the only guidance being that costs would not exceed £100m ($158m) in the areas outside Long Island, while costs in the worst-hit areas would be a "multiple of Hurricane Irene". Hurricane Irene damage cost £72m, rising to £116m if the ice storm that struck directly after is included in the final bill. "The multiple could be well above that, I don't think the market has taken that on board," added Mr Anastasiou.
National Grid has previously said in comparison to Hurricane Irene over two and a half times the number of crews were deployed and that they were working for a significantly longer period of time to repair extensive damage. Over time National Grid should be able to recover all costs related to the repair work as it is only the operator of the underlying assets. But Mr Anastasiou thinks timing issues could impinge on the company in the short and medium term in relation to cash costs of the repair work.
