##### Table of Contents



Exhibit 99.1
 National Grid USA Companies
Incentive Thrift Plan I




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##### 



Table of Contents
 PageReport of Independent Registered Public Accounting Firm
    
    
    2Financial Statements:Statements Of Net Assets Available For Benefits
    
    
    3Statement Of Changes In Net Assets Available For Benefits
    
    
    4Notes to Financial Statements
    
    
    5Supplemental Schedule:Schedule H, Line 4(i)  Schedule of Assets (Held At End Of Year)
    
    
    24
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Report of Independent Registered Public Accounting Firm
 
     
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National Grid USA Companies Incentive Thrift Plan I
 2010
    
    
    2009Assets:Investments, at fair value
    
    $
    1,173,224,098
    
    
    $
    1,281,779,933Plan interest in Master Trust
    
    
    302,659,890
    
    
    
    134,818,353Receivables:Dividends
    
    
    2,109,065
    
    
    
    1,660,429Employee contributions
    
    
    615,638
    
    
    
    604,578Employer contributions
    
    
    1,120,103
    
    
    
    1,057,220Rollover contributions
    
    
    
    
    
    
    13,149Notes receivable from participant loans
    
    
    23,389,917
    
    
    
    22,134,833Total receivables
    
    
    27,234,723
    
    
    
    25,470,209Cash
    
    
    
    
    
    
    26,062Total assets
    
    
    1,503,118,711
    
    
    
    1,442,094,557Liabilities
    
    
    
    
    
    
    Net assets available for benefits at fair value
    
    
    1,503,118,711
    
    
    
    1,442,094,557Adjustment from fair value to contract value
for fully benefit-responsive investment contracts
    
    
    1,215,502
    
    
    
    3,881,660Net assets available for benefits
    
    $
    1,504,334,213
    
    
    $
    1,445,976,217
 The accompanying notes are an integral part of the financial statements
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National Grid USA Companies Incentive Thrift Plan I
 Additions to net assets attributed to:Investment income:Dividend and interest income
    
    $
    47,074,156Net appreciation in fair value of investments
    
    
    77,926,960Total investment income
    
    
    125,001,116Interest income on notes receivable from participant loans
    
    
    1,127,360Contributions:Employer contributions
    
    
    18,391,088Employee contributions
    
    
    58,397,772Rollover contributions
    
    
    14,596,843Total contributions
    
    
    91,385,703Total additions
    
    
    217,514,179Deductions from net assets attributed to:Benefits paid to participants
    
    
    176,494,816Fees
    
    
    189,985Total deductions
    
    
    176,684,801Transfer of assets from Thrift Plan II
    
    
    17,528,618Net increase
    
    
    58,357,996Net assets available for benefitsBeginning of year
    
    
    1,445,976,217End of year
    
    $
    1,504,334,213
 The accompanying notes are an integral part of the financial statements
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National Grid USA Companies Incentive Thrift Plan I
 1.
    
    Description of Plan
 The following brief description of the National Grid USA Companies Incentive Thrift Plan I
(the Plan) provides only general information. Participants should refer to the Plan document
for a more complete description of the Plans provisions.Effective as of August 24, 2007, which was the date of the merger of National Grid USA with
KeySpan Corporation, the KeySpan Energy 401(k) Plan for Management Employees (the KeySpan
Plan) merged into the Plan. As of the merger date, KeySpan Corporation and all affiliated
KeySpan entities that were participating employers in the KeySpan Plan immediately prior to the
merger date (the KeySpan Plan Participating Employers) became employers under the Plan and
each participant and beneficiary under the KeySpan Plan became a participant and beneficiary
under the Plan. Also, as of the merger date, all liabilities and assets of the KeySpan Plan
were assumed by, and became part of, the Plan. A different third-party service provider
provided Trustee and recordkeeping services for assets and participant accounts related to the
KeySpan Plans participants and beneficiaries.Most of the provisions of the former KeySpan Plan, which differ from the Plan provisions, were
incorporated by reference into the Plan document effective August 24, 2007 and remained
applicable to former KeySpan Plan participants and beneficiaries as well as newly eligible
employees of a former KeySpan Plan Participating Employer until the Plan Conversion described
below.Plan Conversion
 On July 2, 2010 (the Conversion Date), the Plan underwent a transition (Conversion)to a
common plan administrator, the Vanguard Group (Vanguard). On the Conversion Date a new
investment lineup was implemented in the Plan and many of the Plan provisions were aligned
for all of the former participant groups.Prior to the Conversion Date, participants were given an opportunity to elect how they
wanted their Plan account balance and future contributions invested following the
Conversion. In the absence of a participant election, participant account balances and
future contribution allocations were directed to the Vanguard Target Date Retirement Fund
closest to the year in which the Participant will reach age 65. The Vanguard Target Date
Funds are also designated as the Qualified Default Investment Alternative (QDIA) in the
Plan as defined under Section 404(c)(5) under ERISA. Any Participant balances or future
contributions allocated to the National Grid ADR Fund were maintained at the time of the
Conversion. In addition, any participant balances in or future contribution allocations to
the JPMorgan Stable Value Fund, the T.Rowe Price Stable Value Common Trust or the T.Rowe
Price U.S. Treasury Money Market Trust Fund, were transferred to the Galliard Stable Value
Fund at the time of Conversion.The following Plan description outlines, the provisions of the Plan in effect following the
Conversion Date. For a description of the Plan provisions which were in effect prior to the
Conversion Date see the section titled Prior Plan Provisions.
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National Grid USA Companies Incentive Thrift Plan I
 Plan Description
 The Plan was established effective January 1, 1980, pursuant to the authorization of the
Board of Directors of certain subsidiaries of the New England Electric System (NEES), to
provide a long-range program of systematic savings for eligible employees (the
Participants). The Plan was renamed National Grid USA Companies Incentive Thrift Plan I
upon the merger between National Grid plc and NEES on March 22, 2000, at which time NEES was
renamed National Grid USA.Employees of participating subsidiaries of National Grid USA (collectively, the Employers
or the Company) are immediately eligible to participate in the Plan upon employment, but
will not receive Matching Contributions from the Employers until the first of the month
following three months of service. Certain individuals are not eligible to participate in
the plan, including but not limited to leased employees, interns, co-op students, summer
students, and independent contractors or individuals paid by an agency or party other than
the Company, or any employee covered under a collective bargaining agreement.The Plan was prepared in conformity with the Employee Retirement Income Security Act of 1974
(ERISA).The Plan administrators are the Benefits Committee and the Investment Committee of National
Grid USA Service Company, Inc. (the Administrator). The Board of Directors of National
Grid plc has the governing authority to amend the Plan, but has delegated certain amending
authority to the Board of Directors of National Grid USA Service Company, Inc. (Service
Company).Vanguard serves as record keeper of the Plan. The Vanguard Fiduciary Trust Company is
trustee and custodian for all assets and Participant accounts with the exception of the
Master Trust. Wells Fargo Bank, N.A. is the Master Trustee and custodian for the assets of
the Plan related to investments in the Galliard Stable Value Fund.The Plans management evaluated subsequent events for recognition or disclosure through the
date the financial statements were issued.
 Contributions
 The Plan is a defined contribution plan. An eligible employee can make Elective
Contributions through Contribution Agreements (also known as Salary Reduction Agreements
or Elective Contributions) to have from 1% to 50% of their pay contributed to the Plan on
their behalf. Participants can choose whether their Elective Contributions to the Plan will
be calculated on their Base Pay or All Pay.Base Pay is defined as the Participants regular pay, prior to any salary reductions for
Elective Contributions to the Thrift Plan, and any other salary reductions under the Health
Care Spending Account Plan, Family Day Care Assistance Plan or for Company health care
coverage.
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National Grid USA Companies Incentive Thrift Plan I
 Base Pay excludes all other forms of compensation, including supplemental disability income,
amounts deferred under other plans, reimbursements of expenses, bonuses, incentive pay,
commissions, options, payments made in lieu of vacation days or under short- or long-term
disability provisions, awards, overtime, premiums, and any other additional forms of
earnings (including Company contributions to or under any other employee benefit plan, such
as health insurance, pension, or severance pay).All Pay is Base Pay, as defined above, plus overtime, commissions, premium pay, and any
bonus or incentive pay.The annual employee pre-tax Elective Contributions by each Participant were subject to
Internal Revenue Service (IRS) limits of $16,500 in 2010 and 2009 for employees who did
not attain age 50 by the end of the respective Plan year. For employees who did attain age
50 by the last day of the applicable Plan year, the annual maximum pre-tax contribution was
$22,000 for 2010 and 2009.Participants can also elect to contribute up to 15% of their pay on an after-tax basis. The
total amount of Elective Contributions (pre-tax and after-tax) may not exceed 50% of pay
(further subject to the combined IRS annual contribution limit, adjusted periodically by
law, which was $49,000 for 2010 and 2009).The Company makes Matching Contributions to the Plan; prior to January 1, 2011, the
following formulas were used to determine Matching Contributions:.For Participants who are covered by the Niagara Mohawk Pension Plan: 50% of the first 6% of
Base PayFor Participants who are covered by the cash balance provisions under the National Grid USA
Companies Final Average Pay Pension Plan: 50% of the first 6% of Base PayFor National Grid USA Companies Final Average Pay Pension Plan Participants who are NOT
covered by the cash balance provisions of the plan: 100% of the first 2% of Base Pay, plus
75% of the next 4% of Base PayFor former KeySpan Plan Participants: 50% of the first 6% of All Pay. These employees were
also eligible to receive a Discount Employer Stock Contribution which is a 10% discount on
the purchase of National Grid ADRs in the KeySpan Plan. Management employees of KeySpan Home
Energy Services New England (KHES NE) however, received Matching Contributions equal to
100% of the employee elective contribution up to a maximum of 6%, resulting in a 6% maximum
matching contribution, with respect to total compensation. KHES
NE employees were not eligible to receive a 10% discount on the purchase of National Grid
ADRs.
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National Grid USA Companies Incentive Thrift Plan I
 Effective January 1, 2011, the Company matches 50% of the first 8% Participants contribute
(pre-tax and after-tax contributions) to the Plan. Matching Contributions are based on All
Pay, as a ratio of the Participants Elective Contribution dollar amount and their All Pay.
Also effective January 1, 2011, the Discount Employer Stock Contribution was eliminated.New employees with funds held under a previous employers qualified plan are permitted to
roll over eligible amounts from such funds into the Plan.Contributions are subject to certain limitations.All employer Matching Contributions are invested in the same investments elected by the
Participant for their employee contributions unless otherwise directed by the Participant.Participants may allocate their account balances in any whole percentage without restriction
on the frequency of subsequent reallocations subject to investment fund short-term trading
restrictions.Active or former employees who are Participants and who receive a lump sum distribution from
a Company qualified pension plan (National Grid Pension Plan, Niagara Mohawk Pension Plan,
Southern Union Company Providence Energy Pension Plan, Southern Union Company Valley Pension
Plan, KeySpan Retirement Plan and KeySpan Retirement Income Plan) may roll the lump sum
proceeds into the Plan to the extent the proceeds qualify for rollover under the code. The
total amount rolled over from these Plans in 2010 was $12,169,281.
 Automatic Enrollment
 Effective as of the Conversion Date, new hires will be auto enrolled 45 days after the hire
date at 6% of their All Pay. Participant contributions will be defaulted to the Plans QDIA
if a Participant does not select their own investments. The auto enrollment election can be
reversed within the first 90 days of the enrollment date and all money in the account
returned to the Participant. After the first 90 days of enrollment the auto enrollment
election can be reversed but any money already contributed to the account can not be
returned to the Participant.
 Automatic Increase
 Participants may elect an automatic increase of pre-tax Contributions each year. For
Participants who elect an automatic increase and do not customize their elections, pre-tax
contributions will increase by 1% each January. The automatic increase service is not
available for after-tax Contributions.
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National Grid USA Companies Incentive Thrift Plan I
 Participant Accounts
 Each Participants account is credited with the Participants Contribution, allocations of
(a) the employers Matching Contributions (and Discount Employer Stock Contributions, if
applicable, for former KeySpan Plan Participants), and (b) allocations of Plan earnings, net
of fees. Allocations are based on Participant earnings or account balances, as defined. The
benefit to which a Participant is entitled is the benefit that can be provided from the
Participants vested account, as provided in the Plan Document.
 Vesting
 Participants are immediately vested in their Elective Contributions plus actual earnings
thereon. Upon termination of employment or upon the determination of an employees
disability being total and permanent, a Participant or a Participants beneficiary (in the
case of death) is entitled to receive the full amount in the Participants account.
Participants will be 100% vested in employer match, discount, and employer non-elective
contributions on the earlier to occur of: (i) the Participants completion of three (3)
years of service with the Company; (ii) the Participants attainment of Normal Retirement
Age (age 65) (iii) the death of the Participant; (iv) the disability of the Participant if
the Participant is receiving disability benefits under Title II of the Social Security Act;
or (v) the termination or partial termination of the Plan.
 Notes Receivable from Participants
 An employee can obtain a loan from the Plan from such Participants account. The minimum
loan allowed is $1,000. A loan cannot exceed the lesser of 50% of the Participants account
balance or $50,000. The $50,000 limit is further limited by the Participants highest
outstanding loan balance within the twelve months preceding the loan request. Loans are
stated at the unpaid principal balance plus any accrued but unpaid interest. The loans are
secured by the balance in the Participants account. Loans must be repaid over a period of
one to five years (up to fifteen years for the purchase of a primary residence) by means of
payroll deductions. The loan interest rate is set when at the time Participants apply for a
loan based on the rate established by the Benefits Committee. Interest rates at December 31,
2010 ranged from 3.25% to 10.50%. Notes receivable are stated at their unpaid principal
balance plus accrued unpaid interest.A default of the loan will occur if the loan balance is not paid off by the end of the
quarter following the quarter in which the missed payment was due or the loan is not paid in
full within 60 months of the date that the loan was made. In the event of default, the
outstanding balance of the loan and any unpaid accrued interest is deemed to have been
distributed to the Participant. Interest continues to be tracked following a default solely
for determining the amount available for a subsequent loan. Deemed distributions are
included in the Loan Funds investment balance until the employee has been terminated. Upon
termination the
defaulted loan balance is deducted from the Plan. There were cumulative deemed distributions
of $158,306 and $13,131 as of December 31, 2010 and 2009, respectively.
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National Grid USA Companies Incentive Thrift Plan I
 Payment of Benefits
 Participants qualify for a distribution of their entire account balance when the Participant
ends employment (including at retirement), becomes totally and permanently disabled or
reaches age 591/2. Participants who qualify for a distribution may receive an immediate lump
sum, defer payment, or receive the value of their account in cash installments. If a
Participant defers receipt of benefits, their funds will remain invested in the investment
funds of their choice. They may make investment transfers in the same manner as any active
Participant.Effective March 28, 2005, the Plan was amended to allow automatic lump-sum distributions if
the value of the Participants vested account balance is less than $1,000 and is payable on
or after March 28, 2005. The Participant must consent to the distribution if the present
value is more than $1,000.Unless Participants choose otherwise, their account balance remains in the Plan until they
attain age 701/2. At that time Participants are required to receive minimum required
distributions beginning on April 1 of the following year. Participants can elect a total or
partial distribution from their account(s) at any time following separation of service. In
addition, Participants may: 1) Receive account balances in annual, semi-annual, quarterly or
monthly installments, to be paid over a period not to exceed their life expectancy. Once
installments begin, the amount of each payment is determined by dividing the Participant
account balance at the time of payment by the number of installments remaining to be paid;
2) Receive account balances in a series of substantially equal periodic payments (paid at
least annually for their life expectancy); or 3) Elect to receive distributions in any
amount a Participant wishes, beginning and ending at their discretion.The Plan allows Qualified Nonelective Contributions to the extent such contributions are
necessary to satisfy the nondiscrimination requirement under the Internal Revenue Code
(IRC). Following separation from service prior to age 55, a Participant may elect to
receive a partial distribution from his or her account or a total distribution at any time;
such Participant may also defer receipt of his or her benefit until the latest date
permitted under the IRC.
 Forfeitures
 Forfeiture accounts are maintained to hold any employer contributions and earnings thereon
that were deposited as a result of a Participants separation from service prior to becoming
fully vested. In addition, forfeitures from prior Plan mergers and uncashed Participant
checks
are held in the Plan forfeiture accounts.As of December 31, 2010 and 2009, forfeited non-vested accounts totaled $151,894 and
$661,320, respectively. These accounts may be used to reduce future employer contributions
and pay Plan administration expenses as described in the Plan document. During the year
ended December 31, 2010 $660,487 of forfeited non-vested accounts were utilized to reduce
employer contributions.
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National Grid USA Companies Incentive Thrift Plan I
 Prior Plan Provisions
 Many of the Plan provisions noted above were effective prior to the Conversion Date, except
as otherwise noted below.
 Plan Description
 Vanguard Fiduciary Trust Company (Vanguard) served as record keeper, trustee and custodian
for the assets and Participant accounts of the former KeySpan Plan Participants and
beneficiaries. T. Rowe Price Retirement Plan Service, Inc. served as record keeper of the
Plan and T. Rowe Price Trust Company served as trustee and custodian of the Plan until July
2, 2010 when all assets were transferred to Vanguard.
 Contributions
 Prior to the Conversion Date Participants (with the exception of Former KeySpan Plan
Participants) became eligible to receive employer Matching Contributions after one year of
service. At the time of the conversion, any Participants hired prior to the Conversion Date
became eligible immediately to receive Employer Matching Contributions.
 Automatic Enrollment
 Effective March 15, 2006, newly hired or rehired nonunion employees without an account
balance were automatically enrolled in the Plan and 6% of their base pay was contributed to
the Plan on a pre-tax basis. Additionally, each June, nonunion employees without an account
balance were automatically enrolled in the Plan as described above. These automatic
enrollment provisions were not applicable to Participants of the former KeySpan Plan prior
to the Conversion.
 Automatic Increase
 Effective March 1, 2006, Participants could elect an automatic increase of pre-tax
contributions each year. For Participants who elected an automatic increase and did not
customize their elections, pre-tax contributions were increased by 1% each July until they
reached 15%. This provision was not applicable to Participants of the former KeySpan Plan.
 Vesting
 Participants were immediately vested in their elective contributions and employer Matching
Contributions plus actual earnings thereon. Upon termination of employment or upon the
determination of an employees disability being total and permanent, a Participant or a
Participants beneficiary (in the case of death) was entitled to receive the full amount in
the Participants account. Participants from the former KeySpan Plan were 100% vested in
employer match, discount, and employer non-elective contributions on the earlier to occur
of:
(i) the Participants completion of three (3) years of service with the Company; (ii) the
Participants retirement from the Company at age fifty-five or older; (iii) the death of the
Participant; (iv) the disability of the Participant if the Participant is receiving
disability benefits under Title II of the Social Security Act; or (v) the termination or
partial termination of the Plan.
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National Grid USA Companies Incentive Thrift Plan I
 Notes Receivable from Participants
 The annual interest rate for Participants loans was determined using the prime rate as
reported by the Wall Street Journal on the first business day of the month in which the loan
is obtained, except for loans taken under the former KeySpan Plan in which interest is the
prime rate plus 1%. Notes receivable were stated at their unpaid principal balance plus
accrued unpaid interest.Active Participants in the former KeySpan Plan who failed to make a loan repayment by its
due date, had until the end of the quarter following the quarter in which the payment was
missed to make up the missed payment (Cure Period).
 Payment of Benefits
 In addition to other types of distribution options, Participants in the former KeySpan Plan
had
the ability to elect to receive annual installments or partial distributions at any time.
 Subsequent Events
 Company Core Contributions
 Participants hired or rehired on January 1, 2011 or later, are eligible for Company Core
Contributions, which begin the 1st of the month following 3 months of service.
The Company calculates a Participants Core Contribution each payroll period, based on
actual compensation for that payroll period. The contribution is a percentage of pay based
on the Participants total points (age plus years of service) as of January 1 of the Plan
year. The contribution schedule is as follows:
 Core Contribution (% ofPoints
    
    Pay)< 45
    
    
    4
    %45  54
    
    
    5
    %55  64
    
    
    6
    %65  74
    
    
    7
    %75 +
    
    
    8
    %
 Core Contributions are based on All Pay. Participants will have an account established for
them at Vanguard and Core Contributions will begin with their first paycheck after the
1st of the month following 3 months of service. These contributions will continue
even if Participants do not contribute to the Plan.Unless elected otherwise, Core Contributions will be automatically invested in the QDIA
which is the Vanguard Target Retirement Fund closest to the year in which the Participant
will attain age 65. Once enrolled, Participants can change the investment allocation at any
time.
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National Grid USA Companies Incentive Thrift Plan I
 2.
    
    Summary of Significant Accounting Policies
 Basis of Accounting
 The accompanying financial statements have been prepared on the accrual basis of accounting,
in accordance with accounting principles generally accepted in the United States of AmericaInvestment contracts held by a defined contribution plan are required to be reported at fair
value. However, contract value is the relevant measurement attribute for that portion of the
net assets available for benefits of a defined contribution plan attributable to fully
benefit-responsive investment contracts because contract value is the amount Participants
would receive if they were to initiate permitted transactions under the terms of the Plan.
The statement of net assets available for benefits presents the fair value of the investment
contracts as well as the adjustment of the fully benefit-responsive investment contracts
from fair value to contract value. The statement of changes in net assets available for
benefits is prepared on a contract value basis.
 Risks and Uncertainties
 The Plan provides for various investment options in various combinations of investment
funds. Investment funds are exposed to various risks, such as interest rate, market and
credit risks. Due to the level of risk associated with certain investment securities, it is
at least reasonably possible that changes in the values of investment securities will occur
in the near term and that such changes could materially affect Participants account
balances and the amounts reported in the statement of net assets available for benefits.
 Use of Estimates
 The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and changes therein,
and disclosure of contingent assets and liabilities. Actual results could differ from those
estimates.
 Investment Valuation and Income Recognition
 Investments are reported at fair value. Fair value is the price that would be received to
sell an
asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. See note 11 for discussion of fair value measurements.Purchases and sales of securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net
appreciation includes the plans gains and losses on investments bought and sold as well as
held during the year.
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National Grid USA Companies Incentive Thrift Plan I
 Management fees and operating expenses are charged to Plan Participants and are reflected as
a reduction of investment return in the each of the investment options of the Plan. Such
management fees and operating expenses are deducted from income earned on a daily basis.
 Payment of Benefits
 Benefit payments to, and withdrawals by Participants, are recorded when paid.
 Reclassifications
 Certain prior period amounts are classified to conform with the current years presentation.
 New Accounting Standards
 In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Update No. 2010-06 Fair Value Measurements and Disclosures: Improving Disclosures
about Fair Value Measurements, (ASU 2010-06), which provides a greater level of
disaggregated information and more robust disclosures about valuation techniques and inputs
to fair value measurements, transfers in and out of Levels 1 and 2, and the separate
presentation of information in Level 3 reconciliations on a gross basis rather than net. New
disclosures and clarifications of existing disclosures are effective for interim and annual
reporting periods beginning after December 15, 2009. Level 3 disclosures are effective for
fiscal years beginning after December 15, 2010. Adoption of ASU 2010-06 had no material
impact on the Plans financial statements but expanded disclosures about certain fair value
measurements.In September 2010, FASB issued Accounting Standards Update No. 2010-25 Plan
Accounting-Defined Contribution Pension Plans: Reporting Loans to Participants by Defined
Contribution Pension Plans, (ASU 2010-25), which clarifies how loans to Participants
should be classified and measured by participant defined contribution pension benefit plans.
Loans are required to be classified as notes receivable from Participants, which are
segregated from Plan investments and measured at their unpaid principal balance plus any
accrued but unpaid interest. ASU 2010-25 is applied retrospectively to all prior periods
presented effective for fiscal years ending after December 15, 2010. The Plan adopted ASU
2010-25 and has presented loans to Participants in accordance with this guidance as of
December 31, 2010 and 2009.
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National Grid USA Companies Incentive Thrift Plan I
 3.
    
    Investments
 The following table presents investments that represent five percent or more of the Plans net
assets at December 31, 2010 and 2009:
 2010
    
    2009National Grid American Depository Receipts
    
    $
    91,159,626
    
    
    $
    76,058,150Master Trust Investment  Galliard Stable
Value Fund
    
    
    303,875,392
    **
    
    
    Vanguard Target Retirement 2015
    
    
    114,917,094
    
    
    
    Vanguard Target Retirement 2020
    
    
    166,732,505
    
    
    
    Vanguard Target Retirement 2025
    
    
    203,855,069
    
    
    
    Vanguard Target Retirement 2030
    
    
    147,545,024
    
    
    
    T. Rowe Price Stable Value Common Trust Fund
    
    
    
    *
    
    
    132,949,138SSGA
S&P 500 Index
    
    
    
    *
    
    
    102,644,164Vanguard PRIMECAP Fund
    
    
    
    *
    
    
    102,254,664Master Trust Investment  JP Morgan Stable
Value
    
    
    
    *
    
    
    142,816,052Vanguard Life St Mod Growth
    
    
    
    *
    
    
    107,566,638
 
 *
    
    Indicates investments that represent 5% or more of net assets available for benefits
only as of December 31, 2009.**
    
    This represents contract value and therefore, differs from the fair value of
$302,659,890 as noted in the statements of net assets available for benefits. During the year ended December 31, 2010, the Plans investments (including gains and losses on
investments bought, sold and held during the year) appreciated (depreciated) in value as
follows:
 Mutual funds
    
    $
    87,642,273Common stock
    
    
    (10,698,507
    )Common/Collective Trusts
    
    
    983,194Net appreciation in fair value
    
    $
    77,926,960
 During the year ended December 31, 2010, the Plans dividend and interest income included
proceeds from a rights issue. In June 2010, National Grid plc (parent of the Company) raised
approximately £3.2 billion (net of expenses) by way of a fully underwritten rights issue. In
general, shareholders and ADR holders with a registered address in the United States were not
eligible to participate in the rights issue. Instead, for ADRs owned through the National Grid
ADR Fund in the Plan, Bank of New York Mellon sold the rights on behalf of impacted holders and
delivered the sale proceeds (less fees) to Vanguard. Participants who held shares in the
National Grid ADR Fund at close of business on June 14, 2010, received a Miscellaneous
Earnings credit equal to $4.233004 per ADR in their Plan account. This credit was invested in
the National Grid ADR Fund at an average share price of $37.74. Vanguard deposited the
additional shares of the National Grid ADR Fund in Participants accounts on July 9, 2010.
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National Grid USA Companies Incentive Thrift Plan I
 4.
    
    Plan Termination
 Although it has not expressed any intent to do so, the Company has the right under the Plan to
discontinue its contributions at any time and to terminate the Plan subject to the provisions
of ERISA. In the event of Plan termination, any unallocated assets of the Plan will be
allocated to Participant accounts and distributed in such a manner as the Company may
determine.
 5.
    
    Tax Status
 The Plan obtained its latest determination letter on July 17, 2002, in which the IRS stated
that the Plan, as then designed, was in compliance with the applicable requirements of the IRC.
The Plan has been amended and restated since receiving the determination letter. Additionally,
the Plan filed for a new determination letter in January 2011 which is currently pending
approval. However, the Plan administrator and the Plans counsel believe that the Plan is
designed and currently being operated in compliance with the applicable requirements of the
IRC. Therefore, no provision for income taxes has been included in the Plans financial
statements. To the best of its knowledge, the Company believes that the Plan is currently in
compliance with the provisions of the IRC.
 6.
    
    Related-Party Transactions
 Section 3(14) of ERISA defines a party-in-interest to include among others, fiduciaries or
employees of the Plan, any person who provides services to the Plan or an employer whose
employees are covered by the Plan. Accordingly, loans to Participants and investments in
American Depositary Receipts of National Grid plc are considered party-in-interest
transactions. Moreover, the Plans investment options include mutual funds and trust funds
managed by Vanguard and T. Rowe Price.
 7.
    
    Administration of Plan Assets
 The trustees of the Plan hold the Plans assets. Contributions are held and managed by the
trustees, who invest cash received, interest and dividend income and make distributions to
Participants.
 Certain administrative functions are performed by officers or employees of the Company. No such
officer or employee receives compensation from the Plan.
 8.
    
    Plan Administrative Expenses
 Some administrative expenses for the Plan are paid by the
Company. The trustees were paid
$52,225 in administration fees for administering the Plan for the year ended December 31, 2010.
 16




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National Grid USA Companies Incentive Thrift Plan I
 9.
    
    Guaranteed Investment Contracts
 Prior to the Conversion Date, the Plan provided a stable value investment option, the JP Morgan
Stable Value Fund, to former KeySpan Plan Participants that included a Synthetic GIC which was
made up of wrapper contracts that guaranteed principal and accumulated interest and a portfolio
of financial instruments that were owned by the Plan. The synthetic GIC contract included
underlying assets and was held in the Master Trust of which the Plan had an undivided interest
and utilized benefit-responsive wrapper contracts issued by AIG Financial Products Corp., Royal
Bank of Canada, State Street Bank and Trust Company, and ING, proportionately. The contracts
provided that Participants execute plan transactions at contract value. Contract value
represents contributions made to the funds, plus earnings, less Participant withdrawals. The
interest rates were reset quarterly, or on a more frequent basis as needed, based on the
current yield of the underlying investments and the spread between the fair value and contract
value, but the rate could not be less than 0%. The crediting interest rate of the wrapper
contracts was 2.22% at December 31, 2009.
 On the Conversion Date assets in the JPMorgan Stable Value Fund, the T.Rowe Price Stable Value
Common Trust or the T.Rowe Price U.S. Treasury Money Market Trust Fund, were transferred the
Galliard Stable Value Fund (the Galliard Fund), which primarily invests in traditional
guaranteed investment contracts (GICs) and security-backed contracts issued by insurance
companies and other financial institutions.
 Traditional GICs are backed by the general account of the contract issuer. The Galliard Fund
deposits a lump sum with the issuer and receives a guaranteed interest rate for a specified
period. Interest is accrued on either a simple or fully compounded basis, and is paid either
periodically or at the end of the contract term. The issuer guarantees that all qualified
Participant withdrawals will be at contract value (principal plus accrued interest).
 A security-backed contract is an investment contract issued by an insurance company or other
financial institution, backed by a portfolio of bonds that are owned by the Galliard Fund.
Security-backed contracts are considered either targeted benchmark (underlying investments
are managed to a specific benchmark) or targeted duration (underlying investments are managed
to a specific duration). The portfolio underlying the contract is maintained separately from
the contract issuers general assets, usually by a third party custodian. The interest
crediting rate of a security-backed contract is based on the contract value, and the fair
value, duration, and yield to maturity of the underlying portfolio. These contracts typically
allow for realized and unrealized gains and losses on the underlying assets to be amortized,
usually over the duration of the underlying investments, through adjustments to the future
interest crediting rate, rather than reflected immediately in the net assets of the Galliard
Fund. The issuer guarantees that all qualified Participant withdrawals will be at contract
value.
 The Galliard Fund enters into participating or hybrid contracts. In a participating contract,
the contract holder participates in asset and liability risks. Therefore, these risks transfer from
the contract issuer to the Galliard Fund. However, in the case of a full liquidation event, the
issuer is responsible for covering any amount by which the contract value exceeds the fair value of
the underlying portfolio. A hybrid contract is a combination of participating and non-participating
contracts. In a non-participating contract, the contract holder does not participate in asset and
 17




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National Grid USA Companies Incentive Thrift Plan I
 liability risks. Typically, hybrid contracts are 20% participating and 80% non-participating,
and each component is reset over a 12-month cycle. Hybrid contracts generally have a higher
contract fee compared to participating contracts. No payments related to participating or
hybrid contracts were made during the year ended December 31, 2010.
 Risks arise when entering into any investment contract due to the potential inability of the
issuer to meet the terms of the contract. In addition, security-backed contracts have the risk
of default or the lack of liquidity of the underlying portfolio assets.
 GICs provide a fixed-rate of interest over the term to maturity of the contract, and therefore
do not experience fluctuating crediting rates. The net crediting rate reflects fees paid to
security-backed contract issuers. The security-backed contracts are designed to reset their
respective crediting rates on a quarterly basis. GIC crediting rates are not reset.
Security-backed contracts cannot credit an interest rate that is less than zero percent. The
crediting rate of security-backed contracts will track current market yields on a trailing
basis. The rate reset allows the contract value to converge with the fair value of the
underlying portfolio over time, assuming the portfolio continues to earn the current yield for
a period of time equal to the current portfolio duration.
 To the extent that the underlying portfolio of a security-backed contract has unrealized and/or
realized losses, a positive adjustment is made to the adjustment from fair value to contract
value under contract value accounting. As a result, the future crediting rate may be lower over
time than the then-current market rates. Similarly, if the underlying portfolio generates
unrealized and/or realized gains, a negative adjustment is made to the adjustment from fair
value to contract value, and the future crediting rate may be higher than the then-current
market rates.
 The yield earned by the Galliard Fund at December 31, 2010 was 2.81%. The yield earned by the
Galliard Fund with an adjustment to reflect the actual interest rate credited to Participants
in the Galliard Fund at December 31, 2010 was 2.34%.
 GICs and security-backed contracts generally provide for withdrawals associated with certain
events which are not in the ordinary course of Galliard Fund operations. These withdrawals are
paid with a market value adjustment applied to the withdrawal as defined in the investment
contract. Each contract issuer specifies the events which may trigger a market value adjustment
At this time, the Galliard Fund does not believe that the occurrence of any such market value
event, which would limit the Galliard Funds ability to transact at contract value with
Participants, is probable.
 GICs generally do not permit issuers to terminate the agreement prior to the scheduled maturity
date. Security-backed contracts generally are evergreen contracts that contain termination
provisions, allowing the Galliard Fund or the contract issuer to terminate with notice, at any
time at fair value, and providing for automatic termination of the contract if the contract
value or the fair value of the underlying portfolio equals zero. The issuer is obligated to pay
the excess contract value when the fair value of the underlying portfolio equals zero.
 In addition, if the Galliard Fund defaults in its obligations under the security-backed
contract (including the issuers determination that the agreement constitutes a non-exempt
prohibited
 18




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National Grid USA Companies Incentive Thrift Plan I
 transaction as defined under ERISA), and such default is not corrected within the time
permitted by the contract, then the contract may be terminated by the issuer and the Galliard
Fund will receive the fair value as of the date of termination.
 Certain events such as Plan termination or a Plan merger initiated by the Company which results
in a material and adverse effect on the wrapper contract may limit the ability of the Plan to
transact on contract value or may allow for the termination of the wrapper contracts at less
than contract value. At this time, the Company believes that any events that may limit the
ability of the Plan to transact at contract value are remote.
 10.
    
    Master Trust
 A Master Trust exists for the sole purpose of holding the Galliard Stable Value Fund and prior
to the Conversion Date , the JPMorgan Stable Value Fund (Stable Value Funds) assets of the
Plan and those of the National Grid USA Companies Incentive Thrift Plan II. The Stable Value
Funds through the Master Trust are Participant-directed. Prior to the Conversion Date, the
Master Trust was comprised of the JPMorgan Stable Value Fund which included a Synthetic
Guaranteed Investment Contract (Synthetic GIC) whose underlying investments are stated at fair
value. Following the Conversion Date, the Master Trust is comprised of the Galliard Stable
Value Fund which includes Traditional Guaranteed Investment Contracts (Traditional GICs) and
security-backed contracts issued by insurance companies and other financial institutions, whose
underlying investments are stated at fair value.
 At December 31, 2010, Wells Fargo is the master trustee of the Galliard Stable Value Fund and
holds the investment assets of the Master Trust as a commingled fund in which each separate
Plan is deemed to have a proportionate undivided interest in the investments in which they
participate. Previously, The Vanguard Fiduciary Trust Company was the master trustee of the JP
Morgan Stable Value Fund. At December 31, 2010 and 2009, the Plans interest in the net assets
of the Master Trust was approximately 45% and 43%, respectively.
 The following presents the net assets of the Master Trust as of December 31, 2010 and 2009:
 2010
    
    
    2009InvestmentsGalliard Stable Value Fund, at fair value
    
    $
    671,813,556
    
    
    $
    JP Morgan Stable Value Fund, at fair value
    
    
    
    
    
    
    311,791,944Adjustment from fair value to contract
value for fully-benefit responsive
investment contracts
    
    
    2,698,047
    
    
    
    18,496,132Net Assets In The Master Trust
At Contract Value
    
    $
    674,511,603
    
    
    $
    330,288,076
 Investment income of the Master Trust for the year ended December 31, 2010 is as follows:
 Investment IncomeInterest income
    
    
    
    
    
    $
    7,639,160
 19




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##### Table of Contents



National Grid USA Companies Incentive Thrift Plan I
 11.
    
    Fair Value of Financial Instruments
 The Plan measures on a recurring basis its investments at fair value in accordance with FASB
codification Fair Value Measurements and Disclosures, which provides the framework for
measuring fair value. That framework provides fair value hierarchy used to classify the inputs
used in measuring fair value. That hierarchy prioritizes the inputs used in determining
valuations into three levels. The levels of fair value hierarchy are as follows:
 Level 1  Inputs to the valuation methodology are unadjusted quoted prices in active
markets that are accessible to the Plan for identical assets. These generally provide the
most reliable evidence and are used to measure fair value whenever available.
 Level 2  Inputs to the valuation methodology include significant inputs, other than Level
1 inputs, that are observable either directly or indirectly for substantially the full term
of the asset through corroboration with observable market data. Level 2 inputs include
quoted market prices in active markets for similar assets, quoted market prices in markets
that are not active for identical or similar assets, and other observable inputs.
 Level 3  Inputs to the valuation methodology are unobservable inputs and significant to the
fair value measurement.
 The asset or liabilitys fair value measurement level within the fair value hierarchy is based
on the lowest level of any input that is significant to the fair value measurement. Valuation
techniques used need to maximize the use of observable inputs and minimize the use of
unobservable inputs.
 The following tables summarize financial instruments measured at fair value on a recurring basis
for the Plan excluding the Plans interest in the Master Trust:
 Assets at Fair Value as of December 31, 2010Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalCommon stock, energy
    
    $
    91,159,626
    
    
    $
    
    
    
    $
    
    
    
    $
    91,159,626Mutual funds:Index funds
    
    
    148,882,918
    
    
    
    
    
    
    
    
    
    
    
    148,882,918Balanced funds
    
    
    823,706,322
    
    
    
    
    
    
    
    
    
    
    
    823,706,322Fixed income fund
    
    
    56,411,294
    
    
    
    
    
    
    
    
    
    
    
    56,411,294Total mutual funds
    
    
    1,029,000,534
    
    
    
    
    
    
    
    
    
    
    
    1,029,000,534Common/collective trusts:Balanced funds
    
    
    
    
    
    
    53,063,938
    
    
    
    
    
    
    
    53,063,938Total
    
    $
    1,120,160,160
    
    
    $
    53,063,938
    
    
    $
    
    
    
    $
    1,173,224,098
 20




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National Grid USA Companies Incentive Thrift Plan I
 Assets at Fair Value as of December 31, 2009Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalCommon stock, energy
    
    $
    76,058,150
    
    
    $
    
    
    
    $
    
    
    
    $
    76,058,150Mutual funds:Index funds
    
    
    125,379,529
    
    
    
    
    
    
    
    
    
    
    
    125,379,529Balanced funds
    
    
    210,694,831
    
    
    
    
    
    
    
    
    
    
    
    210,694,831Growth funds
    
    
    377,559,297
    
    
    
    
    
    
    
    
    
    
    
    377,559,297Fixed income fund
    
    
    70,893,540
    
    
    
    
    
    
    
    
    
    
    
    70,893,540Other funds
    
    
    154,053,558
    
    
    
    
    
    
    
    
    
    
    
    154,053,558Total mutual funds
    
    
    938,580,755
    
    
    
    
    
    
    
    
    
    
    
    938,580,755Common/collective trusts:Stable value fund
    
    
    
    
    
    
    137,065,177
    
    
    
    
    
    
    
    137,065,177Money market
    
    
    
    
    
    
    27,431,687
    
    
    
    
    
    
    
    27,431,687Equity fund
    
    
    
    
    
    
    102,644,164
    
    
    
    
    
    
    
    102,644,164Total common/collective
trusts
    
    
    
    
    
    
    267,141,028
    
    
    
    
    
    
    
    267,141,028Total
    
    $
    1,014,638,905
    
    
    $
    267,141,028
    
    
    $
    
    
    
    $
    1,281,779,933
 The following tables summarize financial instruments measured at fair value on a
recurring basis for the Plans overall Master Trust:
 Assets at Fair Value as of December 31, 2010Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalGaillard Stable Value Fund
    
    $
    
    
    
    $
    671,813,556
    
    
    $
    
    
    
    $
    671,813,556
 Asset at Fair Value as of December 31, 2009Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalJP Morgan Stable Value
    
    $
    
    
    
    $
    311,791,944
    
    
    $
    
    
    
    $
    311,791,944
 The following is a description of the valuation methodologies used for assets measured at
fair value. There have been no changes in methodologies used at December 31, 2010 or 2009.
 Cash: Valued at cost, which approximates fair value due to short term nature.
 Common stock: Investments in the National Grid plc American Depositary Receipts (which
trades on the New York Stock Exchange NYSE under the symbol NGG) are valued according to
the closing price on the NYSE.
 Mutual funds: Valued at the net asset value (NAV) of shares held by the Plan at year end.
 Stable value funds  Plans interest in master trust: Fair value of the underlying
investments is determined taking into account values supplied by reputable pricing or
quotation service or quotations furnished by one or more reputable sources, such as
securities brokers, dealers or investment bankers, mutual fund administrators or other
relevant information. Fair value of
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National Grid USA Companies Incentive Thrift Plan I
 the insurance contracts, known as wrapper contracts, is based on quoted market prices at the
time of valuation versus actual costs of the contracts. The fair value of wrapper contracts
for the Stable Value Funds as of December 31, 2010 was $97,612 and zero at December 31,
2009.
 Common/collective trusts: Valued based upon the unit values of such collective trust funds
held by the Plan at year end. Unit values are based on the fair value of the underlying
assets of the fund derived from inputs principally from or corroborated by observable market
data by correlation or other means.
 The methods described above may produce a fair value calculation that may not be indicative of
net realizable value or reflective of future values. Furthermore, while the Plan believes its
valuation methods are appropriate and consistent with other market participants, the use of
different methodologies or assumptions to determine the fair value of certain financial
instruments could result in a different fair value measurement at the reporting date.
 The following is a description of the nature and risks of the common/collective trust
investments at December 31, 2010 and 2009:
 The Wellington common/collective trust funds (Balanced Funds) seek to provide growth and a
level of risk appropriate for a particular retirement date, while preserving capital during
retirement. There are no unfunded commitments or withdrawal restrictions.
 The objective of the SSGA S&P 500 Index Fund (Equity Fund), a common/collective trust, is to
match, as closely as possible, the return of the S&P 500® Index. There are no unfunded
commitments; however the Company was subject to a withdrawal schedule for a full liquidation at
the time of Conversion.
 The objective of the T. Rowe Price Stable Value Common Trust Fund (Stable Value Fund), a
common/collective trust, is to maximize current income consistent with the maintenance of
principal and to provide for withdrawals for certain Participant-initiated transactions without
penalty or adjustment. There are no unfunded commitments and the Company provided 12 months
advance notice in order to withdraw some or all of its investment.
 The objective of the T. Rowe Price U.S. Treasury Money Market Trust (Money Market Fund), a
common/collective trust, is to maximize safety of capital, liquidity, and, consistent with
these objectives, the highest available current income. The trust will invest substantially all
of its assets in short-term U.S. Treasury obligations and repurchase agreements collateralized
by
U.S. Treasury obligations. There are no unfunded commitments or withdrawal restrictions.
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National Grid USA Companies Incentive Thrift Plan I
 12.
    
    Reconciliation of Financial Statements to Form 5500
 The following is a reconciliation of net assets available for benefits per the financial
statements to the Form 5500 as of December 31, 2010 and 2009:
 2010
    
    
    2009Net assets available for
benefits per the financial
statements
    
    $
    1,504,334,213
    
    
    $
    1,445,976,217Less deemed distributions
    
    
    (158,306
    )
    
    
    (13,131
    )Adjustment from contract
value to fair value for
fully benefit-responsive
investment contracts not
included as an asset in
the Form 5500
    
    
    (1,215,502
    )
    
    
    (3,881,660
    )Net assets available for
benefits per the Form 5500
    
    $
    1,502,960,405
    
    
    $
    1,442,081,426
 The following is reconciliation of the changes in net assets per the financial statements to
the Form 5500 for the year ended December 31, 2010:
 Change in net assets available for benefits
per the financial statements
    
    $
    58,357,996Change in cumulative deemed loans
    
    
    (145,175
    )Change in adjustment from fair value to contract
value for fully benefit-responsive
investment contracts not included in the
Form 5500
    
    
    2,666,158Change in net assets available for benefits per
the Form 5500
    
    $
    60,878,979
 13.
    
    Plan Amendments
 The Plan was amended and restated as of July 2, 2010. The description of the Plan in Note 1 has
been updated to discuss the primary amendments to the Plan.
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##### Table of Contents



National Grid USA Companies Incentive Thrift Plan I
 (a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)CurrentIdentity of Issue
    
    Description of Investment
    
    Cost
    
    Value*
    
    National Grid plc
    
    National Grid American Depositary Receipts
    
    N/R
    
    $
    91,159,626*
    
    Vanguard
    
    Vanguard Extended Market Index Institution
    
    N/R
    
    
    51,503,247*
    
    
    
    Vanguard Institution Index Fund
    
    N/R
    
    
    68,708,465*
    
    
    
    Vanguard Target Retirement 2005
    
    N/R
    
    
    14,006,673*
    
    
    
    Vanguard Target Retirement 2010
    
    N/R
    
    
    52,381,353*
    
    
    
    Vanguard Target Retirement 2015
    
    N/R
    
    
    114,917,094*
    
    
    
    Vanguard Target Retirement 2020
    
    N/R
    
    
    166,732,505*
    
    
    
    Vanguard Target Retirement 2025
    
    N/R
    
    
    203,855,069*
    
    
    
    Vanguard Target Retirement 2030
    
    N/R
    
    
    147,545,024*
    
    
    
    Vanguard Target Retirement 2035
    
    N/R
    
    
    57,955,873*
    
    
    
    Vanguard Target Retirement 2040
    
    N/R
    
    
    20,042,792*
    
    
    
    Vanguard Target Retirement 2045
    
    N/R
    
    
    14,310,657*
    
    
    
    Vanguard Target Retirement 2050
    
    N/R
    
    
    14,336,456*
    
    
    
    Vanguard Target Retirement 2055
    
    N/R
    
    
    927,174*
    
    
    
    Vanguard Target Retirement Inc
    
    N/R
    
    
    16,695,652*
    
    
    
    FTSE All-World ex-US Ist
    
    N/R
    
    
    28,671,206Wellington
    
    Wellington Trust Target 2000
    
    N/R
    
    
    162,275Wellington Trust Target 2010
    
    N/R
    
    
    2,619,421Wellington Trust Target 2020
    
    N/R
    
    
    17,245,080Wellington Trust Target 2030
    
    N/R
    
    
    17,365,257Wellington Trust Target 2040
    
    N/R
    
    
    7,362,163Wellington Trust Target 2050
    
    N/R
    
    
    7,203,763Wellington Trust Target Retirement Income
    
    N/R
    
    
    1,105,979PIMCO
    
    PIMCO Total Return Fund
    
    N/R
    
    
    56,411,294*
    
    Participant Loans
    
    Participant loans with various maturities and rates
of interest from 3.25% to 10.50%
    
    $0
    
    
    23,389,917Total
    
    
    
    $
    1,196,614,015
 
 *
    
    Parties-in-interest, as defined by ERISAN/R 
    
    Participant directed investment; cost not required to be reported 24