EXHIBIT 2(b).5.1
  
 National Grid plc
 (incorporated with limited liability in England and Wales on 11 July 2000 under registered number 4031152)
 National Grid Electricity Transmission plc
 (incorporated with limited liability in England and Wales on 1 April 1989 under registered number 2366977))
 Euro 15,000,000,000
Euro Medium Term Note Programme
 Programme Prospectus National Grid NGET Issuer Issuers Instruments
 U.K. Listing Authority FSMA Official List London Stock Exchange Market listed Investment Services Directive
 temporary Global Instrument permanent Global Instrument Global Instruments NGN Common Safekeeper Euroclear société anonyme Clearstream, Luxembourg Common Depositary Classic Global Notes CGNs
  Prospectus Directive 
  Programme Arranger and Dealer
 HSBC
 Dealers
 ABN AMRO
    
    Banc of America Securities LimitedBarclays Capital
    
    CitiDeutsche Bank
    
    Dresdner KleinwortMitsubishi UFJ Securities International plc
    
    National Australia Bank LimitedRBC Capital Markets
    
    The Royal Bank of Scotland




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IMPORTANT NOTICES
 Base Prospectus National Grid Group National Grid Prospectus NGET Group NGET Prospectus Prospectuses Prospectus
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Euro Japanese yen £ Sterling U.S. dollars U.S.$ Canadian dollars Australian dollars New
Zealand dollars Swedish krona Danish krone Hong
Kong dollars Swiss francs
 In
connection with the issue of any Tranche (as defined in Overview of the Programme - Method
of Issue), the Dealer or Dealers (if any) named as the stabilising manager(s) (the
Stabilising Manager(s)) in the applicable Final Terms (or any person acting on behalf of any
Stabilising Manager(s)) may over-allot Instruments or effect transactions with a view to
supporting the market price of the Instruments at a level higher than that which might
otherwise prevail. However, there is no assurance that the Stabilising Manager(s) (or any
person acting on behalf of any Stabilising Manager) will undertake stabilisation action. Any
stabilisation action may begin on or after the date on which adequate public disclosure of the
final terms of the offer of the relevant Tranche is made and, if begun, may be ended at any
time, but it must end no later than the earlier of 30 days after the issue date of the relevant
Tranche and 60 days after the date of the allotment of the relevant Tranche. Any stabilisation
action or over-allotment must be conducted by the relevant Stabilising Manager(s) or person(s)
acting on behalf of any Stabilising Manager(s) in accordance with all applicable laws and
rules.
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TABLE OF CONTENTS
 PageIMPORTANT NOTICES
    
    
    2DOCUMENTS INCORPORATED BY REFERENCE
    
    
    5SUPPLEMENTAL PROSPECTUS
    
    
    6OVERVIEW OF THE PROGRAMME
    
    
    7RISK FACTORS
    
    
    14TERMS AND CONDITIONS OF THE INSTRUMENTS
    
    
    26SUMMARY OF PROVISIONS RELATING TO THE INSTRUMENTS WHILE IN GLOBAL FORM
    
    
    62USE OF PROCEEDS
    
    
    68DESCRIPTION OF NATIONAL GRID PLC
    
    
    69DESCRIPTION OF NATIONAL GRID ELECTRICITY TRANSMISSION PLC
    
    
    77UNITED KINGDOM TAXATION
    
    
    81PLAN OF DISTRIBUTION
    
    
    84FORM OF FINAL TERMS
    
    
    87GENERAL INFORMATION
    
    
    103
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DOCUMENTS INCORPORATED BY REFERENCE
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SUPPLEMENTAL PROSPECTUS
 Supplemental Prospectus
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OVERVIEW OF THE PROGRAMME
  Issuers
    
    National Grid plcNational Grid Electricity Transmission plcDescription
    
    Euro Medium Term Note ProgrammeSize
    
    Up to Euro 15,000,000,000 (or the equivalent in other
currencies at the date
of issue) aggregate
nominal amount of
Instruments outstanding
at any one time.Arranger
    
    HSBC Bank plcPrincipal Dealers
    
    ABN AMRO Bank N.V.Banc of America Securities LimitedBarclays Bank PLCCitigroup Global Markets LimitedDeutsche Bank AG, London BranchDresdner Bank AG London BranchHSBC Bank plcMitsubishi UFJ Securities International plcNational Australia Bank LimitedRoyal Bank of Canada Europe LimitedThe Royal Bank of Scotland plcThe Issuers may from time to time terminate the
appointment of any dealer under the Programme
or appoint additional dealers either in respect
of one or more Tranches or in respect of the
whole Programme. References in this Prospectus
to Permanent Dealers are to the persons
listed above as Dealers and to such additional
persons that are appointed as dealers in
respect of the whole Programme (and whose
appointment has not been terminated) and to
Dealers are to all Permanent Dealers and all
persons appointed as a dealer in respect of one
or more Tranches.Trustee
    
    The Law Debenture Trust Corporation p.l.c.Issuing and Paying Agent
    
    The Bank of New YorkOther Paying Agent
    
    Kredietbank S.A. LuxembourgeoiseMethod of Issue
    
    The Instruments will be issued on a syndicated or
non-syndicated basis. The Instruments will be issued in
series (each a Series) having one or more issue dates
and on terms otherwise identical (or identical other than
in respect of the first payment of interest), the
Instruments of each Series being intended to be
interchangeable with all other Instruments of that Series.
Each Series may be
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issued in tranches (each a Tranche)
on the same or different issue dates. The specific terms
of each Tranche (which will be completed, where necessary,
with supplemental terms and conditions and, save in
respect of the issue date, issue price, first payment of
interest and nominal amount of the Tranche, will be
identical to the terms of other Tranches of the same
Series) will be completed in the final terms document (the
Final Terms).Issue Price
    
    Instruments may be issued at their nominal amount or at a
discount or premium to their nominal amount. Partly Paid
Instruments may be issued, the issue price of which will
be payable in two or more instalments.Form of Instruments
    
    The Instruments may be issued in bearer form only. Each
Tranche of Instruments will be represented on issue by a
temporary Global Instrument if (a)
definitive Instruments are to be made
available to Instrumentholders following
the expiry of 40 days after their issue
date or (b) such Instruments have an
initial maturity of more than one year
and are being issued in compliance with
the D Rules (as defined in Selling
Restrictions below), otherwise such
Tranche will be represented by a
permanent Global Instrument. Any
permanent Global Instrument shall only
be exchanged for Instruments in
definitive form in the limited
circumstances set out in the permanent
Global Instrument.Clearing Systems
    
    Clearstream, Luxembourg,
Euroclear and, in relation to
any Tranche, such other
clearing system as may be
agreed between the relevant
Issuer, the Issuing and Paying
Agent, the Trustee and the
relevant Dealer.Initial Delivery of Instruments
    
    On or before the issue date
for each Tranche, if the
relevant Global Instrument is
intended to be eligible
collateral for Eurosystem
monetary policy and intra-day
credit operations, the Global
Instrument will be delivered
to a Common Safekeeper for
Euroclear and Clearstream,
Luxembourg. On or before the
issue date for each Tranche,
if the relevant Global
Instrument is not intended to
be eligible collateral for
Eurosystem monetary policy and
intra-day credit operations,
the Global Instrument
representing the relevant
Instruments may be deposited
with a common depositary for
Euroclear and Clearstream,
Luxembourg. Global Instruments
may also be deposited with any
other clearing system or may
be delivered outside any
clearing system provided that
the method of such delivery
has been agreed in advance by
the relevant Issuer, the
Issuing and Paying Agent, the
Trustee and the relevant
Dealer.
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Currencies
    
    Subject to compliance with all relevant laws, regulations
and directives, Instruments may be issued in Euro, Japanese yen, Sterling,
U.S. dollars, Canadian dollars, Australian dollars, New Zealand dollars,
Swedish krona, Danish krone, Hong Kong dollars or Swiss francs or in other
currencies if the relevant Issuer and the relevant Dealer(s) so agree.
Instruments may, subject to compliance as above, be issued as Dual Currency
Instruments.Maturities
    
    Subject to compliance with all relevant laws, regulations
and directives, any maturity from one
month to perpetuity.Any Instruments having a maturity
of less than one year from their
date of issue must (a) have a
minimum redemption value of
£100,000 (or its equivalent in
other currencies) and be issued
only to persons whose ordinary
activities involve them in
acquiring, holding, managing or
disposing of investments (as
principal or agent) for the
purposes of their businesses or
who it is reasonable to expect
will acquire, hold, manage or
dispose of investments (as
principal or agent) for the
purposes of their businesses or
(b) be issued in other
circumstances which do not
constitute a contravention of
Section 19 of FSMA by the
relevant Issuer.Denominations
    
    Definitive Instruments will be in
such denominations as may be
specified in the relevant Final
Terms, save that (i) in the case
of any Instruments which are to
be admitted to trading on a
regulated market within the
European Economic Area or offered
to the public in a Member State
of the European Economic Area in
circumstances which require the
publication of a prospectus under
the Prospectus Directive, the
minimum denomination shall be
50,000 (or its equivalent in any
other currency as at the date of
issue of the Instruments); and
(ii) unless otherwise permitted
by then current laws and
regulations, Instruments which
have a maturity of less than one
year will have a minimum
denomination of £100,000 (or its
equivalent in other currencies).Fixed Rate Instruments
    
    Fixed interest will be payable in
arrear on the date or dates in
each year specified in the
relevant Final Terms and at
maturity.Floating Rate Instruments
    
    Floating Rate Instruments will
bear interest set separately for
each Series as follows:(a)    on the same basis as the
floating rate under a notional
interest rate swap transaction in
the relevant Specified Currency governed by an agreement
incorporating the 2006 ISDA
Definitions published by
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the
International Swaps and
Derivatives Association, Inc. or(b)   by reference to LIBOR, LIBID,
LIMEAN or EURIBOR (or such other
benchmark as may be specified in
the relevant Final Terms) as
adjusted for any applicable
margin. Interest periods will be
selected by the relevant Issuer
prior to issue and specified in
the relevant Final Terms.
Floating Rate Instruments may
also have a maximum interest
rate, a minimum interest rate, or
both.Zero Coupon Instruments
    
    Zero Coupon Instruments may be
issued at their nominal amount or
at a discount to it and will not
bear interest.Dual Currency Instruments
    
    Payments (whether in respect of
principal or interest and whether
at maturity or otherwise) in
respect of Dual Currency
Instruments will be made in such
currencies, and based on such
rates of exchange as may be
specified in the relevant Final
Terms.Index Linked Instruments
    
    Payments of principal in respect
of Index Linked Redemption
Instruments or of interest in
respect of Index Linked Interest
Instruments will be calculated by
reference to such index and/or
formula as may be specified in
the relevant Final Terms and (if
applicable) the relevant
Supplemental Prospectus.Interest Periods and Rates of Interest
    
    The length of the interest periods for the Instruments and
the applicable interest rate or its
method of calculation may differ from
time to time or be constant for any
Series. Instruments may have a
maximum interest rate, a minimum
interest rate, or both. The use of
interest accrual periods permits the
Instruments to bear interest at
different rates in the same interest
period. All such information will be
set out in the relevant Final Terms.Redemption
    
    The relevant Final Terms will
specify the basis for calculating
the redemption amounts payable,
which may be by reference to a
stock index or formula or as
otherwise provided in the
relevant Final Terms.Unless permitted by then current
laws and regulations, Instruments
which have a maturity of less
than one year must have a minimum
redemption amount of £100,000 (or
its equivalent in other
currencies).Redemption by Instalments
    
    The Final Terms issued in respect
of each issue of Instruments that
are redeemable in two or more
instalments will set out the
dates on which, and the amounts
in which, such Instruments may be
redeemed.Other Instruments
    
    Terms applicable to high interest
Instruments, low interest
Instruments, step-up Instruments,
step-down Instruments, Dual
Currency Instruments, reverse
Dual Currency
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Instruments,
optional Dual Currency
Instruments, Partly-Paid
Instruments and any other type of
Instrument that the relevant
Issuer, the Trustee and any
Dealer(s) may agree to issue
under the Programme, subject to
compliance with all relevant
laws, regulations and directives,
will be set out in the relevant
Final Terms and (if applicable)
the relevant Supplemental
Prospectus.Optional Redemption
    
    The Final Terms issued in respect
of each issue of Instruments will
state whether such Instruments
may be redeemed prior to their
stated maturity at the option of
the relevant Issuer (either in
whole or in part) and/or the
Instrumentholders, and if so the
terms applicable to such
redemption.The relevant Issuer may elect to
redeem all, but not some only, of
the Instruments of any Series at
their Residual Holding Redemption
Amount at any time if the
Residual Holding Percentage or
more of the aggregate nominal
amount of such Instruments
originally issued shall have been
redeemed or purchased and
cancelled.Redemption at the Option of the
Instrumentholders following a National
Grid Restructuring Event, or as the
case may be, an NGET Restructuring
Event (each as defined in Condition
5.6.2):
    
    Instruments issued by National
Grid will be subject to an
optional redemption by
Instrumentholders following a Put
Event (as defined in Condition
5.6.1). Instruments issued by
NGET will, if so specified in the
relevant Final Terms, be subject
to an optional redemption by
Instrumentholders following a Put
Event (as defined in Condition
5.6.1).If at any time while any relevant
Instrument remains outstanding, a
Put Event occurs then (other than
in certain circumstances
described in Condition 5.6.1) the
Instrumentholders will, upon the
giving of a Put Event Notice (as
defined in Condition 5.6.1), have
the option to require the
relevant Issuer to redeem the
relevant Instrument on the Put
Date (as defined in Condition
5.6.4) at the principal amount of
the Instrument together with
accrued interest to the Put Date.Status of Instruments
    
    The Instruments will constitute unsubordinated and
unsecured obligations of the
relevant Issuer, all as described
in Terms and Conditions of the
Instruments  Status.Negative Pledge
    
    Instruments issued by National Grid
will have the benefit of a negative
pledge as described in Terms and
Conditions of the Instruments 
Status and Negative Pledge.Instruments issued by NGET will not
have the benefit of a negative
pledge.Cross Acceleration
    
    The Instruments will have the
benefit of a cross
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acceleration
provision as described in Terms and
Conditions of the Instruments 
Events of Default.Events of Default
    
    The events of default under the
Instruments are as specified below
under Terms and Conditions of the
Instruments  Events of Default.Early Redemption
    
    Except as provided in Optional
Redemption and Redemption above,
Instruments will be redeemable at
the option of the relevant Issuer
prior to maturity only for tax
reasons and in the case of Index
Linked Instruments only, for index
reasons. See Terms and Conditions
of the Instruments  Redemption,
Purchase and Options and Terms and
Conditions of the Instruments 
Indexation.Withholding Tax
    
    All payments of principal and interest in respect of the
Instruments, Receipts and Coupons will be made free and clear of
withholding taxes of the United Kingdom unless compelled by law.
In that event, the Issuer will, subject to customary exceptions
(including the standard EU exceptions), pay such additional
amounts as will result in the payment to the Instrumentholders,
Receiptholders or Couponholders of the amounts which would
otherwise have been received in respect of the Instruments,
Receipts and Coupons had no withholding or deduction been made,
all as described in Terms and Conditions of the Instruments 
Taxation.Governing Law
    
    EnglishListing
    
    Each Series may be admitted to the Official List and
admitted to trading on the Market
and/or admitted to listing, trading
and/or quotation by any other
listing authority, stock exchange
and/or quotation system as may be
agreed between the relevant Issuer
and the relevant Dealer(s) and
specified in the relevant Final
Terms or may be unlisted.Ratings
    
    Tranches of Instruments (as defined
in Overview of the Programme) may
be rated or unrated. Where a Tranche
of Instruments is rated, such rating
will be specified in the relevant
Final Terms. A rating is not a
recommendation to buy, sell or hold
securities and may be subject to
suspension, reduction or withdrawal
at any time by the assigning rating
agency.Selling Restrictions
    
    United States, United Kingdom,
European Economic Area (in the case
of unlisted Instruments) and Japan.
See Plan of Distribution.Category 2 selling restrictions will
apply to the Instruments for the
purposes of Regulation S under the
Securities Act.The Instruments will be issued in compliance with U.S.
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Treas. Reg. §1.163-5(c)(2)(i)(D)
(the D Rules) unless (a) the
relevant Final Terms states that
Instruments are issued in
compliance with U.S. Treas. Reg.
§1.163-5(c)(2)(i)(C) (the C
Rules) or (b) the Instruments are
issued other than in compliance
with the D Rules or the C Rules but
in circumstances in which the
Instruments will not constitute
registration required obligations
under the United States Tax Equity
and Fiscal Responsibility Act of
1982 (TEFRA), which circumstances
will be referred to in the relevant
Final Terms as a transaction to
which TEFRA is not applicable.Terms and Conditions
    
    The Terms and Conditions applicable
to each Series will be as agreed
between the relevant Issuer, the
Trustee and the relevant Dealer(s)
or other subscriber at or prior to
the time of issuance of such Series
and will be specified in the
relevant Final Terms. The Terms and
Conditions applicable to each Series
will therefore be those as set out
in Terms and Conditions of the
Instruments below as supplemented,
modified or replaced by the relevant
Final Terms.
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RISK FACTORS
 The relevant Issuer believes that the following factors may affect its ability to fulfil its
obligations under Instruments issued under the Programme. All of these factors are contingencies which
may or may not occur and the relevant Issuer is not in a position to express a view on the
likelihood of any such contingency occurring.
 Factors which the relevant Issuer believes may be material for the purpose of assessing the
market risks associated with Instruments issued under the Programme are also described below.
 The relevant Issuer believes that the factors described below represent the principal risks
inherent in investing in Instruments issued under the Programme, but the relevant Issuer may be
unable to pay interest, principal or other amounts on or in connection with any Instruments for
other reasons. If this occurs, Prospective investors may lose the value of their entire
investment or part of it. Prospective investors should read the detailed information set out
elsewhere in this Prospectus (including any documents deemed to be incorporated by reference
herein) and reach their own views prior to making any investment decision.
 Factors that may affect National Grids ability to fulfil its obligations under Instruments
issued under the Programme
 Risks relating to National Grid and its businesses
 Changes in law or regulation in the geographies in which National Grid operates could have an
adverse effect on National Grids results of operations
  Breaches of or changes in environmental or health and safety laws or regulations could expose
National Grid to claims for financial compensation and adverse regulatory consequences as well
as damaging National Grids reputation
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Network failure or the inability to carry out critical non-network operations may have
significant adverse impacts on both National Grids financial position and its reputation
  National Grids results of operations depend on a number of factors relating to business
performance including performance against regulatory targets, recovery of incurred expenditure
and the delivery of anticipated costs and efficiency savings
 Ofgem
 Business development activity, including acquisitions and disposals, may be based on incorrect
assumptions or conclusions and significant liabilities may be overlooked or there may be other
unanticipated or unintended effects
 KeySpan
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Changes to the regulatory treatment of commodity costs may have an adverse effect on the
results of operations
  National Grids reputation may be harmed if consumers of energy suffer a disruption to their
supply even if this disruption is outside of National Grids control
  Fluctuations in exchange rates, interest rates and commodity price indices, in particular in
the U.S. dollar, could have a significant impact on National Grids results of operations
because National Grid has substantial business interests in the U.S. and because of the
significant proportion of National Grids borrowings, derivative financial instruments and
commodity contracts that may potentially be affected by such fluctuations.
  The nature and extent of National Grids borrowings means that an increase in interest rates
could have an adverse impact on its financial position and business results
  National Grids financial position may be adversely affected by a number of factors including
restrictions in borrowing and debt arrangements, changes to credit ratings and effective tax
rates
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Future funding requirements of National Grids pension schemes could adversely affect its
results of operations.
  New or revised accounting standards, rules and interpretations by the U.K., U.S. or
international accounting standard setting boards and other relevant bodies could have an
adverse effect on National Grids reported financial results
 IFRS
 Factors that may affect NGETs ability to fulfil its obligations under Instruments issued under
the Programme
 Risks relating to NGET and its business
 Changes in law or regulation could have an adverse effect on NGETs results of operations
  Breaches of or changes in environmental or health and safety laws or regulations could expose
NGET to claims for financial compensation and adverse regulatory consequences as well as
damaging NGETs reputation
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Network failure or the inability to carry out critical non-network operations may have
significant adverse impacts on both NGETs financial position and its reputation
  NGETs results of operations depend on a number of factors relating to business performance
including performance against regulatory targets and the delivery of anticipated costs and
efficiency savings
  Changes to the regulatory treatment of commodity costs may have an adverse effect on the
results of operations
  NGETs reputation may be harmed if consumers of energy suffer a disruption to their supply even
if this disruption is outside of NGETs control
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The nature and extent of NGETs borrowings means that an increase in interest rates could have
an adverse impact on its financial position and business results
  NGETs financial position may be adversely affected by a number of factors including
restrictions in borrowing and debt arrangements, changes to credit ratings and effective tax
rates
  Future funding requirements of NGETs section of the Electricity Supply Pension Scheme could
adversely affect its results of operations.
  New or revised accounting standards, rules and interpretations by the U.K or international
accounting standard setting boards and other relevant bodies could have an adverse effect on
NGETs reported financial results
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Factors which are material for the purpose of assessing the market risks associated with
Instruments issued under the Programme
 Instruments may not be a suitable investment for all investors
 (i)
    
    have sufficient knowledge and experience to make a meaningful evaluation of the
relevant Instruments, the merits and risks of investing in the relevant Instruments and
the information contained or incorporated by reference in this Prospectus or any
applicable supplement;(ii)
    
    have access to, and knowledge of, appropriate analytical tools to evaluate, in the
context of its particular financial situation, an investment in the relevant Instruments
and the impact such investment will have on its overall investment portfolio;(iii)
    
    have sufficient financial resources and liquidity to bear all of the risks of an
investment in the relevant Instruments, including where principal or interest is payable
in one or more currencies, or where the currency for principal or interest payments is
different from the potential investors currency;(iv)
    
    understand thoroughly the terms of the relevant Instruments and be familiar with the
behaviour of any relevant indices and financial markets; and(v)
    
    be able to evaluate (either alone or with the help of a financial adviser) possible
scenarios for economic, interest rate and other factors that may affect its investment and
its ability to bear the applicable risks.
  Risks related to the structure of a particular issue of Instruments
 Instruments subject to optional redemption by the Issuer
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Index Linked Instruments and Dual Currency Instruments  Relevant Factor
 (i)
    
    the market price of such Instruments may be volatile;(ii)
    
    they may receive no interest;(iii)
    
    payment of principal or interest may occur at a different time or in a different
currency than expected;(iv)
    
    the amount of principal payable at redemption may be less than the nominal amount of
such Instruments or even zero;(v)
    
    a Relevant Factor may be subject to significant fluctuations that may not correlate
with changes in interest rates, currencies or other indices;(vi)
    
    if a Relevant Factor is applied to Instruments in conjunction with a multiplier
greater than one or contains some other leverage factor, the effect of changes in the
Relevant Factor on principal or interest payable likely will be magnified; and(vii)
    
    the timing of changes in a Relevant Factor may affect the actual yield to investors,
even if the average level is consistent with their expectations. In general, the earlier
the change in the Relevant Factor, the greater the effect on yield.
 Partly-paid Instruments
 Variable rate Instruments with a multiplier or other leverage factor
 Fixed/Floating Rate Instruments
 Instruments issued at a substantial discount or premium
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Risks related to Instruments generally
 Modification, waivers and substitution
  European Monetary Union
 EU Savings Directive
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If a payment in respect of an Instrument which is the subject of the Directive were to be made
or collected through a Member State which has opted for a withholding system and an amount of,
or in respect of, tax were to be withheld from that payment, neither the Issuer nor any Paying
Agent nor any other person would be obliged to pay additional amounts with respect to such
Instrument as a result of the imposition of such withholding tax. However, the Issuer is
required, save as provided in Condition 6.4 of the Instruments, to maintain a Paying Agent in a
Member State that will not be obliged to withhold or deduct tax pursuant to any law
implementing the Directive or any other Directive implementing the conclusions of the ECOFIN
Council meeting of 26-27 November 2000.
 Change of law
 Integral multiples of less than 50,000    
 Risks related to the market generally
 The secondary market generally
 The Clearing Systems  Euroclear Clearstream, Luxembourg
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Exchange rate risks and exchange controls  Investors Currency
  Interest rate risks
 Credit ratings may not reflect all risks
 Legal investment considerations may restrict certain investments
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TERMS AND CONDITIONS OF THE INSTRUMENTS
 The following is the text of the terms and conditions which, save for the text in italics and
subject to completion and amendment and as supplemented or varied in accordance with the provisions
of Part A of the relevant Final Terms, will be endorsed on the Instruments in definitive form
(if any) issued in exchange for the Global Instrument(s) representing each Series. Either (a)
the full text of these terms and conditions together with the relevant provisions of Part A of
the Final Terms or (b) these terms and conditions as so completed, amended, supplemented or
varied (and subject to simplification by the deletion of non-applicable provisions), shall be
endorsed on such Instruments. All capitalised terms which are not defined in these Conditions
will have the meanings given to them in the Trust Deed or Part A of the relevant Final Terms.
Those definitions will be endorsed on the definitive Instruments.
 Instruments
 National Grid NGET Issuer Issuers Programme Instruments Trust Deed Trustee Agency
Agreement Issuing and Paying Agent Paying Agents Calculation Agent(s)
 Coupons Talons Couponholders Receipts
 1
    
    Form, Denomination and TitleThe Instruments are issued in bearer form in the Specified Denomination(s) specified in the
relevant Final Terms and are serially numbered. Instruments of one Specified Denomination are
not exchangeable for Instruments of another Specified Denomination provided that in the case of
any Instruments which are to be admitted to trading on a regulated market within the European
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Economic Area or offered to the public in a Member State of the European Economic Area in
circumstances which require the publication of a prospectus under the Prospectus Directive, the
minimum Specified Denomination shall be 50,000 (or its equivalent in any other currency as at
the date of issue of the relevant Instruments).
    Instrumentholder holder
 2
    
    Status and Negative Pledge
 2.1
    
    StatusThe Instruments and the Receipts and Coupons relating to them constitute direct,
unconditional and unsecured obligations of the Issuer and rank pari passuwithout any
preference or priority among themselves. The payment obligations of the Issuer under the
Instruments, Receipts and Coupons shall, subject to such exceptions as are from time to
time applicable under the laws of England and, in relation to Instruments issued by
National Grid, as provided in Condition 2.2, rank equally with all other present and
future unsecured obligations (other than subordinated obligations, if any) of the Issuer.
 2.2
    
    Negative PledgeSo long as any Instrument, Receipt or Coupon of National Grid remains outstanding (as
defined in the Trust Deed) National Grid will not create or permit to subsist any
mortgage, charge, pledge, lien or other form of encumbrance or security interest
(Security) upon the whole or any part of its undertaking, assets or revenues present or
future to secure any Relevant Indebtedness, or any guarantee of or indemnity in respect
of any Relevant Indebtedness unless, at the same time or prior thereto, National Grids
obligations under the Instruments, the Receipts, the Coupons and the Trust Deed (a) are
secured equally and rateably therewith or benefit from a guarantee or indemnity in
substantially identical terms thereto, as the case may be, in each case to the
satisfaction of the Trustee, or (b) have the benefit of such other security, guarantee,
indemnity or other arrangement as the Trustee in its absolute discretion shall deem to be
not materially less beneficial to the Instrumentholders or
 27




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as shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the
Instrumentholders.For the purposes of these Conditions, Relevant Indebtedness means any present or future
indebtedness in the form of, or represented by, bonds, notes, debentures, loan stock or
other securities which are for the time being, or are intended, with the agreement of the
Issuer, to be quoted, listed or ordinarily dealt in on any stock exchange.
 3
    
    Interest
 3.1
    
    Interest on Fixed Rate InstrumentsEach Fixed Rate Instrument bears interest on its outstanding nominal amount from the
Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the
Rate of Interest, payable in arrear on each Interest Payment Date. The amount of Interest
payable shall be determined in accordance with Condition 3.2.4(f).If a Fixed Coupon Amount or a Broken Amount is specified in the relevant Final Terms, the
amount of interest payable on each Interest Payment Date will amount to the Fixed Coupon
Amount, or, if applicable, the Broken Amount so specified and in the case of a Broken
Amount will be payable on the particular Interest Payment Date(s) specified in the
relevant Final Terms.
 3.2
    
    Interest on Floating Rate Instruments and Index Linked Interest Instruments
 3.2.1
    
    Interest Payment DatesEach Floating Rate Instrument and Index Linked Interest Instrument bears interest
on its outstanding nominal amount from the Interest Commencement Date at the rate
per annum (expressed as a percentage) equal to the Rate of Interest, such interest
being payable in arrear on each Interest Payment Date. The amount of Interest
payable shall be determined in accordance with Condition 3.2.4(f). Such Interest
Payment Date(s) is/are either specified in the relevant Final Terms as Specified
Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are
specified in the relevant Final Terms, Interest Payment Date shall mean each date
which falls the number of months or other period shown on this Instrument as the
Interest Period after the preceding Interest Payment Date or, in the case of the
first Interest Payment Date, after the Interest Commencement Date.
 3.2.2
    
    Business Day ConventionIf any date which is specified to be subject to adjustment in accordance with a
Business Day Convention would otherwise fall on a day which is not a Business Day,
then, if the Business Day Convention specified is (a) the Floating Rate Convention,
such date shall be postponed to the next day which is a Business Day unless it
would then fall into the next calendar month, in which event (x) such date shall be
brought forward to the immediately preceding Business Day and (y) each subsequent
such date shall be the last Business Day of the month in which such date would have
fallen had it not been subject to adjustment, (b) the Following Business Day
Convention, such date shall be postponed to the next day which is a Business Day,
(c) the Modified Following Business Day Convention, such date shall be postponed to
the next day which is a Business Day unless it would then fall into the next
calendar month, in that event such date shall be brought forward to the immediately
preceding Business Day
 28




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or (d) the Preceding Business Day Convention, such date shall be brought forward to
the immediately preceding Business Day.
 3.2.3
    
    Rate of Interest for Floating Rate InstrumentsThe Rate of Interest in respect of Floating Rate Instruments for each Interest
Accrual Period shall be determined in the manner specified in the relevant Final
Terms and the provisions below relating to either ISDA Determination or Screen Rate
Determination shall apply, depending upon which is specified on this Instrument.
 (a)
    
    ISDA Determination for Floating Rate Instruments: Where ISDA
Determination is specified in the relevant Final Terms as the manner in which
the Rate of Interest is to be determined, the Rate of Interest for each
Interest Accrual Period shall be determined by the Calculation Agent as a rate
equal to the relevant ISDA Rate. For the purposes of this sub-paragraph (a),
ISDA Rate for an Interest Accrual Period means a rate equal to the Floating
Rate which would be determined by the Calculation Agent under a Swap
Transaction under the terms of an agreement incorporating the ISDA Definitions
and under which:
 (i)
    
    the Floating Rate Option is as specified in the
relevant Final Terms;(ii)
    
    the Designated Maturity is a period specified in
the relevant Final Terms; and(iii)
    
    the relevant Reset Date is the first day of that
Interest Accrual Period unless otherwise specified in the relevant Final
Terms.
 Floating Rate Calculation
Agent Floating Rate Option Designated Maturity Reset Date Swap
Transaction
 (b)
    
    Screen Rate Determination for Floating Rate Instruments:
 (i)
    
    Where Screen Rate Determination is specified in
the relevant Final Terms as the manner in which the Rate of Interest is
to be determined, the Rate of Interest for each Interest Accrual Period
will, subject as provided below, be either:
 (x)
    
    the offered quotation; or(y)
    
    the arithmetic mean of the offered
quotations,
  29




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(ii)
    
    if the Relevant Screen Page is not available or
if, sub-paragraph (i)(x) applies and no such offered quotation appears
on the Relevant Screen Page or if sub-paragraph (i)(y) above applies and
fewer than three such offered quotations appear on the Relevant Screen
Page in each case as at the time specified above, subject as provided
below, the Calculation Agent shall request, if the Reference Rate is
LIBOR, the principal London office of each of the Reference Banks or, if
the Reference Rate is EURIBOR, the principal Euro-zone office of each
of the Reference Banks, to provide the Calculation Agent with its
offered quotation (expressed as a percentage rate per annum) for the
Reference Rate if the Reference Rate is LIBOR, at approximately 11.00
a.m. (London time), or if the Reference Rate is EURIBOR, at
approximately 11.00 a.m. (Brussels time) on the Interest Determination
Date in question. If two or more of the Reference Banks provide the
Calculation Agent with such offered quotations, the Rate of Interest for
such Interest Period shall be the arithmetic mean of such offered
quotations as determined by the Calculation Agent; and
 (iii)
    
    if paragraph (ii) above applies and the
Calculation Agent determines that fewer than two Reference Banks are
providing offered quotations, subject as provided below, the Rate of
Interest shall be the arithmetic mean of the rates per annum (expressed
as a percentage) as communicated to (and at the request of) the
Calculation Agent by the Reference Banks or any two or more of them, at
which such banks were offered, if the Reference Rate is LIBOR, at
approximately 11.00 a.m. (London time) or, if the Reference Rate is
EURIBOR, at approximately 11.00 a.m. (Brussels time) on the relevant
Interest Determination Date, deposits in the Specified Currency for a
period equal to that which would have been used for the Reference Rate
by leading banks in, if the Reference Rate is LIBOR, the London
inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone
inter-bank market, as the case may be, or, if fewer than two of the
Reference Banks provide the Calculation Agent with such offered rates,
the offered rate for deposits in the Specified Currency for a period
equal to that which would have been used for the Reference Rate, or the
arithmetic mean of the offered rates for deposits in the Specified
Currency for a period equal to that which would have been used for the
Reference Rate, at which, if the Reference Rate is LIBOR, at
approximately 11.00 a.m. (London time) or, if the Reference Rate is
EURIBOR, at approximately 11.00 a.m. (Brussels time), on the relevant
Interest Determination Date, any one or more banks (which bank or banks
is or are in the opinion of the Trustee and the Issuer suitable for such
purpose) informs the Calculation Agent it is quoting to leading banks
in, if the Reference Rate is LIBOR, the London inter-bank market or, if
the Reference Rate is EURIBOR, the Euro-zone inter-bank market, as the
case may be, provided that, if the Rate of Interest cannot be determined
 30




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in accordance with the foregoing provisions of this paragraph, the Rate
of Interest shall be determined as at the last preceding Interest
Determination Date (though substituting, where a different Margin or
Maximum or Minimum Rate of Interest is to be applied to the relevant
Interest Accrual Period from that which applied to the last preceding
Interest Accrual Period, the Margin or Maximum or Minimum Rate of
Interest relating to the relevant Interest Accrual Period, in place of
the Margin or Maximum or Minimum Rate of Interest relating to that
last preceding Interest Accrual Period).
 3.2.4
    
    Rate of Interest for Index Linked Interest InstrumentsThe Rate of Interest in respect of Index Linked Interest Instruments for each
Interest Accrual Period shall be determined in the manner specified in the relevant
Final Terms and interest will accrue by reference to an Index or Formula as
specified in the relevant Final Terms.
 (a)
    
    Zero Coupon InstrumentsWhere an Instrument, the Interest Basis of which is specified to be Zero
Coupon, is repayable prior to the Maturity Date and is not paid when due, the
amount due and payable prior to the Maturity Date shall be the Early
Redemption Amount of such Instrument. As from the Maturity Date, the Rate of
Interest for any overdue principal of such an Instrument shall be a rate per
annum (expressed as a percentage) equal to the Amortisation Yield (as defined
in Condition 5.4.1(b)).
 (b)
    
    Dual Currency InstrumentsIn the case of Dual Currency Instruments, if the rate or amount of interest
falls to be determined by reference to a Rate of Exchange or a method of
calculating a Rate of Exchange, the rate or amount of interest payable shall
be determined in the manner specified in the relevant Final Terms.
 (c)
    
    Partly Paid InstrumentsIn the case of Partly Paid Instruments (other than Partly Paid Instruments
which are Zero Coupon Instruments), interest will accrue as previously stated
on the paid-up nominal amount of such Instruments and otherwise as specified
in the relevant Final Terms.
 (d)
    
    Accrual of InterestInterest shall cease to accrue on each Instrument on the due date for
redemption unless, upon due presentation, payment is improperly withheld or
refused, in which event interest shall continue to accrue (as well after as
before judgment) at the Rate of Interest in the manner provided in this
Condition 3 to the Relevant Date (as defined in Condition 7).
 (e)
    
    Margin, Maximum/Minimum Rates of Interest, Instalment Amounts
and Redemption Amounts and Rounding
 (i)
    
    If any Margin is specified in the relevant Final
Terms (either (x) generally, or (y) in relation to one or more Interest
Accrual Periods), an adjustment
 31




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shall be made to all Rates of Interest, in the case of (x), or the Rates
of Interest for the specified Interest Accrual Periods, in the case of (y),
calculated in accordance with Condition 3.2.3(b) above, by adding (if
a positive number) or subtracting (if a negative number) the absolute
value of such Margin, subject always to the next paragraph.
 (ii)
    
    If any Maximum or Minimum Rate of Interest,
Instalment Amount or Redemption Amount is specified in the relevant
Final Terms, then any Rate of Interest, Instalment Amount or Redemption
Amount shall be subject to such maximum or minimum, as the case may be.(iii)
    
    For the purposes of any calculations required
pursuant to these Conditions (unless otherwise specified), (x) all
percentages resulting from such calculations shall be rounded, if
necessary, to the nearest one hundred thousandth of a percentage point
(with halves being rounded up), (y) all figures shall be rounded to
seven significant figures (with halves being rounded up) and (z) all
currency amounts that fall due and payable shall be rounded to the
nearest unit of such currency (with halves being rounded up), save in
the case of yen, which shall be rounded down to the nearest yen. For
these purposes unit means the lowest amount of such currency which is
available as legal tender in the country of such currency.
 (f)
    
    CalculationsThe amount of interest payable per Calculation Amount in respect of any
Instrument for any Interest Accrual Period shall be equal to the product of
the Rate of Interest, the Calculation Amount as specified in the relevant
Final Terms, and the Day Count Fraction for such Interest Accrual Period,
unless an Interest Amount (or a formula for its calculation) is applicable to
such Interest Accrual Period, in which case the amount of interest payable
per Calculation Amount in respect of such Instrument for such Interest
Accrual Period shall equal such Interest Amount (or be calculated in
accordance with such formula). Where any Interest Period comprises two or
more Interest Accrual Periods, the amount of interest payable per Calculation
Amount in respect of such Interest Period shall be the sum of the Interest
Amounts payable in respect of each of those Interest Accrual Periods. In
respect of any other period for which interest is required to be calculated,
the provisions above shall apply save that the Day Count Fraction shall be
for the period for which interest is required to be calculated.(g)
    
    Determination and Publication of Rates of Interest, Interest
Amounts, Final Redemption Amounts, Early Redemption Amounts, Optional
Redemption Amounts and Instalment AmountsThe Calculation Agent shall as soon as practicable on each Interest
Determination Date or such other time on such date as the Calculation Agent
may be required to calculate any rate or amount, obtain any quotation or make
any determination or calculation, determine such rate and calculate the
Interest Amounts for the relevant Interest Accrual Period, calculate the
Redemption Amount or Instalment Amount, obtain such quote or make such
determination or calculation, as the case may be, and cause the Rate of
Interest and the Interest
 32




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##### 



Amounts for each Interest Accrual Period and the relevant Interest Payment Date and, if required to be calculated, the Final
Redemption Amount, Early Redemption Amount, Optional Redemption Amount or any
Instalment Amount to be notified to the Trustee, the Issuer, each of the Paying Agents, the
Instrumentholders, any other Calculation Agent appointed in respect of the
Instruments that is to make a further calculation upon receipt of such
information and, if the Instruments are listed on a stock exchange and the
rules of such exchange so require, such exchange as soon as possible after
their determination but in no event later than (i) the commencement of the
relevant Interest Period, if determined prior to such time, in the case of
notification to such exchange of a Rate of Interest and Interest Amount, or
(ii) in all other cases, the fourth Business Day after such determination.
Where any Interest Payment Date or Interest Period Date is subject to
adjustment pursuant to Condition 3.2.3(b)(ii), the Interest Amounts and the
Interest Payment Date so published may subsequently be amended (or
appropriate alternative arrangements made with the consent of the Trustee by
way of adjustment) without notice in the event of an extension or shortening
of the Interest Period. If the Instruments become due and payable under
Condition 8, the accrued interest and the Rate of Interest payable in respect
of the Instruments shall nevertheless continue to be calculated as previously
in accordance with this Condition but no publication of the Rate of Interest
or the Interest Amount so calculated need be made unless the Trustee
otherwise requires. The determination of any rate or amount, the obtaining of
each quotation and the making of each determination or calculation by the
Calculation Agent(s) shall (in the absence of manifest error) be final and
binding upon all parties.
 (h)
    
    Determination or Calculation by TrusteeIf the Calculation Agent does not at any time for any reason determine or
calculate the Rate of Interest for an Interest Accrual Period or any Interest
Amount, Instalment Amount, Final Redemption Amount, Early Redemption Amount
or Optional Redemption Amount the Trustee shall do so (or shall appoint an
agent on its behalf to do so) and such determination or calculation shall be
deemed to have been made by the Calculation Agent. In doing so, the Trustee
shall apply the preceding provisions of this Condition, with any necessary
consequential amendments, to the extent that, in its opinion, it can do so,
and, in all other respects it shall do so in such manner as it shall deem
fair and reasonable in all the circumstances.
 3.2.5
    
    DefinitionsIn these Conditions, unless the context otherwise requires, the following defined
terms shall have the meanings set out below:Business Day means:
 (a)
    
    in the case of a currency other than Euro, a day (other than
a Saturday or Sunday) on which commercial banks and foreign exchange markets
settle payments in the principal financial centre for such currency; and/or(b)
    
    in the case of Euro, a day on which the TARGET System is
operating (a TARGET Business Day); and/or
 33




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(c)
    
    in the case of a currency and/or one or more Business Centres
as specified in the relevant Final Terms, a day (other than a Saturday or a
Sunday) on which commercial banks and foreign exchange markets settle payments
in such currency or, if no currency is indicated, generally in each of the Business
Centres.
 Day Count Fraction Calculation Period
 (a)
    
    if Actual/Actual or Actual/Actual-ISDA is specified in
the relevant Final Terms, the actual number of days in the Calculation Period
divided by 365 (or, if any portion of that Calculation Period falls in a leap
year, the sum of (i) the actual number of days in that portion of the
Calculation Period falling in a leap year divided by 366 and (ii) the actual
number of days in that portion of the Calculation Period falling in a non-leap
year divided by 365);(b)
    
    if Actual/365 (Fixed) is specified in the relevant Final
Terms, the actual number of days in the Calculation Period divided by 365;(c)
    
    if Actual/360 is specified in the relevant Final Terms, the
actual number of days in the Calculation Period divided by 360;(d)
    
    if 30/360, 360/360 or Bond Basis is specified in the
relevant Final Terms, the number of days in the Calculation Period divided by
360 calculated on a formula basis as follows:
 Day Count Fraction
    
    =
    
    [360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1)360
  1
 2
 1
 2
 1 1
 2 1 2
 34




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(e)
    
    if 30E/360 or Eurobond Basis is specified in the
relevant Final Terms, the number of days in the Calculation Period divided by
360 calculated on a formula basis as follows:
 Day Count Fraction
    
    =
    
    [360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1)360
  1
 2
 1
 2
 1 1
 2 2
 (f)
    
    if 30E/360 (ISDA) is specified in the relevant Final
Terms, the number of days in the Calculation Period divided by 360, calculated
on a formula basis as follows:
 Day Count Fraction
    
    =
    
    [360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1)360
  1
 2
 1
 2
 1 1
 35




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2 2
 (g)
    
    if Actual/Actual-ICMA is specified in the relevant Final
Terms:
 (i)
    
    if the Calculation Period is equal to or shorter
than the Determination Period during which it falls, the actual number
of days in the Calculation Period divided by the product of (x) the
actual number of days in such Determination Period and (y) the number of
Determination Periods in any year; and(ii)
    
    if the Calculation Period is longer than one
Determination Period, the sum of:
 (1)
    
    the actual number of days in such
Calculation Period falling in the Determination Period in which
it begins divided by the product of (a) the actual number of days
in such Determination Period and (b) the number of Determination
Periods in any year; and(2)
    
    the actual number of days in such
Calculation Period falling in the next Determination Period
divided by the product of (a) the actual number of days in such
Determination Period and (b) the number of Determination Periods
in any year,where:Determination Period means the period from and including a
Determination Date in any year to but excluding the next
Determination Date; andDetermination Date means the date specified as such in the
relevant Final Terms or, if none is so specified, the Interest
Payment Date.
 Euro-zone
 Interest Accrual Period
 Interest Amount
 (i)
    
    in respect of an Interest Accrual Period, the amount of
interest payable per Calculation Amount for that Interest Accrual Period and
which, in the case of Fixed Rate Instruments, and unless otherwise specified
in the relevant Final Terms, shall mean the Fixed Coupon Amount or Broken
Amount specified in the relevant Final Terms as being payable on the Interest
Payment Date ending the Interest Period of which such Interest Accrual Period
forms part; and
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(ii)
    
    in respect of any other period, the amount of interest
payable per Calculation Amount for that period.
 Interest Commencement Date
 Interest Determination Date
 Interest Payment Date
 Interest Period
 Interest Period Date
 ISDA Definitions
 Rate of Interest
 Redemption Amount
 Reference Banks
 Reference Rate
 Relevant Screen Page
 Specified Currency
 37




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##### 



TARGET System
 3.2.6
    
    Calculation AgentThe Issuer shall procure that there shall at all times be one or more Calculation
Agents if provision is made for them in the relevant Final Terms and for so long as
any Instrument is outstanding. Where more than one Calculation Agent is appointed
in respect of the Instruments, references in these Conditions to the Calculation
Agent shall be construed as each Calculation Agent performing its respective duties
under these Conditions. If the Calculation Agent is unable or unwilling to act as
such or if the Calculation Agent fails duly to establish the Rate of Interest for
an Interest Period or Interest Accrual Period or to calculate any Interest Amount,
Instalment Amount, Final Redemption Amount, Early Redemption Amount or Optional
Redemption Amount, as the case may be, or to comply with any other requirement, the
Issuer shall (with the prior approval of the Trustee) appoint a leading bank or
investment banking firm engaged in the interbank market (or, if appropriate, money,
swap or over-the-counter index options market) which is most closely connected with
the calculation or determination to be made by the Calculation Agent (acting
through its principal London office or any other office actively involved in such
market) to act as such in its place. The Calculation Agent may not resign its
duties without a successor having been appointed as specified in this paragraph.
 4
    
    IndexationThis Condition 4 is applicable only if the relevant Final Terms specifies the Instruments as
Index Linked Instruments.
 4.1
    
    DefinitionsBase Index Figure means (subject to Condition 4.3(i)) the base index figure as
specified in the relevant Final Terms;Index or Index Figure means, subject as provided in Condition 4.3(i), the U.K. Retail
Price Index (RPI) (for all items) published by the Office for National Statistics
(January 1987 = 100) or any comparable index which may replace the U.K. Retail Price
Index for the purpose of calculating the amount payable on repayment of the Reference
Gilt. Any reference to the Index Figure which is specified in the relevant Final Terms
as:
 (i)
    
    applicable to a particular month, shall, subject as provided in
Conditions 4.3 and 4.5, be construed as a reference to the Index Figure published in
the seventh month prior to that particular month and relating to the month before
that of publication; or(ii)
    
    applicable to the first calendar day of any month shall, subject as
provided in Conditions 4.3 and 4.5, be construed as a reference to the Index Figure
published in the second month prior to that particular month and relating to the
month before that of publication; or(iii)
    
    applicable to any other day in any month shall, subject as provided in
Conditions 4.3 and 4.5, be calculated by linear interpolation between (x) the Index
Figure applicable to the first calendar day of the month in which the day falls,
calculated as specified in sub-paragraph (ii) above and (y) the Index Figure
applicable to the first calendar day of
 38




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the month following, calculated as specified in sub-paragraph (ii) above and rounded to the nearest fifth decimal place.
  Index Ratio
 Limited Index Ratio
 Limited Indexation Date
 Limited Indexation Factor
 Limited Indexation Month
 Limited Index Linked Instruments
 Reference Gilt Indexation Adviser
 4.2
    
    Application of the Index RatioEach payment of interest and principal in respect of the Instruments shall be the amount
provided in, or determined in accordance with, these Conditions, multiplied by the Index
Ratio or Limited Index Ratio in the case of Limited Index Linked Instruments applicable
to the month or date, as the case may be, on which such payment falls to be made and
rounded in accordance with Condition 3.2.4(e).4.3
    
    Changes in Circumstances Affecting the Index
 (i)
    
    Change in base: If at any time and from time to time the Index is changed by the
substitution of a new base therefor, then with effect from the month from and including
 39




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that in which such substitution takes effect or the first date from and including
that on which such substitution takes effect, as the case may be, (1) the definition
of Index and Index Figure in Condition 4.1 shall be deemed to refer to the new
date or month in substitution for January 1987 (or, as the case may be, to such
other date or month as may have been substituted therefor), and (2) the new Base
Index Figure shall be the product of the existing Base Index Figure and the Index
Figure for the date on which such substitution takes effect, divided by the Index Figure for the date
immediately preceding the date on which such substitution takes effect.
 (ii)
    
    Delay in publication of Index if sub-paragraph (i) of the definition of
Index Figure is applicable: If the Index Figure which is normally published in the
seventh month and which relates to the eighth month (the relevant month) before
the month in which a payment is due to be made is not published on or before the
fourteenth business day before the date on which such payment is due (the date for
payment), the Index Figure applicable to the month in which the date for payment
falls shall be (1) such substitute index figure (if any) as the Trustee considers
(acting solely on the advice of the Indexation Adviser) to have been published by
the United Kingdom Debt Management Office or the Bank of England, as the case may
be, for the purposes of indexation of payments on the Reference Gilt or, failing
such publication, on any one or more issues of index-linked Treasury Stock selected
by an Indexation Adviser (and approved by the Trustee (acting solely on the advice
of the Indexation Adviser)) or (2) if no such determination is made by such
Indexation Adviser within seven days, the Index Figure last published (or, if later,
the substitute index figure last determined pursuant to Condition 4.3(i)) before the
date for payment.
 (iii)
    
    Delay in publication of Index if sub-paragraph (ii) and/or (iii) of the
definition of Index Figure is applicable: If the Index Figure relating to any month
(the calculation month) which is required to be taken into account for the
purposes of the determination of the Index Figure for any date is not published on
or before the fourteenth business day before the date on which such payment is due
(the date for payment), the Index Figure applicable for the relevant calculation
month shall be (1) such substitute index figure (if any) as the Trustee considers
(acting solely on the advice of the Indexation Adviser) to have been published by
the United Kingdom Debt Management Office or the Bank of England, as the case may
be, for the purposes of indexation of payments on the Reference Gilt or, failing
such publication, on any one or more issues of index-linked Treasury Stock selected
by an Indexation Adviser (and approved by the Trustee (acting solely on the advice
of the Indexation Adviser)) or (2) if no such determination is made by such
Indexation Adviser within seven days, the Index Figure last published (or, if later,
the substitute index figure last determined pursuant to Condition 4.3(i)) before the
date for payment.
 4.4
    
    Application of ChangesWhere the provisions of Condition 4.3(ii) or Condition 4.3(iii) apply, the determination
of the Indexation Adviser as to the Index Figure applicable to the month in which the
date for payment falls or the date for payment, as the case may be, shall be conclusive
and binding. If, an Index Figure having been applied pursuant to Condition 4.3(ii)(2) or
Condition 4.3(iii)(2), the Index Figure relating to the relevant month or relevant
calculation month, as the case may be, is subsequently published while an Instrument is
still outstanding, then:
 40




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##### 



(i)
    
    in relation to a payment of principal or interest in respect of such
Instrument other than upon final redemption of such Instrument, the principal or
interest (as the case may be) next payable after the date of such subsequent
publication shall be increased or reduced, as the case may be, by an amount equal to
the shortfall or excess, as the case may be, of the amount of the relevant payment
made on the basis of the Index Figure applicable by virtue of Condition 4.3(ii)(2)
or Condition 4.3(iii)(2) below or above the amount of the relevant payment that
would have been due if the Index Figure subsequently published had been published on or before the fourteenth business day
before the date for payment; and(ii)
    
    in relation to a payment of principal or interest upon final redemption,
no subsequent adjustment to amounts paid will be made.
 4.5
    
    Cessation of or Fundamental Changes to the Index
 (i)
    
    If (1) the Trustee has been notified by the Calculation Agent that the
Index has ceased to be published or (2) any change is made to the coverage or the
basic calculation of the Index which constitutes a fundamental change which would,
in the opinion of (A) the Issuer be materially prejudicial to the interests of the
Issuer, or (B) the Trustee (acting solely on the advice of the Indexation Adviser),
be materially prejudicial to the interests of the Instrumentholders, the Trustee
will give written notice of such occurrence to the Issuer in the case of (B), and
the Issuer and the Trustee (acting solely on the advice of the Indexation Adviser)
together shall seek to agree for the purpose of the Instruments one or more
adjustments to the Index or a substitute index (with or without adjustments) with
the intention that the same should leave the Issuer and the Instrumentholders in no
better and no worse position than they would have been had the Index not ceased to
be published or the relevant fundamental change not been made.(ii)
    
    If the Issuer and the Trustee (acting solely on the advice of the
Indexation Adviser) fail to reach agreement as mentioned above within 20 business
days following the giving of notice as mentioned in paragraph (i), a bank or other
person in London shall be appointed by the Issuer and the Trustee or, failing
agreement on and the making of such appointment within 20 business days following
the expiry of the 20 day period referred to above, by the Trustee (acting solely on
the advice of the Indexation Adviser) (in each case, such bank or other person so
appointed being referred to as the Expert), to determine for the purpose of the
Instruments one or more adjustments to the Index or a substitute index (with or
without adjustments) with the intention that the same should leave the Issuer and
the Instrumentholders in no better and no worse position than they would have been
had the Index not ceased to be published or the relevant fundamental change not been
made. Any Expert so appointed shall act as an expert and not as an arbitrator and
all fees, costs and expenses of the Expert and of any Indexation Adviser and of any
of the Issuer and the Trustee in connection with such appointment shall be borne by
the Issuer.(iii)
    
    The Index shall be adjusted or replaced by a substitute index as agreed
by the Issuer and the Trustee (acting solely on the advice of the Indexation
Adviser) or as determined by the Expert pursuant to the foregoing paragraphs, as the
case may be, and references in these Conditions to the Index and to any Index Figure
shall be deemed amended in such manner as the Trustee (acting solely on the advice
of the Indexation Adviser) and the Issuer agree are appropriate to give effect to
such
 41




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adjustment or replacement. Such amendments shall be effective from the date of
such notification and binding upon the Issuer, the Trustee and the
Instrumentholders, and the Issuer shall give notice to the Instrumentholders in
accordance with Condition 14 of such amendments as promptly as practicable following
such notification.
 4.6
    
    Redemption for Index ReasonsIf either (i) the Index Figure for three consecutive months is required to be determined
on the basis of an Index Figure previously published as provided in Condition 4.3(ii)(2)
and the Trustee has been notified by the Calculation Agent that publication of the Index
has ceased or (ii) notice is published by Her Majestys Treasury, or on its behalf,
following a change in relation to the Index, offering a right of redemption to the
holders of the Reference Gilt, and (in either case) no amendment or substitution of the
Index shall have been advised by the Indexation Adviser to the Issuer and such
circumstances are continuing, the Issuer may, upon giving not more than 60 nor less than
30 days notice to the Instrumentholders in accordance with Condition 14, redeem all, but
not some only, of the Instruments at their principal amount together with interest
accrued but unpaid up to and including the date of redemption (in each case adjusted in
accordance with Condition 4.2).
 5
    
    Redemption, Purchase and Options
 5.1
    
    Final RedemptionUnless previously redeemed, purchased and cancelled as provided below, this Instrument
will be redeemed at its Final Redemption Amount (which, unless otherwise provided, is its
nominal amount) on the Maturity Date specified in the relevant Final Terms provided,
however, that if this Instrument is a Perpetual Instrument it will only be redeemable and
repayable in accordance with the following provisions of this Condition 5.5.2
    
    Redemption for Taxation ReasonsIf, on the occasion of the next payment in respect of the Instruments the Issuer
satisfies the Trustee immediately before the giving of the notice referred to below that
it would be unable to make such payment without having to pay additional amounts as
described in Condition 7, and such requirement to pay such additional amounts arises by
reason of a change in the laws of the United Kingdom or any political sub-division of the
United Kingdom or taxing authority in the United Kingdom or any political sub-division of
the United Kingdom or in the interpretation or application of the laws of the United
Kingdom or any political sub-division of the United Kingdom or in any applicable double
taxation treaty or convention, which change becomes effective on or after the date on
which agreement is reached to issue the first Tranche of the Instruments, and such
requirement cannot be avoided by the Issuer taking reasonable measures (such measures not
involving any material additional payments by, or expense for, the Issuer), the Issuer
may, at its option, at any time, having given not less than 30 nor more than 45 days
notice to the Instrumentholders in accordance with Condition 14, redeem all, but not some
only, of the Instruments at their Early Redemption Amount together with interest accrued
to the date of redemption provided that the date fixed for redemption shall not be
earlier than 90 days prior to the earliest date on which the Issuer would be obliged to
pay such additional amounts or make such withholding or deduction, as the case may be,
were a payment in respect of the Instruments then due. Prior to the publication of any
notice of redemption pursuant to this Condition 5.2, the Issuer shall deliver to the
Trustee a certificate signed by two Directors of the Issuer stating that the requirement
referred to above cannot be avoided by the Issuer taking reasonable measures available to
it and the
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Trustee shall be entitled to accept such certificate as sufficient evidence of
the satisfaction of the condition precedent set out above in which event it shall be
conclusive and binding on Instrumentholders and Couponholders.
 5.3
    
    PurchasesThe Issuer and any of its subsidiary undertakings may at any time purchase Instruments
(provided that all unmatured Receipts and Coupons and unexchanged Talons appertaining to
them are attached or surrendered with them) in the open market or otherwise at any price.5.4
    
    Early Redemption
 5.4.1
    
    Zero Coupon Instruments
 (a)
    
    The Early Redemption Amount payable in respect of any Zero
Coupon Instrument, the Early Redemption Amount of which is not linked to an
index and/or a formula, upon redemption of such Instrument pursuant to
Condition 5.2 or upon it becoming due and payable as provided in Condition 9
shall be the Amortised Face Amount (calculated as provided below) of such
Instrument unless otherwise specified in the relevant Final Terms.(b)
    
    Subject to the provisions of sub-paragraph (c) below, the
Amortised Face Amount of any such Instrument shall be the scheduled Final
Redemption Amount of such Instrument on the Maturity Date discounted at a rate
per annum (expressed as a percentage) equal to the Amortisation Yield (which,
if none is specified in the relevant Final Terms, shall be such rate as would
produce an Amortised Face Amount equal to the issue price of the Instruments
if they were discounted back to their issue price on the Issue Date)
compounded annually.(c)
    
    If the Early Redemption Amount payable in respect of any such
Instrument upon its redemption pursuant to Condition 5.2 or, if applicable,
Condition 5.5 or 5.6 or upon it becoming due and payable as provided in
Condition 9, is not paid when due, the Early Redemption Amount due and payable
in respect of such Instrument shall be the Amortised Face Amount of such
Instrument as defined in sub-paragraph (b) above, except that such
sub-paragraph shall have effect as though the reference in that sub-paragraph
to the date on which the Instrument becomes due and payable was replaced by a
reference to the Relevant Date as defined in Condition 7. The calculation of
the Amortised Face Amount in accordance with this sub-paragraph shall continue
to be made (as well after as before judgment) until the Relevant Date, unless
the Relevant Date falls on or after the Maturity Date, in which case the
amount due and payable shall be the scheduled Final Redemption Amount of such
Instrument on the Maturity Date together with any interest that may accrue in
accordance with Condition 3.2.
  5.4.2
    
    Other InstrumentsThe Early Redemption Amount payable in respect of any Instrument (other than
Instruments described in Condition 5.4.1), upon redemption of such Instrument
pursuant to this Condition 5.4 or upon it becoming due and payable as provided in
Condition 9, shall be the Final Redemption Amount unless otherwise specified in the
relevant Final Terms.
 43




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5.5
    
    Redemption at the Option of the Issuer and Exercise of Issuers Options
 5.5.1
    
    If (i) Residual Holding Call Option is specified in the relevant Final
Terms, and (ii) if at any time the Residual Holding Percentage or more of the
aggregate nominal amount of Instruments originally issued shall have been redeemed or purchased and cancelled,
the Issuer shall have the option to redeem such outstanding Instruments in whole,
but not in part, at their Residual Holding Redemption Amount. Unless otherwise
specified in the relevant Final Terms, the Residual Holding Redemption Amount will
be calculated by the Calculation Agent by discounting the outstanding nominal
amount of the Instruments and the remaining interest payments (if applicable) to
the Maturity Date by a rate per annum (expressed as a percentage to the nearest one
hundred thousandth of a percentage point (with halves being rounded up)) equal to
the Benchmark Yield, being the yield on the Benchmark Security at the close of
business on the third Business Day prior to the date fixed for such redemption,
plus the Benchmark Spread. Where the specified calculation is to be made for a
period of less than one year, it shall be calculated using the Benchmark Day Count
Fraction. The Issuer will give not less than 15 nor more than 30 days irrevocable
notice to the Instrumentholders and the Trustee of any such redemption pursuant to
this Condition 5.5.1.5.5.2
    
    If Call Option is specified in the relevant Final Terms, the Issuer may,
on giving not less than 15 nor more than 30 days irrevocable notice to the
Instrumentholders (or such other notice period as may be specified in the relevant
Final Terms), redeem, or exercise any Issuers option in relation to, all or, if so
provided, some of such Instruments on any Optional Redemption Date or Option
Exercise Date, as the case may be. Any such redemption of Instruments shall be at
their Optional Redemption Amount together with interest accrued to the date fixed
for redemption. Any such redemption or exercise must relate to Instruments of a
nominal amount at least equal to the minimum nominal amount (if any) permitted to be
redeemed specified hereon and no greater than the maximum nominal amount (if any)
permitted to be redeemed specified on this Instrument.
   5.6
    
    Redemption at the Option of Instrumentholders following a Restructuring Event
 5.6.1
    
    *[Redemption of Instruments issued by National Grid at the option of InstrumentholdersIf at any time whilst any of the Instruments issued by National Grid remains
outstanding, there occurs the National Grid Restructuring Event, a Public
Announcement shall be made and if, within the National Grid Restructuring Period,
either:
 
 *
    
    Only applicable where National Grid is the Issuer. 44




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(a)
    
    (if at the time that the National Grid Restructuring Event
occurs there are Rated Securities) a Rating Downgrade in respect of the
National Grid Restructuring Event occurs; or(b)
    
    (if at the time that the National Grid Restructuring Event
occurs there are no Rated Securities) a Negative Rating Event in respect of
the National Grid Restructuring Event occurs,
 Put Event
  Put Event Notice
  5.6.2
    
    For the purposes of this ConditionAccountants Report means a report of the Reporting Accountants stating whether
the amounts included in the calculation of the Operating Profit and the amount for
Consolidated Operating Profit as included in the Directors Report have been
accurately extracted from the accounting records of National Grid and its
Subsidiaries and whether the Disposal Percentage included in the Directors Report
has been correctly calculated which will be prepared pursuant to an engagement
letter to be entered into by the Reporting Accountants, National Grid and the
Trustee.National Grid shall use reasonable endeavours to procure that there shall at the
relevant time be Reporting Accountants who have (a) entered into an engagement
letter with National Grid and the Trustee which shall (i) not limit the liability
of the Reporting Accountants to the Trustee by reference to a monetary cap and (ii)
be available for inspection by Instrumentholders at the principal office of the
Trustee or (b)
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agreed to provide Accountants Reports on such other terms as
National Grid and the Trustee shall approve. If National Grid, having used
reasonable endeavours, is unable to procure that there shall at the relevant time
be Reporting Accountants who have entered into an engagement letter complying with
(i) above, the Trustee may rely on an Accountants Report which contains a limit on the liability of the Reporting
Accountants by reference to a monetary cap or otherwise.Investors should be aware that the engagement letter may contain a limit on the
liability of the Reporting Accountants which may impact on the interests of
Instrumentholders.
  Consolidated Operating Profit IFRS
 Directors Report
 Disposal Percentage
 Disposed Assets
 Negative Rating Event Rateable Debt
 46




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National Grid Restructuring Event
 National Grid Restructuring Period
 Operating Profit
 Public Announcement Financial Times
 Rated Securities provided that provided that
 Rating Agency
 47




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Rating Downgrade
 Relevant Accounts
 Reporting Accountants
 Subsidiary Subsidiaries
 5.6.3
    
    The Trustee shall not be responsible for ascertaining or monitoring
whether or not the National Grid Restructuring Event, a Negative Rating Event or a
Rating Downgrade in relation to National Grid has occurred and, unless and until it
has actual knowledge to the contrary, shall be entitled to assume that no such event
has occurred.5.6.4
    
    To exercise the option of redemption of an Instrument under Condition
5.6.1 the Instrumentholder must deliver each Instrument to be redeemed accompanied
by a duly signed and completed notice of exercise in the form (for the time being
current) obtainable from the specified office of any Paying Agent (a Put Notice)
and, in which the Instrumentholder may specify an account to which payment is to be
made under this Condition 5.6 to the specified office of any Paying Agent on any
business day falling within the period (the Put Period) of 45 days after a Put
Event Notice is given. The Instrument should be delivered together with all Receipts
and Coupons (and Talons) appertaining thereto maturing after the date (the Put
Date) falling seven days after the expiry of the Put Period, failing which (unless
Condition 6.5.2 applies) the Paying Agent will require payment of an amount equal to
the face value of any such missing Receipt, Coupon and/or Talon. Any amount so paid
will be reimbursed in the manner provided in Condition 6 against presentation and
surrender of the relevant missing Receipt, Coupon and/or Talon, subject to Condition
8. The Paying Agent to
 48




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which such Instrument and Put Notice are delivered will issue to the Instrumentholder concerned a non-transferable receipt in respect of the
Instrument so delivered. Payment in respect of any Instrument so delivered will be
made, if the Instrumentholder duly specified a bank account in the Put Notice to
which payment is to be made, on the Put Date by transfer to that bank account and,
in every other case, on or after the Put Date in the manner provided in Condition 6
against presentation and surrender (or, in the case of part payment, endorsement) of such receipt at the
specified office of any Paying Agent. A Put Notice, once given, shall be
irrevocable. For the purposes of the Conditions and the Trust Deed, receipts issued
pursuant to this Condition 5.6 shall be treated as if they were Instruments.
National Grid shall redeem the relevant Instruments on the Put Date unless
previously redeemed or purchased.]
 5.6.1
    
    *[Redemption of Instruments issued by NGET at the option of
InstrumentholdersIf NGET Restructuring Put Option is specified in the relevant Final Terms and at
any time whilst any of the Instruments issued by NGET remains outstanding there
occurs an NGET Restructuring Event and in relation to that NGET Restructuring
Event, a Negative Certification is made and, within the NGET Restructuring Period
either:
 (a)
    
    (if at the time that an NGET Restructuring Event occurs there
are Rated Securities) a Rating Downgrade in respect of the relevant NGET
Restructuring Event occurs; or(b)
    
    (if at the time that an NGET Restructuring Event occurs there
are no Rated Securities) a Negative Rating Event in respect of the relevant
NGET Restructuring Event occurs,
 Put Event
  Put Event Notice
 
 *
    
    Only applicable where NGET is the Issuer. 49




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5.6.2
    
    For the purposes of this ConditionElectricity Act means the Electricity Act 1989 as amended or re-enacted from time
to time and all subordinate legislation made pursuant thereto;Electricity Transmission Licence means the transmission licence, as subsequently
amended from time to time, originally granted by the Secretary of State for Energy
to NGET under the Electricity Act;Negative Certification means, on the occurrence of an NGET Restructuring Event,
such event or events being certified in writing by an independent financial adviser
appointed by NGET and approved by the Trustee (or, if NGET shall not have appointed
such an adviser within 21 days after becoming aware of the occurrence of such NGET
Restructuring Event, appointed by the Trustee (following consultation with NGET))
as being in its opinion materially prejudicial to the interests of the
Instrumentholders. Any Negative Certification by an independent financial adviser
as to whether or not, in its opinion, any event defined as an NGET Restructuring
Event is materially prejudicial to the interests of the Instrumentholders shall, in
the absence of manifest error, be conclusive and binding upon NGET, the Trustee,
the Instrumentholders and the Couponholders;Negative Rating Event shall be deemed to have occurred if NGET is unable as a
result of an NGET Restructuring Event to obtain a rating of the Instruments or of
any other comparable unsecured and unsubordinated debt of NGET (or of any
Subsidiary of NGET and which is guaranteed on an unsecured and unsubordinated basis
by NGET) having an initial maturity of five years or more (Rateable Debt) from a
Rating Agency of at least investment grade (BBB-/Baa3, or their respective
equivalents for the time being), which rating NGET shall use all reasonable
endeavours to obtain, provided that a Negative Rating Event shall not be deemed to
have occurred in respect of a particular NGET Restructuring Event if the Rating
Agency making the relevant reduction or declining to assign a rating of at least
investment grade (as described above) does not announce or publicly confirm or
otherwise inform the Trustee that the reduction or its declining to assign a rating
of at least investment grade was the result, in whole or in part, of any event or
circumstance comprised in or arising as a result of, or in respect of, the
applicable NGET Restructuring Event;NGET Restructuring Event means the occurrence of any one or more of the following
events:
 (a)
    
    the Secretary of State for Trade and Industry or any official
succeeding to his functions gives NGET written notice of revocation of the
Electricity Transmission Licence in accordance with the terms as to revocation
set out in Schedule 2 of the Electricity Transmission Licence, such revocation
to become effective not later than the Maturity Date of the Instruments or
NGET agrees in writing with the Secretary of State for Trade and Industry or
any official succeeding to his functions to any revocation or surrender of the
Electricity Transmission Licence or any legislation (whether primary or
subordinate) is enacted terminating or revoking the Electricity Transmission
Licence; or(b)
    
    any modification is made to the terms and conditions of the
Electricity Transmission Licence other than such a modification which the
Trustee, in its
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opinion, considers to be not materially prejudicial to the
interests of the Instrumentholders and has so confirmed in writing to NGET; or
 (c)
    
    any legislation (whether primary or subordinate) is enacted
removing, reducing or qualifying the duties or powers of the Secretary of
State for Trade and Industry or any official succeeding to his functions
and/or the Gas and Electricity Markets Authority under Section 3A of the
Electricity Act as compared with those in effect on the issue date of the
first Tranche of the Instruments other than such legislation which the
Trustee, in its opinion, considers to be not materially prejudicial to the interests of the Instrumentholders and has so confirmed in
writing to NGET;
 NGET Restructuring Period
 (a)
    
    if at the time at which the NGET Restructuring Event occurs
there are Rated Securities, the period of 90 days starting from and including
the day on which an NGET Restructuring Event occurs or such longer period in
which the Rated Securities are under consideration (announced publicly within
such 90 day period) for rating review by a Rating Agency; or(b)
    
    if at the time at which an NGET Restructuring Event occurs
there are no Rated Securities, the period starting from and including the day
on which an NGET Restructuring Event occurs and ending on the day 90 days
following the date on which a Negative Certification shall have been given to
NGET in respect of that NGET Restructuring Event;
 Rated Securities
 Rating Agency
 Rating Downgrade
 51




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Subsidiary Subsidiaries
 5.6.3
    
    The Trustee shall not be responsible for ascertaining whether or not an
NGET Restructuring Event, a Negative Rating Event or a Rating Downgrade in relation
to NGET has occurred and, unless and until it has actual knowledge to the contrary,
shall be entitled to assume that no such event has occurred.5.6.4
    
    To exercise the option of redemption of an Instrument under Condition
5.6.1 the Instrumentholder must deliver each Instrument to be redeemed accompanied
by a duly signed and completed notice of exercise in the form (for the time being
current) obtainable from the specified office of any Paying Agent (a Put Notice)
and, in which the Instrumentholder may specify an account to which payment is to be
made under this Condition 5.6 to the specified office of any Paying Agent on any
business day falling within the period (the Put Period) of 45 days after a Put
Event Notice is given. The Instrument should be delivered together with all Receipts
and Coupons (and Talons) appertaining thereto maturing after the date (the Put
Date) falling seven days after the expiry of the Put Period, failing which (unless
Condition 6.5.2 applies) the Paying Agent will require payment of an amount equal to
the face value of any such missing Receipt, Coupon and/or Talon.Any amount so paid will be reimbursed in the manner provided in Condition 6 against
presentation and surrender of the relevant missing Receipt, Coupon and/or Talon,
subject to Condition 8. The Paying Agent to which such Instrument and Put Notice
are delivered will issue to the Instrumentholder concerned a non-transferable
receipt in respect of the Instrument so delivered.Payment in respect of any Instrument so delivered will be made, if the
Instrumentholder duly specified a bank account in the Put Notice to which payment
is to be made, on the Put Date by transfer to that bank account and, in every other
case, on or after the Put Date in the manner provided in Condition 6 against
presentation and surrender (or, in the case of part payment, endorsement) of such
receipt at the specified office of any Paying Agent. A Put Notice, once given,
shall be irrevocable. For the purposes of the Conditions and the Trust Deed,
receipts issued pursuant to this Condition 5.6 shall be treated as if they were
Instruments. NGET shall redeem the relevant Instruments on the Put Date unless
previously redeemed or purchased.]
 5.7
    
    Redemption at the Option of InstrumentholdersIf Put Option is specified in the relevant Final Terms, the Issuer shall, at the option
of any Instrumentholder, upon such Instrumentholder giving not less than 15 nor more than
30 days notice to the Issuer (or such other notice period as may be specified on this
Instrument) redeem such Instrument on the Optional Redemption Date(s) (as specified in
the Final Terms) at its Optional Redemption Amount (as specified in the Final Terms)
together with interest accrued to the date fixed for redemption.
 52




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Exercise Notice
 5.8
    
    Partly Paid InstrumentsPartly Paid Instruments will be redeemed, whether at maturity, early redemption or
otherwise, in accordance with the provisions of this Condition and the provisions
specified in the relevant Final Terms.5.9
    
    Redemption by InstalmentsUnless previously redeemed, purchased and cancelled as provided in this Condition 5, each
Instrument which provides for Instalment Dates and Instalment Amounts will be partially
redeemed on each Instalment Date at the Instalment Amount specified in the relevant Final
Terms. The outstanding nominal amount of each such Instrument shall be reduced by the
Instalment Amount (or, if such Instalment Amount is calculated by reference to a
proportion of the nominal amount of such Instrument, such proportion) for all purposes
with effect from the related Instalment Date, unless payment of the Instalment Amount is
improperly withheld or refused on presentation of the related Receipt, in which case,
such amount shall remain outstanding until the Relevant Date relating to such Instalment
Amount.5.10
    
    CancellationAll Instruments redeemed pursuant to any of the foregoing provisions will be cancelled
forthwith together with all unmatured Receipts and Coupons and unexchanged Talons
attached thereto. All Instruments purchased by or on behalf of the Issuer or any of its
Subsidiaries may, at the option of the Issuer be held by or may be surrendered together
with all unmatured Receipts and Coupons and all unexchanged Talons attached to them to a
Paying Agent for cancellation, but may not be resold and when held by the Issuer or any
of its respective Subsidiaries shall not entitle the holder to vote at any meeting of
Instrumentholders and shall not be deemed to be outstanding for the purposes of
calculating quorums at meetings of Instrumentholders or for the purposes of Condition 11.
 6
    
    Payments and Talons
 6.1
    
    PaymentsPayments of principal and interest in respect of Instruments will, subject as mentioned
below, be made against presentation and surrender of the relevant Receipts (in the case
of payments of Instalment Amounts other than on the due date for redemption and provided
that the Receipt is presented for payment together with its relative Instrument),
Instruments (in the case of all other payments of principal and, in the case of interest,
as specified in Condition 6.5.6) or Coupons (in the case of interest, save as specified
in Condition 6.5.6), as the case may be, at the specified office of any Paying Agent
outside the United States by a cheque payable in the currency in which such payment is
due drawn on, or, at the option of the holder, by transfer to an account denominated in
that currency with, a bank in the principal financial centre for that currency; provided
that in the case of Euro, the transfer shall be in a city in which banks have access to
the TARGET System.
 53




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6.2
    
    Payments in the United StatesNotwithstanding the above, if any Instruments are denominated in U.S. dollars, payments
in respect of them may be made at the specified office of any Paying Agent in New York
City in the same manner as specified above if (a) the Issuer shall have appointed Paying
Agents with specified offices outside the United States with the reasonable expectation
that such Paying Agents would be able to make payment of the amounts on the Instruments
in the manner provided above when due, (b) payment in full of such amounts at all such
offices is illegal or effectively precluded by exchange controls or other similar
restrictions on payment or receipt of such amounts and (c) such payment is then permitted by United States law,
without involving, in the opinion of the Issuer, any adverse tax consequence to the
Issuer.6.3
    
    Payments subject to Fiscal Laws etc.All payments are subject in all cases to any applicable fiscal or other laws, regulations
and directives, but without prejudice to the provisions of Condition 7. No commission or
expenses shall be charged to the Instrumentholders or Couponholders in respect of such
payments.6.4
    
    Appointment of AgentsThe Issuing and Paying Agent, the Paying Agents and the Calculation Agent initially
appointed by the Issuer and their respective specified offices are listed below. The
Issuing and Paying Agent, the Paying Agents and the Calculation Agent act solely as
agents of the Issuer and do not assume any obligation or relationship of agency or trust
for or with any holder. The Issuer reserves the right at any time with the approval of
the Trustee to vary or terminate the appointment of the Issuing and Paying Agent, any
other Paying Agent or the Calculation Agent and to appoint additional or other Paying
Agents, provided that the Issuer shall at all times maintain (a) an Issuing and Paying
Agent, (b) a Paying Agent having its specified office in a major European city, which
shall be London so long as the Instruments are admitted to the Official List of the
Financial Services Authority in its capacity as competent authority under the Financial
Services and Markets Act 2000 and admitted to trading on the London Stock Exchanges
Gilt-Edged and Fixed Interest Market, (c) a Calculation Agent where the Conditions so
require one, (d) so long as the Instruments are listed on any stock exchange or admitted
to listing by any other relevant authority, a Paying Agent having a specified office in
such place as may be required by the rules and regulations of any other relevant stock
exchange or other relevant authority and (e) to the extent that the Issuer is able to do
so and not provided for by the foregoing provisions of this Condition 6.4, a Paying Agent
with a specified office in a European Union member state that will not be obliged to
withhold or deduct tax pursuant to any law implementing European Council Directive
2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council
meeting of 26-27 November 2000. As used in these Conditions, the terms Issuing and
Paying Agent, Calculation Agent, and Paying Agent include any additional or
replacement Issuing and Paying Agent, Calculation Agent or Paying Agent appointed under
this Condition.In addition, the Issuer shall forthwith appoint a Paying Agent in New York City in
respect of any Instruments denominated in U.S. dollars in the circumstances described in
Condition 6.2.Notice of any such change or any change of any specified office shall promptly be given
to the Instrumentholders in accordance with Condition 14.
 54




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6.5
    
    Unmatured Coupons and Receipts and unexchanged Talons
 6.5.1
    
    Unless the Instrument provides that the relevant Coupons are to become
void upon the due date for redemption of those Instruments, Instruments should be
surrendered for payment together with all unmatured Coupons (if any) appertaining to
them, failing which an amount equal to the face value of each missing unmatured
Coupon (or, in the case of payment not being made in full, that proportion of the
amount of such missing unmatured Coupon that the sum of principal so paid bears to
the total principal due) will be deducted from the Final Redemption Amount, Early
Redemption Amount or Optional Redemption Amount, as the case may be, due for
payment. Any amount so deducted shall be paid in the manner mentioned above against
surrender of such missing Coupon within a period of 10 years from the Relevant Date for the payment
of such principal (whether or not such Coupon has become void pursuant to Condition
8).6.5.2
    
    If the relevant Instrument so provides, upon the due date for redemption
of any Instrument, unmatured Coupons relating to such Instrument (whether or not
attached) shall become void and no payment shall be made in respect of them.6.5.3
    
    If the relevant Instrument so provides, upon the due date for redemption
of any Instrument, any unexchanged Talon relating to such Instrument (whether or not
attached) shall become void and no Coupon shall be delivered in respect of such
Talon.6.5.4
    
    Upon the due date for redemption of any Instrument which is redeemable
in instalments, all Receipts relating to such Instrument having an Instalment Date
falling on or after such due date (whether or not attached) shall become void and no
payment shall be made in respect of them.6.5.5
    
    Where any Instrument which provides that the relevant Coupons are to
become void upon the due date for redemption of those Instruments is presented for
redemption without all unmatured Coupons and any unexchanged Talon relating to it,
and where any Instrument is presented for redemption without any unexchanged Talon
relating to it, redemption shall be made only against the provision of such
indemnity as the Issuer may require.6.5.6
    
    If the due date for redemption of any Instrument is not a due date for
payment of interest, interest accrued from the preceding due date for payment of
interest or the Interest Commencement Date, as the case may be, shall only be
payable against presentation (and surrender if appropriate) of the relevant
Instrument. Interest accrued on an Instrument that only bears interest after its
Maturity Date shall be payable on redemption of that Instrument against presentation
of that Instrument.
 6.6
    
    Non-business DaysIf any date for payment in respect of any Instrument, Receipt or Coupon is not a business
day, the holder shall not be entitled to payment until the next following business day
nor to any interest or other sum in respect of such postponed payment. In this paragraph,
business day means a day (other than a Saturday or a Sunday) on which banks and foreign
exchange markets are open for business in the relevant place of presentation, in such
jurisdictions as shall be specified as Financial Centres in the relevant Final Terms
and:
 6.6.1
    
    (in the case of a payment in a currency other than Euro) where payment
is to be made by transfer to an account maintained with a bank in the relevant
currency, on which
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foreign exchange transactions may be carried on in the relevant
currency in the principal financial centre of the country of such currency; or
 6.6.2
    
    (in the case of a payment in Euro) which is a TARGET Business Day.
 6.7
    
    TalonsOn or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet
issued in respect of any Instrument, the Talon forming part of such Coupon sheet may be
surrendered at the specified office of the Issuing and Paying Agent in exchange for a
further Coupon sheet (but excluding any Coupons which may have become void pursuant to
Condition 8).
 7
    
    TaxationAll payments of principal and interest by or on behalf of the Issuer in respect of the
Instruments, the Receipts and the Coupons will be made without withholding or deduction for or
on account of, any present or future taxes or duties of whatever nature imposed or levied by or
on behalf of the United Kingdom or any political sub-division of the United Kingdom or any
authority in or of the United Kingdom having power to tax, unless such withholding or deduction
is compelled by law. In that event, the Issuer will pay such additional amounts of principal
and interest as will result in the payment to the Instrumentholders, Receiptholders or, as the
case may be, the Couponholders of the amounts which would otherwise have been receivable in
respect of the Instruments, Receipts or Coupons had no withholding or deduction been made,
except that no such additional amounts shall be payable in respect of any Instrument, Receipt
or Coupon presented for payment:
 (a)
    
    by or on behalf of, a person who is liable to such taxes or duties in respect of such
Instrument, Receipt or Coupon by reason of his having some connection with the United
Kingdom other than the mere holding of such Instrument, Receipt or Coupon; or(b)
    
    by or on behalf of a person who would not be liable or subject to such deduction or
withholding by making a declaration of non-residence or other claim for exemption to a tax
authority; or(c)
    
    more than 30 days after the Relevant Date except to the extent that the holder would
have been entitled to such additional amounts on presenting the same for payment on such
30th day; or(d)
    
    where such withholding or deduction is imposed on a payment to an individual and is
required to be made pursuant to any law implementing European Council Directive 2003/48/EC
or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26-27
November 2000; or(e)
    
    by or on behalf of a holder who would have been able to avoid such withholding or
deduction (i) by presenting the relevant Instrument, Receipt or Coupon to another Paying
Agent in a Member State of the European Union; or (ii) by satisfying any statutory or
procedural requirements (including, without limitation, the provision of information).
 Relevant Date
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principal interest principal interest
 8
    
    PrescriptionInstruments, Receipts and Coupons (which, for this purpose, shall not include Talons) shall be
prescribed and become void unless presented for payment within 10 years (in the case of
principal) or five years (in the case of interest) from the appropriate Relevant Date in
respect of them.
 9
    
    Events of DefaultIf any of the following events (each an Event of Default) occurs and is continuing, the
Trustee at its discretion may, and if so requested by the holders of at least one-quarter in
nominal amount of the Instruments then outstanding or if so directed by an Extraordinary
Resolution shall, give notice to the Issuer at its registered office that the Instruments are,
and they shall accordingly immediately become due and repayable at their Redemption Amount
together with accrued interest (if any) to the date of payment:
 (a)
    
    Non-Payment:there is default for more than 30 days in the payment of any principal
or interest due in respect of the Instruments; or(b)
    
    Breach of Other Obligations:there is default in the performance or observance by the
Issuer of any other obligation or provision under the Trust Deed or the Instruments (other
than any obligation for the payment of any principal or interest in respect of the
Instruments) which default is incapable of remedy or, if in the opinion of the Trustee
capable of remedy, is not remedied within 90 days after notice of such default shall have
been given to the Issuer by the Trustee; or(c)
    
    Cross-Acceleration:if (i) any other present or future Relevant Indebtedness of the
Issuer [(or a Principal Subsidiary)]* becomes due and payable prior to its
stated maturity by reason of any actual event of default or (ii) any amount in respect of
such Relevant Indebtedness is not paid when due or, as the case may be, within any
applicable grace period, provided that the aggregate amount of the Relevant Indebtedness
in respect of which one or more of the events mentioned above in this paragraph (c) have
occurred equals or exceeds £50,000,000, for the period up to 31 March 2017, and
thereafter, £100,000,000.[For the purposes of this Condition 9, Principal Subsidiary means National Grid Gas
plc, NGET and National Grid USA, and includes any successor entity thereto or any member
of the group of companies comprising National Grid and each of its subsidiary
undertakings (the National Grid Group) which the Auditors have certified to the Trustee
as being a company to which all or substantially all of the assets of a Principal
Subsidiary are transferred. In the event that all or substantially all of the assets of a
Principal Subsidiary are transferred to a
 
 *
    
    Only applicable where National Grid is the Issuer. 
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(d)
    
    Winding-up:a resolution is passed, or a final order of a court in the United Kingdom
is made and, where possible, not discharged or stayed within a period of 90 days, that the
Issuer be wound up or dissolved; or(e)
    
    Enforcement Proceedings:attachment is made of the whole or substantially the whole
of the assets or undertakings of the Issuer and such attachment is not released or
cancelled within 90 days or an encumbrancer takes possession or an administrative or other
receiver or similar officer is appointed of the whole or substantially the whole of the
assets or undertaking of the Issuer or an administration or similar order is made in
relation to the Issuer and such taking of possession, appointment or order is not released, discharged or cancelled
within 90 days; or(f)
    
    Insolvency:the Issuer ceases to carry on all or substantially all of its business or
is unable to pay its debts within the meaning of Section 123(1)(e) or Section 123(2) of
the Insolvency Act 1986; or(g)
    
    Bankruptcy:the Issuer is adjudged bankrupt or insolvent by a court of competent
jurisdiction in its country of incorporation,
  10
    
    EnforcementThe Trustee may, at its discretion and without further notice, institute such proceedings
against the Issuer as it may think fit to enforce any obligation, condition or provision
binding on the Issuer under the Instruments or under the Trust Deed, but shall not be bound to
do so unless:
 (a)
    
    it has been so directed by an Extraordinary Resolution or in writing by the holders
of at least one-quarter of the principal amount of the Instruments outstanding; and(b)
    
    it has been indemnified to its satisfaction.
  11
    
    Meetings of Instrumentholders, Modifications and Substitution
 11.1
    
    Meetings of InstrumentholdersThe Trust Deed contains provisions for convening meetings of Instrumentholders to
consider any matter affecting their interests, including the sanctioning by Extraordinary
Resolution (as defined in the Trust Deed) of a modification of any of these Conditions or
any provisions of the Trust Deed. An Extraordinary Resolution duly passed at any such
meeting shall be binding on Instrumentholders (whether or not they were present at the
meeting at which such resolution was passed) and on all Couponholders, except that any
Extraordinary Resolution proposed, inter alia, (a) to amend the dates of maturity or
redemption of the Instruments, any Instalment Date or any date for payment of interest on
the Instruments, (b) to reduce or cancel the nominal amount of, or any Instalment Amount
of, or any premium payable on redemption of, the Instruments, (c) to reduce the rate or
rates of interest in respect of the Instruments or to vary the method or basis of
calculating the rate or rates or amount of
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interest or the basis for calculating any Interest Amount in respect of the Instruments, (d) if a Minimum and/or a Maximum Rate of
Interest is shown on the face of the Instrument, to reduce any such Minimum and/or
Maximum Rate of Interest, (e) to vary any method of calculating the Final Redemption
Amount, the Early Redemption Amount or the Optional Redemption Amount, (f) to take any
steps that as specified in this Instrument may only be taken following approval by an
Extraordinary Resolution to which the special quorum provisions apply, and (g) to modify
the provisions concerning the quorum required at any meeting of Instrumentholders or the
majority required to pass the Extraordinary Resolution will only be binding if passed at
a meeting of the Instrumentholders (or at any adjournment of that meeting) at which a
special quorum (as defined in the Trust Deed) is present. A resolution in writing signed
by the holders of not less than 95 per cent. in nominal amount of the Instruments will be binding on all Instrumentholders and Couponholders. The Issuer
may convene a meeting of Instrumentholders jointly with the holders of all other
instruments issued pursuant to the Agency Agreement and not forming a single series with
the Instruments to which meeting the provisions referred to above apply as if all such
instruments formed part of the same series, provided that the proposals to be considered
at such meeting affect the rights of the holders of the instruments of each series
attending the meeting in identical respects (save insofar as the Conditions applicable to
each such series are not identical).
 11.2
    
    Modification of the Trust DeedThe Trustee may agree, without the consent of the Instrumentholders or Couponholders, to
(a) any modification of any of the provisions of the Trust Deed that is of a formal,
minor or technical nature or is made to correct a manifest error, and (b) any other
modification (except as mentioned in the Trust Deed), and any waiver or authorisation of
any breach or proposed breach, of any of the provisions of the Trust Deed that is in the
opinion of the Trustee not materially prejudicial to the interests of the
Instrumentholders. Any such modification, authorisation or waiver shall be binding on the
Instrumentholders and the Couponholders and, if the Trustee so requires, such
modification shall be notified to the Instrumentholders as soon as practicable.11.3
    
    SubstitutionThe Trust Deed contains provisions permitting the Trustee to agree, subject to such
amendment of the Trust Deed and such other conditions as the Trustee may require, but
without the consent of the Instrumentholders or the Couponholders, to the substitution of
any other company in place of the Issuer or of any previous substituted company, as
principal debtor under the Trust Deed and the Instruments. In the case of such a
substitution the Trustee may agree, without the consent of the Instrumentholders or the
Couponholders, to a change of the law governing the Instruments, the Receipts, the
Coupons, the Talons and/or the Trust Deed provided that such change would not in the
opinion of the Trustee be materially prejudicial to the interests of the
Instrumentholders.11.4
    
    Entitlement of the TrusteeIn connection with the exercise of its functions (including but not limited to those
referred to in this Condition) the Trustee shall have regard to the interests of the
Instrumentholders as a class and shall not have regard to the consequences of such
exercise for individual Instrumentholders or Couponholders and the Trustee shall not be
entitled to require, nor shall any Instrumentholder or Couponholder be entitled to claim,
from the Issuer any
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indemnification or payment in respect of any tax consequence of any
such exercise upon individual Instrumentholders or Couponholders.
 12
    
    Replacement of Instruments, Receipts, Coupons and TalonsIf an Instrument, Receipt, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it
may be replaced, subject to applicable laws, listing authority and stock exchange regulations,
at the specified office of such other Paying Agent as may from time to time be designated by
the Issuer for the purpose and notice of whose designation is given to Instrumentholders in
accordance with Condition 14 on payment by the claimant of the fees and costs incurred in
connection with that replacement and on such terms as to evidence, security and indemnity
(which may provide, inter alia, that if the allegedly lost, stolen or destroyed Instrument,
Receipt, Coupon or Talon is subsequently presented for payment or, as the case may be, for
exchange for further Coupons, there shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such
Instruments, Receipts, Coupons or further Coupons) and otherwise as the Issuer may require.
Mutilated or defaced Instruments, Receipts, Coupons or Talons must be surrendered before
replacements will be issued.
 13
    
    Further IssuesThe Issuer may from time to time without the consent of the Instrumentholders or Couponholders
create and issue further instruments having the same terms and conditions as the Instruments
and so that such further issue shall be consolidated and form a single series with such
Instruments.References in these Conditions to the Instruments include (unless the context requires
otherwise) any other instruments issued pursuant to this Condition and forming a single series
with the Instruments. Any such further instruments forming a single series with Instruments
constituted by the Trust Deed or any deed supplemental to it shall, and any other instruments
may (with the consent of the Trustee), be constituted by the Trust Deed.The Trust Deed contains provisions for convening a single meeting of the Instrumentholders and
the holders of instruments of other series if the Trustee so decides.
 14
    
    NoticesAll notices to the Instrumentholders will be valid if published in a daily English language
newspaper of general circulation in the United Kingdom (which is expected to be the Financial
Times). If in the opinion of the Trustee any such publication is not practicable, notice shall
be validly given if published in another leading daily English language newspaper with general
circulation in Europe. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once or on different dates, on the first date on which
publication is made, as provided above.Couponholders shall be deemed for all purposes to have notice of the contents of any notice
given to the holders of Instruments in accordance with this Condition.
 15
    
    Indemnification of TrusteeThe Trust Deed contains provisions for the indemnification of the Trustee and for its relief
from responsibility, including but not limited to provisions relieving it from any obligation
to (a) appoint an independent financial adviser and (b) take proceedings to enforce repayment
unless indemnified to its satisfaction. The Trustee is entitled to enter into business
transactions with the Issuer or any of its subsidiary undertakings, parent undertakings, joint
ventures or associated undertakings without accounting for any profit resulting from these
transactions and to act as trustee for the holders of
 60




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any other securities issued by the Issuer or any of its subsidiary undertakings, parent undertakings, joint ventures or associated
undertakings.16
    
    Contracts (Rights of Third Parties) Act 1999No person shall have any right to enforce any term or condition of the Instruments under the
Contracts (Rights of Third Parties) Act 1999.17
    
    Governing Law and Jurisdiction
 17.1
    
    The Instruments and all matters arising from or connected with the Instruments are
governed by, and shall be construed in accordance with, English law.17.2
    
    The courts of England have exclusive jurisdiction to settle any dispute (a
Dispute), arising from or connected with the Instruments.17.3
    
    The Issuer agrees that the courts of England are the most appropriate and convenient
courts to settle any Dispute and, accordingly, that it will not argue to the contrary.17.4
    
    Nothing in this Condition 17 prevents the Trustee or any Instrumentholder from taking
proceedings relating to a Dispute (Proceedings) in any other courts with jurisdiction.
To the extent allowed by law, the Trustee or Instrumentholders may take concurrent
Proceedings in any number of jurisdictions.
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SUMMARY OF PROVISIONS RELATING TO THE INSTRUMENTS
WHILE IN GLOBAL FORM
 Initial Issue of Instruments
 Common Depositary
     Relationship of Accountholders with Clearing Systems
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Exchange
 1
    
    Temporary Global InstrumentsEach temporary Global Instrument will be exchangeable, free of charge to the holder, on or
after its Exchange Date:
 1.1
    
    if the relevant Final Terms indicates that such Global Instrument is issued in
compliance with the C Rules or in a transaction to which TEFRA is not applicable (as to
which, see Summary of the Programme  Selling Restrictions), in whole, but not in part,
for the Definitive Instruments defined and described below; and1.2
    
    otherwise, in whole or in part upon certification as to non-U.S. beneficial ownership
in the form set out in the Agency Agreement for interests in a permanent Global Instrument
or, if so provided in the relevant Final Terms, for Definitive Instruments.
 2
    
    Permanent Global InstrumentsEach permanent Global Instrument will be exchangeable, free of charge to the holder, on or
after its Exchange Date in whole but not, except as provided under Partial Exchange of
Permanent Global Instruments, in part for Definitive Instruments if the permanent Global
Instrument is held on behalf of Euroclear or Clearstream, Luxembourg or any other clearing
system (an Alternative Clearing System) and any such clearing system is closed for business
for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise)
or announces an intention permanently to cease business or in fact does so.In the event that a Global Instrument is exchanged for Definitive Instruments, such Definitive
Instruments shall be issued in Specified Denomination(s) only. An Instrumentholder who holds a
principal amount of less than the minimum Specified Denomination will not receive a definitive
Instrument in respect of such holding and would need to purchase a principal amount of
Instruments such that it holds an amount equal to one or more Specified Denominations.3
    
    Partial Exchange of Permanent Global InstrumentsFor so long as a permanent Global Instrument is held on behalf of a clearing system and the
rules of that clearing system permit, such permanent Global Instrument will be exchangeable in
part on one or more occasions for Definitive Instruments (a) if principal in respect of any
Instruments is not paid when due or (b) if so provided in, and in accordance with, the
Conditions (which will be set out in the relevant Final Terms) relating to Partly Paid
Instruments.
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4
    
    Delivery of InstrumentsIf the Global Instrument is a CGN, on or after any due date for exchange the holder of a Global
Instrument may surrender such Global Instrument or, in the case of a partial exchange, present
it for endorsement to or to the order of the Issuing and Paying Agent. In exchange for any
Global Instrument, or the part of that Global Instrument to be exchanged, the relevant Issuer
will (a) in the case of a temporary Global Instrument exchangeable for a permanent Global
Instrument, deliver, or procure the delivery of, a permanent Global Instrument in an aggregate
nominal amount equal to that of the whole or that part of a temporary Global Instrument that is
being exchanged or, in the case of a subsequent exchange, endorse, or procure the endorsement
of, a permanent Global Instrument to reflect such exchange or (b) in the case of a Global
Instrument exchangeable for Definitive Instruments, deliver, or procure the delivery of, an
equal aggregate nominal amount of duly executed and authenticated Definitive Instruments or if
the Global Instrument is a NGN, the Issuer will procure that details of such exchange be
entered pro ratain the records of the relevant clearing system. In this Prospectus,
Definitive Instruments means, in relation to any Global Instrument, the Definitive
Instruments for which such Global Instrument may be exchanged (if appropriate, having attached
to them all Coupons and Receipts in respect of interest or Instalment Amounts that have not
already been paid on the Global Instrument and a Talon). Definitive Instruments will be
security printed in accordance with any applicable legal and stock exchange requirements in or
substantially in the form set out in the Schedules to the Trust Deed. On exchange in full of
each permanent Global Instrument, the relevant Issuer will, if the holder so requests, procure
that it is cancelled and returned to the holder together with the relevant Definitive
Instruments.5
    
    Exchange DateExchange Date means, in relation to a temporary Global Instrument, the day falling after the
expiry of 40 days after its issue date and, in relation to a permanent Global Instrument, a day
falling not less than 60 days, or in the case of failure to pay principal in respect of any
Instruments when due 30 days, after that on which the notice requiring exchange is given and on
which banks are open for business in the city in which the specified office of the Issuing and
Paying Agent is located and in the city in which the relevant clearing system is located.6
    
    Amendment to ConditionsThe temporary Global Instruments and permanent Global Instruments contain provisions that apply
to the Instruments which they represent, some of which modify the effect of the terms and
conditions of the Instruments set out in this Prospectus. The following is a summary of certain
of those provisions:7
    
    PaymentsNo payment falling due after the Exchange Date will be made on any Global Instrument unless
exchange for an interest in a permanent Global Instrument or for Definitive Instruments is
improperly withheld or refused. Payments on any temporary Global Instrument issued in
compliance with the D Rules before the Exchange Date will only be made against presentation of
certification as to non-U.S. beneficial ownership in the form set out in the Agency Agreement.
All payments in respect of Instruments represented by a Global Instrument will be made against
presentation for endorsement and, if no further payment falls to be made in respect of the
Instruments, surrender of that Global Instrument to or to the order of the Issuing and Paying
Agent or such other Paying Agent as shall have been notified to the Instrumentholders for such
purpose. If the Global Instrument is a CGN, a record of each payment so made will be endorsed
on each
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Global Instrument, which endorsement will be prima facieevidence that such payment has been
made in respect of the Instruments. If the Global Instrument is a NGN, the Issuer shall procure
that details of each such payment shall be entered pro ratain the records of the relevant
clearing system and in the case of payments of principal, the nominal amount of the Instruments
recorded in the records of the relevant clearing system and represented by the Global
Instrument will be reduced accordingly. Payments under the NGN will be made to its holder. Each
payment so made will discharge the Issuers obligations in respect thereof. Any failure to make
the entries in the records of the relevant clearing system shall not affect such discharge.
 8
    
    PrescriptionClaims against an Issuer in respect of Instruments which are represented by a permanent Global
Instrument will become void unless it is presented for payment within a period of 10 years (in
the case of principal) and five years (in the case of interest) from the appropriate Relevant
Date (as defined in Condition 7).9
    
    MeetingsThe holder of a permanent Global Instrument shall (unless such permanent Global Instrument
represents only one Instrument) be treated as being two persons for the purposes of any quorum
requirements of a meeting of Instrumentholders and, at any such meeting, as having one vote in
respect of each integral currency unit of the Specified Currency of the Instruments for which
it may be exchanged in accordance with its terms.10
    
    CancellationCancellation of any Instrument represented by a permanent Global Instrument which is required
by the Conditions to be cancelled (other than upon its redemption) will be effected by
reduction in the nominal amount of the relevant permanent Global Instrument.11
    
    PurchaseInstruments represented by a permanent Global Instrument may only be purchased by an Issuer or
any of its subsidiary undertakings if they are purchased together with the right to receive all
future payments of interest and Instalment Amounts (if any) on those Instruments.12
    
    Issuers OptionAny option of an Issuer provided for in the Conditions of any Instruments while such
Instruments are represented by a permanent Global Instrument shall be exercised by such Issuer
giving notice to the Instrumentholders within the time limits set out in and containing the
information required by the Conditions, except that the notice shall not be required to contain
the serial numbers of Instruments drawn in the case of a partial exercise of an option and
accordingly no drawing of Instruments shall be required. In the event that any option of such
Issuer is exercised in respect of some but not all of the Instruments of any Series, the rights
of accountholders with a clearing system or Approved Intermediary in respect of the Instruments
will be governed by the standard procedures of Euroclear and/or Clearstream, Luxembourg (to be
reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a
reduction in nominal amount, at their discretion) or any other Alternative Clearing System (as
the case may be).13
    
    Instrumentholders OptionsAny option of the Instrumentholders provided for in the Conditions of any Instruments while
such Instruments are represented by a permanent Global Instrument may be exercised by the
holder of
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the permanent Global Instrument giving notice to the Issuing and Paying Agent within the time
limits relating to the deposit of Instruments with a Paying Agent set out in the Conditions
substantially in the form of the notice available from any Paying Agent stating the nominal
amount of Instruments in respect of which the option is exercised and at the same time, where
the permanent Global Instrument is a CGN, presenting the permanent Global Instrument for
notation. Where the Global Instrument is an NGN, the Issuer shall procure that details of such
exercise shall be entered pro ratain the records of the relevant clearing system and the
nominal amount of the Instruments recorded in those records will be reduced accordingly.
 14
    
    NGN nominal amountWhere the Global Note is a NGN, the Issuer shall procure that any exchange, payment,
cancellation, exercise of any option or any right under the Instruments, as the case may be, in
addition to the circumstances set out above shall be entered in the records of the relevant
clearing systems and upon any such entry being made, in respect of payments of principal, the
nominal amount of the Instruments represented by such Global Instrument shall be adjusted
accordingly.15
    
    Trustees PowersIn considering the interests of Instrumentholders while any Global Instrument is held on behalf
of a clearing system, the Trustee may have regard to any information provided to it by such
clearing system or its operator as to the identity (either individually or by category) of its
accountholders with entitlements to such Global Instrument and may consider such interests as
if such accountholders were the holders of the Instruments represented by such Global
Instrument.16
    
    Events of DefaultEach Global Instrument provides that the Trustee, at its discretion, may, and if so requested
by holders of at least one-quarter in nominal amount of the Instruments then outstanding or if
so directed by an Extraordinary Resolution, shall cause such Global Instrument to become due
and repayable in the circumstances described in Condition 9 by stating in the notice to the
relevant Issuer the principal amount of such Global Instrument which is becoming due and
repayable. If principal in respect of any Instrument is not paid when due, only the Trustee may
enforce the rights of the Instrumentholders against such Issuer under the terms of the Trust
Deed unless the Trustee, having become bound to proceed, fails to do so within a reasonable
time and such failure is continuing.17
    
    NoticesSo long as any Instruments are represented by a Global Instrument and such Global Instrument is
held on behalf of a clearing system, notices to the holders of Instruments of that Series may
be given by delivery of the relevant notice to that clearing system for communication by it to
entitled accountholders in substitution for publication as required by the Conditions or by
delivery of the relevant notice to the holder of the Global Instrument.18
    
    Partly Paid InstrumentsThe provisions relating to Partly Paid Instruments are not set out in this Prospectus, but will
be contained in the relevant Final Terms and so in the Global Instruments. While any
instalments of the subscription moneys due from the holder of Partly Paid Instruments are
overdue, no interest in a Global Instrument representing such Instruments may be exchanged for
an interest in a permanent Global Instrument or for Definitive Instruments (as the case may
be). If any Instrumentholder fails to
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pay any instalment due on any Partly Paid Instruments within the time specified, the relevant
Issuer may forfeit such Instruments and shall have no further obligation to their holder in
respect of them.
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USE OF PROCEEDS
  68




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DESCRIPTION OF NATIONAL GRID PLC
 Overview
 National Grid National Grid Group NGG Lattice
   Introduction
  Business overview
 Principal activities and markets
  
    
    Transmission;
    
    Gas distribution;
    
    Electricity distribution; and
    
    Non-regulated businesses.
  
    
    Transmission  U.K.;
    
    Transmission  U.S.;
    
    Gas Distribution  U.K.;
    
    Gas Distribution  U.S.;
    
    Electricity Distribution  U.S.; and
 69




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
    
    U.S. stranded cost recoveries.
   Transmission
  Transmission  U.K.
     Transmission  U.S.
  70




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Gas Distribution  U.K.
  Gas Distribution  U.S.
    Electricity Distribution  U.S.
  U.S. stranded cost recoveries
  Other activities
 Onstream Grain LNG
 71




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Regulatory environment
 SEC
   U.K. electricity and gas transmission
 Electricity Act
 Gas Act NGG
  GEMA Ofgem
 U.S. electricity transmission
 FERC
 NERC
 72




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U.K. gas distribution
   U.S. gas distribution
      U.S. stranded cost recoveries
  Other
  Regulatory developments
  U.K. electricity and gas transmission
  73




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(i)
    
    covering the external costs of its system operation roles to apply for one year from
1 April 2007; and(ii)
    
    the internal costs of system operation to apply for the five years from 1 April 2007.
  U.S. electricity transmission
  ISO
  U.K. gas distribution
  Electricity Distribution.
  74




---



##### 



Other
  Board of Directors
  Principal activities outsideName
    
    Title
    
    the National Grid GroupSir John Parker
    
    Chairman
(Non-Executive)
    
    Non-Executive Director of
Carnival plc and Carnival
Corporation (US), Joint
Non-Executive Chairman of
Mondi plc (UK) and Mondi Ltd
(S. Africa). Director of
Port and Free World Zone
(Dubai) and Senior
Non-Executive Director of
the Court of the Bank of
England, Member of the
Business Council for Britain
and Chancellor of the
University of Southampton.Steven Holliday
    
    Chief Executive
    
    Non-Executive Director of
Marks and Spencer Group plc.Steve Lucas
    
    Finance Director
    
    Non-Executive Director of
Compass Group PLC. Director
of American European
Business Association Ltd.Edward Astle
    
    Executive Director
    
    No appointments held outside
the National Grid Group.Mark Fairbairn
    
    Executive Director
    
    No appointments held outside
the National Grid Group.Nick Winser
    
    Executive Director
    
    No appointments held outside
the National Grid Group.Linda Adamany
    
    Non-Executive Director
    
    Senior Employee of BP plcJohn Allan
    
    Non-Executive Director
    
    Member of the management
board of Deutsche Post.
Director of Exel Limited and
Samsonite Corporation.
Member of the CBI
Presidents Committee,
Member of the International
Advisory Council of
 75




---



##### 



Principal activities outsideName
    
    Title
    
    the National Grid Groupthe Singapore Economic
Development Board and Member
of the University of
Edinburgh Campaign Board.Kenneth Harvey
    
    Non-Executive Director
(Senior Independent
Director)
    
    Non-Executive Chairman of
Pennon Group plc.Stephen Pettit
    
    Non-Executive Director
    
    Non-Executive Director of
Halma plc. and Chairman of
ROK Property Solutions plc.
Member of BT plcs Equality
of Access Board.Maria Richter
    
    Non-Executive Director
    
    Director of Pro Mujer
International, The Pantry
Inc. and The Vitec Group
plc.George Rose
    
    Non-Executive Director
    
    Director of BAe Systems plc,
Non-Executive Director of
SAAB AB and a member of the
Financial Reporting Review
Panel.
   Recent Developments
     76




---



##### 



DESCRIPTION OF NATIONAL GRID ELECTRICITY TRANSMISSION PLC
 Overview
 National Grid Electricity Transmission NGET
 Transmission Licence
  
    
    own electricity transmission assets in England and Wales (there are separate licensees
in respect of transmission assets in Scotland); and
    
    operate (since the introduction of the British Electricity Trading and Transmission
Arrangements (BETTA) on 1 April 2005) the electricity transmission system throughout
Great Britain (that is, including the transmission systems owned by the electricity
transmission licensees in Scotland).
  Business of NGET
 Transmission Business inter alia
  
    
    owns and maintains assets comprising 8,671 miles of high-voltage overhead lines, 420
miles of underground cables and 337 substations at 244 sites;
    
    develops the network to accommodate new connections and disconnections; and
    
    manages a programme of asset replacement and investment to ensure the long term
reliability of the system.
 GEMA
 77




---



##### 



GBSO
   Board of Directors
  Name
    
    Title
    
    Principal Activities outside NGET GroupNick Winser
    
    Chief Executive
    
    Executive Director of National Grid
plc. Director of National Grid USA and
National Grid Gas plc.Andy Chapman
    
    Finance Director
    
    Director of National Grid Gas plc and
Director of National Grid
Interconnectors Ltd.Malcolm Cooper
    
    Director
    
    Group Tax and Treasury Director of
National Grid plc, Director of British
Transco Capital Inc., British Transco
Finance Inc, National Grid Commercial
Holdings Ltd, National Grid Holdings
One plc, National Grid International
Limited, Lattice Group plc, National
Grid Insurance Company (Isle of Man)
Ltd and The Association of Corporate
Treasurers.Mark Fairbairn
    
    Director
    
    Executive Director of National Grid
plc, Director of National Grid Gas
Holdings plc and National Grid Gas
plc.Paul Whittaker
    
    Director
    
    UK Director of Regulation for National
Grid plc, and Director of National
Grid Gas plc.
  78




---



##### 



Regulation
   
    
    develop, operate and maintain an efficient, co-ordinated and economical system of
electricity transmission; and
    
    facilitate competition in the supply and generation of electricity.
   
    
    the need to secure that all reasonable demands for electricity are met; and
    
    the need to secure that licence holders are able to finance their activities.
   
    
    prohibiting NGET from carrying on activities other than those permitted by the
Transmission Licence;
    
    requiring that the business has sufficient managerial and financial resources available
to it to conduct its licensed activities;
    
    requiring NGET to maintain an investment grade issuer credit rating;
 79




---



##### 




    
    prohibiting NGET from creating indebtedness (except in limited circumstances) other
than on an arms length basis on normal commercial terms for one of its permitted
purposes;
    
    prohibiting the creation of cross-default obligations; and
    
    prohibiting NGET from giving or receiving any cross-subsidy to or from any other group
business.
  NETA
 Recent Developments
  (i)
    
    covering the external costs of its system operation role to apply for one year from 1
April 2007; and(ii)
    
    the internal costs of system operation to apply for the five years from 1 April 2007.
   80




---



##### 



UNITED KINGDOM TAXATION
 The following is a summary of the United Kingdom withholding taxation treatment at the
date hereof in relation to payments of principal and interest in respect of the Instruments.
The comments do not deal with other United Kingdom tax aspects of acquiring, holding or
disposing of Instruments. The comments relate only to the position of persons who are absolute
beneficial owners of the Instruments. Prospective Instrumentholders should be aware that the
particular terms of issue of any series of Instruments as specified in the relevant Final Terms
may affect the tax treatment of that and other series of Instruments. The following is a
general guide and should be treated with appropriate caution. Instrumentholders who are in any
doubt as to their tax position should consult their professional advisers. Instrumentholders
who may be liable to taxation in jurisdictions other than the United Kingdom in respect of
their acquisition, holding or disposal of the Instruments are particularly advised to consult
their professional advisers as to whether they are so liable (and if so under the laws of which
jurisdictions), since the following comments relate only to certain United Kingdom taxation
aspects of payments in respect of the Instruments. In particular, Instrumentholders should be
aware that they may be liable to taxation under the laws of other jurisdictions in relation to
payments in respect of the Instruments even if such payments may be made without withholding or
deduction for or on account of taxation under the laws of the United Kingdom.
 1
    
    U.K. Withholding Tax on U.K. Source InterestThe Instruments issued by an Issuer which carry a right to interest will constitute quoted
Eurobonds provided they are and continue to be listed on a recognised stock exchange within
the meaning of section 1005 of the Income Tax Act 2007. The London Stock Exchange is a
recognised stock exchange for these purposes. Section 1005 Income Tax Act 2007 provides that
securities will be treated as listed on the London Stock Exchange if they are admitted to the
Official List by the United Kingdom Listing Authority and are admitted to trading on the London
Stock Exchange. Whilst the Instruments are and continue to be quoted Eurobonds, payments of
interest on the Instruments may be made without withholding or deduction for or on account of
United Kingdom income tax.In all cases falling outside the exemption described above, interest on the Instruments may
fall to be paid under deduction of United Kingdom income tax at the savings rate (currently 20
per cent.) subject to such relief as may be available under the provisions of any applicable
double taxation treaty or to any other exemption which may apply. However, this withholding
will not apply if the relevant interest is paid on Instruments with a maturity date of less
than one year from the date of issue and which are not issued under arrangements the effect of
which is to render such Instruments part of a borrowing with a total term of a year or more.2
    
    Provision of InformationInstrumentholders should note that where any interest on Instruments or amounts due on
redemption of any Instruments which constitute deeply discounted securities as defined in
Chapter 8 of Part 4 of the Income Tax (Trading and Other Income) Act 2005 is paid to them (or
to any person acting on their behalf) by the relevant Issuer or any person in the United
Kingdom acting on behalf of such Issuer (a paying agent), or is received by any person in the
United Kingdom acting on behalf of the relevant Instrumentholder (other than solely by clearing
or arranging the clearing of a cheque) (a collecting agent), then the relevant Issuer, the
paying agent or the
 81




---



##### 



collecting agent (as the case may be) may, in certain cases, be required to
supply to HM Revenue and Customs
details of the payment and certain details relating to the Instrumentholder (including the
Instrumentholders name and address). These provisions will apply whether or not the interest
has been paid subject to withholding or deduction for or on account of United Kingdom income
tax and whether or not the Instrumentholder is resident in the United Kingdom for United
Kingdom taxation purposes. Where the Instrumentholder is not so resident, the details provided
to HM Revenue and Customs may, in certain cases, be passed by HM Revenue and Customs to the tax
authorities of the jurisdiction in which the Instrumentholder is resident for taxation
purposes. However, in relation to amounts payable on the redemption of such Instruments HM
Revenue & Customs published practice* indicates that HM Revenue & Customs will not
exercise its power to obtain information where such amounts are paid or received on or before 5
April 2008.
 3
    
    Other Rules Relating to United Kingdom Withholding Tax
 
    
    Instruments may be issued at an issue price of less than 100 per cent. of their
principal amount. Any discount element on any such Instruments will not generally be
subject to any United Kingdom withholding tax pursuant to the provisions mentioned above,
but may be subject to reporting requirements as outlined above.
    
    Where Instruments are to be, or may fall to be, redeemed at a premium, as opposed to
being issued at a discount, then any such element of premium may constitute a payment of
interest. Payments of interest are subject to United Kingdom withholding tax and
reporting requirements as outlined above.
    
    Where interest has been paid under deduction of United Kingdom income tax,
Instrumentholders who are not resident in the United Kingdom may be able to recover all or
part of the tax deducted if there is an appropriate provision in any applicable double
taxation treaty and an appropriate claim is submitted to HM Revenue & Customs by the
recipient of the interest.
    
    The references to interest above mean interest as understood in United Kingdom tax
law. The statements above do not take any account of any different definitions of
interest or principal which may prevail under any other law or which may be created by
the terms and conditions of the Instruments or any related documentation.
    
    The above description of the United Kingdom withholding tax position assumes that there
will be no substitution of an Issuer and does not consider the tax consequences of any
such substitution.
 4
    
    EU Savings DirectiveUnder EU Council Directive 2003/48/EC on the taxation of savings income, each Member State is
required to provide to the tax authorities of another Member State details of payments of
interest or other similar income paid by a person within its jurisdiction to, or collected by
such a person for, an individual or to certain other persons resident in that other Member
State; however, for a transitional period, Austria, Belgium and Luxembourg may instead apply a
withholding system in relation to such payments, deducting tax at rates rising over time to 35
per cent. The transitional period is to terminate at the end of the first full fiscal year
following agreement by certain non-EU countries to the exchange of information relating to such
payments.
 
 *
    
    See paragraph 4.5 of HM Revenue & Customs Section 18 Guidance Notes.(http://www.hmrc.gov.uk/esd-guidance/s18-guidance-note-07.pdf). 82




---



##### 



83




---



##### 



PLAN OF DISTRIBUTION
 Summary of Agreement
 Dealer Agreement
 Selling Restrictions
 United States
 Securities Act
    Public Offer Selling Restriction under the Prospectus Directive
 Relevant Member State Relevant Implementation Date
 84




---



##### 



(a)
    
    in the final terms in relation to the Instruments, which specify that an offer of
those Instruments is being made other than pursuant to Article 3(2) of the Prospectus
Directive in that Relevant Member State (a Non-Exempt Offer), in the period beginning on
the date of publication of a prospectus in relation to those Instruments which has been
approved by the competent authority in that Relevant Member State or, where appropriate,
approved in another Relevant Member State and notified to the competent authority in that
Relevant Member State, provided that any such prospectus has subsequently been completed
by the final terms contemplating such Non-exempt offer, in accordance with the Prospectus
Directive, and ending on the date specified in such prospectus in final terms, as
applicable;(b)
    
    at any time to legal entities which are authorised or regulated to operate in the
financial markets or, if not so authorised or regulated, whose corporate purpose is solely
to invest in securities;(c)
    
    at any time to any legal entity which has two or more of (1) an average of at least
250 employees during the last financial year; (2) a total balance sheet of more than
43,000,000 and (3) an annual net turnover of more than 50,000,000, as shown in its last
annual or consolidated accounts;(d)
    
    at any time to fewer than 100 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive) subject to obtaining the prior consent
of the relevant Dealer or Dealers nominated by the Issuer for any such offer;(e)
    
    at any time if the denomination per Instrument being offered amounts to at least
50,000; or(f)
    
    at any time in any other circumstances falling within Article 3(2) of the Prospectus
Directive(g)
    
    provided that no such offer of Instruments referred to in (a) to (f) above shall
require the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the
Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus
Directive..
 offer of Instruments to the public
 United Kingdom
  (a)
    
    in relation to any Instruments which have a maturity of less than one year, (i) it is
a person whose ordinary activities involve it in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of its business and (ii) it has
not offered or sold and will not offer or sell any Instruments other than to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or as agent) for the purposes of their businesses or who it is
reasonable to expect
 85




---



##### 



will acquire, hold, manage or dispose of investments (as principal or
agent) for the purposes
of their businesses where the issue of the Instruments would otherwise constitute a
contravention of Section 19 of the FSMA by the relevant Issuer;(b)
    
    it has only communicated or caused to be communicated and will only communicate or
cause to be communicated an invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the FSMA) received by it in connection with the issue
or sale of any Instruments in circumstances in which Section 21(1) of the FSMA does not
apply to the relevant Issuer; and(c)
    
    it has complied and will comply with all applicable provisions of the FSMA with
respect to anything done by it in relation to any Instruments in, from or otherwise
involving the United Kingdom.
 Japan
 Securities and Exchange Law resident of
Japan
 General
    86




---



##### 



FORM OF FINAL TERMS
 The Final Terms in respect of each Tranche of Instruments will be substantially in the
following form, duly supplemented (if necessary), amended (if necessary) and completed to reflect
the particular terms of the relevant Instruments and their issue. Text in this section appearing in
italics does not form part of the form of the Final Terms but denotes directions for completing the
Final Terms.
 Final Terms dated []
 [NATIONAL GRID PLC/NATIONAL GRID ELECTRICITY TRANSMISSION PLC] *
 PART A  CONTRACTUAL TERMS
  Prospectus Directive
 The following alternative language applies if the first tranche of an issue which is being
increased was issued under a Prospectus with an earlier date.
 Conditions  Prospectus Directive    
 [Include whichever of the following apply or specify as Not Applicable (N/A). Note that the
numbering should remain as set out below, even if Not Applicable is indicated for individual
paragraphs or sub-paragraphs. Italics denote guidance for completing the Final Terms.]
 [When completing final terms or adding any other final terms or information consideration
should be given as to whether such terms or information constitute significant new factors and
consequently trigger the need for a supplement to the Prospectus under Article 16 of the Prospectus
Directive.]
 
 *
    
    Delete as applicable. 87




---



##### 



1.
    
    (i)
    
    Issuer:
    
    [National Grid plc/National Grid Electricity Transmission plc]2.
    
    (i)
    
    Series Number:
    
    [         ](ii)
    
    Tranche Number:
    
    [         ](If fungible with
an existing
Series, details
of that Series,
including the
date on which the
Instruments
become
fungible).]3.
    
    Specified Currency or Currencies:
    
    [         ]4.
    
    Aggregate Nominal Amount:
    
    [         ][(i)]
    
    Series:
    
    [         ][(ii)
    
    Tranche:
    
    [         ]]5.
    
    Issue Price:
    
    [         ] per cent of the Aggregate Nominal Amount [plus accrued interest from [insert date] ( if applicable)]6.
    
    (i)
    
    Specified
Denominations:
    
    [         ]
[         ][Note  where multiple denominations above 50,000 (or equivalent) are being used the following sample
wording should be followed:[50,000] and integral multiples of [1,000] in excess thereof [up to and including [99,000]. No
instruments in definitive form will be issued with a denomination above [99,000]].](ii)
    
    Calculation
Amount:
    
    [If only one Specified Denomination, insert the Specified Denomination. If more than one Specified
Denomination, insert the highest common factor] [Note: There must be a common factor in the case of two
or more Specified Denominations]7.
    
    [(i)]
    
    Issue Date:
    
    [         ][(ii)]
    
    Interest
Commencement Date
    
    [Specify/Issue Date/Not Applicable]8.
    
    Maturity Date:
    
    [specify date or (for Floating Rate
Instruments) Interest Payment Date falling
in or nearest to the relevant month and
year]
 
 
    
    Delete as applicable
    
    Instruments which have a maturity of less than one year
must have a minimum denomination of £100,000 (or it equivalent in other
currencies) 88




---



##### 



9.
    
    Interest Basis:
    
    [[] per cent. Fixed Rate][[specify reference rate] +/- [] per cent. Floating Rate][Zero Coupon][Index Linked Interest][Other (specify)](further particulars specified below)10.
    
    Redemption/Payment Basis:
    
    [Redemption at par][Index Linked Redemption][Dual Currency][Partly Paid][Instalment][Other (specify)][N.B. If the Final Redemption
Amount is less than 100 per cent.
of the nominal value, the
Instruments will constitute
derivative securities for the
purposes of the Prospectus
Directive and the requirements of
Annex XII to the Prospectus
Directive Regulation No.809/2004
will apply and the Issuer will
prepare and publish a supplement
to the Prospectus.]11.
    
    Change of Interest or
Redemption/Payment Basis:
    
    [Specify details of any provision
for convertibility of Instruments
into another interest or
redemption/ payment basis]12.
    
    Put/Call Options:§
    
    [Investor Put][Issuer Call][(further particulars specified below)]13.
    
    (i)
    
    Status of the Instruments:
    
    Senior(ii)
    
    Date [Board] approval for
issuance of Instruments
obtained:
    
    [         ] [and [         ], respectively]](N.B Only relevant where Board (or similar) authorisation is required for the particular tranche of Instruments)]14.
    
    Method of distribution:
    
    [Syndicated/Non-syndicated]PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE15.
    
    Fixed Rate Instrument Provisions
    
    [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)(i)
    
    Rate[(s)] of Interest:
    
    [       ] per cent. per annum [payable [annually/semi-annually/quarterly/monthly] in arrear](ii)
    
    Interest Payment Date(s):
    
    [         ] in each year(iii)
    
    Fixed Coupon Amount[(s)]:
    
    [  ] per Calculation Amount
 
 §
    
    If Instruments are issued by National Grid, only insert
any additional put/call option other than the National Grid Restructuring Put
contained in Condition 5.6 and the call option contained in Condition 5.5.1.
This does not include the National Grid or NGET Restructuring Put in Condition
5.6. 89




---



##### 



(iv)
    
    Broken Amount(s):
    
    [  ] per Calculation Amount, payable on the Interest Payment Date falling [in/on] [  ](v)
    
    Day Count Fraction
(Condition 3.2.5):
    
    [30/360 / Actual/Actual ([ICMA]/ISDA)/other](vi)
    
    Determination Dates
(Condition 3.2.5):
    
    [       ] in each year (insert regular interest payment dates, ignoring issue date or maturity date in the case of a
long or short first or last coupon. N.B. only relevant where Day Count Fraction is Actual/Actual ([ICMA]))(vii)
    
    Other terms relating to
the method of calculating
interest for Fixed Rate
Instruments:
    
    [Not Applicable/give details]16.
    
    Floating Rate Instrument Provisions
    
    [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)(i)
    
    Interest Period(s):
    
    [       ](ii)
    
    Specified Interest Payment
Dates:
    
    [       ](iii)
    
    Business Day Convention:
    
    [Floating Rate Convention/ Following Business Day Convention/ Modified Following Business Day Convention/Preceding
Business Day Convention/ other (give details)](iv)
    
    First Interest Payment
Date:
    
    [       ](v)
    
    Business Centre(s)
(Condition 3.2.5):
    
    [       ](vi)
    
    Manner in which the
Rate(s) of Interest is/are to
be determined:
    
    [Screen Rate
Determination/ISDA
Determination/other (give details)](vii)
    
    Interest Period Date(s):
    
    (Not Applicable unless different from Interest Payment Date)(viii)
    
    Party responsible for
calculating the Rate(s) of
Interest and Interest Amount(s)
(if not the Calculation Agent):
    
    [         ](ix)
    
    Screen Rate Determination
(Condition 3.2.3(b)):  Reference Rate:
    
    [         ]  Interest
Determination Date(s):
    
    [[         ][TARGET] Business Days in [specify city] for [specify currency] prior to [the first day in each
Interest Accrual
 90




---



##### 



Period/each Interest Payment Date]]  Relevant Screen Page:
    
    [         ]-  Reference Banks (if
Primary Source is
Reference Banks):
    
    [Specify five](x)
    
    ISDA Determination
(Condition 3.2.3(a)):  Floating Rate Option:
    
    [         ]  Designated Maturity:
    
    [         ]  Reset Date:
    
    [         ]-   [ISDA Definitions:
(if different from
those set out in the
Conditions)
    
    [2000/2006]](xi)
    
    Margin(s):
    
    [+/-][   ] per cent. per annum(xii)
    
    Minimum Rate of Interest:
    
    [      ] per cent. per annum(xiii)
    
    Maximum Rate of Interest:
    
    [      ] per cent. per annum(xiv)
    
    Day Count Fraction
(Condition 3.2.5):
    
    [         ](xv)
    
    Fall back provisions,
rounding provisions,
denominator and any other terms
relating to the method of
calculating interest on
Floating Rate Instruments, if
different from those set out in
the Conditions:
    
    [         ]17.
    
    Zero Coupon Instrument Provisions
    
    [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)(i)
    
    Amortisation Yield
(Condition 5.4):
    
    [       ] per cent. per annum(ii)
    
    Day Count Fraction
(Condition 3.2.5):
    
    [         ](iii)
    
    Any other formula/basis
of determining amount payable:
    
    [         ]
 91




---



##### 



18.
    
    Index-Linked Interest Instrument
    
    [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)(i)
    
    Index/Formula/other
variable:
    
    [give or annex details](ii)
    
    Interest Rate:
    
    [         ](iii)
    
    Party responsible for
calculating the Rate(s) of
Interest, Interest Amount and
Redemption Amount(s) (if not
the Calculation Agent):
    
    [         ](iv)
    
    Provisions for
determining Coupon calculated
by reference to Index and/or
Formula and/or other variable:
    
    [         ](v)
    
    Interest Determination
Date(s)
    
    [         ](vi)
    
    Provisions for
determining Coupon where
calculation by reference to
Index and/or Formula is
impossible or impracticable or
otherwise disrupted
    
    [         ](vii)
    
    Interest Payment Dates:
    
    [         ](viii)
    
    First Interest Payment
Date:
    
    [         ](ix)
    
    Interest Period(s):
    
    [         ](x)
    
    Business Day Convention:
    
    [Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day
Convention/other (give details)](xi)
    
    Minimum Indexation Factor:
    
    [Not Applicable/specify](xii)
    
    Business Centre(s)
(Condition 3.2.5):
    
    [         ](xiii)
    
    Maximum Indexation
Factor:
    
    [Not Applicable/specify](xiv)
    
    Limited Indexation
    
    [         ] per cent per annum
 92




---



##### 



Month(s) or Period for
calculation of Limited
Indexation Factor:(xv)
    
    Base Index Figure:
    
    [         ](xvi)
    
    Day Count Fraction
(Condition 3.2.5):
    
    [         ](xvii)
    
    Index or Index
Figure (Condition 4.1):
    
    Sub-paragraph [(i)/(ii)/(iii)] of the definition of Index or Index Figure as set out in Condition 4.1 shall apply(xviii)
    
    Reference Gilt:
    
    [  ]19.
    
    Dual Currency Instrument
Provisions
    
    [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)(i)
    
    Rate of Exchange/method
of calculating Rate of
Exchange:
    
    [give details](ii)
    
    Calculation Agent, if any,
responsible for calculating
the principal and/or
interest due:
    
    [         ](iii)
    
    Provisions applicable
where calculation by reference
to Rate of Exchange impossible
or impracticable:
    
    [         ](iv)
    
    Person at whose option
Specified Currency(ies) is/are
payable:
    
    [         ](v)
    
    Day Count Fraction
(Condition 3.2.5):
    
    [         ]PROVISIONS RELATING TO REDEMPTION20.
    
    Residual Holding Call Option
    
    [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)(i)
    
    Residual Holding
Percentage:
    
    [  ] per cent.(ii)
    
    Party responsible for
calculating the Residual
Holding Redemption Amount (if
not the Calculation Agent):
    
    [         ]
 93




---



##### 



(iii)
    
    Benchmark Security:
    
    [Specify Government Security/swap benchmark](iv)
    
    Benchmark Spread:
    
    [         ] per cent. per annum(v)
    
    Benchmark Day Count
Fraction:
    
    [         ][(vi)
    
    Other relevant
provisions:
    
    [         ]]21.
    
    Call Option**
    
    [Applicable/Not Applicable]
(If not applicable, delete the remaining sub-paragraphs of this paragraph)(i)
    
    Optional Redemption
Date(s):
    
    [         ](ii)
    
    Optional Redemption
Amount(s) of each Instrument
and method, if any, of
calculation of such amount(s):
    
    [         ] per Calculation Amount(iii)
    
    If redeemable in part:(a) Minimum nominal
amount to be redeemed:
    
    [         ] per Calculation Amount(b) Maximum nominal
amount to be redeemed:
    
    [         ] per Calculation Amount(iv)
    
    Option Exercise Date(s):
    
    [         ](v)
    
    Notice period (if other than as set out in the
Conditions)
    
    [         ]22.
    
    Put Option
    
    [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)(i)
    
    Optional Redemption
Date(s):
    
    [         ](ii)
    
    Optional Redemption
Amount(s) of each Instrument
and method, if any, of
calculation of such amount(s):
    
    [         ] per Calculation Amount(iii)
    
    Option Exercise Date(s):
    
    [         ]
 
 **
    
    This does not include the tax call in Condition 5.2 or
the call option contained in Condition 5.5.1
    
    This does not include the National Grid or NGET
Restructuring Put in Condition 5.6. 94




---



##### 



(iii)
    
    Notice period (if other
than as set out in the
Conditions)
    
    [         ]23.
    
    NGET Restructuring Put Option:
    
    [Applicable/Not Applicable]24.
    
    Final Redemption Amount of each
Instrument:
    
    [         ] per Calculation Amount(i)
    
    Index/Formula:
    
    [give or annex details](ii)
    
    Calculation Agent
responsible for calculating
the Final Redemption Amount:
    
    [         ](iii)
    
    Provisions for
determining Final Redemption
Amount where calculated by
reference to Index and/or
Formula and/or other variable:
    
    [give or annex details](iv)
    
    Determination Date(s):
    
    [         ](v)
    
    Provisions for determining
Final Redemption Amount where
calculation by reference to
Index and/or Formula and/or
other variable is impossible
or impracticable or otherwise
disrupted:
    
    [         ](vi)
    
    Payment Date:(vii)
    
    Minimum Final Redemption Amount:
    
    [         ] per Calculation Amount(viii)
    
    Maximum Final
Redemption Amount:
    
    [         ] per Calculation Amount25.
    
    Early Redemption Amount(i)
    
    Early Redemption Amount(s)
of each Instrument payable on
redemption for taxation
reasons (Condition 5.2) or on
Event of Default (Condition 9)
or other early
    
    [         ]
 95




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##### 



redemption
and/or the method of
calculating the same (if
required or if different from
that set out in the
Conditions):(ii)
    
    Redemption for taxation
reasons permitted on days
other than Interest Payment
Dates (Condition 5.2)
    
    [Yes/No](iii)
    
    Unmatured Coupons to
become void upon early
redemption (Condition 6.5)
    
    [Yes/No/Not Applicable]GENERAL PROVISIONS APPLICABLE TO THE INSTRUMENTS26.
    
    Form of Instruments:
    
    Bearer Instruments:[temporary Global Instrument
exchangeable for a permanent Global
Instrument which is exchangeable for
Definitive Instruments in the limited
circumstances specified in the
permanent Global Instrument][temporary Global Instrument
exchangeable for Definitive
Instruments in the limited
circumstances specified in the
temporary Global Instrument][permanent Global Instrument
exchangeable for Definitive
Instruments in the limited
circumstances specified in the
permanent Global Instrument]27.
    
    New Global Note
    
    [Yes] [No]28.
    
    Financial Centre(s) or other
special provisions relating to
Payment Dates (Condition 6.6):
    
    [Not Applicable/give details. Note
that this item relates to the date
and place of payment, and not
interest period end dates, to which
items 16(iv) and 18(vii) relate]29.
    
    Applicable TEFRA exemption:
    
    [C Rules/D Rules/Not Applicable]30.
    
    Talons for future Coupons or
Receipts to be attached to
Definitive Instruments
(and dates
on which such Talons mature):
    
    [Yes/No. If yes, give details]31.
    
    Details relating to Partly Paid
Instruments: amount of each
payment
comprising the Issue Price
and date
on which each payment is to
be made
and
    
    [Not Applicable/give details]
 
 
    
    You should only elect yes opposite New Global Note
if you have elected yes to the Section in Part B under the heading
Operational Information entitled Intended to be held in a manner which would
allow Eurosystem eligibility. 96




---



##### 



consequences
(if any) of failure to pay,
 including
any right
of the Issuer
to forfeit the
Instruments and interest
due on
late payment:32.
    Details relating to Instalment
Instruments:
    
    [Not Applicable/give details]-  Amount of each
instalment:
    
    [         ]-  Date on which each
payment is to be made:
    
    [         ]-  Maximum Instalment
Amount:
    
    [         ]-  Minimum Instalment
Amount:
    
    [         ]33.
    Redenomination,
renominalisation and
reconventioning provisions:
    
    [Not Applicable/ give details]34.
    Consolidation provisions:
    
    [Not Applicable/ give details]35.
    Other final terms:
    
    [Not Applicable/give details](When adding any other final terms
consideration should be given as to
whether such terms constitute a
significant new factor and
consequently trigger the need for a
supplement to the Prospectus under
Article 16 of the Prospectus
Directive.)DISTRIBUTION36.



    (i)   If syndicated, names of Managers:
    
    [Not Applicable/give names](ii)  Stabilising Manager(s) (if any):
    
    [Not Applicable/give name]37.
    If non-syndicated,
name of Dealer:
    
    [Not Applicable/give name]38.
    Additional selling
restrictions:
    
    [Not  Applicable/give details]
 [PURPOSE OF FINAL TERMS
  97




---



##### 



RESPONSIBILITY
   
 Signed on behalf of the Issuer:By:Duly authorised 98




---



##### 



PART
B  OTHER INFORMATION *
 1.
    
    LISTING(i)      Listing:
    
    [London/other (specify)/None](ii)     Admission to
trading:
    
    [Application has been made for the Instruments
to be admitted to trading on the London Stock
Exchange plcs Gilt-Edged and Fixed Interest
Market with effect from [     ].] [Not
Applicable.](iii)     Estimate of total expenses
related to admission to trading:
    
    [     ]2.
    
    RATINGSRatings:
    
    The Instruments to be issued have been rated:[S & P: [     ]][Moodys: [     ]][[Fitch: [     ]][[Other]: [     ]](The above disclosure should reflect the rating allocated to
Instruments of the type being issued under the Programme
generally or, where the issue has been specifically rated, that
rating.)3.
    
    NOTIFICATIONThe Financial Services Authority
[has been requested to provide/has provided  include first
alternative for an issue which is contemporaneous with the update of the Programme and the
second alternative for subsequent issues] the [include names of competent authorities of host
Member States] with a certificate of approval attesting that the Prospectus has been drawn up
in accordance with the Prospectus Directive.4.
    
    [INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUENeed to include a description of any interest, including conflicting ones, that is material to the
issue/offer, detailing the persons involved and the nature of the interest. May be satisfied
by the inclusion of the following statement:So far as the Issuer is aware, no person involved in the offer of the Instruments has an
interest material to the offer.]
 
 *
    
    If an issue of Instruments is (i) NOT admitted to
trading on a regulated market within the European Economic Area and (ii) only
offered in the European Economic Area in circumstances where a prospectus is
not required to be published under the Prospectus Directive the Issuer may
elect to amend and/or delete certain of the above paragraphs of Part B. 99




---



##### 



[(When adding any other description, consideration should be given as to whether such
matters described constitute significant new factors and consequently trigger the need for
a supplement to the Prospectus under Article 16 of the Prospectus Directive.)][5.
    
    REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES[(i)Reasons for the offer
    
    [     ](See [Use of Proceeds] wording in
Prospectus  if reasons for offer
different fromgeneral corporate purposes
will need to include those reasons
here.)][(ii)] Estimated net proceeds:
    
    [     ](If proceeds are intended for more than
one use will need to split out and
present in order of priority. If proceeds
insufficient to fund all proposed uses
state amount and sources of other
funding.)[(iii) Estimated total expenses:
    
    [     ] [Include breakdown of expenses.]([If the Instruments are derivative
securities for which Annex XII of the
Prospectus Directive Regulation applies
it is] only necessary to include
disclosure of net proceeds and total
expenses at (ii) and (iii) above where
disclosure is included at (i)
above.)]*6.
    

[Fixed Rate Instruments only YIELDIndication of yield:
    
    [     ]The yield is calculated at the Issue Date on the basis of the Issue Price. It
is not an indication of future yield. ]7. [Index-Linked Instruments only PERFORMANCE OF INDEX/FORMULA/OTHER VARIABLE AND OTHER
INFORMATION CONCERNING THE UNDERLYINGNeed to include details of where past and future performance and volatility of the
index/formula/other variable can be obtained. Where the underlying is an index need to include
the name of the index and a description if composed by the Issuer and if the index is not
composed by the Issuer need to include details of where the information about the index can be
obtained. Where the underlying is not an index need to include equivalent information. Include
other information concerning the underlying required by Paragraph 4.2 of Annex XII of the
Prospectus Directive Regulation][(When completing this paragraph, consideration should be given as to whether such matters
described constitute significant new factors and consequently trigger the need for a
supplement to the Prospectus under Article 16 of the Prospectus Directive.)]
 
 *
    
    Required for derivative securities to which Annex XII to
the Prospectus Directive Regulation applies. 100




---



##### 



The Issuer [intends to provide post-issuance information [specify what information will be reported
and where it can be obtained]] [does not intend to provide post-issuance information]*.8.
    
    [Dual
Currency Instruments only PERFORMANCE OF RATE[S] OF EXCHANGENeed to include details of where past and future performance and volatility of the relevant
rate[s] can be obtained.]*[(When completing this paragraph, consideration should be given as to whether such matters
described constitute significant new factors and consequently trigger the need for a
supplement to the Prospectus under Article 16 of the Prospectus Directive.)]9.
    
    OPERATIONAL INFORMATIONISIN Code:
    
    [     ]Common Code:
    
    [     ]Any clearing
system(s) other
than Euroclear Bank
S.A./N.V. and
Clearstream Banking
société anonyme
and the relevant
identification
number(s):
    
    [Not Applicable/give name(s) and number(s) [and address(es)]]Delivery:
    
    Delivery [against/free of] paymentNames and addresses of additional
Paying Agent(s) (if any):
    
    [     ]Intended to be held in a manner
which would allow Eurosystem
eligibility:
    
    [Yes][No] [Note that the designation
Yes simply means that the
Instruments are intended upon issue
to be deposited with Euroclear or
Clearstream, Luxembourg as Common
Safekeeper and does not necessarily
mean that the Instruments will be
recognised as eligible collateral
for Eurosystem monetary policy and
intra-day credit operations by the
Eurosystem either upon issue or at
any or all times during their life.
Such recognition will depend upon
satisfaction of the Eurosystem
eligibility criteria.][Include this
text if Yes selected in which case
the Instruments must be issued in
NGN form]10
    
    GENERALThe aggregate principal amount of
Instruments issued has been translated into
Euro at the rate of [], producing a sum of
(for
    
    [Not
Applicable/[[Euro]][]]
 
 *
    
    Required for derivative securities to which Annex XII
to the Prospectus Directive Regulation applies. 101




---



##### 



Instruments not denominated in Euro):Additional steps that may only be taken
following approval by an Extraordinary
Resolution in accordance with Condition
11.1:
    
    [Not Applicable/give details]
 102




---



##### 



GENERAL INFORMATION
 1.
    
    The admission of the Programme to listing on the Official List of the U.K. Listing Authority and
to trading on the Market is expected to take effect on or about 7 August 2007. The
listing of the Instruments on the Official List will be expressed as a percentage of their
nominal amount (exclusive of accrued interest). Any Tranche of Instruments intended to be
admitted to listing on the Official List of the U.K. Listing Authority and admitted to
trading on the Market will be so admitted to listing and trading upon submission to the
U.K. Listing Authority and the Market (in accordance with their rules and procedures) of
the relevant Final Terms and any other information required by the U.K. Listing Authority
and the Market, subject in each case to the issue of the relevant Instruments. Prior to
official listing, dealings will be permitted by the Market in accordance with its rules.
Transactions will normally be effected for delivery on the third working day in London
after the day of the transaction.However, Instruments may be issued pursuant to the Programme which will not be admitted
to listing and/or trading by the U.K. Listing Authority or the Market or any other
listing authority, stock exchange and/or quotation system or which will be admitted to
listing, trading and/or quotation by such listing authority, stock exchange and/or
quotation system as the relevant Issuer and the relevant Dealer(s) may agree.2.
    
    National Grid has obtained all necessary consents, approvals and authorisations in the
United Kingdom in connection with the issue and performance of the Instruments.3.
    
    NGET has obtained all necessary consents, approvals and authorisations in the United
Kingdom in connection with the issue and performance of the Instruments.4.
    
    The establishment of the Programme was authorised by a resolution of the Finance
Committee of the Board of Directors of National Grid (which was established by a
resolution of the Board of Directors of National Grid passed on 21 October 2002) passed on
23 October 2002.5.
    
    The establishment of the Programme was authorised by resolutions of the Finance
Committee of the Board of Directors of NGET (which was established by a resolution of the
Board of Directors of NGET passed on 19 November 2002) passed on 19 November 2002.6.
    
    The update of the Programme was authorised by a resolution of the Finance Committee
of the Board of Directors of National Grid (which was established by a resolution of the
Board of Directors of National Grid passed on 21 October 2002) passed on 28 October 2004.
The increase of the Programme limit to 15,000,000,000 was authorised by a resolution of
the Finance Committee of the Board of Directors of National Grid passed on 23 April 2007.7.
    
    The update of the Programme was authorised by a resolution of the Finance Committee
of the Board of Directors of NGET (which was established by a resolution of the Board of
Directors of NGET passed on 19 November 2002) passed on 28 October 2004. The increase of
the Programme limit to 15,000,000,000 was authorised by a resolution of the Finance
Committee of the Board of Directors of NGET passed on 23 April 2007.8.
    
    The Instruments have been accepted for clearance through the Euroclear and
Clearstream, Luxembourg. The appropriate common code and the International Securities
Identification Number in relation to the Instruments of each Series will be specified in
the Final Terms relating thereto. The relevant Final Terms shall specify any other
clearing system(s) as shall
 103




---



##### 



have accepted the relevant Instruments for clearance together with any further
appropriate information.9.
    
    Neither National Grid nor any of it subsidiaries is or has been involved in any governmental,
legal or arbitration proceedings (including any such proceedings which are pending or
threatened of which National Grid is aware) during the 12 months preceding the date of
this Prospectus which may have, or have in such period had, significant effects on the
financial position or profitability of National Grid or of the National Grid Group.10.
    
    Neither NGET nor any of its subsidiaries is or has been involved in any governmental, legal
or arbitration proceedings (including any such proceedings which are pending or
threatened of which NGET is aware) during the 12 months preceding the date of this
Prospectus which may have, or have in such period had, significant effects on the
financial position or profitability of NGET or of the NGET Group.11.
    
    Save as disclosed in the
section entitled Description of National Grid plc - Recent
Developments on page 76, there has been no significant change in the financial or trading
position of National Grid or the National Grid Group since 31 March 2007 and no material
adverse change in the prospects of National Grid since 31 March 2007.12.
    
    Save as disclosed in the section entitled Description of National Grid Electricity
Transmission plc - Recent Developments on page 80, there has been no significant change
in the financial or trading position of NGET or the NGET Group since 31 March 2007 and no
material adverse change in the prospects of NGET since 31 March 2007.13.
    
    Pricewaterhouse Coopers LLP, Chartered Accountants and Registered Auditors of
1 Embankment Place, London, WC2N 6RH (members of the Institute of Chartered Accountants
in England and Wales), have audited, and rendered unqualified audit reports on, the
consolidated financial statements prepared under IFRS of National Grid for the two years
ended 31 March 2007.14.
    
    Pricewaterhouse Coopers LLP, Chartered Accountants and Registered Auditors of
1 Embankment Place, London, WC2N 6RH (members of the Institute of Chartered Accountants
in England and Wales), have audited, and rendered unqualified audit reports on, the
consolidated financial statements prepared under IFRS of NGET for the two years ended 31
March 2007.15.
    
    Each Instrument, Receipt, Coupon and Talon will bear the following legend: Any United
States person who holds this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code.16.
    
    For so long as the Programme remains in effect or any Instruments are outstanding, copies
of the following documents may be inspected during usual business hours on any weekday
(Saturdays, Sundays and public holidays excepted), at the registered offices of the
relevant Issuer and the specified office in London of the Issuing and Paying Agent:
 (a)
    
    a copy of this Prospectus together with any supplement to this Prospectus
or further Prospectus;(b)
    
    the Memorandum and Articles of Association of National Grid;(c)
    
    the Memorandum and Articles of Association of NGET;
 104




---



##### 



(d)
    
    the audited consolidated accounts of National Grid for the financial
years ended 31 March 2006 and 31 March 2007, respectively, together with the audit
report thereon and any consolidated interim accounts of National Grid published
subsequently to such accounts; and(e)
    
    the audited consolidated accounts of NGET for the two financial years
ended 31 March 2006 and 31 March 2007, respectively, together with the audit report
thereon.
 www.londonstockexchange.com/en-gb/pricesnews/marketnews
 105




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##### 



REGISTERED OFFICE OF EACH OF THE ISSUERS
 
 THE ARRANGER
 HSBC Bank plc
 THE DEALERS
 ABN AMRO Bank N.V.
250 Bishopsgate 
London EC2M 4AA
    
    Banc of America Securities Limited
5 Canada Square
London E14 5AQBarclays Bank PLC
5 The North Colonnade 
Canary Wharf 
London E14 4BB
    
    Citigroup Global Markets Limited
Citigroup Centre
Canada Square
Canary Wharf
London E14 5LBDeutsche Bank AG, London Branch
Winchester House 
1 Great Winchester Street 
London EC2N 2DB
    
    Dresdner Bank AG London Branch
30 Gresham Street
London EC2P 2XYHSBC Bank plc
8 Canada Square 
London E14 5HQ
    
    National Australia Bank Limited
88 Wood Street
London EC2V 7QQRoyal Bank of Canada Europe Limited
71 Queen Victoria Street 
London EC4V 4DE
    
    The Royal Bank of Scotland plc
135 Bishopsgate
London EC2M 3UR
 Mitsubishi UFJ Securities International plc
 LEGAL ADVISERS
 To the Dealers and to the Trustee
 Clifford Chance LLP
 To the Issuers
 Linklaters LLP
 106




---



##### 



THE TRUSTEE
 The Law Debenture Trust Corporation p.l.c.
 ISSUING AND PAYING AGENT
 The Bank of New York
 PAYING AGENT
 Kredietbank S.A. Luxembourgeoise
 REGISTERED AUDITORS TO EACH OF THE ISSUERS
 PricewaterhouseCoopers LLP
 107