Revenue at electricity distributor Northern Powergrid has topped £1bn on the back of new gas and renewables activity, as well as acquisitions in Australia.
Newcastle-based Northern Powergrid group, which distributes power to millions of customers in the North East and Yorkshire, reported revenues of £1.14bn in 2022, a rise of £230.5m. Operating profits were boosted by more than £40m to £422.6m as the business pointed to higher smart metering payments, high contract volumes, gas coming on stream and revenue attached to its £143.9m purchase of two solar farms in New South Wales, Australia.
The firm, a subsidiary of US conglomerate Berkshire Hathaway, is responsible for 17,000 miles of overhead wires, 43,400 miles of underground cables and more than 800 substations which deliver electricity from the national grid. During the year it said investment in its network - which included refurbishment of transformers, rebuilding of overhead lines, and changing of deteriorated poles, among other things - was £442.9m, down on the previous year's £455.8m.
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The 2,500-strong firm also said it continued a rollout of an automatic power restoration system and network monitoring sensors that can detect developing faults so that they can be managed. Around £13.6m was also spent on flood mitigation and defence works and £2.8m into research and development.
Northern Powergrid is regulated by Ofgem which requires it to operate within a price control framework that sets an upper limit on the amount it can charge for use of its networks. Those charges typically account for about 15% of homeowners bills.
Earlier this year the firm was granted permission by the Competition and Markets Authority to challenge decisions made by the Gas and Electricity Authority (GEMA), which governs Ofgem, over decisions made about price controls between 2023 to 2028. Northern Powergrid said the decisions contain "errors of fact" that mean it is unable to invest properly in the network. Hearings are currently taking place and a decision on the issue is expected later this year.
In accounts filed at Companies House for 2022, Northern Powergrid Holdings Company said it had benefited from a higher gross margin of £112.5m and lower bad debts of £10.3m, partially offset by depreciation of £66m and higher pension costs of £13.4m.
Included in the accounts were the results of a market research exercise which showed a marginal declines in customer satisfaction across the firm's Yorkshire and North East customers. No final dividend was recommended by the firm's directors.
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