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U.S. Securities and Exchange Commission

National Grid Group plc Acquisition of
New England Electric System
Appendix B: Nonutility Subsidiaries of National Grid and Nees

A. Nonutility Subsidiaries of National Grid

National Grid Holdings Limited was formed to serve as a subholding company for National Grid's current businesses. Prior to consummation of the Merger, National Grid Holdings intends to file Form U-57, under rule 57, claiming status as a FUCO within the meaning of section 33 of the Act.

National Grid Insurance Limited is a wholly owned insurance subsidiary formed in connection with the self-insured retention of National Grid Company's transmission assets.

National Grid International Limited ("National Grid International") is an intermediate holding company for certain overseas operations of National Grid. The company is engaged indirectly in automated meter reading and billing, telecommunications, and electric transmission and distribution. Two of its subsidiaries, Teldata International Limited ("Teldata") and National Grid USA Inc. have operations in the U.S. Teldata Inc. and First Point Services, Inc. are Delaware subsidiaries of Teldata that provide metering and billing services to gas, electric and water utilities and energy service providers. National Grid USA Inc. was formed to investigate potential opportunities in the U.S. for National Grid. Apart from these companies, no other subsidiary of National Grid Holdings maintains operations in the U.S.

The National Grid Group Quest Trustees Limited is the trustee company for National Grid's qualifying employee share ownership trust.

NGG Telecoms Holdings Limited indirectly holds National Grid's interest (currently 36%) in Energis plc, a telecommunications company that focuses on the business marketplace in the U.K. Energis plc was originally established to meet National Grid's need for an internal high-speed information transmission network.

Natgrid Finance Holdings Limited is an intermediate holding company for entities that provide financial management services to National Grid.

B. Nonutility Subsidiaries of NEES

New England Power Service Company is the system service company.

New England Hydro Finance Company, Inc., owned in equal shares by two majority-owned subsidiaries of NEES, provides the debt financing that its owners (including NEET, New Hampshire Hydro and Massachusetts Hydro) require to fund the capital costs of their participation in the Hydro-Quebec and New England Interconnection.

NEES Communications, Inc. is an exempt telecommunications company within the meaning of section 34 of the Act. Its wholly owned subsidiary, NEES Telecommunications Corp., is currently inactive.

NEES Global, Inc. ("NEES Global") provides consulting services to nonassociate utilities. NEES Global has a 4% ownership in Monitoring Technologies, Inc., a company that designs, develops, manufactures and markets microprocessor-based products that monitor wear and forecast failure of machinery components. NEES Global has a 40.3% ownership interest in Nexus Energy Software, Inc., a company that develops and licenses software to utilities and offers consulting to energy consumers. NEES Global has a 5.02% ownership interest in Separation Technologies, Inc., a company that provides ash processing equipment, project financing, operations and marketing services related to its equipment.

NEES Energy, Inc. ("NEES Energy") is a wholly owned energy marketing subsidiary. Its wholly owned subsidiary, AllEnergy Marketing Company, L.L.C. ("AllEnergy"), is an energy marketing and energy-related services company. Its wholly owned subsidiary, Texas-Ohio Gas, Inc., is a gas marketing company; its partially owned subsidiary, Texas Liquids, L.L.C. ("Texas Liquids"), engages principally in marketing and sales of propane and energy in the New Jersey area. Texas Liquids is owned 99% by AllEnergy and 1% by NEES Energy. Texas Liquids owns 50% of the voting securities of AEDR Fuels L.L.C., a company engaged in the home heating oil business, and approximately 5% of the voting securities of Weatherwise USA, L.L.C., a company that provides energy management, demand side management and technical services, and utility hedging services to reduce weather-related financial uncertainties for utilities and energy users. NEES recently announced plans to dispose of AllEnergy.

Granite State Energy, Inc. is a wholly owned energy marketing subsidiary.

Metro West Realty, L.L.C., a wholly owned subsidiary, owns real estate occupied by NEES Subsidiaries.

25 Research Drive, L.L.C., a wholly owned subsidiary, was formed to effect the proposed acquisition of EUA.