National Grid's New CEO Wants You to See a Growth Utility—With a Data-Center Option

Zoe Yujnovich upgraded capex and EPS guidance, but the real test is whether Joulent and Micron can coexist with a £70bn regulated core.

NGG · Earnings Call · 2026-11-05

The headline is acceleration; the subtext is a new operating style

National Grid's half-year 2027 report is, on the surface, a straightforward beat-and-raise. Capital investment rose 32% to £6.7bn, a first-half record; full-year capex guidance is now £13.5bn; and underlying EPS rose 22% to 36.5p, prompting management to nudge full-year EPS growth guidance to 15-16%. The interim dividend rose 3.8% to 16.97p. Those are strong numbers for a regulated utility. But the more interesting signal is stylistic. New CEO Zoe Yujnovich, six months into the job, has replaced John Pettigrew's regulatory-negotiation framing with an operating-execution vocabulary: sharpen performance, brilliant basics, 'big shifts,' 'world-class business.' The call is less about fighting Ofgem for a higher cost of equity and more about proving National Grid can deliver a record capital programme on time and on budget. “Six months ago, I set a clear direction for National Grid to build on our strong foundations, sharpen performance, and advance us as a world-class business.” — Zoe Yujnovich, Chief Executive Officer · 2026-11-05 That sentence is the tell. Prior calls were dominated by RIIO-T3 draft determinations, nominal debt, cost of equity, and credit ratings. The current call still contains those words, but they are background. The foreground is delivery: ASTI project construction, supply-chain security, technology pilots. This is a meaningful change in emphasis, and it makes the guidance upgrade more credible—if the organization is actually accelerating, the £70bn programme is less of a promise and more of a run-rate.

The regulated core is doing the heavy lifting

UK electricity transmission capex rose 71% to £2.9bn, driven by the ASTI ramp. Management says 100% of critical primary supply chain is secured and 80% of the broader £70bn programme is under delivery mechanisms. The ED3 business plan is due at end-November, with £9bn planned over five years, 40% above the prior period. In the U.S., New York capex rose 11% to £1.8bn and New England 14% to £1.1bn. The constraint costs argument remains central: more transmission investment reduces system balancing costs, which helps affordability and gives the company a political shield. “there were 2 fundamental areas that we wanted to focus on between the draft determination and the final determination. The first was the overall investable framework and the second was the workability of the regulatory framework.” — John Pettigrew, Chief Executive Officer · 2025-11-06 That was Pettigrew in late 2025, still fighting the RIIO-T3 battle. Yujnovich does not relitigate it; she assumes a constructive outcome and gets on with delivery. The risk is that delivery slippage—EGL 1 is mentioned as a delay event—could reopen the regulatory debate. She acknowledges 'not every project will go exactly to plan' and cites a 100-day schedule improvement on EGL 1 through generative scheduling. That is unusually specific, and it matters because the market has heard supply-chain excuses before.

Joulent and Micron: the data-center adjacency is real, but deliberately small

data centers are not a new keyword for National Grid. They have ranked at or near the top of the company's keyword trajectory for several quarters, and prior management talked about 19GW of demand connections and the AI Energy Council. What is new is the company putting capital behind a specific data-center power project. Joulent is a $1.75bn investment, mostly for Project Kilby, a 2.7GW co-located data-center power facility in West Texas, structured as a 50-50 JV with Chevron and backed by a 20-year PPA with Microsoft.

The majority of our $1.75 billion investment will support the development of Project Kilby, a 2.7 gigawatt co-located data center power facility in West Texas. The project is already at an advanced stage. A 50-50 joint venture with Chevron has been established. EPC contracts are being finalized and all the turbines and other critical equipment have been secured, with delivery expected over the next 12 months. Importantly, a 20-year power purchase agreement has been signed with Microsoft, providing long-term predictable cash flows with a AAA-rated customer.
Zoe Yujnovich, Chief Executive Officer · 2026-11-05

Then there is Micron in upstate New York: an initial 480MW connection, building toward roughly 2GW at full scale, which would make Micron the largest single electric customer in New York. That is regulated growth, not merchant. It also fits the political mood better than a generic data-center campus because the demand is tied to semiconductor reshoring and thousands of direct jobs. The contrast with the global tape is striking. The AI data-center complex has been one of the sharpest 30-day decliners in the global price tape—'AI data centers' down roughly 31%, 'data center infrastructure' down roughly 27% across a long list of hardware and power names. National Grid's pitch is deliberately different: remote, behind-the-meter, no grid congestion, who-pays question answered by the PPA. “It is, of course, located in a very remote part of Texas. It's in West Texas. And it is also behind the meter. So there isn't congestion that gets added to the grid.” — Zoe Yujnovich, Chief Executive Officer · 2026-11-05 That does not make Joulent riskless, but it explains why the company thinks it can earn risk adjusted returns above regulated levels without taking a full merchant data-center risk. The Q&A exposes the tension. Analysts asked about protections, hurdle rates, and how big the non-regulated portfolio could become. Yujnovich said NGV is around 5% of the group and 'the lion's share will remain in the regulated core.' That is the right answer for a utility investor, but it also limits how much the market can pay for the data-center optionality. If Joulent works, it is a nice call option; if it does not, it is small enough not to break the balance sheet. The company accounts for Joulent as a financial asset, reflecting preferred distributions and equipment rights. That is a subtle but important disclosure: this is not being treated as a full consolidated operating business.

Rates, affordability, and the political backdrop

The balance sheet is the counterweight. Net debt rose £4.5bn to £48.6bn, and management expects a further £4bn increase this year, including remaining Joulent funding. For a utility, that is normal in a heavy capex cycle, but it keeps the market focused on rate cases and allowed returns. The next few months bring a Massachusetts Gas outcome, KEDNY/KEDLI downstate gas filings, and upstate NiMo electric and gas cases. The rate case calendar is therefore a live catalyst. Yujnovich noted the one-year rate stabilization for KEDNY and KEDLI keeps bills flat, a political gesture that may help in the affordability debate but could also defer return recovery. Andy Agg's rate-sensitivity claim is the most striking number on the call: “even a sustained increase in rates of 100 basis points across the 5-year framework would only impact FY '31 EPS by around 1p” — Andrew Agg, Chief Financial Officer · 2026-11-05. If true, it means National Grid is unusually hedged against the bond-market risk that has hurt utilities. About 75% of the debt book is covered by operating-company recovery mechanisms; only around 10% of net debt is rate-sensitive. That is a genuine differentiator versus a generic regulated utility. It also explains why management can afford to be relaxed about rates while the market remains nervous. “us getting on with the investment is very beneficial to consumers because it ultimately reduces the cost for them” — John Pettigrew, Chief Executive Officer · 2025-11-06. That was Pettigrew in 2025, and the current call keeps the affordability framing but adds a harder political edge. The U.S. midterms came up, and Yujnovich said the Northeast is stable while Texas has changed. Kilby's behind-the-meter structure is partly a political risk mitigant. That is a sophisticated answer, and it shows the company is thinking about data-center backlash beyond the usual regulatory process.

What changed—and what did not

The biggest change is that National Grid now has a CEO who talks like an operator rather than a dealmaker. The rights issue, the strategic pivot, and the RIIO-T3 lobbying campaign are done. The new language is about technology, productivity, and selective adjacencies. The Lighthouse pilot—crews reaching first jobs 15% faster, 25% less travel between jobs, up to one-third more valve inspections per day, and a 75% cut in unplanned overtime on Long Island—is exactly the kind of granular proof that was missing in prior calls. If that spreads, it supports both the affordability story and the ROE story. What did not change is the basic investment case: a regulated asset base growing at around 10% a year, a progressive inflation-linked dividend, and a £70bn capital programme that is now 80% secured. The guidance upgrade is real, but it is still within the five-year framework. The data-center adjacency is real, but it is deliberately capped at around 5% of the group. The stock is not a pure AI infrastructure play, and management does not want it to be. The interesting question is whether the market will reward the operating improvements and the Joulent option, or simply treat NGG as a bond proxy with a new CEO. After a 22% EPS jump and an upgraded outlook, the burden of proof is shifting from 'can they deliver?' to 'will they get paid for it?'