News Release

EXHIBIT NO. 99-1

NOTE TO EDITORS/REPORTERS:  National Grid and Niagara Mohawk will conduct a media conference call on this release today at 11:00 a.m. Lawrence Reilly from National Grid and William Edwards from Niagara Mohawk will be available on the call for questions. Anyone wishing to take part should call: 1-877-715-5282. A digital replay of the call will be available until Friday, Jan. 19 at: 1-888-888-9539.

ELECTRIC DELIVERY PRICE REDUCTIONS, LONG-TERM FREEZE
PROPOSED BY NATIONAL GRID, NIAGARA MOHAWK

Companies File 10-Year Pricing Proposal with PSC;
Plan Would Partially Offset Commodity Price Increases

SYRACUSE, Jan. 17 – National Grid Group plc (NYSE: NGG) and Niagara Mohawk Holdings, Inc. (NYSE: NMK) today proposed to cut rates for electricity delivery service by $132 million, followed by a 10-year price freeze, subject to limited adjustments. The proposal was filed with the New York State Public Service Commission, along with a petition seeking authority to complete the proposed merger of the two companies.

If approved, Niagara Mohawk estimates that customers would see cuts in electric delivery rates of 7.8 percent for residential service, 3.8 percent for commercial service, 6.4 percent for small-to-mid-sized industrial service and 13.4 percent for large industry, relative to prices that customers would see without the merger. Delivery prices include all costs except for the commodity.

The reduction in electricity delivery rates will soften anticipated increases in electricity commodity prices. Based on forecasts of market conditions, commodity costs alone are likely to cause average total price increases of between 8 and 12 percent over today’s prices. The proposal to reduce delivery prices will cut those increases by about four percent on average.

After the initial reduction, delivery rates will be fixed for 10 years subject to specified extraordinary events, such as changes in taxes, laws, regulation or accounting practices; high inflation; and transmission revenue adjustments.

The long-term proposal has a number of other initiatives, including:

     o  Price–stabilized commodity service for residential and commercial customers for several years, providing those customers with significant protection from severe fluctuations in the generation marketplace.

     o  The extension by one year of a multi-year gas rate settlement, resulting in gas delivery rates–unchanged since 1996 –remaining locked through August 2004.

     o  The extension of the Low Income Customer Assistance Program, which was expanded under Niagara Mohawk’s existing regulatory agreement with the PSC.

     o  The establishment of a Service Quality Program, under which Niagara Mohawk would receive annual rewards or penalties of up to $22 million based on its customer service performance. Results would be measured by criteria approved by the Commission.

     o  The establishment of a Congestion Reduction Program to help ease or prevent congestion on the bulk power transmission network in portions of New York state, thereby reducing power supply costs.

The companies have asked that the Commission approve the petitions by June 1 of this year, so that the benefits of the merger of National Grid’s U.S. operations with those of Niagara Mohawk’s can be brought to customers by Sept. 1, when increases in the commodity portion of the bill are expected to take effect for most Niagara Mohawk customers.

Niagara Mohawk provides transmission and distribution delivery service to its customers, with prices for that service set by regulation. The commodity or supply side of the bill is now open to competition, with prices that are subject to market conditions. Some of Niagara Mohawk’s customers purchase their supply needs at market rates, while others take their supply service from Niagara Mohawk. The expiration of some supply contracts, increases in charges from the state’s Independent System Operator and other market factors, particularly fuel costs, are projected to increase commodity costs.

“The merger of the two operations will allow us to reduce delivery costs to consumers and improve service at the same time,” said Lawrence Reilly, senior vice president and general counsel of National Grid USA. “We have recently experienced high generation market prices. The long-term rate proposal we submitted today will, if approved, reduce the impact of these price increases.”

Under the rate proposal filed today, Niagara Mohawk will forego the opportunity to seek 1 percent transmission and distribution price increases in 2001 and 2002 provided under the company’s existing rate agreement with the state.

“We have had electric price stability over the past five years as a result of our existing regulatory agreement, known as PowerChoice,” said William F. Edwards, senior vice president and chief financial officer for Niagara Mohawk. “The merger and this price proposal builds on that platform of stability.

“The delivery rate cuts we are proposing will prove to be an economic development benefit to our existing customers, and will help our efforts as we work with the state and local governments to attract new industry and jobs to New York.”

The merger of the operations, if approved, is expected to result in net savings over the next 10 years of approximately $970 million in today’s dollars when compared to the rates Niagara Mohawk forecasts it would have had to charge without the merger.

Niagara Mohawk Power Corp. will become part of National Grid’s U.S. operations, and will be known as “Niagara Mohawk, a National Grid Company.” It will keep its operating headquarters in Syracuse.

Niagara Mohawk will be National Grid’s third U.S. acquisition, after New England Electric System and Eastern Utilities Associates, which were both acquired in 2000. The combination will create the ninth largest electric utility in the U.S. with an electric customer base of approximately 3.3 million.

Niagara Mohawk Holdings, Inc. is an investor-owned energy services company that provides electricity to more than 1.5 million customers across 24,000 square miles of upstate New York. The company also delivers natural gas to more than 540,000 over 4,500 square miles of eastern, central and northern New York.

The National Grid Group plc builds, owns and operates electric and telecommunications networks around the world. National Grid operates electric networks in the United Kingdom, the U.S., Argentina and Zambia. Its growing portfolio of telecommunications business includes ventures in the U.K., the U.S., Brazil, Argentina, Chile and Poland. It is headquartered in London.

National Grid USA includes local electric companies Massachusetts Electric, Narragansett Electric, Granite State Electric, Nantucket Electric and a substantial transmission business.

The merger of the two operations requires approvals from regulators in New York, as well as the Federal Energy Regulatory Commission, the Securities and Exchange Commission and other regulatory agencies.

Contacts:

Niagara Mohawk:

Media:
Syracuse: Kenneth M. Tompkins, Director, Corporate Communications
315-428-3523

Albany: Nicholas J. Lyman, Regional Communications Manager,
518-782-2155

Buffalo: Stephen F. Brady, Regional Communications Manager
716-857-4300

Financial:
Leon T. Mazur, Director, Investor Relations
315-428-5876

National Grid USA/Mass.:

Media:
Fred Mason, Vice President and Director, Corporate Communications
508-389-3568

Financial:
Karen Shih, Investor Relations
508-389-3176

NOTE:   This release contains statements that constitute forward-looking information. Such statements are subject to certain risks, uncertainties and assumptions. All of these forward-looking statements are based on estimates and assumptions made by the company’s management which, although believed by the company’s management to be reasonable, are inherently uncertain. Such forward-looking statements are not guarantees of future performance or results and involve certain risks and uncertainties. Actual results or developments may differ materially from the forward-looking statements as a result of various factors.