National Grid names new chief executive

National Grid confirmed on Tuesday morning that current chief executive Steve Holliday will step down, to be replaced by the executive director of UK operations from next summer.

John Pettigrew will take the top spot after joining National Grid almost 25 years ago and holding senior positions across various business units in the UK and the US.

The transmission operator said that Holliday will remain the chief executive until the end of March next year and on the board until July 2016, “to support John with the transition”.

Pettigrew was tipped in the national press as one of two likely candidates to take the lead role in the company and his longstanding experience is expected to assure investors of some “continuity” for the £35 billion firm.

National Grid chairman Peter Gershon said the nominations committee was “unanimous in its support” for Pettigrew given his experience covering the company’s UK and US operations.

“He was the architect of National Grid’s strategy for ensuring the delivery and out performance under the UK regulatory regime, RIIO. He also played a pivotal role in introducing improvements and demonstrating strong leadership within both the US Electricity Transmission and Distribution businesses,” Gershon said.

But Jefferies utilities analyst Peter Atherton said in a note following the announcement that “challenges remain”.

“First, to structurally resolve the long term underperformance of the US regulated businesses. Second, to navigate the difficult and highly politicised UK energy market. Third, resist all temptations to revert to the expansionary capital destroying strategies of the mid 2000s,” he said.

“If Mr Pettigrew can succeed on these three issues then he will likely hand the company to his eventual successor in even better shape than it is now,” he added.

In addition, investors are expected to raise some concerns over Pettigrew’s lack of top-level experience having only recently joined the board in 2014 as executive director UK.

Prior to this he held several senior management roles, becoming director of engineering in 2003; chief operating officer and executive vice president for the US electricity distribution and generation business in 2007; chief operating officer for UK gas distribution in 2010; and UK chief operating officer from 2012 to 2014.

National chief financial officer Andrew Bonfield was also named as a possible contender for the role, and Atherton said that investors will now be interested in whether Pettigrew’s appointment might prompt Bonfield to leave the company.