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FEW companies evoke the image of the 'old economy' more than National Grid. One immediately visualises ugly power lines, executives more skilled at designing get-rich-quick share option schemes than distributing electricity and an industry constrained by regulation.

It is amazing how difficult it is for even the most transformed of companies to shed the reputation acquired in the first flush of privatisation.

The extraordinary thing is that under the stewardship of David Jones, the low-key engineer who has been chief executive at the Grid since 1994, the group has become the most highly valued electricity property on the London Stock Exchange. It is worth more than British Energy, PowerGen and National Power put together.

In the Grid's London boardroom overlooking the massive new Tate Modern art gallery on the south bank of the Thames, Jones says: 'At the time of privatisation it was very much seen as the poor relation. And if you had been talking to National Power the attitude would have been pretty derogatory.'

But while other power companies have struggled to develop brands at home and an overseas strategy beyond the reach of British regulation, National Grid has been quietly carving out a global empire stretching through the Americas and is making incursions into eastern Europe.

The entree for Jones and the Grid into foreign marketplaces has been its ability in Britain, with some notable blips along the way, to drive down the cost of electricity transmission by 50% since 1991, while at the same time improving the quality of service.

Critics note that if there were to be a prolonged cold spell of the kind Britain has not seen in recent years the ability to cope would be less than in the days before privatisation divided the electricity system into a series of interlocking pieces.

But so far that has not happened.

Instead, the Grid has used its skills as an operator of electricity transmission systems to become a leader in the field of broadband global telecoms.

While cable companies around the world have invested billions to dig up roads and countryside to construct the backbone for their TV, telecoms and internet offerings, National Grid simply wraps its fibre-optic cables round existing electricity transmission wires or inserts a fibre-optic core in new transmission systems.

The result is that the Grid, while perceived as part of the traditional industrial economy, is a low-cost entrant in the new economy.

Jones gives a great deal of the credit for this innovation to David Jefferies, who helped to guide the Grid to the stock market in 1995 and for a time was seen as a figure as unpalatable to the then Labour opposition and the public as the original utilities 'fat cat', Cedric Brown of British Gas.

Seeking ways of making better use of the transmission network, Jefferies began what Jones calls 'the immensely successful Energis story'. In much the same way that internet service provider Freeserve has outpaced bricksand-mortar parent Dixons, so Energis, one of the first of a new generation of telecoms companies, has put its parent National Grid in the shade.

IT is fascinating to note that when the Grid sold off its first 25% share in Energis in 1998, its stake in the telecoms offshoot was valued at [pounds sterling]1.2 billion. Last year when it sold down to 50%, the stake was worth [pounds sterling]2.4 billion, and this year when it brought the holding down to 36.5% it was worth [pounds sterling]4.3 billion.

All this, says Jones, happened because 'fibres were spun on the earth wire' across the transmission system. 'David Jefferies, against quite a lot of cynicism, pushed this through and had the courage of his convictions, which proved to be 100 and however many per cent right as you would like to make it.' But if Jefferies came up with the idea it was Jones, brought in from South Wales Electricity, which is now part of the troubled Hyder utility group, who pushed the concept forward. …