By The Business Review (Albany)

National Grid will eliminate 1,200 management positions in the U.S. as it seeks to cut operating costs by $200 million in the next year.

The company also is reorganizing its operations, appointing five regional presidents including one for New York.

The announcement comes less than two weeks after the state Public Service Commission approved a $112.7 million National Grid rate increase, that the company says will not enable it to cover operating costs.

That increase, which takes effect this week, wonâ¿¿t impact commercial or residential customers in 2011 because National Grid will not be able to recover fees for major storm restoration and post employment benefits until next year.

Tom King, president of National Grid U.S., said the company is losing money in upstate New York. And the current restructuring proposal would have been less severe if the PSC had approved a large rate increase. The company sought more than $390 million.

King said the company is committed to the U.S. and will ensure that upstate services remain reliable.

But he said National Grid will be ⿿very cautious⿝ about future capital improvements in the upstate electrical and natural gas infrastructure until the company has a clearer picture about how future PSC decisions will impact the company.

National Grid is reorganizing its management structure, focusing more on geographic areas instead of specific divisions of the company.

Upstate New York accounts for about 55 percent to 60 percent of the companyâ¿¿s overall business, which is why the company appointed a regional president to oversee the area, King said.

Kenneth Daly, who had been National Gridâ¿¿s global finance controller, was appointed regional president of New York.

He will manage upstate natural gas and electricity businesses as well as natural gas operations in Brooklyn, Staten Island, Queens and Long Island.