Electricity Regulation (Amendment) (Single Electricity Market) Act 2007

1. Citation and commencement.

1.— (1) This Act may be cited as the Electricity Regulation (Amendment) (Single Electricity Market) Act 2007.

(2) This Act comes into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or provisions.

2. Definitions.

2.— In this Act—

“ Act of 1999 ” means Electricity Regulation Act 1999;

“ Minister” means Minister for Communications, Marine and Natural Resources.

3. Amendment of section 2 of Act of 1999.

3.— Section 2 of the Act of 1999 is amended—

(a) in subsection (1) by the insertion of the following definitions:

“ ‘Authority’ means Northern Ireland Authority for Utility Regulation;

‘Internal Market Regulations’ means the European Communities (Internal Market in Electricity) Regulations 2000 and 2005;

‘the Department’ means the Department of Enterprise, Trade and Investment in Northern Ireland;

‘the Memorandum of Understanding’ means the Memorandum of Understanding relating to the establishment and operation of a single competitive wholesale electricity market in the State and in Northern Ireland entered into between the Government of Ireland and the Government of the United Kingdom of Great Britain and Northern Ireland signed on behalf of the Government of Ireland on 5 December 2006 and on behalf of the Government of the United Kingdom of Great Britain and Northern Ireland on 6 December 2006;

‘public electricity supplier’ means the holder of a licence under section 14(1)(h);

‘the SEM Committee’ means the committee referred to in Section 8A;

‘ SEM matter ’ shall be construed in accordance with section 8A(5);

‘the Single Electricity Market’ means the new arrangements in the State and Northern Ireland which are—

(a) described in the Memorandum of Understanding, and

(b) designed to promote the establishment and operation of a single competitive wholesale electricity market in the State and Northern Ireland;

‘Single Electricity Market operator’ means the holder of a licence under section 14(1)(j) or a person exempted from the requirement to hold such a licence;”,

and

(b) by the insertion of the following subsection after subsection (1):

“(1A) (a) Notwithstanding the definition of ‘Department’ in subsection (1) where the electricity functions of the Department of Enterprise, Trade and Investment in Northern Ireland are, under the law for the time being in force in Northern Ireland, exercisable by any other Department, Ministry or authority, references to the Department in this Act shall be construed as references to such other Department, Ministry or authority, as the case may be.

(b) Notwithstanding the definition of ‘Authority’ in subsection (1) where the electricity functions of the Authority are, under the law for the time being in force in Northern Ireland, exercisable by any other authority, Department, Ministry, person or statutory body, references to the Authority in this Act shall be construed as references to such other authority, Department, Ministry, person or statutory body, as the case may be.

(c) In this subsection ‘ electricity functions ’ has the same meaning as it has in Article 9 of the Electricity (Single Wholesale Market) (Northern Ireland) Order 2007.”.

4. Single Electricity Market Committee.

4.— The Act of 1999 is amended by the insertion after section 8 of the following:

“Single Electricity Market Committee.

8A.— (1) There shall be a committee of the Commission to be known as the Single Electricity Market Committee or as the SEM Committee.

(2) The SEM Committee shall comprise such members as stand appointed to it from time to time.

(3) Schedule 1A applies to the SEM Committee.

(4) Any decision as to the exercise of a relevant function of the Commission in relation to a SEM matter shall be taken on behalf of the Commission by the SEM Committee.

(5) For the purposes of this Act a matter is a SEM matter if the SEM Committee determines that the exercise of a relevant function of the Commission in relation to that matter materially affects, or is likely materially to affect, the Single Electricity Market.

(6) For the purposes of this section ‘ relevant function ’ means—

(a) a function under this Act relating to electricity,

(b) a function under the Internal Market Regulations.”.

5. Commission and working arrangements as respects Single Electricity Market.

5.— The Act of 1999 is amended by the insertion after section 8A (inserted by section 4 of this Act) of the following:

“Commission and working arrangements as respects Single Electricity Market.

8B.— (1) The Commission shall publish a statement—

(a) setting out the procedures and working arrangements adopted by the Commission for ensuring compliance with section 8A(4), and

(b) describing how the Commission will work together with the Authority in the exercise of their respective statutory functions in relation to the Single Electricity Market.

(2) A statement under this section may be amended from time to time and the Commission shall as soon as practicable thereafter publish the statement as so amended.”.

6. Amendment of Section 9 of Act of 1999.

6.— Section 9 of the Act of 1999 is amended by—

(a) the substitution in subsection (1E) of “subsection (1D) and section 9BA(3)” for “subsection (1D)”, and

(b) the insertion after subsection (5) of the following:

“(5A) Where the Single Electricity Market is in operation, subsections (3), (4) and (5) shall not apply in relation to a matter which is a SEM matter.”.

7. Function of Commission relating to Single Electricity Market.

7.— The Act of 1999 is amended by the insertion after section 9B of the following:

“Functions of Commission relating to Single Electricity Market.

9BA.— (1) In addition to the functions conferred on it by section 9, the Commission shall have as a function, following consultation with the Authority, the taking of all necessary steps (including the making of regulations under subsection (2) to have effect in the State in connection therewith) to establish and facilitate the operation of the Single Electricity Market, including a Trading and Settlement Code in relation to that market.

(2) (a) The Commission may make regulations for the purposes of subsections (1) and (3).

(b) Without prejudice to the generality of paragraph (a) regulations under subsection (1) may—

(i) subject to paragraph (iii), require every person holding a licence under section 14(1)(a) to (d) and (h) to make available for trading under the Single Electricity Market such electricity as is generated by that person or available to that person for supply,

(ii) prescribe an amount of electricity to be a threshold quantity (expressed in megawatts) for the purposes of paragraph (iii) and may prescribe different amounts in relation to different classes of licence holder,

(iii) provide that a person holding a licence under section 14 who does not generate an amount of electricity greater than the relevant threshold quantity may, but is not required to, make available for trading under the Single Electricity Market such electricity as is generated by that person.

(3) In performing the function referred to in subsection (1) the Commission shall monitor, supervise and keep under review the operation and effectiveness of the Single Electricity Market including the functions of the Single Electricity Market operator, and may make regulations under subsection (2) in relation to the Single Electricity Market.”.

8. Restriction on disclosure of information.

8.— The Act of 1999 is amended by the insertion after section 9BA (inserted by section7 of this Act) of the following:

“Restriction on disclosure of information.

9BB.— (1) (a) This subsection applies to information received by the Minister or the Commission, which information has been given to that person under or by virtue of—

(i) any provision of the law of Northern Ireland corresponding to a provision under this Act (including a condition in a licence, exemption or authorisation granted under it) or the Internal Market Regulations, or

(ii) a licence, exemption or authorisation granted in Northern Ireland by the Department analogous to a licence, exemption or authorisation which may be granted by the Commission under this Act.

(b) Subject to paragraph (c), information to which this subsection applies shall not be disclosed or published by the recipient of the information unless—

(i) that person is required or permitted to disclose that information—

(I) under or by virtue of any enactment, or

(II) by order of a Court exercising its jurisdiction,

or

(ii) such disclosure or publication is made for the purpose of facilitating the performance of any of the functions of that person under this Act.

(c) The Minister and the Commission, to the extent that each of them believes it necessary or expedient for the effective operation of the Single Electricity Market, may share information with such persons exercising a function in Northern Ireland in relation to electricity which corresponds to any of the functions of the Commission or the Minister under—

(i) the Electricity and Gas Regulation Acts 1999 to 2002, or

(ii) the Internal Market Regulations,

including information which is commercially sensitive, and information which has been furnished to that person by the holder of a licence or exemption under section 14 or the holder of an authorisation under section 16.

(2) (a) This subsection applies to information received by the holder of a licence, an exemption or an authorisation, which information has been given to that person under or by virtue of—

(i) this Act (including a condition of a licence, exemption or authorisation granted under it),

(ii) the Internal Market Regulations,

(iii) any corresponding provision of the law of Northern Ireland, or

(iv) a licence, exemption or authorisation granted in Northern Ireland by the Department analogous to a licence, exemption or authorisation which may be issued by the Commission under this Act.

(b) Information to which this subsection applies shall not be disclosed or published by the recipient of the information unless that person is required to disclose or publish that information—

(i) by reason of a condition in a licence, exemption or authorisation,

(ii) under or by virtue of any enactment, or

(iii) by order of a Court exercising its jurisdiction.”.

9. Principal objective and functions of Minister, the Commission and SEM Committee in carrying out their functions in relation to the Single Electricity Market.

9.— The Act of 1999 is amended by the insertion after section 9BB (inserted by section 8 of this Act) of the following:

“Principal objective and functions of Minister, the Commission and SEM Committee in carrying out their functions in relation to the Single Electricity Market.

9BC.— (1) The principal objective of—

(a) the Minister in carrying out his or her electricity functions in relation to matters which the Minister considers materially affect, or are likely materially to affect, the Single Electricity Market,

(b) the Commission in giving effect to any decision of the SEM Committee, and

(c) the SEM Committee in carrying out its functions under section 8A(4),

is to protect the interests of consumers of electricity in the State and Northern Ireland supplied by authorised persons, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the sale or purchase of electricity through the Single Electricity Market.

(2) The Minister, the Commission and the SEM Committee shall carry out their respective functions referred to in subsection (1) in the manner which each considers is best calculated to further the principal objective, having regard to—

(a) the need to secure that all reasonable demands for electricity in the State and Northern Ireland are met,

(b) the need to secure that authorised persons are able to finance the activities which are the subject of conditions or obligations imposed by or under this Act or the Internal Market Regulations or any corresponding provision of the law of Northern Ireland,

(c) the need to secure that the functions of the Minister, the Commission, the Authority, and the Department in relation to the Single Electricity Market are exercised in a co-ordinated manner,

(d) the need to ensure transparent pricing in the Single Electricity Market, and

(e) the need to avoid unfair discrimination between consumers in the State and consumers in Northern Ireland.

(3) The Minister, the Commission and the SEM Committee may, in carrying out any of the functions mentioned in subsection (1), have regard to the interests of consumers in the State and Northern Ireland in relation to gas.

(4) Subject to subsection (2), the Minister, the Commission and the SEM Committee shall carry out the functions mentioned in subsection (1) in the manner which each of them consider is best calculated—

(a) to promote efficiency and economy on the part of authorised persons,

(b) to secure a diverse, viable and environmentally sustainable long-term energy supply in the State and Northern Ireland,

(c) to promote research into, and the development and use of—

(i) new techniques by or on behalf of authorised persons, and

(ii) methods of increasing efficiency in the use and generation of electricity.

(5) Subject to subsection (2), in carrying out any of the functions mentioned in subsection (1) the Minister, the Commission and the SEM Committee shall have regard to—

(a) the effect on the environment in the State and Northern Ireland of the activities of authorised persons, and

(b) the need, where appropriate, to promote the use of energy from renewable energy sources.

(6) In carrying out any of the functions mentioned in subsection (1) the Minister, the Commission and the SEM Committee shall not discriminate unfairly as regards terms and conditions—

(a) between authorised persons, or

(b) between persons who are applying to become authorised persons.

(7) In this section—

‘ authorised person ’ means the holder of a licence or exemption under a provision of this Act relating to electricity or under any corresponding provision of the law of Northern Ireland;

‘ electricity functions ’ means—

(a) functions under this Act, and

(b) functions under the Internal Market Regulations,

relating to electricity;

‘ environmentally sustainable ’ includes the need to guard against climate change;

‘ renewable energy sources ’ has the same meaning as in Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC [^1].”.

10. Performance of functions relating to Single Electricity Market.

10.— The Act of 1999 is amended by the insertion after section 9BC (inserted by section 9 of this Act) of the following:

“Performance of functions relating to Single Electricity Market.

9BD.— The Minister, the Commission and the SEM Committee shall have regard to the objective that the performance of any of their respective functions in relation to the Single Electricity Market should, to the extent that the person exercising the function believes is practical in the circumstances, be transparent, accountable, proportionate, consistent and targeted only at cases where action is needed.”.

11. Amendment of section 10A of Act of 1999.

11.— Section 10A of the Act of 1999 is amended—

(a) in subsection (3)(a)—

(i) by the substitution for subparagraphs (ii) and (iii) of the following:

“(ii) the Joint Committee referred to in paragraph 26 of Schedule 1 of this Act,

(iii) the SEM Committee, and

(iv) any other person the Minister deems appropriate,”,

and

(ii) to substitute “or publication under paragraph (b),” for “or such publication,”,

(b) by the insertion of the following subsection after subsection (3):

“(3A) The Minister, having provided a draft of the proposed direction to the persons referred to in subsection (3)(a) and having published a draft of that direction under subsection (3)(b), shall provide a draft of the proposed direction to the Department.”,

(c) in subsection (4) by the substitution of “Subject to subsection (4A), the Minister,” for “The Minister,” and

(d) by the insertion of the following subsection after subsection (4):

“(4A) The Minister shall not give a direction under subsection (1) where the SEM Committee has informed the Minister that the proposed direction would materially affect, or would be likely to materially affect, the Single Electricity Market.”.

12. Licences.

12.— Section 14(1) of the Act of 1999 is amended—

(a) in subsection (1)—

(i) by the insertion in paragraph (c) of “or section 9BA” after “section 9(1)(d)”,

(ii) by the insertion in paragraph (d) of “or section 9BA” after “section 9(1)(d)”,

(iii) by the substitution in paragraph (i) of “maintain an interconnector, or” for “maintain an interconnector,”, and

(iv) by the insertion after paragraph (i) of the following paragraph:

“(j) to act as the Single Electricity Market operator,”,

(b) by the insertion after subsection (2D) of the following subsections:

“(2E) A licence under subsection (1) may include such terms and conditions relating to participation in and the operation of the Single Electricity Market as the Commission considers necessary or expedient.

(2F) The Commission may grant an exemption from the requirement to hold a licence to act as the Single Electricity Market operator to a person who holds a licence to perform corresponding functions in Northern Ireland.”,

and

(c) by the insertion after subsection (14) of the following subsection:

“(15) For the purposes of this section a person acts as Single Electricity Market operator if the responsibilities of that person include responsibility, pursuant to the Trading and Settlement Code under the Single Electricity Market, for calculating charges and other payments due under that code.”.

13. Transitional power to modify licence conditions concerning Single Electricity Market, etc.

13.— The Act of 1999 is amended by the insertion after section 14 of the following new section: