Gas Act 1986

Part I — Gas Supply

Introductory

Scottish Ministers' promotion of reductions in home-heating costs: gas suppliers

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Gas transporters

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Abolition of Corporation's special privilege

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General duties of Secretary of State and Director

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• (1) The Secretary of State and the Director shall each have a duty to exercise the functions assigned to him by this Part in the manner which he considers is best calculated—

• (a) to secure that persons authorised by or under this Part to supply gas through pipes satisfy, so far as it is economical to do so, all reasonable demands for gas in Great Britain ; and

• (b) without prejudice to the generality of paragraph (a) above, to secure that such persons are able to finance the provision of gas supply services.

• (2) Subject to subsection (1) above, the Secretary of State and the Director shall each have a duty to exercise the functions assigned to him by this Part in the manner which he considers is best calculated—

• (a) to protect the interests of consumers of gas supplied through pipes in respect of the prices charged and the other terms of supply, the continuity of supply and the quality of the gas supply services provided;

• (b) to promote efficiency and economy on the part of persons authorised by or under this Part to supply gas through pipes and the efficient use of gas supplied through pipes;

• (c) to protect the public from dangers arising from the transmission or distribution of gas through pipes or from the use of gas supplied through pipes ;

• (d) to enable persons to compete effectively in the supply of gas through pipes at rates which, in relation to any premises, exceed 25,000 therms a year.

• (3) In performing his duty under subsection (2) above to exercise functions assigned to him in the manner which he considers is best calculated to protect the interests of consumers of gas supplied through pipes in respect of the quality of the gas supply services provided, the Secretary of State or, as the case may be, the Director shall take into account, in particular, the interests of those who are disabled or of pensionable age.

Licensing of activities relating to gas

Prohibition on unauthorised supply

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• (1) Subject to section 6A below and Schedule 2A to this Act, a person who—

• (a) otherwise than by means of a gas interconnector conveys gas through pipes to any premises, or to a pipe-line system operated by a gas transporter;

• (aa) participates in the operation of a gas interconnector;

• (b) supplies to any premises gas which has been conveyed to those premises through pipes; ...

• (c) arranges with a gas transporter for gas to be introduced into, conveyed by means of or taken out of a pipe-line system operated by that transporter ; or

• (d) provides a smart meter communication service ; or

• (e) performs the function of code manager in relation to a designated gas licence document (see further subsections (11A) and (11B)),

shall be guilty of an offence unless he is authorised to do so by a licence.

• (2) The exceptions to subsection (1) above which are contained in Schedule 2A to this Act shall have effect.

• (3) A person guilty of an offence under this section shall be liable—

• (a) on summary conviction to a fine not exceeding the statutory maximum;

• (b) on conviction on indictment, to a fine.

• (4) No proceedings shall be instituted in England and Wales in respect of an offence under this section except by or on behalf of the Secretary of State or the Director.

• (5) Any reference in this Part to the conveyance by any person of gas through pipes to any premises is a reference to the conveyance by him of gas through pipes to those premises with a view to the gas being supplied to those premises by any person, or being used in those premises by the holder of a licence under section 7A(2) below.

• (6) A reference in this Part to participating in the operation of a gas interconnector is a reference to—

• (a) co-ordinating and directing the conveyance of gas into or through a gas interconnector; or

• (b) making such an interconnector available for use for the conveyance of gas.

• (7) For the purposes of subsection (6)(b) a person shall not be regarded as making something available just because he consents to its being made available by another.

• (8) In this Part “gas interconnector” means so much of any pipeline system as—

• (a) is situated at a place within the jurisdiction of Great Britain; and

• (b) subsists wholly or primarily for the purposes of the conveyance of gas (whether in both directions or in only one) between Great Britain and another country or territory.

• (9) For the purposes of this section a place is within the jurisdiction of Great Britain if it is in Great Britain, in the territorial sea adjacent to Great Britain or in an area designated under section 1(7) of the Continental Shelf Act 1964.

• (10) In this section “pipe-line system” includes the pipes and any associated apparatus comprised in that system.

• (11) A reference in this Part to providing a smart meter communication service is a reference to making arrangements with each domestic supplier to provide a service, for such suppliers, of communicating relevant information to and from smart meters through which gas is supplied to domestic premises.

• (11A) A reference in this Part to a person (“P”) performing the function of code manager in relation to a designated gas licence document is a reference to making arrangements, with the persons to whom subsection (11B) applies, under which P is responsible for the governance of the document.

• (11B) This subsection applies to the holder of a licence for the purposes of section 5 where a condition of the licence—

• (a) requires the holder to comply with, or to enter into arrangements that conform with, the designated gas licence document in question, or

• (b) imposes obligations on the holder that do not apply to the holder where the holder complies with that document.

• (12) In this section—

• “designated gas licence document” means a document that is—maintained in accordance with the conditions of a licence for the purposes of section 5, anddesignated under section 182 of the Energy Act 2023;

• “domestic supplier” means a gas supplier—who is authorised, in accordance with the conditions of a licence, to supply gas to domestic premises; andwho supplies gas to domestic premises in accordance with that licence;

• “external electronic communications network” means a network which—is an electronic communications network, within the meaning of section 32 of the Communications Act 2003; anddoes not form part of a smart meter;

• “relevant information” means information relating to the supply of gas; ...

• “smart meter” means—a gas meter which can send and receive information using an external electronic communications network; ora gas meter and a device which is associated with or ancillary to that meter and which enables information to be sent to and received by the meter using an external electronic communications network.

Exception to section 5

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Authorisation of public gas suppliers

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• (1) In this Part “gas transporter” means the holder of a licence under this section except where the holder is acting otherwise than for purposes connected with—

• (a) the carrying on of activities authorised by the licence;

• (b) the conveyance of gas through pipes which—

• (i) are situated in an authorised area of his; or

• (ii) are situated in an area which was an authorised area of his, or an authorised area of a previous holder of the licence, and were so situated at a time when it was such an area; or

• (c) the conveyance through pipes of gas which is in the course of being conveyed to or from a country or territory outside Great Britain.

• (2) Subject to subsections (3) and (3A) below, the Director may grant a licence authorising any person to do either or both of the following, namely—

• (a) to convey gas through pipes to any premises in an authorised area of his, that is to say, any area specified in the licence as it has effect for the time being;

• (b) to convey gas through pipes either to any pipe-line system operated by another gas transporter, or to any pipe-line system so operated which is specified in the licence or an extension of the licence.

• (3) A licence shall not be granted under this section to a person who is the holder of a licence under section 7ZA or 7A below.

• (3A) A licence authorising the conveyance of gas through pipes to any premises must not be granted under this section to a person who is a gas producer unless it is a condition of the licence that the person must not convey gas through pipes to 100,000 or more sets of premises.

• (4) Subject to subsection (3A), the Director may, with the consent of the licence holder, direct that any licence under this section shall have effect—

• (a) as if any area or pipe-line system specified in the direction were specified in the licence;

• (b) in the case of a licence under subsection (2)(a) above, as if it were also a licence under subsection (2)(b) above and any pipe-line system specified in the direction were specified in the licence; or

• (c) in the case of a licence under subsection (2)(b) above, as if it were also a licence under subsection (2)(a) above and any area specified in the direction were specified in the licence;

and references in this Part to, or to the grant of, an extension under this section, or an extension of such a licence, shall be construed as references to, or to the giving of, such a direction.

• (4A) The Authority may, with the consent of the licence holder, direct that any licence under this section shall have effect as if any area or pipe-line system specified in the direction were not specified in the licence; and references in this Part to, or to the grant of, a restriction under this section, or a restriction of such a licence, shall be construed as references to, or to the giving of, such a direction.

• (5) Before granting a licence . . . under this section, the Director shall give notice—

• (a) stating that he proposes to grant the licence . . .;

• (b) stating the reasons why he proposes to grant the licence . . .; and

• (c) specifying the time from the date of publication of the notice (not being less than two months . . .) within which represent- ations or objections with respect to the proposed licence . . . may be made,

and shall consider any representations or objections which are duly made and not withdrawn.

• (6) A notice under subsection (5) above shall be given—

• (a) by publishing the notice in such manner as the Director considers appropriate for bringing it to the attention of persons likely to be affected by the grant of the licence . . .; and

• (b) by sending a copy of the notice to the Secretary of State, to the Health and Safety Executive and to any gas transporter whose area includes the whole or any part of the area proposed to be specified in the licence . . ..

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) As soon as practicable after the granting of a licence under this section, the gas transporter shall publish, in such manner as the Director considers appropriate for bringing it to the attention of persons who are likely to do business with the transporter, a notice—

• (a) stating that the licence has been granted; and

• (b) explaining that, as a result, it might be necessary for those persons to be licensed under section 7A below.

• (10) In this section—

• (za) “gas producer” means a person who—

• (i) gets natural gas from its natural condition in strata otherwise than as an unintended consequence of the storage of gas, and requires a licence under section 3 of the Petroleum Act 1998 (licences to search and bore for and get petroleum) to do so or would require such a licence if getting the gas in Great Britain; or

• (ii) produces any other gas, including in particular biomethane, which is suitable for conveyance through pipes to premises in accordance with a licence under section 7;

• (a) “relevant main” has the same meaning as in section 10 below;

• (b) references to an area specified in a licence or direction include references to an area included in an area so specified; and

• (c) references to a pipe-line system specified in a licence or direction include references to a pipe-line system of a description, or situated in an area, so specified.

• (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authorisation of other persons

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• (1) Subject to subsections (2) and (3) ... , each condition which by virtue of section 81(2) of the Utilities Act 2000 or section 150 of the Energy Act 2004 is a standard condition for the purposes of—

• (a) licences under section 7 above;

• (aa) licences under section 7ZA above;

• (b) licences under subsection (1) of section 7A above; ...

• (c) licences under subsection (2) of that section, or

• (d) licences under section 7AC,

shall be incorporated (that is to say, incorporated by reference) in each licence under that section or, as the case may be, that subsection.

• (2) Subsection (1) above shall not apply in relation to a licence under section 7A(1) above which authorises only the supply to premises of gas which has been conveyed to the premises otherwise than by a gas transporter.

• (3) Subject to the following provisions of this section, the Director may, in granting a licence, modify any of the standard conditions to such extent as he considers requisite to meet the circumstances of the particular case.

• (4) Before making any modifications under subsection (3) above, the Director shall give notice—

• (a) stating that he proposes to make the modifications and setting out their effect;

• (b) stating the reasons why he proposes to make the modifications; and

• (c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,

and shall consider any representations or objections which are duly made and not withdrawn.

• (5) A notice under subsection (4) above shall be given—

• (a) by publishing the notice in such manner as the Director considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the modifications; and

• (b) by sending a copy of the notice to the Secretary of State, to the Health and Safety Executive , to Citizens Advice and to Consumer Scotland.

• (6) If, within the time specified in the notice under subsection (4) above, the Secretary of State directs the Director not to make any modification, the Director shall comply with the direction.

• (6A) The Authority shall not make any modifications under subsection (3) above of a condition of a licence under section 7ZA unless it is of the opinion that the modifications are such that—

• (a) the licence holder would not be unduly disadvantaged in competing with one or more other holders of licences under that section; and

• (b) no other holder of a licence under that section would be unduly disadvantaged in competing with the holder of the licence to be modified or with any one or more other holders of licences under that section.

• (7) The Director shall not make any modifications under subsection (3) above of a condition of a licence under subsection (1) or (2) of section 7A above unless he is of the opinion that the modifications are such that.

• (a) the licence holder would not be unduly disadvantaged in competing with other holders of a licence under that subsection; and

• (b) no other holder of such a licence would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence being modified)

• (8) The modification under subsection (3) above of a condition of a licence shall not prevent so much of the condition as is not so modified being regarded as a standard condition for the purposes of this Part.

• (9) In this section “modify” includes fail to incorporate and “modification” shall be construed accordingly.

Powers and duties of public gas transporters

General powers and duties

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• (1) It shall be the duty of a gas transporter as respects each authorised area of his—

• (a) to develop and maintain an efficient and economical pipe-line system for the conveyance of gas; and

• (b) subject to paragraph (a) above, to comply, so far as it is economical to do so, with any reasonable request for him —

• (i)

to connect to that system, and convey gas by means of that system to, any premises ; or.

• (ii) to connect to that system a pipe-line system operated by an authorised transporter.

• (1A) It shall also be the duty of a gas transporter to facilitate competition in the supply of gas.

• (2) It shall also be the duty of a gas transporter to avoid any undue preference or undue discrimination—

• (a) in the connection of premises , or a pipe-line system operated by an authorised transporter, to any pipe-line system operated by him; or

• (b) in the terms on which he undertakes the conveyance of gas by means of such a system.

• (2A) The conditions of a licence held by a gas transporter may include a condition requiring the gas transporter, in performing a duty under subsection (1), (1A) or (2), to have regard to the interests of existing and future consumers in relation to electricity conveyed by distribution systems or transmission systems (within the meaning of the Electricity Act 1989).

• (3) The following provisions shall have effect, namely—

• (a) Schedule 3 to this Act (which provides for the acquisition of land by gas transporters); and