Electricity Act 1989

Part I — ELECTRICITY SUPPLY

Introductory

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

General duties of Secretary of State and Director.

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The principal objective and general duties of the Secretary of State and the Authority.

3A

• (1) The principal objective of the Secretary of State and the Gas and Electricity Markets Authority (in this Act referred to as “the Authority”) in carrying out their respective functions under this Part is to protect the interests of existing and future consumers in relation to electricity conveyed by distribution systems or transmission systems ....

• (1A) Those interests of existing and future consumers are their interests taken as a whole, including—

• (a) their interests in the Secretary of State’s compliance with the duties in sections 1 and 4(1)(b) of the Climate Change Act 2008 (net zero target for 2050 and five-year carbon budgets); ...

• (b) their interests in the security of the supply of electricity to them ; and

• (c) their interests in the fulfilment by the Authority, when carrying out its designated regulatory functions, of the designated regulatory objectives.

• (1B) The Secretary of State and the Authority shall carry out their respective functions under this Part in the manner which the Secretary of State or the Authority (as the case may be) considers is best calculated to further the principal objective, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the generation, transmission, distribution or supply of electricity or the provision or use of electricity interconnectors.

• (1C) Before deciding to carry out functions under this Part in a particular manner with a view to promoting competition as mentioned in subsection (1B), the Secretary of State or the Authority shall consider—

• (a) to what extent the interests referred to in subsection (1) of consumers would be protected by that manner of carrying out those functions; and

• (b) whether there is any other manner (whether or not it would promote competition as mentioned in subsection (1B)) in which the Secretary of State or the Authority (as the case may be) could carry out those functions which would better protect those interests.

• (2) In performing the duties under subsections (1B) and (1C), the Secretary of State or the Authority shall have regard to —

• (a) the need to secure that all reasonable demands for electricity are met; and

• (b) the need to secure that licence holders are able to finance the activities which are the subject of obligations imposed by or under this Part , the Utilities Act 2000 , Part 2 or 3 of the Energy Act 2004 , Part 2 or 5 of the Energy Act 2008 or section 4, Part 2, , sections 26 to 29 of the Energy Act 2010 , Part 2 of the Energy Act 2013 , the Nuclear Energy (Financing) Act 2022 or Chapter 1 of Part 2, Chapters 2 and 3 of Part 4 and sections 245 to 247 of the Energy Act 2023 ; and

• (c) the need to contribute to the achievement of sustainable development.

• (3) In performing the duties under subsections (1B), (1C) and (2), the Secretary of State or the Authority shall have regard to the interests of—

• (a) individuals who are disabled or chronically sick;

• (b) individuals of pensionable age;

• (c) individuals with low incomes; and

• (d) individuals residing in rural areas;

but that is not to be taken as implying that regard may not be had to the interests of other descriptions of consumer.

• (4) The Secretary of State and the Authority may, in carrying out any function under this Part, have regard to—

• (a) the interests of consumers in relation to gas conveyed through pipes (within the meaning of the Gas Act 1986); and

• (b) any interests of consumers in relation to—

• (i) communications services and electronic communications apparatus, or

• (ii) water services or sewerage services (within the meaning of the Water Industry Act 1991),

which are affected by the carrying out of that function.

• (5) Subject to subsections (1B) and (2), and to section 132(2) of the Energy Act 2013 (duty to carry out functions in manner best calculated to further delivery of policy outcomes) the Secretary of State and the Authority shall carry out their respective functions under this Part in the manner which he or it considers is best calculated—

• (a) to promote efficiency and economy on the part of persons authorised by licences or exemptions to distribute, supply or participate in the transmission of electricity , to co-ordinate and direct the flow of electricity onto or over transmission systems by means of which the transmission of electricity takes place, to participate in the operation of electricity interconnectors or to provide a smart meter communication service and the efficient use of electricity conveyed by distribution systems or transmission systems;

• (b) to protect the public from dangers arising from the generation, transmission, distribution or supply of electricity or the provision of a smart meter communication service;

• (ba) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) to secure a diverse and viable long-term energy supply,

and ... shall, in carrying out those functions, have regard to the effect on the environment of activities connected with the generation, transmission, distribution or supply of electricity or the provision of a smart meter communication service.

• (5A) In carrying out their respective functions under this Part in accordance with the preceding provisions of this section the Secretary of State and the Authority must each have regard to—

• (a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed; and

• (b) any other principles appearing to him or, as the case may be, it to represent the best regulatory practice.

• (5B) In subsection (1A)—

• “the designated regulatory objectives” means the objectives set out in Article 36(c) to (h) of the Electricity Directive but read with the following modifications— in Article 36(c), for the words from “between” to the end substitute “ , including enabling the development of appropriate cross-border transmission capacities to meet demand; ”in Article 36(d), omit “, in line with general energy policy objectives,in Article 36(f), omit “and foster market integration”, andin Article 36(g), for “their national market” substitute “ the energy market in Great Britain ”;

• ...

• ...

• ...

• (6) In subsections (1C), (3) and (4) references to consumers include both existing and future consumers.

• (7) In this section and sections 3B and 3C, references to functions of the Secretary of State or the Authority under this Part include a reference to functions under the Utilities Act 2000 which relate to electricity conveyed by distribution systems or transmission systems.

• (8) In this Part, unless the context otherwise requires—

• “exemption” means an exemption granted under section 5;

• “licence” means a licence under section 6 and “licence holder” shall be construed accordingly.

Guidance on social and environmental matters.

3B

• (1) The Secretary of State shall from time to time issue guidance about the making by the Authority of a contribution towards the attainment of any social or environmental policies set out or referred to in the guidance.

• (2) The Authority shall, in carrying out its functions under this Part, have regard to any guidance issued under this section.

• (3) Before issuing guidance under this section the Secretary of State shall consult—

• (a) the Authority;

• (b) Citizens Advice;

• (ba) Consumer Scotland;

• (c) licence holders; and

• (d) such other persons as the Secretary of State considers it appropriate to consult in relation to the guidance.

• (4) A draft of any guidance proposed to be issued under this section shall be laid before each House of Parliament.

• (5) Guidance shall not be issued under this section until after the period of forty days beginning with—

• (a) the day on which the draft is laid before each House of Parliament; or

• (b) if the draft is laid before the House of Lords on one day and the House of Commons on another, the later of those two days.

• (6) If, before the end of that period, either House resolves that the guidance should not be issued, the Secretary of State must not issue it.

• (7) In reckoning any period of forty days for the purposes of subsection (5) or (6), no account shall be taken of any time during which—

• (a) Parliament is dissolved or prorogued; or

• (b) both Houses are adjourned for more than four days.

• (8) The Secretary of State shall arrange for any guidance issued under this section to be published in such manner as he considers appropriate.

Health and safety.

3C

• (1) The Secretary of State and the Authority shall consult —

• (a) the Health and Safety Executive about all electricity safety issues, and

• (b) the Office for Nuclear Regulation about all electricity safety issues relating to nuclear sites (within the meaning of Part 3 of the Energy Act 2013),

which may be relevant to the carrying out of their respective functions under this Part.

• (2) The Secretary of State may require the Authority also to consult him about electricity safety issues of particular descriptions.

• (3) The Secretary of State and the Authority shall, in carrying out their respective functions under this Part, take into account any advice given by the Health and Safety Executive or the Office for Nuclear Regulation about any electricity safety issue (whether or not in response to consultation under subsection (1)).

• (4) The Authority shall, in carrying out its functions under this Part, take into account any advice given by the Secretary of State about any electricity safety issue (whether or not in response to consultation under subsection (2)).

• (5) For the purposes of this section an electricity safety issue is anything concerning the generation, transmission, distribution or supply of electricity which may affect the health and safety of—

• (a) members of the public; or

• (b) persons employed in connection with any of those activities.

Exceptions from sections 3A to 3C.

3D

• (1) Section 3A does not apply in relation to the issuing by the Secretary of State of guidance under section 3B.

• (2) Sections 3A to 3C do not apply in relation to functions of the Secretary of State under sections 36 to 37.

• (3) Sections 3A to 3C do not apply in relation to anything done by the Authority—

• (a) in the exercise of functions relating to the determination of disputes;

• (b) in the exercise of functions under section 43(3).

• (4) The Authority may nevertheless, when exercising any function under section 43(3), have regard to any matter in respect of which a duty is imposed by sections 3A to 3C (“a general matter”), if it is a matter to which the CMA could have regard when exercising that function (but that is not to be taken as implying that, in relation to functions mentioned in subsection (2), regard may not be had to any general matter).

• (5) The duties imposed by sections 3A to 3C do not affect the obligation of the Authority or the Secretary of State to perform or comply with any other duty or requirement (whether arising under this Act or another enactment, by virtue of any assimilated obligation or otherwise).

Binding decisions of the Agency for the Cooperation of Energy Regulators and of the European Commission

3E

• (1) The Authority must carry out its functions under this Part in the manner that it considers is best calculated to implement, or to ensure compliance with, any binding decision of the Agency or the European Commission made under the Electricity Directive, the Electricity Regulation or the Agency Regulation (or the predecessor of the Electricity Regulation or the Agency Regulation) in relation to electricity.

• (2) For the purposes of subsection (1), a binding decision does not include a decision that is not, or so much of a decision as is not, assimilated law.

Authority to consult and cooperate with other authorities

3F

• (1) When carrying out its designated regulatory functions the Authority must, wherever it thinks fit—

• (a) consult and cooperate with the Northern Ireland Authority;

• (b) provide the Northern Ireland Authority with information it may require in order to carry out its designated regulatory functions; and

• (c) consult relevant national authorities.

• (2) In exercising functions in accordance with subsection (1) the Authority must, wherever it thinks fit, cooperate with the Northern Ireland Authority with a view ... to—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) the promotion and facilitation of cooperation between transmission system operators;

• (c) the optimal management of electricity networks;

• (d) the promotion of jointly managed cross-border trade in electricity and the allocation of cross-border capacity;

• (e) enabling an adequate level of interconnection capacity;

• (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and

• (g) the coordination of the regulation of electricity markets, including rules concerning the management of congestion of electricity networks.

• (3) In this section—

• ...

• ...

• “relevant national authority” means any of the following—...the Office of Communications; the CMA;the Water Services Regulation Authority.

Licensing of supply etc.

Prohibition on unlicensed supply etc.

4

• (1) A person who—

• (a) generates electricity for the purpose of giving a supply to any premises or enabling a supply to be so given;

• (b) participates in the transmission of electricity for that purpose;

• (bb) distributes electricity for that purpose;

• (c) supplies electricity to any premises, ...

• (ca) co-ordinates and directs the flow of electricity onto and over transmission systems by means of which the transmission of electricity takes place;

• (d) participates in the operation of an electricity interconnector; ...

• (e) provides a smart meter communication service,or

• (f) performs the function of code manager in relation to a designated electricity licence document (see further subsections (3H) and (3I)),

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

• (2) 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.

• (3) 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.

• (3ZA) In subsection (1)(a), the reference to a person who generates electricity includes a reference to a person who generates electricity from stored energy.

• (3ZB) In subsection (3ZA), “stored energy” means energy that—

• (a) was converted from electricity, and

• (b) is stored for the purpose of its future reconversion into electricity.

• (3A) In subsection (1)(b) above, the reference to a person who participates in the transmission of electricity is to a person who—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) makes available for use for the purposes of a transmission system by means of which the transmission of electricity takes place anything which forms part of it.

• (3AA) Subsection (3A) is subject to section 6F (offshore transmission during commissioning period).

• (3B) For the purposes of subsection (3A)(b), a person shall not be regarded as making something available just because he consents to its being made available by another.

• (3C) A reference in this Part to participating in the operation of an electricity interconnector is a reference to—

• (a) co-ordinating and directing the flow of electricity into or through an electricity interconnector; or

• (b) making such an interconnector available for use for the conveyance of electricity;

and a person is not to be regarded as participating in the transmission of electricity by reason only of activities constituting participation in the operation of an electricity interconnector.

• (3D) For the purposes of subsection (3C)(b), a person shall not be regarded as making something available just because he consents to its being made available by another.

• (3E) In this Part “electricity interconnector” means so much of an electric line or other electrical plant 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 electricity (whether in both directions or in only one) between Great Britain and a place within the jurisdiction of another country or territory.

• (3F) For the purposes of this section—

• (a) 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; and

• (b) a place is within the jurisdiction of another country or territory if it is in that country or territory or in waters in relation to which authorities of that country or territory exercise jurisdiction.