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Electricity Act 1989

Type Public General Act

Publication 1989-07-27

Last updated 2026-07-30

State In force

Department Statute Law Database

Source legislation.gov.uk

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(b) in relation to a code manager licence, the Authority.

(4) Conditions included in a licence by virtue of subsection (1)(a) above may—

(a) instead of specifying or describing any contracts or agreements to which they apply, refer to contracts or agreements designated (whether before or after the imposition of the conditions) by the Secretary of State or the Director; and

(b) instead of containing any provisions which fall to be made, refer to provisions set out in documents so designated and direct that those provisions shall have such effect as may be specified in the conditions.

(5) Conditions included in a licence may contain provision for the conditions—

(a) to have effect or cease to have effect at such times and in such circumstances as may be determined by or under the conditions; or

(b) to be modified in such manner as may be specified in the conditions at such times and in such circumstances as may be so determined.

(6) Any provision included by virtue of subsection (5) above in a licence shall have effect in addition to the provision made by this Part with respect to the modification of the conditions of a licence.

(6A) Conditions included in a licence may provide for references in the conditions to any document to operate as references to that document as revised or re-issued from time to time.

(7) Any sums received by the Authority in consequence of the provisions of any condition of a licence shall be paid into the Consolidated Fund.

Transfer of licences.

7A

(1) A licence—

(a) is capable of being transferred by the licence holder, with the consent of the Authority, in accordance with this section but subject to any term as to transfer contained in the licence;

(b) may include conditions which must be complied with before the licence can be transferred.

(2) A transfer may relate to the whole or any part of the licence.

(3) The reference in subsection (2) to part of a licence is a reference to a part of the activities authorised by the licence (whether described by reference to activities being carried on by the licence holder or to activities which he is authorised by the licence to carry on).

(4) Such consent may be given subject to compliance with such modification or other conditions as the Authority considers appropriate.

(5) In the case of a partial transfer, conditions imposed under subsection (4) may make as respects so much of the licence as is proposed to be retained by the transferor provision different from that made as respects so much of the licence as is proposed to be transferred.

(6) In deciding whether to give its consent to a proposed transfer, the Authority shall apply the same criteria as it would apply if the Authority were deciding whether—

(a) in the case of a general transfer, to grant a corresponding licence to the transferee; or

(b) in the case of a partial transfer—

(i) to grant to the transferee a licence corresponding to so much of the licence as is proposed to be transferred; and

(ii) to grant to the transferor a licence corresponding to so much of the licence as is proposed to be retained.

(7) The Authority shall give the Secretary of State not less than 28 days’ notice of any proposal to impose a modification condition.

(8) If, before the expiry of the time specified in a notice under subsection (7), the Secretary of State directs the Authority not to impose the condition, the Authority shall comply with the direction.

(9) Before giving consent to the transfer of a licence, the Authority shall give notice—

(a) stating that it proposes to grant consent to the transfer;

(b) stating the reasons why it proposes to give consent; and

(c) specifying the time from the date of publication of the notice (not being less than two months) within which representations or objections with respect to the transfer may be made,

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

(10) A notice under subsection (9) shall be given by publishing the notice in such manner as the Authority considers appropriate for bringing it to the attention of persons likely to be affected by the transfer.

(10A) Subject to subsection (10C), the Authority shall, following consideration of any representations or objections under subsection (9), give the Secretary of State not less than 28 days’ notice of any proposal to give consent to the transfer of the whole or any part of a smart meter communication licence.

(10B) If, before the expiry of the time specified in a notice under subsection (10A), the Secretary of State directs the Authority not to give consent, the Authority shall comply with that direction.

(10C) Where the Secretary of State does not give a direction under subsection (10B), the Authority may give consent to the transfer of the licence after—

(a) the expiry of the time specified in the notice under subsection (10A); or

(b) if earlier than the time in paragraph (a), the time at which the Secretary of State informs the Authority that no direction will be given under subsection (10B) in relation to the notice.

(10D) Subsections (10A) to (10C) do not apply after 1 November 2028.

(11) A purported transfer of a licence shall be void—

(a) if the licence is not capable of transfer or the Authority has not given its consent;

(b) if the purported transfer is in breach of a condition of the licence; or

(c) if there has, before the purported transfer, been a contravention of a condition subject to compliance with which the Authority’s consent is given.

(11ZA) An electricity system operator licence may not be transferred to a person unless a licence granted under section 7AA of the Gas Act 1986 is also transferred to the same person at the same time.

(11A) A smart meter communication licence may not be transferred to a person unless a licence granted under section 7AB of the Gas Act 1986 is also transferred to the same person at the same time.

(11B) Where the holder of a code manager licence is also the holder of a licence under section 7AC of the Gas Act 1986, the code manager licence may not be transferred to a person unless the licence under section 7AC of that Act is transferred to the same person at the same time.

(12) In this section—

“transfer” includes any form of transfer or assignment or, in Scotland, assignation;

“modification condition” means a condition requiring or otherwise providing for the making of modifications to the conditions of a licence.

Uniform prices etc. in certain areas of Scotland.

7B

(1) The Secretary of State may, by an order made under this section, require the holder of—

(a) a transmission licence; or

(b) a distribution licence,

to apply in respect of the use of the transmission or, as the case may be, distribution system, or any part of the system, in a specified area charges which do not distinguish (whether directly or indirectly) between users in different parts of the area.

(2) The Secretary of State may, by such an order, require the holder of a supply licence—

(a) to charge prices; or

(b) to offer conditions of contract,

in respect of a comparable supply of electricity in a specified area which do not distinguish (whether directly or indirectly) between consumers in different parts of the area.

(3) The Secretary of State shall not specify in such an order any particular or maximum charge or price or any particular condition of contract.

(4) Such an order may make different provision for different cases or descriptions of case.

(5) For the purposes of this section—

(a) a specified area is an area of Scotland specified in such an order; and

(b) supplies of electricity are comparable if they are—

(i) at the same or similar voltages; and

(ii) are in accordance with the same or similar demand characteristics.

Conditions for funding certain companies engaged in nuclear generation in Scotland.

8

(1) Without prejudice to section 7(1)(a) above, it may be a condition of a licence granted to a company (“the licence holder”) that it shall from time to time provide any company to which subsection (2) below applies, comes to apply or has at any time applied with such funds as may be determined by or under the condition in respect of such of that company’s liabilities as may be so determined.

(2) This subsection applies to any company engaging in the operation of a nuclear generating station in Scotland while—

(a) deemed for the purposes of the Companies Act 1985 to be a subsidiary of the licence holder; or

(b) a related company of the licence holder (as defined in paragraph 92 of Schedule 4 to that Act).

(3) Subsection (3) of section 7 above applies in respect of a condition included in a licence by virtue of this section as it applies in respect of a condition so included by virtue of subsection (1)(a) of that section.

Standard conditions of licences.

8A

(1) Subject to subsection (2), each condition which by virtue of section 33(1) of the Utilities Act 2000 is a standard condition for the purposes of any of the types of licence mentioned in section 6(1)(a), (c) , (d) or (g) (that is to say, generation licences, distribution licences , supply licences or code manager licences) shall be incorporated by reference in each licence of that type granted after the commencement of this section.

(1A) Subject to subsection (2), each condition which by virtue of section 137(3) of the Energy Act 2004 is a standard condition for the purposes of transmission licences shall be incorporated by reference in each transmission licence granted on or after the day on which section 137(6) of that Act comes into force.

(1B) Subject to subsection (2), each condition which by virtue of section 146 of the Energy Act 2004 is a standard condition for the purposes of interconnector licences shall be incorporated, by reference, in each interconnector licence granted on or after the commencement of subsection (6) of that section.

(2) Subject to the following provisions of this section, the Authority may, in granting a licence of any type, modify any of the standard conditions for licences of that type in its application to the licence to such extent as it considers requisite to meet the circumstances of the particular case.

(3) Before making any modifications under subsection (2), the Authority shall give notice—

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

(b) stating the reasons why it 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.

(4) A notice under subsection (3) shall be given—

(a) by publishing the notice in such manner as the Authority 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 , Citizens Advice and Consumer Scotland.

(5) If, within the time specified in the notice under subsection (3), the Secretary of State directs the Authority not to make any modification, the Authority shall comply with the direction.

(6) The Authority shall not under subsection (2) make any modifications of a condition of a licence of any type unless it 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 licences of that type; and

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

(7) The modification under subsection (2) of part of a condition of a licence shall not prevent any other part of the condition which is not so modified being regarded as a standard condition for the purposes of this Part.

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

General duties of licence holders.

9

(1) It shall be the duty of an electricity distributor—

(a) to develop and maintain an efficient, co-ordinated and economical system of electricity distribution;

(b) to facilitate competition in the supply and generation of electricity.

(2) It shall be the duty of the holder of a licence authorising him to participate in the transmission of electricity—

(a) to develop and maintain an efficient, co-ordinated and economical system of electricity transmission; and

(b) ..., to facilitate competition in the supply and generation of electricity.

(2A) Subsection (2)(a) shall not have effect to require the holder of a transmission licence which is subject to a condition of the kind mentioned in section 7(2A)(a) to carry on an activity which he would be authorised by the licence to carry on apart from the condition.

(2B) The conditions of a licence held by a person to which a duty imposed by subsection (1) or (2) applies may include a condition requiring the person, in performing the duty, to have regard to the interests of existing and future consumers in relation to gas conveyed through pipes (within the meaning of the Gas Act 1986).

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Powers etc. of licence holders.

10

(1) Subject to subsection (2) below, Schedule 3 to this Act (which provides for the compulsory acquisition of land) and Schedule 4 to this Act (which confers other powers and makes other provision) shall have effect—

(a) in relation to ... the holder of a transmission licence or of an electricity system operator licence; and

(b) to the extent that his licence so provides, in relation to an electricity distributor or any other licence holder;

and references in those Schedules to a licence holder shall be construed accordingly.

(2) Where any provision of either of the Schedules mentioned in subsection (1) above is applied to a licence holder by his licence, it shall have effect subject to such restrictions, exceptions and conditions as may be included in the licence for the purpose of qualifying that provision as so applied or any power or right conferred by or under it.

(3) A generation licence may provide that Schedule 4 to this Act shall have effect in relation to the licence holder as if—

(a) any reference to any purpose connected with the carrying on of the activities which he is authorised by his licence to carry on included a reference to any purpose connected with the supply to any premises of heat produced in association with electricity and steam produced from and air and water heated by such heat; and

(b) any reference to electric lines or electrical plant included a reference to pipes and associated works used or intended to be used for conveying heat so produced, and steam produced from and air and water heated by such heat;

and in this subsection “associated works”, in relation to pipes, means any of the following connected with the pipes, namely, any valve, filter, stopcock, pump, meter, inspection chamber and manhole and such other works as may be prescribed.

(3A) Subsection (3) applies in relation to any purpose connected with the supply to any premises of any gas or liquid subjected to a cooling effect produced in association with electricity as it applies to a purpose mentioned in that subsection.

(4) A transmission licence may provide that, where the licence is modified under section 6(6B)... or 11A above so as to reduce in any respect the area in which the licence holder may carry on activities, Schedule 4 to this Act shall have effect in relation to him as if any reference to the activities which he is authorised by his licence to carry on included a reference to the activities which he was previously so authorised to carry on.

(5) The provisions of Schedule 5 to this Act (which provide for the acquisition of water rights for hydro-electric stations in Scotland) shall have effect.

Electricity transmission and the operation of electricity interconnectors: independence

Electricity transmission and the operation of electricity interconnectors: requirement for certain participants to be certified as independent

10A

(1) A person who, for any period on or after the relevant date, holds a transmission licence and participates in the transmission of electricity for the purpose mentioned in subsection (2) must ensure that the person is certified by the Authority under section 10D throughout that period.

(2) That purpose is the purpose of—

(a) giving a supply to any premises; or

(b) enabling a supply to be so given.

(3) A person who, for any period on or after the relevant date, holds an interconnector licence and participates in the operation of an electricity interconnector must ensure that the person is certified by the Authority under section 10D throughout that period.

(4) In subsections (1) and (3) the “relevant date” in respect of a person is 3 March 2012 or any later date before 4 March 2013 which the Authority specifies under subsection (5) or (6) in respect of the person.

(5) The Authority may specify a later date in respect of a person if—

(a) the person has asked the Authority to specify a later date;

(b) the person is not, and is not part of, a vertically integrated undertaking; and

(6) The Authority may also specify a later date in respect of a person if the Authority thinks that, for reasons beyond its and the person’s control, the Authority will not reasonably be able to make a final decision before 3 March 2012 as to whether to certify the person.

(7) In subsection (5)(b) “vertically integrated undertaking” has the meaning given by Article 2(21) of the Electricity Directive.

Application for certification

10B

(1) Any person may apply for certification.

(2) An application for certification—

(a) must be made in writing to the Authority; and

(b) must be made in such form and contain such information as the Authority may specify.

(3) If the application is made ... and the applicant is a person from a country outside the United Kingdom or a person controlled by a person from a country outside the United Kingdom, the Authority must, as soon as is reasonably practicable after receiving the application—

(a) notify the Secretary of State ... that an application has been made by such a person; and

(b) enclose with the notification ... any information which, at the time of the notification, the Authority has in its possession and thinks is relevant to the question of whether the security of electricity supplies in the United Kingdom ... would be put at risk by the certification of the applicant.

(4) The Authority may ask an applicant for certification for any further information the Authority thinks is relevant to the application, and the applicant must supply that information if—

(a) it is in the applicant’s possession; or

(b) it is information which the applicant could reasonably be expected to obtain.

(5) The Authority may ask a relevant producer or supplier for any information the Authority thinks is relevant to an application for certification, and the relevant producer or supplier must supply that information if—

(a) it is in the relevant producer or supplier’s possession; or

(b) it is information which the relevant producer or supplier could reasonably be expected to obtain.

(6) A person required to supply information under subsection (4) or (5) must do so by any deadline specified by the Authority.

Report where applicant connected with a country outside the United Kingdom

10C

(1) This section applies if the Secretary of State is notified by the Authority under section 10B(3) that an application has been made by a person from a country outside the United Kingdom or a person controlled by a person from a country outside the United Kingdom.

(2) The Secretary of State must prepare a report on whether the security of electricity supplies in the United Kingdom ... would be put at risk by the certification of the applicant.

(3) The Secretary of State must prepare the report and send it to the Authority within the 6 weeks beginning with the day on which the notification is received.

(4) If, before the Secretary of State sends the report to the Authority, the Authority receives information under section 10B(4) or (5) and thinks that the information is relevant to the preparation of the report, the Authority must supply that information to the Secretary of State as soon as is reasonably practicable.

(5) In preparing the report, the Secretary of State must take into account—

(a) any relevant international law; and

(b) any relevant agreement between the government of the United Kingdom and the government of the ... country in question.

Certification

10D

(1) Where the Authority receives an application for certification, it must make a ... decision by the relevant deadline as to whether to certify the applicant.

(2) The relevant deadline is the end of the 4 months beginning with the day on which the Authority receives the application; but this is subject to any extension under subsection (3).

(3) If, before the deadline mentioned in subsection (2) (or before that deadline as previously extended under this subsection), the Authority asks the applicant or a relevant producer or supplier for information under section 10B(4) or (5), the relevant deadline is the end of the 4 months beginning with the day on which the last of that information is received.

(4) As soon as is reasonably practicable after making the ... decision the Authority must notify the decision and the reasons for it to—

(a) the applicant; and

(b) the Secretary of State; ...

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

(9) The Authority must publish its decision to certify or to refuse to certify the applicant, together with the reasons for it, in such manner as it considers appropriate.

Grounds for certification

10E

(1) This section applies to—

(a) a ... decision under section 10D as to whether to certify an applicant;

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) The Authority may only ... decide to certify the applicant, if one of the following five grounds (“the certification grounds”) applies.

(3) The first certification ground is that the applicant meets the ownership unbundling requirement in section 10F.

(4) The second certification ground is that the applicant has asked the Authority to exempt it from the ownership unbundling requirement on the grounds in paragraph (9) of Article 9 of the Electricity Directive (alternative arrangements for independence), and the Authority thinks the requirements of that paragraph are met.

(5) The third certification ground is that—

(a) the applicant has asked the Authority to exempt it from the ownership unbundling requirement on the grounds in paragraphs (1) and (2) of Article 13 of the Electricity Directive (independent system operator);

(b) the applicant has nominated an independent system operator for designation in accordance with those paragraphs; and

(i) thinks that the requirements of those paragraphs are met, and

(ii) is minded to designate the nominated independent system operator.

(6) The fourth certification ground is that—

(a) the applicant holds a licence under section 6(1)(e); and

(b) in accordance with the conditions of that licence, the applicant has been granted an exemption under Article 63 of the Electricity Regulation (new interconnectors) and remains entitled to the benefit of it.

(6A) In subsection (6)(b), the reference to an exemption granted under Article 63 of the Electricity Regulation is to be treated as including an exemption granted under Article 17 of the predecessor of that Regulation.

(7) The fifth certification ground is that—

(a) the applicant holds a licence under section 6(1)(e); and

(b) in accordance with the conditions of that licence, the applicant has been granted an exemption under Article 7 of Regulation (EC) No. 1228/2003 of the European Parliament and of the Council of 26 June 2003 on conditions for access to the network for cross-border exchanges in electricity (new interconnectors) and remains entitled to the benefit of it.

(8) But, regardless of whether a certification ground applies, the Authority—

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

(b) ... must not decide to certify the applicant, if a report prepared by the Secretary of State under section 10C states that the certification of the applicant would put at risk the security of electricity supplies in the United Kingdom ...;

(9) For the purposes of subsection (4), Article 9(9) of the Electricity Directive is to be treated as if the comparison with the provisions of Chapter 5 of the Electricity Directive were a comparison with the provisions of Chapter 5 as they applied in relation to a member State immediately before IP completion day.

(10) For the purposes of subsection (5), the references to Article 13(1) and (2) of the Electricity Directive are to be treated as references to those provisions with the following modifications—

(a) Article 13(1) is to be read as if “Such designation shall be subject to approval by the Commission” were omitted;

(b) Article 13(2)(b) is to be read as if the reference to Article 12 of the Electricity Directive were a reference to Article 12 with the omission of point (h);

(i) for “Regulation (EC) No 714/2009” there were substituted “ the Electricity Regulation ”, and

(ii) the words from “including” to the end were omitted.

The ownership unbundling requirement

10F

(1) In section 10E(3) the ownership unbundling requirement is met by an applicant for certification if in relation to each of the five tests below—

(a) the Authority thinks that it is passed, or

(b) it is treated as passed by virtue of subsection (7), (9) or (9A).

(2) The first test is that the applicant—

(a) does not control a relevant producer or supplier;

(b) does not have a majority shareholding in a relevant producer or supplier; and

(3) For the purposes of subsection (2)(c), the Authority is entitled to think that the applicant will not exercise shareholder rights if the applicant has given an undertaking not to exercise those shareholder rights.

(4) The second test is that, where the applicant is a company, partnership or other business, none of its senior officers has been, or may be, appointed by a person who—

(a) controls an electricity undertaking which is a relevant producer or supplier; or

(b) has a majority shareholding in an electricity undertaking which is a relevant producer or supplier.

(5) The third test is that, where the applicant is a company, partnership or other business, none of its senior officers is also a senior officer of an electricity undertaking which is a relevant producer or supplier.

(6) The fourth test is that the applicant is not controlled by a person who controls a relevant producer or supplier.

(7) But even where the fourth test is not passed, the Authority may treat it as passed if—

(a) the control over the applicant was gained through the exercise of a right conferred as a condition of the provision of either financial support or a guarantee (or both), in relation to the applicant’s business; or

(b) the control over the relevant producer or supplier was gained through the exercise of such a right conferred in relation to the business of the relevant producer or supplier.

(8) The fifth test is that the applicant is not controlled by a person who has a majority shareholding in a relevant producer or supplier.

(9) But even where the fifth test is not passed, the Authority may treat it as passed if—

(a) the control over the applicant was gained through the exercise of a right conferred as a condition of the provision of either financial support or a guarantee (or both), in relation to the applicant’s business; or

(b) the majority shareholding in the relevant producer or supplier was gained through the exercise of such a right conferred in relation to the business of the relevant producer or supplier.

(9A) Except where subsection (9B) applies, the Authority may treat one or more of the five tests in this section as passed if—

(a) the test or tests are not passed in relation to a relevant producer or supplier,

(b) the applicant has demonstrated to the Authority’s satisfaction that the applicant does not have a relationship with the relevant producer or supplier which might lead the applicant to discriminate in favour of the relevant producer or supplier, and

(9B) This subsection applies where the applicant, or a person who controls or has a majority shareholding in the applicant, controls or has a majority shareholding in a person (“A”) who operates a generating station and—

(a) A is a relevant producer or supplier; and

(b) the generating station is directly physically connected to anything that forms part of the applicant’s transmission system or electricity interconnector.

(10) In subsection (2)(c) “relevant date” means the relevant date for the purposes of section 10A(1) or (3).

The ownership unbundling requirement: supplementary

10G

(1) Subsections (2) and (3) apply where—

(a) by virtue of subsection (7) or (9) of section 10F, the Authority treats the fourth or fifth test under section 10F as passed in relation to a person; and

(b) the person is certified in reliance on that treatment.

(2) The Authority must by notice to the certified person specify a period of time at the end of which the Authority will cease to treat that test as passed by virtue of that subsection.

(3) The Authority may by notice to the certified person extend that period if the Authority thinks it necessary or expedient to do so.

(4) In deciding whether to treat a test as passed by virtue of section 10F(7) or (9), and in determining any period or extension under subsection (2) or (3), the Authority—

(a) must take into account—

(i) the period of time for which the test is likely to continue not to be passed, and

(ii) whether the relationship (direct or indirect) between the applicant and the relevant producer or supplier has led or might lead the applicant to discriminate in favour of the relevant producer or supplier; and

(b) may, in particular, take into account any information or undertaking given to the Authority by the applicant, the relevant producer or supplier or the person who controls the applicant and controls or has a majority shareholding in the relevant producer or supplier.

(5) The information and undertakings that may be taken into account under subsection (4)(b) include information and undertakings regarding any measures that have been or will be put in place to ensure the effective separation of the business of the applicant and the business of the relevant producer or supplier.

Designation for the purposes of the Electricity Regulation

10H

(1) This section applies in relation to any period for which a person—

(a) holds a transmission licence or an interconnector licence; and

(b) is certified.

(2) If the person is certified on the first, second, fourth or fifth certification ground in section 10E, the person is designated as an electricity transmission system operator for the purposes of the Electricity Regulation.

(3) If the person is certified on the third certification ground in section 10E, the independent system operator nominated in the application for certification is designated as an electricity transmission system operator for the purposes of the Electricity Regulation.

(4) As soon as is reasonably practicable after a person is designated by virtue of this section, the Authority must notify the designation to—

(a) the person designated; and

(b) the Secretary of State; ...

Monitoring and review of certification

10I

(1) The Authority must monitor, in respect of each certified person, whether the basis on which the Authority decided to certify the person, including the certification ground on which the person was certified, (the “certification basis”) continues to apply.

(2) If, ... as result of information it has received or obtained, the Authority thinks that a person from a country outside the United Kingdom has taken or may take control of a certified person, the Authority must, as soon as is reasonably practicable—

(a) notify the information to the Secretary of State ...; and

(b) enclose with the notification to the Secretary of State any further information which, at the time of the notification, the Authority has in its possession and thinks is relevant to the question of whether the security of electricity supplies in the United Kingdom ... would be put at risk by the continued certification of the person.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The Authority may ... review whether the certification basis in respect of a certified person continues to apply if—

(a) the certified person notifies it of any event or circumstance which may affect that basis; or

(b) the Authority thinks that the basis may no longer apply.

(6) A review under subsection (5) is to be carried out within the 4 months beginning with—

(a) if paragraph (a) of subsection (5) applies, the day on which the Authority receives the notification under that paragraph;

(b) otherwise, the first day on which the Authority thinks that the certification basis may no longer apply.

(7) Subsection (8) applies where—

(a) by virtue of section 10F(7) or (9), the Authority has treated the fourth or fifth test under section 10F as passed in relation to a person;

(b) the person is certified in reliance on that treatment; and

(8) Where this subsection applies, the Authority must review whether that test is now passed.

(9) A review under subsection (8) is to be carried out within the 4 months beginning with the end of the period mentioned in subsection (7)(c).

(10) If, before any of the deadlines mentioned in subsection ..., (6) or (9) (or before such deadline as previously extended under this subsection), the Authority asks the certified person or a relevant producer or supplier for information under section 10J(2) or (3), the relevant deadline is the end of the 4 months beginning with the day on which the last of that information is received.

Review of certification: requirement to provide information etc

10J

(1) As soon as is reasonably practicable after beginning a review under section 10I, the Authority must notify the certified person that the review is being carried out and of the reasons for it.

(2) The Authority may ask that person for any information the Authority thinks is relevant to the review, and the person must supply the information if—

(a) it is in the person’s possession; or

(b) it is information which the person could reasonably be expected to obtain.

(3) The Authority may ask a relevant producer or supplier for any information the Authority thinks is relevant to a review under section 10I, and the relevant producer or supplier must supply that information if—

(a) it is in the relevant producer or supplier’s possession; or

(b) it is information which the relevant producer or supplier could reasonably be expected to obtain.

(4) A person required to supply information under subsection (2) or (3) must do so by any deadline specified by the Authority.

Report as to any connection of certified person with a country outside the United Kingdom

10K

(1) This section applies if the Authority notifies information to the Secretary of State under section 10I(2) in respect of a certified person.

(2) The Secretary of State must prepare a report on whether the security of electricity supplies in the United Kingdom ... would be put at risk by the continued certification of the person.

(3) The Secretary of State must prepare the report and send it to the Authority within the 6 weeks beginning with the day on which the notification is received.

(4) If, before the Secretary of State sends the report to the Authority, the Authority receives information under section 10J(2) or (3) and thinks that the information is relevant to the preparation of the report, the Authority must supply that information to the Secretary of State as soon as is reasonably practicable.

(5) In preparing the report, the Secretary of State must take into account—

(a) any relevant international law; and

(b) any relevant agreement between the government of the United Kingdom and the government of the ... country in question.

Continuation or withdrawal of certification

10L

(1) Where the Authority reviews under section 10I(5) whether the certification basis in respect of a certified person continues to apply, it may, within the 4 months mentioned in section 10I(6) or where relevant the 4 months mentioned in section 10I(10), either—

(a) make a ... decision to continue the certification on the certification ground mentioned in section 10I(1); or

(b) make a ... decision to withdraw the certification.

(2) If the Authority does not make a decision under subsection (1) within those 4 months, it is to be taken as having made a ... decision at the end of the 4 months to continue the certification on the certification ground mentioned in section 10I(1).

(3) Where the Authority reviews under section 10I(8) whether the fourth or fifth test under section 10F is now passed, it may, within the 4 months mentioned in section 10I(9) or where relevant the 4 months mentioned in section 10I(10), either—

(a) make a ... decision to continue the certification on the basis that the test is now passed; or

(b) make a ... decision to withdraw the certification.

(4) If the Authority does not make a decision under subsection (3) within those 4 months, it is to be taken as having made a ... decision at the end of the 4 months to continue the certification on the basis that the test is now passed.

(5) As soon as is reasonably practicable after a ... decision is made (or taken to be made) under this section, the Authority must—

(a) notify the decision to the certified person and the Secretary of State; ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9A) The Authority must publish its decision to continue a certification, or to withdraw a certification, together with the reasons for it, in such manner as it considers appropriate.

(10) Section 10E(8)(b) applies in relation to a decision mentioned in this section as it applies in relation to a decision mentioned in section 10E(1), but as if—

(a) the references in section 10E(8)(b) to the certification of the applicant were references to the continued certification of the person certified; and

(b) the reference in section 10E(8)(b) to a report prepared under section 10C were a reference to a report prepared under section 10K.

Prohibition on the exercise of certain shareholder rights and rights of appointment

10M

(1) A person must not exercise a shareholder right or a right of appointment if—

(a) the right falls within subsection (2), (3), (4) or (5);

(b) the relevant date in respect of the certified person mentioned in that subsection has been reached;

(c) the exercise of the right would or might lead the certified person to discriminate in favour of the relevant producer or supplier mentioned in that subsection; and

(d) the relevant producer or supplier is a person to whom subsection (6) applies.

(2) A right falls within this subsection if—

(a) it is a shareholder right;

(b) it is held by a person who controls a person certified on the certification ground in section 10E(3); and

(3) A right falls within this subsection if—

(a) it is a shareholder right;

(b) it is exercisable in relation to a person certified on the certification ground in section 10E(3); and

(4) A right falls within this subsection if—

(a) it is a shareholder right;

(b) the person who holds it appointed a senior officer of a person certified on the certification ground in section 10E(3);

(d) the right is exercisable in relation to an electricity undertaking which is a relevant producer or supplier.

(5) A right falls within this subsection if—

(a) it is a right to appoint a senior officer of a person certified on the certification ground in section 10E(3); and

(b) the person who holds it has, within the immediately preceding period of 3 years, exercised a shareholder right in relation to an electricity undertaking which is a relevant producer or supplier.

(6) This subsection applies to a person if, in order to carry out of some or all of the activity by virtue of which the person is a relevant producer or supplier, the person—

(a) requires a licence under section 6 of this Act, section 7A of the Gas Act 1986 (licensing of gas suppliers and gas shippers) or section 3 of the Petroleum Act 1998 (licences to search and bore for and get petroleum); or

(b) would require such a licence if carrying out the activity in Great Britain.

(7) In this section—

(a) “exercise” means exercise directly or indirectly, and “exercisable” is to be interpreted accordingly; and

(b) “relevant date” means the relevant date for the purposes of section 10A(1) or (3).

Validity of acts infringing section 10M

10N

(1) The following are voidable on an application to the court—

(a) the exercise of a shareholder right in breach of section 10M;

(b) the appointment of a senior officer in breach of that section.

(2) Any person may make an application under subsection (1).

(3) Such an application may not be made after the end of the 5 years beginning with the day on which the shareholder right was exercised or the appointment made.

(4) If, by virtue of this section, the court declares the exercise of a shareholder right or an appointment to be void, it may make an order as to the consequences of its declaration.

(5) In this section, “the court” means—

(a) in relation to England and Wales, the High Court, and

(b) in relation to Scotland, the Court of Session.

Interpretation

10O

(1) In sections 10A to 10N and this section—

“control”, in relation to one person having control over another, has the meaning given by Article 2(34) of the Electricity Directive (but in determining whether one person (“person A”) has control over another (“person B”) no account is to be taken of any unexercised contractual or other right which would, if exercised, give person A control over person B and which was conferred as a condition of the provision of either financial support or a guarantee (or both), by person A in relation to the business of person B); and references to one person controlling another are to be interpreted accordingly;

“certified” means certified by the Authority under section 10D; and “certify” and “certification” are to be interpreted accordingly;

“certification grounds” has the meaning given by section 10E(2);

“majority shareholding” means a simple majority of shares;

“person from a country outside the United Kingdom” means a person the Authority thinks is from a country outside the United Kingdom;

“shareholder right” means a right, conferred by the holding of a share in a company’s share capital—to vote at general meetings of the company; orto appoint or remove a member of the company’s board of directors;

(2) In this Part “electricity undertaking” means 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) supplies electricity to any premises; or

(3) In this Part “relevant producer or supplier”, in relation to an applicant for certification or a certified person, means a person who falls within each of subsections (4) and (5).

(4) A person falls within this section if the person—

(a) is an electricity undertaking;

(b) 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;

(c) 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 of the Gas Act 1986;

(d) supplies to any premises gas which has been conveyed to those premises through pipes;

(e) 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

(f) otherwise sells gas,

and terms used in paragraphs (b) to (f) of this subsection have the same meanings in those paragraphs as in Part 1 of the Gas Act 1986.

(5) A person falls within this subsection if—

(a) the person requires a licence under section 7A of the Gas Act 1986 (licensing of gas suppliers and gas shippers) or section 6 of this Act to carry out the activity by virtue of which the person falls within subsection (4);

(b) where the person does not carry out the activity in Great Britain, the person would, in the Authority’s opinion, require such a licence if carrying out the activity in Great Britain; or

(c) the person has a relationship with the applicant or certified person which the Authority thinks might lead the applicant or certified person to discriminate in favour of the person.

Long duration electricity storage

10P

(1) The Authority must, as soon as reasonably practicable after this section comes into force, establish and operate a scheme in accordance with this section.

(2) The scheme must be designed for the purpose of encouraging the development and use of long duration electricity storage installations.

(3) The scheme must be open to persons who—

(a) hold or intend to apply for a generation licence to operate a long duration electricity storage installation, and

(b) meet any other specified criteria.

(4) The scheme must provide for an LDES operator who operates an approved installation—

(a) to receive payments from a holder of an electricity system operator licence where the operator’s assessed revenue from that installation is below a specified amount, in specified circumstances, and

(b) to make payments to a holder of an electricity system operator licence where the operator’s assessed revenue from that installation is above a specified amount, in specified circumstances.

(5) In subsection (4)—

“an approved installation” means a long duration electricity storage installation which is approved by the Authority for the purposes of subsection (4) in accordance with the scheme;

“assessed revenue”, in relation to a long duration electricity storage installation, means the difference between—revenue of a specified kind earned or derived in connection with that installation, andcosts of a specified kind incurred in connection with operating the installation.

(6) The Authority may determine how costs and revenue are to be calculated for the purposes of the scheme.

(7) In setting charges to which Article 18(1) of the Electricity Regulation applies, the holder of an electricity system operator licence may take account of payments it makes or receives under the scheme.

(8) In this section—

“LDES operator” means a person who, under a generation licence, generates electricity by means of a long duration electricity storage installation;

“long duration electricity storage installation” means an installation that—generates electricity from stored energy,has an electricity generating capacity of not less than 50 megawatts, andis capable of generating electricity at its full capacity for a continuous period of not less than eight hours;

“specified” means specified by the Authority for the purposes of the scheme in—a document published by the Authority, ora condition of a licence;

“stored energy” has the meaning given by section 4(3ZB).

(9) The Secretary of State may by regulations amend the definition of “long duration electricity storage installation” by substituting—

(a) for the amount of electricity generating capacity for the time being mentioned in paragraph (b) of the definition, a different amount;

(b) for the period for the time being mentioned in paragraph (c) of the definition, a different period (which may not be less than eight hours).

Modification of licences

Modification by agreement.

11

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

Modification of conditions of licences

11A

(1) The Authority may make modifications of—

(a) the conditions of a particular licence;

(b) the standard conditions of licences of any type mentioned in section 6(1).

(2) Before making any modifications under this section, the Authority must give notice—

(a) stating that it proposes to make modifications;

(b) setting out the proposed modifications and their effect;

(d) specifying the time within which representations with respect to the proposed modifications may be made.

(3) The time specified by virtue of subsection (2)(d) may not be less than 28 days from the date of the publication of the notice.

(4) A notice under subsection (2) must be given—

(a) by publishing the notice in such manner as the Authority 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—

(i) each relevant licence holder,

(ii) the Secretary of State, ...

(iii) Citizens Advice, and

(iv) Consumer Scotland.

(4A) The Authority must consider any representations which are duly made.

(5) If, within the time specified by virtue of subsection (2)(d), the Secretary of State directs the Authority not to make any modification, the Authority shall comply with the direction.

(6) Subsections (7) to (9) apply where, having complied with subsections (2) to (4A), the Authority decides to proceed with the making of modifications of the conditions of any licence under this section.

(7) The Authority must—

(a) publish the decision and the modifications in such manner as it considers appropriate for the purpose of bringing them to the attention of persons likely to be affected by the making of the modifications,

(b) state the effect of the modifications,

(d) state the reason for any differences between the modifications and those set out in the notice by virtue of subsection (2)(b).

(8) Each modification has effect from the date specified by the Authority in relation to that modification (subject to the giving of a direction under paragraph 2 of Schedule 5A).

(9) The date specified by virtue of subsection (8) may not be less than 56 days from the publication of the decision to proceed with the making of modifications under this section , except as provided in section 11AA.

(9A) This section does not apply to the modification of a licence in exercise of the power under section 6CC(5)(a) (modification of licence to give effect to determination on a tender exercise).

(10) In this section “relevant licence holder”—

(a) in relation to the modification of standard conditions of licences of any type, means the holder of a licence of that type—

(i) which is to be modified by the inclusion of any new standard condition, or

(ii) which includes any standard conditions to which the modifications relate which are in effect at the time specified by virtue of subsection (2)(d); or

(b) in relation to the modification of a condition of a particular licence (other than a standard condition), means the holder of that particular licence.

Modification of conditions under section 11A: early effective date

11AA

(1) The date specified by virtue of section 11A(8) in relation to a modification under that section may be less than 56 days from the publication of the decision to proceed with the making of the modification if—

(a) the Authority considers it necessary or expedient for the modification to have effect before the 56 days expire,

(b) the purpose condition is satisfied,

(d) the time limit condition is satisfied.

(2) The purpose condition is that the Authority considers the modification necessary or desirable for purposes described in section 11(2) of the Smart Meters Act 2018 (enabling or requiring half-hourly electricity imbalances to be calculated using information about customers' actual consumption of electricity on a half-hourly basis).

(3) The consultation condition is that the notice under section 11A(2) relating to the modification—

(a) stated the date from which the Authority proposed that the modification should have effect,

(b) stated the Authority's reasons for proposing that the modification should have effect from a date less than 56 days from the publication of the decision to modify, and

(4) The time limit condition is that the specified date mentioned in subsection (1) falls within the period of 5 years beginning on the day on which section 11 of the Smart Meters Act 2018 comes into force.

Modification of conditions under section 11A: supplementary

11B

(1) Subsections (2) and (3) apply where at any time the Authority modifies the conditions of licences of any type under section 11A.

(2) If the conditions modified are standard conditions, the Authority must—

(a) also make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in licences of that type granted after that time, and

(b) publish the modifications in such manner as it considers appropriate for the purpose of bringing them to the attention of persons likely to be affected by the making of the modifications.

(3) The Authority may make such incidental or consequential modifications of any conditions of licences of any type as it considers necessary or expedient.

(4) The modification of part of a standard condition of a particular licence under section 11A does not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Part.

(5) The modification of a condition of a licence under this section has effect subject to the giving of a direction under paragraph 2 of Schedule 5A in relation to the decision to which the modification relates.

Appeal from decisions of the Authority

Appeal to the CMA

11C

(1) An appeal lies to the CMA against a decision by the Authority to proceed with the modification of a condition of a licence under section 11A.

(2) An appeal may be brought under this section only by—

(a) a relevant licence holder (within the meaning of section 11A);

(b) any other person who holds a licence of any type under section 6(1) whose interests are materially affected by the decision;

(d) Citizens Advice or Consumer Scotland or those bodies acting jointly in the capacity of representing consumers whose interests are materially affected by the decision.

(3) The permission of the CMA is required for the bringing of an appeal under this section.

(4) The CMA may refuse permission to bring an appeal only on one of the following grounds—

(a) in relation to an appeal brought by a person falling within subsection (2)(b), that the interests of the person are not materially affected by the decision;

(b) in relation to an appeal brought by a qualifying body or association, that the interests of the person represented are not materially affected by the decision;

(c) in relation to an appeal brought by Citizens Advice or Consumer Scotland or those bodies acting jointly, that the interests of the consumers represented are not materially affected by the decision;

(d) in relation to any appeal—

(i) that the appeal is brought for reasons that are trivial or vexatious;

(ii) that the appeal has no reasonable prospect of success.

(5) References in this section to a qualifying body or association are to a body or association whose functions are or include representing persons in respect of interests of theirs which are materially affected by the decision in question.

Procedure on appeal to CMA

11D

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) ... Schedule 5A to this Act has effect.

(2A) Except where specified otherwise in Schedule 5A, the functions of the CMA with respect to an appeal under section 11C are to be carried out on behalf of the CMA by a group constituted for the purpose by the chair of the CMA under Schedule 4 to the Enterprise and Regulatory Reform Act 2013.

Determination by CMA of appeal

11E

(1) This section applies to every appeal brought under section 11C.

(2) In determining an appeal the CMA must have regard, to the same extent as is required of the Authority, to the matters to which the Authority must have regard—

(a) in the carrying out of its principal objective under section 3A;

(b) in the performance of its duties under that section; and

(3) In determining the appeal the CMA —

(a) may have regard to any matter to which the Authority was not able to have regard in relation to the decision which is the subject of the appeal; but

(b) must not, in the exercise of that power, have regard to any matter to which the Authority would not have been entitled to have regard in reaching its decision had it had the opportunity of doing so.

(4) The CMA may allow the appeal only to the extent that it is satisfied that the decision appealed against was wrong on one or more of the following grounds—

(a) that the Authority failed properly to have regard to any matter mentioned in subsection (2);

(b) that the Authority failed to give the appropriate weight to any matter mentioned in subsection (2);

(d) that the modifications fail to achieve, in whole or in part, the effect stated by the Authority by virtue of section 11A(7)(b);

(e) that the decision was wrong in law.

(5) To the extent that the CMA does not allow the appeal, it must confirm the decision appealed against.

CMA's powers on allowing appeal

11F

(1) This section applies where the CMA allows an appeal to any extent.

(2) If the appeal is in relation to a price control decision, the CMA must do one or more of the following—

(a) quash the decision (to the extent that the appeal is allowed);

(b) remit the matter back to the Authority for reconsideration and determination in accordance with any directions given by the CMA ;

(c) substitute the CMA's decision for that of the Authority (to the extent that the appeal is allowed) and give any directions to the Authority or any other party to the appeal.

(3) If the appeal is in relation to any other decision, the CMA must do one or both of the following—

(a) quash the decision (to the extent that the appeal is allowed);

(b) remit the matter back to the Authority for reconsideration and determination in accordance with any directions given by the CMA .

(4) A direction under subsection (2) or (3) must not require a person to do anything that the person would not have power to do (apart from the direction).

(5) A person to whom a direction is given under that subsection must comply with it.

(6) A direction given under that subsection to a person other than the Authority is enforceable as if it were an order of the High Court or (in Scotland) an order of the Court of Session.

(7) For the purposes of this section a decision is a price control decision, in relation to the modification of a condition of a licence, if the purpose of the condition is, in the CMA's opinion, to limit or control the charges on, or the revenue of, the holder of the licence.

(8) In determining for the purposes of subsection (7) what the purpose of a condition is the condition may be assessed on its own or in combination with any other conditions of the licence.

(9) In this section and sections 11G and 11H any reference to a party to an appeal is to be read in accordance with Schedule 5A.

Time limits for CMA to determine an appeal

11G

(1) The CMA must—

(a) determine an appeal against a price control decision within the period of 6 months beginning with the permission date;

(b) determine an appeal against any other decision within the period of 4 months beginning with the permission date.

(2) Subsection (1)(a) or (b) does not apply if subsection (3) applies.

(3) This subsection applies where—

(a) the CMA has received representations on the timing of the determination from a party to the appeal; and

(b) it is satisfied that there are special reasons why the determination cannot be made within the period specified in subsection (1)(a) or (b).

(4) Where subsection (3) applies, the CMA must—

(a) determine an appeal against a price control decision within the period specified by it, not being longer than the period of 7 months beginning with the permission date;

(b) determine an appeal against any other decision within the period specified by it, not being longer than the period of 5 months beginning with the permission date.

(5) Where subsection (3) applies, the CMA must also—

(a) inform the parties to the appeal of the time limit for determining the appeal, and

(b) publish that time limit in such manner as it considers appropriate for the purpose of bringing it to the attention of any other persons likely to be affected by the determination.

(6) In this section “price control decision” is to be read in accordance with section 11F.

(7) References in this section to the permission date are to the date on which the CMA gave permission to bring the appeal in accordance with section 11C(3).

Determination of appeal by CMA : supplementary

11H

(1) A determination by the CMA on an appeal—

(a) must be contained in an order made by the CMA ;

(b) must set out the reasons for the determination;

(d) must be notified by the CMA to the parties to the appeal;

(e) must be published by the CMA —

(i) as soon as reasonably practicable after the determination is made;

(ii) in such manner as the CMA considers appropriate for the purpose of bringing the determination to the attention of any person likely to be affected by it (other than a party to the appeal).

(2) The CMA may exclude from publication under subsection (1)(e) any information which it is satisfied is—

(a) commercial information, the disclosure of which would, or might in CMA's opinion, significantly harm the legitimate business interests of an undertaking to which it relates; or

(b) information relating to the private affairs of an individual, the disclosure of which would, or might in the CMA's opinion, significantly harm the individual’s interests.

(3) The Authority must take such steps as it considers requisite for it to comply with an order of the CMA made by virtue of subsection (1)(a).

(4) The steps must be taken—

(a) if a time is specified in (or is to be determined in accordance with) the order, within that time;

(b) in any other case, within a reasonable time.

(5) Subsections (2) to (4) of section 11B apply where a condition of a licence is modified in accordance with section 11F as they apply where a condition of a licence is modified under section 11A.

Modification references to Monopolies Commission.

12

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

References under section 12: time limits

12A

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

References under section 12: powers of investigation

12B

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

Reports on modification references.

13

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

Modification following report.

14

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

Competition Commission’s power to veto modifications following report.

14A

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

Modification by order under other enactments.

15

(1) Where the CMA or (as the case may be) the Secretary of State (in this section “the relevant authority”) makes a relevant order, the order may also provide for the modification of the conditions of a particular licence, or the standard conditions of licences of any type mentioned in section 6(1), to such extent as may appear to the relevant authority to be requisite or expedient for the purpose of giving effect to, or taking account of, any provision made by the order.

(2) In subsection (1) above “relevant order” means—

(a) an order under section 75, 83 or 84 of, or paragraph 5, 10 or 11 of Schedule 7 to, the Enterprise Act 2002 where—

(i) one or more than one of the enterprises which have, or may have, ceased to be distinct enterprises was engaged in the carrying on of activities authorised or regulated by a licence; or

(ii) one or more than one of the enterprises which will or may cease to be distinct enterprises is engaged in the carrying on of activities authorised or regulated by a licence; or

(b) an order under section 160 or 161 of that Act where the feature, or combination of features, of the market or markets in the United Kingdom for goods or services which prevents, restricts or distorts competition relates to the generation, transmission, distribution or supply of electricity.

(2A) The modification under subsection (1) of part of a standard condition of a particular licence shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Part.

(2B) Where the relevant authority modifies under subsection (1) the standard conditions of licences of any type, the relevant authority—

(a) shall also make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in licences of that type granted after that time; and

(b) may, after consultation with the Authority, make such incidental or consequential modifications as the relevant authority considers necessary or expedient of any conditions of any licence of that type granted before that time.

(2C) Where at any time the relevant authority modifies standard conditions under subsection (2B)(a) for the purposes of their incorporation in licences granted after that time, the relevant authority shall publish those modifications in such manner as the relevant authority considers appropriate.

(3) Expressions used in subsection (2) above and in Part 3 or (as the case may be) Part 4 of the Enterprise Act 2002 have the same meanings in that subsection as in that Part.

Licence modifications relating to new electricity trading arrangements.

15A

(1) The Secretary of State may, in accordance with this section, modify—

(a) the conditions of a particular licence; or

(b) the standard conditions of licences of any type mentioned in section 6(1),

where he considers it necessary or expedient to do so for the purpose of implementing, or facilitating the operation of, new arrangements relating to the trading of electricity.

(2) The power to modify licence conditions under paragraph (a) or (b) of subsection (1) includes power—

(a) to make modifications relating to the operation of transmission systems and distribution systems; and

(b) to make incidental or consequential, or transitional, modifications.

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