Legalize / United Kingdom / Public General Act

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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(3) In this section “successor company in England and Wales” means a company nominated for the purposes of section 65(1) or 66(1) or (2) above.

Provisions with respect to floatation

Responsibility for composite listing particulars.

82

(1) Where—

(a) the same document contains listing particulars for securities of two or more successor Companies; and

(b) any person’s responsibility for any information included in the document is stated in the document to be confined to its inclusion as part of the listing particulars for securities of any one of those companies,

that person shall not be treated as responsible for that information in so far as it is stated in the document to form part of the listing particulars for securities of any other of those companies.

(2) In this section—

“the 1986 Act” means the Financial Services Act 1986;

“listing particulars” means any listing particulars or supplementary listing particulars within the meaning of the 1986 Act;

“responsible” means responsible for the purposes of Part IV of the 1986 Act and “responsibility” shall be construed accordingly.

Application of Trustee Investments Act 1961 in relation to investment in operating companies.

83

(1) Subsection (2) below shall have effect for the purpose of applying paragraph 3(b) of Part IV of Schedule I to the Trustee Investments Act 1961 (which provides that shares and debentures of a company shall not count as wider–range and narrower–range investments respectively within the meaning of that Act unless the company has paid dividends in each of the five years immediately preceding that in which the investment is made) in relation to investment in shares or debentures of an operating company during the calendar year in which the transfer date falls (“the first investment year”) or during any year following that year.

(2) The company shall be deemed to have paid a dividend as mentioned in the said paragraph 3(b)—

(a) in every year preceding the first investment year which is included in the relevant five years; and

(b) in the first investment year, if that year is included in the relevant five years and that company does not in fact pay such a dividend in that year.

(3) In subsection (2) above “the relevant five years” means the five years immediately preceding the year in which the investment in question is made or proposed to be made.

Provisions with respect to existing bodies

Dissolution etc. of existing bodies.

84

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Compensation to members and employees of existing bodies.

85

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Discharge of certain advances and loans made to existing bodies.

86

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Expenditure and receipts of Electricity Council.

87

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Grants towards expenditure during transitional period.

88

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Miscellaneous

Payments for the use of tax losses.

89

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Taxation provisions.

90

Schedule 11 to this Act (which makes provision about taxation in relation to or in connection with the other provisions of this Part) shall have effect.

Electricity Stock.

91

(1) On the transfer date all the rights and liabilities —

(a) to which the Electricity Council was entitled or subject immediately before that date under the terms of issue of British Electricity Stock; or

(b) to which the North of Scotland Hydro-Electric Board was entitled or subject immediately before that date under the terms of issue of North of Scotland Electricity Stock,

shall become by virtue of this section rights and liabilities of the Treasury.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The Bank of England shall deal with—

(a) money paid to them under subsection (2) above; and

(b) money already in their hands which represents such unclaimed interest or redemption money as is mentioned in that subsection,

as money entrusted to them for payment to holders of the Stock concerned and section 5 of the Miscellaneous Financial Provisions Act 1955 (which relates to unclaimed dividends etc. on Government Stock) shall apply accordingly.

(4) In this section—

“British Electricity Stock” means any stock created and issued under section 16(1) of the Electricity Act 1957 or under section 40 of the Electricity Act 1947;

“North of Scotland Electricity Stock” means any stock created and issued under section 13 of the Hydro-Electric Development (Scotland) Act 1943.

Abolition of central guarantee fund.

92

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Supplemental

Parliamentary disqualification.

93

In the House of Commons Disqualification Act 1975, in Part III of Schedule 1 (other disqualifying offices) there shall be inserted (at the appropriate place) the following entry—

Director of a successor company (within the meaning of Part II of the Electricity Act 1989), being a director nominated or appointed by a Minister of the Crown or by a person acting on behalf of the Crown

Construction of references to property, rights and liabilities.

94

(1) References in this Part to property, rights and liabilities of an Electricity Board or the Electricity Council are references to all such property, rights and liabilities, whether or not capable of being transferred or assigned by that body.

(2) It is hereby declared for the avoidance of doubt that—

(a) any reference in this Part to property of an Electricity Board or the Electricity Council is a reference to property of that Board or Council, whether situated in the United Kingdom or elsewhere; and

(b) any such reference to rights and liabilities of an Electricity Board or the Electricity Council is a reference to rights to which that Board or Council is entitled, or (as the case may be) liabilities to which that body is subject, whether under the law of the United Kingdom or of any part of the United Kingdom or under the law of any country or territory outside the United Kingdom.

Other interpretation of Part II.

95

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

“the appropriate successor company”, in relation to an existing body, has the meaning given by section 88(4) above;

“debentures” includes debenture stock;

“existing body” has the meaning given by section 84(1) above;

“generating company” means a company designated as such by the Secretary of State;

“operating company” has the meaning given by section 74(10) above;

“securities”, in relation to a company, includes shares, debentures, bonds and other securities of the company, whether or not constituting a charge on the assets of the company;

“shares” includes stock;

“Scottish electricity company” means a company designated as such by the Secretary of State;

“Scottish nuclear company” means the company designated as such by the Secretary of State;

“successor company” has the meaning given by section 71(1) above;

“supply company” has the meaning given by section 65(5) above;

“the transfer date”—in relation to any transfer effected by subsection (1) of section 65 or subsection (5) of section 66 above, has the meaning given by the said subsection (1);in relation to any transfer effected by subsection (4) of section 67 above, has the meaning given by subsection (3) of that section;

“transferee” and “transferor”, in relation to any transfer of property, rights and liabilities effected or proposed to be effected under this Part, mean respectively the person to whom and the person from whom they are or are to be so transferred;

“transfer scheme” has the meaning given by section 69(1) above;

“transitional period”, in relation to an existing body, has the meaning given by section 84(2) above;

“transmission company” means the company designated as such by the Secretary of State.

(2) A company shall be regarded for the purposes of this Part as wholly owned by the Crown at any time when none of the issued shares in the company is held otherwise than—

(a) by, or by a nominee of, the Treasury or the Secretary of State; or

(b) by a company which is itself wholly owned by the Crown.

Part III — MISCELLANEOUS AND SUPPLEMENTAL

Miscellaneous

Directions for preserving security of electricity supplies etc.

96

(1) The Secretary of State may, after consultation with a person to whom this section applies, give to that person such directions of a general character as appear to the Secretary of State to be requisite or expedient for the purpose of—

(a) preserving the security of buildings or installations used for, or for purposes connected with, the generation, transmission or supply of electricity or the provision of a smart meter communication service; or

(b) mitigating the effects of any civil emergency which may occur.

(2) If it appears to the Secretary of State to be requisite or expedient to do so for any such purpose as is mentioned in subsection (1) above, he may, after consultation with a person to whom this section applies, give to that person a direction requiring him (according to the circumstances of the case) to do, or not to do, a particular thing specified in the direction.

(3) A person to whom this section applies shall give effect to any direction given to him by the Secretary of State under this section notwithstanding any other duty imposed on him by or under this Act.

(4) The Secretary of State shall lay before each House of Parliament a copy of every direction given under this section unless he is of the opinion that disclosure of the direction is against the interests of national security or the commercial interests of any person.

(5) A person shall not disclose, or be required by virtue of any enactment or otherwise to disclose, anything done by virtue of this section if the Secretary of State has notified him that the Secretary of State is of the opinion that disclosure of that thing is against the interests of national security or the commercial interests of some other person.

(6) This section applies to any licence holder and any person authorised by an exemption to generate or supply electricity or the provision of a smart meter communication service.

(7) In this section “civil emergency” means any natural disaster or other emergency which, in the opinion of the Secretary of State, is or may be likely to disrupt electricity supplies; and expressions used in Part I have the same meanings as in that Part.

Financial assistance for discharge of nuclear liabilities.

97

The provisions of Schedule 12 to this Act (which provide for the giving of financial assistance in connection with the storage and reprocessing of nuclear fuel, the treatment, storage and disposal of radioactive waste and the decommissioning of nuclear installations) shall have effect.

Provision of statistical information.

98

(1) The Secretary of State may, if he considers it expedient for the purpose of obtaining statistical information relating to the generation, transmission or supply of electricity or the use of electricity interconnectors or the provision of a smart meter communication service, serve a notice under this section on any licence holder or any person who is authorised by an exemption to generate or supply electricity or to participate in the operation of electricity interconnectors or to provide a smart meter communication service.

(2) A notice under this section may require the person on whom it is served to furnish, at a time and place specified in the notice, to the Secretary of State such statistical information about that person’s business as may be so specified.

(3) Subject to subsections (4) and (5) below, no information with respect to any particular business which—

(a) has been obtained under this section; and

(b) relates to the affairs of any individual or to any particular business,

shall, during the lifetime of that individual or so long as that business continues to be carried on, be published or otherwise disclosed without the consent of that individual or the person for the time being carrying on that business.

(4) Subsection (3) above does not apply in relation to any disclosure which is made after consultation with the individual concerned, or the person for the time being carrying on the business concerned, and is of information relating to—

(a) the quantities of electricity generated by particular methods or by the use of particular fuels;

(b) the quantities of particular fuels used for the generation of electricity;

(c) the quantities of electricity transferred between Great Britain and countries or territories outside Great Britain, or between England and Wales on the one hand and Scotland on the other; or

(d) the quantities of electricity supplied in England, Scotland or Wales either generally or to persons of any particular class or description.

(5) Subsection (3) above does not apply in relation to any disclosure which is made to the Minister in charge of any Government department or to the Scottish Ministers or for the purposes of any proceedings under this section.

(6) The Secretary of State may, after consultation with persons or bodies appearing to him to be representative of persons likely to be affected, by order amend subsection (4) above so as to add other descriptions of information which may be disclosed notwithstanding that it may relate to a particular person or business.

(7) Any person who without reasonable excuse fails to furnish information in compliance with a requirement under this section shall be liable on summary conviction to a fine not exceeding level 1 on the standard scale.

(8) Any person who publishes or discloses any information in contravention of subsection (3) above or, in purported compliance with a requirement under this section, knowingly or recklessly furnishes any information which is false in any material particular shall be liable—

(a) on summary conviction, to imprisonment for a term not exceeding three months or a fine not exceeding the statutory maximum or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both.

(9) In this section “information” does not include estimates as to future matters but, subject to that, expressions which are used in Part I have the same meanings as in that Part.

Promotion of new techniques in national interest.

99

(1) The Secretary of State shall exercise the power conferred on him by section 5 of the Science and Technology Act 1965 (expenditure on research and development in science or technology) for the purpose of promoting such research into, and such development of, new techniques relating to the generation, transmission or supply of electricity as appears to him to be necessary in the national interest.

(2) The Secretary of State may, if he considers it expedient for purposes connected with the performance of his duty under this section, serve notice under this subsection on any licence holder or any person who is authorised by an exemption to generate or supply electricity.

(3) A notice under subsection (2) above may require the person on whom it is served to furnish, at a time and place specified in the notice, to the Secretary of State such information about that person’s business as may be so specified.

(4) Subsections (3), (5) and (7) to (9) of section 98 above shall apply for the purposes of this section as they apply for the purposes of that section.

Amendment of enactments

Competition and restrictive trade practices.

100

(1) Electricity shall be treated as goods for the purposes of the 1973 Act, ... , the 1980 Act and the Enterprise Act 2002.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

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

Rights of entry.

101

In section 2 of the Rights of Entry (Gas and Electricity Boards) Act 1954 (warrant to authorise entry), for subsection (4) there shall be substituted the following subsection—

(4) Every warrant granted under this section shall continue in force until— (a) the time when the purpose for which the entry is required is satisfied; or (b) the end of the period of 28 days beginning with the day on which the warrant was granted, whichever is the earlier.

Production and supply of heat or electricity etc. by Scottish local authorities.

102

The provisions of Schedule 13 (which inserts into the Local Government (Scotland) Act 1973 provisions analogous to sections 11 (production and supply of heat or electricity or both by local authorities in England and Wales) and 12 (provisions supplementary to the said section 11) of the Local Government (Miscellaneous Provisions) Act 1976) shall have effect.

Stamp duty exemption for certain contracts.

103

Electricity shall be treated as goods for the purposes of section 59 of the Stamp Act 1891 (certain contracts chargeable as conveyances on sale).

Amendment etc. of pension schemes

Amendment etc. of Electricity Supply Pension Scheme.

104

The provisions of Schedule 14 to this Act (which provide for amending the Electricity Supply Pension Scheme and for giving special protection to certain persons who have or may acquire rights under that scheme) shall have effect.

Amendment etc. of Scottish Pension Schemes.

105

The provisions of Schedule 15 to this Act (which provide for amending the Hydroboard Superannuation Fund and the South of Scotland Electricity Board’s Superannuation Scheme and for giving special protection to certain persons who have or may acquire rights under those schemes) shall have effect.

Supplemental

Regulations and orders.

106

(1) Any power under this Act to make regulations, and any power of the Secretary of State under this Act to make orders (other than the powers conferred by section 23, paragraph 9(6) of Schedule 4 and paragraph 2 of Schedule 5), shall be exercisable by statutory instrument.

(1ZA) Subsection (1) does not apply to a power of the Scottish Ministers to make regulations (see section 27 of the Interpretation and Legislative Reform (Scotland) Act 2010 (Scottish statutory instruments)).

(1A) Any power of the Scottish Ministers to make orders under section 32 is exercisable by statutory instrument.

(1B) Any power of the Welsh Ministers to make orders under section 36 or 36C or paragraph 1(4) of Schedule 9 is exercisable by statutory instrument.

(2) Any statutory instrument containing—

(a) regulations under this Act made by the Secretary of State (other than regulations under section 56FBA); or

(b) an order under this Act (other than an order appointing a day or nominating a company , an order under section 11A, 27O, 32, 32LA, 32N, 32R(4), 41A, ... 56A or 56FA or an order under paragraph 4 of Schedule 12 to this Act),

shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(2ZA) Subsection (2) does not apply to a statutory instrument containing (whether alone or with other provision)—

(a) regulations under paragraph 2A of Schedule 8;

(b) regulations under section 38A.

(2A) Any statutory instrument containing regulations or an order made by the Welsh Ministers under section 36 or 36C or paragraph 1(4) of Schedule 9 shall be subject to annulment in pursuance of a resolution of the National Assembly for Wales.

(3) Regulations made by the Scottish Ministers under —

(a) section 36C,

(b) section 37A,

(d) section 37C,

(e) paragraph 6A of Schedule 4, or

(f) any paragraph of Schedule 8 except paragraph 2A,

are subject to the negative procedure.

(4) Before making regulations under a provision listed in subsection (6), the Secretary of State must consult the Scottish Ministers.

(5) Before making regulations under a provision listed in subsection (6), the Scottish Ministers must consult the Secretary of State.

(6) The provisions are—

(a) section 37A;

(b) section 37B;

(d) paragraphs 1A, 2A and 7B of Schedule 8.

Directions.

107

(1) It shall be the duty of any person to whom a direction is given under this Act to give effect to that direction.

(2) Any power conferred by this Act to give a direction shall, unless the context otherwise requires, include power to vary or revoke the direction.

(3) Any direction given under this Act shall be in writing.

Offences by bodies corporate.

108

(1) Where a body corporate is guilty of an offence under this Act and that offence is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting t oact in any such capacity he, as well as the body corporate, shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

(2) Where the affairs of a body corporate are managed by its members, subsection (1) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.

Extraterritorial operation of Act

108A

(1) Where by virtue of this Act an act or omission taking place outside Great Britain constitutes an offence, proceedings for the offence may be taken, and the offence may for all incidental purposes be treated as having been committed, in any place in Great Britain.

(2) Provision made by or under this Act in relation to places outside Great Britain—

(a) so far as it applies to individuals, applies to them whether or not they are British citizens; and

(b) so far as it applies to bodies corporate, applies to them whether or not they are incorporated under the law of a part of the United Kingdom.

Service of documents.

109

(1) Any document required or authorised by virtue of this Act to be served on any person may be served—

(a) by delivering it to him or by leaving it at his proper address or by sending it by post to him at that address; or

(b) if the person is a body corporate, by serving it in accordance with paragraph (a) above on the secretary of that body; or

(c) if the person is a partnership, by serving it in accordance with paragraph (a) above on a partner or a person having the control or management of the partnership business.

(2) For the purposes of this section and section 7 of the Interpretation Act 1978 (which relates to the service of documents by post) in its application to this section, the proper address of any person on whom a document is to be served shall be his last known address, except that—

(a) in the case of service on a body corporate or its secretary, it shall be the address of the registered or principal office of the body;

(b) in the case of service on a partnership or a partner or a person having the control or management of a partnership business, it shall be the address of the principal office of the partnership;

and for the purposes of this subsection the principal office of a company registered outside the United Kingdom or of a partnership carrying on business outside the United Kingdom is its principal office within the United Kingdom.

(3) If a person to be served by virtue of this Act with any document by another has specified to that other an address within the United Kingdom other than his proper address (as determined in pursuance of subsection (2) above) as the one at which he or someone on his behalf will accept documents of the same description as that document, that address shall also be treated as his proper address for the purposes of this section and for the purposes of the said section 7 in its application to this section.

(4) If the name or address of any owner or occupier of land on whom by virtue of this Act any document is to be served cannot after reasonable inquiry be ascertained, the document may be served by—

(a) addressing it to him by the description of “owner” or “occupier” of the land (describing it); and

(b) either leaving it in the hands of a person who is or appears to be resident or employed on the land or leaving it conspicuously affixed to some building or object on or near the land.

(4A) In the case of any document required or authorised by virtue of this Act to be served on any person by the Authority or the Secretary of State, that document may also be served by electronic means if the conditions in subsection (4B) are met.

(4B) The conditions in this subsection are that—

(a) the person on whom the document is to be served has indicated to the Authority or the Secretary of State (as the case may be) the person’s willingness to receive by electronic means documents of that description (and has not withdrawn that indication); and

(b) the document is sent to the number or address most recently specified by the person for that purpose.

(4C) An indication for the purposes of subsection (4B)—

(a) must be given in such manner and include such information as the Authority or the Secretary of State (as the case may be) directs; and

(b) may be withdrawn by an indication given in such manner as the Authority or the Secretary of State (as the case may be) directs.

(4D) Withdrawal of an indication given for the purposes of subsection (4B) takes effect at the beginning of the fifth working day after the day on which the Authority or the Secretary of State (as the case may be) receives the indication withdrawing it.

(4E) A document which is served in accordance with subsection (4A) is to be treated as having been served on the next working day after the day on which it is sent.

(5) This section shall not apply to any document in relation to the service of which provision is made by rules of court.

(6) In this section—

“secretary”, in relation to a local authority within the meaning of the Local Government Act 1972 or the Local Government (Scotland) Act 1973, means the proper officer within the meaning of that Act;

“working day” means any day other than—Saturday or Sunday;Christmas Day or Good Friday;a day which is a bank holiday in England and Wales or Scotland under the Banking and Financial Dealings Act 1971.

Financial provisions.

110

There shall be paid out of money provided by Parliament—

(a) any administrative expenses incurred by the Secretary of State or the Treasury in consequence of the provisions of this Act; and

(b) any increase attributable to this Act in the sums payable out of money so provided under any other Act.

General interpretation.

111

(1) In this Act, unless the context otherwise requires—

“Area Board” has the same meaning as in the Electricity Act 1947;

“the Authority” means the Gas and Electricity Markets Authority;

“Citizens Advice” means the National Association of Citizens Advice Bureaux;

“Citizens Advice Scotland” means the Scottish Association of Citizens Advice Bureaux;

“contravention”, in relation to any direction, condition, requirement, regulation or order, includes any failure to comply with it and cognate expressions shall be construed accordingly;

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

“Electricity Board” means an Area Board, the Generating Board or a Scottish Board;

“the Generating Board” means the Central Electricity Generating Board;

“modifications” includes additions, alterations and omissions and cognate expressions shall be construed accordingly;

“protection of the water environment” has the same meaning as in section 1(2) of the Water Environment and Water Services (Scotland) Act 2003;

“Scottish Board” means either the North of Scotland Hydro-Electric Board or the South of Scotland Electricity Board.

(2) For the purposes of this Act any class or description may be framed by reference to any matters or circumstances whatever.

Amendments, transitional provisions, savings and repeals.

112

(1) The enactments mentioned in Schedule 16 to this Act shall have effect subject to the amendments there specified (being minor amendments or amendments consequential on the preceding provisions of this Act).

(2) The Secretary of State may by order make such consequential modifications of any provision contained in any Act (whether public general or local) passed, or in subordinate legislation made, before the relevant date as appear to him necessary or expedient—

(a) in respect of any reference in that Act or subordinate legislation to any of the Electricity Boards or the Electricity Council;

(b) in respect of any reference (in whatever terms) in that Act or subordinate legislation to a person carrying on an electricity undertaking or to such an undertaking;

(d) in the case of a provision contained in a local Act or subordinate legislation, in respect of any other inconsistency between that Act or subordinate legislation and this Act;

and in this subsection “the relevant date”, in relation to any modifications, means the date of the coming into force of the provisions of this Act on which they are consequential.

(3) The transitional provisions and savings contained in Schedule 17 to this Act shall have effect; but those provisions are without prejudice to sections 16 and 17 of the Interpretation Act 1978 (effect of repeals).

(4) The enactments mentioned in Schedule 18 to this Act (which include some that are spent or no longer of practical utility) are hereby repealed to the extent specified in the third column of that Schedule.

Short title, commencement and extent.

113

(1) This Act may be cited as the Electricity Act 1989.

(2) This Act shall come into force on such day as the Secretary of State may by order appoint; and different days may be so appointed for different provisions or for different purposes.

(3) This Act, except this section and the following provisions, namely—

Sections 32N to 32Z2;

sections 65 to 70;

section 82;

sections 91 to 95;

section 100;

paragraph 8 of Schedule 1 and section 1(5) so far as relating to that paragraph;

paragraph 10 of Schedule 2 and section 2(6) so far as relating to that paragraph;

paragraph 11 of Schedule 16 and section 112(1) so far as relating to that paragraph; and

Schedule 18 and section 112(4) so far as relating to enactments which extend there ...,

does not extend to Northern Ireland.

SCHEDULE 1

Remuneration, pensions etc.

1

(1) There shall be paid to the Director such remuneration, and such travelling and other allowances, as the Secretary of State may determine.

(2) In the case of any such holder of the office of the Director as may be determined by the Secretary of State, there shall be paid such pension, allowance or gratuity to or in respect of him, or such contributions or payments towards provision for such a pension, allowance or gratuity, as may be so determined.

(3) If, when any person ceases to hold office as the Director, the Secretary of State determines that there are special circumstances which make it right that he should receive compensation, there may be paid to him a sum by way of compensation of such amount as may be determined by the Secretary of State.

(4) The approval of the Treasury shall be required for the making of a determination under this paragraph.

Staff

2

The Director may, with the approval of the Treasury as to numbers and terms and conditions of service, appoint such staff as he may determine.

Expenses of the Director and his staff

3

There shall be paid out of money provided by Parliament—

(a) the remuneration of, and any travelling or other allowances payable under this Act to, the Director and any staff of the Director;

(b) any sums payable under this Act to or in respect of the Director; and

Official seal

4

The Director shall have an official seal for the authentication of documents required for the purposes of his functions.

Performance of functions

5

(1) Anything authorised or required by or under this Act or any other enactment to be done by the Director, other than the making of a statutory instrument, may be done by any member of the staff of the Director who is authorised generally or specially in that behalf by the Director.

(2) The Statutory Instruments Act 1946 shall apply to any power to make statutory instruments conferred on the Director by this Act as if the Director were a Minister of the Crown.

Documentary evidence

6

The Documentary Evidence Act 1868 shall have effect as if the Director were included in the first column of the Schedule to that Act, as if the Director and any person authorised to act on behalf of the Director were mentioned in the second column of that Schedule, and as if the regulations referred to in that Act included any document issued by the Director or by any such person.

The Parliamentary Commissioner

7

In the Parliamentary Commissioner Act 1967, in Schedule 2 (departments and authorities subject to investigation), there shall be inserted (at the appropriate place) the following entry—

Office of the Director General of Electricity Supply.

Parliamentary disqualification etc.

8

In the House of Commons Disqualification Act 1975, in Part III of Schedule 1 (other disqualifying offices), there shall be inserted (at the appropriate place) the following entry—

Director General of Electricity Supply

SCHEDULE 2

Preliminary

1

In this Schedule any reference to the committee is a reference to each of the consumers’ committees.

Remuneration, pensions etc. of chairman

2

(1) There shall be paid to the chairman of the committee such remuneration, and such travelling and other allowances, as the Director may determine.

(2) There shall be paid such pension, allowance or gratuity to or in respect of a person who has held or holds office as chairman of the committee, or such contributions or payments towards provision for such a pension, allowance or gratuity to or in respect of such a person, as the Director may determine.

(3) If, when any person ceases to hold office as such a chairman, the Director determines that there are special circumstances which make it right that that person should receive compensation, there may be paid to him a sum by way of compensation of such amount as the Director may determine.

(4) The approval of the Treasury shall be required for the making of a determination under this paragraph.

Allowances for other members

3

There shall be paid to members of the committee other than the chairman such travelling and other allowances as the Director with the approval of the Treasury may determine.

Administration etc.

4

The Director may make arrangements for the committee to be provided with office accommodation and with such services as he considers appropriate to enable them to carry out their functions.

Proceedings

5

The validity of any proceedings of the committee shall not be affected by any vacancy amongst the members or by any defect in the appointment of a member.

6

(1) Subject to sub-paragraphs (2) and (3) below, meetings of the committee shall be open to the public.

(2) The public shall be excluded during any item of business where—

(a) it is likely, were members of the public to be present during that item, that information furnished in confidence to the committee by the Director would be disclosed in breach of the obligation of confidence; or

(b) the committee have resolved that, by reason of the confidential nature of the item or for other special reasons stated in the resolution, it is desirable in the public interest that the public be excluded; or

(c) the item relates to a proposal to refer any matter to the Director in pursuance of section 45(3) or 46(1)(a) or (4) of this Act.

(3) Except to the extent that the Director otherwise directs (whether generally or in relation to the particular case), the public shall be excluded during any item of business which relates to—

(a) the determination of any dispute referred to the committee under section 39(5) of this Act; or

(b) the investigation by the committee of any matter in pursuance of section 45(2) or 46(1)(b) of this Act.

(4) The committee shall give such notice—

(a) of any meeting of the committee which is open to the public; and

(b) of the business to be taken at that meeting (other than items during which the public is to be excluded),

as they consider appropriate for the purpose of bringing the meeting to the attention of interested members of the public.

Sub-committees

7

(1) The committee may, with the approval of the Director—

(a) establish local and other sub-committees through which the committee may carry out such of their functions as they may determine;

(b) appoint such persons (including persons who are not members of the committee) to be members of any such sub-committee as they may determine; and

(2) Persons appointed under sub-paragraph (1) who are not members of the committee may be reimbursed for their travelling expenses and such of their out-of-pocket expenses as do not relate to loss of remuneration.

Financial provisions

8

(1) There shall be paid by the Director out of money provided by Parliament—

(a) any sums payable to or in respect of any person under paragraph 2, 3 or 7 above; and

(b) any expenses incurred by the committee in accordance with any statement approved under sub-paragraph (3) below.

(2) The committee shall prepare and send to the Director before the beginning of each financial year a statement of the expenses which they expect to incur in respect of that year for the purposes of, or in connection with, the carrying out of their functions.

(3) The Director shall consider any statement sent to him under sub-paragraph (2) above and shall either approve the statement or approve it with such modifications as he considers appropriate.

Amendment of other Acts

9

In section 14(1) of the Chronically Sick and Disabled Persons Act 1970, for the words “Electricity Consultative Councils, the Electricity Consumers’ Council” there shall be substituted the words “consumers’ committees appointed under section 2 of the Electricity Act 1989”.

10

In Part III of Schedule 1 to the House of Commons Disqualification Act 1975, there shall be inserted at the appropriate place—

Chairman of a consumers’ committee appointed under section 2 of the Electricity Act 1989

SCHEDULE 2ZA — Duties of distribution exemption holders

Third party access

1

(1) This paragraph applies where—

(a) a customer owns or occupies premises which are connected to an exempt distribution system;

(b) the customer is taking a supply of electricity through that system from—

(i) the distribution exemption holder that operates or has control of the system, or

(ii) a person related to the distribution exemption holder; and

(i) has served on the distribution exemption holder a notice expressing the customer’s interest in taking a supply of electricity from a third party supplier through that system; and

(ii) has provided with the notice evidence that at least one third party supplier would be willing to supply the customer with electricity through that system, and has identified any such third party supplier in the notice.

(2) In this Schedule “expression of interest” means a notice served under sub-paragraph (1).

(3) Within 5 working days beginning with the day on which it receives the expression of interest, the distribution exemption holder must provide any person related to it that is currently supplying the customer with electricity with a copy of the expression of interest.

(4) Within 10 working days beginning with the day on which it receives the expression of interest, the distribution exemption holder must serve on the customer—

(a) a notice informing the customer that it will take the steps in sub-paragraph (6) with a view to giving a third party supplier access to its distribution system; or

(b) a notice informing the customer that the distribution exemption holder considers—

(i) that it would need to increase the capacity of its distribution system in order to give a third party supplier access to that distribution system; and

(ii) that one of the conditions in sub-paragraph (5) is met.

(5) Those conditions are—

(a) that it is not technically feasible to provide the increase in capacity in question;

(b) that providing that increase in capacity would have a significant and adverse economic impact on the distribution exemption holder or any other person.

(6) Where the distribution exemption holder has served on the customer a notice under sub-paragraph (4)(a), the distribution exemption holder must—

(a) serve on any third party supplier identified in the expression of interest a notice specifying—

(i) any metering arrangements that the distribution exemption holder considers would be required to enable access to be given; and

(ii) whether it would be willing to give access through contractual arrangements which would not require a connection to be made or modified; and

(b) provide each such third party supplier with any other documents or information that it may reasonably request.

(7) The distribution exemption holder must serve the notice required by sub-paragraph (6)(a) within 20 working days beginning with the day on which it receives the expression of interest.

(8) The distribution exemption holder must provide any documents or information requested by a third party supplier under sub-paragraph (6)(b)—

(a) within 20 working days beginning with the day of the distribution exemption holder’s receipt of the expression of interest; or

(b) if the request is made at a time when there are fewer than 10 working days remaining in the 20 working day period mentioned in paragraph (a) above, within 10 working days beginning with the day of the distribution exemption holder’s receipt of the request.

2

(1) This paragraph and paragraph 3 apply where a customer who has served an expression of interest relating to an exempt distribution system serves on the distribution exemption holder a notice—

(a) confirming that the customer has entered into a contract with a third party supplier identified in the expression of interest for the supply of electricity to premises which are connected to the exempt distribution system; and

(b) identifying that third party supplier.

(2) Within 5 working days beginning with the day on which it receives the notice served under sub-paragraph (1), the distribution exemption holder must provide any person related to it that is currently giving a supply of electricity to the customer with a copy of that notice.

(3) If the distribution exemption holder has not, by the end of the 10 working day period mentioned in paragraph 1(4), served on the customer a notice under paragraph 1(4)(b), the distribution exemption holder must give the third party supplier such access to the distribution system to which the expression of interest relates as is necessary to enable the third party supplier to give a supply of electricity to the customer.

(4) Access under sub-paragraph (2) must be given either—

(a) as soon as is reasonably practicable after the distribution exemption holder receives the notice served under sub-paragraph (1); or

(b) on a date agreed by the distribution exemption holder, the third party supplier and the customer in writing.

(5) Sub-paragraphs (6) to (11) apply if the distribution exemption holder has served on the customer a notice under paragraph 1(4)(b) (whether before or after the service of the notice under sub-paragraph (1)).

(6) Subject to sub-paragraph (7), the distribution exemption holder must give the third party supplier such access to its distribution system as is necessary to enable the third party supplier to give a supply of electricity to the customer, and must give that access—

(a) as soon as is reasonably practicable after the end of the period of 28 working days beginning with the day on which the customer serves the notice under sub-paragraph (1); or

(b) on a date agreed by the distribution exemption holder, the third party supplier and the customer in writing.

(7) If, before the end of the period mentioned in sub-paragraph (6)(a), the distribution exemption holder takes the steps mentioned in sub-paragraph (8)—

(a) the distribution exemption holder is not required to give access in accordance with sub-paragraph (6), and

(b) sub-paragraph (9) applies.

(8) The steps mentioned in sub-paragraph (7) are—

(a) providing the third party supplier with evidence to show—

(i) that the distribution exemption holder would need to increase the capacity of its distribution system in order to give the third party supplier access to that distribution system; and

(ii) that one of the conditions in paragraph 1(5) is met; and

(b) sending a copy of the evidence to the customer.

(9) If, within the period mentioned in sub-paragraph (10), the distribution exemption holder and the third party supplier enter into a contract for the provision to the third party supplier of such access as is necessary to enable it to give a supply of electricity to the customer through the distribution system, the distribution exemption holder must give access to the third party supplier in accordance with the terms of the contract.

(10) That period is—

(a) the 14 days immediately following the period mentioned in sub-paragraph (6)(a); or

(b) any longer period that the distribution exemption holder, the third party supplier and the customer may agree in writing.

(11) If, before the end of the 28 day period mentioned in sub-paragraph (6)(a), the distribution exemption holder, the third party supplier and the customer agree in writing to the extension of that period, sub-paragraphs (6) to (10) have effect as if sub-paragraph (6)(a) referred to the extended period instead of to the period of 28 working days there mentioned.

3

(1) The third party supplier mentioned in paragraph 2(1) may make an application to the Authority under this paragraph if—

(a) the distribution exemption holder has served on the customer a notice under paragraph 1(4)(b); and

(b) at the end of the period mentioned in paragraph 2(10), the distribution exemption holder is not under a duty (whether by virtue of sub-paragraph (6) or (9) of paragraph 2) to give access to the third party supplier.

(2) The third party supplier may not make an application under this paragraph unless it has, no later than the 10th working day before the day on which the application is made, served on the distribution exemption holder a notice—

(a) informing the distribution exemption holder that it intends to make an application under this paragraph; and

(b) inviting the distribution exemption holder to provide it with any further evidence it may wish to provide for the purpose mentioned in paragraph 2(8)(a).

(3) The application must include—

(a) any evidence provided by the distribution exemption holder under paragraph 2(8)(a) or sub-paragraph (2)(b) above;

(b) a description of the nature of the access required by the third party supplier (including any alternative forms of access that would be acceptable to it); and

(i) to show that the capacity of the distribution system would not need to be increased in order to give a third party supplier access to it;

(ii) to show that a condition in paragraph 1(5) is not met; or

(iii) as to the benefits that would be brought by any increase in capacity that may be necessary.

(4) The third party supplier must send a copy of the application to the distribution exemption holder and the customer.

(5) Where an application has been made under this paragraph the Authority may, at the request of the customer or the third party supplier (the “requesting party”), ask the distribution exemption holder to provide the Authority and the requesting party with information in respect of the measures that would be required to reinforce the distribution system in order to provide the necessary capacity.

(6) Except to the extent that sub-paragraph (7) applies, the distribution exemption holder must comply with any request made by the Authority under sub-paragraph (5).

(7) If the distribution exemption holder represents to the Authority that particular information should not be disclosed under sub-paragraph (6) because it is commercially sensitive, the Authority may determine that the information in question should be excepted from the duty to disclose information under that sub-paragraph, having regard to the need to preserve the confidentiality of commercially sensitive information.

(8) The distribution exemption holder may recover from the requesting party any costs reasonably incurred in providing any information requested under sub-paragraph (5).

(9) Where an application has been made under this paragraph the Authority—

(a) must, if satisfied that the conditions in sub-paragraph (10) are met, determine that the distribution exemption holder is entitled to refuse the third party supplier access to its distribution system on the ground of lack of capacity;

(b) must, if not satisfied that those conditions are met, determine that the distribution exemption holder is not entitled to refuse the third party supplier access to its distribution system on the ground of lack of capacity.

(10) Those conditions are—

(a) that the distribution exemption holder would need to increase the capacity of its distribution system in order to give the third party supplier access to it; and

(b) that either it is not technically feasible to provide that increase in capacity, or the benefits of the increase in capacity would be outweighed by the economic impact that the provision of the increase in capacity would have on the distribution exemption holder or any other person.

(11) The Authority must, as soon as is reasonably practicable after making its determination—

(a) notify the distribution exemption holder of its determination; and

(b) provide the customer and the third party supplier with a copy of that notice.

(12) If the Authority determines that the distribution exemption holder is not entitled to refuse the third party supplier access to its distribution system on the ground of lack of capacity—

(a) the distribution exemption holder must give the third party supplier such access to its distribution system as is necessary to enable the third party supplier to give a supply of electricity to the customer;

(b) paragraph 1(6) to (8) applies as if the distribution exemption holder had served a notice under paragraph 1(4)(a) on the customer, and as if the references in paragraph 1(7) and (8)(a) to the “expression of interest” were to the notification under sub-paragraph (11) above; and

(c) paragraph 5 has effect as if the reference in paragraph 5(3) to the “expression of interest” were to the notification under sub-paragraph (11) above.

(13) Access under sub-paragraph (12)(a) must be given either—

(a) as soon as is reasonably practicable after the distribution exemption holder receives the notification under sub-paragraph (11); or

(b) on a date agreed by the distribution exemption holder, the third party supplier and the customer in writing.

4

(1) This paragraph applies where a distribution exemption holder is required under paragraph 2(3), (6) or (9) or 3(12)(a) to give a third party supplier access to its distribution system.

(2) The duty must be performed for so long as the access is required.

(3) In meeting the duty the distribution exemption holder must not—

(a) treat the third party supplier less favourably than any other supplier in respect of the terms and conditions for access to its distribution system, including those relating to any connection under paragraph 7(2);

(b) refuse to give access on the basis that the Authority has not yet approved its charging methodology; or

(c) act in a manner which unreasonably prevents, restricts or delays access to its distribution system by the third party supplier.

(4) The distribution exemption holder must grant the third party supplier such ancillary or incidental rights over its distribution system as are necessary to enable the third party supplier to meet its licence or statutory obligations, including any obligations of the third party supplier relating to metering functions.

(5) Where access has been given before a methodology for calculating a use of system charge has been given an approval that is required by virtue of paragraph 5(1), the distribution exemption holder may, within a reasonable period after receiving notification of the approval of the methodology, require the third party supplier to pay for that access an amount that is—

(a) equivalent to the charge that would have been payable for that access had the methodology been approved before the access was given; and

(b) payable within such period as the parties agree or, in the absence of such agreement, within such reasonable period after the distribution exemption holder demands the payment as may be specified by the distribution exemption holder.

Charges for use of system

5

(1) Subject to paragraph 13(1), a distribution exemption holder on whom a customer has served an expression of interest must not impose a use of system charge unless the Authority has approved the methodology for calculating that charge under sub-paragraph (5) or paragraph 14(7).

(2) If such a distribution exemption holder proposes to impose a use of system charge in circumstances where, by virtue of sub-paragraph (1), the Authority’s approval of the methodology for that charge is required the distribution exemption holder must—

(a) prepare a record of the assets and liabilities associated with its distribution activities at the time of the receipt of the expression of interest;

(b) prepare a statement (a “charging statement”) containing details of the proposed methodology for calculating the use of system charge;

(i) the charging statement,

(ii) any evidence that the distribution exemption holder may wish to provide in support of the methodology proposed for calculating the use of system charge,

(iii) a copy of the expression of interest, and

(iv) such other information or documents as the Authority may request;

(d) provide the relevant third party supplier with a copy of the charging statement.

(3) Subject to sub-paragraph (4), all of the steps required by sub-paragraph (2) must be carried out within 20 working days beginning with the day of the distribution exemption holder’s receipt of the expression of interest.

(4) Where the Authority has requested further information or documents in accordance with sub-paragraph (2)(c)(iv) at a time when there are fewer than 10 working days remaining in the 20 working day period mentioned in sub-paragraph (3), the further information or documents must be provided within 10 working days beginning with the day of the distribution exemption holder’s receipt of the request.

(5) Where a distribution exemption holder has complied with sub-paragraph (2)(c) the Authority must, as soon as is reasonably practicable—

(a) decide whether to approve the methodology proposed by that distribution exemption holder; and

(b) notify the distribution exemption holder of that decision.

(6) Where a distribution exemption holder receives a notice under sub-paragraph (5)(b), it must, as soon as is reasonably practicable after that receipt, provide the relevant third party supplier with a copy of that notice.

(7) Where the Authority does not approve the methodology proposed by the distribution exemption holder, the Authority must give reasons for that decision.

(8) Where the Authority does not approve the methodology proposed by the distribution exemption holder and the distribution exemption holder still wishes to impose a use of system charge the distribution exemption holder must—

(a) submit to the Authority a charging statement containing details of a revised methodology;

(b) provide the Authority with a copy of such other information as the Authority may request in respect of that revised methodology; and

(9) Where at any time a distribution exemption holder wishes to modify a methodology that has previously been approved under this Schedule and is used by it for calculating a use of system charge levied for the use of a distribution system other than a closed distribution system, the distribution exemption holder must—

(a) submit to the Authority a charging statement containing details of the proposed revised methodology;

(b) provide the Authority with a copy of such other information as the Authority may request; and

(c) provide the relevant third party supplier, and any other third party supplier who would be affected by the modification proposed, with a copy of the charging statement.

(10) If a distribution exemption holder takes the steps required by sub-paragraph (8) or (9), sub-paragraphs (5) to (7) apply as if it had complied with sub-paragraph (2)(c).

(11) For the purposes of sub-paragraphs (2)(d), (6), (8)(c) and (9)(c), a duty to provide anything to “the relevant third party supplier” is a duty to provide it—

(a) if at the time when the duty is discharged the distribution exemption holder has received a notice from the customer under paragraph 2(1), to the third party supplier identified in that notice; or

(b) if at the time when the duty is discharged the distribution exemption holder has not received such a notice from the customer, to any third party supplier identified in the expression of interest.

6

(1) Sub-paragraph (2) applies where a distribution exemption holder is under a duty to give access to its distribution system under paragraph 2(3), (6) or (9) or 3(12)(a).

(2) Where and for so long as the distribution exemption holder is imposing a use of system charge, it must—

(a) prepare and maintain distribution accounts in respect of the distribution system for each regulatory year;

(b) keep copies of those accounts for 6 years from the date of the transactions to which they relate; and

(3) In sub-paragraph (2)—

“distribution accounts” means accounting records in relation to the business (the “distribution business”) constituted by the distribution activities of the distribution exemption holder’s business that—are sufficient to show and explain the transactions of the distribution business, separate from any other transactions of the distribution exemption holder’s business;are sufficient to disclose with reasonable accuracy, at any time, the financial position of the distribution business at that time;contain entries from day to day of all sums of money received and expended in the course of the distribution business and the matters in respect of which the receipt and expenditure takes place; andcontain a record of the assets and liabilities attributable to the distribution business;

“regulatory year”, in relation to a distribution business, means—a period of 12 months beginning on 1 April in any calendar year and ending on 31 March of the next calendar year; orwhere the distribution exemption holder wishes to align the accounting period for the distribution business with the accounting period for any other business it carries on or the business of any a person related to it, the period of 12 months used as the accounting period for that other business or the business of that related person.

Connection

7

(1) This paragraph applies where a distribution exemption holder is under a duty to give access to a third party supplier under paragraph 2(3), (6) or (9) or 3(12)(a).

(2) The distribution exemption holder must, if required to do so by the third party supplier or the customer who served the notice under paragraph 2(1), make a connection between its distribution system and—

(a) the premises mentioned in paragraph 1(1)(a); or

(b) the distribution system of another authorised distributor.

(3) The duty under sub-paragraph (2) includes a duty to provide such electric lines or electrical plant as may be necessary to enable the connection to be used for the purpose for which it is required.

(4) The duty under sub-paragraph (2) must be performed in accordance with such terms as are agreed under paragraphs 8 and 9, or paragraph 10, for so long as the connection is required.

(5) In this paragraph and paragraphs 8 to 10—

(a) any reference to making a connection includes a reference to maintaining the connection (and continuing to provide the necessary electric lines or electrical plant);

(b) any reference to requiring a connection includes a reference to requiring the connection to be maintained (and the continued provision of the necessary electric lines or electrical plant); and

(c) any reference to the provision of any electric line or electrical plant is a reference to the provision of such a line or an item of electrical plant either by the installation of a new one or by the modification of an existing one.

8

(1) Where a distribution exemption holder makes a connection under paragraph 7(2) any expenses reasonably incurred in making the connection or in providing any electric line or electrical plant that the distribution exemption holder is under a duty to provide must, if and to the extent that the distribution exemption holder requires, be met by the person requiring the connection.

(2) The reference in sub-paragraph (1) to any expenses reasonably incurred in providing an electric line or electrical plant includes a reference to the capitalised value of any expenses likely to be so incurred in continuing to provide it.

(3) Where a distribution exemption holder is under a duty to make a connection under paragraph 7(2)—

(a) it may require the person requiring the connection to provide it with reasonable security for the payment to it under sub-paragraph (1) of amounts in respect of the provision of any electric lines or electrical plant that it is under a duty to provide; and

(b) if the person requiring the connection fails to provide any security required under paragraph (a), or any security given by the person requiring the connection becomes invalid or insufficient and that person fails to provide alternative or additional security, the distribution exemption holder may if it thinks fit—

(i) where the connection has not been made, refuse to provide the line or plant for so long as the failure continues, or

(ii) where the connection is being maintained, disconnect the premises or distribution system in question.

(4) Where any sum has been deposited with a distribution exemption holder by way of security under sub-paragraph (3) the distribution exemption holder must, on repaying the amount, also pay interest on that amount, calculated on a daily basis at the rate of 1 per cent above LIBOR, for the period beginning with the day following that on which the amount was deposited and ending on the day on which the amount is repaid.

(5) In sub-paragraph (4) “LIBOR”, in relation to any day, means the sterling three-month London inter-bank offered rate in force for that day rounded if necessary to two decimal places.

(6) Nothing in paragraph 7 is to be taken as requiring the distribution exemption holder to make a connection between its distribution system and any premises or other distribution system if and to the extent that—

(a) the distribution exemption holder is prevented from doing so by circumstances outside its control;

(b) circumstances exist by reason of which the connection would or might involve danger to the public, and the distribution exemption holder has taken all reasonable steps to prevent the circumstances from occurring and to prevent them from having that effect; or

(7) Without prejudice to the generality of sub-paragraph (6), nothing in paragraph 7 is to be taken as requiring the distribution exemption holder to make a connection if any consent that is necessary for the connection to be made has not been given.

(8) A distribution exemption holder who is required to make a connection under paragraph 7(2) may require the person requiring the connection to accept, in respect of the making of the connection, any terms restricting any liability of the distribution exemption holder for economic loss resulting from negligence which it is reasonable in all the circumstances for that person to be required to accept.

(9) Sub-paragraphs (3)(b)(ii) and (6)(c), do not permit a distribution exemption holder to disconnect any premises or distribution system unless the distribution exemption holder has given the owner and the occupier of the premises or (as the case may be) the person who operates or has control of the distribution system not less than 7 working days’ notice of its intention to disconnect.

9

(1) This paragraph applies where a distribution exemption holder has a duty to make a connection under paragraph 7(2).

(2) Except where an agreement under paragraph 10(1) is in place, the distribution exemption holder must comply with the requirements of sub-paragraph (3) as soon as is reasonably practicable after the person requiring the connection has—

(a) served on the distribution exemption holder a notice requesting that the distribution exemption holder offer terms for making the connection; and

(b) provided the distribution exemption holder with the following information—

(i) details of the premises or distribution system from which the connection to the distribution exemption holder’s distribution system is required, including the location of the premises or distribution system,

(ii) the date on or by which the person requiring the connection proposes that the work necessary for the connection to be made should be carried out,

(iii) the maximum power at which electricity may be required to be conveyed through the connection,

(iv) details of any other requirements that the person requiring the connection has, including any metering requirements, and

(v) any other information in relation to the required connection reasonably requested by the distribution exemption holder.

(3) The distribution exemption holder must serve on the person requiring the connection a notice—

(a) raising any concerns that it has with the information provided in accordance with sub-paragraph (2)(b);

(b) proposing arrangements for any security that the person requiring the connection will be required to pay to it under paragraph 8(3);

(c) proposing arrangements for any payment that the person requiring the connection will be required to make under paragraph 8(1);

(d) stating any terms that the person requiring a connection will be required to accept under paragraph 8(8), restricting the distribution exemption holder’s liability; and

(e) proposing any other terms on which it will make the connection.

(4) The distribution exemption holder must negotiate in good faith with the person requiring the connection and endeavour to reach an agreement on the terms and conditions for that connection.

10

(1) The distribution exemption holder may enter into an agreement with a person requiring a connection in pursuance of paragraph 7(2) for the making of a connection on such terms as may be agreed by the parties.

(2) So long as the agreement is effective, the rights and liabilities of the parties shall be those arising under the agreement and not those provided for under paragraphs 7 to 9.

11

(1) Section 23 (determination of disputes) applies in relation to a dispute arising under paragraphs 7 to 9 of this Schedule as it applies to a dispute arising under sections 16 to 21, but as if—

(a) the references to an electricity distributor were to a distribution exemption holder;

(b) the references to a person requiring a connection were to a person requiring a connection in pursuance of paragraph 7(2); and

(2) The reference in sub-paragraph (1)(b) to requiring a connection is to be construed in accordance with paragraph 7(5).

Closed distribution systems

12

(1) A distribution exemption holder may apply to the Authority for an exempt distribution system operated or controlled by it to be classified as a closed distribution system.

(2) Where the Authority has received an application from a distribution exemption holder under sub-paragraph (1) (a “closed distribution system application”), it must classify the distribution system as a closed distribution system if the Authority considers that all of the following criteria are met—

(a) the distribution system is not used for the purpose of supplying electricity to household customers, or is used to supply fewer than 50 household customers who—

(i) are employees of, or work for or otherwise render services to, the distribution exemption holder or a person related to the distribution exemption holder; and

(ii) take a supply of electricity that is wholly or mainly from a generating station embedded in the distribution system;

(b) the distribution system is wholly or mainly used for distributing electricity within a geographically self-contained industrial, commercial or shared services site and is not integrated with any distribution system operated or controlled by an electricity distributor, or any transmission system operated or controlled by the holder of a transmission licence; and

(i) by system users whose businesses, for technical or safety-related reasons, have operational or production processes that are integrated with those of other system users of that distribution system; or

(ii) for the purpose of supplying electricity to premises owned or occupied by the distribution exemption holder or by a person related to the distribution exemption holder.

(3) A closed distribution system application must—

(a) identify the distribution system to which the application relates;

(b) include any evidence available to the applicant to support that application; and

(4) The Authority must decide whether to classify a distribution system as a closed distribution system as soon as is reasonably practicable after the Authority has received—

(a) the closed distribution system application; and

(b) any further information or documents requested by it in under sub-paragraph (3)(c).

(5) The Authority must notify the distribution exemption holder of its decision as soon as is reasonably practicable after that decision has been made.

13

(1) Paragraph 5(1) to (8) does not apply in relation to any use of system charge (or proposed use of system charge) that relates to a closed distribution system.

(2) Where a distribution exemption holder that operates or has control of a closed distribution system receives an expression of interest from a customer who owns or occupies premises that are connected to that system, it must—

(a) include in any notice served under paragraph 1(4) a statement that its distribution system is a closed distribution system; and

(b) within 7 working days beginning with the day on which it receives the expression of interest, by notice inform any third party supplier identified in the expression of interest that its distribution system is a closed distribution system.

14

(1) Sub-paragraphs (2) and (3) apply if a customer has served an expression of interest with respect to a closed distribution system and—

(a) the customer, or a third party supplier identified in the expression of interest, serves a notice on the distribution exemption holder requesting that the methodology for a proposed use of system charge be submitted to the Authority for approval; and

(b) at the time of receiving the request the distribution exemption holder has not received any confirmation under paragraph 2(1) that the customer has entered into a contract with a third party supplier.

(2) From the time when the distribution exemption holder receives that request, paragraph 5(1) to (8) has effect in relation to the closed distribution system as if paragraph 13(1) did not have effect.

(3) For the purposes of the application of paragraph 5(2) in relation to the proposed use of system charge mentioned in sub-paragraph (1)(a), the reference in paragraph 5(3) to the “expression of interest” is to be read as a reference to the request mentioned in sub-paragraph (1)(a) above.

(4) Sub-paragraphs (5) to (11) apply where a customer who owns or occupies premises that are connected to a closed distribution system has served a notice under paragraph 2(1) confirming that it has entered into a contract with a third party supplier (“the confirmed third party supplier”) and—

(a) the customer or the confirmed third party supplier serves on the distribution exemption holder that operates or has control of the closed distribution system a notice requesting that the methodology for a use of system charge that is being applied by the distribution exemption holder be submitted to the Authority for approval;

(b) the methodology for calculating the charge has not previously been approved under this Schedule; and

(c) at the time of receiving the notice under paragraph (a), the distribution exemption holder has received the notice served under paragraph 2(1).

(5) The distribution exemption holder must, within 20 working days beginning with the day on which it receives the request under sub-paragraph (4)(a)—

(a) provide the Authority with—

(i) a charging statement in respect of the methodology for any use of system charge applied at the time of the request being made; and

(ii) such other information or documents as the Authority may specify; and

(b) provide the customer and the confirmed third party supplier with a copy of that charging statement.

(6) Where the Authority has requested further documents or information in accordance with sub-paragraph (5)(a)(ii) at a time when there are fewer than 10 working days remaining in the 20 working day period mentioned in sub-paragraph (5), those further documents or information must be provided within 10 working days beginning with the day of the distribution exemption holder’s receipt of that request for further documents or information.

(7) Where the distribution exemption holder has complied with sub-paragraph (5)(a), the Authority must, as soon as is reasonably practicable—

(a) decide whether to approve the methodology set out in the charging statement; and

(b) notify the distribution exemption holder and the confirmed third party supplier of its decision.

(8) Where the Authority does not approve the methodology, the Authority must give reasons for that decision.

(9) Where the Authority has notified the distribution exemption holder of a decision that it does not approve the methodology, the distribution exemption holder must not continue to impose a use of system charge, except where the Authority has considered the methodology for such a charge by virtue of sub-paragraph (11) and has approved it.

(10) Where the Authority does not approve the methodology submitted under sub-paragraph (5)(a) the distribution exemption holder may—

(a) submit to the Authority a charging statement containing details of a revised methodology;

(b) provide the Authority with such other information or documents as the Authority may specify; and

(11) If the distribution exemption holder takes the steps mentioned in sub-paragraph (10)(a) to (c), sub-paragraphs (7) and (8) apply as if it had complied with sub-paragraph (5)(a).

(12) Where at any time a distribution exemption holder wishes to modify a methodology that has previously been approved under this Schedule and is used by it for calculating a use of system charge levied for the use of a closed distribution system, the distribution exemption holder must—

(a) submit to the Authority a charging statement containing details of the proposed revised methodology;

(b) provide the Authority with a copy of such other information or documents as the Authority may request; and

(c) send a copy of the charging statement to the customer, the confirmed third party supplier and any other third party supplier who would be affected by the modification proposed.

(13) If the distribution exemption holder takes the steps mentioned in sub-paragraph (12)(a) to (c), sub-paragraphs (7) and (8) apply as if it had complied with sub-paragraph (5)(a).

Change of circumstance in respect of a closed distribution system

15

(1) If, after a system has been classified as a closed distribution system, there is a change of circumstance which affects, or might affect, whether the system continues to meet the criteria set out in paragraph 12(2), the distribution exemption holder that operates or has control of the distribution system must notify the Authority of the change as soon as is reasonably practicable after it occurs.

(2) If the distribution exemption holder that operates or has control of the distribution system wishes the system to continue to be classified as a closed distribution system, it must include in the notice an application to the Authority asking the Authority to confirm the classification.

(3) Any application under sub-paragraph (2) must—

(a) identify the distribution system to which the application relates;

(b) include any evidence available to the applicant to support that application; and

(4) Where the Authority has received a notice under sub-paragraph (1), it must, as soon as is reasonably practicable, either—

(a) revoke the classification; or

(b) confirm the classification if—

(i) the notice includes an application made under sub-paragraph (2);

(ii) the Authority has received any further information or documents requested by it; and

(iii) the Authority considers that the criteria set out in paragraph 12(2) continue to be met.

(5) The Authority must notify the applicant of its decision under sub-paragraph (4) as soon as is reasonably practicable after the decision has been made.

Interpretation

16

(1) In this Schedule—

“charging statement” (in relation to a distribution exemption holder who proposes to impose a use of system charge) is to be construed in accordance with paragraph 5(2)(b);

“closed distribution system” means a system classified as a closed distribution system by the Authority under paragraph 12(2);

“customer” means a person who purchases electricity for the person’s own consumption;

“expression of interest’ has the meaning given by paragraph 1(2);

“household customer” means a customer who purchases electricity for consumption by the customer’s own household;

“system user”, in relation to a distribution system, means—a person supplying electricity that is being conveyed by means of that distribution system; ora customer who owns or occupies premises that are connected to that distribution system;

“third party supplier”, in relation to a distribution exemption holder, means any authorised supplier that is not related to the distribution exemption holder;

“use of system charge”, in relation to a distribution exemption holder, means a charge which—is levied by the distribution exemption holder on a third party supplier identified in an expression of interest that has been served on the distribution exemption holder; andis for use of the exempt distribution system to which the expression of interest relates.

(2) For the purposes of this Schedule, a person (“A”) is related to another person (“B”) where A is—

(a) an undertaking in which B has a participating interest within the meaning of section 421A of the Financial Services and Markets Act 2000;

(b) a holding company of B;

(d) a subsidiary of a holding company of B.

(3) For the purposes of sub-paragraph (2) “holding company” and “subsidiary” are to be construed in accordance with section 1159 of the Companies Act 2006.

SCHEDULE 2ZB — Duties of supply exemption holders

Change of supplier

1

(1) This paragraph applies if a supply exemption holder enters into a contract with a customer to start supplying electricity to any premises.

(2) The supply exemption holder must, within 7 days beginning with the day on which the contract is entered into, give any person who is currently supplying electricity to the premises a notice stating—

(a) that the contract has been entered into, and

(b) when the supply exemption holder will start supplying electricity to the premises.

(3) Subject to sub-paragraphs (4) and (7), the supply exemption holder must start supplying electricity to the premises within 21 days of the relevant date.

(4) The supply exemption holder need not comply with sub-paragraph (3) if—

(a) the customer requests that the supply start on a later date;

(b) the customer terminates, or gives notice to terminate, the contract; or

(5) The reasons in this sub-paragraph are—

(a) that the supply exemption holder—

(i) does not have all of the information it requires in order to start supplying electricity to the premises, despite having taken all reasonable steps to obtain the missing information from the customer; and

(ii) cannot readily obtain that information from another source;

(b) that the customer is taking a supply of electricity through an exempt distribution system and the supply exemption holder is unable to start supplying electricity to the premises because—

(i) a connection which the customer or supply exemption holder requires to be made in pursuance of paragraph 7(2) of Schedule 2ZA has not yet been made; or

(ii) the distribution exemption holder has specified, in a notice under paragraph 1(6)(a)(i) of Schedule 2ZA, a metering arrangement which it considers would be required for access to be given to a third party supplier (within the meaning of that Schedule) and that metering arrangement is not yet in place;

(c) that any other circumstance which is outside the control of the supply exemption holder and which it has taken all reasonably practicable steps to resolve prevents it from starting to supply electricity to the premises.

(6) If, because of a reason in sub-paragraph (5), a supply exemption holder is not required to start supplying electricity to the premises within 21 days of the relevant date, it must start supplying electricity to the premises as soon as is reasonably practicable after the reason ceases to apply, and in any event within 21 days of the date on which the reason ceases to apply (but if there is more than one reason, references in this sub-paragraph to a reason’s ceasing to apply are to all the reasons’ having ceased to apply).

(7) If another supply exemption holder is currently supplying electricity to the premises and has objected to the change of supplier under paragraph 2, then the supply exemption holder mentioned in sub-paragraph (1) above—

(a) must not start supplying electricity to the premises before that objection is resolved; but

(b) must start supplying electricity to the premises as soon as is reasonably practicable after the objection is resolved, and in any event within 21 days of the date on which the objection is resolved.

(8) For the purposes of sub-paragraph (7) an objection made under paragraph 2 is taken to be resolved—

(a) in the case of an objection based on the reason in paragraph 2(5)(a) alone—

(i) when the customer, or the supply exemption holder who made the objection, informs the supply exemption holder mentioned in sub-paragraph (1) above that the debt has been paid off in full, or

(ii) when an arrangement such as is mentioned in paragraph 2(5)(a)(iii) is made with respect to the debt;

(b) in the case of an objection based on the reason in paragraph 2(5)(b) alone, when the period mentioned in that paragraph expires;

(c) in the case of an objection based on both those reasons, when the objection has been resolved in relation to each reason in accordance with paragraphs (a) and (b) above; or

(d) in any case, when the objection is withdrawn.

(9) In this paragraph “the relevant date” means—

(a) the day after the day on which the supply exemption holder enters into the contract mentioned in sub-paragraph (1); or

(b) if, after the contract is entered into, there is a period within which the customer may decide not to proceed with it, the earlier of—

(i) the day after the day on which that period ends; or

(ii) the 14th day after the day on which the contract was entered into.

2

(1) This paragraph applies if—

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