Utilities Act 2000

Part I — New regulatory arrangements

Gas and Electricity Markets Authority

1

• (1) There shall be a body corporate to be known as the Gas and Electricity Markets Authority (in this Act referred to as “the Authority”) for the purpose of carrying out—

• (a) functions transferred to the Authority from the Director General of Gas Supply and the Director General of Electricity Supply; and

• (b) the other functions of the Authority under this Act.

• (2) The functions of the Authority are performed on behalf of the Crown.

• (3) The offices of Director General of Gas Supply and Director General of Electricity Supply are abolished.

• (4) Schedule 1 has effect with respect to the Authority.

Guidance on social and environmental matters in relation to gas.

2

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Gas transporters’ duty to make a connection.

3

• (1) The functions of the Director General of Gas Supply and the Director General of Electricity Supply (“the Directors”) are transferred to the Authority.

• (2) Any enactment which—

• (a) relates to a function of either of the Directors; and

• (b) is in force immediately before the transfer by subsection (1) of that function,

shall have effect after the transfer, so far as necessary for the purposes of or in consequence of the transfer, as if references to the Director were references to the Authority.

• (3) The Secretary of State may make one or more schemes (“transfer schemes”) for the transfer of the property, rights and liabilities of the Directors to the Authority ....

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

• (5) On the day appointed by a transfer scheme, the property, rights and liabilities which are the subject of the scheme shall, by virtue of this subsection, be transferred in accordance with the provisions of the scheme.

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

• (7) Subsection (6) has effect in relation to property, rights or liabilities to which it applies in spite of any provision (of whatever nature) which would prevent or restrict the transfer of the property, rights or liabilities otherwise than by that subsection.

• (8) Schedule 3 has effect in relation to transfer schemes and transfers by any provision of this Act of functions, property, rights and liabilities to the Authority ....

Standards of performance in individual cases.

4

• (1) The Authority ... shall, before each financial year, ... publish a document (the “forward work programme”) containing a general description of the projects, other than those comprising routine activities in the exercise of its functions, which it plans to undertake during the year.

• (2) That description must include the objectives of each project.

• (3) The forward work programme for any year shall also include an estimate of the overall expenditure which the Authority ... expects to incur during the year in the exercise of its functions.

• (4) Before publishing the forward work programme for any year, the Authority ... shall give notice—

• (a) containing a draft of the forward work programme, and

• (b) specifying the time within which representations or objections to the proposals contained in it may be made,

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

• (5) The notice under subsection (4) must be published by the Authority ... in such manner as it considers appropriate for the purpose of bringing the matters contained in it to the attention of persons likely to be affected by them.

• (6) The Authority must send a copy of any notice given by it under subsection (4) to Citizens Advice and Consumer Scotland.

• (7) In this section—

• (a) references to functions do not include functions under Part 1 of the Energy Act 2023, and

• (b) references to projects do not include projects with regard to the exercise of such functions.

Licence enforcement.

5

• (1) The Authority shall, as soon as practicable after the end of each financial year, make to the Secretary of State a report (the “annual report” for that year) on—

• (a) its activities during that year, and

• (b) the activities of the Competition and Markets Authority during that year in respect of any references made by the Authority.

• (2) The annual report for each year shall include—

• (a) a general survey of developments in respect of matters falling within the scope of the Authority’s functions, including in particular developments in competition between persons engaged in, or in commercial activities connected with—

• (i) the shipping, transportation or supply of gas conveyed through pipes; ...

• (ii) the generation, transmission, distribution or supply of electricity; or

• (iii) the operation or maintenance of, or the supply of heating, cooling or hot water by means of, relevant heat networks (as defined in section 216 of the Energy Act 2023);

• (b) a report on the progress of the projects described in the forward work programme for that year;

• (c) a summary of final and provisional orders made and penalties imposed by the Authority during the year; ...

• (ca) a summary of final notices given by the Authority under the Electricity and Gas (Market Integrity and Transparency) (Enforcement etc.) Regulations 2013; and

• (d) a report on such other matters as the Secretary of State may from time to time require.

• (2A) The annual report for each year shall also include a report on—

• (a) the ways in which the Authority has carried out its duties under section 132(1) and (2) of the Energy Act 2013 in relation to the strategy and policy statement (so far as the statement's designation was in effect during the whole or any part of the year), and

• (b) the extent to which the Authority has done the things set out under section 4A in a forward work programme or other document as the things the Authority proposed to do during that year in implementing its strategy for furthering the delivery of the policy outcomes contained in the statement (see subsection (3)(b) of that section).

• (2B) The report mentioned in subsection (2A) must, in particular, include—

• (a) the Authority's assessment of how the carrying out of its functions during the year has contributed to the delivery of the policy outcomes contained in the strategy and policy statement, and

• (b) if the Authority has failed to do any of the things mentioned in subsection (2A)(b), an explanation for the failure and the actions the Authority proposes to take to remedy it.

• (2C) In subsections (2A) and (2B)—

• “ forward work programme ” has the meaning given by section 4(1);

• “ policy outcomes ” and “ strategy and policy statement ” have the same meaning as in Part 5 of the Energy Act 2013.

• (3) The annual report for each year shall set out any general directions given by the Secretary of State under section 34(3) of the 1986 Act or section 47(2) of the 1989 Act.

• (3A) The annual report for each year must also include an overview of—

• (a) developments relating to documents designated for the purposes of Part 6 of the Energy Act 2023 (governance of gas and electricity industry codes);

• (b) decisions made by the Authority during the year in relation to such documents, including details of any modifications made under section 192 of the Energy Act 2023.

• (4) The Secretary of State shall consult the Authority before exercising the power under subsection (2)(d) in relation to any matter.

• (5) The Secretary of State shall—

• (a) lay a copy of each annual report before each House of Parliament; ...

• (aa) send a copy of the report to the Scottish Ministers and the Welsh Ministers, and

• (b) arrange for the report to be published in such manner as he considers appropriate.

• (5A) The Scottish Ministers shall lay a copy of each annual report before the Scottish Parliament.

• (5B) The Welsh Ministers shall lay a copy of each annual report before the National Assembly for Wales.

• (6) The Authority may also prepare other reports with respect to any matter falling within the scope of its functions and may arrange for any such report to be published in such manner as it considers appropriate.

• (7) The Authority shall send a copy of each annual or other report published under this section to Citizens Advice and Consumer Scotland.

• (8) In making or preparing any report under this section the Authority shall have regard to the need for excluding, so far as that is practicable, any matter which relates to the affairs of a particular individual or body of persons (corporate or unincorporate), where publication of that matter would or might, in the opinion of the Authority, seriously and prejudicially affect the interests of that individual or body.

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

• (10) Section 39 of the 1986 Act (annual and other reports of the Director General of Gas Supply) and section 50 of the 1989 Act (annual and other reports of the Director General of Electricity Supply) shall cease to have effect.

• (11) In this section—

• (a) references to functions of the Authority do not include functions under Part 1 of the Energy Act 2023;

• (b) references to activities of the Authority do not include activities in the exercise of such functions;

• (c) the reference in subsection (1) to “references made by the Authority” does not include references made by virtue of section 36(1) of the Energy Act 2023.

Restrictions on disclosure in respect of cross-border exchanges of information

6

• (1) For section 35 of the 1986 Act (publication by Director of information and advice) there is substituted—

(35) (1) If it appears to the Authority that the publication of any advice and information would promote the interests of consumers in relation to gas conveyed through pipes, the Authority may publish that advice or information in such manner as it thinks fit. (2) In publishing advice or information under this section the Authority shall have regard to the need for excluding, so far as that is practicable, any matter which relates to the affairs of a particular individual or body of persons (corporate or unincorporate), where publication of that matter would or might, in the opinion of the Authority, seriously and prejudicially affect the interests of that individual or body. (3) Before deciding to publish under this section any advice or information relating to a particular individual or body of persons the Authority shall consult that individual or body. (4) In this section “consumers” includes both existing and future consumers.

• (2) For subsections (1) and (2) of section 48 of the 1989 Act (publication by Director of information and advice) there is substituted—

(1) If it appears to the Authority that the publication of any advice and information would promote the interests of consumers in relation to electricity conveyed by distribution systems, the Authority may publish that advice or information in such manner as it thinks fit. (2) In publishing advice or information under this section the Authority shall have regard to the need for excluding, so far as that is practicable, any matter which relates to the affairs of a particular individual or body of persons (corporate or unincorporate), where publication of that matter would or might, in the opinion of the Authority, seriously and prejudicially affect the interests of that individual or body. (2A) Before deciding to publish under this section any advice or information relating to a particular individual or body of persons the Authority shall consult that individual or body.

• (3) After subsection (3) of that section there is inserted—

(4) In this section “consumers” includes both existing and future consumers.

Co-operation between Authority and Council

7

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Payments by licence holders relating to new arrangements

8

• (1) In this section “payment conditions” means—

• (a) in relation to a gas licence, conditions included in the licence by virtue of section 7B(4)(c) of the 1986 Act; or

• (b) in relation to an electricity licence, conditions included in the licence by virtue of section 7(1)(b) of the 1989 Act.

• (2) The payment conditions of a gas licence or an electricity licence may (without prejudice to the generality of the provisions mentioned in subsection (1)) require the payment by the licence holder of sums—

• (a) relating to any of the expenses mentioned in subsection (3) or (3A), or

• (b) relating to such amounts as the Secretary of State considers reasonable in respect of the provision, in or as regards Scotland, of consumer advocacy and advice by, or by agreement with, a public body or the holder of a public office, in relation to gas and electricity consumers

• (3) The expenses within this subsection are—

• (a) the expenses of the Gas and Electricity Consumer Council; and

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

• (3A) The expenses within this subsection are—

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

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

• (ba) the appropriate proportion of the expenses of Citizens Advice (including expenses relating to taking on functions transferred from the National Consumer Council but not including expenses within paragraph (ca));

• (bb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) any expenses of ... the Secretary of State or the Gas and Electricity Consumer Council which relate to a transfer scheme made in respect of the Gas and Electricity Consumer Council under section 35(2)(a) or (7) of the Consumers, Estate Agents and Redress Act 2007;

• (ca) the appropriate proportion of the expenses of Citizens Advice which relate to a transfer scheme made in respect of the National Consumer Council under section 23 of the Public Bodies Act 2011;

• (cb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) the expenses of the Secretary of State which relate to the abolition of the Gas and Electricity Consumer Council;

• (da) the appropriate proportion of the expenses of the Secretary of State which relate to the abolition of the National Consumer Council and the transfer of functions to Citizens Advice and Citizens Advice Scotland;

• (db) the appropriate proportion of the expenses of the Secretary of State which relate to the transfer of functions and the conferring of functions on Citizens Advice and Citizens Advice Scotland by the Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 2014 (S.I. 2014/…);

• (dc) the appropriate proportion of the expenses of the Secretary of State which relate to a transfer scheme made in respect of the National Consumer Council under section 23 of the Public Bodies Act 2011;

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (f) the appropriate proportion of the expenses of Citizens Advice ... on, or in connection with, the support of any qualifying public consumer advice scheme.

• (3B) The “appropriate proportion” of any expenses means such proportion of the expenses as the Secretary of State considers is reasonable having regard to—

• (a) in the case of expenses within subsection (3A)(ba), ... (ca)... or (db), the functions exercisable by Citizens Advice or Citizens Advice Scotland, as the case may be, in relation to gas and electricity consumers, ...

• (aa) in the case of expenses within subsection (3A)(da) or (dc), the functions exercised by the National Consumer Council in relation to gas and electricity consumers, and

• (b) in the case of expenses within subsection (3A)(f), the functions under the qualifying consumer advice scheme which are exercisable in relation to gas and electricity consumers.

• (3C) A qualifying public consumer advice scheme is a scheme that is supported by Citizens Advice ... in a manner that the Competition and Markets Authority is prohibited from using by section 8A of the Enterprise Act 2002.

• (4) The Authority may, in accordance with this section, modify any payment conditions of a gas licence or an electricity licence where the Authority considers it necessary or expedient to do so in consequence of, or of preparations for—

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

• (b) the abolition of the Gas and Electricity Consumer Council.

• (c) the abolition of the National Consumer Council, or

• (d) the conferring of functions which are exercisable in relation to gas and electricity consumers on Citizens Advice or Citizens Advice Scotland by the Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 2014 (S.I. 2014/...).

• (5) The Authority may, in accordance with this section, make such incidental or consequential modifications of—

• (a) the other conditions of a gas licence or an electricity licence, or

• (b) any code or agreement relevant to the conditions of such a licence,

as it considers necessary or expedient in consequence of, or of preparations for, an event mentioned in subsection (4)(a) or (b).

• (6) Before modifying the conditions of a licence or any code or agreement under subsection (4) or (5) the Authority shall consult the licence holder.

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

• (8) The powers of the Authority under subsection (4) (as amended by paragraph 29 of Schedule 1 to the Consumers, Estate Agents and Redress Act 2007), and subsection (5) as it applies in relation to that subsection, may not be exercised after the end of the period of 2 years beginning with the commencement of that paragraph.

• (9) The Secretary of State may give directions to the Authority for the purpose of securing that sums relating to any of the expenses mentioned in subsection (3) or (3A) or to amounts mentioned in subsection (2)(b) are included in the sums payable by virtue of payment conditions in gas licences and electricity licences; and the Authority shall comply with any such direction.

• (10) For the purposes of this section—

• ...

• ...

• “ consumer ” has the same meaning as in Part 1 of the Consumers, Estate Agents and Redress Act 2007 (see section 3 of that Act);

• “ gas and electricity consumers ” means consumers in relation to gas conveyed through pipes or electricity conveyed by distribution systems or transmission systems;

• “ OFT scheme ” means any public consumer advice scheme supported by the Office of Fair Trading.

Part II — Objectives of regulation of gas and electricity

Gas

Objectives and duties under 1986 Act

9

For section 4 of the 1986 Act (general duties of Secretary of State and Director) there is substituted—

(4AA) (1) The principal objective of the Secretary of State and the Gas and Electricity Markets Authority (in this Act referred to as “the Authority”) in carrying out their respective functions under this Part is to protect the interests of consumers in relation to gas conveyed through pipes, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the shipping, transportation or supply of gas so conveyed. (2) The Secretary of State and the Authority shall carry out those functions in the manner which he or it considers is best calculated to further the principal objective, having regard to— (a) the need to secure that, so far as it is economical to meet them, all reasonable demands in Great Britain for gas conveyed through pipes are met; and (b) the need to secure that licence holders are able to finance the activities which are the subject of obligations imposed by or under this Part or the Utilities Act 2000. (3) In performing that duty, the Secretary of State or the Authority shall have regard to the interests of— (a) individuals who are disabled or chronically sick; (b) individuals of pensionable age; (c) individuals with low incomes; and (d) individuals residing in rural areas; but that is not to be taken as implying that regard may not be had to the interests of other descriptions of consumer. (4) The Secretary of State and the Authority may, in carrying out any function under this Part, have regard to— (a) the interests of consumers in relation to electricity conveyed by distribution systems (within the meaning of the Electricity Act 1989); and (b) any interests of consumers in relation to— (i) telecommunication services and telecommunication apparatus (within the meaning of the Telecommunications Act 1984); or (ii) water services or sewerage services (within the meaning of the Water Industry Act 1991), which are affected by the carrying out of that function. (5) Subject to subsection (2), the Secretary of State and the Authority shall carry out their respective functions under this Part in the manner which he or it considers is best calculated— (a) to promote efficiency and economy on the part of persons authorised by licences or exemptions to carry on any activity, and the efficient use of gas conveyed through pipes; (b) to protect the public from dangers arising from the conveyance of gas through pipes or from the use of gas conveyed through pipes; and (c) to secure a diverse and viable long-term energy supply, and shall have regard, in carrying out those functions, to the effect on the environment of activities connected with the conveyance of gas through pipes. (6) In this section “consumers” includes both existing and future consumers. (7) In this section and sections 4AB and 4A, references to functions of the Secretary of State or the Authority under this Part include a reference to functions under the Utilities Act 2000 which relate to gas conveyed through pipes. (8) In this Part, unless the context otherwise requires,— - “exemption” means an exemption granted under section 6A; - “licence” means a licence under section 7 or 7A and “licence holder” shall be construed accordingly.

Guidance on social and environmental matters in relation to gas

10

After section 4AA of the 1986 Act (which is inserted by section 9 above) there is inserted—

(4AB) (1) The Secretary of State shall from time to time issue guidance about the making by the Authority of a contribution towards the attainment of any social or environmental policies set out or referred to in the guidance. (2) The Authority shall, in carrying out its functions under this Part, have regard to any guidance issued under this section. (3) Before issuing guidance under this section the Secretary of State shall consult— (a) the Authority; (b) the Gas and Electricity Consumer Council (in this Act referred to as “the Council”); (c) licence holders; and (d) such other persons as the Secretary of State considers it appropriate to consult in relation to the guidance. (4) A draft of any guidance proposed to be issued under this section shall be laid before each House of Parliament. (5) Guidance shall not be issued under this section until after the period of forty days beginning with— (a) the day on which the draft is laid before each House of Parliament; or (b) if the draft is laid before the House of Lords on one day and the House of Commons on another, the later of those two days. (6) If, before the end of that period, either House resolves that the guidance should not be issued, the Secretary of State must not issue it. (7) In reckoning any period of forty days for the purposes of subsection (5) or (6), no account shall be taken of any time during which— (a) Parliament is dissolved or prorogued; or (b) both Houses are adjourned for more than four days. (8) The Secretary of State shall arrange for any guidance issued under this section to be published in such manner as he considers appropriate.

Health and safety in relation to gas

11

For section 4A of the 1986 Act (duties with respect to safety) there is substituted—

(4A) (1) The Secretary of State and the Authority shall consult the Health and Safety Commission about all gas safety issues which may be relevant to the carrying out of any of their respective functions under this Part. (2) The Secretary of State and the Authority shall, in carrying out their respective functions under this Part, take into account any advice given by the Health and Safety Commission about any gas safety issue (whether or not in response to consultation under subsection (1)). (3) For the purposes of this section a gas safety issue is anything concerning the conveyance of gas through pipes, or the use of gas conveyed through pipes, which may affect the health and safety of— (a) members of the public; or (b) persons employed in connection with the conveyance of gas through pipes or the supply of gas conveyed through pipes.

Exceptions from the general duties under 1986 Act

12

After section 4A of the 1986 Act there is inserted—

(4B) (1) Section 4AA does not apply in relation to the issuing by the Secretary of State of guidance under section 4AB. (2) Sections 4AA to 4A do not apply in relation to anything done by the Authority— (a) in the exercise of functions relating to the determination of disputes; or (b) in the exercise of functions under section 36A(3). (3) The Authority may nevertheless, when exercising any function under section 36A(3), have regard to any matter in respect of which a duty is imposed by sections 4AA to 4A if it is a matter to which the Director General of Fair Trading could have regard when exercising that function. (4) The duties imposed by sections 4AA to 4A do not affect the obligation of the Authority or the Secretary of State to perform or comply with any other duty or requirement (whether arising under this Act or another enactment, by virtue of any EU obligation or otherwise).

Electricity

Objectives and duties under 1989 Act

13

For section 3 of the 1989 Act (general duties of Secretary of State and Director) there is substituted—

(3A) (1) The principal objective of the Secretary of State and the Gas and Electricity Markets Authority (in this Act referred to as “the Authority”) in carrying out their respective functions under this Part is to protect the interests of consumers in relation to electricity conveyed by distribution systems, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the generation, transmission, distribution or supply of electricity. (2) The Secretary of State and the Authority shall carry out those functions in the manner which he or it considers is best calculated to further the principal objective, having regard to— (a) the need to secure that all reasonable demands for electricity are met; and (b) the need to secure that licence holders are able to finance the activities which are the subject of obligations imposed by or under this Part or the Utilities Act 2000. (3) In performing that duty, the Secretary of State or the Authority shall have regard to the interests of— (a) individuals who are disabled or chronically sick; (b) individuals of pensionable age; (c) individuals with low incomes; and (d) individuals residing in rural areas; but that is not to be taken as implying that regard may not be had to the interests of other descriptions of consumer. (4) The Secretary of State and the Authority may, in carrying out any function under this Part, have regard to— (a) the interests of consumers in relation to gas conveyed through pipes (within the meaning of the Gas Act 1986); and (b) any interests of consumers in relation to— (i) telecommunication services and telecommunication apparatus (within the meaning of the Telecommunications Act 1984); or (ii) water services or sewerage services (within the meaning of the Water Industry Act 1991), which are affected by the carrying out of that function. (5) Subject to subsection (2), the Secretary of State and the Authority shall carry out their respective functions under this Part in the manner which he or it considers is best calculated— (a) to promote efficiency and economy on the part of persons authorised by licences or exemptions to transmit, distribute or supply electricity and the efficient use of electricity conveyed by distribution systems; (b) to protect the public from dangers arising from the generation, transmission, distribution or supply of electricity; and (c) to secure a diverse and viable long-term energy supply, and shall, in carrying out those functions, have regard to the effect on the environment of activities connected with the generation, transmission, distribution or supply of electricity. (6) In this section “consumers” includes both existing and future consumers. (7) In this section and sections 3B and 3C, references to functions of the Secretary of State or the Authority under this Part include a reference to functions under the Utilities Act 2000 which relate to electricity conveyed by distribution systems. (8) In this Part, unless the context otherwise requires— - “exemption” means an exemption granted under section 5; - “licence” means a licence under section 6 and “licence holder” shall be construed accordingly.

Guidance on social and environmental matters in relation to electricity

14

After section 3A of the 1989 Act (which is inserted by section 13 above) there is inserted—

(3B) (1) The Secretary of State shall from time to time issue guidance about the making by the Authority of a contribution towards the attainment of any social or environmental policies set out or referred to in the guidance. (2) The Authority shall, in carrying out its functions under this Part, have regard to any guidance issued under this section. (3) Before issuing guidance under this section the Secretary of State shall consult— (a) the Authority; (b) the Gas and Electricity Consumer Council (in this Act referred to as “the Council”); (c) licence holders; and (d) such other persons as the Secretary of State considers it appropriate to consult in relation to the guidance. (4) A draft of any guidance proposed to be issued under this section shall be laid before each House of Parliament. (5) Guidance shall not be issued under this section until after the period of forty days beginning with— (a) the day on which the draft is laid before each House of Parliament; or (b) if the draft is laid before the House of Lords on one day and the House of Commons on another, the later of those two days. (6) If, before the end of that period, either House resolves that the guidance should not be issued, the Secretary of State must not issue it. (7) In reckoning any period of forty days for the purposes of subsection (5) or (6), no account shall be taken of any time during which— (a) Parliament is dissolved or prorogued; or (b) both Houses are adjourned for more than four days. (8) The Secretary of State shall arrange for any guidance issued under this section to be published in such manner as he considers appropriate.

Health and safety in relation to electricity

15

After section 3B of the 1989 Act (which is inserted by section 14 above) there is inserted—

(3C) (1) The Secretary of State and the Authority shall consult the Health and Safety Commission about all electricity safety issues which may be relevant to the carrying out of any of their respective functions under this Part. (2) The Secretary of State may require the Authority also to consult him about electricity safety issues of particular descriptions. (3) The Secretary of State and the Authority shall, in carrying out their respective functions under this Part, take into account any advice given by the Health and Safety Commission about any electricity safety issue (whether or not in response to consultation under subsection (1)). (4) The Authority shall, in carrying out its functions under this Part, take into account any advice given by the Secretary of State about any electricity safety issue (whether or not in response to consultation under subsection (2)). (5) For the purposes of this section an electricity safety issue is anything concerning the generation, transmission, distribution or supply of electricity which may affect the health and safety of— (a) members of the public; or (b) persons employed in connection with any of those activities.

Exceptions from the general duties under 1989 Act

16

After section 3C of the 1989 Act (which is inserted by section 15 above) there is inserted—

(3D) (1) Section 3A does not apply in relation to the issuing by the Secretary of State of guidance under section 3B. (2) Sections 3A to 3C do not apply in relation to functions of the Secretary of State under section 36 or 37. (3) Sections 3A to 3C do not apply in relation to anything done by the Authority— (a) in the exercise of functions relating to the determination of disputes; (b) in the exercise of functions under section 43(3). (4) The Authority may nevertheless, when exercising any function under section 43(3), have regard to any matter in respect of which a duty is imposed by sections 3A to 3C (“a general matter”), if it is a matter to which the Director General of Fair Trading could have regard when exercising that function (but that is not to be taken as implying that, in relation to functions mentioned in subsection (2), regard may not be had to any general matter). (5) The duties imposed by sections 3A to 3C do not affect the obligation of the Authority or the Secretary of State to perform or comply with any other duty or requirement (whether arising under this Act or another enactment, by virtue of any Community obligation or otherwise).

Part III — Functions of the Council

Preliminary

17

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Acquisition and review of information

18

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

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

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

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

• (5) After section 41H of the 1986 Act (which is inserted by section 88 below) there is inserted—

(41I) Where the Authority is required by any provision of this Part to publish a notice or any other document, the Authority shall send a copy of the document to the Council.

• (6) Before section 57 of the 1989 Act (restriction on disclosure of information) there is inserted—

(56G) Where the Authority is required by any provision of this Part to publish a notice or any other document, the Authority shall send a copy of the document to the Council.

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

Provision of advice and information to public authorities and other persons

19

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Provision of information to consumers

20

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

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

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

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

• (5) After section 33D of the 1986 Act there is inserted—

(33DA) (1) It shall be the duty of the Council to publish, in such form and manner and with such frequency as it thinks appropriate, such statistical information as it considers appropriate in relation to— (a) the levels of performance achieved by gas suppliers and gas transporters in respect of— (i) standards of performance prescribed or determined under sections 33A, 33AA, 33B and 33BA; and (ii) energy efficiency obligations imposed by order under section 33BC; and (b) complaints made by consumers about any matter relating to the activities of such suppliers or transporters and the handling of such complaints. (2) In subsection (1)(b) “complaints” includes complaints made directly to gas suppliers and gas transporters (or anyone carrying on activities on their behalf) and complaints to the Authority or the Council.

• (6) After section 42A of the 1989 Act there is inserted—

(42AA) (1) It shall be the duty of the Council to publish, in such form and manner and with such frequency as it thinks appropriate, such statistical information as it considers appropriate relating to— (a) the levels of performance achieved by electricity suppliers and electricity distributors in respect of— (i) standards of performance prescribed or determined under sections 39, 39A, 40 and 40A; and (ii) energy efficiency obligations imposed by order under section 41A; and (b) complaints made by consumers about any matter relating to the activities of such suppliers or distributors and the handling of such complaints. (2) In subsection (1)(b) “complaints” includes complaints made directly to electricity suppliers and electricity distributors (or anyone carrying on activities on their behalf) and complaints to the Authority or the Council.

• (7) In consequence of this section, section 33C(4) and (5) of the 1986 Act and section 42(4) and (5) of the 1989 Act shall cease to have effect.

Power to publish advice and information about consumer matters

21

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

Complaints

22

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

Investigations

23

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

Provision of information to Council

24

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

Publication of notice of reasons

25

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

Provision of information by Council to Authority

26

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

Sections 24 to 26: supplementary

27

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

Part IV — Amendment of the Electricity Act 1989

Electricity licensing

Prohibition on unlicensed distribution of electricity

28

• (1) Section 4 of the 1989 Act (prohibition on unlicensed supply etc. of electricity) is amended as follows.

• (2) In subsection (1), after paragraph (b) there is inserted—

(bb) distributes electricity for that purpose;

.

• (3) In subsection (4)—

• (a) before the definition of “supply” there is inserted—

“distribute”, in relation to electricity, means distribute by means of a distribution system, that is to say, a system which consists (wholly or mainly) of low voltage lines and electrical plant and is used for conveying electricity to any premises or to any other distribution system;

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

Exemptions from electricity licensing

29

For section 5 of the 1989 Act (exemptions from prohibition) there is substituted—

(5) (1) The Secretary of State may by order grant exemption from paragraph (a), (b), (bb) or (c) of section 4(1)— (a) either to a person or to persons of a class; (b) either generally or to such extent as may be specified in the order; and (c) either unconditionally or subject to such conditions as may be so specified. (2) Before making an order under subsection (1) the Secretary of State shall give notice— (a) stating that he proposes to make such an order and setting out the terms of the proposed order; (b) stating the reasons why he proposes to make the order in the terms proposed; and (c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations with respect to the proposals may be made, and shall consider any representations which are duly made in respect of the proposals and not withdrawn. (3) The notice required by subsection (2) shall be given— (a) by serving a copy of it on the Authority and the Council; and (b) by publishing it in such manner as the Secretary of State considers appropriate for bringing it to the attention of those likely to be affected by the proposed order. (4) Notice of an exemption granted to a person shall be given— (a) by serving a copy of the exemption on him; and (b) by publishing the exemption in such manner as the Secretary of State considers appropriate for bringing it to the attention of other persons who may be affected by it. (5) Notice of an exemption granted to persons of a class shall be given by publishing the exemption in such manner as the Secretary of State considers appropriate for bringing it to the attention of— (a) persons of that class; and (b) other persons who may be affected by it. (6) An exemption may be granted— (a) indefinitely; or (b) for a period specified in, or determined by or under, the exemption. (7) Conditions subject to which an exemption is granted may (in particular) require any person carrying on any activity in pursuance of the exemption— (a) to comply with any direction given by the Secretary of State or the Authority as to such matters as are specified in the exemption or are of a description so specified; (b) except in so far as the Secretary of State or the Authority consents to his doing or not doing them, not to do or to do such things as are specified in the exemption or are of a description so specified; and (c) to refer for determination by the Secretary of State or the Authority such questions arising under the exemption as are specified in the exemption or are of a description so specified. (8) The Secretary of State may by order revoke an order by which an exemption was granted to a person or vary an order by which more than one exemption was so granted so as to terminate any of the exemptions— (a) at the person’s request; (b) in accordance with any provision of the order by which the exemption was granted; or (c) if it appears to the Secretary of State inappropriate that the exemption should continue to have effect. (9) The Secretary of State may by order revoke an order by which an exemption was granted to persons of a class or vary an order by which more than one exemption was so granted so as to terminate any of the exemptions— (a) in accordance with any provision of the order by which the exemption was granted; or (b) if it appears to the Secretary of State inappropriate that the exemption should continue to have effect. (10) The Secretary of State may by direction withdraw an exemption granted to persons of a class from any person of that class— (a) at the person’s request; (b) in accordance with any provision of the order by which the exemption was granted; or (c) if it appears to the Secretary of State inappropriate that the exemption should continue to have effect in the case of the person. (11) Before— (a) making an order under subsection (8)(b) or (c) or (9); or (b) giving a direction under subsection (10)(b) or (c), the Secretary of State shall consult the Authority and give notice of his proposal to do so (with reasons) and of a period within which representations may be made to him. (12) The notice under subsection (11) shall be given— (a) where the Secretary of State is proposing to make an order under subsection (8)(b) or (c), by serving a copy of it on the person to whom the exemption was granted; (b) where he is proposing to make an order under subsection (9), by publishing it in such manner as the Secretary of State considers appropriate for bringing it to the attention of persons of the class of persons to whom the exemption was granted; and (c) where he is proposing to give a direction under subsection (10)(b) or (c), by serving a copy of it on the person from whom he proposes to withdraw the exemption.

Licences authorising supply etc. of electricity

30

For section 6 of the 1989 Act there is substituted—

(6) (1) The Authority may grant any of the following licences— (a) a licence authorising a person to generate electricity for the purpose of giving a supply to any premises or enabling a supply to be so given (“a generation licence”); (b) a licence authorising a person to transmit electricity for that purpose in that person’s authorised area (“a transmission licence”); (c) a licence authorising a person to distribute electricity for that purpose (“a distribution licence”); or (d) a licence authorising a person to supply electricity to premises (“a supply licence”). (2) The same person may not be the holder of both a distribution licence and a supply licence. (3) A supply licence may authorise the holder to supply electricity— (a) to any premises; (b) only to premises specified in the licence, or to premises of a description so specified; or (c) only to any premises situated in a specified area, or to premises of a specified description which are so situated. (4) The Authority may, with the consent of the holder of a supply licence, modify terms included in the licence in pursuance of subsection (3) so as to extend or restrict the premises to which the licence holder may give a supply of electricity. (5) A distribution licence may authorise the holder to distribute electricity in any area, or only in an area specified in the licence. (6) The Authority may, with the consent of the holder of a distribution licence, modify terms included in the licence in pursuance of subsection (5) so as to extend or restrict the area within which the licence holder may distribute electricity. (7) A licence and any extension or restriction of a licence under subsection (4) or (6) shall be in writing. (8) A licence shall, unless previously revoked in accordance with any term of the licence, continue in force for such period as may be specified in or determined by or under the licence. (9) In this Part— - “authorised area”, in relation to the holder of a transmission licence, means so much of the area designated as such in the licence as is not for the time being designated in a subsequent transmission licence; - “electricity distributor” means any person who is authorised by a distribution licence to distribute electricity except where he is acting otherwise than for purposes connected with the carrying on of activities authorised by the licence; - “electricity supplier” means any person who is authorised by a supply licence to supply electricity except where he is acting otherwise than for purposes connected with the carrying on of activities authorised by the licence. (6A) (1) This section applies to any application— (a) for a licence; or (b) for the extension or restriction of a licence under section 6(4) or (6). (2) The application shall be made in such form and manner, and shall contain, or be accompanied by, such information and documents and such fee (if any), as may be prescribed. (3) Within the prescribed period after the making of the application the applicant shall publish a notice of the application in the prescribed manner. (4) Where the Authority proposes to refuse the application, it shall give to the applicant a notice— (a) stating that it proposes to refuse the application; (b) stating the reasons why it proposes to refuse the application; and (c) specifying the time within which representations with respect to the proposed refusal may be made, and shall consider any representations which are duly made and not withdrawn. (5) Where the Authority grants the licence, extension or restriction applied for, it shall as soon as practicable thereafter send a notice of the grant to any person who holds a licence and whose interests may, in the opinion of the Authority, be affected by the grant. (6) In this section “prescribed” means prescribed in regulations made by the Authority. (7) Any sums received by the Authority under this section shall be paid into the Consolidated Fund. (6B) (1) This section applies to applications for a transmission licence (in addition to the requirements of section 6A). (2) The applicant shall give notice of the application to any person who holds a transmission licence and whose authorised area includes the whole or any part of the area to which the application relates. (3) Before granting the transmission licence applied for, the Authority shall give notice— (a) stating that it proposes to grant the licence; (b) stating the reasons why it proposes to grant the licence; 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 licence 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 by publication in such manner as the Authority considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them. (5) The Authority shall send a copy of a notice under subsection (3) to— (a) the applicant; (b) the Secretary of State; and (c) any person who holds a transmission licence and whose authorised area includes the whole or any part of the area to which the application relates.

Enactments referring to public electricity suppliers

31

• (1) References in any enactment to public electricity suppliers shall have effect after the commencement of this section as if they were references to—

• (a) electricity suppliers;

• (b) electricity distributors; or

• (c) both electricity suppliers and electricity distributors,

according to the nature of the activities carried on by the persons to whom they referred before that time.

• (2) References in any enactment to the supply of electricity shall have effect after the commencement of this section as if they were references to—

• (a) the supply of electricity;

• (b) the distribution of electricity; or

• (c) both the supply and distribution of electricity,

according to the nature of the activities to which they referred before that time.

• (3) References in any enactment to holders of licences under section 6(2) of the 1989 Act shall have effect after the commencement of this section as if they were references to electricity suppliers.

Electricity licence conditions

32

• (1) Section 7 of the 1989 Act (conditions of licences) is amended as follows.

• (2) In subsection (1) for “grantor” and “section 3 above” there is substituted respectively “ Authority ” and “ sections 3A to 3C ”.

• (3) In subsection (2) for “a licence” there is substituted “ a transmission licence or distribution licence ”.

• (4) In subsection (3)—

• (a) for “Conditions included in a licence by virtue of subsection (1)(a) above” there is substituted “ Without prejudice to the generality of paragraph (a) of subsection (1), conditions included in a licence by virtue of that paragraph ”;

• (b) for “Director” (in each place it appears) there is substituted “ Authority or Secretary of State ”; and

• (c) in paragraph (c) after “licence” (in the first place it appears) there is inserted “ , or under any document referred to in the licence, ”.

• (5) After subsection (3) there is inserted—

(3A) Conditions included in a transmission licence or a distribution licence by virtue of subsection (1)(a) may require the holder, in such circumstances as are specified in the licence— (a) so to increase his charges for the transmission or distribution of electricity as to raise such amounts as may be determined by or under the conditions; and (b) to pay the amounts so raised to such licence holders as may be so determined.

• (6) For subsection (5) there is substituted—

(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.

• (7) After subsection (6) there is inserted—

(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.

• (8) In subsection (7) for “Secretary of State or the Director” there is substituted “ Authority ”.

Standard conditions of electricity licences

33

• (1) Such conditions as may be determined by the Secretary of State before the relevant time, and published by him in such manner as he considers appropriate, in relation to any of the types of licence mentioned in section 6(1)(a), (c), (d) and (g) of the 1989 Act (that is to say, in relation to generation licences, ... distribution licences, supply licences or code manager licences) shall be standard conditions for the purposes of licences of that type, subject to any modifications of the standard conditions for the purposes of licences of that type made—

• (za) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (a) under Part 1 of the 1989 Act after the determination under this section, ...

• (b) under the Energy Act 2004 ...

• (c) under section 7 of the Climate Change and Sustainable Energy Act 2006 (sale of electricity generated by microgeneration: power to modify distribution and supply licences etc) , ...

• (d) under section 41, 84, 88 or 97 of the Energy Act 2008 (power to amend licence conditions), ...

• (e) under the Energy Act 2010, ...

• (f) under Chapter 1 of Part 1 ... of the Energy Act 2011, ...

• (g) under the Energy Act 2013, ...

• (h) under section 6 of the Smart Meters Act 2018,

• (i) under section 1 or 10 of the Domestic Gas and Electricity (Tariff Cap) Act 2018, ...

• (j) under the Nuclear Energy (Financing) Act 2022 , or

• (k) under or by virtue of section 21 of the Energy Prices Act 2022 ...,

• (k) under sections 169, 245 to 247 of, and paragraph 4 of Schedule 12 to, the Energy Act 2023, or

• (m) under section 14 of the Planning and Infrastructure Act 2025.

• (1A) In subsection (1), “the relevant time” means—

• (a) where the determination relates to any of the types of licence mentioned in section 6(1)(a), (c) and (d) of the 1989 Act (generation licences, distribution licences or supply licences), the time when subsection (3) comes into force;

• (b) where the determination relates to the type of licence mentioned in section 6(1)(g) of the 1989 Act (code manager licences), 26th October 2030.

• (2) The standard conditions for the purposes of licences of any type may contain provision—

• (a) for any standard condition included in a licence of that type not to have effect until brought into operation in such manner and in such circumstances as may be specified in or determined under the standard conditions;

• (b) for the effect of any standard condition included in such a licence to be suspended in such manner, and in such circumstances, as may be so specified or determined; or

• (c) for any standard condition included in such a licence which is for the time being suspended to be brought back into operation in such manner and in such circumstances as may be so specified or determined.

• (3) After section 8 of the 1989 Act there is inserted—

(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) (that is to say, generation licences, transmission licences, distribution licences or supply licences) shall be incorporated by reference in each licence of that type granted after the commencement of this 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 and the Council. (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.

Modification of conditions of particular licence

34

• (1) In section 11 of the 1989 Act (modification of licence conditions by agreement), for subsection (1) there is substituted—

(1) Subject to the following provisions of this section, the Authority may modify the conditions of a particular licence. (1A) The Authority may not make any modifications under this section unless the licence holder has consented to the modifications and, in the case of standard conditions of the licence, the Authority is of the opinion that the modifications— (a) are requisite to meet the circumstances of the particular case; and (b) are such that— (i) the licence holder would not be unduly disadvantaged in competing with other holders of licences of that type; and (ii) 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).

• (2) After subsection (4) of that section there is inserted—

(5) The modification under this section of part of a standard condition of a 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.

Modification of standard conditions of licences

35

After section 11 of the 1989 Act there is inserted—

(11A) (1) Subject to the following provisions of this section, the Authority may modify the standard conditions of licences of any type mentioned in section 6(1). (2) Where at any time the Authority modifies the standard conditions of licences of any type under this section the Authority may make such incidental or consequential modifications as it considers necessary or expedient of any conditions of any licence of that type. (3) Before making any modifications under this section, 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 each relevant licence holder, to the Secretary of State and to the Council. (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 may not under this section make any modifications of the standard conditions of licences of any type unless— (a) no notice of objection to those modifications is given to the Authority within the time specified in the notice under subsection (3) by any relevant licence holder; (b) if one or more relevant licence holders give notice of objection to the Authority within that time— (i) the proportion (expressed as a percentage) of the relevant licence holders who have given notice of objection is less than such percentage as may be prescribed; and (ii) the percentage given by subsection (7) is less than such percentage as may be prescribed; or (c) subsection (8) applies to the case. (7) The percentage given by this subsection is the proportion (expressed as a percentage) of the relevant licence holders who have given notice of objection, weighted according to their market share in such manner as may be prescribed. (8) This subsection applies where the Authority is satisfied that— (a) the effect of the standard conditions is such as to impose a burden affecting relevant licence holders in the carrying on of activities to which the modifications relate; (b) the modifications would remove or reduce the burden without removing any necessary protection; and (c) the modifications are such that no holder of a licence of the type in question would be unduly disadvantaged in competing with other holders of such licences. (9) Where the Authority modifies the standard conditions of licences of any type— (a) the Authority 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) the Authority shall publish the modifications in such manner as it considers appropriate. (10) In this section— - “prescribed” means prescribed in an order made by the Secretary of State; and - “relevant licence holder”, in relation to proposed modifications of standard conditions of licences of any type, means the holder of a licence of that type— 1. which is to be modified under the proposals by the inclusion of any new standard condition; or 2. which includes any standard conditions to which the proposals relate, other than standard conditions which are not in effect (by virtue of anything done under section 33(2) of the Utilities Act 2000) at the time specified in the notice under subsection (3). (11) A statutory instrument containing an order under this section shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

Electricity licence modification references

36

• (1) Section 12 of the 1989 Act (licence modification references to the Competition Commission) is amended as follows.

• (2) For subsection (1) there is substituted—

(1) The Authority may make to the Competition Commission a reference which is so framed as to require the Commission to investigate and report on the questions— (a) whether any matters which relate to the carrying on of activities authorised or regulated by a particular licence and which are specified in the reference operate, or may be expected to operate, against the public interest; and (b) if so, whether the effects adverse to the public interest which those matters have or may be expected to have could be remedied or prevented by modifications of the conditions of the licence. (1A) The Authority may make to the Competition Commission a reference which is so framed as to require the Commission to investigate and report on the questions— (a) whether any matters which relate to the carrying on of activities authorised or regulated by licences of any type mentioned in section 6(1), and which are specified in the reference operate, or may be expected to operate, against the public interest; and (b) if so, whether the effects adverse to the public interest which those matters have or may be expected to have could be remedied or prevented by modifications of the standard conditions of licences of that type.

• (3) In subsection (3)(b), for “conditions of the licence” there is substituted “ relevant conditions ”.

• (4) In subsection (4), after “licence” at the end of paragraph (a) there is inserted “ or, as the case may be, the relevant licence holders and the Council ”.

• (5) In subsection (5), for “this section” there is substituted “ subsection (1A) ”.

• (6) In subsection (6), after “this section” there is inserted “ or in carrying out functions under section 14A ”, after “the investigation” there is inserted “ or the carrying out of those functions ” and after “such investigation” there is inserted “ or such functions ”.

• (7) After subsection (6) there is inserted—

(6A) In this section and sections 13, 14 and 14A— - “relevant conditions”— 1. in relation to a reference under subsection (1), means the conditions of the licence to which the reference relates; and 2. in relation to a reference under subsection (1A), means the standard conditions of the licences to which the reference relates; and - “relevant licence holder” means the holder of a licence to which a reference under subsection (1A) relates.

Reports on modification references

37

• (1) Section 13 (reports on modification references) of the 1989 Act is amended as follows.

• (2) In subsection (1)(c), for “conditions of the licence” there is substituted “ relevant conditions ”.

• (3) In subsection (5)—

• (a) in paragraph (a), for the words from “such” to “relates” there is substituted “ a report on a reference under section 12(1), send a copy of it to the licence holder ”; and

• (b) in paragraph (b), for “publish the report” there is substituted “ send another copy to the Council and publish that other copy ”.

• (4) After subsection (5) of that section there is inserted—

(5A) Subject to subsection (6), the Authority shall— (a) on receiving a report on a reference under section 12(1A), send a copy of it to the Secretary of State; and (b) not less than 14 days after that copy is received by the Secretary of State— (i) send another copy to the Council and to each relevant licence holder; and (ii) not less than 24 hours after complying with sub-paragraph (i) above, publish the copy sent to the Council in such manner as it considers appropriate for bringing the report to the attention of persons likely to be affected by it.

• (5) In subsection (6) of that section, for the words from “paragraph (b)” to the end there is substituted “ subsection (5) or (5A), direct the Authority to exclude that matter from the copy of the report, or (as the case may be) each copy of the report, to be sent and published as mentioned in paragraph (b) of that subsection. ”

Modification following report

38

• (1) Section 14 of the 1989 Act (modification following report) is amended as follows.

• (2) In subsection (1), for “the conditions of the licence” and “the conditions of that licence” there is substituted “ the relevant conditions ”.

• (3) After subsection (1) there is inserted—

(1A) Where at any time it modifies under subsection (1) the standard conditions of licences of any type in consequence of a reference under section 12(1A), the Authority may make such incidental and consequential modifications as it considers necessary or expedient of any conditions of licences of that type granted before that time.

• (4) In subsection (4)(b) after “licence” there is inserted “ or, as the case may be, the relevant licence holders ”.

• (5) After subsection (4) there is inserted—

(5) After considering any representations or objections made in response to proposals set out in a notice under subsection (3), the Authority shall give notice to the Competition Commission— (a) setting out the modifications it proposes to make to remedy or prevent the adverse effects specified in the report; and (b) stating the reasons for making the modifications. (6) The Authority shall include with the notice under subsection (5) a copy of any representations or objections received in relation to the notice under subsection (3). (7) If the period of four weeks from the date on which the notice under subsection (5) is given elapses without a direction under section 14A(1)(a) having been given to it, the Authority shall— (a) make the modifications set out in the notice; or (b) if a direction under section 14A(1)(b) has been given, make the modifications which are not specified in the direction. (8) The modification under subsection (1) of part of a standard condition of a particular licence in consequence of a reference under section 12(1) shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Part. (9) Where the Authority modifies the standard conditions of licences of any type as mentioned in subsection (1A), the 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) shall publish the modifications made for those purposes in such manner as it considers appropriate.

Competition Commission’s power to veto modifications

39

After section 14 of the 1989 Act (modification following report) there is inserted—

(14A) (1) The Competition Commission (in this section referred to as “the Commission”) may, within the period of four weeks after the date on which it is given a notice under section 14(5), direct the Authority— (a) not to make the modifications set out in that notice; or (b) not to make such of the modifications as may be specified in the direction; and the Authority shall comply with any such direction. (2) The Secretary of State may, within the period of four weeks after the date on which the Commission is given a notice under section 14(5) and on the application of the Commission, direct that the period for giving a direction under subsection (1) (and, accordingly, the period mentioned in section 14(7)) shall be extended by 14 days. (3) The power to give a direction under subsection (1) may only be exercised in respect of such of the modifications set out in the notice under section 14(5)(a) as appear to the Commission not to be the modifications which are requisite for the purpose of remedying or preventing all or any of the adverse effects specified in the report as effects which could be remedied or prevented by modifications. (4) If the Commission gives a direction under subsection (1), the Commission— (a) shall give notice setting out the modifications proposed by the Authority, the terms of the direction and the reasons for giving it; and (b) shall itself make such modifications of the relevant conditions as appear to it to be requisite for the purpose of remedying or preventing— (i) if the direction was given under subsection (1)(a), the adverse effects specified in the report as effects which could be remedied or prevented by modifications; (ii) if the direction was given under subsection (1)(b), such of those adverse effects as are not remedied or prevented by the modifications made by the Authority under section 14(7)(b). (5) In exercising its function under subsection (4)(b) the Commission shall have regard to the matters to which the Authority is required to have regard when determining the conditions of a licence. (6) Before making modifications under subsection (4)(b) the Commission shall give notice— (a) stating that it proposes to make the modifications and setting them out; (b) stating the reason why it proposes to make them; (c) specifying the period (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. (7) A notice under subsection (4)(a) or (6) shall be given— (a) by publishing the notice in such manner as the Commission considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by the making of the modifications; and (b) by serving a copy on the Authority and the holder of the licence in question or, as the case may be, the relevant licence holders. (8) After making modifications under this section the Commission shall publish a notice stating that the modifications have been made and setting them out, with the reasons for making them. (9) Where, in consequence of a reference under section 12(1A), the Commission modifies under subsection (4)(b) the standard conditions of licences of any type, the Authority may make such incidental and consequential modifications as it considers necessary or expedient of any conditions of licences of that type granted before that time. (10) Where the Commission modifies the standard conditions of licences of any type as mentioned in subsection (9), the Authority— (a) shall 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) shall publish the modifications made for those purposes in such manner as it considers appropriate. (11) The modification under this section of part of a standard condition of a particular licence in consequence of a reference under section 12(1) shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Part. (12) The provisions mentioned in subsection (13) are to apply in relation to the exercise by the Commission of its functions under this section as if— (a) in section 82(1) and (2) of the Fair Trading Act 1973 references to a report of the Commission under that Act were references to a notice under subsection (4)(a), (6) or (8) of this section; (b) in section 85 of that Act references to an investigation on a reference made to the Commission were references to an investigation by the Commission for the purposes of the exercise of its functions under this section. (13) The provisions are— (a) section 82(1) and (2) of the Fair Trading Act 1973 (general provisions as to reports under that Act); (b) section 85 of that Act (attendance of witnesses and production of documents); (c) section 24 of the Competition Act 1980 (modification of provisions about the Competition Commission’s general functions); and (d) Part II of Schedule 7 to the Competition Act 1998 (the Competition Commission’s general functions). (14) This section does not apply to the modification of a licence following a report of the Commission made before the commencement of section 39 of the Utilities Act 2000.

Modification by order under other enactments

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• (1) Section 15 of the 1989 Act (modification of licences by order under enactments other than the 1989 Act) is amended as follows.

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

• (3) After subsection (2) there is inserted—

(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 Secretary of State modifies under subsection (1) the standard conditions of licences of any type— (a) he 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) he may, after consultation with the Authority, make such incidental or consequential modifications as he considers necessary or expedient of any conditions of any licence of that type granted before that time. (2C) Where at any time the Secretary of State modifies standard conditions under subsection (2B)(a) for the purposes of their incorporation in licences granted after that time, he shall publish those modifications in such manner as he considers appropriate.

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

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

Transfer of electricity licences

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After section 7 of the 1989 Act there is inserted—

(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. (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. (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.

Reasons for decisions under 1989 Act

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After section 49 of the 1989 Act (keeping of register) there is inserted—

(49A) (1) This section applies to the following decisions of the Authority or the Secretary of State, namely— (a) the revocation of a licence; (b) the modification of the conditions of a licence; (c) the giving of any directions or consent in pursuance of a condition included in a licence by virtue of section 7(3)(a) or (b); (d) the determination of a question referred in pursuance of a condition included in a licence by virtue of section 7(3)(c); (e) the determination of a dispute referred under section 23(1); (f) the making of a final order, the making or confirmation of a provisional order or the revocation of a final order or of a provisional order which has been confirmed. (2) As soon as reasonably practicable after making such a decision the Authority or the Secretary of State shall publish a notice stating the reasons for the decision in such manner as it or he considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be interested. (3) The Authority shall send a copy of a notice published in respect of a decision mentioned in paragraph (a), (b), (c), (d) or (f) of subsection (1) to the licence holder to whose licence, or to whom, the decision relates. (4) In preparing a notice under subsection (2) the Authority or the Secretary of State shall have regard to the need for excluding, so far as that is practicable, any matter which relates to the affairs of a particular individual or body of persons (corporate or unincorporate), where it or he considers that publication of that matter would or might seriously and prejudicially affect the interests of that individual or body. (5) This section does not apply to a decision resulting in any provision which the Secretary of State has under section 49(4) directed the Authority not to enter in the register required to be kept under that section.

Altering activities requiring electricity licence

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After section 56 of the 1989 Act there is inserted—