EXHIBIT 10.4
SECOND TIER LICENCE TO SUPPLY ELECTRICITY
-for-
Yorkshire Electricity Group plc
L/OF/127/2TS
Uncertified copies of this licence are available price (pound)4.20 payment with
order from:
Library
Office of Electricity Regulation
Hagley House
Hagley Road
Birmingham
B16 8QG
Cheques and postal orders should be made payable to:
Office of Electricity Regulation.
(C) Crown Copyright
2
SECOND TIER LICENCE TO SUPPLY ELECTRICITY
- for -
Yorkshire Electricity Group plc
3
NOTE
The licenceholder is subject to the
environmental obligations set out in
Schedule 9 (Preservation of Amenity and
Fisheries) to the Electricity Act 1989
4
TABLE OF CONTENTS
Page
----
PART I: TERMS OF THE LICENCE 1
PART II: THE CONDITIONS
1. Interpretation and construction 2
2. Restriction on supply to certain premises 8
3. Connection and use of system - requirement to 12
offer terms
3A. Connection and use of system - functions of the 18
Director
4. Compliance with Scottish Grid Codes 20
5. Compliance with Scottish Distribution Codes 21
6. Compliance with Trading Code 22
7. Licensee 's system planning 23
8. Generation security standard 25
9. Security arrangements 30
10. Health and safety of employees 31
11. Provision of information to the Director 32
12. Payment of fees 33
SCHEDULE 1: Specified premises 35
SCHEDULE 2: Terms as to revocation 36
5
SECOND-TIER LICENCE TO SUPPLY ELECTRICITY
PART I: TERMS OF THE LICENCE
1. The Director General of Electricity Supply in accordance with a general
authority given by the Secretary of State under Sections 6(1) and (2) of
the Electricity Act 1989 (hereinafter referred to as "the Act") and in
exercise of the powers conferred by Section 6(2)(a), Section 6(6), and
Section 7 of the Act hereby licenses Yorkshire Electricity Group plc
(registered in England under number 2366995) to supply electricity to the
premises specified in Schedule 1 below during the period specified in
paragraph 3 below, subject to the Conditions set out in Part II below
(hereinafter referred to as the "Conditions") .
2. The Conditions are subject to modification or amendment in accordance with
their terms or with Sections 11, 14 or 15 of the Act. The licence is
further subject to the terms as to revocation specified in Schedule 2.
3. This licence shall come into force on 1 April 1991 and unless revoked in
accordance with the provisions of Schedule 2 shall continue until
determined by not less than 25 years' notice in writing given by the
Director General of Electricity Supply to the licensee, such notice not to
be served earlier than a date being 10 years after the licence comes into
force .
Dr. Eileen Marshall
authorised on behalf of the
25 March 1991 Director General of Electricity Supply
6
PART II: THE CONDITIONS
Condition 1: Interpretation and construction
1. Unless the contrary intention appears, words and expressions used in the
Conditions or in the Schedules below shall be construed as if they were in an
Act of Parliament and the Interpretation Act 1978 applied to them and references
to an enactment shall include any statutory modification or reenactment thereof
after the date when this licence comes into force .
2. Any word or expression defined for the purposes of any provision of Part I of
the Act shall, unless the contrary intention appears, have the same meaning when
used in the Conditions or in the Schedules below.
3. In the Conditions and in the Schedules below unless otherwise specified or
the context otherwise requires:-
"affiliate" in relation to any person means any
holding company or subsidiary of such
person or any subsidiary of a holding
company of such person, in each case
within the meaning of Sections 736, 736A
and 736B of the Companies Act 1989 and
if that Section is not in force at the
date of grant of this licence as if such
Section were in force at such date.
"authorised" in relation to any business or activity
means authorised by licence granted
under Section 6 or exemption granted
under Section 5 of the Act.
7
"authorised electricity means any person (other than the
operator" licensee) who is authorised to generate,
transmit or supply electricity.
"designated" in relation to any agreement means
designated by the Secretary of State or
on his behalf by means of initialling or
descriptive reference whether for the
purposes of any Condition of this
licence or otherwise, but so that an
agreement so designated may at the
discretion of the Secretary of State
cease to be designated if amended or
modified in any material respect.
"Distribution Code" means, in relation to any public
electricity supplier, the Distribution
Code required to be prepared by such
supplier and approved by the Director as
from time to time revised with the
approval of the Director.
"distribution system" in relation to any public electricity
supplier, shall have the same meaning as
it has for the purposes of the licence
held by such supplier under Section
6(l)(c) of the Act or, in the event that
such supplier holds more than one such
licence at any time, it shall mean at
that time each system which is defined
as the distribution system of that
supplier in such licences (taken
together with each other system which is
so defined) .
"equivalent megawatt" in circumstances where demand is only
measured in megavolt amperes. means
megavolt amperes converted into
megawatts using for this purpose a power
factor of 0.9 megawatts per megavolt
ampere or such other factor
8
as may with the approval of the Director
be taken as being appropriate having
regard to electrical characteristics of
the supply, and cognate expressions
shall be construed accordingly.
"Grid Code" means, in relation to any transmission
licensee, the Grid Code required to be
prepared by such transmission licensee
and approved by the Director as from
time to time revised with the approval
of the Director.
"licensee" means Yorkshire Electricity Group plc
(registered number 2366995) and (where
the context so requires) shall include
any business in respect of which the
licensee is the successor company .
"licensee's system" means the electric lines of the licensee
through which the licensee supplies
electricity to premises pursuant to this
licence and includes any electrical
plant and meters of the licensee which
are used in connection with the
transport of electricity through such
lines.
"megawatt" or "MW" includes an equivalent megawatt.
"related undertaking" in relation to any person means any
undertaking in which such a person has a
participating interest as defined by
Section 260 of the Companies Act 1985 as
substituted by Section 22 of the
Companies Act 1989 and if that Section
is not in force at the date of grant of
this licence as if such Section were in
force at such date.
9
"Scottish transmission means a person who holds a licence under
licensee" Section 6(1)(b) of the Act for an
authorised area in Scotland.
"successor company" has the meaning ascribed to it for the
purposes of Part II of the Act.
"Trading Code" means the Trading Code required to
be adopted by the Scottish transmission
licensees, as from time to time revised
with the approval of the Director.
"transmission licensee" means a person who holds a licence under
Section 6(1)(b) of the Act.
"transmission system" in relation to any transmission
licensee, shall have the same meaning as
it has for the purposes of the licence
held by such licensee under Section
6(1)(b) of the Act or, in the event that
such licensee holds more than one such
licence at any time, it shall mean at
that time each system which is defined
as the transmission system of that
licensee in such licences (taken
together with each other system which is
so defined).
"undertaking" bears the meaning ascribed to that
expression by Section 259 of the
Companies Act 1985 as substituted by
Section 22 of the Companies Act 1989 and
if that Section is not in force at the
date of grant of this licence as if such
Section were in force at such date.
4. Unless otherwise specified, any reference to a numbered Condition or to a
numbered Condition with a suffix letter or to a numbered Schedule is
respectively a
10
reference to the Condition, or to the Condition with a suffix letter or to the
Schedule bearing that number in this licence, and any reference to a numbered
paragraph or to a numbered paragraph with a suffix letter is respectively a
reference to the paragraph or to the paragraph with a suffix letter bearing that
number in the Condition or Schedule in which the reference occurs.
5. The heading or title of any Part, Condition, Schedule or paragraph shall not
affect the construction hereof.
6. Where any obligation of the licensee is expressed to require performance
within a specified time limit that obligation shall continue to be binding and
enforceable after that time limit if the licensee fails to perform that
obligation within that time limit (but without prejudice to all rights and
remedies available against the licensee by reason of the licensee's failure to
perform within the time limit).
7. The provisions of Section 109 of the Act shall apply for the purposes of the
delivery or service of any documents, directions or notices to be delivered or
served pursuant to any Condition or Schedule and directions issued by the
Director pursuant to any Condition or Schedule shall be delivered or served as
aforesaid.
11
Condition 2: Restriction on supply to certain premises
1. Save as provided in paragraphs 3 and 5 below the licensee shall not during
the franchise period supply electricity to any single premises at which the
relevant demand in megawatts is at or below the franchise limit.
2. In determining for the purposes of this Condition whether any single premises
falls within the franchise limit the licensee shall have regard to the following
bases of assessment:
(a) in respect of premises occupied by existing customers the relevant
demand in megawatts shall be calculated as an average of the maximum
monthly demands under normal operating conditions at such single premises
supplied by one or more authorised electricity operators and/or the
licensee in the 3 months of highest maximum demand as recorded over the
most recent 12 month period in respect of which figures are available; and
(b) in respect of premises occupied by a new customer seeking a supply
from the licensee the relevant demand in megawatts shall be calculated by
reference to the average maximum monthly demand which might reasonably be
expected in the 3 months of highest maximum demand over a 12 month period
at premises having similar demand characteristics to the premises occupied
by such new customer.
2A. For the purposes of paragraph 2, if any electricity which has been or is to
be supplied by the licensee to any single premises ("premises A") is or will be
on-supplied by another person from premises A to one or more single premises
("premises B") then:
(a) If the on-supply to premises B from premises A was made on 31st
March 1990 by that other person pursuant to an agreement for that other
person to supply premises B which was subsisting on that date that demand
at premises B which is met by such on-supply from premises A may be
regarded as part of the relevant demand in megawatts at premises A; and
(b) save as provided in sub-paragraph (a) above, that demand at
premises
12
B which is met by such on-supply from premises A shall not be regarded as
part of the relevant demand in megawatts at premises A.
3. Subject to paragraph 4, if at any time during the franchise period the
relevant demand in megawatts (calculated in accordance with paragraph 2 and 2A)
at any single premises to which a supply is given by the licensee in accordance
with the provisions of this Condition should fall to or below the franchise
limit the licensee may, notwithstanding such fact, continue to supply such
premises without being in breach of this Condition until such time as:
(a) any contract existing between the licensee and the customer
occupying such premises is determined by effluxion of time or otherwise; or
(b) the supply arrangements between the licensee and the customer
occupying such premises shall for any other reason be terminated.
4. Save where the Director otherwise agrees, if (having regard to the basis of
assessment referred to in paragraph 2(b)) the relevant demand in megawatts of a
customer who was a new customer at the time of commencement of supply by the
licensee should, in the first 12 month period for which figures are available,
prove to be less than was reasonably expected of such customer and to fall to or
below the franchise limit, the licensee shall cease to supply such customer.
5. Notwithstanding paragraph 1, the licensee may supply electricity to single
premises at which the relevant demand in megawatts is at or below the franchise
limit where such single premises are specified for the purposes of this licence
by the Director with the prior approval of the Secretary of State.
6. For the purposes of paragraph 2(a), where the average calculated as there
provided, but ignoring for this purpose the reference to normal operating
conditions, was no more than 10 per cent higher than the average (calculated in
the same manner) over the twelve-month period preceding the twelve-month period
referred to in paragraph 2(a), the maximum monthly demands from which the
average was derived shall be presumed to have occurred under normal operating
conditions.
7. Any dispute arising under the provisions of this Condition between the
licensee and any authorised electricity operator or any person requiring a
supply of electricity from the licensee may be referred to the Director and the
Director shall
13
determine whether the premises in respect of which the customer requires a
supply to be given fall within the franchise limit.
8. In this Condition:
"existing customer" means any person occupying premises to which
a supply is being given by the licensee or
any other authorised electricity operator,
which person (or any affiliate or related
undertaking of such person) and premises have
been supplied for a clear period of at least
12 months prior to the date on which
application for supply by the licensee is
made.
"franchise limit" means:
(a) during the 4 year period from 31st March
1990 to 30th March 1994 one megawatt; and
(b) during the succeeding 4 year period from
31st March 1994 to 30th March 1998 0.1
megawatt
"franchise period" means the period of 8 years commencing on
31st March 1990.
"new customer" means any person supplied or applying for a
supply to premises other than an existing
customer.
"single premises" includes in the case of sites or buildings in
multi-occupation, each area in respect of
which the supply of electricity was as at
31st December 1989 or is or is to be
separately metered and the occupier
individually invoiced by the licensee or any
authorised electricity operator.
14
Condition 3: Connection and use of system - requirement to offer terms
1. The licensee shall, subject to paragraphs 6, 7 and 10:-
(a) offer to enter into an agreement to provide a connection to the
licensee's system with any person who has made application for connection
to the licensee's system; and
(b) offer to enter into an agreement for the modification of a connection
to the licensee's system with any person who has made application for
modification of a connection to the licensee's system; and
(c) offer to enter into an agreement with any person who has made
application for use of system:-
(i) to accept into the licensee's system at such entry point and in
such quantities as may be specified in application, electricity to be
provided by or for the person; and
(ii) to deliver electricity equal in quantity to that accepted into
the licensee's system (less only any losses incurred in the course of
transporting such electricity through the licensee's system) from such
exit points on the licensee's system and in such quantities as may be
specified in the application to such person as the person making the
application may specify.
2. The licensee shall, subject to paragraphs 6 and 7, offer terms for an
agreement in accordance with paragraph 1 as soon as practicable and in any event
not more than the period specified in paragraph 8 after receipt by the licensee
of an application from the person containing all such information as the
licensee may reasonably require for the purpose of formulating the terms of its
offer.
3. Each offer made in accordance with paragraph I shall:
(a) make detailed provision regarding such of the following matters as are
relevant for the purposes of the agreement:
(i) the carrying out of works (if any) required for the construction
or modification of the entry point to connect, the licensee's system
15
to the transmission system of any transmission licensee or the
distribution system of any public electricity supplier or the system
for the distribution of electricity of any other person authorised to
supply electricity or in connection with the construction or
modification of any exit points for the delivery of electricity as
specified in the application and for the obtaining of any consents
necessary for such purpose;
(ii) the carrying out of works (if any) for the provision of
electrical plant or for the extension or reinforcement of the
licensee's system which are required to be undertaken for the
provision of connection to, or the making of a modification to a
connection to, the licensee's system or for provision of use of the
licensee's system to the person and for the obtaining of any consents
necessary for such purpose;
(iii) the installation of appropriate meters or other apparatus
(if any) required to enable the licensee to measure electricity being
accepted into the licensee's system at the specified entry point and
leaving such system at the specified exit points;
(iv) the installation of such switchgear or other apparatus (if
any) as may be required for interrupting the use of system should
there be a failure by or for a person to provide electricity at its
entry point on the licensee's system for delivery to the person
specified by the person in its application from the exit points on the
licensee's system;
(v) the date by which any works required so as to permit access
to the licensee's system (including for this purpose any works for its
extension or reinforcement) shall be completed (and so that, unless
otherwise agreed by the person making the application, a failure to
complete such works by such date shall be a material breach of the
agreement entitling the person to rescind such agreement);
16
(vi) the charges to be paid by the person making the application
for the provision of electrical plant, for connections to or
modification of connections to, or the extension or reinforcement of,
the licensee s system, for the installation of meters, switchgear or
other apparatus and for their maintenance, for disconnection from the
licensee's system and the removal of electrical plant, electric lines
and meters following disconnection and for use of system which shall,
unless manifestly inappropriate, be set in conformity with paragraph
4; and
(b) contain such other provisions as may be appropriate for the purposes of
the agreement in the circumstances in which it is likely to be entered
into.
4. The charges referred to in paragraph 3 to be contained in every agreement
subject of an offer by the licensee shall be such that:
(a) charges for the provision of electrical plant, connection charges,
charges for modification or connections, charges for disconnection from the
licensee's system and the removal of electrical plant, electric lines and
meters following disconnection or any charges for extension or
reinforcement of the licensee s system or for use of system are set at a
level which will enable the licensee to recover no more than:
(i) the appropriate proportion (taking account of the factors referred
to in paragraph 5) of the costs directly or indirectly incurred by the
licensee; and
(ii) a reasonable rate of return on the capital represented by such
costs; and
(b) charges for the installation of meters, switchgear or other apparatus
and for their maintenance shall not exceed the costs thereof and a
reasonable rate of return on the capital represented by such costs.
5. For the purpose of determining an appropriate proportion of the costs
directly or indirectly incurred in carrying out works, the licensee shall have
regard to:-
17
(a) the benefit (if any) to be obtained or likely in the future to be
obtained by the licensee or any other person as a result of the carrying
out of such works whether by virtue of the provision of electrical plant,
the reinforcement or extension of the licensee s system or the provision of
additional entry or exit points on the licensee's system or otherwise; and
(b) the ability or likely future ability of the licensee to recoup a
proportion of such costs from other persons.
6. The licensee shall not be obliged pursuant to this Condition 3 to offer to
enter into any agreement where, by reason of the capacity of the licensee's
system and the use made or reasonably expected to be made of it, the licensee
would be required to expand or reinforce the capacity of the licensee s system.
7. The licensee shall not be obliged pursuant to this Condition 3 to offer to
enter into any agreement with any person if:
(a) to do so would be likely to involve the licensee:
(i) in breach of the Grid Code of any transmission licensee; or
(ii) in breach of the Distribution Code of any public electricity
supplier; or
(iii) in breach of the Electricity Supply Regulations 1988 or any
regulations made under Section 29 of the Act; or
(iv) in breach of any other enactment relating to safety or standards
applicable to the licensee's system; or
(b) the person does not undertake to be bound, insofar as applicable, by
the terms of the Codes referred to in sub-paragraphs (a)(i) and (a)(ii)
above, as from time to time in force.
8. For the purpose of paragraph 2, the period specified shall be:
(a) in the case of persons seeking use of system only, 28 days; and
18
(b) in the case of persons seeking connection or modification of an
existing connection or seeking use of system in conjunction with
connection, 3 months.
9. The licensee shall within 28 days following receipt of a request from any
person, give or send to such person such information in the possession of the
licensee as may be reasonably required by such person for the purpose of
completing paragraph 8 of Part 1 and paragraphs 2(v) and (vi) of Part 2 of
Schedule 2 to the Electricity (Application for Licences and Extensions of
Licences) Regulations 1990 or such provisions to like effect contained in any
further regulations then in force made pursuant to Sections 6(3),to the extent
that, the Director so directs and the licensee shall comply with any such
direction.
10. Paragraphs 1 to 9 inclusive above shall apply only if, and to the extent
that, the Director so directs and the licensee shall comply with any such
direction.
19
Condition 3A: Connection and use of system - functions of the Director
1. If, after a period which appears to the Director to be reasonable for the
purpose, the licensee has failed to enter into an agreement with any person
entitled or claiming to be entitled thereto pursuant to an application in
accordance with Condition 3, the Director may, pursuant to Section 7(3) of the
Act, on the application of such person or the licensee, settle any terms of the
agreement in dispute between the licensee and the person in such manner as
appears to the Director to be reasonable having (insofar as relevant) regard, in
particular, to the following considerations:
(a) that the person should pay to the licensee the whole or an appropriate
proportion (as determined in accordance with paragraph 5 of Condition 3] of
the costs directly or indirectly incurred by the licensee in the carrying
out of any works or in providing or doing any other thing under the
agreement in question calculated in accordance with the principles set out
in paragraph 4 of Condition 3 together with a reasonable rate of return on
the capital represented by such costs;
(b) that the performance by the licensee of its obligations under the
agreement should not cause it to be in breach of any of the Conditions;
(c) that any methods by which the licensee's system is connected to the
transmission system of any transmission licensee or the distribution system
of any public electricity supplier or the system for the distribution of
electricity of any other person authorised to supply electricity accord
with good engineering principles and practices;
(d) that the terms and conditions of agreements entered into by the
licensee pursuant to an application in accordance with Condition 3 should
be, so far as circumstances allow, as similar in substance and form as is
practicable
2. If the person wishes to proceed on the basis of the agreement as settled by
the Director, the licensee shall forthwith enter into and implement such
agreement in accordance with its terms.
3. If the licensee proposes to vary the contractual terms of any agreement for
connection to, or modification of a connection to, the licensee's system or for
use of
20
system entered into pursuant to Condition 3 or this Condition in any
manner provided for under such agreement, the Director may, at the request of
the licensee or other party to such agreement, settle any dispute relating to
such variation in such manner as appears to the Director to be reasonable.
21
Condition 4: Compliance with Scottish Grid Codes
1. The licensee shall comply with the provisions of the Grid Code of each
Scottish transmission licensee insofar as applicable to it.
2. The Director may (following consultation with such Scottish transmission
licensees as the Director shall consider appropriate) issue directions relieving
the licensee of its obligation under paragraph 1 in respect of such parts of the
Grid Code of any Scottish transmission licensee and to such extent as may be
specified in those directions.
3. In this Condition -
"authorised activities" means the activities which the licensee
is authorised by this Licence to carry
on.
22
Condition 5: Compliance with Scottish Distribution Codes
1. The licensee shall comply with the provisions of the Distribution Code of
each Scottish public electricity supplier insofar as applicable to it.
2. The Director may (following consultation with such Scottish public
electricity suppliers as the Director shall consider appropriate) issue
directions relieving the licensee of its obligation under paragraph 1 in respect
of such parts of the Distribution Code of any Scottish public electricity
supplier and to such extent as may be specified in those directions.
23
Condition 6: Compliance with Trading Code
1. The licensee shall comply with the provisions of the Trading Code insofar as
applicable to it during any period that the licensee is a member of the trading
system established by the Trading Code, including any requirements thereunder
for the Director's approval or consent, for compliance with directions issued by
the Director or relating to determinations made by the Director.
2. The Director may (following consultation with such members of the trading
system established by the Trading Code as the Director shall consider
appropriate) issue directions relieving the licensee of its obligation under
paragraph 1 in respect of such parts of the Trading Code and to such extent as
may be specified in those directions.
24
Condition 7: Licensee's system Planning
1. The licensee shall plan and develop each part of the licensee's system in
accordance with a standard not less than the relevant standard insofar as
applicable to it, or such standard of planning as the licensee may, following
consultation with such (if any) authorised electricity operators as the Director
shall consider appropriate and with the approval of the Director, adopt from
time to time.
2. The Director may (following consultation with the licensee and such other (if
any) authorised electricity operators as the Director shall consider
appropriate) issue directions relieving the licensee of its obligation under
paragraph 1 in respect of such parts of the licensee's system and to such extent
as may be specified in the directions.
3. In this Condition:-
"relevant standard" means, in relation to each part of the
licensee's system, whichever of the
following standards is applicable to
that part namely:-
(i) the standard in accordance with
which the transmission licensee within
whose authorised area that part is
situated is required under the licence
held by it under Section 6(1)(b) of the
Act to plan and develop its transmission
system; or
(ii) the standard in accordance with
which the public electricity supplier
within whose authorised area that part
is situated is required under the
licence held by it under Section 6(l)(c)
of the Act to plan and develop its
distribution system.
25
Condition 8: Generation security standard
1. The licensee shall make arrangements sufficient to meet the generation
security standard.
2. Not later than 3 months before the end of each financial year, commencing
with the financial year ending on 31 March 1992, the licensee shall provide to
the Director a statement complying with the provisions of paragraphs 3 and 4.
3. The statement to be provided to the Director under paragraph 2 shall:
(a) be signed by 2 Directors of the licensee;
(b) describe the arrangements made or to be made by the licensee to meet
the generation security standard in each of the 7 succeeding financial
years;
(c) state the planning margin or margins adopted by the licensee for the
purpose of the above arrangements and set out the methodology and
calculations used in arriving at such margin or margins;
(d) refer to data, assumptions and demand forecasts (including insofar as
relevant those relating to diversity of demand, own generation,
arrangements for trading energy and capacity with other persons,
arrangements with relevant purchasers, including those permitting
interruption and reduction of supply, forecast maximum demand from relevant
purchasers, the maximum demand which the licensee could meet without
failing to meet the generation security standard, contracted availability
of generation, and load management (if any) of relevant purchasers); and
(e) include such other matters as the Director shall specify in directions
issued by the Director to the licensee for the purpose of this Condition
not later than 6 months before the end of the financial year in which the
statement is provided.
4. The licensee shall upon request by the Director provide to the Director
such information as the Director may require for the purpose of monitoring
compliance with this Condition and to enable the Director (having regard to
his statutory duties)
26
to review the operation of the generation security standard.
5. The licensee shall not make or agree any alteration other than an alteration
to which paragraph 7 applies, to the arrangements described in any statement
provided to the Director under paragraph 2 as having been made by the licensee
to meet the generation security standard for the first financial year covered by
such statement.
6. The licensee shall:-
(a) procure that, except to the extent that the Director shall otherwise
approve, arrangements described in any statement provided to the Director
under paragraph 2 as failing to be made by the licensee, to meet the
generation security standard for the first financial year covered by such
statement shall be made; and
(b) not make or agree any alteration, other than an alteration to which
paragraph 7 applies, to the arrangements so made.
7. This paragraph applies to an alteration which the Director considers is
unlikely to result in the licensee failing to meet the generation security
standard.
8. The licensee shall not enter into any contract for the supply of electricity
if the entering into of the contract would cause demand from relevant purchasers
in the first year covered by the statement most recently provided to the
Director under paragraph 2 to exceed the maximum demand which the licensee can
meet in that year without failing to meet the generation security standard, as
referred to in such statement, unless the Director shall consider that the
entering into of the contract is unlikely to result in the licensee failing to
meet the generation security standard.
9. In the event that the Director, after consultation with the licensee, shall
at any time or from time to time issue a direction to the licensee for the
purpose of this Condition to the effect that, in the opinion of the Director, it
is desirable that the licensee make arrangements such as are specified in the
direction to meet the generation security standard, then the duty imposed by
paragraph 1 shall not be capable of being discharged by the licensee after such
date as shall be specified for the purpose in the direction except by the
licensee making the arrangements so specified.
27
10. The duty of the licensee under paragraph 1 may, in relation to relevant
purchasers whose premises are located in isolated areas, be discharged by the
making of arrangements sufficient to meet a standard of generation security
(other than the generation security standard) agreed between the licensee and
the Director.
11. The provisions of this Condition are without prejudice to the duties of the
licensee under the Electricity Supply Regulations 1988.
12. In this Condition:-
"generation security standard" means:-
(a) such standard of generation security
as will ensure:
(i) that the supply of electricity to
relevant purchasers will not be
discontinued in more than 9 years in any
period of 100 years; and
(ii) that the voltage or frequency of
electricity supplied to relevant
purchasers will not be reduced below
usual operational limits in more than 30
years in any period of 100 years by
reason of insufficiency of electricity
generation available for the purposes of
supply by the licensee to its relevant
purchasers at times of annual system
peak demand; and
(b) sufficient electricity generation
being available for the purposes of
supply by the licensee to its relevant
purchasers at times other than times of
annual system peak demand to ensure that
the standard of generation security at
each such time will be not less than
that referred to in sub-paragraph (a)
above for times of annual system peak
demand.
28
"relevant purchaser" means any purchaser from the licensee
entitled and requiring at any time to be
supplied by the licensee at any premises
but shall exclude:
(a) a purchaser under an interruptible
contract or a contract containing load
management terms to the extent that
supplies to that purchaser may be
interrupted or reduced in accordance
with the terms of that contract; and
(b) a purchaser whose premises are
within an authorised area for which the
licensee is the public electricity
supplier.
"contract" includes an agreement or arrangement
(whether or not constituted or evidenced
by any written document)
"contract for the supply
of electricity" includes any contract which amends
another contract so as to provide for
the licensee, to supply quantities of
electricity in excess of that supplied
under the last mentioned contract .
29
Condition 9: Security arrangements
1. If so directed in directions issued by the Director for the purposes of this
Condition the licensee shall, not later than such date as it shall be directed
so to do in the directions, enter into an agreement designated by the Secretary
of State for the purposes of this Condition relating to compliance with
directions issued by the Secretary of State under Section 34 and/or Section 35
of the Act.
2. The licensee shall comply with and perform its obligations under any
agreement which it enters into pursuant to paragraph 1.
30
Condition 10: Health and safety of employees
It shall be the duty of the licensee to act together with other licensees to
consult with appropriate representatives of the employees for the purpose of
establishing and maintaining an appropriate machinery or forum for the joint
consideration of matters of mutual concern in respect of the health and safety
of persons employed by those licensees.
31
Condition 11: Provision of information to the Director
1. Subject to paragraphs 2 and 3, the licensee shall furnish to the Director, in
such manner and at such times as the Director may require, such information and
shall procure and furnish to him such reports, as the Director may consider
necessary in the light of the Conditions or as he may require for the purpose of
performing:-
(a) the functions assigned to him by or under the Act; and
(b) any functions transferred to him under the Act.
2. The licensee may not be required by the Director to furnish him under this
Condition with information for the purpose of the exercise of his functions
under Section 48 of the Act.
3. The licensee may not be required by the Director to furnish him under this
Condition with any information required in relation to an enforcement matter
which the licensee could not be compelled to produce or give under Section 28(3)
of the Act.
4. The powers of the Director to call for information under paragraph 1 are in
addition to the power of the Director to call for information under or pursuant,
to any other Condition.
5. In paragraphs 1 to 4, "information" shall include any documents, accounts,
estimates, returns or reports (whether or not prepared specifically at the
request of the Director) of any description specified by the Director.
6. The licensee shall, if so requested by the Director, give reasoned comments
on the accuracy and text of any information and advice (so far as relating to
the supply of electricity authorised by this licence) which the Director
proposes to publish pursuant to Section 48 of the Act.
32
Condition 12: Payment of fees
1. The licensee shall at the times stated hereunder pay to the Director fees of
the amount specified in, or determined under, the following paragraphs of this
Condition.
2. Within 30 days after the grant of this licence but, in any event before 2 May
1991 the licensee shall pay to the Director an initial fee of(pound)250.00.
3. In respect of the year beginning on 1 April in 1992 and in each subsequent
year, the licensee shall pay to the Director a fee which is aggregate of the
following amounts:
(a) an amount which is a proportion, as determined by the Director of the
amount estimated by the Director, according to a method which has
previously been disclosed in writing to the licensee. as likely to be his
costs during the coming year in the exercise of his general functions under
the Act in relation to the holders of licences granted under Section 6(1)
and 6(2) of the Act;
(b) an amount which is a proportion as determined by the Director of the
amount estimated by the Director (in consultation with the Monopolies
Commission) as having been incurred in the calendar year immediately
preceding the 1st April in question by the Monopolies Commission in
connection with references made to it under Section 12 of the Act with
respect to this licence or any other licence issued under Section 6(2) of
the Act; and
(c) the difference (being a positive or a negative amount), if any,
between:
(i) the amount of the fee paid by the licensee in respect of the year
immediately preceding the 1st April in question: and
(ii) the amount which that fee would have been in respect of that year
had the amount comprised therein under sub-paragraph (a) above (or, where
that year commenced on 1 April 1991 the amount comprised therein which was
attributable to the matters referred to in that sub-paragraph) been
calculated by reference to the total costs of the Director and the
proportion thereof actually attributable to the licensee (such total costs
being apportioned as determined by the
33
Director according to a method previously disclosed in writing to the
licensee)
and the fee shall be paid by the licensee to the Director within one month of
the Director giving notice to the licensee of its amount if that notice is given
within 6 months of the beginning of the year in respect of which the fee is
payable.
34
Condition 13: Compulsory acquisition of land etc
1. All the powers and rights conferred by or under the provisions of Schedule
3 of the Act (compulsory acquisition of land etc.) shall have effect in
relation to the licensee to the extent that they are required for the
installation, maintenance, removal or replacement of the licensee's system
or any part thereof which are necessary to enable the licensee to supply
electricity to the premises specified in Schedule 1 of this licence.
2 Paragraph 1. shall cease to have effect on 31 March 1994.
35
Condition 14: Powers to carry out road works etc
1. For the purposes of enabling the licensee to carry on the authorised
activities, The powers and rights conferred by or under the provisions of
Schedule 4 to the Act (powers to carry out street works etc.) shall have
effect and may, subject to paragraph 2 below, be exercised by carrying out
works in relation to, or in pursuance of, the installation, inspection,
maintenance, adjustment, repair, alteration, replacement and removal of:
(a) electric lines which are necessary to enable the licensee to supply
electricity to premises specified in Schedule 1 below;
(b) electrical plant associated with such lines; and
(c) any structures for housing or covering such lines or plant.
2. Works which are under, over, in, on, along or across any road, which for
the purposes of the Roads (Scotland) Act 1984 constitutes a public road,
may be undertaken in pursuance of paragraph 1 above subject to the
following conditions:
(a) that such works shall not be carried out except with the consent,
which shall not unreasonably be withheld, of the roads authority and
in accordance with such reasonable conditions as may be attached to
such consent;
(b) that any question as to whether or not a consent of roads authority is
unreasonably withheld, or as to the reasonableness of conditions
attached to such consent, shall be determined by a single arbiter to
be appointed:
(i) by agreement between the licensee and the roads authority; or
(ii) in default of such agreement, by the Director on the application
of either party.
3. In this condition:-
"authorised activities" has the meaning given in
paragraph 3 of condition 4.
4. Paragraph 1. shall cease to have effect on 31 March 1994.
36
SCHEDULE 1
Specified Premises
All non-domestic premises having a maximum demand over 1 MW in the authorised
areas as at 31 March 1990 of the following public electricity suppliers:
Scottish Power plc
Scottish Hydro-Electric plc
37
SCHEDULE 2
Terms as to revocation
1. The Director General may at any time revoke this licence by not Less than 30
days' notice in writing to the licensee:-
(a) if the licensee agrees in writing with the Director that this licence
should be revoked;
(b) if any amount payable under Condition 14 is unpaid 30 days after it has
become due and remains unpaid for a period of 14 days after the Director
has given the licensee notice that the payment is overdue. Provided that no
such notice shall be given earlier than the sixteenth day after the day on
which the amount payable became due;
(c) if the licensee fails to comply with a final order (within the meaning
of Section 25 of the Act) or with a provisional order (within the meaning
of that Section) which has been confirmed under that Section and which (in
either case) has been made in respect of a contravention or apprehended
Contravention of any of the Conditions or of any relevant requirement
(within the meaning of that Section) imposed on the licensee in its
capacity as holder of this licence and (in either case) such failure is not
rectified to the satisfaction of the Director within 3 months after the
Director has given notice of such failure to the licensee. Provided that no
such notice shall be given by the Director before the expiration of the
period within which an application under Section 27 of the Act could be
made questioning the validity of the final or provisional order or before
the proceedings relating to any such application are finally determined;
(d) if the licensee fails to comply with any order made by the Secretary of
State under Section 56 73, 74 or 89 of the Fair Trading Act 1973 or under
Section l0(2)(a) of the Competition Act 1980;
(e) if:-
(i) none of the premises specified, or of the description
specified, in Schedule 1 shall have been supplied with electricity by
the licensee at any time during the period of 5 years commencing on
the date on which this licence comes into force; or
38
(ii) none of the premises specified, or of the description
specified, in Schedule l shall have been supplied with electricity by
the licensee at any time during any period of 5 years;
(f) if the licensee:
(i) is unable to pay its debts (within the meaning of Section
123(1) or (2) of the Insolvency Act 1986, but subject to paragraph 2
of this Schedule) or if any voluntary arrangement is proposed in
relation to it under Section 1 of that Act or if it enters into any
scheme of arrangement (other than for the purpose of reconstruction or
amalgamation upon terms and within such period as may previously have
been approved in writing by the Director);
(ii) has a receiver (which expression shall include an
administrative receiver within the meaning of Section 251 of the
Insolvency Act 1986) of the whole or any material part of its assets
or undertaking appointed;
(iii) has an administration order under Section 8 of the
Insolvency Act 1986 made in relation to it;
(iv) passes any resolution for winding-up other than a resolution
previously approved in writing by the Director; or
(v) becomes subject to an order for winding-up by a court of
competent jurisdiction; or
(g) if the licensee is convicted of having committed an offence under
Section 59 of the Act.
2. (a) For the purposes of paragraph 1(f)(i) of this Schedule Section
123(1)(a) of the Insolvency Act 1986 shall have effect as if for
"(pound)750" there was substituted "(pound)250,000" or such higher figure
as the Director may from time to time determine by notice in writing to the
licensee .
(b) The licensee shall not be deemed to be unable to pay its debts for the
purposes of paragraph 1(f)(i) of this Schedule if any such demand as is
mentioned in Section 123(1)(a) of the Insolvency Act 1986 is being
contested in good faith by the licensee with recourse to all appropriate
measures and procedures or if any such demand is satisfied before the
39
expiration of such period as may be stated in any notice given by the
Director under paragraph l of the Schedule.
40