TABLE OF CONTENTS
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Yorshire Power
Exhibit 10.1
PAGE
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PART I: TERMS OF THE LICENCE 1
PART II: THE CONDITIONS 2
1. Interpretation 2
2. Separate accounts for separate businesses 19
2A. Restriction on activity and financial ring-fencing 24
2B. Availability of resources 26
2C. [Not applicable] 29
2D. Credit rating of Licensee 30
3. Charge restriction conditions: definitions 31
3A. Restriction of distribution charges 38
Annex A to Condition 3A 45
Annex B to Condition 3A 46
3B. Restriction of supply charges 47
Annex A to Condition 3B 55
Annex B to Condition 3B 56
Annex C to Condition 3B 57
Annex D to Condition 3B 58
3C. [No longer used] 59
3D. Restriction of distribution charges and of supply charges: adjustments 60
3E. Information to be provided to the Director in connection with the
charge restriction conditions 62
3F. Allowances in respect of security costs 67
3G. Duration of charge restriction conditions 71
4. Prohibition of cross-subsidies and of discrimination in electricity sale
contracts 73
4A. Prohibition of discrimination in supply 74
4B. Duration of discrimination conditions 79
5. Obligation on economic purchasing 81
6. Restriction on own-generation capacity 84
7. Tariffs 89
7A. Arrangements for informing customers on revocation of Licence 90
7B. The Programme Implementation Agreement 92
8. Basis of charges for top-up and standby supplies or sales of electricity,
exempt supply services, use of system and connection to the system:
requirements for transparency 96
8A. Non-discrimination in the provision of top-up or standby supplies or
sales of electricity, exempt supply services, use of system and
connection to the system 102
8B. Requirement to offer terms 104
8C. Requirement to offer Standard Terms of Connection 111
8D. Functions of the Director 113
9. Distribution system planning standard and quality of service 115
9A. Security and safety of supplies 116
9B. Procedures for the detection and prevention of theft, damage and
meter interference 119
9C. Provisions relating to the connection of metering equipment 120
9D. Agreements for the provision of meters 122
10. Generation security standard 123
11. Distribution Code 126
11A. The Metering Point Administration Service and the Master
Registration Agreement 129
11B. Establishment of a Data Transfer Service 132
11C. Requirement to offer terms for the provision of Metering and Data
Services 135
11D. Non-discrimination in the provision of Metering and Data Services 138
11E. Basis of charges for Metering and Data Services: requirements for
transparency 139
11F. Functions of the Director 141
12. Restriction on use of certain information 142
13. Compliance with the Grid Code 147
14. Security arrangements 148
2
15. Pooling and Settlement Agreement 149
16. Conditions of supply affecting customers' statutory rights 150
17. Licensee's apparatus on customers' side of meter 152
18. Code of practice on payment of bills and guidance for dealing with
customers in difficulty 153
19. Record of and report on performance 155
20. Provision of services for persons who are of pensionable age or disabled or 157
chronically sick
20A. Code of practice on procedures with respect to site access 159
21. Standards of performance 160
22. Efficient use of electricity 161
23. Complaint handling procedure 163
23A. Preparation, review of and compliance with customer service codes 164
23B. Information given to Designated Customers 166
23C. Publication of information to customers 167
24. Relations with the Relevant Consumers' Committee 168
25. Health and safety of employees 169
26. [No longer used] 170
27. Disposal of relevant assets 171
28. Provision of information to the Director 175
29. Payment of fees 177
30. Designated Premises 179
31. Terms for supply of electricity incompatible with Licence Conditions 181
32. Limitation on requirements for termination fees 182
33. Revision of Contract Terms Conditions 183
PART III: THE CONTRACT TERMS CONDITIONS
34. Designated Supply Contracts 186
35. Contractual terms 187
36. Notification of terms 189
37. Security Deposits 191
38. Termination of contracts on notice 193
39. Termination of contracts in specified circumstances 195
40. Assignment of outstanding charges 197
41. Modification of provisions under Conditions 38 and 40 199
3
SCHEDULE 1: Description of authorised area 201
SCHEDULE 2: Terms as to revocation 203
SCHEDULE 3: Supplementary provisions of the charge restriction conditions 206
PART A Principles for attribution of the fossil fuel levy and of
payments in lieu thereof, transmission connection point charges,
remote transmission asset rentals and distribution losses 206
PART B EHV premises 209
PART C Excluded services 210
PART D Regulated distribution unit categories 214
PART E Calculation of factor in respect of distribution losses 216
4
PART I: TERMS OF THE LICENCE
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1. The Secretary of State, in exercise of the powers conferred by Section 6 (1)
(c), Section 6 (6) and Section 7 of the Electricity Act 1989 (hereinafter
referred to as the "Act") hereby licenses Yorkshire Electricity Group plc
(registered in England and Wales under number 2366995) as public electricity
supplier to supply electricity to any premises in the authorised area
designated in Schedule 1 below during the period specified in paragraph 3
below, subject to the Conditions set out in Part II and Schedule 3 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. This licence is
further subject to the terms as to revocation specified in Schedule 2.
3. This licence shall come into force on the transfer date appointed under
section 65 of the Act 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 Secretary of State to the licensee, such
notice not to be served earlier than a date being 10 years after the licence
comes into force.
JOHN WAKEHAM
26 March, 1990 Secretary of State for Energy
PART II: THE CONDITIONS
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CONDITION 1: INTERPRETATION
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1. Unless the contrary intention appears, words and expressions used in the
Conditions 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 re-enactment thereof after the
date when this Licence comes into force.
2. Any word or expression defined for the purposes of any provision of Part 1
of the Act shall, unless the contrary intention appears, have the same
meaning when used in the Conditions.
3. In the Conditions unless the context otherwise requires:
"Act" means the Electricity Act 1989.
"affiliate" in relation to the Licensee means any holding
company of the Licensee, any subsidiary of
the Licensee or any subsidiary of a holding
company of the Licensee.
"Auditors" means the Licensee's auditors for the time
being holding office in accordance with the
requirements of the Companies Act 1985.
"authorised" in relation to any business or activity means
authorised by licence granted under Section 6
or by exemption granted under Section 5 of
the Act.
"authorised area" means the area from time to time comprised in
Schedule 1 to this Licence.
2
"Authorised Electricity Operator" means any person (other than the
Licensee) who is authorised to generate,
transmit or supply electricity and for
the purposes of Conditions 8A to 8C
inclusive shall include any person who
has made an application to be so
authorised which has not been refused
and any person transferring electricity
to or from England and Wales across an
interconnector or who has made an
application for use of interconnector
which has not been refused.
"Condition" means a condition set out in this Part
of this Licence.
"connection charges" means charges made or levied or to be
made or levied for the carrying out
(whether before or after the date on
which the Licence comes into force) of
works and provision and installation of
electrical plant, electric lines and
ancillary meters in constructing or
modifying entry and exit points on the
Licensee's Distribution System together
with charges in respect of maintenance
and repair of such items in so far as
not otherwise recoverable as use of
system charges and in respect of
disconnection and the removal of
electrical plant, electric lines and
ancillary meters following
disconnection, all as more fully
described in paragraphs 5 and 9 of
Condition 8, whether or not such charges
are annualised.
"contract" in relation to the supply of electricity
by the Licensee to a customer at
premises, means a special agreement in
accordance with section 22 of the Act.
"Contract Terms Conditions" means, as the context requires, either
the Conditions contained in Section C of
this Licence or those Conditions
together with the equivalent Conditions
contained in the licences of all other
Electricity Suppliers.
3
"customer" means any person supplied or requiring
to be supplied with electricity at
premises within the authorised area
whether by the Licensee (including any
affiliate or related undertaking of the
Licensee) or, where the context
requires, by another Electricity
Supplier, but shall not include any
Authorised Electricity Operator in its
capacity as such.
"data aggregation services" has the meaning given at sub-paragraph
1(e) of Condition 11C.
"data processing services" has the meaning given at sub-paragraph
1(d) of Condition 11C.
"data retrieval services" has the meaning given at sub-paragraph
1(c) of Condition 11C.
"Data Transfer Catalogue" has the meaning given at sub-paragraph
6(c) of Condition 11A.
"Data Transfer Service" means the service to be established,
operated and maintained by the Licensee,
in conjunction and co-operation with all
other public electricity suppliers, in
accordance with Condition 11B.
"data transfer services" means the services of the Data Transfer
Service established in accordance with
Condition 11B.
"date of the contract" means, in respect of any contract, the
date on which that contract is entered
into.
4
"Declared Net Capacity" means, in relation to generation plant,
the highest generation of electricity at
the main alternator terminals which can
be maintained for an indefinite period
of time without causing damage to the
plant, less so much of that capacity as
is consumed by the plant.
"deposit" means a deposit of money by way of
security for the payment of charges for
the supply of electricity.
"Designated Customer" means a customer supplied or requiring
to be supplied with electricity at
Designated Premises (but excluding such
customer in so far as he is supplied or
requires to be supplied at premises
other than Designated Premises).
"Designated Premises" has the meaning determined in accordance
with Condition 30.
"Designated Supply Contract" has the meaning given in Condition 34.
"Distribution Business" means the business of the Licensee or
any affiliate or related undertaking
comprising or ancillary to:
(a) the distribution (whether for its
own account or that of third
parties) of electricity through the
Licensee's Distribution System,
including any business in providing
connections to such system; and
(b) the provision of Metering and Data
Services (other than prepayment
meter services).
5
"Distribution Code" means the Distribution Code required to
be prepared pursuant to Condition 11 and
approved by the Director, as from time
to time revised with the approval of the
Director.
"Domestic Customer" means a customer supplied or requiring
to be supplied with electricity at
Domestic Premises (but excluding such
customer in so far as he is supplied or
requires to be supplied at premises
other than Domestic Premises).
"Domestic Premises" means premises at which a supply is
taken wholly or mainly for domestic
purposes.
"electricity purchase contract" includes any contract or arrangement,
other than for the supply of electricity
to a customer at premises, under which
provision is made for the making or
receipt of payments by reference to the
difference between
(a) an amount specified or
ascertainable under the terms of
such contract or arrangement; and
(b) the price at which electricity is
sold or purchased under the
Pooling and Settlement Agreement
or any component of either of such
prices;
and
"electricity sale contract" shall be construed accordingly.
"Electricity Supplier" means either a Second Tier Supplier or a
public electricity supplier.
6
"equivalent megawatt" in circumstances where demand is
measured only 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 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.
"established connection" means, in relation to any premises, an
existing connection to the Licensee's
Distribution System which does not
require modification, or a new or
modified connection to such system in
respect of which all works have been
completed, such that in either case
electricity is able to be supplied to
the premises in accordance with the
terms of the relevant supply agreement.
"Exempt Supplier" means a person who is authorised to
supply electricity by virtue of an
exemption granted under Section 5 of the
Act.
"exempt supply services" means the services detailed at paragraph
4 of Condition 8B, as provided by the
Licensee to Exempt Suppliers in respect
of premises within the authorised area.
"financial year" bears the meaning given to it at
paragraph 1 of Condition 2.
"fixed term period" means, in relation to any Designated
Supply Contract, a specified period of
more than 12 months during which the
Principal Terms of that contract may not
be varied by the Licensee other than by
agreement with the customer.
"Fuel Security Code" means the document of that title
designated as such by the Secretary of
State as from time to time amended.
7
"Generation Business" means the business (if any) in the
generation of electricity, being a
business involving own-generation sets
or in which there is an accountable
interest in generation sets, as defined
for the purposes of Condition 6.
"generation set" means any plant or apparatus for the
production of electricity and shall
where appropriate include a generating
station comprising more than one
generation set.
"goods or services" includes electric lines and electric
plant, and goods or services designed or
calculated to promote the efficient use
of electricity, but excludes meters,
meter operation and prepayment systems,
and data retrieval and related services.
"Grid Code" means the Grid Code required to be
prepared by the Transmission Company and
approved by the Director as from time to
time revised with the approval of the
Director.
"Grid Supply Point" means any point at which electricity is
delivered to the Licensee's Distribution
System from the Transmission System.
"half-hourly metering equipment" means metering equipment which is
configured to record the quantity of
electricity (to be calculated in kWh)
supplied to premises during each half
hour period of supply and "non-half-
hourly metering equipment" shall be
construed accordingly.
"holding company" means a holding company within the
meaning of Sections 736, 736A and 736B
of the Companies Act 1985.
8
"interconnectors" means the electric lines and electrical
plant and meters owned or operated by
the Transmission Company solely for the
transfer of electricity to or from the
Transmission System into or out of
England and Wales.
"Licensee" means Yorkshire Electricity Group plc
(registered in England and Wales under
number 2366995) and (where the context
so requires) shall include any Area
Board in respect of which the Licensee
is the successor company.
"Licensee's Distribution System" means the system of electric lines
situated wholly or partly within the
authorised area owned or operated by the
Licensee for the distribution of
electricity between the Grid Supply
Points or generation sets or other entry
points and the points where it is
delivered to customers or Authorised
Electricity Operators, and includes any
Remote Transmission Assets owned by the
Transmission Company operated by the
Licensee and any electrical plant and
meters owned or operated by the Licensee
in connection with the distribution of
electricity, and references to the
distribution system of any Authorised
Electricity Operator shall be construed
accordingly.
"Master Registration Agreement" means the agreement of that title to be
prepared by the Licensee, in conjunction
and co-operation with all other public
electricity suppliers, in accordance
with and comprising such matters as are
set out in Condition 11A.
"megawatt" or "MW" includes an equivalent megawatt.
"meter operation services" has the meaning given at sub-paragraph
1(b) of Condition 11C.
9
"meter provision services" has the meaning given at sub-paragraph
1(a) of Condition 11C.
"Metering and Data Services" has the meaning given in Condition 11C.
"metering equipment" includes any meter and any associated
equipment which materially affects the
operation of that meter.
"Metering Point Administration means the service to be established,
Service" operated and maintained by the Licensee
in accordance with Condition 11A.
"metering point administration means the services of the Metering Point
services" Administration Service established in
accordance with Condition 11A or, where
the context requires, means the
equivalent services provided by any
other public electricity supplier in
accordance with the provisions of its
public electricity supply licence.
"notice" means (unless otherwise specified)
notice given in writing or by any other
reasonable means.
"participating interest" bears the meaning ascribed to that
expression by Section 260 of the
Companies Act 1985.
10
"Permitted Purpose" means the purpose of all or any of the
following:
(a) the Supply Business, the Second
Tier Supply Business, the
Distribution Business or any
business or activity within the
limits of paragraph 4(e) of
Condition 2A;
(b) the Generation Business;
(c) any business conducted or activity
carried on by the Licensee or by an
affiliate or related undertaking of
the Licensee on 31 March 1997; and
(d) without prejudice to the generality
of paragraphs (a) to (c), any
payment or transaction lawfully
made or undertaken by the Licensee
for a purpose within sub-paragraphs
(i) to (ix) of paragraph 5(b) of
Condition 27.
"Pooling and Settlement means the agreement of that title
Agreement" approved by the Secretary of State as
from time to time amended with the
approval of the Director (where so
required pursuant to its terms).
"prepayment meter services" has the meaning given at sub-paragraph
1(f) of Condition 11C.
11
"Principal Terms" means, in respect of any form of
Designated Supply Contract, those terms
which relate to:
(a) charges for the supply of electricity;
(b) any requirement to pay charges for the
supply by prepayment through a
prepayment meter;
(c) any requirement for a security
deposit;
(d) the duration of the contract;
(e) the rights to terminate the contract
(including any obligation to pay a
termination fee); and
(f) the obligation to enter into an
agreement on the Standard Terms of
Connection,
and such other terms as may reasonably be
considered significantly to affect the
evaluation of the contract.
"related undertaking" in relation to the Licensee means any
undertaking in which the Licensee has a
participating interest.
"Relevant Consumers' Committee" means the committee appointed by the
Director under Section 2 of the Act for
the area in respect of which the Licensee
is the public electricity supplier.
"relevant premises" in relation to a Designated Supply
Contract, means any premises supplied with
electricity under the terms of the
contract.
12
"Remote Transmission Assets" means any electric lines, electrical
plant or meters owned by the
Transmission Company which:
(a) are embedded in the distribution
system of the Licensee or any
Authorised Electricity Operator
other than the Transmission Company
and are not directly connected by
lines or plant owned by the
Transmission Company to a sub-
station owned by the Transmission
Company; and
(b) are by agreement between the
Transmission Company and the
Licensee or such Authorised
Electricity Operator operated under
the direction and control of the
Licensee or such Authorised
Electricity Operator.
"representation" includes any objection or any other
proposal made in writing.
"Retail Price Index" means the general index of retail prices
published by the Office for National
Statistics each month in respect of all
items or:
(a) if the index for any month in any
year shall not have been published
on or before the last day of the
third month after such month, such
index for such month or months as
the Director may after consultation
with the Licensee determine to be
appropriate in the circumstances; or
(b) if there is a material change in the
basis of the index, such other index
as the Director may after
consultation with the Licensee
determine to be appropriate in the
circumstances.
13
"Second Tier Supplier" means a person authorised to supply
electricity pursuant to Section 6(2) of
the Act.
"Second Tier Supply Business" means the authorised business (if any)
of the Licensee or any affiliate or
related undertaking as a private
electricity supplier.
"Settlement Agreement for means the agreement of that title to be
Scotland" prepared in accordance with, and
comprise such matters as are set out in,
Condition 24 of Part V of the Scottish
Generation, Transmission and Public
Electricity Supply Licences.
"settlement purposes" means for the purposes of settlement as
set out in the Pooling and Settlement
Agreement or the Settlement Agreement
for Scotland.
"Separate Business" means each of the Distribution, Supply,
Second Tier Supply and Generation
Businesses taken separately from one
another and from any other business of
the Licensee, but so that where all or
any part of such business is carried on
by an affiliate or related undertaking
of the Licensee such part of the
business as is carried on by that
affiliate or related undertaking shall
be consolidated with any other such
business of the Licensee (and of any
other affiliate or related undertaking)
so as to form a single Separate
Business.
"Standard Terms of Connection" means the terms approved by the
Director, in accordance with Condition
8C, for the retention of an established
connection to the Licensee's
Distribution System.
14
"standby" means the periodic or intermittent
supply or sale of electricity:
(a) to an Authorised Electricity
Operator to make good any
shortfall in the availability of
electricity to that operator for
the purposes of its supply of
electricity to persons seeking
such supply; or
(b) to a customer of the Licensee to
make good any shortfall between
the customer's total supply
requirements and that met either
by its own generation or by
electricity supplied by an
Authorised Electricity Operator
other than the Licensee
such standby supply or sale being
provided at such entry or exit point on
the Licensee's Distribution System as
the operator or customer may request.
"subsidiary" means a subsidiary within the meanings
of Sections 736, 736A and 736B of the
Companies Act 1985.
"Supply Business" means the authorised business of the
Licensee as public electricity supplier
in the authorised area, but shall not
include any activities forming part of
the Distribution Business.
"termination fee" means any sum of money or other penalty
(whether financial or otherwise) which
may be demanded of a customer solely in
consequence of the termination of a
contract to supply electricity to
premises.
15
"top-up" means the supply or sale of electricity
on a continuing or regular basis:
(a) to an Authorised Electricity
Operator to make good any
shortfall in the availability of
electricity (including, where that
operator is using the Licensee's
Distribution System, to make good
any distribution losses on that
system) to that operator for the
purposes of its supply of
electricity to persons seeking
such supply; or
(b) to a customer of the Licensee to
make good any shortfall between
the customer's total supply
requirements and that met either
by its own generation or by
electricity supplied by an
Authorised Electricity Operator
other than the Licensee
such top-up supply or sale being
provided at such entry or exit point on
the Licensee's Distribution System as
the operator or customer may request.
"Transfer Date" means such date as may be appointed by
the Secretary of State by order under
Section 65 of the Act.
"Transmission Company" means The National Grid Company plc or
any other holder for the time being of a
Licence to transmit electricity in
England and Wales under Section 6(1)(b)
of the Act.
16
"Transmission System" means the system consisting (wholly or
mainly) of high voltage electric lines
owned or operated by the Transmission
Company and used for the transmission of
electricity from one generating station
to a sub-station or to another
generating station, or between sub-
stations or to any interconnector, and
includes any electrical plant and meters
owned or operated by the Transmission
Company in connection with the
transmission of electricity but shall
not include any Remote Transmission
Assets.
"undertaking" bears the meaning ascribed to that
expression by Section 259 of the
Companies Act 1985.
"unmetered supply" means a supply of electricity to
premises which is not, for the purpose
of calculating the charges for
electricity supplied to the customer at
such premises, measured by metering
equipment.
"use of system" means use of the Licensee's Distribution
System for the distribution of
electricity by the Licensee for the
Supply Business or for any other
Authorised Electricity Operator.
"use of system charges" means charges made or levied or to be
made or levied by the Licensee for the
provision of services as part of the
Distribution Business to any Authorised
Electricity Operator or to the Licensee
for the purposes of its Supply Business
or Second Tier Supply Business as more
fully described at paragraph 4 of
Condition 8 and at paragraph C2 of Part
C of Schedule 3 to this Licence; but
shall not include connection charges.
"valid notice of termination" has the meaning given in Condition 38.
17
4. Unless otherwise specified, any reference to a numbered Condition (with
or without a suffix letter) or Schedule is a reference to the Condition
or Schedule bearing that number in this Licence, and any reference to a
numbered paragraph (with or without a suffix letter) is a reference to
the paragraph bearing that number in the Condition or Schedule in which
the reference occurs.
5. In construing the provisions of this Licence, the heading or title of
any Part, Section, Condition, Schedule or paragraph shall be
disregarded.
6. Where any obligation of the Licensee is required to be performed by a
specified date or within a specified period, and where the Licensee has
failed so to perform, such obligation shall continue to be binding and
enforceable after the specified date or after the expiry of the
specified period (but without prejudice to all rights and remedies
available against the Licensee by reason of the Licensee's failure to
perform by that date or within that period).
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.
18
CONDITION 2: SEPARATE ACCOUNTS FOR SEPARATE BUSINESSES
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1. The first financial year of the Licensee shall run from 1st April 1990
to 31st March 1991, and thereafter each financial year of the Licensee
shall run from 1st April to the following 31st March.
2. The remaining paragraphs of this Condition apply for the purpose of
ensuring that the Licensee (and any affiliate or related undertaking)
maintains accounting and reporting arrangements which enable separate
accounts to be prepared for each Separate Business and showing the
financial affairs of each such Separate Business.
3. The Licensee shall in respect of each Separate Business:
(a) keep or cause to be kept for the period referred to in Section
222 (5) (b) of the Companies Act 1985 and in the manner
referred to in that section such accounting records in respect
of each Separate Business as would by Section 221 of the
Companies Act 1985 be required to be kept in respect of each
such business if it were carried on by a separate company, so
that the revenues, costs, assets, liabilities, reserves and
provisions of, or reasonably attributable to, each Separate
Business are separately identifiable in the books of the
Licensee (and any affiliate or related undertaking) from those
of any other business; and
(b) prepare on a consistent basis from such accounting records in
respect of:
(i) the financial year commencing on 1st April 1990 and
each subsequent financial year, accounting statements
comprising a profit and loss account, a balance sheet
and a statement of source and application of funds,
together with notes thereto, and showing separately
in respect of each Separate Business and in
appropriate detail the amounts of any revenue, cost,
asset, liability, reserve or provision which has been
either:
(aa) charged from or to any other business
(whether or not a Separate Business)
together with a description of the basis of
that charge; or
19
(bb) determined by apportionment or allocation
between any Separate Business and any other
business (whether or not a Separate
Business) together with a description of the
basis of the apportionment or allocation;
and
(ii) the first six months of the financial year commencing
on 1st April 1990 and of each subsequent financial
year, an interim profit and loss account; and
(c) procure, in respect of the accounting statements prepared in
accordance with this Condition in respect of a financial year,
a report by the Auditors and addressed to the Director stating
whether in their opinion those statements have been properly
prepared in accordance with this Condition and give a true and
fair view of the revenues, costs, assets, liabilities,
reserves and provisions of, or reasonably attributable to, the
Separate Business to which the statements relate; and
(d) deliver to the Director a copy of the account referred to in
sub-paragraph (b) (ii) above, the Auditors' report referred to
in sub-paragraph (c) above and the accounting statements
referred to in sub-paragraph (b) (i) above as soon as
reasonably practicable, and in any event not later than three
months after the end of the period to which it relates in the
case of the account referred to in sub-paragraph (b) (ii) and
six months after the end of the financial year to which they
relate in the case of the accounting statements and Auditors'
report referred to in sub-paragraphs (b) (i) and (c) above.
4. Unless the Director so specifies in directions issued for the purposes
of this Condition or with his prior written approval the Licensee shall
not in relation to the accounting statements in respect of a financial
year change the bases of charge or apportionment or allocation referred
to in sub-paragraph (b) (i) of paragraph 3 from those applied in
respect of the previous financial year.
5. Where, in relation to the accounting statements in respect of a
financial year, the
20
Licensee has changed such bases of charge or apportionment or
allocation from those adopted for the immediately preceding financial
year, the Licensee shall, if so directed in directions issued by the
Director, in addition to preparing accounting statements on those bases
which it has adopted, prepare such accounting statements on the bases
which applied in respect of the immediately preceding financial year.
21
6. Accounting statements in respect of a financial year prepared under
sub-paragraph (b) (i) of paragraph 3 shall, so far as reasonably
practicable and unless otherwise approved by the Director having regard
to the purposes of this Condition:
(a) have the same content and format (in relation to each Separate
Business) as the annual accounts of the Licensee prepared
under Section 226 and, where appropriate, Section 227 of the
Companies Act 1985 and conform to the best commercial
accounting practices including Statements of Accounting
Practice issued by the member bodies of the Consultative
Committee of Accountancy Bodies currently in force; and
(b) state the accounting policies adopted; and
(c) (with the exception of the part of such statement which shows
separately the amounts charged, apportioned or allocated and
describes the bases of charge or apportionment or allocation
respectively and with the exception of the accounting
statements relating to the Second-Tier Supply Business), be
published with the annual accounts of the Licensee.
7. Unless the accounting statements prepared under sub-paragraph (b) (i)
of paragraph 3 are prepared on the current cost basis as provided by
the alternative accounting rules, the Licensee shall, unless otherwise
agreed by the Director, in addition to preparing those accounting
statements under that paragraph, prepare accounting statements for each
Separate Business covering the same period, which shall comprise and
show separately:
(a) a profit and loss account, a balance sheet and a statement of
source and application of funds, together with notes thereto,
which shall:
(i) include in respect of current cost assets amounts
determined on the current cost basis as provided by
the alternative accounting rules; and
22
(ii) show or disclose the information and other matters
required by the alternative accounting rules to be
shown or disclosed in accounts where the amounts
included in respect of assets covered by any items
shown in those accounts have been determined on any
basis mentioned in paragraph 31 of Section C of Part
II of Schedule 4 to the Companies Act 1985;
(b) in respect of each Separate Business the adjusted amount of
any such provision for depreciation as is referred to in
paragraph 32 (2) of Section C of Part II of Schedule 4 to the
Companies Act 1985 and the items shown in the profit and loss
account of the Separate Business for the relevant period which
are affected by the determination of amounts on the current
cost basis as provided by the alternative accounting rules,
including the profit (or loss) before taxation; and
(c) such other current cost information as is referred to in the
Handbook as the Director may reasonably require
and shall deliver the same, together with the Auditors' report prepared
in relation to the current cost basis accounting statements in the form
referred to in sub-paragraph (c) of paragraph 3, to the Director within
the time limit referred to in sub-paragraph (d) of paragraph 3, and
shall (with the exception of the part of such statement which shows
separately the amounts charged, apportioned or allocated and describes
the bases of charge or apportionment or allocation respectively and
with the exception of the accounting statements relating to the Second-
Tier Supply Business) publish the same with the annual accounts of the
Licensee.
8. References in this Condition to costs or liabilities of, or reasonably
attributable to, any Separate Business shall be construed as excluding
taxation, capital liabilities which do not relate principally to a
particular Separate Business, and interest thereon; and references to
any profit and loss account shall be construed accordingly.
23
9. Without prejudice to paragraph 1 of Condition 1, references in this
Condition to sections of the Companies Act 1985 are references to those
provisions as amended, substituted or inserted by the relevant
provisions of the Companies Act 1989 and if such provisions of the
Companies Act 1989 are not in force at the date of grant of this
Licence shall be construed as if such provisions were in force at such
date.
10. For the purposes of paragraph 7:
"alternative means the rules set out in Section C of Part
accounting rules" II of Schedule 4 to the Companies Act 1985.
"current cost assets" means assets of any description mentioned
in paragraph 31 of Section C of Part II of
Schedule 4 to the Companies Act 1985.
"the Handbook" means the handbook issued by the Accounting
Standards Committee of the Consultative
Committee of Accounting Bodies (CCAB
Limited) or any successor body entitled
"Accounting for the effects of changing
prices: a Handbook" in its current edition
for the time being or in the event that no
such handbook shall be in issue such
guidance or publication as may be issued in
replacement or substitution therefor.
24
CONDITION 2A: RESTRICTION ON ACTIVITY AND FINANCIAL RING-FENCING
- -----------------------------------------------------------------
1. Save as provided by paragraphs 3 and 4, the Licensee shall not conduct
any business or carry on any activity other than the Supply Business,
the Second-Tier Supply Business and the Distribution Business.
2. The Licensee shall not without the written consent of the Director
acquire shares in any affiliate or related undertaking after 31 March
1997 except
(a) shares in any body corporate which was a subsidiary of the
Licensee on 31 March 1997;
(b) shares acquired in a body corporate to satisfy the obligation
imposed by paragraph 3;
(c) shares in a body corporate which conducts business only for a
Permitted Purpose; or
(d) shares acquired in order to avoid dilution of a shareholding
in a body corporate in which the Licensee holds shares in
conformity with this licence.
3. Notwithstanding paragraph 1, the licensee may continue to conduct any
business or carry on any activity otherwise prohibited by paragraph 1
which it was conducting or carrying on as at 31 March 1997, but by 31
March 1998 or such later date as the Director shall specify to the
Licensee in writing, shall transfer to an affiliate or otherwise cease
to conduct or carry on any such other business or activity.
4. Nothing in this Condition shall prevent:
(a) any affiliate or related undertaking from conducting any
business or carrying on any activity;
(b) the Licensee from holding shares as, or performing the
supervisory or management functions of, an investor in respect
of any body corporate in which it holds an interest
consistently with the provisions of this licence;
25
(c) the Licensee from performing the supervisory or management
functions of a holding company in respect of any subsidiary;
(d) the Licensee from carrying on any business or conducting any
activity to which the Director has given his consent in
writing; or
(e) the Licensee from carrying on any business or conducting any
activity other than the Supply Business, the Second-Tier
Supply Business and the Distribution Business provided that
the aggregate turnover of all such other businesses or
activities does not in any financial year exceed 5% of the
aggregate turnover of the Supply Business, the Second-Tier
Supply Business and the Distribution Business (excluding the
turnover on transactions which the Supply Business the Second-
Tier Supply Business and the Distribution Business make with
each other) in the immediately preceding financial year.
26
CONDITION 2B: AVAILABILITY OF RESOURCES
- ----------------------------------------
1. The Licensee shall at all times act in a manner calculated to secure
that it has sufficient management resources and financial resources and
financial facilities to enable it:
(a) to carry on the Supply Business and the Distribution Business, and
(b) to comply with its obligations under the Act and this Licence.
2. The Licensee shall submit a certificate addressed to the Director,
approved by a resolution of the board of directors of the Licensee and
signed by a director of the Licensee pursuant to that resolution. Such
certificate shall be submitted on 30 June 1997 and 30 June of each
subsequent year. Each certificate shall be in one of the following
forms:
(a) "After making enquiries, the directors of the Licensee have a
reasonable expectation that the Licensee will have available to
it, after taking into account in particular (but without
limitation) any dividend or other distribution which might
reasonably be expected to be declared or paid, sufficient
financial resources and financial facilities to enable the
Licensee to carry on the Supply Business and Distribution Business
for a period of 12 months from the date of this certificate."
(b) "After making enquiries, the directors of the Licensee have a
reasonable expectation, subject to what is said below, that the
Licensee will have available to it, after taking into account in
particular (but without limitation) any dividend or other
distribution which might reasonably be expected to be declared or
paid, sufficient financial resources and financial facilities to
enable the Licensee to carry on the Supply Business and
Distribution Business for a period of 12 months from the date of
this certificate. However, they would like to draw attention to
the following factors which may cast doubt on the ability of the
Licensee to carry on the Supply Business and Distribution
Business..."
27
(c) "In the opinion of the directors of the Licensee, the Licensee
will not have available to it sufficient financial resources and
financial facilities to enable the Licensee to carry on the Supply
Business and Distribution Business for a period of 12 months from
the date of this certificate."
3. The Licensee shall submit to the Director with that certificate a
statement of the main factors which the directors of the Licensee have
taken into account in giving that certificate.
4. The Licensee shall inform the Director in writing immediately if the
directors of the Licensee become aware of any circumstance which causes
them no longer to have the reasonable expectation expressed in the then
most recent certificate given under paragraph 2.
5. The Licensee shall use its best endeavours to obtain and submit to the
Director with each certificate provided for in paragraph 2 a report
prepared by its auditors and addressed to the Director stating whether
or not the auditors are aware of any inconsistencies between, on the
one hand, that certificate and the statement submitted with it and, on
the other hand, any information which they obtained during their audit
work.
6. The Licensee shall procure from the holding company of the Licensee a
legally enforceable undertaking in favour of the Licensee in a form
already specified by the Director that the holding company will refrain
from any action, and will procure that every subsidiary of the holding
company (other than the Licensee and its subsidiaries) will refrain
from any action, which would then be likely to cause the licensee to
breach any of its obligations under the Act or this Licence. Such
undertaking shall be obtained by 22 December 1997 and shall remain in
force for as long as the Licensee remains the holder of this Licence
and the giver of the undertaking remains the holding company of the
Licensee.
28
7. The Licensee shall:
(a) deliver to the Director evidence (including a copy of such
undertaking) that the Licensee has complied with the
obligation to procure an undertaking pursuant to paragraph 6;
and
(b) inform the Director immediately in writing if the directors of
the Licensee become aware that the undertaking has ceased to
be legally enforceable or that its terms have been breached.
29
CONDITION 2C: CHANGE OF FINANCIAL YEAR
- ---------------------------------------
[Not applicable]
30
CONDITION 2D CREDIT RATING OF LICENSEE
- ---------------------------------------
1. The Licensee shall use all reasonable endeavours to ensure that:
(a) any corporate debt of the Licensee in issue at 31 March 1997 which had
an investment grade credit rating at that date maintains an investment
grade credit rating throughout the period during which such debt
remains outstanding, and
(b) any corporate debt, other than corporate debt issued by way of
negotiated private placement, issued by the Licensee on or after the 1
April 1997 has and maintains an investment grade credit rating
throughout the period during which such debt remains outstanding.
2. For the purpose of paragraph 1:
(a) "corporate debt" means any unsecured and unsubordinated borrowing of
money having an initial maturity of five years or more, and
(b) "investment grade credit rating" means a rating of not less than BBB-
by Standard & Poor's Ratings Group or any of its subsidiaries or not
less than Baa3 by Moody's Investors Service, Inc. or any of its
subsidiaries or an equivalent rating from any other reputable credit
rating agency which has comparable standing in the UK and the USA.
31
CONDITION 3: CHARGE RESTRICTION CONDITIONS: DEFINITIONS
- --------------------------------------------------------
1. In this Condition and in Conditions 3A to 3G and Schedule 3:
"attributed" means when used in relation to the fossil fuel levy or
payments in lieu thereof or transmission connection
point charges or Remote Transmission Asset rentals or
distribution losses or transmission costs or allowed
distribution costs, or in relation to attributing
electricity purchase or sale contracts and electricity
purchase costs to regulated customers and other
customers, attributed in accordance with the principles
set out in Part A of Schedule 3 and attribute,
attributed, attributable and attribution shall be
construed accordingly.
"average charge per means the distribution revenue in the relevant year
unit distributed" divided by the regulated quantity distributed in that
year.
"average charge per means the supply revenue in the year divided by the
unit supplied" quantity supplied in that year.
"average charge per means the regulated supply revenue in the relevant
regulated year divided by the regulated quantity supplied in
supplied" that year.
"average specified means the average of the daily base rates of Barclays
rate" Bank plc current from time to time during the
period in respect of which the calculation falls to
be made.
"charge restriction means Conditions 3 to 3G inclusive together with
conditions" Schedule 3 to this Licence, as from time to time
modified or replaced in accordance therewith or
pursuant to Sections 11, 14 or 15 of the Act.
32
"distribution means units unaccounted for on the Licensee's
losses" distribution system, measured as being the difference
between the units metered on entry into the system
and the units metered on leaving the system.
"distribution means the revenue (measured on an accruals basis)
revenue" derived by the Licensee from the provision of
distribution services in the relevant year, after
deduction of:
(i) an amount equal to such part of the total
amount payable in that relevant year to the
Transmission Company (measured on an accruals
basis) in respect of transmission connection
point charges and Remote Transmission Asset
rentals and which would otherwise be included
in distribution revenue by reason of being
recovered in that relevant year by the
Licensee in its use of system charges, as
falls to be attributed to the regulated
quantity distributed in that relevant year;
and
(ii) value added tax (if any) and any other taxes
based directly on the amount so derived.
"distribution services" means all services provided by the Licensee as part
of its Distribution Business other than excluded
services.
"EHV premises" means those premises to which units are delivered by
the Licensee which fall to be treated as EHV premises
in accordance with Part B of Schedule 3.
"EHV units" means units distributed by the Licensee which are
delivered or deemed to be delivered to EHV premises.
33
"electricity purchase means the licensee's purchase costs of electricity
calculated costs" in accordance with the principles
in Part F of Schedule 3.
"excluded services" means those services provided by the licensee which
in accordance with the principles set out in Part C
of Schedule 3 fall to be treated as excluded
services.
"fifth relevant year" means the relevant year commencing 1st April 1994.
"HV units" means units (other than EHV units) distributed by the
Licensee which are delivered to premises connected to
the Licensee's distribution system at a voltage at or
higher than 1000 volts.
"interconnector means charges levied by the Interconnectors Business
charges" of the Transmission Company and payable by the Supply
or Second-Tier Supply Business of the Licensee in
respect of use of interconnector for the transfer of
electricity into England and Wales.
"LV units" means units distributed by the Licensee which are
delivered to premises connected to the Licensee's
distribution system at a voltage less than 1000
volts.
"LV1 units" means LV units which are distributed by the Licensee
outside nighttime periods to Domestic Premises or
small premises (other than Domestic Premises) where
the appropriate use of system charges apply different
rates in night-time periods as opposed to other times
of day, for the avoidance of doubt including the use
of system charges under the tariffs specified in
paragraph D2 of Part D of Schedule 3.
34
"LV2 units" means LV units which are distributed by the Licensee
to Domestic Premises or small premises (other than
Domestic Premises):
(a) during night-time periods, where the
appropriate use of system charges apply
different rates in night-time periods as
opposed to other times of the day; or
(b) where the appropriate use of system charges
are incorporated into tariffs which restrict
availability of supply to specified off-peak
periods,
for the avoidance of doubt including the use of
system charges under the tariffs specified in
paragraph D3 of Part D of Schedule 3.
"LV3 units" means LV units other than LV1 and LV2 units, for the
avoidance of doubt including units distributed under
the tariffs specified in paragraph D4 of Part D of
Schedule 3.
"maximum average means the charge calculated in accordance with the
charge per unit formula in paragraph 1 of Condition 3A.
distributed"
"maximum average means the charge calculated in accordance with the
charge per regulated formula in paragraph 1 of Condition 3B.
unit supplied"
"metered" means, in relation to any quantity distributed or
supplied, as measured by a meter installed for such
purpose or (where no such meter is installed or it is
not reasonably practicable to measure the quantity by
such meter) as otherwise reasonably calculated.
"0.1MW customer" means any customer other than an over 0.1MW customer
in its capacity as such.
35
"0.1MW premises" means any premises other than over 0.1MW premises.
"over 0.1MW means a customer supplied at over 0.1MW premises but
customer" shall not include such customer insofar as supplied
at 0.1MW premises.
"over 0.1MW means premises supplied by the Licensee at which the
premises" average of the maximum monthly demands in the three
months of highest demand in any period of twelve
consecutive months commencing on or after January
1993 exceeds one tenth of a megawatt.
"quantity supplied" means the aggregate quantity of units supplied by the
Licensee in the relevant year metered at the points
of supply (whether or not in the authorised area of
the Licensee).
"regulated customer" means a person other than the Licensee who in the
calendar year ending in the relevant year t-1 was
supplied at 0.1 MW premises.
"regulated distribution means as the case may be HV units or LV1 units
unit category" or LV2 units or LV3 units.
"regulated quantity means the aggregate quantity of units distributed
distributed" (both for the Supply Business of the Licensee and on
behalf of third parties under use of system) by the
Licensee through the Licensee's distribution system
in relevant year t metered at exit points on leaving
the Licensee's distribution system but excluding for
this purpose:
(a) units distributed for the purpose of supply
to premises outside the Licensee's authorised
area; and
(b) EHV units.
36
"relevant year" means a financial year commencing on or after
1st April 1990.
"relevant year t" means that relevant year for the purposes of
which any calculation falls to be made;
"relevant year t-1" means the relevant year
preceding relevant year t or, in respect of
the period prior to 1st April 1990, the
period of 12 calendar months commencing on
1st April 1989; and similar expressions shall
be construed accordingly.
"remote transmission means any rent or other periodic payment
asset rental" payable by the Distribution Business of the
Licensee to the Transmission Company in
respect of Remote Transmission Assets forming
part of the Licensee's distribution system.
"sixth relevant year" means the relevant year commencing 1st April
1995.
"supply" includes supply outside the authorised area,
standby and top-up supply and sale and any
other sales of electricity by the Licensee to
persons other than customers; and "supplied"
and similar expressions shall be construed
accordingly.
"supply charges" means all charges (including charges for the
provision of distribution services and
standing charges) made by the Licensee in
respect of electricity supplied by the
Licensee other than charges for the provision
of excluded services by the Licensee.
"supply revenue" means the revenue (measured on an accruals
basis) derived by the Licensee from supply
charges after deduction of value added tax
(if any) and any other taxes based directly
on the amounts so derived.
37
"transmission charges" means charges levied by the Transmission
Company payable by the Supply or the Second-
Tier Supply Business of the Licensee in
respect of the transmission of electricity,
but for the avoidance of doubt shall exclude
transmission connection point charges and
remote transmission asset rentals.
"transmission means charges levied by the Transmission
connection point Company as connection charges by direct
charges" reference to the number or nature of the
connections between the Licensee's
distribution system and the Transmission
System and payable by the Distribution
Business of the Licensee.
"unit" means a kilowatt hour.
38
CONDITION 3A: RESTRICTION OF DISTRIBUTION CHARGES
- --------------------------------------------------
BASIC FORMULA
- -------------
1. Without prejudice to Condition 3F the Licensee shall in setting its charges
for the provision of distribution services use its best endeavours to
ensure that in any relevant year the average charge per unit distributed
shall not exceed the maximum average charge per unit distributed calculated
in accordance with the following formula:
M/dt/ = P/dt/ + PN/dt/ - K/dt/
2. For the purposes of paragraph 1, M/dt/ means the maximum average charge per
unit distributed in relevant year t.
Formula for P/dt/ as used in paragraph 1
----------------------------------------
3. For the purposes of paragraph 1, P/dt/ is derived from the following
formula:
P/dt/ = ( (PU+PM) . GR/t/..PID /t/) + (PL. (Al/t/ - L/t/) . PIL/t/)
-----------------------------------------------
D/t/
where:
PU means the amount set against that term in the part of Annex
A to this Condition that applies to the Licensee.
PM means the amount set against that term in the part of Annex
A to this Condition that applies to the Licensee.
GR/t/ is derived from the following formula:
GR/t/ = 0.5 (SIGMA)P/oi/.D/it/ + Cd/t/ ) GR/t/ -1
------------- ---
(SIGMA)Poi.D/it/-1 C/dt/-1 )
39
where, for the relevant year beginning 1st April 1995,
GR/t/-1 equals 1.
(SIGMA) means the summation across all regulated distribution unit
categories i.
P/oi/ means in respect of each regulated distribution unit
category i set out in column 1 under that term in the part
of Annex A to this Condition that applies to the Licensee
the value opposite that category in column 2.
D/it/ means that number of units in each regulated distribution
unit category i distributed in relevant year t.
D/it/-1 means that number of units in each regulated distribution
unit category i distributed in relevant year t-1.
C/dt/ means a notional figure, representing the number of
customers in the authorised area defined (for the purpose of
this term Cdt only) for each relevant year, given in the
table appearing under that term in the part of Annex A to
this Condition that applies to the Licensee.
C/dt/-1 means the number equal to C/dt/ in relevant year t-1.
PID/t/ is derived from the following formula:
PID/t/ = ( 1 + RPI/t/ - Xd/t/ ) PID/t/-1
-------------
100
where, for the relevant year beginning 1 April 1995,
PID/t/-1 equals 1.
RPI/t/ means the percentage change (whether of a positive or a
negative value) in the arithmetic average of the Retail
Price
40
Index numbers published or determined with respect to each
of the six months July to December (inclusive) in relevant
year t-1 and the arithmetic average of the Retail Price
Index numbers published or determined with respect to the
same months in relevant year t-2.
X/dt/ for any relevant year beginning on or after 1 April 1997,
shall equal 3.
PL means an amount equal to 3.0656p
AL/t/ means an amount (in units) representing allowed distribution
losses in relevant year t, being the allowed percentage of
the adjusted units distributed (calculated as provided in
paragraph E5 of Part E of Schedule 3) where in respect of
each relevant year t, the allowed percentage shall equal
that percentage which the aggregate of adjusted distribution
losses (calculated as provided in paragraphs E2 to E5 of
Part E of Schedule 3) over the preceding relevant years
(commencing with the twelve-month period from 1 April 1989,
or, if the number of preceding relevant years exceeds nine,
relevant year t-10) bears to the aggregate of adjusted units
distributed (calculated as aforesaid) over the corresponding
relevant years: save that for this purpose adjusted
distribution losses in respect of the twelve-month period
from 1 April 1989 shall be derived by applying the initial
relevant loss percentage (calculated as provided in
paragraphs E6 to E8 of Part E of Schedule 3) to the adjusted
units distributed in that period.
L/t/ means in respect of relevant year t, adjusted grid supply
point purchases less adjusted units distributed (calculated
as provided in paragraphs E2 to E5 of Part E of Schedule 3).
PIL/t/ is derived from the following formula:
41
PIL/t/ = (1 + RPI/t/ ) PIL/t/-1
----
100
where, for the relevant year beginning 1 April 1995,
PIL/t/-1 equals 1.
D/t/ means the regulated quantity distributed in relevant year t.
FORMULA FOR PN/dt/ AS USED IN PARAGRAPH 1
-----------------------------------------
4. For the purposes of paragraph 1, in the ninth and subsequent relevant years
the term PN/dt/ shall be calculated in accordance with the following formula:
PNdt = (PS + PR) PIR/t/ - TA/dt/-1 - GA/dt/-1
--------------------------------------
D/t/
and for each relevant year t prior to the ninth relevant year PNdt shall be
0.
where:
PS means an amount equal to (pound)4.87 million for each of the
ninth to the thirteenth relevant years, and thereafter shall be
0.
PR means, in the ninth and all subsequent relevant years, the amount
given under that heading in Annex B to this Condition.
PIR/t/ is derived from the following formula:
PIR/t/ = (1+ RPI/t/ ) PIR/t/-1
-----
100
where for the ninth relevant year PIR/t/-1 equals 1
TA/dt/ in respect of any relevant year t, is derived from the
following formula:
My
TA/dt/ = Sigma P/sd/.Cmn
Mx
42
save that TA shall be a figure not less than 0, and shall for
each relevant year t prior to the ninth relevant year be 0.
where:
My
Sigma means a summation across all the months M/x/ to M/y/ in each
relevant M/x/ year.
M/x/ means, in the ninth relevant year, the month commencing 1/st/
July 1998, and means in each subsequent relevant year the month
commencing 1/st/ April in such relevant year.
M/y/ means, in each relevant year, the month commencing 1st March
in such relevant year.
P/sd/ means the amount given under that heading in Annex B to this
Condition.
C/mn/ means, in respect of each month M/x/ to M/y/ in the ninth and
each subsequent relevant year, a proportion of the total number
of 0.1MW customers within the authorised area (expressed as a
figure greater than or equal to - 1 and less than or equal to 1)
to be calculated by reference to the first day of such month in
accordance with the following formula:
C/mn/ = N - SC
where:
N means a figure equal to:
(a) in respect of the months commencing 1/st/ July 1998, 1/st/
August 1998 and 1/st/ September 1998, the amount given under
that heading in Annex B to this Condition;
(b) in respect of the months commencing 1/st/ October 1998,
1/st/ November 1998 and 1/st/ December 1998, 0.5; and
43
(c) in respect of the month commencing 1/st/ January 1999 and
all subsequent months, 1.
SC in respect of the first day of each relevant month, means a
proportion of the total number of 0.1MW customers within the
authorised area (expressed as a figure greater than or equal to 0
and less than or equal to 1), being customers who may be supplied
by a Second Tier Supplier on such date in accordance with any
direction or variation of a direction issued by the Director (and
not subsequently withdrawn or varied) pursuant to Condition 3 of
that Supplier's licence to supply electricity.
GA/dt/ shall in the ninth relevant year, where the earliest date
specified (and not subsequently withdrawn or varied to a later
date) in any direction or variation of a direction issued by the
Director, pursuant to Condition 3 of the licence held by any
Second Tier Supplier, in relation to the supply of electricity to
any premises:
(a) is in April 1998, be 0:
(b) is in May 1998, be the amount given for that month under the
heading GA/dt/ in Annex B to this Condition;
(c) is in June 1998, be the amount given for that month under
that heading; or
(d) is in July 1998 or any subsequent month, be the amount given
for July under that heading.
and shall in each relevant year t other than the ninth relevant
year be 0.
FORMULA FOR K/dt/ AS USED IN PARAGRAPH 1
----------------------------------------
5. For the purposes of paragraph 1, K/dt/ means the correction factor per unit
(whether of a positive or a negative value) to be applied to the average
charge per unit distributed in
44
relevant year t (subject to paragraph 4 of Condition 3D) and is derived from the
following formula:
45
K/dt/ = R/dt/-1 - (D/t/-1.M/dt/-1) (1 + I/dt/)
------------------------- -----
D/t/ 100
provided that: notwithstanding the above, the value of K/dt/ for the
sixth relevant year shall be that value required by
Condition 3A in the Licence in the form in force on
31st March 1995.
where:
R/dt/-1 means the distribution revenue in relevant year t-1.
D/t/-1 means the regulated quantity distributed in relevant
year t-1.
M/dt/-1 means maximum average charge per unit distributed in
relevant year t - 1.
I/dt/ means that interest rate in relevant year t which is
equal to, where K/dt/ (taking no account of I/d/ for
this purpose) has a positive value, the average
specified rate plus 4, or where Kdt (taking no account
of I/d/ for this purpose) has a negative value, the
average specified rate.
6. In this Condition, any term defined for the purposes of paragraph 1 shall
have the same meaning in all paragraphs of this Condition.
46
ANNEX A TO CONDITION 3A
- -----------------------
YORKSHIRE ELECTRICITY GROUP PLC:
- --------------------------------
(pound)m
PU 249.7
PM 27.9
C/dt/
'000s
-----
relevant year beginning on
--------------------------
1 April 1994 2036
1 April 1995 2051
1 April 1996 2065
1 April 1997 2080
1 April 1998 2094
1 April 1999 2109
every subsequent relevant year 2109
P/0i/
1 2
unit category i value (p)
--------------- ---------
LV1 1.9497
LV2 0.3271
LV3 1.6654
HV 0.5750
47
ANNEX B TO CONDITION 3A
- -----------------------
VALUES FOR PARAGRAPH 4 OF THIS CONDITION FOR YORKSHIRE ELECTRICITY GROUP PLC:
PR (pound)3.28m
P/sd/ (pound)0.57m
N (1.7.98 - 1.9.98) 0.105
GA/dt/ (May) (pound)0.14m
GA/dt/ (June) (pound)0.51m
GA/dt/ (July) (pound)1.16m
48
CONDITION 3B: RESTRICTION OF SUPPLY CHARGES
- --------------------------------------------
CONTINUATION OF TARIFFS
- -----------------------
1.1 Save where the Director consents in writing to a tariff being discontinued,
the Licensee shall continue to make available to customers at Designated
Premises the tariffs listed under the Licensee's name in Annex A to this
Condition.
1.2 Where a customer at Designated Premises was supplied at the end of the
eighth relevant year on a tariff listed under the Licensee's name in Annex
B to this Condition, the Licensee shall continue to offer that tariff to
that customer at those premises unless the Director consents in writing to
the Licensee's not doing so.
1.3 The Licensee shall not, without the consent in writing of the Director,
change the terms (other than price, which shall be regulated in accordance
with this Condition) of any tariff described in the second column of the
Table; and the terms to which this prohibition applies include, for
example, the hours between which particular prices apply and the level of
consumption at which prices change.
NEW TARIFFS
- -----------
2. The Licensee shall not offer to supply any customer at Designated Premises
on a tariff not shown in the Table unless the terms of that tariff have
been approved by the Director.
THE PRICE RESTRAINT
- -------------------
3. Without prejudice to Condition 3F, the prices in the tariffs which apply at
the beginning of the ninth relevant year to supplies to Designated
Customers shall be set at or below the limit imposed by paragraph 4 and in
addition at or below each of the limits imposed by paragraph 5 and (where
those paragraphs apply) by paragraphs 6 and 7.
49
4. The prices referred to in paragraph 3 shall be so set that they do not
cause the value of composite term
/n/ /n/
Sigma PSi/t/.QSi0 + <C083> PUi/t/.QUi0
1 1
/n/ /n/
Sigma PSi0.QSi0 + <C083> PUi0.QUi0
1 1
to exceed the value of the formula
100 + RPI/t/ - X/a/
-------------------
100
where,
/n/ means the summation across all tariffs; and
Sigma
1
X/a/ has the value given against the Licensee's name in Annex C to
this Condition.
5.1 Without prejudice to Condition 3F, at the beginning of the ninth relevant
year the Licensee shall so set its prices to Designated Customers supplied
on the tariff numbered 1 in the Table that the total charge for that year
for a Designated Customer supplied on such a tariff who consumes 3300 units
in that year shall not exceed
100 + RPI/t/ - X/a/
-------------------
(Psi0 + 3300 PUi0) 100
where
X/a/ has the value given against the Licensee's name in Annex C to
this Condition.
50
5.2 Without prejudice to Condition 3F, at the beginning of the ninth relevant
year, the prices to Designated Customers on each of the domestic tariffs in
the Table other than the tariff numbered 1 shall be so set that, when used
to determine the value of the terms Pui/t/ and Psi/t/, they do not cause
the value of the composite term
/u/
<C083> PUi/t/.QUi0 s
1 + <C083> PSi/t/
---------------------
NC 1
to exceed the value of the formula
/u/
<C083> PUi0.QUi0 s 100 + RPI/t/ - X/b/
-------------------
1 + <C083> Psi0 100
------------------------
NC 1
where X/b/ has the value of 3.
5.3 Without prejudice to Condition 3F, at the beginning of the ninth relevant
year, the prices to Designated Customers on each of the non-domestic
tariffs in the Table shall be so set that, when used to determine the value
of the terms Puit and Psit, they do not cause the value of the composite
term
/u/
<C083> PUi/t/.QUi0 s
1 + <C083> Psi/t/,
-----------------
NC 1
when applied to that tariff, to exceed the value of the formula
/u/
<C083> PUi0.QUi0 s 100 + RPI/t/
------------
1 + <C083> PSi0 100
---------------
NC 1
6. Without prejudice to Condition 3F, in the case of any tariff described as
domestic in column 3 of the Table, the standing charge to a Designated
Customer at the beginning of the ninth relevant year shall not exceed the
standing charge given for that tariff in column 5 of the Table multiplied
by
100 + RPI/t/
------------
-
100
7.1 Without prejudice to Condition 3F, in the case of any tariff described in
column 2 of the
51
Table which is a domestic prepayment tariff,
(a) the standing charge and the unit charge at the beginning of the ninth
relevant year shall each be lower than the standing charge and unit
charge respectively set against that tariff in column 5 of the Table
by the same proportion as the standing charge and the unit charge at
the beginning of the ninth relevant year of the nearest equivalent
domestic tariff (not being a prepayment tariff) are lower than the
standing charge and unit charge respectively of that nearest
equivalent domestic charge shown against them in column 5 of the Table
(and in this sub-paragraph the standing charge shall be exclusive of
any prepayment surcharge); and
(b) there shall at no time be any increase in the amount by which the
standing charge (including any prepayment meter surcharge) for any
domestic prepayment tariff exceeds the standing charge for the nearest
comparable domestic tariff (not being a prepayment tariff).
7.2 The Director may direct which tariff is the nearest equivalent domestic
tariff for the purpose of this paragraph.
8.1 Without prejudice to paragraph 9 and Condition 3F, no price (whether a
standing charge or a unit charge) in any tariff shall be increased during
the ninth relevant year above the price which applies at the beginning of
the ninth relevant year, unless the Director has consented in writing.
8.2 In giving consent the Director shall have regard in particular but not
exclusively to the impact of significant movements in costs outside the
Licensee's control, and shall consider whether such movements in costs
justify an increase in all tariffs, a differential increase in tariffs or
an increase in some tariffs only.
9. If any change is made to the rate of the Fossil Fuel Levy between 1 August
1997 and 2 April 1998, and whenever any change is made to that rate
thereafter, every price limit set pursuant to paragraphs 4, 5, 6 and 7.1(a)
shall be multiplied by the following factor:
100 + F/t/
----------
100 + F/d/
52
10.1 Where, after the end of the eighth relevant year, the Director is
satisfied that in the eighth relevant year the average charge per unit
supplied differed from the maximum average charge per unit supplied
assumed for the purpose of setting the prices in column 5 of the Table,
the Director may give a direction to the Licensee stipulating the prices
to be charged for any (or all) of the tariffs described in column 2 of the
Table.
10.2 Before giving any such direction, the Director shall consult the Licensee.
10.3 In considering whether to give any such direction, and in considering the
content of any such direction, the Director shall have regard
(a) to the extent to which the regulated supply revenue for the eighth
relevant year assumed for the purpose of setting the prices in column
5 of the Table differs from the actual regulated supply revenue for
that year adjusted
(i) to reflect what the regulated supply revenue would have been if
the tariffs in force on 1 August 1997 had remained unchanged until
the end of the eighth relevant year; and
(ii) by adding any rebates or discounts to Regulated Customers in
respect of the period from 1 August 1997 to the end of the eighth
relevant year, being rebates or discounts not included in the tariffs
in force on 1 August 1997;
(b) to any representations made by the Licensee; and
(c) to the cost to the Licensee of changing any tariff.
11.1 Where, for relevant year t, the terms TAdt or GAdt (or both of them) in
paragraph 4 of Condition 3A have a value greater than 0, the Director may
give a direction to the Licensee stipulating the prices to be charged, in
that or any subsequent relevant year, for any (or all) of the tariffs
described in column 2 of the Table.
11.2 Before giving any such direction, the Director shall consult the Licensee.
53
11.3 In considering whether to give any such direction, and in considering the
content of any such direction, the Director shall have regard
(a) to the extent by which the charges made by the Distribution
Business to the Supply Business have been reduced on account of the
terms TA/dt/ or GA/dt/ (or both of them) having a greater value
than 0;
(b) to any representation made by the Licensee; and
(c) to the cost to the Licensee of changing any tariff.
12.1 Without prejudice to paragraph 9 and Condition 3F, for the tenth and
every subsequent relevant year, unless the Director has consented in
writing, each component of each tariff described in column 2 of the Table
or approved for the purpose of paragraph 2 shall have a price no greater
than the price at the end of the immediately preceding relevant year, in
each case multiplied by the formula
100 + RPIt - Xc
-----------------
100
where X/c/ has the value of 3 for the tenth relevant year and the value
of 0 for every subsequent relevant year.
12.2 In giving consent the Director shall have regard in particular but not
exclusively to the impact of significant movements in costs outside the
Licensee's control, and shall consider whether such movements in costs
justify an increase in all tariffs, a differential increase in tariffs or
an increase in some tariffs only.
INTERPRETATION
- --------------
13. In this Condition:
(a) all prices and revenue shall exclude value added tax (if any); and
54
(b) any reference to the first relevant year shall be a reference to
the relevant year commencing on 1 April 1990, and any reference to
the second financial year and so on shall be construed accordingly;
(c) in respect of any tariff described in column 2 of the Table the
following terms have the following meanings:
PSi/t/ is the standing charge (or each of them) for that tariff for
the ninth relevant year t:
PSi0 is the standing charge (or each of them) for that tariff
given in column 5 of the Table;
QSi0 is the number in column 6 of the Table set against that
standing charge;
PUi/t/ is the unit charge (or each of them) for that tariff for the
ninth relevant year t;
PUi0 is the unit charge (or each of them) for that tariff given
in column 5 of the Table;
QUi0 is the number in column 6 of the Table set against that unit
charge (or each of them);
u
Sigma means the summation across all unit charges for that tariff;
1
s
Sigma means the summation across all standing charges for that
1
tariff;
NC means the number given against tariff in column 7 of the
Table; and
(d) the following terms shall have the following meanings:
F/t/ means the rate of the Fossil Fuel Levy applicable from time
to time during relevant year t;
F/d/ has the value of 2.2;
RPI/t/ means the percentage change (whether of a positive or a
negative value) in the arithmetic average of the Retail
Price Index numbers published or determined with respect to
each of the six months July to December (inclusive) in
relevant year t-1 and the arithmetic average of the Retail
Price Index numbers published or determined with respect to
the same months in relevant year t-2; and
55
the Table means the table given under the Licensee's name in
Annex D to this Condition.
56
ANNEX A TO CONDITION 3B
- -----------------------
TARIFFS GENERALLY AVAILABLE - YORKSHIRE ELECTRICITY GROUP PLC
- -------------------------------------------------------------
TARIFF NO. TARIFF
1 Domestic Unrestricted
2 Economy 7
3 Domestic Off-Peak
4 Prepayment
5 Prompt Payment
6 Automated Payment
7 General Quarterly
8 Economy 7 Quarterly
9 Evening/Weekend Quarterly
10 Evening/Weekend E7 Quarterly
11 Farm Off-Peak
12 Commercial 2 Rate Tariff
13 Commercial Off Peak
14 Industrial Off Peak Tariff
15 Prompt Payment
16 Automated Payment
57
ANNEX B TO CONDITION 3B
- -----------------------
PRESERVED TARIFFS - YORKSHIRE ELECTRICITY GROUP PLC
- ---------------------------------------------------
TARIFF NO. TARIFF
---------- ------
3 Domestic Off-Peak
11 Farm Off-Peak
12 Commercial 2 Rate Tariff
13 Commercial Off-Peak
14 Industrial Off-Peak Tariff
58
ANNEX C TO CONDITION 3B
- -----------------------
VALUE OF X/A/
- -------------
Yorkshire Electricity Group plc: X/a/ = 3.7
59
ANNEX D TO CONDITION 3B
- -----------------------
THE TABLE - YORKSHIRE ELECTRICITY GROUP PLC
- -------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NO. DESCRIPTION OF TARIFF CATEGORY COMPONENT PRICE PO QUANTITY Q0 NC
(UNIT RATE IN (UNIT RATE IN
PENCE PER KWH) GWH)
- ---------------------------------------------------------------------------------------------------------------------------------
1 Domestic UR Domestic Standing Charge 4000 1702844 1702844
Unit Charge 6.19 5774.61
2 Economy 7 Domestic Standing Charge 5200 162799 162799
Day Units 6.56 516.67
Night Units 2.49 798.21
3 Domestic Off Peak Domestic Standing Charge 1200 34147 34147
Units 3.82 146.53
4 Prepayment Domestic Standing Charge 2360 248125 248125
5 Prompt Payment Standing Charge Discount 0 361700 361700
6 Automated Payment Domestic Standing Charge Discount -1200 533512 533512
7 General Quarterly Non Domestic Standing Charge 5200 60745 60745
1st 1000 Units 6.96 157.60
Excess Units 6.37 89.77
8 Economy 7 Quarterly Non Domestic Standing Charge 6400 6076 6076
Night Units 2.49 16.71
First 1000 Day Units 7.33 15.34
Excess Day Units 6.74 5.10
9 Weekend/Evening Non Domestic Standing Charge 6400 1224 1224
Quarterly WE units 3.60 3.20
First 1000 Units 9.31 1.94
Excess Units 8.72 0.16
10 Weekend/Evening E7 Non Domestic Standing Charge 7200 939 939
Quarterly Night Units 2.49 1.40
WE7 Units 3.60 2.17
First 1000 Units 9.31 1.93
Excess Units 8.72 0.10
11 Farm Off Peak Non Domestic Standing Charge 1200 509 509
Units 4.32 4.57
12 Commercial '2 rate Tar' Non Domestic Units 3.48 0.78
13 Commercial Off Peak Non Domestic Standing Charge 1200 1428 1428
Units 3.64 7.01
14 Industrial Off Peak Non Domestic Standing Charge 1200 89 89
Units 4.05 0.50
15 Prompt Payment Standing Charge Discount 0.00 32132 32132
16 Automated Payment Automated Payment Standing Charge Discount -1296.2 15430 15430
- ---------------------------------------------------------------------------------------------------------------------------------
60
CONDITION 3C: [NO LONGER USED]
- ----------------------------------
61
CONDITION 3D: RESTRICTION OF DISTRIBUTION CHARGES AND OF SUPPLY CHARGES:
- -------------------------------------------------------------------------
ADJUSTMENTS
- -----------
1. If, in respect of any relevant year, the average charge per unit
distributed exceeds the maximum average charge per unit distributed by more
than 3 per cent, the Licensee shall furnish an explanation to the Director
and in the next following relevant year the Licensee shall not effect any
increase in charges unless it has demonstrated to the reasonable
satisfaction of the Director that the average charge per unit distributed
would not be likely to exceed the maximum charge per unit distributed in
that next following relevant year.
2. If, in respect of any two successive relevant years, the sum of the amounts
by which the average charge per unit distributed has exceeded the maximum
average charge per unit distributed is more than 4 per cent, then in the
next following relevant year the Licensee shall, if required by the
Director, adjust its charges such that the average charge per unit
distributed would not be likely, in the judgment of the Director, to exceed
the maximum average charge per unit in that next following relevant year.
3. If, in respect of two successive relevant years, the average charge per
unit distributed is less than 90 per cent of the maximum average charge per
unit distributed, the Director, after consultation with the Licensee, may
direct that in calculating K/dt/ for the purposes of paragraph 1 of
Condition 3A in respect of the next following relevant year, there shall be
substituted for R/dt-1/ in the formula at paragraph 1 of Condition 3A such
figure as the Director may specify being not less than R/dt-1/, and not
more than 0.90 (Dt-1.M/dt-1/).
4.1 If, in respect of the eighth relevant year, the average charge per
regulated unit supplied exceeds the maximum average charge per regulated
unit supplied, but by not more than 1 1/2 per cent, the Licensee shall
ensure that the excess above the maximum average charge per regulated unit
supplied, with interest thereon at a rate 2 per cent above the average
specified rate, shall be paid to all 0.1 MW customers who continue to be
supplied by the Licensee in the ninth relevant year.
4.2 If, in respect of the eighth relevant year, the average charge per
regulated unit supplied exceeds the maximum average charge per regulated
unit supplied by more than 1 1/2 per cent, the Licensee shall use all
reasonable endeavours to return the excess above the maximum average charge
per unit supplied, with interest thereon at a rate 4 per cent above the
average specified rate, during the ninth relevant year to all 0.1MW
customers supplied by the
62
Licensee in the eighth relevant year.
4.3 For the purpose of Condition 3B, no sum payable under paragraphs 4.1 or 4.2
shall be regarded as paid or payable under a tariff applicable to the ninth
relevant year or any subsequent relevant year.
5. No later than three months after the end of the eighth relevant year, the
Licensee shall send to the Director a statement accompanied by such
forecasts, estimates and calculations as may be necessary, showing the
basis by which the Licensee intends to comply with paragraph 4.
6. The powers exercisable under paragraphs F6 and F8 of Part F of Schedule 3
in the form of licence in force on 31 March 1998 shall continue to be
exercisable after that date, but only in respect of a relevant year ending
before 1 April 1998.
63
CONDITION 3E: INFORMATION TO BE PROVIDED TO THE DIRECTOR IN CONNECTION WITH THE
- --------------------------------------------------------------------------------
CHARGE RESTRICTION CONDITIONS
- -----------------------------
1. Where the Licensee is intending to make any change in charges for the
provision of distribution services regulated under Condition 3A the
Licensee shall (unless otherwise agreed by the Director) not later than the
date of publication of such charges provide the Director with:
(a) written forecast of the maximum average charge per unit distributed,
together with its components, in respect of the relevant year t in
which such a change is to take effect and in respect of the next
following relevant year t+1; and
(b) a written estimate of the maximum average charge per unit distributed,
together with its components, in respect of the relevant year t-1
immediately preceding the relevant year in which the change is to take
effect unless a statement complying with paragraph 7 in respect of
relevant year t-1 has been furnished to the Director before the
publication of the proposed change.
2. Where, at any time during the eighth relevant year, the Licensee intends to
change the principles of attribution or any provisional attribution
specified in a statement already made to the Director or to purchase or
sell an electricity sale contract, the change or the provisional
attribution in relation to the purchase or sale shall be specified in a
written statement signed by a person authorised to sign the statement by
the directors of the Licensee which statement shall not provide for a
retrospective change of principles or for any re-attribution of payments
already made or any payment where the event giving rise to that payment has
already occurred.
3. If within three months of the commencement of any relevant year t the
Licensee has not made any such change in charges as is referred to in
paragraph 1, the Licensee shall provide the Director with a written
forecast of the maximum average charge per unit distributed, together with
its components, in respect of the relevant year t.
64
4. The Director may issue directions providing that any forecast or estimate
provided in accordance with paragraphs 1, 2 or 3 shall be accompanied by
such information as regards the assumptions underlying the forecast or
estimate as may be necessary to enable the Director to be satisfied that
the forecast or estimate has been properly prepared on a consistent basis.
5. Subject as provided in sub-paragraph (b) below, not later than six weeks
after the commencement of each relevant year t, the Licensee shall send to
the Director a statement as to:
(a) whether or not the provisions of Condition 3D are likely to be
applicable in consequence of the average charge per unit distributed
in the preceding relevant year t-1 or the two preceding relevant years
t-1 and t-2; and
(b) its best estimate as to the relevant correction factor K/dt/ to be
applied in calculating the maximum average charge per unit distributed
in respect of the relevant year t.
6. Not later than 15 January in the ninth and tenth relevant years the
Licensee shall send to the Director a written estimate of the value of the
term TA for that year (TA/dt/), together with an estimate of the value of
each of its component parts, as detailed in paragraph 4 of Condition 3A.
7. Not later than three months after the end of a relevant year the Licensee
shall send the Director a statement, in respect of that relevant year,
showing the specified terms referred to in paragraph 9.
8. The statement referred to in the preceding paragraph shall be:
(a) accompanied by a report from the Auditors that in their opinion (i)
such statement fairly presents each of the specified items referred to
in paragraph 9 in accordance with the requirements of the charge
restriction conditions and (ii) the amounts shown in respect of each
of those specified items are in accordance with the Licensee's
accounting records which have been maintained in respect of each of
the relevant Separate Businesses in accordance with Condition 2; and
65
(b) certified by a director of the Licensee on behalf of the Licensee that
to the best of his knowledge, information and belief having made all
reasonable enquiries:
(i) there is no amount included in its calculations under Condition
3A and Schedule 3 which represents other than:
(aa) bona fide consideration for the provision of distribution
services in the course of its Distribution Business; or
(bb) an amount permitted under the charge restriction
conditions to be so included;
(ii) (in respect of the eighth relevant year only) there is no
amount included in its calculations under Condition 3B and
Schedule 3 (in each case in the form of licence in force on 31
March 1998) which represents other than:
(aa) bona fide consideration for electricity supplied to
regulated customers (as defined in the form of licence in
force on 31 March 1998); or
(bb) an amount permitted under the charge restriction
conditions to be so included;
(iii) there is no amount included in its calculations of allowed
security costs under Condition 3F which represents other than
an amount permitted under the charge restriction conditions to
be so included;
(iv) no service has been treated as an excluded service which was
not properly so treated and no amount included in the revenues
in respect thereof represents other than bona fide
consideration for the provision of the excluded service to
which it relates;
(v) all amounts which should properly be taken into account for the
purposes of the charge restriction conditions have been taken
into account; and
(vi) (in respect of the eighth relevant year only) there is no
amount included in its calculations under Condition 3B and
Schedule 3 in respect of electricity
66
purchase or sale costs which does not result from an
attribution or method of attribution contained in the statement
under either paragraph 2(a) or paragraph 2(b) in the form of
licence in force on 31 March 1998.
9. The specified items to be contained in the statement referred to in
paragraph 7 shall be the following:
(a) the regulated quantity distributed;
(b) the quantity distributed in each regulated distribution unit category;
(c) the average charge per unit distributed;
(d) the amount in respect of the Terms AL/t/ and L/t/ in paragraph 3 of
Condition 3A calculated as therein provided;
(e) the value of the term TAdt, together with the value of each of its
component parts, as detailed in paragraph 4 of Condition 3A;
(f) the information referred to at paragraph 8 of Condition 3F;
(g) the statements and information referred to in paragraph A6, B2, C8, D1
and E10 of Schedule 3; and
(h) in respect of the eighth relevant year only, the statements and
information referred to in paragraph F7 or Schedule 3 of the Licence
in the form in force on 31 March 1997;
Provided that the statement to be provided in the ninth relevant year in
respect of the immediately preceding relevant year shall contain the
information required by paragraph 10 of Condition 3E of the Licence in the
form in force on 31 March 1998.
67
10. Where the Director issues directions in accordance with paragraph 9 of
Condition 3F or paragraphs A7, B3, C9, D5 or E11 of Schedule 3, then such
directions shall not have effect from a date earlier than the commencement
of the relevant year to which the statement last furnished to the Director
pursuant to paragraph 7 prior to the issue of the directions related,
unless such statement (or the accompanying report or certificate under
paragraph 8) or any statement, report or certificate in respect of an
earlier relevant year was incorrect or was misleading in any material
respect.
11. Where the Director issues such directions as are referred to in the
preceding paragraph the Director may require the Licensee to provide a
revised statement in respect of such of the specified items as may be
affected by the directions, and the Licensee shall comply with such
request.
68
CONDITION 3F: ALLOWANCES IN RESPECT OF SECURITY COSTS
- ------------------------------------------------------
1. At any time during a security period, the Licensee may give notice in
writing to the Director suspending, with effect from the date of receipt of
the notice by the Director, application of such of the charge restriction
conditions as may be specified in the notice for the unexpired term of the
security period.
2. At any time during a security period, the Director may (having regard to
his duties under the Act) by means of directions:
(a) suspend or modify for the unexpired term of the security period the
charge restriction conditions or any part or parts thereof; or
(b) introduce for the unexpired term of the security period new charge
restriction conditions
in either case, so as to make such provision as in the opinion or
estimation of the Director is requisite or appropriate:
(i) to enable the Licensee to recover by means of increased charges an
amount estimated as being equal to the Licensee's allowed security
costs during such period;
(ii) to ensure that such part of the amount referred to in sub-paragraph
(i) above as is estimated as being equal to the allowed security
costs incurred by the Licensee as costs in its Distribution Business
are recovered by means of appropriate equitable increases on the
charges made by the Licensee in its Distribution Business; and
(iii) to ensure that such part of the amount referred to in sub-paragraph
(i) above as is estimated as being equal to the allowed security
costs incurred by the Licensee as costs in its Supply Business and
its Second-Tier Supply Business respectively are recovered by
appropriate equitable increases in the charges made by the Licensee
in those Businesses and the Licensee shall comply with the terms of
any directions so issued.
69
3. At any time following a security period, the Director may (following such
consultation with the Licensee and others as the Director may consider
appropriate) issue directions suspending or modifying the charge
restriction conditions or any part or parts thereof or replacing such
directions as may have been made during the security period and introducing
such new charge restriction conditions as in the opinion of the Director
are appropriate in all the circumstances (including at the Director's
discretion an appropriate adjustment having regard to any profit gained or
forgone by the Licensee during the security period), and the Licensee shall
comply with any directions so issued.
4. At any time within three months after the issue of directions by the
Director under paragraph 3, the Licensee may serve on the Director a
disapplication request in respect of such of the charge restriction
conditions or any part or parts thereof as are specified in the request.
5. If within three months of the receipt by the Director of the disapplication
request referred to in paragraph 4, the Director has either not agreed in
writing to such disapplication request or has not made a reference to the
Monopolies Commission under Section 12 of the Act relating to the
modification of the charge restriction conditions, the Licensee may deliver
one month's written notice to the Director terminating the application of
the charge restriction conditions (or any part or parts thereof) as were
specified in the disapplication request.
6. Subject to paragraphs 7 and 9, the Licensee shall in any relevant year be
entitled to recover an aggregate amount equal to its allowed security costs
in that year or (insofar as not previously recovered) any previous year, by
means of appropriate equitable increases on the charges made by the
Licensee in each of its Distribution, Supply and Second-Tier Supply
Businesses.
7. Paragraph 6 shall not apply insofar as such allowed security costs:
(a) were otherwise recovered by the Licensee; or
(b) were taken into account by the Director in setting charge restriction
conditions by means of directions issued under paragraph 3 above.
70
8. The Licensee shall following the end of each relevant year provide to the
Director, as being one of the specified items to be contained in the
statement referred to at paragraph 8 of Condition 3E, details in respect of
that relevant year of:
(a) the amount of the Licensee's allowed security costs; and
(b) the aggregate amounts charged under paragraph 6 on account of the
Licensee's allowed security costs; and
(c) the bases and calculations underlying the increases in charges made
by the Licensee in its Distribution, Supply and Second-Tier Supply
Businesses under paragraph 6.
9. Where the Director is satisfied that the Licensee has recovered amounts in
excess of the allowed security costs, the Director may issue directions
requiring the Licensee to take such steps as may be specified to reimburse
customers of or purchasers from the Distribution, Supply and Second-Tier
Supply Business (as the case may be) for the excess amounts charged to
them, and the Licensee shall comply with any directions so issued provided
that if the excess amounts relate to allowed security costs paid to any
authorised electricity operator, the Licensee shall not be obliged to make
any such reimbursement unless and until it has recovered such costs from
the relevant authorised electricity operator.
10. No amounts charged by the Licensee under this Condition (whether or not
subsequently required to be reimbursed) shall be taken into account for the
purpose of applying the charge restriction provisions of Conditions 3A and
3B.
11. In this Condition:
"allowed security shall have the meaning ascribed to that term in the
cost" Fuel Security Code;
71
"security period" means a period commencing on the date on which any
direction issued by the Secretary of State under
Section 34 (4) (b) of the Act enters into effect and
terminating on the date (being not earlier than the
date such direction, as varied, is revoked or
expires) as the Director, after consultation with
such persons (including without limitation, Licence
holders liable to be principally affected) as he
shall consider appropriate, may with the consent of
the Secretary of State by notice to all Licence
holders determine after having regard to the views
of such persons.
72
CONDITION 3G: DURATION OF CHARGE RESTRICTION CONDITIONS
- --------------------------------------------------------
1. The charge restriction conditions shall apply so long as this Licence
continues in force but shall cease to have effect (in whole or in part, as
the case may be) if the Licensee delivers to the Director a disapplication
request made in accordance with paragraph 2 and:
(a) the Director agrees in writing to the disapplication request; or
(b) their application (in whole or in part) is terminated by notice given
by the Licensee in accordance with either paragraph 4 or paragraph 5.
2. A disapplication request pursuant to this Condition 3G shall (a) be in
writing addressed to the Director, (b) specify the charge restriction
conditions (or any part or parts thereof) to which the request relates and
(c) state the date from which the Licensee wishes the Director to agree
that the specified charge restriction conditions shall cease to have
effect.
3. Save where the Director otherwise agrees, no disapplication following
delivery of a disapplication request pursuant to this Condition 3G shall
have effect earlier than that date which is the later of:
(a) a date being not less than 18 months after delivery of the
disapplication request; and either
(b) in the case of distribution charges regulated under Condition 3A, 31st
March 2000; or
(c) in the case of supply charges regulated under Condition 3B, 31st March
2000.
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4. If the Director has not made a reference to the Monopolies Commission under
Section 12 of the Act relating to the modification of the charge
restriction conditions before the beginning of the period of 12 months
which will end with the disapplication date, the Licensee may deliver
written notice to the Director terminating the application of such of the
charge restriction conditions (or any part or parts thereof) as are
specified in the disapplication request with effect from the disapplication
date or a later date.
5. If the Monopolies Commission makes a report on a reference made by the
Director relating to the modification of the charge restriction conditions
(or any part or parts thereof) specified in the disapplication request and
such report does not include a conclusion that the cessation of such charge
restriction conditions, in whole or in part, operates or may be expected to
operate against the public interest, the Licensee may within 30 days after
the publication of the report by the Director in accordance with Section 13
of the Act deliver to him written notice terminating the application of
such charge restriction conditions with effect from the disapplication date
or later.
6. A disapplication request or notice served under this Condition may be
served in respect of a specified geographic area.
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CONDITION 4: PROHIBITION OF CROSS-SUBSIDIES AND OF DISCRIMINATION IN
- ----------------------------------------------------------------------
ELECTRICITY SALE CONTRACTS
- --------------------------
1. The Licensee shall procure that no Separate Business gives any cross-
subsidy to, or receives any cross-subsidy from, any other business of the
Licensee or an affiliate or related undertaking of the Licensee (whether or
not a Separate Business).
2. The Licensee shall not, and shall procure that any affiliate or related
undertaking of the Licensee shall not, sell or offer to sell electricity
under any electricity sale contract to any one relevant purchaser or person
seeking to become a relevant purchaser on terms as to price which are
materially more or less favourable than those on which it sells or offers
to sell electricity under any electricity sale contract to comparable
relevant purchasers. For these purposes, due regard shall be had to the
circumstances of sale to such purchasers including (without limitation)
volumes, load factors, conditions of interruptibility and the dates and
duration of the relevant agreements.
3. For the purposes of paragraph 2:
"relevant purchaser" means any purchaser of electricity from
the Licensee or any affiliate or related
undertaking of the Licensee under an
electricity purchase contract.
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CONDITION 4A: PROHIBITION OF DISCRIMINATION IN SUPPLY
- ------------------------------------------------------
1. This Condition applies where the Licensee is in a dominant position in a
market for the supply of electricity to customers at premises.
2. Where this Condition applies the Licensee shall not supply or offer to
supply electricity to customers in any market in which it is dominant on
terms which are predatory.
3. Where this Condition applies, but subject to paragraph 4, the Licensee
(taken together with its affiliates and related undertakings) shall not, in
supplying or offering terms for the supply of electricity to customers in
any market in which it is dominant:
(a) show undue preference to any person (or class of persons) within such
market;
(b) exercise undue discrimination between any persons (or classes of
person) within such market; or
(c) set terms which are unduly onerous.
4. Nothing in paragraph 3 shall prohibit the Licensee, within any area or
class of customers (the "relevant area or class") in respect of which there
is established competition in the supply of electricity, from supplying or
offering to supply electricity on terms which are reasonably necessary to
meet that competition, save that the Licensee (taken together with its
affiliates and related undertakings) shall not, in supplying or offering
terms for the supply of electricity:
(a) show undue preference to any person (or class of persons) or exercise
undue discrimination between any persons (or classes of person) within
the relevant area or class of customers; or
(b) set terms in respect of any person (or class of persons) in a market
in which the Licensee is dominant, save such persons who are within
the relevant area or class of customers, which are unduly onerous.
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5. For the purposes of this Condition, terms are unduly onerous if the revenue
from the supply of electricity to customers on those terms:
(a) significantly exceeds the costs of that supply; and
(b) exceeds such costs to a significantly greater degree than the revenue
from supply to all other customers of the Licensee (and of its
affiliates and related undertakings) within the same market exceeds
the costs of supply to those customers.
6. For the purposes of this Condition, a market may be defined by reference to
a geographical area, or to a class of customer or both, save that no market
defined by reference to Designated Customers shall comprise fewer than
50,000 such customers.
7. In determining, for the purposes of this Condition, whether any persons
constitute a class of person, due regard shall be had to the circumstances
of supply to such persons including (without limitation) volumes, load
factors, conditions of interruptibility, location of premises being
supplied and date and duration of the supply contract.
8. For the purposes of this Condition, the Director shall determine any
question as to:
(a) whether any area or class of customers constitutes a market for the
supply of electricity;
(b) whether the Licensee is dominant in any market for the supply of
electricity;
(c) whether there is established competition in respect of the supply of
electricity in any area or to any class of customers; and
(d) whether any terms are predatory, having due regard to whether such
terms:
(i) incorporate charges which do not reasonably cover the avoidable
costs incurred in consequence of supplying the customers in
question; and
(ii) are intended or are likely to restrict, distort or prevent
competition in the supply of electricity.
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9. The Director may determine that the Licensee is dominant in a specified
market:
(a) at any time prior to this Condition coming into force; or
(b) having first consulted with the Licensee and such other persons as he
considers appropriate (and having taken into account any
representations made to him), at any time after this Condition has
come into force, and where the Director does make such a determination
he shall immediately notify the Licensee.
10. Where the Director has notified the Licensee of his determination in
accordance with paragraph 9 that it is dominant in a specified market, the
provisions of paragraphs 11 to 16 shall apply in respect of that market.
11. Where this paragraph applies the Licensee shall, prior to supplying or
offering to supply electricity under a tariff or Designated Supply Contract
on any new terms, give to the Director at least 28 days' notice in writing
of its intention to supply on such terms.
12. For the purposes of this Condition, a tariff or Designated Supply Contract
is on "new terms" if:
(a) it is a form of tariff or Designated Supply Contract under which the
Licensee has not previously supplied or offered to supply electricity;
(b) it is a tariff or Designated Supply Contract in respect of which the
Licensee is varying the terms as to price; or
(c) it is a tariff or Designated Supply Contract in respect of which the
Licensee is varying any other terms in such a manner as to
significantly affect the evaluation of that tariff or contract.
13. Where the Licensee has given notice to the Director of its intention to
supply on new terms it shall not supply or offer to supply electricity on
such terms until either the period of notice given to the Director has
expired and:
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(a) the Director has not given or sent to the Licensee a counter-notice
(the "counter-notice") in accordance with paragraph 14; or
(b) prior to the expiry of such period, the Director has informed the
Licensee that he will not issue a counter-notice in respect of such
terms.
14. The Director may issue a counter-notice where, having considered the new
terms and having had regard to the likely effects of issuing such counter-
notice (including, but not limited to, the likely effect upon the business
of the Licensee), he determines that further consideration is required to
assess whether such terms are in breach of the provisions of this
Condition.
15. Where the Director issues a counter-notice in respect of any new terms the
Licensee shall not supply or offer to supply electricity on such terms
until either:
(a) a period of 3 months from the date of the counter-notice has expired;
or
(b) prior to the expiry of such period, the Director indicates to the
Licensee that he has no present intention of taking enforcement action
under Section 25 of the Act in respect of such terms.
16. Where the Director issues a counter-notice he may:
(a) give or send a copy of that counter-notice to any Interested Person;
(b) invite representations from Interested Persons as to the matters to
which the counter-notice relates; and
79
(c) require the Licensee, within a reasonable period determined by the
Director, to provide him with such further information relating to the
new terms as he may specify (save that he may not by virtue of this
paragraph require the Licensee to furnish him with information for the
purpose of exercising his functions under Section 48 of the Act),
and the Director shall take into account any representations made to him by the
Licensee in respect of such terms.
17. The Director may, at any time after notifying the Licensee of his
determination in accordance with paragraph 9 that it is dominant in a
specified market, determine that the Licensee is no longer dominant in that
market, and where he does make such a determination:
(a) the Director shall immediately notify the Licensee; and
(b) the provisions of paragraphs 11 to 16 shall cease to apply in respect
of the specified market.
18. For the purposes of this Condition, any reference to the Licensee being
dominant in a market for the supply of electricity shall be treated as a
reference to the Licensee, taken together with its affiliates and related
undertakings, being so dominant.
19. In this Condition:
"Interested Persons" means all Electricity Suppliers which supply
electricity within the market or area or to
the class of customers in question, the
Relevant Consumers' Committee and such other
persons or bodies as in the opinion of the
Director have a legitimate interest in the
terms on which the Licensee supplies
electricity.
"terms" means all the terms on which a supply of
electricity is offered or provided which
significantly affect the evaluation of that
supply, and shall include all terms as to
price.
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CONDITION 4B: DURATION OF DISCRIMINATION CONDITIONS
- ----------------------------------------------------
1. Condition 4A shall cease to have effect (in whole or in part, as the case
may be) if the Licensee makes a disapplication request in accordance with
this Condition and:
(a) the Director agrees in writing to that request; or
(b) the application of Condition 4A (in whole or in part) is terminated by
notice given by the Licensee in accordance with paragraph 4 or 5 of
this Condition.
2. A disapplication request pursuant to this Condition may be made by the
Licensee only where the Director has notified it, in accordance with
paragraph 9 of Condition 4A, of his determination that the Licensee is
dominant in a specified market, and any such request shall:
(a) be made in writing to the Director;
(b) specify whether the request relates to the whole of Condition 4A or
any part or parts thereof; and
(c) state the date (the "disapplication date") from which the Licensee
wishes the specified provisions of Condition 4A to cease to have
effect, which date shall be in accordance with paragraph 3 and not
earlier than 12 months after the date on which the request is made.
3. Where the Licensee was notified by the Director prior to this Condition
coming into force of his determination that the Licensee is dominant in a
specified market, no disapplication request made by the Licensee shall be
effective to disapply any of the provisions of Condition 4A prior to 31
March 2000.
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4. If the Director has not by the date which is 6 months prior to the
disapplication date made a reference to the Monopolies Commission (under
Section 12 of the Act) relating to the modification of Condition 4A, the
Licensee may give to the Director a notice in writing terminating the
application of such of the provisions of Condition 4A as are specified in
the disapplication request with effect from the disapplication date or from
any later date specified in the notice.
5. If the Monopolies Commission reports on a reference made by the Director
relating to the modification of Condition 4A and does not conclude that the
disapplication of any of the provisions of that Condition (being provisions
specified in the disapplication request) would or may be expected to
operate against the public interest, the Licensee may within 30 days of the
publication of the report under Section 13 of the Act give to the Director
notice in writing terminating the application of such provisions with
effect from the disapplication date or any later date specified in the
notice.
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CONDITION 5: OBLIGATION ON ECONOMIC PURCHASING
- ------------------------------------------------
1. Subject to paragraph 6, the provisions of paragraph 2 shall apply
separately in relation to purchases of electricity from the following
sources:
(a) qualifying renewable generation;
(b) qualifying non-fossil generation; and
(c) generation from any source other than as referred to in sub-paragraphs
(a) and (b) above.
2. In respect of each category referred to in paragraph 1 above, and subject
to paragraph 4 below, the Licensee shall:
(a) itself purchase;
(b) procure any affiliate of the Licensee to purchase; and
(c) insofar as it is able through the exercise of voting rights or
otherwise to do so, procure any related undertaking of the Licensee or
any defined undertaking to purchase
electricity at the best effective price reasonably obtainable having regard
to the sources available.
3. In determining the effective price at which electricity is purchased by the
Licensee or any affiliate or related undertaking of the Licensee or any
defined undertaking, regard shall be had to any payments made or received
or to be made or received for the grant of or pursuant to any electricity
purchase contract.
4. In the discharge of it obligations under paragraph 2 above, the Licensee
may additionally have regard to any considerations liable to affect its
ability and that of any affiliate of the Licensee to discharge its
obligations under this Condition in the future, including the future
security, reliability and diversity of sources of electricity available for
purchase.
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5. In this Condition (and subject to paragraph 6) references to qualifying
renewable generation and to qualifying non-fossil generation shall refer to
generation from capacity of that description which:
(a) has been contracted by the Licensee or any defined undertaking under
an arrangement certified by the Secretary of State under Section 32
(7) of the Act which was entered into prior to the date this Licence
enters force; or
(b) is available to be contracted under arrangements to be produced to the
Director in satisfaction of an obligation imposed on the Licensee by
Order made under Section 32 of the Act after this Licence enters
force.
6. Notwithstanding that generation may previously have been contracted as
being qualifying renewable generation or qualifying non-fossil generation
(as the case may be), it shall cease to be so treated to the extent that:
(a) the Licensee (or any affiliate or related undertaking of the Licensee
or any defined undertaking) enjoys contractual freedom to vary or
discontinue its obligation to purchase such generation; and
(b) capacity from which qualifying renewable or non-fossil generation (as
the case may be) is otherwise contracted by the Licensee or any
affiliate or related undertaking of the Licensee or any defined
undertaking is equal to or exceeds the aggregate capacity specified in
any Orders previously made under Section 32 of the Act and continuing
in force, as being required to be available to the Licensee at that
time or in respect of any future period covered by such Orders.
7. Paragraphs 2, 3 and 4 of this Condition shall apply mutatis mutandis where
----------------
the Licensee exercises a discretion or (by agreement or otherwise) varies
the terms of an existing contract (whether or not entered into prior to the
date of entry into force of this Licence) in such a manner as to alter the
effective price under such contract.
84
8. In this Condition:
"defined undertaking" means Non-Fossil Purchasing Agency Limited or
other entity through which the Licensee enters
into qualifying arrangements within the meaning of
Section 33 of the Act.
"purchase" includes the acquisition of electricity from
sources falling to be treated as own-generation
for the purpose of Condition 6, and the purchase
of electricity under electricity purchases
contracts.
"qualifying non-fossil shall include generation from renewable sources
generation" which for the time being has not been contracted
as being qualifying renewable generation.
85
CONDITION 6: RESTRICTION ON OWN-GENERATION CAPACITY
- -----------------------------------------------------
1. The Licensee shall procure that, with effect from the transfer date, the
Generation Business of the Licensee is held as a Separate Business by or
through a wholly-owned subsidiary of the Licensee.
2. Save with the prior written consent of the Director or in the circumstances
described in paragraph 3 below, the Licensee shall at all times ensure that
the sum of the amount in megawatts (calculated as provided under paragraphs
4 and 5 below) represented by the declared net capacity of the Licensee's
own-generation sets and the appropriate share of the declared net capacity
of generation sets in which the Licensee has an accountable interest shall
not exceed 800 megawatts.
3. Where the Licensee is in breach of paragraph 2 by reason of the acquisition
of own- generation sets or an accountable interest in other generation sets
in consequence of the occurrence of a specified event affecting the
operator or any third party, the Licensee shall forthwith notify the
Director for the purpose of obtaining such consent as is specified in
paragraph 2.
4. For the purposes of calculating the limit under paragraph 2 and subject to
paragraph 5, there shall be attributed to the Licensee:
(a) the whole of the declared net capacity represented by own-generation
sets; and
(b) the appropriate share (namely the share representing the Licensee's
economic interest therein) of the declared net capacity of generation
sets in which it has an accountable interest, ascertained in such
manner as the Licensee with the approval of the Director may
determine.
5. Where the Director is satisfied that by virtue of the Licensee's economic
interest (ascertained in such manner as the Director may determine)
therein:
(a) generation sets in which the Licensee has only an accountable interest
should more properly be treated as own-generation sets; or
86
(b) own-generation sets should more properly be treated as sets in which
the Licensee only has an accountable interest; or
(c) own-generation sets, or generation sets in which the Licensee has an
accountable interest, should not be treated as falling in either
category; or
(d) generation sets not declared as sets in which the Licensee has an
accountable interest, should be treated as generation sets in which
the Licensee has an accountable interest;
the Director may issue directions to that effect.
6. For the purposes of this Condition and subject to paragraphs 5 and 9, the
Licensee shall have an accountable interest in a generation set in
circumstances where (such generation set not being an own-generation set of
the Licensee):
(a) the operator is a related undertaking of the Licensee or any affiliate
of the Licensee; or
(b) the Licensee or any affiliate of the Licensee is in partnership with
or is party to any arrangement for sharing profits or cost-savings or
any joint venture with the operator or with any third party with
regard to the operator; or
(c) the Licensee or any affiliate of the Licensee has (directly or
indirectly):
(i) any beneficial shareholding interest in the operator; or
(ii) any beneficial underlying interest in the generation set; or
(iii) provided or agreed to provide finance to the operator otherwise
than on arm's length terms; or
(iv) provided or agreed to provide, or has determined or is
responsible for determining the price (or other terms affecting
the financial value) of, the fuel used in the generation sets;
87
and is entitled under a contract of not less than 5 years'
duration:
(aa) to a share of the declared net capacity of the generation
set; or
(bb) to a share of the declared net capacity of a generation
set being the own-generation set of another Authorised
Electricity Operator or in which such Authorised
Electricity Operator has an accountable interest, under
arrangements for the exchange of capacity entitlement or
supplies of electricity representing such entitlement
between the licensee or its affiliate and such Authorised
Electricity Operator.
7. Paragraph 6 shall be applied in relation to the calculation of an
accountable interest in generation sets of any other Authorised Electricity
Operator as if the references therein to the Licensee were replaced by
references to such Authorised Electricity Operator.
8. References in paragraph 6 to contracts giving entitlements to a share of
declared net capacity shall include electricity sale or purchase contracts
where rights under such contract are exercisable by reference to an
identified generation set or to amounts generated at such set.
9. The Licensee shall not be deemed to have an accountable interest in a
generation set where:
(a) such generation set is owned and operated by the National Grid Company
plc or a wholly-owned subsidiary thereof under a Licence granted
pursuant to Section 6 of the Act; or
(b) the Licensee's interest arises wholly under the terms of the Pooling
and Settlement Agreement or (other than as provided in paragraph 8)
under any electricity purchase or sale contract; or
(c) the Licensee's interest arises solely by virtue of arrangements for
the sharing with the operator of any generation set of the risks
associated with changes in the price of fuel used by the generation
set during the term of any such contract as is referred to in
paragraph 6 or 8 above.
88
10. The Licensee shall, on each such occasion as it provides to the Director
separate accounts for the Generation Business pursuant to paragraph 3(b)
(i) of Condition 2 and at any other time upon request of the Director,
provide to the Director a statement:
(a) confirming compliance with paragraphs 1, 2 and 3 above as at the date
of the statement and throughout the period since the last such
statement; and
(b) identifying (in such detail and with such supporting documents or
information as the Director may require) the amount of capacity in
megawatts represented by the declared net capacity of own-generation
sets attributable to the licensee and the appropriate share of the
Licensee in the declared net capacity of generation sets in which the
Licensee has an accountable interest, as at the date of the statement.
11. Where the Director is satisfied that the basis of calculation used by the
Licensee is not in conformity with paragraphs 4 and 5 above, the Director
may issue directions specifying an alternative basis of calculation, and
the basis of calculation by the Licensee shall be adjusted accordingly with
effect from the date of issue of the directions or such other date as may
be specified in the directions.
12. In this Condition:
"operator" means, in relation to any generation set, the
Authorised Electricity Operator or any person
for the time being responsible (under contract
or otherwise) for the generation or sale of
electricity from such plant.
"own-generation set" means any generation set the majority beneficial
ownership of which is vested in the Licensee or
an affiliate of the Licensee or in respect of
which the Licensee or an affiliate of the
Licensee is the operator and references to own-
generation sets of another Authorised
Electricity Operator shall be construed as if
the reference herein to the Licensee were
replaced by reference to that Authorised
Electricity Operator.
89
"specified event" means any such event as is described in
paragraph (1) (f) of Schedule 2 to this Licence
but for this purpose as if references to the
Licensee were replaced by references to the
operator or third party in question.
"underlying interest" in relation to any generation set means any
interest arising by reason of the Licensee or
affiliate or any related undertaking of the
Licensee or affiliate (whether alone or with
others):
(a) holding or being entitled to acquire an
interest in the land on which the
generation set, or any part thereof, is
built;
(b) being in partnership with or party to any
arrangement for sharing of profits or
cost-savings or any joint venture with any
person holding or entitled to acquire an
interest in the land on which the
generation set, or any part thereof, is
built;
(c) owning any electrical plant situated on or
operated as a unit with the generation set
(and for such purpose, any electrical
plant or equipment to the possession of
which the Licensee, affiliate or related
undertaking is entitled under any
agreement for hire, hire purchase,
conditional sale or loan shall be deemed
to be owned by such person) provided
always that such electrical plant shall
not be deemed to be operated as a unit
with any generation set by reason only of
connections with any other system for the
transmission or distribution of
electricity; or
(d) having obtained any consent under Section
36 of the Act required for the
construction or extension of the
generation set or any part thereof.
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CONDITION 7: TARIFFS
- ----------------------
1. The Licensee shall ensure that any tariffs fixed under Section 18 of the
Act shall be so framed as separately to identify:
(a) the use of system element in the Licensee's charges; and
(b) the charges in respect of the supply of electricity to tariff
customers.
2. Where the Director considers that by reason of the complexity of any such
tariffs fixed by the Licensee, simplified explanatory statements are
required or expedient for the understanding of tariff customers, the
Director may direct the Licensee to draw up such explanatory statements and
thereafter to publish them with the tariffs to which they relate.
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CONDITION 7A: ARRANGEMENTS FOR INFORMING CUSTOMERS ON REVOCATION OF LICENCE
- ----------------------------------------------------------------------------
1. The Licensee shall comply with a direction from the Director in the
following terms where the Director:
(a) is, or is aware that the Secretary of State is, about to revoke a
Licence granted to another Electricity Supplier to supply electricity
(in this Condition known as the "First Supplier"); and
(b) considers that the Licensee is able to supply electricity to the
customers of the First Supplier without significantly prejudicing the
supplies of electricity which the Licensee makes or is contracted to
make.
2. The Director shall only issue a direction in accordance with paragraph 1
when the Secretary of State or, as the case may be, the Director has served
the First Supplier with a notice that he is revoking the First Supplier's
Licence to supply electricity in accordance with the terms of the First
Supplier's Licence, or such earlier date as the Director may agree with the
First Supplier.
3. A direction issued in accordance with paragraph 1 shall require that the
Licensee shall, within the period specified by the Director, send a written
notice in a form approved by the Director to each of the persons or
premises specified or described in the direction:
(a) informing the customer in question that, notwithstanding any contract
he may have with the First Supplier, the First Supplier is no longer
supplying him with electricity and has not done so since the
revocation took effect or, where the notice has been sent before the
revocation has taken effect, will be no longer supplying him with
electricity when it takes effect;
(b) informing the customer that the customer must from the moment the
revocation takes effect enter into a new contract for supply with
another Electricity Supplier of the customer's choice, and that he is
free to request a supply from the Licensee; and
(c) setting out the terms upon which the Licensee is prepared to supply
electricity if requested.
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CONDITION 7B: THE PROGRAMME IMPLEMENTATION AGREEMENT
- -----------------------------------------------------
1. The Licensee shall, where the Director has given it a written direction to
do so, enter into and comply with the Programme Implementation Agreement
established in accordance with paragraph 4.
2. The Programme Implementation Agreement shall be concerned with matters
relating to the effective implementation of trading and other arrangements
between the Licensee and other Relevant Parties which, in the reasonable
opinion of the Director following consultation with all Relevant Parties,
are or are likely to be necessary and appropriate to provide for the
effective and timely facilitation of competition in the supply of
electricity.
3. The Programme Implementation Agreement may include provisions relating to:
(a) the operation and management of procedures for the testing, trialing
and integration of those systems, processes and procedures required to
facilitate competition in the supply of electricity;
(b) the obligations of each of the Relevant Parties in respect of the
procedures defined under sub-paragraph (a);
(c) limitations of the liability of the Licensee and of such other persons
as are specified in the Agreement in respect of actions taken in
connection with the Agreement;
(d) the provision of information as between Relevant Parties and to other
persons specified in the Agreement;
(e) the determination of the specification of systems, processes and
procedures to be tested, trialed and integrated in accordance with the
Agreement, except in those circumstances where the Director considers
that any of the Relevant Parties has entered into another agreement
which adequately provides for such specification to be otherwise
determined;
93
(f) the settling by the Director of disputes between Relevant Parties in
relation to matters covered by the Agreement; and
(g) the establishment of a board (the "Implementation Board"), comprising
appropriate persons appointed by the Director following consultation
with the Relevant Parties, which shall:
i) oversee the conduct of the Agreement;
ii) advise the Director and the Relevant Parties of any matters upon
which they may reasonably seek advice in relation to matters
covered by the Agreement, including the operation and management
of procedures established under the Agreement; and
iii) undertake such other functions as in the reasonable opinion of
the Director are necessary to provide for the effective and
timely facilitation of competition in electricity supply.
4. The Programme Implementation Agreement shall be that established by
agreement between the Relevant Parties with the approval of the Director
or, where the Relevant Parties cannot agree (or where in the opinion of the
Director such agreement is unlikely to be reached within a reasonable
period) and where:
(a) the Director has sent to each of the Relevant Parties a notice (the
"proposals notice") setting out his own proposals in relation to the
content of the Programme Implementation Agreement; and
(b) following consideration of any comments received from any of the
Relevant Parties within 21 days of the issue of the proposals notice,
and having made such changes to his proposals as the Director
considers appropriate, the Director has given to each of the Relevant
Parties a notice setting out his final proposals (the "confirmation
notice"),
96
the Programme Implementation Agreement shall, unless within 7 days of the
issue of the confirmation notice the parties have reached agreement with
the approval of the Director as to an alternative, be established in
accordance with the terms of the Director's confirmation notice.
5. With regard to the provisions of paragraphs 1 to 4, and following
consultation with the Relevant Parties and with such other persons or
bodies as appear to the Director to represent the interests of those likely
to be affected, the Director may issue a direction that specified parts of
the Relevant Conditions shall take effect at such time and in such cases or
circumstances as he shall direct.
6. In issuing a direction in accordance with paragraph 5 the Director shall
have regard to the need to provide for effective arrangements to facilitate
competition in the supply of electricity to customers and for the effective
maintenance of existing trading arrangements in respect of the supply of
electricity.
7. This Condition shall cease to be in force on whichever is the latest of the
following dates:
(a) 30 September 1998;
(b) the date which is 6 months after the latest date upon which any
provision in accordance with paragraph 3 (but excluding sub-paragraph
3(c)) ceases to have effect; or
(c) such other date as may be agreed between the Director and the
Licensee.
8. In this Condition:
"Relevant Conditions" means Conditions 7A, 7B, 8B, 11A to 11F,
18 to 23C, 30 to 33 and the Contract Terms
Conditions of this Licence.
97
"Relevant Parties" means the Licensee, other Authorised
Electricity Operators, the Electricity Pool of
England and Wales and Scottish Electricity
Settlements Ltd.
98
CONDITION 8: BASIS OF CHARGES FOR TOP-UP AND STANDBY SUPPLIES OR SALES OF
- -------------------------------------------------------------------------
ELECTRICITY, EXEMPT SUPPLY SERVICES, USE OF SYSTEM AND CONNECTION TO THE SYSTEM:
- -------------------------------------------------------------------------------
REQUIREMENTS FOR TRANSPARENCY
- -----------------------------
1. The Licensee shall as soon as practicable and in any event within 28 days
after this Licence has come into force prepare statements in a form
approved by the Director setting out the basis upon which the charges for
the provision of top-up and standby supplies or sales of electricity and
for exempt supply services (in each case, as part of the Supply or Second
Tier Supply Business), for use of system and for connection to the
Licensee's Distribution System (in each case, as part of the Distribution
Business) will be made, in all cases in such form and with such detail as
shall be necessary to enable any person to make a reasonable estimate of
the charges to which he would become liable for the provision of such
services, and (without prejudice to the foregoing) including the
information set out in paragraphs 2 to 5.
2. The statement referred to in paragraph 1 shall, in respect of the provision
of top-up and standby supplies or sales of electricity, set out the methods
by which and the principles on which the charges for the provision of each
of top-up supplies or sales and standby supplies or sales will be made.
3. The statement referred to in paragraph 1 shall, in respect of the provision
of exempt supply services, set out the methods by which and the principles
on which charges for the provision of such services will be made.
4. The statement referred to in paragraph 1 shall in respect of use of system
include:
(a) a schedule of charges for the distribution of electricity under use of
system;
(b) a schedule of adjustment factors to be made in respect of distribution
losses, in the form of additional supplies required to cover those
distribution losses;
(c) the methods by which and the principles on which the charges (if any)
for availability of distribution capacity on the Licensee's
Distribution System will be made; and
99
(d) save to the extent that such matters are included in any statement
prepared in accordance with Condition 11E:
i) a schedule of charges in respect of meter reading, accounting and
administrative services; and
ii) a schedule of the charges (if any) which may be made for the
provision and installation of any meters or electrical plant at
entry or exit points, the provision and installation of which is
ancillary to the grant of use of system, and for the maintenance
of such meters or electrical plant.
5. The statement referred to in paragraph 1 shall in respect of connections to
the Licensee's Distribution System include (save to the extent that such
matters are included in any statement prepared in accordance with Condition
11E):
(a) a schedule listing those items (including the carrying out of works
and the provision and installation of electric lines or electrical
plant or meters) of significant cost liable to be required for the
purpose of connection (at entry or exit points) to the Licensee's
Distribution System for which connection charges may be made or levied
and including (where practicable) indicative charges for each such
item and (in other cases) an explanation of the methods by which and
the principles on which such charges will be calculated;
(b) the methods by which and the principles on which any charges will be
made in respect of extension or reinforcement of the Licensee's
Distribution System rendered (in the Licensee's discretion) necessary
or appropriate by virtue of providing connection to or use of system
to any person seeking connection;
(c) the methods by which and the principles on which connection charges
will be made in circumstances where the electric lines or electrical
plant to be installed are (at the Licensee's discretion) of greater
size or capacity than that required for use of system by the person
seeking connection;
100
(d) the methods by which ad the principles on which any charges (including
any capitalised charge) will be made for maintenance, repair, and
replacement required o electric lines, electrical plant or meters
provided and installed for making a connection to the Licensee's
Distribution System;
(e) the methods by which and principles on which any charges will be made
for the provision of special metering or telemetry or data processing
equipment by the Licensee for the purposes of enabling any person
which is party to the Pooling and Settlement Agreement to comply with
its obligations in respect of metering thereunder, or for the
performance by the Licensee of any service in relation thereto; and
(f) the methods by which and principles on which any charges will be made
for disconnection from the Licensee's Distribution System and the
removal of electrical plant, electric lines and ancillary meters
following disconnection.
6. The basis on which charges for the provision of top-up and standby supplies
or sales of electricity shall be set shall reflect the costs directly
incurred in the provision thereof, together with a reasonable rate of
return on the capital represented by such costs.
7. The basis on which charges for the provision of exempt supply services
shall be set shall reflect the costs directly incurred in the provision
thereof, together with a reasonable rate of return on the capital
represented by such costs.
8. Use of system charges for those items referred to in paragraph 4 shall be
determined on the same basis as is applied by the Licensee when determining
the use of system element of tariffs fixed pursuant to Section 18 of the
Act and Condition 7.
9. Connection charges for those items referred to in paragraph 5 shall be set
at a level which will enable the Licensee to recover:
(a) the appropriate proportion of the costs directly or indirectly
incurred in carrying out any works, the extension or reinforcement of
the Licensee's Distribution System or the provision and installation,
maintenance, repair, and replacement or (as the case may be) removal
following disconnection of any electric lines, electrical plant or
meters; and
101
(b) a reasonable rate of return on the capital represented by such costs.
10. If so requested and subject to paragraphs 11 and 16, the Licensee shall, as
soon as practicable and in any event within 28 days (or where the Director
so approves such longer period as the Licensee may reasonably require
having regard to the nature and complexity of the request) after the date
referred to in paragraph 17 give or send to any person making such request
a statement showing present and future circuit capacity, forecast power
flows and loading on the part or parts of the Licensee's Distribution
System specified in the request and fault levels for each distribution node
covered by the request and containing:
(a) such further information as shall be reasonably necessary to enable
such person to identify and evaluate the opportunities available when
connecting to and making use of the part or parts of the Licensee's
Distribution System specified in the request; and
(b) if so requested, a commentary prepared by the Licensee indicating the
Licensee's views as to the suitability of the part or parts of the
Licensee's Distribution System specified in the request for new
connections and the distribution of further quantities of electricity.
11. The Licensee shall include in every statement given or sent under paragraph
10 the information required by that paragraph except that the Licensee may:
(a) with the prior consent of the Director omit from any such statement
any details as to circuit capacity, power flows, loading or other
information, disclosure of which would, in the view of the Director,
seriously and prejudicially affect the commercial interests of the
Licensee or any third party; and
(b) omit information the disclosure of which would place the Licensee in
breach of Condition 12.
12. The Licensee may periodically revise the information set out in and, with
the approval of the Director, alter the form of the statements prepared in
accordance with paragraph 1 and shall, at least once in every year this
Licence is in force, make any necessary revisions to such statements in
order that the information set out in the statements shall continue to be
accurate in all material respects.
102
13. The Licensee shall send a copy of the statements prepared in accordance
with paragraph 1, and of each revision of such statements in accordance
with paragraph 12, to the Director.
14. The Licensee shall give or send a copy of the statements prepared in
accordance with paragraph 1, or (as the case may be) of the latest revision
of such statements in accordance with paragraph 12, to any person who
requests a copy of such statement or statements.
15. The Licensee may make a charge for any statement given or sent pursuant to
paragraph 14 of an amount which shall not exceed the amount specified in
directions issued by the Director for the purposes of this Condition based
on the Director's estimate of the Licensee's reasonable costs of providing
such a statement.
16. The Licensee may within 10 days after receipt of the request provide an
estimate of its reasonable costs in the preparation of any statement
referred to in paragraph 10, and its obligation to provide such statement
shall be conditional on the person requesting such statement agreeing to
pay the amount estimated or such other amount as the Director may, upon
application of the Licensee or the person requesting such statement,
direct.
17. For the purposes of paragraph 10, the date referred to shall be the latest
of:
(a) the date of receipt of the request referred to in paragraph 10; or
(b) the date on which the Licensee receives agreement from the person
making the request to pay the amount estimated or such other amount as
is determined by the Director (as the case may be) under paragraph 16.
18. The Licensee shall, not less than 5 months prior to the date on which it
proposes to amend its use of system charges in respect of any agreement for
use of system, send to the Director a notice setting out the Licensee's
proposals in relation to such amendment together with an explanation of the
proposed amendment (including a statement of any assumptions on which such
proposals are based), and the Licensee shall send a copy of such notice to
any person who has entered into an agreement for use of system under
Condition 8B.
103
19. Except with the prior consent of the Director, the Licensee shall not amend
its use of system charges in respect of any agreement for use of system
save to the extent that it has given prior notice of the amendment in
accordance with paragraph 18 and such amendment reflects the proposals made
in the notice (subject only to revisions consequent upon material changes
in the matters which were expressed, in the statement which accompanied the
notice, to be assumptions on which the proposals were based).
104
CONDITION 8A: NON-DISCRIMINATION IN THE PROVISION OF TOP-UP OR STANDBY SUPPLIES
- -------------------------------------------------------------------------------
OR SALES OF ELECTRICITY, EXEMPT SUPPLY SERVICES, USE OF SYSTEM AND CONNECTION TO
- -------------------------------------------------------------------------------
THE SYSTEM
- ----------
1. It the provision of top-up or standby supplies or sales of electricity, in
the carrying out of works for the purpose of connection to the Licensee's
Distribution System or in providing for the retention of a connection to
its Distribution System, the Licensee shall not discriminate:
(a) between any persons or class or classes of persons; or
(b) as between the Licensee (in the provision of connections by the
Licensee as part of its Distribution Business to itself for the
purpose of its Supply or Second Tier Supply Business) and any person
or class or classes of persons.
2. In the provision of use of system the Licensee shall not discriminate:
(a) between any Authorised Electricity Operators or class or classes
thereof; or
(b) as between the Licensee (in the provision of use of system by the
Licensee as part of its Distribution Business to itself for the
purpose of its Supply or Second Tier Supply Business) and any
Authorised Electricity Operator or class or classes thereof.
3. In the provision of exempt supply services the Licensee shall not
discriminate between any Exempt Suppliers or class or classes thereof.
4. Without prejudice to paragraphs 1 to 3, the Licensee shall not:
(a) make charges for the provision of top-up or standby supplies or sales
of electricity to any person or class or classes of persons;
(b) make charges for use of system to any Authorised Electricity Operator
or class or classes thereof, or
(c) make charges for exempt supply services to any Exempt Supplier or
class or classes thereof which differ from the charges for such
provision:
105
i) (in the case of top-up or standby supplies or sales of
electricity) to any other person or class or classes of person;
ii) (in the case of use of system):
(aa) to any other Authorised Electricity Operator or to any class
or classes thereof; or
(bb) to the Licensee (in the provision of use of system by the
Licensee as part of its Distribution Business to itself for
the purposes of the Supply Business or the Second Tier
Supply Business); or
iii) (in the case of exempt supply services) to any other Exempt
Supplier or class or classes thereof
except in so far as such differences reasonably reflect differences in the
costs associated with such provision.
5. The Licensee shall not in setting its charges for provision of top-up or
standby supplies or sales of electricity, for exempt supply services or for
use of system restrict, distort or prevent competition in the generation,
distribution or supply of electricity.
106
CONDITION 8B: REQUIREMENT TO OFFER TERMS
- -------------------------------------------
1. On application made by any Authorised Electricity Operator the Licensee
shall (subject to paragraph 7) offer to enter into an agreement for use of
system:
(a) to accept into the Licensee's Distribution System at such entry point
or points and in such quantities as may be specified in the
application, electricity to be provided by or on behalf of such
Authorised Electricity Operator; and/or
(b) to distribute such quantities of electricity as are referred to in
sub-paragraph (a) (less any distribution losses) at such exit point or
points on the Licensee's Distribution System and to such person or
persons as the Authorised Electricity Operator may specify; and
(c) specifying the use of system charges to be paid by the Authorised
Electricity Operator, such charges (unless manifestly inappropriate)
to be referable to the statement referred to at paragraphs 1 and 4 of
Condition 8 or any revision thereof, and to be in conformity with the
requirements of paragraph 8 of Condition 8;
(d) containing (where appropriate) the provisions referred to in paragraph
2 of Condition 21;
(e) including terms requiring and entitling the Authorised Electricity
Operator to act (where appropriate) as agent of the Licensee in order
to procure an agreement on the Standard Terms of Connection between
the Licensee and each customer of the Authorised Electricity Operator
at premises which are to be supplied with electricity through an
established connection;
(f) where the applicant is an Exempt Supplier, requiring such Exempt
Supplier either to enter into an agreement with the Licensee for
exempt supply services or to enter into an equivalent agreement with
another Electricity Supplier; and
(g) containing such further terms as are or may be appropriate for the
purposes of the agreement.
107
2. On application made by any person, the Licensee shall (subject to paragraph
7) offer to enter into an agreement for the provision of a connection or
for the modification of an existing connection to the Licensee's
Distribution System and such offer shall make detailed provision regarding:
(a) the carrying out of works (if any) required to connect the Licensee's
Distribution System to any other system for the transmission or
distribution of electricity, and for the obtaining of any consents
necessary for such purpose;
(b) the carrying out of works (if any) in connection with the extension or
reinforcement of the Licensee's Distribution System rendered (in the
Licensee's discretion) appropriate or necessary by reason of making
the connection or modification to an existing connection and for the
obtaining of any consents necessary for such purpose;
(c) (save to the extent that such matters are included in any agreement
offered in accordance with Condition 11C) the installation of
appropriate meters (if any) required to enable the Licensee to measure
electricity being accepted into the Licensee's Distribution System at
the specified entry point or points or leaving such system at the
specified exit point or points;
(d) the installation of such switchgear or other apparatus (if any) as may
be required for the interruption of supply where the person seeking
connection or modification of an existing connection does not require
the provision by the Licensee of top-up or standby supplies or sales
of electricity;
(e) (save to the extent that such matters are included in any agreement
offered in accordance with Condition 11C) the installation of special
metering, telemetry or data processing (if any) for the purpose of
enabling any person which is party to the Pooling and Settlement
Agreement to comply with its obligations in respect to metering or the
performance by the Licensee of any service in relation to such
metering thereunder;
(f) the date by which any works required to permit access to the
Licensee's
108
Distribution System (including for this purpose any works to reinforce
or extend the Licensee's Distribution System) shall be completed (time
being of the essence unless otherwise agreed by the person seeking
connection);
(g) the connection charges to be paid to the Licensee, such charges
(unless manifestly inappropriate):
i) to be presented in such a way as to be referable to the statement
referred to in paragraphs 1 and 5 of Condition 8 or any revision
thereof; and
ii) to be set in conformity with the requirements of paragraph 9 of
Condition 8 and (where relevant) of paragraph 5 of this
Condition; and
(h) containing such further terms as are or may be appropriate for the
purpose of the agreement.
3. On application made by any person the Licensee shall (subject to paragraph
7) offer to enter into an agreement to provide top-up or standby supplies
or sales of electricity, such offer to make provision for the charges to be
made in respect of top-up or standby supplies or sales of electricity,
which shall:
(a) be presented in such a way as to be referable to the statement
referred to at paragraphs 1 and 2 of Condition 8 or any revision
thereof; and
(b) be set in conformity with the requirements of paragraph 6 of Condition
8.
4. On application made by any Exempt Supplier the Licensee shall (subject to
paragraph 7) offer to enter into an agreement for exempt supply services
within its authorised area and such offer shall make detailed provision
regarding:
(a) the making, maintenance and termination by the Licensee of
registrations under and in accordance with the Master Registration
Agreement in relation to premises to which the Exempt Supplier
supplies or is required to supply electricity;
109
(b) the exchange between the Licensee and Exempt Supplier of such
information as is required for the performance of the Licensee's
obligations in accordance with sub-paragraph (a);
(c) the appointment by the Exempt Supplier of an appropriate provider of
meter operation, data retrieval, data processing and data aggregation
services in relation to premises to which it supplies electricity;
(d) the apportionment and settlement by the Licensee of charges incurred
by it by virtue of registrations under the Master Registration
Agreement which are made, maintained and terminated in accordance with
sub-paragraph (a);
(e) the payment by the Exempt Supplier of charges for exempt supply
services, such charges (unless manifestly inappropriate) to be
referable to the statement referred to at paragraphs 1 and 3 of
Condition 8 or any revision thereof and to be in conformity with the
requirements of paragraph 7 of Condition 8;
(f) the reimbursement by the Exempt Supplier (by way of indemnity) of all
charges incurred by the Licensee by virtue of registrations made and
maintained in accordance with sub-paragraph (a);
(g) the provision by the Exempt Supplier to the Licensee of reasonable
security or collateral for the performance of its obligations under
the agreement;
(h) the varying of the agreement, including the making of amendments
necessary to give effect to any determination made by the Director in
respect of the agreement; and
(i) such further matters as are or may be appropriate for the purposes of
the agreement.
110
5. For the purpose of determining an appropriate proportion of the costs
directly or indirectly incurred in carrying out works under an agreement
for making a connection or modification to an existing connection, the
Licensee shall have regard to:
(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 reason of the reinforcement or
extension of the Licensee's Distribution System or the provision of
additional entry or exit points on such system or otherwise;
(b) the ability or likely future ability of the Licensee to recoup a
proportion of such costs from third parties; and
(c) the principles that:
(i) no charge will normally be made for reinforcement of the existing
Distribution System if the new or increased load requirement does
not exceed 25 per cent of the existing effective capacity at the
relevant points on the system; and
(ii) charges will not generally take into account system reinforcement
carried out at more than one voltage level above the voltage of
connection.
6. The Licensee shall offer terms for agreements in accordance with paragraphs
1 to 4 as soon as practicable and (save where the Director consents to a
longer period) in any event not more than the period specified in paragraph
8 after receipt by the Licensee (or its agent) from:
(a) in the case of paragraph 1, an Authorised Electricity Operator;
(b) in the case of paragraphs 2 and 3, any person; and
(c) in the case of paragraph 4, an Exempt Supplier
111
of all such information as the Licensee may reasonably require for the
purpose of formulating the terms of the offer.
7. The Licensee shall not be obliged pursuant to this Condition to offer to
enter or to enter into any agreement if:
(a) to do so would be likely to involve the Licensee being:
i) in breach of its duties under section 9 of the Act;
ii) in breach of the Electricity Supply Regulations 1988 or of any
regulations made under section 29 of the Act or of any other
enactment relating to safety or standards applicable in respect
to the Distribution Business;
iii) in breach of the Grid Code or the Distribution Code; or
iv) in breach of the Conditions;
(b) the person making the application does not undertake to be bound,
in so far as applicable, by the terms of the Distribution Code or
the Grid Code from time to time in force;
(c) in the case of a person making application for use of system
under paragraph 1, such person ceases to be an Authorised
Electricity Operator; or
(d) in the case of a person making application for exempt supply
services under paragraph 4, such person ceases to be an Exempt
Supplier.
8. For the purpose of paragraph 6, the period specified shall be:
(a) in the case of persons seeking use of system, exempt supply services
or top-up or standby supplies or sales of electricity only, 28 days;
(b) in the case of persons seeking connection or a modification to an
existing connection, 3 months; and
112
(c) in the case of persons seeking use of system or top-up or standby
supplies or sales of electricity 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), 60
and 64(1) of the Act.
113
CONDITION 8C: REQUIREMENT TO OFFER STANDARD TERMS OF CONNECTION
- -----------------------------------------------------------------
1. The Licensee shall, within 28 days after this Condition has come into
force, prepare and submit to the Director for his approval the standard
terms of an agreement (the "Standard Terms of Connection") to provide, as
between the Licensee and any customer, for the retention of an established
connection at premises which are to be supplied with electricity through
such a connection.
2. The Licensee may, subject to the approval of the Director, prepare
different Standard Terms of Connection for different cases or classes of
customer or premises, clearly identifying the criteria used to distinguish
between such cases or classes.
3. The Licensee shall from time or time, and whenever requested to do so by
the Director, review the Standard Terms of Connection with a view to
determining whether any revision should be made to such terms, and in the
course of the review the Licensee shall consult with the Relevant
Consumers' Committee, all other public electricity suppliers and all Second
Tier Suppliers which supply electricity within the authorised area.
4. At the conclusion of any review in accordance with paragraph 3 the Licensee
shall submit to the Director:
(a) a proposal for the revision of the Standard Terms of Connection (or,
where the Licensee considers it appropriate in all the circumstances,
a proposal that no revision should be made to the Standard Terms of
Connection); and
(b) the reasons for its proposal, together with a summary of responses
received from such parties as were consulted by the Licensee.
5. A proposal made by the Licensee in accordance with paragraph 4 shall
require to be approved by the Director and, following such approval in
writing, the Licensee shall accordingly revise (or, as the case may be,
shall make no revision to) the Standard Terms of Connection.
114
6. The Licensee shall, in such manner as will in the opinion of the Licensee
secure adequate publicity therefor:
(a) publish, no later than 31 December 1997, the Standard Terms of
Connection approved by the Director in accordance with paragraph 1;
and
(b) publish, within 21 days after receiving the approval of the Director,
any revision to the Standard Terms of Connection in accordance with
paragraph 5.
7. The Licensee shall not:
(a) subject to paragraph 8, enter into a contract with a customer for the
supply of electricity to premises which are to be supplied through an
established connection without at the same time (in respect of such
premises) entering into an agreement with the customer on the Standard
Terms of Connection; or
(b) do anything to prevent the conclusion of an agreement on the Standard
Terms of Connection between itself and a customer of any Authorised
Electricity Operator which is acting as agent for the Licensee in
accordance with an agreement for use of system.
8. The Licensee may at any time agree with any person (by way of variation to
the Standard Terms of Connection) terms for the retention of a particular
established connection which differ from the Standard Terms of Connection
where such different terms are appropriate in all the circumstances.
115
CONDITION 8D: 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 a request under
Condition 8B or 8C, the Director may, on the application of such person or
the Licensee, settle any terms of the agreement in dispute between the
Licensee and that person in such manner as appears to the Director to be
reasonable having (in so far as relevant) regard in particular to the
following considerations:
(a) that such person should pay to the Licensee:
i) in the case of the provision of top-up or standby supplies or
sales of electricity, such sum as is determined in accordance
with paragraph 6 of Condition 8;
ii) in the case of exempt supply services, such sum as is determined
in accordance with paragraph 7 of Condition 8;
iii) in the case of provision of use of system, the use of system
charges determined in accordance with paragraph 8 of Condition 8;
and
iv) in the case of provision of a connection or a modification to an
existing connection to the system, the whole or an appropriate
proportion (as determined in accordance with paragraph 5 of
Condition 8B) of the costs referred to in sub-paragraph 9(a) of
Condition 8, 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 those provisions
referred to at sub-paragraph 7(a) of Condition 8B;
(c) that any methods by which the Licensee's Distribution System is
connected to any other system for the transmission or distribution of
electricity accord (in so far as applicable to the Licensee) with the
Distribution Code and with the Grid Code;
116
(d) that the terms and conditions of the agreement so settled by
the Director and of any other agreements entered into by the
Licensee pursuant to an application under Condition 8B or 8C
should be, so far as circumstances allow, in as similar a form
as is practicable; and
(e) in the case of exempt supply services, that the agreement for
the provision of exempt supply services should make provision
for all the matters set out at paragraph 5 of Condition 8B.
2. In so far as any person entitled or claiming to be entitled to an offer
under Condition 8B or 8C 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 either party to such agreement proposes to vary the contractual
terms of any agreement for exempt supply services, for the provision of
a connection or for the modification of an existing connection to the
Licensee's Distribution System, for the retention of an established
connection to such Distribution System or for use of system entered
into pursuant to Condition 8B or 8C or under this Condition in any
manner provided for under such agreement, the Director may, at the
request of that party, settle any dispute relating to such variation in
such manner as appears to the Director to be reasonable.
117
CONDITION 9: DISTRIBUTION SYSTEM PLANNING STANDARD AND QUALITY OF SERVICE
- -----------------------------------------------------------------------------
1. The Licensee shall plan and develop the Licensee's Distribution System
in accordance with a standard not less than that set out in Engineering
Recommendation P.2/5 (October 1978 revision) of the Electricity Council
Chief Engineers' Conference in so far as applicable to it or such other
standard of planning as the Licensee may, following consultation (where
appropriate) with the Transmission Company and any other Authorised
Electricity Operator liable to be materially affected thereby and with
the approval of the Director, adopt from time to time.
2. The Licensee shall within 3 months after this Licence enters into force
draw up and submit to the Director for his approval a statement setting
out criteria by which the quality of performance of the Licensee in
maintaining distribution system security and availability and quality
of service may be measured.
3. The Licensee shall within 2 months after the end of each financial year
submit to the Director a report providing details of the performance of
the Licensee during the previous financial year against the criteria
referred to in paragraph 2.
4. The Director may (following consultation with the Licensee and, where
appropriate, with the Transmission Company and any other Authorised
Electricity Operator liable to be materially affected thereby) issue
directions relieving the Licensee of its obligation under paragraph 1
in respect of such parts of the Licensee's Distribution System and to
such extent as may be specified in the directions.
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CONDITION 9A: SECURITY AND SAFETY OF SUPPLIES
- -------------------------------------------------
1. The Licensee shall establish and operate an enquiry service for use by
any person for the purposes of receiving reports and offering
information, guidance or advice about any matter or incident that:
(a) causes danger or requires urgent attention, or is likely to
cause danger or require urgent attention, in relation to the
supply or distribution of electricity in the Licensee's
authorised area; or
(b) affects or is likely to affect the maintenance of the
security, availability and quality of service of the
Licensee's Distribution System.
2. The service established by the Licensee in accordance with paragraph 1
shall:
(a) be provided without charge by the Licensee to the user at the
point of use;
(b) ensure that all reports and enquiries are processed in a
prompt and efficient manner whether made by telephone, in
writing or in person;
(c) be available to receive and process telephone reports and
enquiries at all times on every day of each year; and
(d) be operational no later than 31 March 1998.
3. In the establishment and operation of the enquiry service in accordance
with paragraph 1 the Licensee shall not discriminate:
(a) between any persons or class or classes thereof; or
(b) between the Licensee (in the provision of such services by the
Licensee as part of its Distribution Business to itself for
the purpose of its Supply Business) and any private
electricity supplier or any customer thereof.
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4. In the establishment and operation of the enquiry service in accordance
with paragraph 1 the Licensee shall not restrict, distort or prevent
competition in the supply of electricity.
5. The Licensee shall by 1 January 1998 prepare and submit to the Director
for his approval a statement setting out details of the service to be
provided in accordance with paragraph 1, and the Licensee shall,
following the Director's approval, give or send a copy of such
statement to any person requesting it.
6. The Licensee shall give to the Director notice of any amendments it
proposes to make to the statement prepared under paragraph 5, and shall
not make such amendments until either:
(a) a period of one month from the date of the notice has expired;
or
(b) prior to the expiry of such period, the Licensee has obtained
the written approval of the Director to the amendments.
7. The Licensee shall make arrangements to keep each of its customers
informed of a postal address and telephone number at which the service
established in accordance with paragraph 1 may be contacted.
8. The Licensee may discharge the duty imposed by paragraph 7 by providing
the requisite information to each of its customers:
(a) on the occasion of the customer first commencing to take a
supply from the Licensee; and
(b) either:
(i) where bills or statements in respect of charges for the
supply of electricity are rendered to the customer, on
a quarterly basis (it being sufficient that the
information is included on or with any bill or
statement); or
(ii) where no bills or statements in respect of charges for
the supply of electricity are rendered to the customer,
on an annual basis
and by publishing such information in such manner as will in the
opinion of the Licensee secure adequate publicity for it.
120
9. The Licensee shall take steps to inform each of its customers, and each
Authorised Electricity Operator which uses the service, of any change
to the address or telephone number of the service established in
accordance with paragraph 1 as soon as is practicable prior to such
change becoming effective.
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CONDITION 9B: PROCEDURES FOR THE DETECTION AND PREVENTION OF THEFT, DAMAGE
- ------------------------------------------------------------------------------
AND METER INTERFERENCE
- ----------------------
1. The Licensee shall (and shall ensure that its agents) take all
reasonable steps to detect and prevent:
(a) the theft of electricity at premises which are supplied by it;
(b) damage to any electrical plant, electric line or electricity
meter through which such premises are supplied; and
(c) interference with any electricity meter through which such
premises are supplied.
2. Where a person other than the Licensee is the owner of any electrical
plant, electric lines or meter the Licensee shall, as soon as is
reasonably practicable, inform that person of any incident where it has
reason to believe:
(a) there has been damage to such electrical plant, electric line
or meter; or
(b) there has been interference with the meter to alter its
register or prevent it from duly registering the quantity of
electricity supplied.
3. Where a person other than the Licensee is the supplier of electricity
to premises within the authorised area the Licensee shall, as soon as
is reasonably practicable, inform that person of any incident where it
has reason to believe:
(a) there has been damage to any electrical plant, electric line
or meter through which such premises are supplied with
electricity; or
(b) there has been interference with the meter through which such
premises are supplied to alter its register or prevent it from
duly registering the quantity of electricity supplied.
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CONDITION 9C: PROVISIONS RELATING TO THE CONNECTION OF METERING EQUIPMENT
- -----------------------------------------------------------------------------
1. On application made by any person the Licensee shall, subject to
paragraph 5, offer to enter into an agreement authorising that person
to connect metering equipment to the Licensee's Distribution System.
2. In making an offer to enter into an agreement specified in paragraph 1,
the Licensee shall set out:
(a) the date from which the applicant is authorised to undertake
connections;
(b) the procedures to be adopted by the applicant when making
connections, with particular regard to those relating to
safety; and
(c) such other detailed terms as are or may be appropriate for the
purposes of the agreement.
3. The Licensee shall offer terms for agreements in accordance with
paragraph 1 as soon as practicable and (save where the Director
consents to a longer period) in any event not more than 28 days after
receipt by the Licensee from any person of an application containing
all such information as the Licensee may reasonably require for the
purpose of formulating the terms of the offer
4. In the offering of the terms in accordance with paragraph 1, the
Licensee shall not show undue preference to or exercise undue
discrimination against any person or class of persons.
5. The Licensee shall not be obliged pursuant to this Condition to offer
to enter or to enter into any agreement:
(a) (in respect of non-half hourly metering equipment) which comes
into effect prior to 1 April 2000; or
(b) where to do so would be likely to cause the Licensee to be in
breach of those provisions referred to at sub-paragraph 7(a)
of Condition 8B.
123
6. 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 a
request under this Condition, the Director may, on the application of
such person or the Licensee, settle any terms of the agreement in
dispute between the Licensee and that person in such manner as appears
to the Director to be reasonable.
7. In so far as any person entitled or claiming to be entitled to an offer
under this Condition 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.
8. If the Licensee or other party to such agreement proposes to vary the
terms of any agreement entered into pursuant to 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.
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CONDITION 9D: AGREEMENTS FOR THE PROVISION OF METERS
- --------------------------------------------------------
1. The Licensee shall not, in the course of its Supply Business, enter
into an agreement with any person for the provision of an electricity
meter at any premises (whatever the nature of that agreement) which is
intended or is likely to restrict, distort or prevent competition in
the supply of electricity.
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CONDITION 10: GENERATION SECURITY STANDARD
- ----------------------------------------------
1. The Licensee shall make arrangements sufficient to meet the generation
security standard.
2. The duty imposed by paragraph 1 shall be discharged either by the
Licensee's complying with the provisions of paragraph 3 below or by the
making by the Licensee of such other arrangements as may have been
previously approved in writing for the purpose by the Director.
3. The Licensee may discharge the duty imposed by paragraph 1 by:
(a) for so long as the relevant condition is met, purchasing as a
pool member under the terms of the Pooling and Settlement
Agreement quantities of electricity which are at all times
sufficient to meet the demands of all qualifying customers of
the Licensee; and
(b) for so long as the relevant condition is met, and save by
reason of planned maintenance undertaken on the Licensee's
Distribution System or in circumstances of force majeure
affecting either the Licensee's Distribution System or the
quantities of electricity delivered into that system, not:
(i) making voltage reductions outside statutory limits;
or
(ii) interrupting or reducing supplies to any qualifying
customer
otherwise than as instructed pursuant to the Grid Code by the
Transmission Company or in accordance with the Distribution Code.
4. The relevant condition referred to in paragraph 3 is that there should
at any relevant time be electricity available to be purchased under the
terms of the Pooling and Settlement Agreement at a price less than the
ceiling price.
126
5. 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) to review the operation of the
generation security standard.
6. The provisions of this Condition are without prejudice to the duties of
the Licensee under the Electricity Supply Regulations 1988.
7. In this Condition:
"ceiling price" means such price as would be equal to the
Pool Selling Price in circumstances where
the corresponding Pool Purchase Price was an
amount equal to the Value of Lost Load.
"generation security means such standard of generation security
standard" as will ensure that:
(a) the supply of electricity to
qualifying customers will not be
discontinued in more than 9 years in
any 100 years; and
(b) the voltage or frequency of
electricity supplied to qualifying
customers will not be reduced below
usual operational limits in more
than 30 years in any 100 years by
reason of insufficiency of
electricity generation available for
the purposes of supply by the
Licensee to its qualifying customers
at times of annual system peak
demand.
"Pool Purchase Price" shall each have the meaning from time to
and "Pool Selling time ascribed to them in Schedule 9 to the
Price" Pooling and Settlement Agreement.
127
"qualifying customer" means any purchaser from the Licensee
entitled and requiring at any time to be
supplied by the Licensee at premises within
the authorised area of the Licensee but
shall exclude:
(a) a contract 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 tariff customer on special tariffs
which restrict supplies to
particular time periods to the
extent that supplies to that
customer may be interrupted or
reduced in accordance with such
tariff.
"Value of Lost Load" means in respect of the first financial
year, the sum of (pound)2 per kWh and, in
respect of each succeeding financial year,
the sum which corresponds to (pound)2 per
kWh as adjusted to reflect the percentage
change in the Retail Price Index between the
index published or determined in respect to
the December prior to the start of that
financial year and the index published or
determined for December 1989.
128
CONDITION 11: DISTRIBUTION CODE
- -----------------------------------
1. The Licensee shall in consultation with Authorised Electricity
Operators liable to be materially affected thereby prepare and at all
times have in force and shall implement and (subject to paragraph 10 of
this Condition) comply with a Distribution Code:
(a) covering all material technical aspects relating to
connections to and the operation and use of the Licensee's
Distribution System or (insofar as relevant to the operation
and use of the Licensee's Distribution System) the operation
of electric lines and electrical plant connected to the
Licensee's Distribution System or the distribution system of
any Authorised Electricity Operator and (without prejudice to
the foregoing) making express provision as to the matters
referred to in paragraph 5 below; and
(b) which is designed so as:
(i) to permit the development, maintenance and operation
of an efficient, co-ordinated and economical system
for the distribution of electricity; and
(ii) to facilitate competition in the generation and
supply of electricity.
2. The Distribution Code in force at the date this Licence enters force
shall be sent to the Director for his approval. Thereafter the Licensee
shall (in consultation with Authorised Electricity Operators liable to
be materially affected thereby) periodically review (including upon the
request of the Director) the Distribution Code and its implementation.
Following any such review, the Licensee shall send to the Director:
(a) a report on the outcome of such review; and
(b) any proposed revisions to the Distribution Code from time to
time as the Licensee (having regard to the outcome of such
review) reasonably thinks fit for the achievement of the
objectives referred to in sub-paragraph (b) of paragraph 1;
and
129
(c) any written representations or objections from Authorised
Electricity Operators (including any proposals by such
operators for revisions to the Distribution Code not accepted
by the Licensee in the course of the review) arising during
the consultation process and subsequently maintained.
3. Revisions to the Distribution Code proposed by the Licensee and sent to
the Director pursuant to paragraph 2 shall require to be approved by
the Director.
4. Having regard to any written representations or objections referred to
in sub-paragraph (c) of paragraph 2, and following such further
consultation (if any) as the Director may consider appropriate, the
Director may issue directions requiring the Licensee to revise the
Distribution Code in such manner as may be specified in the directions
and the Licensee shall forthwith comply with any such directions.
5. The Distribution Code shall include:
(a) a distribution planning and connection code containing:
(i) connection conditions specifying the technical,
design and operational criteria to be complied with
by any person connected or seeking connection with
the Licensee's Distribution System; and
(ii) planning conditions specifying the technical and
design criteria and procedures to be applied by the
Licensee in the planning and development of the
Licensee's Distribution System and to be taken into
account by persons connected or seeking connection
with the Licensee's Distribution System in the
planning and development of their own plant and
systems; and
(b) a distribution operating code specifying the conditions under
which the Licensee shall operate the Licensee's Distribution
System and under which persons shall operate their plant
and/or distribution systems in relation to the Licensee's
Distribution System, insofar as necessary to protect the
security and quality of supply and safe operation of the
Licensee's Distribution System under both normal and abnormal
operating conditions.
130
6. The Licensee shall give or send a copy of the Distribution Code (as
from time to time revised) to the Director.
7. The Licensee shall (subject to paragraph 8) give or send a copy of the
Distribution Code (as from time to time revised) to any person
requesting the same.
8. The Licensee may make a charge for any copy of the Distribution Code
(as from time to time revised) given or sent pursuant to paragraph 7 of
an amount which will not exceed any amount specified for the time being
for the purposes of this Condition in directions issued by the
Director.
9. In preparing, implementing and complying with the Distribution Code
(including in respect of the scheduling of maintenance of the
Licensee's Distribution System), the Licensee shall not unduly
discriminate against or unduly prefer:
(a) any one or any group of persons; or
(b) the Licensee in the conduct of any business other than the
Distribution Business
in favour of or as against any one other or any other group of persons.
10. The Director may (following consultation with the Licensee) issue
directions relieving the Licensee of its obligations under the
Distribution Code in respect of such parts of the Licensee's
Distribution System and to such extent as may be specified in the
directions.
11. Compliance with this Condition shall not require the Licensee to impose
any contractual obligation on tariff customers to comply with the
Distribution Code (as from time to time revised).
131
CONDITION 11A: THE METERING POINT ADMINISTRATION SERVICE AND THE MASTER
- ---------------------------------------------------------------------------
REGISTRATION AGREEMENT
- ----------------------
1. The Licensee shall establish, and shall subsequently operate and
maintain, a service to be known as the Metering Point Administration
Service.
2. The Metering Point Administration Service shall, within the authorised
area, fulfil the following functions:
(a) the maintenance of such a register of technical and other data
as is necessary to facilitate supply by any Electricity
Supplier or Exempt Supplier to all premises within the
authorised area and to meet the reasonable requirements of
Electricity Suppliers in respect of such premises for
information for settlement purposes, including (where so
required):
i) the identity of the Electricity Supplier responsible
under the Pooling & Settlement Agreement for the
supply to each such premises;
ii) the type of metering equipment installed at each such
premises; and
iii) the address of each such premises;
(b) the amendment of the register maintained in accordance with
sub-paragraph (a) to reflect changes of supplier in respect of
any premises;
(c) the provision, in a timely and efficient manner, of such data
contained in the register as is reasonably required and
requested to:
i) any Electricity Supplier or agent thereof;
ii) any person identified in the Pooling and Settlement
Agreement as an appropriate person for the receipt of
data for settlement purposes; and
132
iii) any person identified in the Master Registration
Agreement as entitled to such data for the purpose of
facilitating changes of supplier in respect of any
premises; and
(d) the maintenance of an enquiry service for the provision to any
customer of an Electricity Supplier, on request and free of
charge to that customer, of such data contained in the
register as is relevant to the supply of electricity to
premises which are (or are to be) owned or occupied by the
customer, and the taking of such steps as will in the opinion
of the Licensee secure adequate publicity for the operation of
the enquiry service.
3. In fulfilling its obligation in accordance with paragraph 1 the
Licensee shall not restrict, distort or prevent competition in the
provision of meter operation, data retrieval, data processing, data
aggregation or prepayment meter services.
4. The Licensee shall use its best endeavours, in conjunction and co-
operation with all other public electricity suppliers, to prepare a
form of agreement to be known as the Master Registration Agreement.
5. The Master Registration Agreement shall be an agreement made between:
(a) on the one part, the Licensee and all other public electricity
suppliers in their capacity as providers of metering point
administration services; and
(b) on the other part, all Electricity Suppliers who require the
provision of metering point administration services from at
least one public electricity supplier, together with such
other persons as are, for settlement purposes, appropriate
parties to the agreement
and shall comprise all the matters set out at paragraph 6.
133
6. The Master Registration Agreement shall comprise:
(a) terms for the provision of metering point administration
services in accordance with the requirements of paragraph 2
and the equivalent requirements in the licences of all other
public electricity suppliers;
(b) provisions to facilitate, and procedures and practices to be
followed by Electricity Suppliers in relation to changes of
Electricity Supplier in respect of any premises;
(c) a catalogue of definitions, flows and forms of such data as
may require to be transferred by or to parties to the Master
Registration Agreement, or as between any persons for
settlement purposes or for any related purposes (the "Data
Transfer Catalogue");
(d) arrangements for the variation of the Master Registration
Agreement following consultation with the parties, or
representatives of the parties, to that agreement;
(e) provisions (which shall require to be approved in advance by
the Director) by virtue of which the whole or specified parts
of the Master Registration Agreement shall not be capable of
variation without the prior approval of the Director; and
(f) such other matters as are or may be appropriate for the
development, maintenance and operation of an efficient, co-
ordinated and economical system for the supply of electricity
and for the purpose of facilitating competition in electricity
supply.
7. The Licensee shall be a party to and shall comply with the provisions
of the Master Registration Agreement.
134
CONDITION 11B: ESTABLISHMENT OF A DATA TRANSFER SERVICE
- ----------------------------------------------------------
1. The Licensee shall use its best endeavours, in conjunction and co-
operation with all other public electricity suppliers:
(a) to establish, or to procure the establishment by a third party
of, a service to be known as the Data Transfer Service; and
(b) subsequently to operate and maintain, or to procure the
subsequent operation and maintenance by a third party of such
Data Transfer Service in accordance with the provisions of
this Condition.
2. The Data Transfer Service shall:
(a) provide a network over which may be made all of the electronic
data transfers specified at paragraph 3;
(b) operate and maintain that network; and
(c) provide a connection to that network, on request, to any
person who is or will be a party to any of the electronic data
transfers specified at paragraph 3.
3. The electronic data transfers specified at this paragraph are those
which are reasonably required for any of the purposes set out at
paragraph 4 and which are made between:
(a) a Metering Point Administration Service (MPAS) Operator and an
Electricity Supplier (including the Licensee acting in the
course of its Supply Business) or any agent thereof;
(b) an MPAS Operator and any person identified in the Pooling and
Settlement Agreement or the Settlement Agreement for Scotland
as an appropriate person for the receipt of data from the MPAS
Operator for settlement purposes;
135
(c) the Electricity Pool of England and Wales or Scottish
Electricity Settlements Limited (or any agent thereof) and an
Electricity Supplier (or any agent thereof);
(d) an Electricity Supplier (or any agent thereof) and another
Electricity Supplier (or any agent thereof);
(e) an Electricity Supplier and any of its agents;
(f) different agents of the same Electricity Supplier;
(g) public electricity suppliers (or their agents) and generators
(or their agents) which are parties to the Settlement
Agreement for Scotland; and
(h) Scottish Electricity Settlements Limited (or any agent
thereof) and generators which are parties to the Settlement
Agreement for Scotland.
4. The purposes of this paragraph are:
(a) meeting obligations with respect to the transfer of data for
settlement purposes;
(b) communicating meter reading and meter standing data;
(c) facilitating the provision of metering point administration
services;
(d) communicating distribution use of system information; and
(e) fulfilling such other requirements relating to the transfer of
data as may be requisite for the supply of electricity to
customers and compliance by Electricity Suppliers with the
Master Registration Agreement.
5. The Data Transfer Service shall, where relevant, transmit data in a
form which complies with the provisions of the Data Transfer Catalogue.
136
6. In fulfilling its obligation under paragraph 1 the Licensee shall not,
or (if appropriate) shall ensure that the third party shall not,
restrict, distort or prevent competition in the provision of meter
operation, data retrieval, data processing, data aggregation or
prepayment meter services.
7. Any obligation placed on the Licensee under Conditions 11C to 11F in
respect of the provision of data transfer services shall (for the
purposes of those Conditions) be treated as a requirement on the
Licensee to use its best endeavours, in conjunction and co-operation
with all other public electricity suppliers, to fulfil that obligation
or to procure the fulfilment of that obligation by a third party, and
Conditions 11C to 11F shall apply mutatis mutandis to the provision of
data transfer services.
8. Further, in relation to the provision of data transfer services the
reference at paragraph 1 of Condition 11F to the Licensee failing to
enter into an agreement shall be a reference to the Licensee, in
conjunction with all other public electricity suppliers, failing to
enter into or failing to procure that a third party enters into an
agreement.
9. In this Condition:
"Metering Point Administration means the Licensee or any other
Service (MPAS) Operator" public electricity supplier in
its capacity as a provider of
metering point administration
services.
137
CONDITION 11C: REQUIREMENT TO OFFER TERMS FOR THE PROVISION OF METERING AND
- ----------------------------------------------------------------------------
DATA SERVICES
- -------------
1. On application made by any private electricity supplier, or in the case of
sub-paragraphs 1(a) and (b) by any person, the Licensee shall (subject to
paragraph 6) offer to enter into an agreement for the provision within its
authorised area of such of the following services as may be required:
(a) the provision of metering equipment whether, at the discretion of the
Licensee, by way of sale, hire or loan ("meter provision services");
(b) the installation, commissioning, testing, repair and maintenance of
metering equipment ("meter operation services");
(c) the retrieval and verification of meter reading data from electricity
meters and the delivery of such data to any relevant person for the
purpose of data processing ("data retrieval services");
(d) the:
i) processing, validation and (where necessary) estimation of meter
reading data; and
ii) creation, processing and validation of data in respect of the
consumption of electricity at premises which receive an unmetered
supply,
and in each case the delivery of such data to any relevant person for the
purpose of data aggregation ("data processing services");
(e) the collation and summation of meter reading data (whether actual or
estimated) and of data in respect of the consumption of electricity at
premises which receive an unmetered supply, and the delivery of such
data to any relevant person for settlement purposes ("data aggregation
services"); and
138
(f) the access to a system which supports the supply of electricity to
Designated Customers with prepayment meters ("prepayment meter
services"), such system providing as may be reasonably appropriate for
prepayment meters which require tokens, cards or keys for their
operation and comprising facilities for:
i) (where requested) the purchase by private electricity suppliers
and/or encoding with data of tokens, cards or keys;
ii) the use by customers of local outlets for the purchase of tokens
and the crediting with value of cards or keys;
iii) the making of payments to suppliers in respect of sums received
by the Licensee on behalf of customers; and
iv) where relevant, the transfer of customer data to private
electricity suppliers.
2. On application made by any Electricity Supplier the Licensee shall (subject
to paragraph 6) offer to provide metering point administration services
within its authorised area pursuant to and in accordance with the Master
Registration Agreement.
3. On application made by any person the Licensee shall (subject to paragraph
6) offer to enter into an agreement for the provision of data transfer
services.
4. In making an offer to enter into any agreement specified in paragraphs 1 to
3, the Licensee shall set out:
(a) the date by which the services required shall be provided (time being
of the essence unless otherwise agreed between parties);
(b) the charges to be paid in respect of the services required, such
charges (unless manifestly inappropriate):
i) to be presented in such a way as to be referable to the
statements prepared in accordance with paragraph 1 of Condition
11E or any revision thereof; and
139
ii) to be set in conformity with the requirements of Condition 11E;
and
(c) such other detailed terms in respect of each of the services required
as are or may be appropriate for the purpose of the agreement.
5. The Licensee shall offer terms for agreements in accordance with paragraphs
1 to 3 as soon as practicable and (save where the Director consents to a
longer period) in any event not more than 28 days after receipt by the
Licensee from any person of an application containing all such information
as may reasonably be required for the purpose of formulating the terms of
the offer.
6. The Licensee shall not be obliged pursuant to this Condition to offer to
enter or to enter into any agreement if to do so would be likely to cause
the Licensee to be in breach of any of the provisions referred to at sub-
paragraph 7(a) of Condition 8B.
7. The Licensee shall undertake each of the services referred to in paragraphs
1 to 3 in the most efficient and economic manner practicable having regard
to the alternatives available and the other requirements of this Licence
and of the Act in so far as they relate to the provision of those services.
8. In the provision of any of the services referred to in paragraphs 1 to 3
(excepting prepayment meter services) the Licensee shall not restrict,
distort or prevent competition in the supply of electricity.
9. The services referred to in paragraphs 1 to 3 shall collectively be
described as Metering and Data Services.
140
CONDITION 11D: NON-DISCRIMINATION IN THE PROVISION OF METERING AND DATA
- ------------------------------------------------------------------------
SERVICES
- --------
1. In the provision of any of the Metering and Data Services the Licensee
shall not discriminate:
(a) between any persons or class or classes thereof; or
(b) as between the Licensee (in the provision of such services by the
Licensee as part of its Distribution Business to itself for the
purpose of its Supply or Second Tier Supply Business) and any persons
or class or classes thereof.
2. Without prejudice to paragraph 1, and subject to the provisions of
Condition 11E, the Licensee shall not make charges for the provision of any
of the Metering and Data Services to any person or class or classes thereof
which differ from the charges for such provision:
(a) to any other person or class or classes of person; or
(b) to the Licensee in the provision of such services by the Licensee (as
part of its Distribution Business to itself for the purposes of its
Supply or Second Tier Supply Business)
except in so far as such differences reasonably reflect differences in the costs
associated with such provision.
3. In relation to the provision of prepayment meter services paragraphs 1 and
2 shall have effect as if after "Distribution Business" were inserted
therein "or any other business."
141
CONDITION 11E: BASIS OF CHARGES FOR METERING AND DATA SERVICES: REQUIREMENTS
- -----------------------------------------------------------------------------
FOR TRANSPARENCY
- ----------------
1. The Licensee shall as soon as reasonably practicable prepare statements in
a form approved by the Director setting out:
(a) the basis upon which charges for the provision of each of the Metering
and Data Services will be made; and
(b) information relating to the other terms that will apply to the
provision of each service,
in each case in such form and with such detail as shall be necessary to enable
any person to make a reasonable estimate of the charges to which he would
become liable for the provision of such services and of the other terms,
likely to have a material impact on the conduct of his business, upon which
the service would be provided and (without prejudice to the foregoing)
including the information set out in paragraph 2.
2. The statements referred to in paragraph 1 shall include:
(a) a schedule of charges for such services; and
(b) an explanation of the methods by which and the principles on which
such charges will be calculated.
3. The Director may, upon the written request of the Licensee, issue a
direction relieving the Licensee of its obligations under paragraphs 1 and
2 to such extent and subject to such terms and conditions as he may specify
in that direction.
4. The Licensee shall not in setting its charges for or in setting the other
terms that will apply to the provision of any of the Metering and Data
Services restrict, distort or prevent competition in the generation,
distribution or supply of electricity or in the provision of meter
operation, data retrieval, data processing or data aggregation services.
142
5. The Licensee may periodically review the information set out in and, with
the approval of the Director, alter the form of the statements prepared in
accordance with paragraph 1 and shall, at least once in every year that
this Licence is in force, make any necessary revisions to such statements
in order that the information set out in the statements shall continue to
be accurate in all material respects.
6. The Licensee shall send a copy of the statements prepared in accordance
with paragraph 1, and of each revision of such statements in accordance
with paragraph 5, to the Director.
7. The Licensee shall give or send a copy of the statements prepared in
accordance with paragraph 1, or (as the case may be) of the latest revision
of such statements in accordance with paragraph 5, to any person who
requests a copy of such statement or statements.
8. The Licensee may make a charge for any statement given or sent pursuant to
paragraph 7 of an amount which shall not exceed the amount specified in
directions issued by the Director for the purposes of this Condition based
on the Director's estimate of the Licensee's reasonable costs of providing
such a statement.
143
CONDITION 11F: 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 a request under
Condition 11C, the Director may, on the application of such person or the
Licensee, settle any terms of the agreement in dispute between the Licensee
and that person in such manner as appears to the Director to be reasonable
having (in so far as relevant) regard in particular to the following
considerations:
(a) that such person should pay in respect of the services required the
whole or the appropriate proportion of such sum as is determined in
accordance with paragraph 4 of Condition 11E;
(b) that the performance by the Licensee of its obligations under the
agreement should not cause it to be in breach of those provisions
referred to at sub-paragraph 7(a) of Condition 8B; and
(c) that the terms and conditions of the agreement so settled by the
Director and of any other agreements entered into pursuant to a
request under Condition 11C should be, so far as circumstances allow,
in as similar a form as is practicable.
2. In so far as any person entitled or claiming to be entitled to an offer
under Condition 11C 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 any party to such agreement proposes to vary the contractual terms of
any agreement for any Metering and Data Services entered into pursuant to
Condition 11C or this Condition in any manner provided for under such
agreement, the Director may, at the request of that party, settle any
dispute relating to such variation in such manner as appears to the
Director to be reasonable.
4. The Director may (following consultation with the Licensee) issue
directions relieving the Licensee of its obligations under Condition 11C in
respect of such parts of that Condition and to such extent as may be
specified in the directions.
144
CONDITION 12: RESTRICTION ON USE OF CERTAIN INFORMATION
- --------------------------------------------------------
1. Where the Licensee or any affiliate or related undertaking of the Licensee
receives, in the course of the operation of the Distribution Business,
information from any person:
(a) pursuant to the provisions of the Distribution Code;
(b) pursuant to the provisions of the Master Registration Agreement;
(c) in accordance with any agreement to provide a Metering or Data Service
pursuant to Condition 11C (but excluding prepayment meter services);
or
(d) in accordance with any agreement for Standard Terms of Connection,
such information shall be treated as confidential information for the purposes
of this Condition and, subject to paragraph 7, the provisions of this
Condition shall apply to that information, save where the person providing
the information notifies (or otherwise agrees with) the Licensee that the
information need not be treated as confidential.
2. The Licensee shall not (and shall procure that its affiliates and related
undertakings shall not) use confidential information in a manner which may
obtain for the Licensee or any affiliate or related undertaking of the
Licensee any commercial advantage in the operation of the Supply Business
or of the Second Tier Supply Business.
3. The Licensee shall not (and shall procure that its affiliates or related
undertakings shall not) authorise access to confidential information to any
of its (or its affiliates' and related undertakings') employees, agents,
consultants or contractors save insofar as sucrequire access to the
information for the effective operation of the Distribution Business.
4. The Licensee shall use all reasonable endeavours to ensure that any person
with authorised access to confidential information in accordance with
paragraph 3 shall use such information only for the purposes for which it
was provided.
145
5. The Licensee shall not (and shall procure that its affiliates and related
undertakings shall not) disclose confidential information other than:
(a) subject to paragraph 6, to any professional or other advisers who
require such information for the purpose of providing advice which is
necessary for the effective operation of the Distribution Business.
(b) to the Director; and
(c) where the Licensee (or any affiliate or related undertaking of the
Licensee) is required or permitted to disclose such information:
(i) in compliance with its duties under the Act or any other
requirement of a Competent Authority;
(ii) in compliance with the conditions of any licence granted under
the Act or any document referred to in such a licence with which
it is by virtue of the Act or that licence to comply;
(iii) in compliance with any other requirement of law;
(iv) in response to a requirement of any Stock Exchange, the Panel on
Take-overs and Mergers or any other regulatory authority; or
(v) pursuant to the arbitration rules for the Electricity
Arbitration Association or pursuant to any judicial or other
arbitral process or tribunal of competent jurisdiction.
6. Where confidential information is disclosed in accordance with sub-
paragraph 5(a), the Licensee shall ensure that any persons to whom that
information is disclosed are aware of its confidential nature, and shall
take reasonable steps to ensure that such persons do not disclose that
confidential information save in accordance with the provisions of this
Condition.
146
7. The Director may, upon the written request of the Licensee, issue a
direction relieving the Licensee of its obligations under paragraphs 1 to 6
to such extent and subject to such terms and conditions as he may specify
in that direction. 8. The Licensee shall no later than 1 January 1998
prepare a statement in a form approved by the Director setting out the
practices, procedures and systems the Licensee has adopted (or intends to
adopt) to ensure its compliance:
(a) with paragraphs 2 to 6 of this Condition; and
(b) in the provision of services in accordance with Conditions 9A,
11A, 11B and 11C (excluding prepayment meter services), with its
obligations not to restrict, distort or prevent competition.
9. The Licensee may periodically revise the information set out in and, with
the approval of the Director, alter the form of the statement prepared in
accordance with paragraph 8 and shall, at least once every year during
which this Licence is in force, review such statement in order that the
information set out therein shall continue to be accurate in all material
respects.
10. The Licensee shall take all reasonable steps to ensure that it complies
with the practices and procedures set out in the statement prepared in
accordance with paragraph 8 (as from time to time revised).
11. The Licensee shall send a copy of the statement prepared in accordance with
paragraph 8, and of each revision of such statement in accordance with
paragraph 9, to the Director.
12. The Licensee shall give or send a copy of the statement prepared in
accordance with paragraph 8, or (as the case may be) of the latest revision
of such statement in accordance with paragraph 9, to any person who
requests a copy of such statement.
13. As soon as is reasonably practicable after the end of each calendar year
the Licensee shall produce a report as to its compliance during that year
with the practices and procedures set out in the statement prepared in
accordance with paragraph 8, and such report shall:
(a) detail the procedures followed by the Licensee during that year for
monitoring its compliance with paragraph 10;
147
(b) refer to such other matters as are or may be appropriate in relation
to the operation of the practices, procedures and systems adopted by
the Licensee during that year;
(c) outline the content of any representations received by the Licensee in
respect of the practices and procedures set out in the statement
prepared in accordance with paragraph 8, and detail such steps as were
taken by the Licensee in response to those representations; and
(d) specify any remedial action taken by the Licensee to ensure its
conformity with the statement prepared in accordance with paragraph 8.
14. The Licensee shall submit to the Director a copy of the report produced in
accordance with paragraph 13, and shall give or send a copy of the report
to any person who requests such a copy.
15. In this Condition:
"Competent Authority" means the Secretary of State, the Director and
any local or national agency, authority,
department, inspectorate, minister, ministry,
official or public or statutory person (whether
autonomous or not) of, or of the government of,
the United Kingdom or the European Community.
"confidential information" means all information required to be treated as
confidential under paragraph 1, but shall
exclude all information that is in or enters
into the public domain otherwise than as a
consequence of unauthorised disclosure by the
Licensee or any affiliate or related
undertaking of the Licensee (or by any person
to whom the same is disclosed or suffered to be
148
disclosed by the Licensee or such affiliate or
related undertaking).
149
"Electricity Arbitration means the unincorporated members' club of
Association" that name formed inter alia to promote the
efficient and economic operation of the
procedure for the resolution of disputes within
the electricity supply industry by means of
arbitration or otherwise in accordance with its
arbitration rules.
150
CONDITION 13: COMPLIANCE WITH THE GRID CODE
- --------------------------------------------
1. The Licensee shall comply with the provisions of the Grid Code insofar as
applicable to it.
2. The Director may (following consultation with the Transmission Company)
issue directions relieving the Licensee of its obligation under paragraph 1
in respect of such parts of the Grid Code and to such extent as may be
specified in those directions.
151
CONDITION 14: SECURITY ARRANGEMENTS
- ------------------------------------
1. The Licensee shall comply with the provisions of the Fuel Security Code and
such provisions shall have effect as if they were set out in this Licence.
152
CONDITION 15: POOLING AND SETTLEMENT AGREEMENT
- -----------------------------------------------
1. The Licensee shall be a pool member under, and comply with the provisions
of, the Pooling and Settlement Agreement.
153
CONDITION 16: CONDITIONS OF SUPPLY AFFECTING CUSTOMERS' STATUTORY RIGHTS
- -------------------------------------------------------------------------
1. The Licensee shall not include in or send with any notice given under
Section 16(3) of the Act, or any form provided to customers for use in
giving notice under Section 16(2) of the Act, or any notice sent to
customers prior to their entering into a tariff or special agreement, an
invitation to agree to anything which, by virtue of the Act, may only be
done or (as the case may be) not done:
(a) with the agreement of that customer; or
(b) in any case where that customer withholds his agreement or makes that
agreement subject to terms and conditions to which the Licensee objects,
with the approval or consent or by order of the Secretary of State
unless the form and terms of such invitation have first been submitted to
and approved by the Director.
2. Nothing in paragraph 1 shall prevent the Licensee from:
(a) inviting or requiring a customer to take a supply of electricity under
a special agreement in accordance with Section 22 of the Act;
(b) including in any such notice any provision or condition which the
Licensee is required or permitted to include in such notice by virtue
of Section 16(4) of the Act; or
(c) including in any such notice concerning the provision of a supply to
premises:
(i) not previously supplied by the Licensee; or
(ii) where any modification is required to any electric line,
electrical plant or electric meter through which such premises
are supplied, or where any change is required to the location
thereof
154
an invitation to any customer to agree to any provision or condition
concerning the installation or location of any or all of an electric
line, electrical plant or an electric meter
in any such case without having submitted the form and terms of such agreement
or notice to the Director.
3. The Licensee shall include in any form provided to a customer for use in
giving notice under Section 16(2) of the Act a prominent statement of the right
of such customer to apply to the Director for the determination of any dispute
arising out of the proposed terms of supply.
155
CONDITION 17: LICENSEE'S APPARATUS ON CUSTOMERS' SIDE OF METER
- ---------------------------------------------------------------
1. This Condition applies where the Licensee, whether on its own behalf or as
a provider of meter operation services to another Electricity Supplier,
installs a second meter or other apparatus for the purpose of ascertaining
or regulating the amount of electricity supplied, the period of supply, or
any other quantity or time connected with the supply on the customer's side
of non half-hourly metering equipment registering the quantity of the
supply to that customer.
2. Any second meter or other apparatus installed by the Licensee in the
position and for a purpose described in paragraph 1 shall be such that the
power consumed by it, when aggregated with the power consumed by any other
meter or apparatus installed by the Licensee in the like position and for a
like purpose in relation to the customer, does not exceed 10 watts except
where otherwise agreed with the customer.
156
CONDITION 18: CODE OF PRACTICE ON PAYMENT OF BILLS AND GUIDANCE FOR DEALING
- ----------------------------------------------------------------------------
WITH CUSTOMERS IN DIFFICULTY
- ----------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to the
Director for his approval a code of practice concerning the payment of
electricity bills by its Domestic Customers, including appropriate guidance
for the assistance of such customers who, through misfortune or inability
to cope with electricity supplied on credit terms, may have difficulty in
paying such bills.
2. The code of practice shall include procedures by which the Licensee can
distinguish customers in difficulty (the "relevant customers") from others
in default and can:
(a) provide general information as to how relevant customers might reduce
their bills in the future by the more efficient use of electricity;
(b) where such a facility is available, accept in payment for electricity
supplied sums which are deducted at source from social security
benefits payable to relevant customers;
(c) detect failures by relevant customers to comply with arrangements
entered into for paying by instalments charges for electricity
supplied;
(d) make such arrangements so as to take into account the customers'
ability to comply with them;
(e) ascertain, with the assistance of other persons or organisations, the
ability of customers to comply with such arrangements;
(f) provide for customers who have failed to comply with such
arrangements, or procure for them the provision of, a prepayment meter
(where safe and practicable to do so); and
(g) arrange for the calibration of any prepayment meter so provided so as
to take into account `the customers' ability to pay any of the charges
due from them under such arrangements in addition to the other charges
lawfully being recovered through the prepayment meter.
157
3. In formulating the procedures referred to at paragraph 2 the Licensee shall
have particular regard:
(a) to the purpose of avoiding, in so far as is practicable, the
disconnection of premises occupied by relevant customers otherwise
than following compliance by the Licensee with such procedures; and
(b) to the interests of relevant customers who are of pensionable age or
disabled or chronically sick and to the purpose of avoiding, in so far
as is practicable, the disconnection of premises occupied by such
customers during the winter months of each year,
and the procedures shall be designed for the achievement of such
purposes.
4. This Condition is subject to the provisions of Condition 23A.
158
CONDITION 19: RECORD OF AND REPORT ON PERFORMANCE
- ---------------------------------------------------
1. The Licensee shall keep a record of its general operation of the
arrangements mentioned in Conditions 18, 20, 20A, 21, 22 and 23 and if the
Director so directs in writing, of its operation of any particular cases
specified, or of a description specified, by him.
2. The Licensee shall keep a statistical record of its performance in relation
to the provision of electricity supply to its Designated Customers under
the terms of contracts or in accordance with tariffs fixed under Section 18
of the Act, including services relating to:
(a) the amounts of electricity supplied and the recovery of electricity
charges for each of the principal payment methods and for each set of
the contract or tariff terms offered;
(b) the disconnection of customers for non-payment of bills and breach
of payment arrangements agreed following such non- payment;
(c) the holding of security deposits;
(d) the installation of pre-payment meters calibrated to recover customer
debts;
(e) the offering of appointments and the making of visits to customers'
premises;
(f) the response made to enquiries concerning electricity supply matters;
(g) the nature of guidance as to the efficient use of electricity given and
the measures to improve the efficient use of electricity introduced by
the Licensee; and
(h) payments made to customers and to suppliers pursuant to the standards
of performance prescribed by the Director in accordance with
regulations made under Section 39 of the Act or in accordance with
paragraphs 2 and 3 of Condition 21.
3. The Licensee shall, from time to time as required by the Director, provide
to the Director and to the Relevant Consumers' Committee such of the
information contained in the records prepared in accordance with paragraphs
1 and 2 as the Director may request in writing.
159
4. As soon as is reasonably practicable after the end of each calendar year,
the Licensee shall submit to the Director and the Relevant Consumers'
Committee a report dealing with the matters mentioned in paragraphs 1 and 2
in relation to that year and shall:
(a) publish the report so submitted in such manner as will in the
reasonable opinion of the Licensee secure adequate publicity for it;
and
(b) send a copy of it free of charge to any person requesting one,
except that, in performing its obligations under sub-paragraphs 4(a) and
(b), the Licensee shall exclude from the report such information as appears
to it to be necessary or expedient to ensure that, save where they consent,
individual Designated Customers referred to therein cannot readily be
identified.
5. The report shall be presented, so far as is reasonably practicable, in a
standard form designated by the Director for the purposes of this
Condition.
160
CONDITION 20: PROVISION OF SERVICES FOR PERSONS WHO ARE OF PENSIONABLE AGE OR
- -----------------------------------------------------------------------------
DISABLED OR CHRONICALLY SICK
- ----------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to the
Director for his approval a code of practice detailing the special services
the Licensee will make available for Domestic Customers who are of
pensionable age or disabled or chronically sick.
2. The code of practice shall include arrangements by which the Licensee will
where appropriate, in respect of its customers:
(a) provide where practicable special controls and adaptors for electrical
appliances and meters (including prepayment meters) and reposition
meters (and shall set out any charges to be made for the provision of
such services);
(b) provide special means of identifying persons acting on behalf of the
Licensee;
(c) give advice on the use of electricity;
(d) send bills in respect of the supply of electricity to a customer to
any person who is willing to be sent such bills and is nominated by
that customer (without prejudice, however, to the right of the
Licensee to send such bills both to the customer and to the nominated
person where that appears appropriate to the Licensee);
(e) make available (free of charge) to blind and partially sighted
customers, by telephone or other appropriate means, information
concerning the details of any bill relating to the supply of
electricity to them and a facility for enquiring or complaining in
respect of any such bill or any service provided by the Licensee; and
(f) make available (free of charge) to deaf and hearing impaired
customers, being in possession of appropriate equipment, facilities to
assist them in enquiring or complaining about any bill relating to the
supply of electricity to them or any service provided by the Licensee.
161
3. The code of practice shall further include arrangements whereby the
Licensee will:
(a) take reasonable steps to draw the attention of its customers to the
existence of a register of customers who may be expected, by virtue of
being of pensionable age or disabled or chronically sick, to require:
(i) information and advice in respect of the matters set out at
paragraph 2; or
(ii) advance notice of interruptions to the supply of electricity;
(b) maintain such a register, comprising the relevant details of each
customer who requests (or, in the case of a customer supplied by a
private electricity supplier, whose supplier requests) his inclusion
on it and:
(i) give to those of its own customers so registered, in respect of
the matters set out at paragraph 2; and
(ii) give to all customers so registered, in respect of interruptions
to the supply of electricity,
such information and advice as may be appropriate and is of such
nature as shall be set out in the code of practice.
4. This Condition is subject to the provisions of Condition 23A.
162
CONDITION 20A: CODE OF PRACTICE ON PROCEDURES WITH RESPECT TO SITE ACCESS
- --------------------------------------------------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to the
Director for his approval a code of practice setting out the principles and
procedures the Licensee will follow in respect of any person acting on its
behalf who requires access to customers' premises.
2. The code of practice shall include procedures calculated to ensure that
persons visiting customers' premises on behalf of the Licensee:
(a) possess the skills necessary to perform the required duties;
(b) are readily identifiable to members of the public;
(c) use passwords provided for vulnerable customers;
(d) are appropriate persons to visit and enter customers' premises; and
(e) are able to inform customers, on request, of a contact point for help
and advice they may require in relation to the supply of electricity.
3. This Condition is subject to the provisions of Condition 23A.
163
CONDITION 21: STANDARDS OF PERFORMANCE
- ---------------------------------------
1. The Licensee shall conduct its Supply and Distribution Businesses in the
manner which it reasonably considers to be best calculated to achieve any
standards of overall performance or standards of performance in connection
with the promotion of the efficient use of electricity by customers, as may
be determined by the Director pursuant to Sections 40 and 41 respectively
of the Act.
2. The Licensee shall not enter into a use of system agreement with any
Electricity Supplier that does not provide for the Licensee to make
payments in respect of the performance of the Distribution Business to the
Electricity Supplier for the benefit of any customer of that Electricity
Supplier equivalent to such sums as would have been paid pursuant to the
standards of performance prescribed by the Director in accordance with
regulations made under Section 39 of the Act had that customer been a
tariff customer of the Licensee in those situations where the Licensee
would have been obliged to make such a payment.
3. In making payments in accordance with any standards of performance or in
accordance with paragraph 2, the Licensee shall not discriminate:
(a) between any persons or class or classes thereof; or
(b) as between the Licensee and any persons or class or classes thereof.
164
CONDITION 22: EFFICIENT USE OF ELECTRICITY
- --------------------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to the
Director for his approval a code of practice setting out the ways in which
the Licensee will make available to customers such guidance on the
efficient use of electricity as will, in the opinion of the Licensee,
enable them to make informed judgments on measures to improve the
efficiency with which they use the electricity supplied to them. Such code
of practice shall include, but shall not be limited to:
(a) the preparation and making available free of charge to any customer
who requests it of a statement, in a form approved by the Director,
setting out information and advice for the guidance of customers in
the efficient use of electricity supplied to them;
(b) the making of arrangements for maintaining sources from which
customers may obtain further information about the efficient use of
electricity supplied to them, including the maintenance of a telephone
information service; and
(c) the preparation and making available free of charge to any customer
who requests it of a statement or statements of sources (to the extent
that the Licensee is aware of the same) outside the Licensee's
organisation from which customers may obtain additional information or
assistance about measures to improve the efficiency with which they
use the electricity supplied to them, such statement or statements to
include basic information which is publicly available on financial
assistance towards the costs of such measures available from Central
or Local Government or through bodies in receipt of financial support
from Government in connection with measures to promote the efficiency
of energy use.
2. Where the Director (who may have regard to the need for economy, efficiency
and effectiveness before giving directions under this paragraph) gives
directions to do so, the Licensee shall:
(a) review and prepare a revision of the code of practice;
(b) take steps to bring to the attention of customers information on the
efficient use of electricity supplied to them; and
165
(c) send to each customer a copy of any information published by the
Director pursuant to Section 48 of the Act
in such manner and at such times as will comply with those directions.
3. This Condition is subject to the provisions of Condition 23A.
166
CONDITION 23: COMPLAINT HANDLING PROCEDURE
- --------------------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to the
Director for his approval a code of practice detailing the procedure for
handling complaints from customers about the manner in which the Licensee
conducts its Supply and Distribution Businesses.
2. Any procedure established in accordance with this Condition shall specify
the periods within which it is intended that different descriptions of
complaint should be processed and resolved.
3. This Condition is subject to the provisions of Condition 23A.
167
CONDITION 23A: PREPARATION, REVIEW OF AND COMPLIANCE WITH CUSTOMER SERVICE CODES
- --------------------------------------------------------------------------------
1. This Condition applies to any code of practice required to be prepared by
the Licensee pursuant to Conditions 18, 20, 20A, 22 and 23 of this Licence.
2. In first preparing such a code the Licensee shall, prior to submitting that
code to the Director, consult the Relevant Consumers' Committee and shall
have regard to any representations made by the committee about such code or
the manner in which it is likely to be operated.
3. Where before the expiry of 30 days of the Licensee first submitting such
code to the Director for his approval the Director notifies the Licensee
that the Director considers the code is not sufficient for the purposes of
meeting the requirements of this Licence the Licensee shall forthwith make
such changes as the Director may require.
4. The Licensee shall, whenever requested to do so by the Director, review
such code and the manner in which it has been operated, with a view to
determining whether any modification should be made to it or to the manner
of its operation.
5. In carrying out any such review the Licensee shall consult the Relevant
Consumers' Committee and shall have regard to any representations made by
it about such code or the manner in which it is likely to be or (as the
case may be) has been operated.
6. The Licensee shall submit any revision of such code which, after consulting
the Relevant Consumers' Committee in accordance with paragraph 5, it wishes
to make, to the Director for his approval and following his approval in
writing shall then revise the code.
7. The Licensee shall:
(a) as soon as practicable following the preparation of any code or any
revision made to it send to the Director and the Relevant Consumers'
Committee a copy of such code or such revision (in each case in the
form approved by the Director);
(b) draw the attention of those of its customers to whom such code applies
to the existence of the code and of each substantive revision of it
and to the means by which they may inspect a copy of such code in its
latest form; and
168
(c) give or send free of charge a copy of such code (as from time to time
revised) to any person who requests it.
8. No changes may be made to any code otherwise than in accordance with the
foregoing procedures.
9. The Licensee shall ensure, so far as reasonably practicable, that it
complies with such arrangements or procedures (as the case may be) as are
contained in or described by any code to which this condition applies and
approved by the Director or any revision to such code approved by the
Director.
169
CONDITION 23B: INFORMATION GIVEN TO DESIGNATED CUSTOMERS
- ----------------------------------------------------------
1. The Licensee shall keep each of its Designated Customers (save insofar as
he receives an unmetered supply) informed of the amount of electricity
which, since he was last informed, its records show as having been consumed
by that customer:
(a) according to the meter through which he is supplied; or
(b) where no meter reading is available, according to the estimate of the
Licensee.
2. The Licensee shall keep each of its Designated Customers informed:
(a) that the Relevant Consumers' Committee or the Director can assist in
resolving complaints which the Licensee has not resolved to the
customer's satisfaction; and
(b) of how the appropriate office of the Committee or the Director can be
contacted.
3. The Licensee may discharge its duties under paragraphs 1 and 2 by providing
the relevant information on or with each bill or statement given to a
customer in respect of charges for the supply of electricity, and annually
to each customer to whom no such bills or statements are rendered.
170
CONDITION 23C: PUBLICATION OF INFORMATION TO CUSTOMERS
- --------------------------------------------------------
1. Subject to paragraph 5, the Licensee shall by 31 December 1997 inform each
customer of a number or numbers ("the Supply Number(s)") relevant to the
registration, under the Master Registration Agreement, of a supplier of
electricity to the premises owned or occupied by such customer.
2. The Licensee shall, at the same time as it informs a customer of the
relevant Supply Number in accordance with paragraph 1, send to that
customer a statement in writing which provides a clear and sufficient
explanation of the nature and function of the Supply Number, such statement
having received the prior approval of the Director.
3. The Supply Number shall consist of a number of data items, each of which
shall be represented by a numerical identifier which shall:
(a) have the number of digits specified in a direction issued by the Director;
(b) be approved by the Director; and
(c) be used by the Licensee in common with all Electricity Suppliers.
4. Subject to paragraph 5, the Licensee shall inform each of its customers of
the Supply Number relevant to such customer:
(a) in a form in accordance with the terms of a direction issued by the
Director, on each bill or statement given to the customer in relation to
the supply of electricity; and
(b) annually where the customer does not receive such a bill or statement.
5. The Director may issue a direction relieving the Licensee of its obligation
under paragraphs 1 and 4 to such extent and subject to such terms and
conditions as he may specify in that direction.
171
CONDITION 24: RELATIONS WITH THE RELEVANT CONSUMERS' COMMITTEE
- ----------------------------------------------------------------
1. The Licensee shall meet with the Relevant Consumers' Committee whenever
requested to do so by that committee, up to a maximum of six times in every
year during the period of this Licence.
2. Without prejudice to paragraph 1, the Licensee shall meet the Relevant
Consumers' Committee at least once in every year during the period of this
Licence.
3. In at least one meeting with the Relevant Consumers' Committee in every
year during the period of this Licence, the Licensee shall be represented
by one or more directors of the Licensee.
172
CONDITION 25: HEALTH AND SAFETY OF EMPLOYEES
- ----------------------------------------------
1. The Licensee shall, together with all other licensees, consult with
appropriate representatives of persons employed by itself and by those
licensees in order to establish and maintain an appropriate machinery or
forum for the joint consideration of matters of mutual concern in respect
of the health and safety of such persons.
2. In this Condition:
"licensees" means all holders of licences granted under
Section 6(1)(a), 6(1)(b), 6(1)(c) and 6(2) of
the Act.
173
CONDITION 26: [NO LONGER USED]
- -------------------------------
174
CONDITION 27: DISPOSAL OF RELEVANT ASSETS
- ---------------------------------------------
1. The Licensee shall not dispose of or relinquish operational control over
any relevant asset otherwise than in accordance with the following
paragraphs of this Condition.
2. Save as provided in paragraph 3, the Licensee shall give to the Director
not less than two months' prior written notice of its intention to dispose
of or relinquish operational control over any relevant asset, together with
such further information as the Director may request relating to such asset
or the circumstances of such intended disposal or relinquishment of control
or to the intentions in regard thereto of the person proposing to acquire
such asset or operational control over such asset.
3. Notwithstanding paragraphs 1 and 2, the Licensee may dispose of or
relinquish operational control over any relevant asset:
(a) where:
(i) the Director has issued directions for the purposes of this
Condition containing a general consent (whether or not subject to
conditions) to:
(aa) transactions of a specified description; and/or
(bb) the disposal of or relinquishment of operational control
over relevant assets of a specified description; and
(ii) the transaction or the relevant assets are of a description to
which such directions apply and the disposal or relinquishment is
in accordance with any conditions to which the consent is
subject;
(b) where the disposal or relinquishment of operational control in
question is required by or under any enactment or subordinate
legislation.
175
4. Notwithstanding paragraph 1, the Licensee may dispose of or relinquish
operational control over any relevant asset as is specified in any notice
given under paragraph 2 in circumstances where:
(a) the Director confirms in writing that he consents to such disposal or
relinquishment (which consent may be made subject to the acceptance by
the Licensee or any third party in favour of whom the relevant asset
is proposed to be disposed or operational control is proposed to be
relinquished of such conditions as the Director may specify); or
(b) the Director does not inform the Licensee in writing of any objection
to such disposal or relinquishment of control within the notice period
referred to in paragraph 2.
5. Without prejudice to paragraphs 1 to 4, the Licensee shall not after 15
December 1997 without the written consent of the Director after disclosure
of all material facts:
(a) create any mortgage, charge, pledge, lien or other form of security or
encumbrance whatsoever, undertake any indebtedness to any other person
or enter into any guarantee of any obligation otherwise than:
(i) on an arm's length basis;
(ii) on normal commercial terms;
(iii) for a Permitted Purpose; and
(iv) (if the transaction is within the ambit of paragraph 1) in
accordance with paragraphs 3 and 4;
provided that nothing in this Condition shall prevent the Licensee
guaranteeing any obligation owed by an affiliate or related
undertaking of the Licensee which has been or is to be incurred for a
Permitted Purpose;
176
(b) transfer, lease, license or lend any sum or sums, asset, right or
benefit to any affiliate or related undertaking of the Licensee
otherwise than by way of:
(i) a dividend or other distribution out of distributable reserves;
(ii) repayment of capital;
(iii) payment properly due for any goods, services or assets provided
on an arm's length basis and on normal commercial terms;
(iv) a transfer, lease, licence or loan of any asset, right or
benefit on an arm's length basis and on normal commercial
terms;
(v) repayment of any loan or payment of any interest on such a
loan on an arm's length basis and on normal commercial terms;
(vi) payments for group corporation tax relief or for the
surrender of Advance Corporation Tax;
(vii) a transfer for the purpose of satisfying paragraph 3 of
Condition 2A;
(viii) an acquisition of shares in conformity with paragraph 2
of Condition 2A; or
(ix) a loan not prohibited by sub-paragraph (c);
(c) make loans to any affiliate or related undertaking of the Licensee,
other than loans for a Permitted Purpose.
177
6. In this Condition:
"disposal" includes any sale, gift, lease, licence, loan,
mortgage, charge or the grant of any other
encumbrance or the permitting of any encumbrance
to subsist or any other disposition to a third
party, and "dispose" shall be construed
accordingly.
"indebtedness" means all liabilities now or hereafter due, owing
or incurred, whether actual or contingent, whether
solely or jointly with any other person and
whether as principal or surety, together with any
interest accruing thereon and all costs, charges,
penalties and expenses incurred in connection
therewith.
"relevant asset" means any asset for the time being forming part of
the Licensee's distribution system, any control
centre for use in conjunction therewith and any
legal or beneficial interest in land upon which
any of the foregoing is situate.
178
Condition 28: Provision of information to the Director
- -------------------------------------------------------
1. Subject to paragraphs 6 and 7, 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 shall by 22 December 1997 procure from the holding company of
the Licensee a legally enforceable undertaking in favour of the Licensee in
a form already specified by the Director; such undertaking shall provide
that the holding company will give to the Licensee, and will procure that
each subsidiary of that holding company (other than the Licensee and its
subsidiaries) will give to the Licensee, all such information as may be
necessary to enable the Licensee to comply fully with paragraph 1. Such
undertaking shall remain in force for as long as the Licensee remains the
holder of this Licence and the giver of the undertaking remains the holding
company of the Licensee.
3. The Licensee shall deliver to the Director evidence (including a copy of
such undertaking) that the Licensee has complied with the obligation to
procure an undertaking pursuant to paragraph 2.
4. The Licensee shall not, save with the consent in writing of the Director,
enter (directly or indirectly) into any agreement or arrangement with the
holding company of the Licensee or any of the subsidiaries of the holding
company (other than the subsidiaries of the Licensee) at a time when:
(a) an undertaking complying with paragraph 2 is not in place; or
(b) there is an unremedied breach of such undertaking.
5. Without prejudice to the generality of paragraph 1, the Director may call
for the furnishing of accounting information which is more extensive than
or differs from that required to be prepared and supplied to the Director
under Condition 2.
179
6. 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.
7. The Licensee may not be required by the Director to furnish him under this
Condition with any information in relation to an enforcement matter which
the Licensee could not be compelled to produce or give under Section 28(3)
of the Act.
8. The power of the Director to call for information under paragraph 1 is in
addition to the power of the Director to call for information under or
pursuant to any other Condition.
9. 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 and Distribution Businesses) which the Director proposes to
publish pursuant to Section 48 of the Act.
10. In this Condition "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.
180
Condition 29: Payment of fees
- ------------------------------
1. The Licensee shall, at the times stated hereunder, pay to the Secretary of
State fees of the amount specified in, or determined under, this Condition.
2. In respect of the year beginning on 1 April 1991 and in each subsequent
year, the Licensee shall pay to the Secretary of State a fee which is the
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 total costs during the coming year;
(b) the amount (or, where the Relevant Consumers' Committee in question is
the consumers' committee for more than one public electricity
supplier, the amount which is a proportion as determined by the
Director, according to a method which has previously been disclosed in
writing to the Licensee, of such amount) estimated by the Director
(having regard to any statement under paragraph 8(2) of Schedule 2 to
the Act) as being likely to be the costs during the coming year of the
Relevant Consumers' Committee in the exercise of the functions
assigned to it by or under the Act and any other such functions as it
has been or may be required to exercise by the Director;
(c) 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(1)(c) of the Act; and
(d) 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 amounts comprised therein been calculated by reference
to:
181
(aa) in the case of sub-paragraph 2(a), the actual total
costs of the Director during that year and the
proportion thereof attributable to the Licensee; and
(bb) in the case of sub-paragraph 2(b), the actual total
costs of the Relevant Consumers' Committee during that
year and where appropriate, the proportion thereof
attributable to the Licensee,
(such costs being apportioned in each case as determined by
the Director according to a method previously disclosed in
writing to the Licensee),
and the fee shall be paid by the Licensee to the Secretary of State 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.
182
Condition 30: Designated Premises
- ----------------------------------
1. For the purposes of this Licence, the question whether any premises are
"Designated Premises" shall be determined in accordance with the provisions
of this Condition.
2. Premises are Designated Premises if they are either:
(a) Domestic Premises; or
(b) premises at which, in the reasonable expectation of the Licensee at
the time of entering into a contract for the supply of electricity to
such premises, the normal annual consumption of electricity will
amount to no more than 12,000 kWh,
but excluding premises referred to at sub-paragraph (b) which receive an
unmetered supply, or which are supplied through half-hourly or maximum
demand metering equipment or under the terms of a multi-site contract.
3. For the purposes of this Condition, a "multi-site contract" is a contract
for the supply of electricity both to any premises which do not fall within
the terms of sub-paragraphs 2(a) or (b) and to one or more other premises
(not being Domestic Premises), all of which premises are owned or occupied
by:
(a) the same person or body of persons whether corporate or unincorporate;
or
(b) an undertaking (the "principal undertaking") and any holding company,
subsidiary, or subsidiary of the holding company of that principal
undertaking, or any other undertaking in which the principal
undertaking has a participating interest.
4. Any premises supplied by the Licensee which (in accordance with paragraphs
1 to 3) were not Designated Premises at the time at which the Licensee
entered into a contract for their supply shall, notwithstanding subsequent
changes to the nature or level of the consumption of electricity at those
premises, not become Designated Premises for the purposes of this Licence
prior to the time at which they cease to be supplied by the Licensee.
183
5. Any premises supplied by the Licensee which (in accordance with paragraphs
1 to 3) were Designated Premises at the time at which the Licensee entered
into a contract for their supply shall cease to be Designated Premises for
the purposes of this Licence where:
(a) they have been continuously supplied by the Licensee for a period of
at least 12 months and:
(i) they are not, or are no longer, Domestic Premises; and
(ii) it is reasonably to be expected that the normal annual
consumption of electricity at the premises will amount to more
than 12,000 kWh; or
(b) (not being, or being no longer, Domestic Premises) the premises
commence receipt of an unmetered supply or a supply through half-
hourly or maximum demand metering equipment or under the terms of a
multi-site contract.
6. In this Condition:
"maximum demand metering means metering equipment which is
equipment" capable of recording the demand for
electricity supplied to premises during
the half hour of maximum demand in any
period of supply.
184
CONDITION 31: TERMS FOR SUPPLY OF ELECTRICITY INCOMPATIBLE WITH LICENCE
- ------------------------------------------------------------------------
CONDITIONS
- ----------
1. Without prejudice to its rights and obligations under the Act, the Licensee
shall not enter into, offer to enter into or enter into a variation of any
contract for the supply of electricity to a customer at Designated Premises
otherwise than on terms which comply with the Licensee's obligations under
this Licence.
2. The Licensee shall not enforce or take advantage of any term of a contract
for the supply of electricity to a customer at Designated Premises if the
inclusion of that term was in breach of the provisions of this Licence.
3. The Licensee shall not take advantage of the omission of any term from a
contract for the supply of electricity to a customer at Designated Premises
if the omission of that term was in breach of the provisions of this
Licence.
185
CONDITION 32: LIMITATION ON REQUIREMENTS FOR TERMINATION FEES
- --------------------------------------------------------------
1. Where the Licensee enters into any Designated Supply Contract in the
circumstances set out at paragraph 2 it may not in such contract provide
for the payment of any termination fee by the Designated Customer.
2. Paragraph 1 applies in respect of any Designated Supply Contract entered
into prior to the date which is 90 days following the earliest date
specified (and not subsequently withdrawn or varied to a later date) in any
direction or variation of a direction issued by the Director, pursuant to
condition 3 of the licence held by any Second Tier Supplier, in relation to
the supply of electricity to all premises within the authorised area.
186
CONDITION 33: REVISION OF THE CONTRACT TERMS CONDITIONS
- --------------------------------------------------------
1. The Director, in accordance with the provisions of this Condition, may from
time to time review (in whole or in part) the provisions and operation of
the Contract Terms Conditions in the licences of all Electricity Suppliers
with a view to establishing whether any revision should be made to the
Contract Terms Conditions in all such licences.
2. At the commencement of any review by the Director, the Director shall:
(a) give to all Relevant Parties a notice in writing which sets out the
terms of the review and of any proposals in connection therewith and
which invites the submission of any representations by a specified
date (being not less than 28 days after the date of the notice); and
(b) publish such notice or an accurate summary of it in a manner which
will, in the opinion of the Director, secure adequate publicity for
it.
3. On receiving from the Director notice of such a review the Licensee may
submit any representations on matters within the terms of the review by the
date specified in the notice.
4. As soon as practicable following the completion of any such review, the
Director shall send to each Relevant Party, and to any person who has made
representations to him by virtue of the notice published under sub-
paragraph 2(b), a copy of:
(a) a report on the outcome of such review;
(b) any revisions which he proposes to make, having regard to any
representations received during such review, to the Contract Terms
Conditions in the licences of all Electricity Suppliers;
(c) a statement of his reasons for proposing those revisions; and
187
(d) a notice specifying the time (being not less than 28 days from the
date the Director issues the notice) within which Electricity
Suppliers which are entitled to supply electricity to Designated
Premises shall state whether or not they consent to the proposed
revisions to the Contract Terms Conditions in their licences.
5. A revision proposed to be made by the Director to the Contract Terms
Conditions of all Electricity Suppliers may be made only where the Director
is satisfied that the figures determined in accordance with paragraphs 6
and 7 (expressed as a percentage) are each not less than 90 per cent.
6. The figure determined in accordance with this paragraph shall be calculated
under the following formula:
C x 100
---
C+N
where:
C = the number of Designated Premises supplied on contract by
consenting Electricity Suppliers; and
N = the number of Designated Premises supplied on contract by
non-consenting Electricity Suppliers
as estimated (in each case) by the Director on the basis of the information
most recently available to him.
7. The figure determined in accordance with this paragraph shall be calculated
under the following formula:
C x 100
---
C+N
where:
C = the number of consenting Electricity Suppliers; and
N = the number of non-consenting Electricity Suppliers.
188
8. In paragraphs 6 and 7 the expressions "consenting" and "non-consenting"
refer (as the case may be) to the consent or otherwise of Electricity
Suppliers which are entitled to supply electricity to Designated Premises
to the proposed revision to the Contract Terms Conditions in their
licences.
9. Where the Director is satisfied that the figures determined in accordance
with paragraphs 6 and 7 (expressed as a percentage) are each not less than
90 per cent the Director may amend the Contract Terms Conditions of the
Licensee in accordance with the proposed revision.
10. No revision made to the Contract Terms Conditions by virtue of this
Condition may introduce an obligation in respect of any matter other than
one which:
(a) is provided for, or is reasonably ancillary to a matter provided for,
under the Contract Terms Conditions on the date on which such
Conditions come into force;
(b) concerns the terms of contracts offered or entered into by the
Licensee for the supply of electricity to Designated Premises; or
(c) concerns any dealings with customers by or on behalf of the Licensee
prior to and for the purpose of offering or entering into contracts
for the supply of electricity to Designated Premises.
11. In this Condition:
"Relevant Parties" means the Licensee, all other
Electricity Suppliers, the Electricity
Consumers' Committees and such other
persons or bodies as in the opinion of
the Director are representative of those
likely to be affected by a revision to
the Contract Terms Conditions.
189
PART III - THE CONTRACT TERMS CONDITIONS
----------------------------------------
CONDITION 34: DESIGNATED SUPPLY CONTRACTS
- ---------------------------------------------
1. A Designated Supply Contract is a contract for the supply of electricity to
Designated Premises, as varied from time to time, which complies with the
provisions of this Condition.
2. Without prejudice to its rights and obligations under the Act, the Licensee
shall not supply electricity to Designated Premises on contract except
under a Designated Supply Contract.
3. A Designated Supply Contract shall:
(a) be in a standard form, save that there may be different forms for
different areas, cases and circumstances;
(b) set out all the terms and conditions, including terms as to price, on
which the Licensee will supply electricity in the relevant case; and
(c) contain terms reflecting the termination provisions of Conditions 38
and 39.
4. Any Designated Supply Contract for both the supply of electricity and the
provision of goods or services shall identify separately the charge for
that supply from the charge for the goods or services.
5. Where a Designated Supply Contract may be terminated by a customer by
virtue of any provision included in that contract in compliance with
Conditions 38 and 39, the Licensee may at its discretion accept a lesser
period of notice than is specified in that provision.
6. Nothing in this Licence shall prevent the Licensee from entering into a
Designated Supply Contract which contains provisions for its termination
that are additional to and do not derogate from those set out at Conditions
38 and 39.
192
CONDITION 35: CONTRACTUAL TERMS
- --------------------------------
1. Where the Licensee offers to supply electricity to Domestic Premises under
Designated Supply Contracts, it shall have available forms of Designated
Supply Contract which provide for the payment of charges for electricity
supplied to Domestic Premises:
(a) by prepayment through a prepayment meter;
(b) by different methods, including:
(i) by cash, at such places and to such persons as are reasonable in
all the circumstances; and
(ii) by cheque, and
(c) at a reasonable range of different intervals, including:
(i) paying monthly a predetermined sum; and
(ii) paying quarterly in arrears.
2. Before entering into any contract to supply electricity to Domestic
Premises (other than through a prepayment meter) the Licensee shall inform
the customer of and offer to enter into Designated Supply Contracts which
comply with sub-paragraphs 1(b) and (c).
3. The Licensee shall process all requests for a supply of electricity to
Designated Premises without undue preference or undue discrimination.
4. The Licensee shall send copies of each of the forms of Designated Supply
Contract (as revised from time to time) under which it supplies or offers
to supply electricity:
(a) on receipt of a request, to any person; and
(b) not later than the date on which it first offers to supply electricity
under each such form of Designated Supply Contract (or revision
thereof), to the Director.
191
5. The Licensee shall prepare, in respect of each form of Designated Supply
Contract:
(a) a document which sets out an accurate summary of the Principal Terms
of that form of Designated Supply Contract; and
(b) particulars of inducements offered to any person entering into such a
contract which might reasonably be expected materially to influence
the decision whether or not to enter into it.
6. The Licensee shall publish the documents and particulars referred to at
paragraph 5 in a manner that will in the opinion of the Licensee secure
adequate publicity for them, and shall send copies of them to the Director
no later than the date on which they are published.
192
CONDITION 36: NOTIFICATION OF TERMS
- ------------------------------------
1. Before entering into any Designated Supply Contract the Licensee shall take
all reasonable steps to draw the attention of the customer to the Principal
Terms of the contract.
2. Where the Licensee has entered into a Designated Supply Contract it shall
(except where it has already done so) provide the customer within 2 working
days of the date of the contract with a copy of its full terms and
conditions.
3. Subject to paragraph 4 the Licensee shall, at least 30 days before any
Designated Supply Contract to supply electricity for a specified period is
due to expire, send to the customer:
(a) a written offer to enter into a new contract for supply from the date
of expiry of the existing contract, drawing the attention of the
customer to the Principal Terms relevant to that offer;
(b) an accurate summary of the Principal Terms of other contracts which
the Licensee will make available to the customer; and
(c) details of how the customer can obtain continuity of supply from the
Licensee.
4. Paragraph 3 shall not apply where:
(a) the customer has informed the Licensee that he does not wish to
continue to be supplied by it after the expiry of the existing
contract; or
(b) it is not reasonable in all the circumstances for the Licensee to be
required to continue to supply that customer and the Licensee has (at
least 30 days before the contract was due to expire) both notified the
customer to that effect and informed him that he must make
arrangements to obtain a supply from another Electricity Supplier.
193
5. Where a Designated Supply Contract allows for its unilateral variation (in
any respect) by the Licensee and is so varied to the significant
disadvantage of the customer, the Licensee shall within 10 days of the
variation give to the customer written notice:
(a) of the variation;
(b) of the customer's right to terminate the contract; and
(c) of the effect of paragraph 6.
6. Where a customer gives to the Licensee a valid notice of termination within
14 days of receiving notice under paragraph 5, the Licensee shall treat the
variation as ineffective and shall neither enforce nor take advantage of
it.
7. Where the Licensee believes that any of its customers no longer occupies or
is about to vacate Designated Premises to which it supplies electricity, it
shall as soon as reasonably practicable provide any new occupier of those
premises with an accurate summary of the Principal Terms of contracts it
will make available to him.
194
CONDITION 37: SECURITY DEPOSITS
- --------------------------------
1. The Licensee shall not, in respect of the supply of electricity under any
Designated Supply Contract, require a deposit:
(a) where the customer is prepared to be supplied through a prepayment
meter and it is reasonably practicable in all the circumstances
(including in particular the risk of loss or damage) for the Licensee
to provide such a meter; or
(b) where it is otherwise unreasonable in all the circumstances to do so.
2. Any deposit required of a Designated Customer may be 1 1/2 times the value
of the average quarterly consumption of electricity reasonably expected at
the relevant premises, or more if that is reasonable in all the
circumstances.
3. Where the Licensee requires a deposit of a Designated Customer it shall at
the same time inform that customer of the effect of paragraphs 5 and 7.
4. Where the Licensee holds any deposit it shall pay interest, at a rate it
shall fix from time to time with the approval of the Director, on every sum
of 50p deposited for every 3 months during which that sum is held.
5. Subject to paragraph 6, any deposit given by a Designated Customer shall be
repaid (with interest) by the Licensee:
(a) within 14 days where, in the previous 12 months, the customer has paid
all charges for electricity supplied within 28 days of each written
demand made; or
(b) as soon as reasonably practicable, and in any event within 1 month,
where the Licensee has ceased to supply the customer and the customer
has paid all charges for electricity supplied.
195
6. Sub-paragraph 5(a) shall not apply where it is reasonable in all the
circumstances for the Licensee to retain the deposit.
7. Any dispute arising under this Condition between the Licensee and a
Designated Customer may be referred by either party to the Director. The
Director shall determine any such dispute, following such practice and
procedure as he considers appropriate.
196
CONDITION 38: TERMINATION OF CONTRACTS ON NOTICE
- -------------------------------------------------
1. Each Designated Supply Contract shall contain a term allowing the customer
to terminate such contract at any time by:
(a) giving to the Licensee a valid notice of termination; and
(b) subject to paragraph 6, paying to the Licensee on demand a termination
fee.
2. A notice of termination is valid where it is given at least 28 days in
advance of the date on which it is to take effect and where, not later than
that date, the requirements of paragraphs 3 and (unless the Licensee
expressly agrees to waive it) 4 are satisfied.
3. The requirement of this paragraph is that either:
(a) another Electricity Supplier commences a supply of electricity to the
relevant premises; or
(b) the relevant premises are cut off because the customer at those
premises has ceased to require a supply.
4. The requirement of this paragraph is that no charges for electricity
supplied to the customer (whether at the relevant premises or at any
premises previously occupied by him), having been demanded in writing prior
to the notice of termination being given, remain owing to the Licensee more
than 28 days after that demand was made.
5. Each Designated Supply Contract shall provide that a notice of termination
which is not valid shall not be effective to terminate such contract.
6. A termination fee shall not be demanded of a customer where:
(a) the contract was terminated under any provision of Condition 39;
197
(b) the contract was a contract of indefinite length, and was terminated
other than during a fixed term period;
(c) the Licensee notified the customer, under paragraph 5 of Condition 36,
of a unilateral variation of the contract and the customer gave notice
of termination in accordance with paragraph 6 of that Condition; or
(d) the contract was a contract to which paragraph 4 of Condition 39
applied and the Licensee did not, before entering into it, take all
reasonable steps to draw the attention of the customer to the effect
of the term set out at that paragraph.
7. Where a termination fee is payable, it shall be of an amount not greater
than that which the Licensee may in all the circumstances reasonably
require.
198
CONDITION 39: TERMINATION OF CONTRACTS IN SPECIFIED CIRCUMSTANCES
- ------------------------------------------------------------------
1. Each Designated Supply Contract shall provide that the contract will
terminate:
(a) on the date on which the customer ceases to own or occupy the relevant
premises, having given the Licensee at least 2 working days' notice of
that date; or
(b) where the customer has ceased to own or occupy the premises without
giving the Licensee at least 2 working days' notice, on the first in
time of:
(i) the second working day after he has given notice to the
Licensee;
(ii) the next day on which the meter is due to be read; and
(iii) the date on which any subsequent owner or occupier enters into a
contract or tariff agreement for the supply of electricity to
the premises.
2. Each Designated Supply Contract shall provide that where it is terminated
by virtue of a term included in the contract in compliance with paragraph
1, the customer shall remain liable for any charges for the supply of
electricity until the date of termination.
3. Each Designated Supply Contract shall provide that it may be terminated
immediately by either party at any time after the Director or the Secretary
of State has revoked this Licence.
4. Any Designated Supply Contract which:
(a) provides for the Licensee to supply electricity for a specified period
of more than 12 months; or
(b) contains an initial fixed term period, shall provide that it may be
terminated immediately by the customer at any time within 5 working
days of the date of the contract.
199
Where a Designated Supply Contract is for both the supply of electricity
and the provision of goods or services:
(a) any reference in the Contract Terms Conditions to its termination is a
reference to its termination in respect of the supply of electricity
alone; and
(b) on its termination by virtue of any provision of the Contract Terms
Conditions, the Licensee may require the customer to give any
reasonable security for his future compliance with the contract for
the provision of goods or services.
200
CONDITION 40: ASSIGNMENT OF OUTSTANDING CHARGES
- ------------------------------------------------
1. This Condition shall apply where:
(a) the Licensee has commenced the supply of electricity to Domestic
Premises at which a supply was previously given to its customer by the
Previous Supplier;
(b) the customer has failed to pay, within 28 days of receiving a demand
in writing, any charges due from him to the Previous Supplier for the
supply of electricity at those premises;
(c) that failure occurred after either the Previous Supplier was informed
of the change of supplier or the Licensee commenced supply to the
premises (whichever is the earlier);
(d) the Previous Supplier has given written notice to the customer that it
proposes to assign the debt to the Licensee, which may be entitled to
reclaim from him its costs in recovering the debt; and
(e) the Licensee has received from the Previous Supplier a notice in
accordance with paragraph 2.
2. A notice in accordance with this paragraph is one which:
(a) is given at least 14 days after the notice referred to at sub-
paragraph 1(d) and is received by the Licensee within 90 days of it
commencing a supply to the premises;
(b) specifies the amount of the debt which remains unpaid;
(c) states that the Previous Supplier has used all reasonable endeavours
to recover the debt, which remains unpaid at least 42 days after being
demanded in writing; and
(d) states that the Previous Supplier intends to assign to the Licensee
the debt, up to a maximum sum of one-third of the value (calculated in
accordance with the charges
201
of the Previous Supplier to the customer immediately before it ceased
to supply him) of the average annual consumption reasonably expected
of the customer.
3. Where this Condition applies the Licensee shall, within 60 days of
receiving a notice under paragraph 2 and in consideration of the assignment
of the debt, pay to the Previous Supplier the sum specified under sub-
paragraph 2(d) (less, where they cannot be reclaimed from the customer, its
reasonable costs of recovering that debt).
4. For the purposes of this Condition, a customer shall not be regarded as
being in debt to the Previous Supplier to the extent to which that debt is
genuinely in dispute.
5. In this Condition:
"Previous Supplier" means, in relation to any premises,
the Electricity Supplier which supplied
electricity to those premises immediately
prior to the commencement of supply by the
Licensee.
202
CONDITION 41: MODIFICATION OF PROVISIONS UNDER CONDITIONS 38 AND 40
- --------------------------------------------------------------------
1. In this Condition, the "relevant provisions" are the provisions of
paragraph 4 of Condition 38 and Condition 40 of this Licence (or any of
them).
2. Where the Director considers (having regard to any representations made to
him) that in any specified class of cases the relevant provisions do not
fulfil the requirements of paragraph 4, he may direct that they shall cease
to have effect in that class of cases.
3. Where a direction under paragraph 2 has been made and the Director
considers (having regard to any representations made to him) that in the
specified class of cases the relevant provisions would fulfil the
requirements of paragraph 4, he may direct that they shall again have
effect in those cases.
4. The requirements of this paragraph are that, in the specified class of
cases, the operation of the relevant provisions:
(a) significantly reduces the number of unrecovered debts otherwise to be
expected; or
(b) involves expenditure in debt recovery which is less than the reduction
in the value of unrecovered debts which it achieves.
5. Any direction under paragraphs 2 or 3 shall be made by a notice given to
the Relevant Parties which shall specify:
(a) the relevant provisions to which it applies;
(b) the class of cases to which it applies; and
(c) the date on which it shall have effect (being, in a direction under
paragraph 3, at least 3 months after the notice is given).
203
6. In this Condition:
"Relevant Parties" means the Licensee, all other
Electricity Suppliers, the Electricity
Consumers' Committees and such other
persons or bodies as in the opinion of
the Director are representative of those
likely to be affected by a revision to
the relevant provisions.
204
SCHEDULE 1
----------
DESCRIPTION OF AUTHORISED AREA
------------------------------
The authorised area shall comprise that area which is outlined on the attached
map and shall additionally include those premises listed in List A (the
"Additional Premises") but shall not include those premises listed in List B
(the "Excluded Premises").
A: ADDITIONAL PREMISES
-------------------
ADDRESS GRID REFERENCE
------- --------------
Mine SE 6040 4045
Stillingfleet Moor
Stillingfleet
Nr York
YO4 6HX
Mine SE 6475 4431
North Selby
New Road
Escrick
YO4 6EY
B: EXCLUDED PREMISES
-----------------
ADDRESS GRID REFERENCE
------- --------------
None
205
SCHEDULE 2
----------
TERMS AS TO REVOCATION
----------------------
1. The Secretary of State 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 Secretary of State that
this Licence should be revoked;
(b) if any amount payable under Condition 29 is unpaid 30 days after it
has become due and remains unpaid for a period of 14 days after the
Secretary of State 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 (in either case) such failure is not rectified to the satisfaction
of the Secretary of State within 3 months after the Secretary of State
has given notice of such failure to the Licensee. Provided that no
such notice shall be given by the Secretary of State 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 10 (2) (a) of the Competition Act 1980;
(e) if the Licensee ceases to carry on its business as a public
electricity supplier;
206
(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 has any voluntary arrangement proposed
in relation to it under Section 1 of that Act or 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
Secretary of State);
(ii) has a receiver (which expression shall include an
administrative receiver within the meaning of Section 29 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 Secretary of State; or
(v) becomes subject to an order by the High Court for winding-up;
or
(g) if the Licensee is convicted of having committed an offence under
Section 59 of the Act in making its application for this Licence.
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 Secretary of State and the Licensee.
207
(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 expiration of such period as may be stated in any notice
given by the Secretary of State under paragraph 1 of this Schedule.
3. The provisions of Section 109 of the Act shall apply for the purposes of
the service of any notice under this Schedule.
208
SCHEDULE 3
----------
SUPPLEMENTARY PROVISIONS OF THE CHARGE RESTRICTION CONDITIONS
-------------------------------------------------------------
PART A
------
PRINCIPLES FOR ATTRIBUTION
--------------------------
General Principles
------------------
A1. Where, for the purposes of the charge restriction conditions, a share of
costs borne by the Licensee requires to be attributed to any part of the
market, the Licensee shall make that attribution on a basis which ensures
that no more than a fair proportion of those costs, reflecting the costs
incurred by the Licensee in supplying that part of the market, are so
attributed.
A2. The following paragraphs of this Part of Schedule 3 are without prejudice
to paragraph A1.
Fossil Fuel Levy and payments in lieu thereof
---------------------------------------------
A3. The fossil fuel levy requiring to be attributed to supplies to Designated
Customers shall be attributed on the basis of the amount of the levy
incorporated in the prices actually charged or to be charged by the
Licensee on supplies to such customers in the relevant year in respect of
which the attribution falls to be made. Amounts in lieu of the fossil fuel
levy in respect of purchases of electricity other than leviable electricity
requiring to be calculated and then attributed to supplies to Designated
Customers in any relevant year for the purposes of Condition 3B shall:
(a) be calculated as being such amounts as correspond to the lesser of:
209
(i) the premium actually payable (measured on an accruals basis) by
the Licensee during the relevant year on purchases of
electricity other than leviable electricity as representing the
benefit to the Licensee of being able to treat such electricity
as being other than leviable electricity for the purposes of
Section 33 of the Act and Regulations thereunder; and
(ii) the additional amount that would have been payable (measured on
an accruals basis) by the Licensee in respect of the fossil
fuel levy pursuant to Regulations made under Section 33 of the
Act had such electricity been leviable electricity; and
(b) be attributed to supplies to Designated Customers pro rata to the
amount which the quantity supplied to Designated Customers bears to
the total quantity supplied (in each case in the relevant year in
respect of which the attribution falls to be made) or on the basis of
the amount referred to in paragraph (a) incorporated in the prices
actually charged or to be charged by the Licensee on supplies to such
customers in the relevant year in respect of which the attribution
falls to be made or on such other basis of attribution as the Licensee
shall previously have agreed with the Director.
Transmission connection point charges and Remote Transmission Asset rentals
---------------------------------------------------------------------------
A4. The transmission connection point charges and Remote Transmission Asset
rentals requiring to be attributed between the regulated quantity
distributed and other quantities distributed shall be attributed in
proportion to the transmission connection point and Remote Transmission
Asset capacity required for the purpose of distributing those quantities.
Distribution losses
-------------------
A5. Where an amount (in units) in respect of distribution losses requires to be
calculated and attributed in respect of EHV units and units distributed by
the Licensee for the purpose of supply to premises outside the Licensee's
authorised area, such calculation and attribution shall be made
consistently with the principles underlying the schedule of adjustment
factors referred to at sub-paragraph (b) of paragraph 3 of Condition 8.
210
Information to be provided by Licensee
--------------------------------------
A6. The Licensee shall following the end of each relevant year furnish to the
Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3E, a statement of the
actual attribution of electricity purchase costs between regulated and
other customers and reconciling the attribution with any statements made in
respect of the relevant year under paragraph 2 of Condition 3E, and a
statement confirming that the calculation of amounts in lieu of the fossil
fuel levy and the attribution of the fossil fuel levy, amounts in lieu
thereof, the transmission connection point charges, the Remote Transmission
Asset rentals and of distribution losses was made in accordance with the
provisions of this Part of Schedule 3, accompanied (where appropriate) by
(i) a statement of the total amounts attributed to regulated
Designated Customers and other customers; and
(ii) copies of statements prepared under paragraph 2 of Condition 3E
and an explanation of the basis therefor.
A7. Where the Director is satisfied that the basis of calculation or
attribution (as the case may be) used by the Licensee is not in conformity
with paragraph A1, the Director may issue directions specifying an
alternative basis of calculation or attribution, and the basis of
calculation or attribution by the Licensee (as the case may be) shall be
adjusted accordingly with effect from the date of issue of the directions
or (subject to paragraph 10 of Condition 3E) such other date as may be
specified in those directions.
211
PART B
------
EHV PREMISES
------------
B1. EHV premises shall comprise:
(a) in relation to premises connected to the Licensee's distribution
system as at the date this Licence enters into force, those premises
specified in the list of EHV premises notified in writing to the
Director by the Licensee within twenty-eight days after this Licence
enters into force; and
(b) in relation to premises connected to the Licensee's distribution
system which are either first connected or (having been previously
connected) have had their connections materially altered following the
date this Licence enters into force, means premises connected to the
Licensee's distribution system at a voltage at or higher than 22
kilovolts or at a sub-station with a primary voltage of 66 kilovolts
or above.
B2. The Licensee shall following the end of each relevant year furnish to the
Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3E, a statement listing
any changes in the premises falling to be treated as EHV premises.
B3. Where the Director is satisfied that any premises treated by the Licensee
as EHV premises should not in conformity with sub-paragraph B1 (b) above be
so treated, the Director may issue directions to that effect, and such
premises shall cease to be treated as EHV premises from the date of issue
of the directions or (subject to paragraph 10 of Condition 3E) such other
date as may be specified in those directions.
212
PART C
------
EXCLUDED SERVICES
-----------------
Distribution Business
---------------------
C1. There may be treated as excluded services provided by the Licensee in its
Distribution Business such services in respect of which charges are made
which:
(a) do not fall within paragraph C2 of this Part; and
(b) may (subject to paragraph C9) be determined by the Licensee as falling
under one of the principles set out in paragraphs C3 to C6 of this
Part.
C2. No service provided by the Licensee as part of its Distribution Business
shall be treated as an excluded service insofar as it consists of the
provision of services remunerated under the use of system charges in
accordance with paragraph 3 of Condition 8 including (without prejudice to
the foregoing):
(i) (subject to paragraph C3 of this Part) the transport of
electricity;
(ii) the carrying out of works for the installation of electric
lines or electrical plant (not otherwise payable in the form of
connection charges);
(iii) the carrying out of works or the provision of maintenance or
repair or other services for the purpose of enabling the
Licensee to comply with Conditions 9, 11 and 13, the
Electricity Supply Regulations 1988 or any regulations made
under Section 29 of the Act or any other enactment relating to
safety or standards applicable in respect of the Distribution
Business; and
(iv) (subject to paragraph C5 of this Part) the provision,
installation and maintenance of any meters, switchgear or other
electrical plant (not being part of connection charges).
213
C3. The Licensee may treat as being an excluded service for the purposes of its
Distribution Business the transport of:
(a) units of electricity not consumed in the Licensee's authorised area;
or
(b) EHV units.
C4. Charges of the type described in paragraph 4 of Condition 8 and borne in
accordance with the principles set out in paragraph 7 of Condition 8 by any
person as connection charges, and charges in respect of the statements
referred to in paragraph 8 of Condition 8, may each be treated as excluded
services for the purposes of the Distribution Business.
C5. A service provided by the Licensee as part of its Distribution Business may
be treated as an excluded service insofar as it consists in the provision
of services (including metering, electric lines or electrical plant) for
the specific benefit of any third party requesting the same and not made
available by the Licensee as a normal part of its Distribution Business
remunerated by use of system charges including (without prejudice to the
foregoing):
(i) special metering (including "time of day" metering) to
facilitate energy saving programmes for the benefit of
customers requesting the same;
(ii) charges for moving mains, services or meters forming part of
the Licensee's distribution system to accommodate extension,
re-design or re-development of any premises on which the same
are located or to which they are connected;
(iii) the provision of electric lines and electrical plant (a)
insofar as the same are required for the specific purpose of
enabling the provision of top-up or standby supplies or sales
of electricity or (b) to provide a higher degree of security
than is required for the purposes of complying with Condition
9;
214
(iv) the amount by which charges for the provision of prepayment
meters to customers exceed charges for the provision of
standard meters for such customers; and
(v) special metering or telemetry or data processing equipment for
the purpose of enabling any person who is a party to the
Pooling and Settlement Agreement to comply with its obligations
in respect of metering thereunder, or for the performance by
the Licensee of any service in relation thereto.
C6. There may be treated as an excluded service for the purposes of the
Distribution Business, charges for the relocation of electric lines or
electrical plant and the carrying out of works associated therewith
pursuant to a statutory obligation (other than under Section 9 (1) or
Section 16 of the Act) imposed on the Licensee.
Supply Business
---------------
C7. Subject to paragraph C9, a service provided by the Licensee as part of its
Supply Business may be treated as an excluded service insofar as it
consists of the provision of services for the specific benefit of customers
requesting the same and not made available by the Licensee as a normal part
of such Business. For the avoidance of doubt, the provision of facilities
for prepayment may not be treated as an excluded service except the
provision of prepayment meters as an excluded service by the Distribution
Business.
Information to be provided to the Director
------------------------------------------
C8. The Licensee shall following the end of each relevant year furnish to the
Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3E, details specifying
separately the nature of all services provided as part of its Distribution
Business or Supply Business by the Licensee and treated as excluded
services by the Licensee during the course of such year and stating the
revenues derived by the Licensee in respect of each such service so
treated.
215
Directions
----------
C9. Where the Director is satisfied that in light of the principles set out in
paragraphs C2 to C7 inclusive any service treated by the Licensee as an
excluded service should not be so treated, the Director shall issue
directions to that effect, and the service or services specified in the
directions shall cease to be treated as excluded services from the date of
issue of the directions or (subject to paragraph 10 of Condition 3E) such
other date as may be specified in the directions.
216
PART D
------
REGULATED DISTRIBUTION UNIT CATEGORIES
--------------------------------------
D1. The Licensee shall following the end of each relevant year furnish to the
Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3E, details specifying
separately those use of system charges in respect of which the Licensee has
during the course of such year treated the units distributed as falling
within the definition of each of LV1 units and LV2 units and LV3 units
respectively.
D2. The definition of LV1 units includes units distributed under the following
tariffs:
Domestic E7 day rate
Quarterly non domestic E7 day rate
Quarterly non domestic 3-rate evening, weekend and night tariff: day,
evening and weekend units only.
D3. The definition of LV2 units includes units distributed under the following
tariffs:
Domestic E7 night rate
Quarterly non domestic E7 night rate
Quarterly non domestic 3-rate evening, weekend and night tariff: night
units only
Off peak tariffs.
D4. The definition of LV3 units includes units distributed under the following
tariffs:
General domestic
Quarterly unrestricted non domestic
Quarterly non domestic two-rate evening and weekend tariffs
Monthly billed maximum demand tariffs
STOD tariffs
Public lighting.
217
D5. Notwithstanding the provisions of paragraphs D2 to D4 above, where the
Director is satisfied that a tariff or tariffs in respect of which the
Licensee has treated the units distributed as falling within one of the
categories in paragraphs D2 to D4 above should not be so treated, the
Director shall issue directions to that effect and the tariff or tariffs
specified in the directions shall cease to be so treated from the date of
issue of the directions or (subject to paragraph 10 of Condition 3E) such
other date as may be specified in the directions and shall with effect from
such date be treated in such manner as may be specified in the directions.
218
PART E
------
CALCULATION OF FACTOR IN RESPECT OF DISTRIBUTION LOSSES
-------------------------------------------------------
E1. For the purposes of calculation of the terms ALt and Lt as used in
paragraph 1 of Condition 3A shall each be determined for relevant years
commencing on or after 1st April 1995 using the consistent methodological
basis set out in paragraphs E2 to E5 below.
Consistent methodological basis for determination of ALt and L
---------------------------------------------------------------
E2. Adjusted distribution losses shall be determined as being the difference
between adjusted grid supply point purchases and adjusted units
distributed.
E3. Units metered on entry to the Licensee's distribution system shall be
adjusted to obtain adjusted grid supply point purchases by:
(a) excluding that number of units which is equal to the sum of:
(i) EHV units; and
(ii) units distributed by the Licensee for the purpose of supply to
premises outside the Licensee's authorised area; and
(iii) an amount in respect of distribution losses between the grid
supply point and the exit point attributable to the units
referred to in (i) and (ii) above, as determined in accordance
with paragraph A5 in Part A of Schedule 3; and
219
(b) including an amount (in units) to represent the effect of units
entering the Licensee's distribution system otherwise than at grid
supply points, being the difference between the number of units so
entering and the number of units that would have been required to
have entered at grid supply points in their absence (such latter
number of units being calculated consistently with the principles
underlying the schedule of adjustment factors in respect of
distribution losses referred to at sub-paragraph (b) of paragraph 3
of Condition 8).
E4. For so long as units are metered on entry to the Licensee's distribution
system at bulk supply points instead of at grid supply points, such units
shall be calculated by:
(i) applying the procedures in paragraph E3 as if all references to units
metered at grid supply points were to units metered at bulk supply
points; and
(ii) grossing-up units metered at the bulk supply points by the relevant
grid supply point conversion factor being either:
(a) 0.5 per cent of the units metered at the bulk supply points; or
(b) such other factor to take account of losses occurring between
the grid supply points and the bulk supply points as the
Licensee may with the prior approval of the Director determine
to be appropriate.
E5. Adjusted units distributed shall be obtained by:
(a) calculating all units distributed by the Licensee metered at exit
points on leaving the Licensee's distribution system; and
(b) deducting therefrom EHV units and units distributed for the purpose
of supply to premises outside the Licensee's authorised area; and
(c) adding thereto an amount equal to the units consumed on the
Licensee's premises in the authorised area (insofar as not otherwise
taken into account in determining units distributed under sub-
paragraph (a) above).
220
Initial relevant loss percentage in the term ALt
------------------------------------------------
E6. In the first relevant year, the initial relevant loss percentage in the
term ALt shall (consistently with the methodology set out in paragraphs E2
to E5 above) be determined as being:
adjusted GSP purchase units less adjusted units distributed
-----------------------------------------------------------
adjusted units distributed
where adjusted GSP purchase units are calculated as provided in paragraph
E7 and adjusted units distributed are calculated as provided in paragraph
E8.
E7. Adjusted GSP purchase units shall be calculated in accordance with the
procedures successively described in the following sub-paragraphs:
(a) the actual losses in each of relevant years t-1, t-2 and t-3 (the
"historic losses") shall be calculated as the difference in each of
those years between units purchased at entry points to the Licensee's
distribution system and units sold;
(b) the historic loss percentage shall be calculated as the proportion
(expressed as a percentage) which the aggregate historic losses were
of the aggregate units purchased at entry points to the Licensee's
distribution system, in each case over the three relevant years t-1 to
t-3;
(c) the total number of units sold in relevant year t-1 shall be grossed
up by the historic loss percentage ("BSP purchase units"); and
(d) the figure for BSP purchase units resulting from sub-paragraph (c)
shall be adjusted to obtain adjusted GSP purchase units in accordance
with the provisions of paragraphs E3 and E4 above.
E8. Adjusted units distributed shall be calculated by applying the methodology
of paragraph E5 in respect of those units referred to in sub-paragraphs (a)
to (c) of paragraph E5 in relevant year t-1.
221
Information to be provided to the Director
------------------------------------------
E9. The Licensee shall within three months after the entry into force of this
Licence furnish to the Director a statement showing the initial relevant
loss percentage and the underlying calculations.
E10. The Licensee shall, following the end of each relevant year, furnish to
the Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3E, a statement showing
adjusted distribution losses for that relevant year, accompanied by the
underlying calculations and (where appropriate) an explanation of any
changes in the basis of calculation or estimation thereof.
E11. Where the Director is satisfied that any statement or underlying
calculation provided has not been drawn up in conformity with paragraphs
E2 to E8 above, the Director may issue directions, and the statement or
underlying calculation shall be adjusted with effect from the date of
issue of the directions or (subject to paragraph 10 of Condition 3E) such
other date as may be specified in the directions.
222