(3) In subsection (3), after “report” insert “, other than the assessment by virtue of

subsection (2A),”.

(4) After subsection (3) insert—

“(3A) An order under this section is subject to the negative resolution

5procedure.”

(5) In subsection (4)—

(a) after the definition of “consumers” insert—

• ““demand side response” means the cessation of, or a reduction in,
  
  the provision of electricity to a person at times of high demand,
  
  10by agreement with the person;”;

(b) after “distribution system,” insert ““electricity interconnector”,

“generating station”, “generation”, “supply,””.

CHAPTER 2 Gas supply

80 Power of the Gas and Electricity Markets Authority to direct a modification of

15the Uniform Network Code

(1) After section 36B of the Gas Act 1986 insert—

“36C Power to direct a modification of the UNC

(1) The Authority may direct the operator of the gas National

Transmission System to make a modification to which this section

20applies and which is specified in the direction to the Uniform Network

Code.

(2) This section applies to a modification—

(a) which relates to the arrangements contained in the Code in

respect of a Gas Supply Emergency, and

(b) 25which the Authority considers is a market-based modification.

(3) The Authority may give a direction under this section only if it

considers that the modification will do either or both of the following—

(a) decrease the likelihood of a Gas Supply Emergency occurring;

(b) decrease the duration or severity of a Gas Supply Emergency

30which occurs.

(4) In the exercise of the power under this section the Authority must have

regard to the purposes of Standard Special Condition A11 of licences

granted under section 7 of this Act.

(5) For the purposes of subsection (2), a modification is “market-based” if

35it relates to the creation of financial incentives for gas shippers or gas

transporters.

(6) Before giving a direction under this section the Authority must consult

such persons as it considers appropriate.

(7) In this section—

• 40“Gas Supply Emergency” and “National Transmission System”
  
  have the meaning given by the Uniform Network Code;

Energy BillPage 61

• “the Uniform Network Code” means the document of that title
  
  required to be prepared pursuant to Standard Special Condition
  
  A11 of licences granted under section 7 of this Act.”

(2) The requirement of subsection (6) of section 36C of the Gas Act 1986 may be

5satisfied by consultation undertaken before the commencement of subsection

(1) of this section or the passing of this Act.

(3) In section 38A of the Gas Act 1986 (reasons for decisions), in subsection (1),

after paragraph (e) insert—

“(ea) the giving of a direction under section 36C;”.

(4) 10In section 173 of the Energy Act 2004 (appeals to the Competition

Commission), after subsection (2) insert—

“(2A) This section also applies to a decision by GEMA to give a direction

under section 36C of the Gas Act 1986 (power to direct a modification

of the Uniform Network Code).

(2B) 15But subsection (2A) does not have effect in relation to such a decision if

it falls within a description of decisions for the time being excluded

from the right of appeal under this section by an order made by the

Secretary of State.”

(5) In section 175 of the Energy Act 2004 (determination of appeals), in subsection

20(4)(b) for “the purposes for which the relevant condition has effect” substitute

“—

“(i) the purposes for which the relevant condition has effect

(in the case of an appeal by virtue of section 173(2)), or

(ii) the purposes of the power to give a direction under

25section 36C of the Gas Act 1986 or the purposes of

Standard Special Condition A11 of licences granted

under section 7 of that Act (in the case of an appeal by

virtue of section 173(2A))”.

(6) In Schedule 22 to the Energy Act 2004 (procedure for appeals under section 173

30of that Act), in paragraph 3(6) (suspension of a decision) after “direction” insert

“(including a direction being appealed against by virtue of section 173(2A) of

this Act)”.

CHAPTER 3 Upstream petroleum infrastructure

81 Acquisition of rights to use upstream petroleum infrastructure

(1) 35This section applies where—

(a) a person makes an application to the owner of a relevant upstream

petroleum pipeline for a right to have things of a kind specified in the

application conveyed by the pipeline during such period as is so

specified and in such quantities as are so specified;

(b) 40a person makes an application to the owner of a relevant oil processing

facility for a right to have petroleum of a kind specified in the

application processed by the facility during such period as is so

specified and in such quantities as are so specified; or

(c) a person makes an application to the owner of a relevant gas processing

facility for a right to have piped gas of a kind specified in the

application processed by the facility during such period as is so

specified and in such quantities as are so specified.

5And references in this section to “the access application” are to the application

made to the owner of the pipeline or facility.

(2) This section does not apply by virtue of subsection (1)(c) where a person makes

an application to the owner of a gas processing facility for a right to have gas

processed by the facility for a downstream purpose (as to which, see section 12

10of the Gas Act 1995).

(3) For the purposes of subsection (1) an upstream petroleum pipeline, an oil

processing facility or a gas processing facility is “relevant” if and in so far as it

is situated—

(a) in Great Britain;

(b) 15in the territorial sea adjacent to Great Britain; or

(c) in the sea in any area designated under section 1(7) of the Continental

Shelf Act 1964;

but an upstream petroleum pipeline which is so situated is not “relevant” if it

is a pipeline to which section 17GA of the Petroleum Act 1998 applies

20(petroleum pipelines subject to Norwegian access system).

(4) If the applicant and the owner do not reach agreement on the access

application, the applicant may apply to the Secretary of State for a notice under

subsection (11) which would secure to the applicant the right sought in the

access application.

(5) 25The Secretary of State may not consider an application under subsection (4)

unless satisfied that the applicant and the owner have had a reasonable time in

which to reach agreement.

(6) When considering an application under subsection (4) the Secretary of State

must—

(a) 30decide whether the application is to be—

(i) rejected,

(ii) adjourned to enable further negotiation between the applicant

and the owner, or

(iii) considered further, and

(b) 35in the case of a decision to consider the application further, give an

opportunity to be heard to—

(i) the applicant and the owner;

(ii) any person with a right to have anything conveyed by the

pipeline or processed by the facility;

(iii) 40the Health and Safety Executive;

(iv) such other persons as the Secretary of State considers

appropriate.

(7) When giving further consideration to an application under subsection (4) the

Secretary of State must (so far as relevant) take into account—

(a) 45capacity which is or can reasonably be made available in the pipeline or

at the facility;

(b) any incompatibilities of technical specification which cannot

reasonably be overcome;

(c) difficulties which cannot reasonably be overcome and which could

prejudice the efficient, current and planned future production of

petroleum;

(d) the reasonable needs of the owner and any associate of the owner for

5the conveying and processing of petroleum;

(e) the interests of all users and operators of the pipeline or facility;

(f) the need to maintain security and regularity of supplies of petroleum;

and

(g) the number of parties involved in the dispute.

(8) 10The Secretary of State may give a notice under subsection (11) only if the

condition in subsection (9) or (10) is met.

(9) The condition in this subsection is that the Secretary of State is satisfied that the

notice will not prejudice—

(a) the conveying by the pipeline, or the processing by the facility, of the

15quantities of substances which the owner or an associate of the owner

requires or may reasonably be expected to require;

(b) the conveying by the pipeline, or the processing by the facility, of the

quantities of substances which another person with a right to have

things so conveyed or processed requires to be conveyed or processed

20in exercise of that right.

(10) The condition in this subsection is that the notice contains provision for the

purpose of ensuring that if the notice does prejudice any of the matters

mentioned in subsection (9) any person who suffers loss as a result may

recover from the applicant payments by way of compensation, of such

25amounts as are determined in accordance with the notice.

(11) A notice under this subsection may contain such provisions as the Secretary of

State considers appropriate for any of the following purposes—

(a) to secure to the applicant the right sought in the access application;

(b) to secure that the exercise of the right is not prevented or impeded;

(c) 30to secure to the applicant such ancillary or incidental rights as the

Secretary of State considers necessary or expedient, which may include

the right to have a pipeline of the applicant’s connected to the pipeline

or facility by the applicant or the owner;

(d) to regulate the charges which may be made for the exercise of any right

35secured by the notice.

(12) A notice under subsection (11) may also contain such provisions as the

Secretary of State considers appropriate for the purpose of ensuring that no

person suffers a loss by reason of the mixing together of—

(a) substances conveyed by the pipeline or processed by the facility on

40behalf of the applicant in exercise of a right secured by the notice; and

(b) substances conveyed by the pipeline or processed by the facility by or

on behalf of any other person.

(13) A notice under subsection (11) may also—

(a) contain provision authorising the owner to recover from the applicant

45payments by way of consideration for any right secured by the notice

of amounts specified in the notice or determined in accordance with the

notice;

(b) contain provision permitting a right secured or a duty imposed by the

notice to be assigned.

(14) A notice under subsection (11) is to be given to the owner and the applicant.

(15) If a notice under subsection (11) contains provision of a sort mentioned in

subsection (10) or (12) the Secretary of State must give a copy of the notice to

every person who has a right to have anything conveyed by the pipeline or

5processed by the facility.

(16) Before giving a copy of a notice under subsection (15) the Secretary of State

must—

(a) remove from the copy any provision included in the notice by virtue of

subsection (11)(d) or (13)(a); and

(b) 10after giving the owner and the applicant an opportunity to be heard,

remove from the copy any other provision included in the notice which

the Secretary of State considers may prejudice the commercial interests

of the owner or the applicant if not removed.

(17) A notice under subsection (11) does not come into force unless and until the

15applicant indicates acceptance of the terms of the notice in such manner and

within such period as is specified in the notice.

(18) For the purposes of subsection (3)(b) and (c) a pipeline is to be treated as being

situated in the sea in any area if it is situated in, under or over the sea in that

area.

(19) 20In this section and section 82 “owner”, in relation to an upstream petroleum

pipeline, an oil processing facility or a gas processing facility, means any of the

following—

(a) a person in whom the pipeline or facility is vested;

(b) a lessee and any person occupying or controlling the pipeline or

25facility; and

(c) a person who has the right to have things conveyed by the pipeline or

processed by the facility, where such right has been acquired by that

person on terms that—

(i) the person is entitled to exercise the right for a period of one

30year or more; and

(ii) the right is capable of being assigned or otherwise disposed of

to another person.

82 Power of Secretary of State to give a notice under section 81(11) on own

initiative

(1) 35This section applies where—

(a) a person has made an application of a kind mentioned in subsection (1)

of section 81 to the owner of a pipeline or facility, and

(b) the applicant and the owner have not reached agreement on the

application.

(2) 40The Secretary of State may on his or her own initiative give a notice under

subsection (11) of section 81 which would secure to the applicant the right

sought in the application; but this is subject to subsection (8) of that section and

subsections (3) and (4).

(3) The Secretary of State may not exercise the power conferred by subsection (2)

45unless the Secretary of State is satisfied that—

(a) the applicant and the owner have had a reasonable time in which to

reach agreement on the application; and

(b) there is no realistic prospect of them doing so.

(4) In considering whether to exercise the power conferred by subsection (2) the

Secretary of State must—

(a) take into account (so far as relevant) the matters mentioned in

5paragraphs (a) to (g) of subsection (7) of section 81;

(b) give the persons mentioned in subsection (5) an opportunity to be

heard.

(5)

Those persons are—

(a) the applicant and the owner;

(b) 10any person with a right to have anything conveyed by the pipeline or

processed by the facility;

(c) the Health and Safety Executive; and

(d) such other persons as the Secretary of State considers appropriate.

83 Compulsory modification of upstream petroleum infrastructure

(1) 15This section applies where—

(a) a person has made an application of a kind mentioned in subsection (1)

of section 81, and

(b) the Secretary of State is considering whether to give a notice under

subsection (11) of that section which would secure to the applicant the

20right sought in the application.

(2) If it appears to the Secretary of State—

(a) that the pipeline or facility that is the subject of the application can and

should be modified so as to increase its capacity; or

(b) that the pipeline or facility that is the subject of the application can and

25should be modified by installing in it a junction or other apparatus

through which a pipeline of the applicant’s may be connected,

then the Secretary of State may give the applicant and the owner of the pipeline

or facility a notice in accordance with subsections (3) and (4).

(3) A notice under subsection (2) must—

(a) 30specify the modifications which the Secretary of State considers should

be made to the pipeline or facility;

(b) specify the sums or the method for determining the sums which the

Secretary of State considers should be paid to the owner by the

applicant for the purpose of defraying the cost of the modifications;

(c) 35require the applicant to make, within the period specified for the

purpose in the notice, arrangements which the Secretary of State

considers appropriate to secure that those sums will be paid to the

owner if the owner carries out the modifications or satisfies the

Secretary of State that they will be carried out;

(d) 40require the owner, if the applicant makes those arrangements within

that period, to carry out the modifications within a period specified for

the purpose in the notice; and

(e) authorise the owner, if the Secretary of State is satisfied that the owner

has carried out or will carry out the modifications, to recover those

45sums from the applicant.

(4) A notice under subsection (2) may also contain provision for the purpose of

ensuring that if the carrying out of the modifications prejudices any of the

matters mentioned in subsection (9) of section 81 any person who suffers loss

as a result may recover from the applicant payments by way of compensation,

of such amounts as are determined in accordance with the notice.

(5) If a notice under subsection (2) contains provision by virtue of subsection (4)

5the Secretary of State must give a copy of the notice to every person who has a

right to have anything conveyed by the pipeline or processed by the facility.

(6) Before giving a copy of a notice under subsection (5) the Secretary of State

must—

(a) remove from the copy any provision included in the notice by virtue of

10subsection (3)(b); and

(b) after giving the owner and the applicant an opportunity to be heard,

remove from the copy any other provision included in the notice which

the Secretary of State considers may prejudice the commercial interests

of the owner or the applicant if not removed.

(7) 15In considering whether to give a notice under subsection (2) the Secretary of

State must—

(a) take into account (so far as relevant) the matters mentioned in

paragraphs (a) to (g) of subsection (7) of section 81;

(b) give the persons mentioned in subsection (8) an opportunity to be

20heard.

(8) Those persons are—

(a) the applicant and the owner;

(b) any person with a right to have anything conveyed by the pipeline or

processed by the facility;

(c) 25the Health and Safety Executive; and

(d) such other persons as the Secretary of State considers appropriate.

(9) If the Secretary of State gives a notice under subsection (2), section 81 has effect

in relation to the pipeline or facility concerned as if references to the pipeline

or facility were references to the pipeline or facility as it would be with the

30modifications specified in the notice.

(10) In this section “owner”, in relation to a pipeline or facility, means any of the

following—

(a) a person in whom the pipeline or facility is vested; and

(b) a lessee and any person occupying or controlling the pipeline or

35facility.

84 Variation of notices under sections 81 and 83

(1) The persons to whom a notice is given under subsection (11) of section 81 or

subsection (2) of section 83 may agree to vary or set aside the notice.

(2) The Secretary of State may vary a notice under subsection (11) of section 81 or

40subsection (2) of section 83 on the application of one of the persons to whom

the notice was given.

(3) But the Secretary of State may do so only if satisfied that the variation is

necessary to resolve a dispute that has arisen in connection with the notice

between the persons to whom it was given.

(4) In considering whether to vary a notice the Secretary of State must give an

opportunity to be heard to—

(a) the persons to whom the notice was given;

(b) any person with a right to have anything conveyed by the pipeline

5concerned or processed by the facility concerned;

(c) the Health and Safety Executive; and

(d) such other persons as the Secretary of State considers appropriate.

(5) For the purposes of this section and section 85, a person is to be treated as

having been given a notice if the person has had assigned to him or her a right

10which is secured by the notice or a duty which is imposed by the notice.

85 Publication of notices and variations

(1) Where the Secretary of State gives a notice under subsection (11) of section 81

or subsection (2) of section 83, the Secretary of State may—

(a) publish the notice or any part of it;

(b) 15publish a summary of the effect of the notice or any part of it.

(2) Where the Secretary of State varies a notice in exercise of the power conferred

by subsection (2) of section 84, the Secretary of State may—

(a) publish the variation;

(b) publish the notice, or any part of it, as varied;

(c) 20publish a summary of the effect of the variation.

(3) Before publishing anything under this section the Secretary of State must give

an opportunity to be heard to the persons to whom the notice was given and to

such other persons as the Secretary of State considers appropriate.

86 Powers of Secretary of State to require information

(1) 25Where the Secretary of State has reason to believe that a person has made or

received an application of a kind mentioned in subsection (1) of section 81, the

Secretary of State may by notice require the person to confirm whether or not

that is the case.

(2) The Secretary of State may by notice require a person who has made or

30received an application of a kind mentioned in subsection (1) of section 81 to

provide the Secretary of State with specified information for the purpose of

enabling the Secretary of State to decide—

(a) whether to exercise any function conferred on the Secretary of State by

section 81, 82, or 83; and

(b) 35if so, how to exercise the function.

(3) Where a person has applied to the Secretary of State under section 84 for a

notice to be varied, the Secretary of State may by notice require any person

within subsection (4) to provide the Secretary of State with specified

information for the purpose of enabling the Secretary of State to decide—

(a) 40whether to vary the notice; and

(b) if so, how to vary the notice.

(4) Those persons are—

(a) the person who applied for the notice to be varied;

(b) the other person to whom the notice was given;

(c) any person who has had assigned to him or her a right which is secured

by the notice or a duty which is imposed by the notice.

(5) The information that may be required under subsection (2) and (3) includes

financial information.

(6) 5The Secretary of State may not disclose any information obtained under this

section unless—

(a) the person by or on behalf of whom the information was provided

consents to the disclosure, or

(b) the disclosure is required by virtue of an obligation imposed on the

10Secretary of State by or under an enactment.

(7) In this section “specified” means specified in a notice under subsection (2) or

(3).

87 Enforcement

(1) A person is guilty of an offence if, in circumstances falling within subsection

15(2), the person provides false information to the Secretary of State for the

purpose of—

(a) inducing the Secretary of State to exercise or not to exercise any of the

functions conferred on the Secretary of State by sections 81 to 84; or

(b) inducing the Secretary of State to exercise any of those functions in a

20particular way.

(2) Those circumstances are that, at the time the information is provided, the

person—

(a) knows or believes the information to be false; or

(b) is reckless as to whether or not it is false.

(3) 25A person guilty of an offence under subsection (1) is liable on summary

conviction to a fine not exceeding level five on the standard scale.

(4) Proceedings for an offence under subsection (1) may not be instituted in

England and Wales except—

(a) by the Secretary of State or by a person authorised to do so by the

30Secretary of State, or

(b) by or with the consent of the Director of Public Prosecutions.

(5) Where an offence under subsection (1) is committed by a body corporate and

it is proved to have been committed with the consent or connivance of, or to be

attributable to neglect on the part of, an officer of the body corporate, that

35officer (as well as the body corporate) is guilty of the offence and is liable to be

proceeded against and dealt with accordingly.

(6) Where an offence under subsection (1) is committed by a Scottish partnership

and it is proved to have been committed with the consent or connivance of, or

to be attributable to neglect on the part of, a partner of the partnership, that

40partner (as well as the partnership) is guilty of the offence and is liable to be

proceeded against and dealt with accordingly.

(7) The duty of a person to comply with a notice under subsection (11) of section

81 or subsection (2) of section 83 is a duty owed to any person who may be

affected by a failure to comply with it.

(8) Where a duty is owed by virtue of subsection (7) to any person, the duty may

be enforced as if it were contained in a contract between that person and the

person who owes the duty.

(9) The duty of a person to comply with a notice under section 86 is enforceable by

5civil proceedings by the Secretary of State—

(a) for an injunction or interdict;

(b) for specific performance of a statutory duty under section 45 of the

Court of Session Act 1988; or

(c) for any other appropriate relief or remedy.

(10) 10Civil proceedings under subsection (9) are to be brought—

(a) in England and Wales, in the High Court, or

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

(11) In this section—

• “officer”, in relation to a body corporate, means—

  (a)

  15any director, manager, secretary or other similar officer of the
  
  body corporate, or

  (b)

  any person purporting to act in any such capacity;

• “partner”, in relation to a Scottish partnership, includes any person who
  
  was purporting to act as a partner in the partnership.

(12) 20In subsection (11) “director”, in relation to a body corporate whose affairs are

managed by its members, means a member of the body corporate.

88 Minor, consequential and supplemental provision

(1) Schedule 2 contains minor and consequential amendments relating to this

Chapter.

(2) 25Before exercising any power conferred by sections 81 to 84 in respect of an

upstream petroleum pipeline that is situated partly in a foreign sector of the

continental shelf, the Secretary of State must consult the relevant authorities in

the other country.

(3) The use of a pipeline by any person in accordance with a right secured by a

30notice under subsection (11) of section 81 is not a contravention of section 14(1)

of the Petroleum Act 1998.