Energy Bill

House of Commons

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Energy Bill

Energy Bill
Part 5 — Strategy and Policy Statement
89

118
Principal objective and general duties in preparation of statement
(1)
Sections 4AA to 4B of the 1986 Act (principal objective and general duties)
apply in relation to the relevant function of the Secretary of State under this
Part as they apply in relation to functions of the Secretary of State under Part 1
of that Act.
5
(2)
Sections 3A to 3D of EA 1989 (principal objective and general duties) apply in
relation to the relevant function of the Secretary of State under this Part as they
apply in relation to functions of the Secretary of State under Part 1 of that Act.
(3)
The “relevant function” is the Secretary of State’s function of determining the
policy outcomes to be set out in the strategy and policy statement (whether
10
when the statement is first prepared under this Part or when it is reviewed
under section 116).
119
Reporting requirements
(1)
The Utilities Act 2000 is amended as follows.
(2)
After section 4 insert—
15
“4A
Information in relation to strategy and policy statement
(1)
As soon as reasonably practicable after the designation of a statement
as the strategy and policy statement, the Authority must publish a
document setting out the required information in relation to the
statement.
20
(2)
The Authority must include the required information in relation to a
strategy and policy statement in the forward work programme for each
financial year, subject to making such modifications to the information
as the Authority considers appropriate from the version as last
published under this subsection.
25
(3)
The required information in relation to a strategy and policy statement
to be set out in a document or forward work programme is—
(a)
the strategy the Authority intends to adopt for the purpose of
furthering the delivery of the policy outcomes contained in the
statement (both in respect of the year in or for which the
30
document or programme is issued and beyond);
(b)
the things the Authority proposes to do in implementing that
strategy (including when the Authority proposes to do them);
(c)
the ways in which the Authority has had regard to the strategic
priorities contained in the statement in setting out the
35
information required under paragraphs (a) and (b).
(4)
The duty under subsection (1) does not apply if—
(a)
the Authority does not think it reasonably practicable to publish
the document mentioned in that subsection before the time
when the Authority is next required to publish a forward work
40
programme, and
(b)
the Authority includes the required information in that forward
work programme.
(5)
The duty under subsection (2) does not apply in relation to the first
financial year beginning after the designation of the statement if—
45

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Part 5 — Strategy and Policy Statement
90

(a)
the Authority does not think it reasonably practicable to include
the required information in the forward work programme for
that year, and
(b)
the Authority includes the required information in a document
published under subsection (1).
5
(6)
The duty under subsection (2) does not apply in relation to a financial
year if the Secretary of State gives notice to the Authority under this
subsection that the statement’s designation—
(a)
will be withdrawn before the beginning of the year, or
(b)
is expected to have been withdrawn before the beginning of the
10
year.
(7)
Subsections (4) to (6) of section 4 (notice requirements) apply to a
document published under subsection (1) as they apply to a forward
work programme.
(8)
In this section—
15
“designation”, in relation to a strategy and policy statement,
means designation of the statement by the Secretary of State
under Part 5 of the Energy Act 2013;
“forward work programme” has the meaning given by section
4(1);
20
“policy outcomes”, “strategic priorities” and “strategy and policy
statement” have the same meaning as in Part 5 of the Energy Act
2013.”
(3)
In section 5 (annual and other reports of Authority), after subsection (2)
insert—
25
“(2A)
The annual report for each year shall also include a report on—
(a)
the ways in which the Authority has carried out its duties under
section 114(1) and (2) of the Energy Act 2013 in relation to the
strategy and policy statement (so far as the statement’s
designation was in effect during the whole or any part of the
30
year), and
(b)
the extent to which the Authority has done the things set out
under section 4A in a forward work programme or other
document as the things the Authority proposed to do during
that year in implementing its strategy for furthering the
35
delivery of the policy outcomes contained in the statement (see
subsection (3)(b) of that section).
(2B)
The report mentioned in subsection (2A) must, in particular, include—
(a)
the Authority’s assessment of how the carrying out of its
functions during the year has contributed to the delivery of the
40
policy outcomes contained in the strategy and policy statement,
and
(b)
if the Authority has failed to do any of the things mentioned in
subsection (2A)(b), an explanation for the failure and the actions
the Authority proposes to take to remedy it.
45
(2C)
In subsections (2A) and (2B)—
“forward work programme” has the meaning given by section
4(1);

Energy Bill
Part 6 — Consumer Protection and Miscellaneous
Chapter 1 — Consumer Protection
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“policy outcomes” and “strategy and policy statement” have the
same meaning as in Part 5 of the Energy Act 2013.”
120
Consequential provision
(1)
The following provisions are repealed (guidance about the making by the
Authority of a contribution towards the attainment of social or environmental
5
policies)—
(a)
sections 4AB and 4B(1) of the 1986 Act, and
(b)
sections 3B and 3D(1) of EA 1989.
(2)
In section 4AA(5) of the 1986 Act, after “(2),” insert “and to section 114(2) of the
Energy Act 2013 (duty to carry out functions in manner best calculated to
10
further delivery of policy outcomes)”.
(3)
In section 3A(5) of EA 1989, after “(2),” insert “and to section 114(2) of the
Energy Act 2013 (duty to carry out functions in manner best calculated to
further delivery of policy outcomes)”.
Part 6
15
Consumer Protection and Miscellaneous
Chapter 1
Consumer Protection
Domestic tariffs
121
Power to modify energy supply licences: domestic supply contracts
20
(1)
The Secretary of State may modify—
(a)
a condition of a particular licence under section 7A(1) of the Gas Act
1986 (supply licences);
(b)
the standard conditions incorporated in licences under that provision
by virtue of section 8 of that Act;
25
(c)
a condition of a particular licence under section 6(1)(d) of EA 1989
(supply licences);
(d)
the standard conditions incorporated in licences under that provision
by virtue of section 8A of that Act.
(2)
The power under subsection (1) may be exercised for the purpose only of—
30
(a)
promoting competition in domestic supplies of gas and electricity; or
(b)
requiring licence holders to change the domestic tariffs or other terms
of domestic supply contracts so as to reduce the costs to their domestic
customers for supplies of gas or electricity.
(3)
A modification under subsection (1) may, in particular, make provision—
35
(a)
requiring a licence holder to adopt one or more standard domestic
tariffs;
(b)
for specifying a limit on the number of domestic tariffs, or domestic
tariffs of a particular category, a licence holder may adopt;

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Chapter 1 — Consumer Protection
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(c)
about discretionary terms (and may in particular require the same
discretionary terms to be offered in connection with, or incorporated
into, all domestic supply contracts of any particular category);
(d)
for requiring a licence holder to provide information about its domestic
tariffs and other supply contract terms, including information for
5
enabling or facilitating the comparison—
(i)
of different domestic tariffs or supply contract terms of the
licence holder;
(ii)
of domestic tariffs and supply contract terms of different licence
holders;
10
(e)
for requiring a licence holder to change the domestic tariff or other
supply contract terms on which it supplies gas or electricity to a
domestic customer by—
(i)
switching to a different domestic tariff or different supply
contract terms, unless the customer objects, or
15
(ii)
offering the customer, or inviting the customer to switch to, a
different domestic tariff or different supply contract terms.
(4)
Provision that may be included in a licence by virtue of subsection (3)(d) may
in particular—
(a)
require a licence holder to provide each domestic customer with
20
information—
(i)
about the customer’s existing domestic tariffs and supply
contract terms;
(ii)
about the expected cost to the customer of supplies under the
customer’s existing domestic supply contract and on one or
25
more other domestic tariffs (including the lowest domestic tariff
for the customer) or other supply contract terms of the licence
holder;
(iii)
about how to switch to different supply contract terms;
(b)
make provision about the format in which information is to be
30
provided, which may in particular require information to be
provided—
(i)
in the form of a code or otherwise in a format readable by an
electronic device, or which facilitates processing of the
information by means of an electronic device, or
35
(ii)
in the case of information about a domestic tariff or supply
contract terms, in the form of a single figure or set of figures.
(5)
Provision included in a licence by virtue of the power in subsection (1)—
(a)
may make provision for specifying how any domestic tariff (including
a licence holder’s lowest domestic tariff for a customer), or other supply
40
contract terms, is or are to be identified for the purpose of any relevant
provision;
(b)
may make provision about the calculation or estimation of any amount
or figure for the purpose of a relevant provision, which may, in
particular, include provision—
45
(i)
about assumptions to be made;
(ii)
requiring information about a customer’s circumstances or
previous consumption of gas or electricity to be taken into
account;
(c)
may confer functions on the Secretary of State or the Authority;
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Chapter 1 — Consumer Protection
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(d)
may make different provision for different kinds of domestic customers
or different supply contract terms, or otherwise in relation to different
cases;
(e)
may make provision generally or only in relation to specified categories
of domestic customers, domestic tariffs or domestic supply contracts or
5
otherwise only in relation to specified cases or subject to exceptions;
(f)
need not relate to the activities authorised by the licence;
(g)
may do any of the things authorised for licences of that type by section
7B(5)(a), (6) or (7) of the Gas Act 1986 or section 7(3), (4), (5) or (6A) of
EA 1989.
10
(6)
The power in subsection (1)—
(a)
may be exercised generally, only in relation to specified cases or subject
to exceptions (including provision for a case to be excepted only so long
as specified conditions are satisfied);
(b)
may be exercised differently in different cases or circumstances;
15
(c)
includes a power to make consequential modifications.
(7)
In this section—
“discretionary terms”, in relation to a domestic supply contract (or
proposed domestic supply contract), means the supply contract terms
other than the principal terms;
20
“domestic customer” means a customer under a domestic supply contract;
“domestic supply contract” means a contract for the supply of gas or
electricity at domestic premises wholly or mainly for domestic
purposes;
“domestic tariff”, in relation to a domestic supply contract (or proposed
25
domestic supply contract), means the principal terms of the contract;
“modify” includes amend, add to or remove, and references to
modifications are to be construed accordingly;
“the principal terms”, in relation to a domestic supply contract, means the
terms of the contract of the types specified in an order under subsection
30
(10);
“relevant provision” means any provision included in a licence by virtue
of subsection (1);
“standard domestic tariff” means a domestic tariff some or all of whose
terms are specified by, or in accordance with, a relevant provision;
35
“supply contract terms” means the terms and conditions of a domestic
supply contract.
(8)
For the purposes of the definition of “standard domestic tariff”, the terms that
may be specified by, or in accordance with, a relevant provision—
(a)
may include a term providing for a charge or rate to be fixed for a
40
period specified by, or in accordance with, the provision, but
(b)
may not otherwise include any term setting a monetary charge or rate.
(9)
For the purposes of this section—
(a)
gas or electricity is supplied on a tariff if the supply is made under a
contract whose principal terms are the terms of the tariff; and
45
(b)
a licence holder adopts a tariff if it supplies or offers to supply gas or
electricity on that tariff.

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Chapter 1 — Consumer Protection
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(10)
The Secretary of State may by order specify types of terms of a domestic supply
contract (as to charges and other matters) which are the principal terms of such
a contract.
(11)
An order under subsection (10) may—
(a)
include incidental, supplementary and consequential provision;
5
(b)
make transitory or transitional provision or savings;
(c)
make different provision for different domestic supply contracts or
otherwise for different purposes;
(d)
make provision subject to exceptions.
(12)
An order under subsection (10) is to be made by statutory instrument.
10
122
Section 121: procedure etc
(1)
Before making modifications of a licence under section 121(1) the Secretary of
State must—
(a)
publish the proposed modifications, and
(b)
consult—
15
(i)
the holder of any licence being modified,
(ii)
the Authority, and
(iii)
such other persons as the Secretary of State considers it
appropriate to consult.
(2)
Subsection (1)(b) may be satisfied by consultation before, as well as by
20
consultation after, the passing of this Act.
(3)
Subsection (4) applies where, after the consultation, the Secretary of State
decides to make the modifications (whether in the form published under
subsection (1)(a) or in a modified form).
(4)
The Secretary of State must publish a statement of the decision, which must—
25
(a)
contain details of the modifications to be made under section 121(1);
(b)
state when the modifications are to take effect.
(5)
Where the Secretary of State makes a modification of the standard conditions
of a licence of any type, the Authority must—
(a)
make the same modification of those standard conditions for the
30
purposes of their incorporation in licences of that type granted after
that time, and
(b)
publish the modification.
(6)
A modification of part of a standard condition of a particular licence does not
prevent any other part of the condition from continuing to be regarded as a
35
standard condition for the purposes of Part 1 of the Gas Act 1986 or Part 1 of
EA 1989.
(7)
The power in section 121(1) may not be exercised after 31 December 2018.
123
General duties of Secretary of State
(1)
Sections 4AA to 4B of the Gas Act 1986 (principal objective and general duties)
40
apply in relation to functions of the Secretary of State under section 121 or 122
of this Act with respect to holders of licences under section 7A(1) of that Act as

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they apply in relation to functions of the Secretary of State under Part 1 of that
Act.
(2)
Sections 3A to 3D of EA 1989 (principal objective and general duties) apply in
relation to functions of the Secretary of State under section 121 or 122 of this Act
with respect to holders of licences under section 6(1)(d) of that Act as they
5
apply in relation to functions of the Secretary of State under Part 1 of that Act.
124
Consequential provision
(1)
The Utilities Act 2000 is amended as follows.
(2)
In section 33 (standard conditions of electricity licences), in subsection (1)(f),
omit “76 or”.
10
(3)
In section 81 (standard conditions of gas licences), in subsection (2), for “or
under Chapter 1 of Part 1 or section 76 or 98 of the Energy Act 2011” substitute
“, under Chapter 1 of Part 1 or section 98 of the Energy Act 2011 or under
section 121 of the Energy Act 2013”.
(4)
In the Energy Act 2011, sections 76 to 78 (power to modify energy supply
15
licences: information about tariffs) are repealed.
Licensable activities
125
Powers to alter activities requiring licence: activities related to supply
contracts
(1)
In section 41C of the Gas Act 1986 (power to alter activities requiring licence),
20
after subsection (4) insert—
“(4A)
For the purposes of subsection (4), activities connected with the supply
of gas include the following activities, whether or not carried on by a
person supplying gas—
(a)
giving advice, information or assistance in relation to contracts
25
for the supply of gas to persons who are or may become
customers under such contracts, and
(b)
the provision of any other services to such persons in
connection with such contracts.”
(2)
In section 56A of EA 1989 (power to alter activities requiring licence), after
30
subsection (4) insert—
“(4A)
For the purposes of subsection (4), activities connected with the supply
of electricity include the following activities, whether or not carried on
by a person supplying electricity—
(a)
giving advice, information or assistance in relation to contracts
35
for the supply of electricity to persons who are or may become
customers under such contracts, and
(b)
providing any other services to such persons in connection with
such contracts.”