Energy Bill (HL Bill 30)

(4) For the purposes of this section, energy policy “for Great Britain” includes such
policy for—

(a) the territorial sea adjacent to Great Britain, and

(b) areas designated under section 1(7) of the Continental Shelf Act 1964.

(5) 5In this Part—

• “the 1986 Act” means the Gas Act 1986;

• “policy outcomes” has the meaning given in subsection (2)(b);

• “strategic priorities” has the meaning given in subsection (2)(a);

• “the strategy and policy statement” means the statement for the time
  10being designated under subsection (1) as the strategy and policy
  statement for the purposes of this Part.

120 Duties in relation to statement

(1) The Authority must have regard to the strategic priorities set out in the strategy
and policy statement when carrying out regulatory functions.

(2) 15The Secretary of State and the Authority must carry out their respective
regulatory functions in the manner which the Secretary of State or the
Authority (as the case may be) considers is best calculated to further the
delivery of the policy outcomes.

(3) Subsection (2) is subject to the application of the principal objective duty in the
20carrying out of any such function.

(4) “Regulatory functions”, in relation to the Secretary of State, means—

(a) functions of the Secretary of State under Part 1 of the 1986 Act or Part 1
of EA 1989;

(b) other functions of the Secretary of State to which the principal objective
25duty is applied by any enactment.

(5) “Regulatory functions”, in relation to the Authority, means—

(a) functions of the Authority under Part 1 of the 1986 Act or Part 1 of EA
1989;

(b) other functions of the Authority to which the principal objective duty is
30applied by any enactment.

(6) The “principal objective duty” means the duty of the Secretary of State or the
Authority (as the case may be) imposed by—

(a) section 4AA(1B) and (1C) of the 1986 Act;

(b) section 3A(1B) and (1C) of EA 1989.

(7) 35The Authority must give notice to the Secretary of State if at any time the
Authority concludes that a policy outcome contained in the strategy and policy
statement is not realistically achievable.

(8) A notice under subsection (7) must include—

(a) the grounds on which the conclusion was reached;

(b) 40what (if anything) the Authority is doing, or proposes to do, for the
purpose of furthering the delivery of the outcome so far as reasonably
practicable.

(9) In this section “enactment” includes—

(a) an enactment contained in this Act, and

(b) an enactment passed or made after the passing of this Act.

121 Exceptions from section 120 duties

(1) Section 120(1) and (2) do not apply in relation to functions of the Secretary of
State under sections 36 to 37 of EA 1989.

(2) 5Section 120(1) and (2) do not apply in relation to anything done by the
Authority—

(a) in the exercise of functions relating to the determination of disputes;

(b) in the exercise of functions under section 36A(3) of the 1986 Act or
section 43(3) of EA 1989.

(3) 10The duties imposed by section 120(1) and (2) do not affect the obligation of the
Authority or the Secretary of State to perform or comply with any other duty
or requirement (whether arising under this Act or another enactment, by virtue
of any EU obligation or otherwise).

122 Review

(1) 15The Secretary of State must review the strategy and policy statement if a period
of 5 years has elapsed since the relevant time.

(2) The “relevant time”, in relation to the strategy and policy statement, means—

(a) the time when the statement was first designated under this Part, or

(b) if later, the time when a review of the statement under this section last
20took place.

(3) A review under subsection (1) must take place as soon as reasonably
practicable after the end of the 5 year period.

(4) The Secretary of State may review the strategy and policy statement at any
other time if—

(a) 25a Parliamentary general election has taken place since the relevant time,

(b) the Authority has given notice to the Secretary of State under section
120(7) since the relevant time,

(c) a significant change in the energy policy of Her Majesty’s government
has occurred since the relevant time, or

(d) 30the Parliamentary approval requirement in relation to an amended
statement was not met on the last review (see subsection (12)).

(5) The Secretary of State may determine that a significant change in the
government’s energy policy has occurred for the purposes of subsection (4)(c)
only if—

(a) 35the change was not anticipated at the relevant time, and

(b) if the change had been so anticipated, it appears to the Secretary of State
likely that the statement would have been different in a material way.

(6) On a review under this section the Secretary of State may—

(a) amend the statement (including by replacing the whole or part of the
40statement with new content),

(b) leave the statement as it is, or

(c) withdraw the statement’s designation as the strategy and policy
statement.

(7) The amendment of a statement under subsection (6)(a) has effect only if the
Secretary of State designates under section 119 the amended statement as the
strategy and policy statement (and the procedural requirements under section
123 apply in relation to any such designation).

(8) 5For the purposes of this section, corrections of clerical or typographical errors
are not to be treated as amendments made to the statement.

(9) The designation of a statement as the strategy and policy statement ceases to
have effect upon a subsequent designation of an amended statement as the
strategy and policy statement in accordance with subsection (7).

(10) 10The Secretary of State must consult the following persons before proceeding
under subsection (6)(b) or (c)—

(a) the Authority,

(b) the Scottish Ministers,

(c) the Welsh Ministers, and

(d) 15such other persons as the Secretary of State considers appropriate.

(11) For the purposes of subsection (2)(b), a review of a statement takes place—

(a) in the case of a decision on the review to amend the statement under
subsection (6)(a)—

(i) at the time when the amended statement is designated as the
20strategy and policy statement under section 119, or

(ii) if the amended statement is not so designated, at the time when
the amended statement was laid before Parliament for approval
under section 123(8);

(b) in the case of a decision on the review to leave the statement as it is
25under subsection (6)(b), at the time when that decision is taken.

(12) For the purposes of subsection (4)(d), the Parliamentary approval requirement
in relation to an amended statement was not met on the last review if—

(a) on the last review of the strategy and policy statement to be held under
this section, an amended statement was laid before Parliament for
30approval under section 123(8), but

(b) the amended statement was not designated because such approval was
not given.

123 Procedural requirements

(1) This section sets out the requirements that must be satisfied in relation to a
35statement before the Secretary of State may designate it as the strategy and
policy statement.

(2) In this section references to a statement include references to a statement as
amended following a review under section 122(6)(a).

(3) The Secretary of State must first—

(a) 40prepare a draft of the statement, and

(b) issue the draft to the required consultees for the purpose of consulting
them about it.

(4) The “required consultees” are—

(a) the Authority,

(b) 45the Scottish Ministers, and

(c) the Welsh Ministers.

(5) The Secretary of State must then—

(a) make such revisions to the draft as the Secretary of State considers
appropriate as a result of responses to the consultation under
5subsection (3)(b), and

(b) issue the revised draft for the purposes of further consultation about it
to the required consultees and to such other persons as the Secretary of
State considers appropriate.

(6) The Secretary of State must then—

(a) 10make any further revisions to the draft that the Secretary of State
considers appropriate as a result of responses to the consultation under
subsection (5)(b), and

(b) prepare a report summarising those responses and the changes (if any)
that the Secretary of State has made to the draft as a result.

(7) 15The Secretary of State must lay before Parliament—

(a) the statement as revised under subsection (6)(a), and

(b) the report prepared under subsection (6)(b).

(8) The statement as laid under subsection (7)(a) must have been approved by a
resolution of each House of Parliament before the Secretary of State may
20designate it as the strategy and policy statement under section 119.

(9) The requirement under subsection (3)(a) to prepare a draft of a statement may
be satisfied by preparation carried out before, as well as preparation carried
out after, the passing of this Act.

124 Principal objective and general duties in preparation of statement

(1) 25Sections 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.

(2) Sections 3A to 3D of EA 1989 (principal objective and general duties) apply in
30relation 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
when the statement is first prepared under this Part or when it is reviewed
35under section 122).

125 Reporting requirements

(1) The Utilities Act 2000 is amended as follows.

(2) After section 4 insert—

“4A Information in relation to strategy and policy statement

(1) 40As 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.

(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
5published under this subsection.

(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
10statement (both in respect of the year in or for which the
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
15priorities contained in the statement in setting out the
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
20when the Authority is next required to publish a forward work
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
25financial year beginning after the designation of the statement if—

(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
30published under subsection (1).

(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) 35is expected to have been withdrawn before the beginning of the
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) 40In this section—

• “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
  454(1);

• “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—

“(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
5section 120(1) and (2) of the Energy Act 2013 in relation to the
strategy and policy statement (so far as the statement’s
designation was in effect during the whole or any part of the
year), and

(b) the extent to which the Authority has done the things set out
10under section 4A in a forward work programme or other
document as the things the Authority proposed to do during
that year in implementing its strategy for furthering the
delivery of the policy outcomes contained in the statement (see
subsection (3)(b) of that section).

(2B) 15The report mentioned in subsection (2A) must, in particular, include—

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

(b) 20if the Authority has failed to do any of the things mentioned in
subsection (2A)(b), an explanation for the failure and the actions
the Authority proposes to take to remedy it.

(2C) In subsections (2A) and (2B)—

• “forward work programme” has the meaning given by section
  254(1);

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

126 Consequential provision

(1) The following provisions are repealed (guidance about the making by the
30Authority of a contribution towards the attainment of social or environmental
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 120(2) of the
35Energy Act 2013 (duty to carry out functions in manner best calculated to
further delivery of policy outcomes)”.

(3) In section 3A(5) of EA 1989, after “(2),” insert “and to section 120(2) of the
Energy Act 2013 (duty to carry out functions in manner best calculated to
further delivery of policy outcomes)”.

(4) 40In the 1986 Act—

(a) in section 4AA(7), for “sections 4AB and 4A” substitute “section 4A”;

(b) in section 7B(4), in paragraph (a) omit “, 4AB”;

(c) in section 23D(2)—

(i) at the end of paragraph (b) omit “and”,

(ii) 45in paragraph (c) for “sections 4AB and” substitute “section”, and

(iii) at the end of paragraph (c) insert “; and

“(d) in the performance of its duties under section 120(1) and
(2) of the Energy Act 2013.”;

(d) in section 28(5), in paragraph (a) omit “, 4AB”;

(e) in section 38(1A), omit “, 4AB”;

(f) 5in section 41E(6)—

(i) omit paragraph (b), and

(ii) at the end of paragraph (c) insert “; and

“(d) any statement for the time being designated as the
strategy and policy statement for the purposes of Part 5
10of the Energy Act 2013.”

(5) In EA 1989—

(a) in section 3A(7), for “sections 3B and 3C” substitute “section 3C”;

(b) in section 11E(2)—

(i) at the end of paragraph (b) omit “and”,

(ii) 15in paragraph (c) for “sections 3B and 3C” substitute “section
3C”, and

(iii) at the end of paragraph (c) insert “; and

“(d) in the performance of its duties under section 120(1) and
(2) of the Energy Act 2013.”;

(c) 20in section 28(2A), omit “, 3B”;

(d) in section 56C(6)—

(i) omit paragraph (b), and

(ii) at the end of paragraph (c) insert “; and

“(d) any statement for the time being designated as the
25strategy and policy statement for the purposes of Part 5
of the Energy Act 2013.”

Part 6 Consumer Protection and Miscellaneous

CHAPTER 1 Consumer Protection

30Domestic tariffs

127 Power to modify energy supply licences: domestic supply contracts

(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) 35the standard conditions incorporated in licences under that provision
by virtue of section 8 of that Act;

(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
40by virtue of section 8A of that Act;

by making provision of any of the kinds specified in subsection (2).

(2) The kinds of provision mentioned in subsection (1) are—

(a) provision requiring a licence holder to adopt one or more standard
domestic tariffs;

(b) provision for restricting the number of domestic tariffs, or domestic
5tariffs of a particular category, a licence holder may adopt;

(c) provision about discretionary terms (which 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) 10provision for requiring a licence holder to provide information about
its domestic tariffs and other supply contract terms, which may include
information for enabling or facilitating the comparison—

(i) of different domestic tariffs or supply contract terms of the
licence holder;

(ii) 15of domestic tariffs and supply contract terms of different licence
holders;

(e) provision for requiring a licence holder to change the domestic tariff on
which it supplies gas or electricity to a domestic customer who is on a
closed tariff by—

(i) 20switching to a different domestic tariff for the time being
offered by the licence holder, unless the customer objects, or

(ii) offering the customer, or inviting the customer to switch to, a
different domestic tariff for the time being offered by the licence
holder.

(3) 25Any limit imposed by virtue of subsection (2)(b) on the number of tariffs, or
tariffs of any category, that a licence holder may adopt must be greater than the
number of standard domestic tariffs, or (as the case may be) standard domestic
tariffs of that category, that the licence holder is required to adopt.

(4) Provision that may be included in a licence by virtue of subsection (2)(d) may
30in particular—

(a) require a licence holder to provide each domestic customer with
information—

(i) about the customer’s existing domestic tariffs and supply
contract terms;

(ii) 35about the expected cost to the customer of supplies under the
customer’s existing domestic supply contract and on one or
more other domestic tariffs (including the lowest domestic tariff
for the customer) or other supply contract terms of the licence
holder;

(iii) 40about how to switch to different supply contract terms;

(b) make provision about the format in which information is to be
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
45electronic device, or which facilitates processing of the
information by means of an electronic device, or

(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 determining when a licence holder is, or is not,
to be regarded as offering to supply gas or electricity on a particular
tariff (or as offering other terms in connection with domestic supply
contracts) for the purpose of a relevant provision;

(b) 5may make provision for supplies (or proposed supplies) of gas or
electricity to be regarded as being on the same tariff or different tariffs
for the purpose of a relevant provision;

(c) may make provision for specifying how any domestic tariff (including
a licence holder’s lowest domestic tariff for a customer), or other supply
10contract terms, is or are to be identified for the purpose of any relevant
provision;

(d) 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—

(i) 15about assumptions to be made;

(ii) requiring information about a customer’s circumstances or
previous consumption of gas or electricity to be taken into
account;

(e) may confer functions on the Secretary of State or the Authority;

(f) 20may make different provision for different kinds of domestic customers
or different supply contract terms, or otherwise in relation to different
cases;

(g) may make provision generally or only in relation to specified categories
of domestic customers, domestic tariffs or domestic supply contracts or
25otherwise only in relation to specified cases or subject to exceptions;

(h) need not relate to the activities authorised by the licence;

(i) 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.

(6) 30The 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;

(c) 35includes a power to make consequential modifications.

(7) In this section—

• “closed tariff” means a domestic tariff on which a licence holder—

  (a)

  supplies gas or electricity to customers under existing domestic
  supply contracts, but

  (b)

  40no longer offers to supply gas or electricity to customers who
  are not already on the tariff;

• “discretionary terms”, in relation to a domestic supply contract (or
  proposed domestic supply contract), means the supply contract terms
  other than the principal terms;

• 45“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” means the set of principal terms of a domestic supply
  50contract (or proposed domestic supply contract);

Energy BillPage 99

• “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
  5(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;

• 10“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
15period to be determined by the licence holder, but

(b) may not include any term setting the amount of a charge or rate or
otherwise specifying how it is to be determined.

(9) For the purposes of this section—

(a) gas or electricity is supplied on a tariff if the supply is made under a
20contract whose principal terms are the terms of the tariff,

(b) a domestic customer is on a particular domestic tariff if gas or electricity
is supplied to the customer on that tariff, and

(c) a licence holder adopts a tariff if it supplies or offers to supply gas or
electricity on that tariff (and references to adopting a tariff include
25references to doing either or both of them).

(10) The Secretary of State may by order specify types of terms of domestic supply
contracts which are the principal terms of such contracts.

(11) An order under subsection (10) may—

(a) include incidental, supplementary and consequential provision;

(b) 30make 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.

128 35Section 127: procedure etc

(1) Before making modifications of a licence under section 127(1) the Secretary of
State must—

(a) publish the proposed modifications, and

(b) consult—

(i) 40the 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
45consultation after, the passing of this Act.