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Utilities Bill - continued        House of Commons
PART I, GAS AND ELECTRICITY - continued
Electricity licensing - continued
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Modification of conditions of particular licence.     31. In section 11 of the 1989 Act (modification of licence conditions by agreement), for subsection (1) there is substituted-
 
 
    "(1) Subject to the following provisions of this section, the Authority may modify the conditions of a particular licence.
 
      (1A) The Authority may not make any modifications under this section unless the licence holder has consented to the modifications and, in the case of standard conditions of the licence, the Authority is of the opinion that the modifications-
 
 
    (a) are requisite to meet the circumstances of the particular case; and
 
    (b) are such that-
 
      (i) the licence holder would not be unduly disadvantaged in competing with other holders of licences of that type; and
 
      (ii) no other holder of a licence of the same type would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence being modified)."
Modification of standard conditions of licences by Authority.     32. After section 11 of the 1989 Act there is inserted-
 
 
"Modification of standard conditions of licences.     11A. - (1) Subject to the following provisions of this section, the Authority may modify the standard conditions of licences of any type mentioned in section 6(1).
 
    (2) Where at any time the Authority modifies the standard conditions of licences of any type under this section the Authority may make such incidental or consequential modifications as it considers necessary or expedient of any conditions of any licence of that type.
 
      (3) Before making any modifications under this section, the Authority shall give notice-
 
 
    (a) stating that it proposes to make the modifications and setting out their effect;
 
    (b) stating the reasons why it proposes to make the modifications; and
 
    (c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made;
  and shall consider any representations or objections which are duly made and not withdrawn.
 
      (4) A notice under subsection (3) shall be given-
 
 
    (a) by publishing the notice in such manner as the Director considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the modifications; and
 
    (b) by sending a copy of the notice to each relevant licence holder, to the Secretary of State and to the Council.
      (5) If, within the time specified in the notice under subsection (3), the Secretary of State directs the Authority not to make any modification, the Authority shall comply with the direction.
 
      (6) The Authority may not under this section make any modifications of the standard conditions of licences of any type unless-
 
 
    (a) no notice of objection to those modifications is given to the Authority within the time specified in the notice under subsection (3) by any relevant licence holder;
 
    (b) if one or more relevant licence holders give notice of objection to the Authority within that time-
 
      (i) the proportion (expressed as a percentage) of the relevant licence holders who have given notice of objection is less than such percentage as may be prescribed; and
 
      (ii) the percentage given by subsection (7) is less than such percentage as may be prescribed; or
 
    (c) subsection (8) applies to the case.
      (7) The percentage given by this subsection is the proportion (expressed as a percentage) of the relevant licence holders who have given notice of objection, weighted according to their market share in such manner as may be prescribed.
 
      (8) This subsection applies where the Authority is satisfied that-
 
 
    (a) the effect of the standard conditions is such as to impose a burden affecting relevant licence holders in the carrying on of activities to which the modifications relate;
 
    (b) the modifications would remove or reduce the burden without removing any necessary protection; and
 
    (c) the modifications are such that no holder of a licence of the type in question would be unduly disadvantaged in competing with other holders of such licences.
      (9) Where the Authority modifies the standard conditions of licences of any type-
 
 
    (a) the Authority shall also make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in licences of that type granted after that time; and
 
    (b) the Authority shall publish the modifications in such manner as it considers appropriate.
      (10) In this section-
 
 
    "prescribed" means prescribed in an order made by the Secretary of State; and
 
    "relevant licence holder", in relation to standard conditions of licences of any type, means a licence holder whose licence incorporates the standard conditions being modified.
      (11) A statutory instrument containing an order under this section shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament."
 
Transfer of electricity licences.     33. After section 7 of the 1989 Act there is inserted-
 
 
"Transfer of licences.     7A. - (1) A licence-
 
    (a) is capable of being transferred by the licence holder, with the consent of the Authority, in accordance with this section but subject to any term as to transfer contained in the licence;
 
    (b) may include conditions which must be complied with before the licence can be transferred.
      (2) A transfer may relate to the whole or any part of the licence.
 
      (3) The reference in subsection (2) to part of a licence is a reference to a part of the activities authorised by the licence (whether described by reference to activities being carried on by the licence holder or to activities which he is authorised by the licence to carry on).
 
      (4) Such consent may be given subject to compliance with such modification or other conditions as the Authority considers appropriate.
 
      (5) In the case of a partial transfer, conditions imposed under subsection (4) may make as respects so much of the licence as is proposed to be retained by the transferor provision different from that made as respects so much of the licence as is proposed to be transferred.
 
      (6) In deciding whether to give its consent to a proposed transfer, the Authority shall apply the same criteria as it would apply if the authority were deciding whether-
 
 
    (a) in the case of a general transfer, to grant a corresponding licence to the transferee; or
 
    (b) in the case of a partial transfer-
 
      (i) to grant to the transferee a licence corresponding to so much of the licence as is proposed to be transferred; and
 
      (ii) to grant to the transferor a licence corresponding to so much of the licence as is proposed to be retained.
      (7) Before giving consent to the transfer of a licence, the Authority shall give notice-
 
 
    (a) stating that it proposes to grant consent to the transfer;
 
    (b) stating the reasons why it proposes to give consent; and
 
    (c) specifying the time from the date of publication of the notice (not being less than two months) within which representations or objections with respect to the transfer may be made,
  and shall consider any representations or objections that are duly made and not withdrawn.
 
      (8) A notice under subsection (7) shall be given by publishing the notice in such manner as the Authority considers appropriate for bringing it to the attention of persons likely to be affected by the transfer.
 
      (9) A purported transfer of a licence shall be void-
 
 
    (a) if the licence is not capable of transfer or the Authority has not given its consent;
 
    (b) if the purported transfer is in breach of a condition of the licence; or
 
    (c) if there has, before the purported transfer, been a contravention of a condition subject to compliance with which the Authority's consent is given.
      (10) In this section-
 
 
    "transfer" includes any form of transfer or assignment or, in Scotland, assignation;
 
    "modification condition" means a condition requiring or otherwise providing for the making of modifications to the conditions of a licence."
Reasons for decisions under the 1989 Act.     34. After section 49 of the 1989 Act (keeping of register) there is inserted-
 
 
"Reasons for decisions.     49A. - (1) This section applies to the following decisions of the Authority or the Secretary of State, namely-
 
    (a) the granting of an exemption;
 
    (b) the revocation of a licence;
 
    (c) the modification of the conditions of a licence;
 
    (d) the giving of any directions or consent in pursuance of a condition included in a licence by virtue of section 7(3)(a) or (b);
 
    (e) the determination of a question referred in pursuance of a condition included in a licence by virtue of section 7(3)(c);
 
    (f) the determination of a dispute referred under section 23(1);
 
    (g) the making of a final order, the making or confirmation of a provisional order or the revocation of a final order or of a provisional order which has been confirmed.
      (2) As soon as reasonably practicable after making such a decision the Authority or the Secretary of State shall give notice of the reasons for the decision.
 
      (3) Notice under subsection (2) shall be given by-
 
 
    (a) publishing it in such manner as the person publishing it considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them; and
 
    (b) in the case of a notice containing reasons for a decision relating to a licence granted to a particular person, by serving a copy of the notice on that person.
      (4) In giving notice under this section the Authority and the Secretary of State shall have regard to the need for excluding, so far as that is practicable, any matter the publication of which it or he considers would or might seriously and prejudicially affect the interests of a particular individual or body of persons (corporate or unincorporate).
 
      (5) This section does not apply in relation to a decision of the Authority resulting in any provision which the Secretary of State has under section 49(4) directed the Authority not to enter in the register required to be kept under that section.".
 
Altering activities requiring electricity licence.     35. After section 5 of the 1989 Act there is inserted-
 
 
"Power to alter activities requiring licence.     5A. - (1) The Secretary of State may by order provide-
 
    (a) that specified activities are to become licensable activities; or
 
    (b) that specified activities are to cease to be licensable activities.
      (2) For the purposes of this Part activities are licensable activities if undertaking them without the authority of a licence or exemption constitutes an offence under section 4(1).
 
      (3) An order under this section may make consequential, transitional, incidental or supplementary provision including-
 
 
    (a) amendments (or repeals) in any provision of this Act or any other enactment; and
 
    (b) provision modifying any standard conditions of licences or (in the case of an order under subsection (1)(a)) provision determining the conditions which are to be standard conditions for the purposes of licences authorising the undertaking of activities which are to become licensable activities.
      (4) An order under this section may only provide for activities to become licensable activities if they are activities connected with the generation, transmission, distribution or supply of electricity.
 
      (5) An order under this section providing for activities to become licensable activities may only be made on the application of the Authority made in accordance with section 5B.
 
      (6) An order under this section providing for activities to cease to be licensable activities may be made either-
 
 
    (a) on the application of the Authority made in accordance with section 5E; or
 
    (b) following consultation by the Secretary of State in accordance with section 5F.
      (7) An order under this section may provide that it is to remain in force only for a period specified in the order.
 
      (8) An order shall not be made under this section unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.
 
Application by Authority for order including new activities.     5B. - (1) If the Authority proposes to make an application for an order providing for activities to become licensable activities, it shall give notice-
 
 
    (a) stating that it proposes to make an application for an order providing for the activities to become licensable activities;
 
    (b) setting out the conditions which it would expect such an order to determine to be standard conditions for the purposes of licences authorising the undertaking of the activities and any other conditions which it would expect to be included in such licences; and
 
    (c) specifying a reasonable period (not being less than 28 days from the date of publication of the notice) within which representations or objections may be made with respect to the proposal,
  and shall consider any representations or objections which are duly made and not withdrawn.
 
      (2) The notice shall be given by serving a copy on the Council and by publishing it in such manner as the Authority considers appropriate for bringing it to the attention of-
 
 
    (a) persons appearing to it to be carrying on, or be intending to carry on, the activities; and
 
    (b) any other persons appearing to it to be likely to be affected by an order providing for the activities to become licensable activities.
      (3) If an objection has been duly made (and not withdrawn) by a person who is carrying on or intends to carry on the activities, the Authority shall make a reference to the Competition Commission under section 5C before making the application.
 
      (4) In any other case where the Authority considers it appropriate to make a reference to the Competition Commission under section 5C before making the application, the Authority may make such a reference.
 
      (5) If a reference is made to the Commission, the application shall not be made unless the Commission has reported on the reference that the fact that the activities to which the application relates are not licensable activities operates, or may be expected to operate, against the public interest.
 
      (6) The application shall set out-
 
 
    (a) the activities which the Authority considers should become licensable activities; and
 
    (b) the conditions which the Authority would expect to be determined to be standard conditions for the purposes of licences authorising the undertaking of the activities in question and any other conditions which it would expect to be included in such licences.
References to Competition Commission.     5C. - (1) A reference to the Competition Commission under this section shall require the Commission to investigate and report on whether the fact that the activities specified in the reference are not licensable activities operates, or may be expected to operate, against the public interest.
 
      (2) The Authority may, at any time, by notice given to the Commission vary the reference by adding to the activities specified in the reference or by excluding from the reference some of the activities so specified; and on receipt of such notice the Commission shall give effect to the variation.
 
      (3) The Authority shall specify in the reference, or a variation of the reference, for the purpose of assisting the Commission in carrying out the investigation on the reference-
 
 
    (a) the conditions which the Authority would expect to be determined to be standard conditions for the purposes of licences authorising the undertaking of the activities specified in the reference and any other conditions which it would expect to be included in such licences; and
 
    (b) any effects adverse to the public interest which, in its opinion, the fact that the activities so specified are not licensable activities has or may be expected to have.
      (4) As soon as practicable after making the reference, or a variation of the reference, the Authority shall serve a copy of it on the Council and publish particulars of it in such manner as the Authority considers appropriate for bringing it to the attention of-
 
 
    (a) persons appearing to the Authority to be carrying on, or be intending to carry on, the activities specified in it; and
 
    (b) any other persons appearing to the Authority to be likely to be affected by it.
      (5) The Authority shall, for the purpose of assisting the Commission in carrying out the investigation on the reference, give to the Commission-
 
 
    (a) any information which is in its possession and which relates to matters falling within the scope of the investigation, and which is either requested by the Commission for that purpose or is information which in its opinion it would be appropriate for that purpose to give to the Commission without any such request; and
 
    (b) any other assistance which the Commission may require, and which it is within its power to give, in relation to any such matters,
  and the Commission shall take account of the information for the purpose of carrying out the investigation.
 
      (6) In determining for the purposes of this section whether the fact that particular activities are not licensable activities operates, or may be expected to operate, against the public interest, the Competition Commission shall have regard to-
 
 
    (a) the matters referred to in section 3A; and
 
    (b) any social or environmental policies set out or referred to in guidance issued under section 3B.
      (7) The provisions mentioned in subsection (8) are to apply in relation to references under this section as if-
 
 
    (a) the functions of the Competition Commission in relation to those references were functions under the Fair Trading Act 1973;
 
    (b) the expression "merger reference" included a reference under this section;
 
    (c) in section 70 of the Fair Trading Act 1973-
 
      (i) references to the Secretary of State were references to the Authority; and
 
      (ii) the reference to three months were a reference to six months.
      (8) The provisions are-
 
 
    (a) sections 70 (time limit for report on merger), 85 (attendance of witnesses and production of documents) and 93B (false or misleading information) of the Fair Trading Act 1973;
 
    (b) Part II of Schedule 7 to the Competition Act 1998 (performance of the Competition Commission's general functions); and
 
    (c) section 24 of the Competition Act 1980 (modification of provisions about performance of such functions).
Reports on references.     5D. - (1) In making a report on a reference under section 5C, the Competition Commission shall include in the report definite conclusions on whether the fact that the activities specified in the reference (or the reference as varied) are not licensable activities operates, or may be expected to operate, against the public interest.
 
      (2) The Commission shall also include in the report such an account of their reasons for those conclusions as in their opinion is expedient for facilitating proper understanding of the questions raised by the reference and of their conclusions.
 
      (3) Where the Commission conclude that the fact that particular activities are not licensable activities operates, or may be expected to operate, against the public interest, they shall specify in the report-
 
 
    (a) the effects adverse to the public interest which that fact has or may be expected to have; and
 
    (b) any modifications to the conditions specified in the reference in accordance with section 5C(3)(a) which they consider appropriate.
      (4) Section 82 of the Fair Trading Act 1973 (general provisions as to reports) shall apply in relation to reports of the Competition Commission on references under section 5C as it applies to reports of the Commission under that Act.
 
      (5) A report of the Competition Commission on a reference under section 5C shall be made to the Authority.
 
      (6) On receiving the report, the Authority shall send a copy of it to the Secretary of State.
 
      (7) Subject to subsection (8), the Authority shall, not less than 14 days after the copy is received by the Secretary of State, send another copy to the Council and publish that other copy in such manner as the Authority considers appropriate for bringing the report to the attention of persons likely to be affected by it.
 
      (8) If it appears to the Secretary of State that the publication of any matter in the report would be against the public interest or the commercial interests of any person, he may, before the end of the period of 14 days mentioned in subsection (7), direct the Authority to exclude that matter from the copy of the report to be sent to the Council and published under that subsection.
 
Application by Authority for order excluding activities.     5E. - (1) Before making an application for an order providing for activities to cease to be licensable activities, the Authority shall give notice-
 
 
    (a) stating that it proposes to make an application for an order providing for the activities to cease to be licensable activities; and
 
    (b) specifying a reasonable period (not being less than 28 days from the date of publication of the notice) within which representations or objections may be made with respect to the proposal,
  and shall consider any representations or objections which are duly made and not withdrawn.
 
      (2) The notice shall be given-
 
 
    (a) by serving a copy on the Secretary of State and the Council; and
 
    (b) by publishing it in such manner as the Authority considers appropriate for bringing it to the attention of persons appearing to the Authority to be likely to be affected by such an order.
      (3) An application under this section shall set out-
 
 
    (a) the activities which the Authority considers should cease to be licensable activities; and
 
    (b) the Authority's reasons for proposing that the order be made.
Consultation by Secretary of State about order excluding activities.     5F. - (1) If the Secretary of State proposes to make an order providing for activities to cease to be licensable activities (otherwise than on an application by the Authority under section 5E), he shall give notice-
 
 
    (a) stating that he proposes to make an order providing for the activities to cease to be licensable activities; and
 
    (b) specifying a reasonable period (not being less than 28 days from the date of publication of the notice) within which representations or objections may be made with respect to the proposal,
  and shall consider any representations or objections duly made (and not withdrawn).
 
      (2) The notice shall be given-
 
 
    (a) by serving a copy on the Authority and the Council; and
 
    (b) by publishing it in such manner as the Secretary of State considers appropriate for bringing it to the attention of persons appearing to him to be likely to be affected by such an order."
 
Duties of electricity distributors
Duty to connect on request.     36. For sections 16 and 17 of the 1989 Act (duty to supply on request and exceptions to that duty) there are substituted-
 
 

"Obligations of electricity distributors
Duty to connect on request.     16. - (1) Subject to the following provisions of this Part and any regulations made under those provisions, it is the duty of an electricity distributor ("the distributor") to make a connection-
 
 
    (a) to any premises, when required to do so by the owner or occupier of the premises or by any person authorised by a licence or exemption to supply electricity who is acting with the consent of the owner or occupier of the premises; or
 
    (b) to any other distribution system, when required to do so by the authorised distributor whose licence or exemption authorises him to run that system.
      (2) The duty of the distributor under subsection (1) is to make a connection-
 
 
    (a) where the request is made in relation to premises, between a distribution system of his and the premises for the purpose of enabling a supply of electricity to be given through the connection;
 
    (b) where the request is made in relation to another distribution system, between a distribution system of his and a distribution system of the other system for the purpose of enabling electricity to be conveyed to that other system through the connection;
  and to provide such electric lines or electrical plant as may be necessary for that purpose.
 
      (3) Where a person requires a connection in pursuance of subsection (1), he shall give to the electricity distributor a notice requiring him to offer terms for making the connection.
 
      (4) That notice must specify-
 
 
    (a) the premises or distribution system to which the connection is to be made;
 
    (b) the period within which a connection is required to be made; and
 
    (c) the maximum power which may be required at any time.
      (5) As soon as practicable after receiving a notice requiring him to offer terms for making a connection, the distributor shall give to the person requiring the connection a notice-
 
 
    (a) stating the extent (if any) to which the proposals specified in the notice under subsection (3) are acceptable to the distributor and specifying any counter proposals made by him;
 
    (b) specifying-
 
      (i) any payment which that person will be required to make under section 19(1) or regulations under section 19(2);
 
      (ii) any security which that person will be required to give under section 20; and
 
      (iii) any other terms which that person will be required to accept under section 21; and
 
    (c) stating the effect of section 23.
      (6) In this section and sections 17 to 23-
 
 
    (a) any reference to making a connection includes a reference to maintaining in good repair the connection and the electric lines or electric plant necessary for the purpose of enabling electricity to be supplied or conveyed through the connection;
 
    (b) any reference to requiring a connection includes a reference to requiring the connection and the necessary electric lines and electric plant to continue to be maintained;
 
    (c) any reference to the provision of an electric line or an item of electrical plant is a reference to the provision of such a line or item either by the installation of a new one or by the modification of an existing one;
  and "authorised distributor" means a person who is authorised by a licence or exemption to distribute electricity.
 
Exceptions from duty to connect.     17. - (1) Nothing in section 16(1) requires an electricity distributor to make a connection if and to the extent that-
 
 
    (a) he is prevented from doing so by circumstances not within his control;
 
    (b) circumstances exist by reason of which his doing so would or might involve his being in breach of regulations under section 29, and he has taken all such steps as it was reasonable to take both to prevent the circumstances from occurring and to prevent them from having that effect; or
 
    (c) it is not reasonable in all the circumstances for him to be required to do so.
      (2) Without prejudice to the generality of subsection (1) an electricity distributor is not required to make a connection if-
 
 
    (a) making the connection involves the distributor doing something which, without the agreement or consent of another person, would require the exercise of a power conferred by any provision of Schedule 3 or 4;
 
    (b) the distributor's licence does provide for that provision to have effect in relation to him; and
 
    (c) the distributor has taken all such steps as it was reasonable to take to secure the agreement or consent of that other person.
      (3) Subsection (2)(c) shall not apply in relation to a connection being maintained by the distributor unless the distributor gives-
 
 
    (a) where the connection is to premises, to the occupier or to the owner if the premises are not occupied;
 
    (b) where the connection is to another distribution system, to the person who is authorised by a licence or exemption to run that system,
  not less than seven working days' notice of his intention to cease to maintain the connection."
 
Power to recover expenditure.     37. - (1) Section 19 of the 1989 Act (power to recover expenditure) is amended as follows.
 
      (2) In subsection (1) for "public electricity supplier", "supplier" and "supply of electricity" there is substituted respectively "electricity distributor", "distributor" and "connection".
 
      (3) For subsection (2) there is substituted-
 
 
    "(2) The Secretary of State may, after consultation with the Authority, make provision by regulations for entitling an electricity distributor to require a person requiring a connection in pursuance of section 16(1) to pay to the distributor, in respect of any expenses reasonably incurred in providing any electric line or electrical plant necessary for the purpose of making the connection, such amount as may be reasonable in all the circumstances if-
 
 
    (a) the connection is required within the prescribed period after the provision of the line or plant; and
 
    (b) a person for the purpose of connecting whose premises or distribution system the line or plant was provided ("the initial contributor") has made a payment to the distributor in respect of those expenses."
      (4) In subsection (3) for "public electricity supplier" there is substituted "electricity distributor" and in subsection (4) for the words from "by" to the end there is substituted "by the distributor as part of the charges made by him for making the connection".
 
 
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