You are here: Parliament home page > Parliamentary business > Bills and legislation > Bills before Parliament > Commons Bill
Utilities Bill - continued        House of Commons
PART I, GAS AND ELECTRICITY - continued
Gas licensing - continued
back to previous text
 
Standard conditions of gas licences.     79. - (1) The standard conditions for the purposes of gas licences of any type (that is to say, licences under section 7, section 7A(1) or section 7A(2) of the 1986 Act) may contain provision-
 
 
    (a) for any standard condition included in a licence of that type not to have effect until brought into operation in such manner and in such circumstances as may be specified in or determined under the standard conditions;
 
    (b) for the effect of any standard condition included in such a licence to be suspended in such manner, and in such circumstances, as may be so specified or determined; or
 
    (c) for any standard condition included in such a licence which is for the time being suspended to be brought back into operation in such manner and in such circumstances as may be so specified or determined.
      (2) Such conditions as may be determined by the Secretary of State before the commencement of subsection (3), and published by him in such manner as he considers appropriate, in relation to gas licences of any type shall be standard conditions for the purposes of licences of that type (in place of the standard conditions which would otherwise be incorporated in licences of that type granted immediately before that commencement).
 
      (3) In section 8(1) of the 1986 Act (standard conditions of licences to be incorporated in gas licences) for "section 8(2) of the Gas Act 1995" there is substituted "section 79(2) of the Utilities Act 2000".
 
Modification of standard conditions of gas licences.     80. - (1) In section 8(7) of the 1986 Act (standard conditions of licences to be incorporated in gas licences), after "such that" there is inserted-
 
 
    "(a) the licence holder would not be unduly disadvantaged in competing with other holders of a licence under that subsection; and
 
    (b) ".
      (2) In section 23 of the 1986 Act (modification of conditions by agreement), for subsection (6) there is substituted-
 
 
    "(6) The Authority shall not make any modifications under subsection (1)(a) unless the licence holder has consented to the modifications and, in the case of standard conditions of a licence under subsection (1) or (2) of section 7A, 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 under that subsection; and
 
      (ii) no other holder of such a licence would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence being modified).
      (6A) The modification under subsection (1)(a) of part of a standard condition of a licence shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Part."
 
      (3) For subsections (7) to (9) of that section there is substituted-
 
 
    "(7) The Authority may not under subsection (1)(b) make any modifications of the standard conditions of any licences 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; or
 
      (ii) the percentage given by subsection (8) is less than such percentage as may be prescribed;
 
    (c) subsection (10) applies to the case.
      (8) 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."
 
      (4) For subsection (12) of that section there is substituted-
 
 
    "(12) In this section-
 
 
    "prescribed" means prescribed by order made by the Secretary of State;
 
    "relevant licence holder", in relation to proposed modifications under subsection (1)(b) of standard conditions of licences of any type, means the holder of a licence of that type which-
 
      (a) is to be modified under the proposals by the inclusion of any new standard condition; or
 
      (b) includes any standard conditions to which the proposals relate, other than standard conditions which are not in effect (by virtue of anything done under section 79(1) of the Utilities Act 2000) at the time specified in the notice under subsection (3).
      (13) 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.".
 
The gas code.     81. - (1) Schedule 2B to the 1986 Act is amended as follows.
 
      (2) After paragraph 6 (meters for disabled persons) there is inserted-
 
 

"Use of pre-payment meters
 6A. A pre-payment meter installed by a gas supplier on a consumer's premises shall not be used to recover any sum other than a sum owing to a gas supplier in respect of the supply of gas to those premises.".
 
      (3) In paragraph 7 (recovery of gas charges etc.)-
 
 
    (a) in sub-paragraph (1)(a) for the words from "the consumer's" to "him" there is substituted "any premises of his (in this paragraph referred to as "the premises")";
 
    (b) sub-paragraph (2) shall cease to have effect; and
 
    (c) in sub-paragraph (3) for paragraphs (a) and (b) there is substituted-
 
    "(a) install a pre-payment meter on the premises in place of the existing meter; or
 
    (b) cut off the supply to the premises by disconnecting the service pipe at the meter or by such other means as he thinks fit;

and the supplier may recover any expenses incurred in so doing from the consumer."
Transfer of gas licences.     82. For section 8AA of the 1986 Act (assignment of gas licences) there is substituted-
 
"Transfer of licences.     8AA. - (1) A licence-
 
    (a) shall be capable of being transferred by the licence holder, with the consent of the Authority, in accordance with this section and subject to any term of the licence relating to its transfer;
 
    (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 to carry on).
 
      (4) Such consent may be given subject to compliance with such modification or other conditions as the Authority considers necessary or expedient.
 
      (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) The Authority shall-
 
 
    (a) give the Health and Safety Executive not less than 28 days' notice of any proposal to consent to any proposed transfer; and
 
    (b) give that Executive and the Secretary of State not less than 28 days' notice of any proposal to impose a modification condition.
      (8) If, before the expiry of the time specified in a notice given to the Secretary of State under subsection (7)(b), the Secretary of State directs the Authority not to impose the condition, the Authority shall comply with the direction.
 
      (9) 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.
      (10) A notice under subsection (9) 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.
 
      (11) 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.
      (12) 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."
Exemptions from gas licensing.     83. - (1) For subsections (2) and (3) of section 6A of the 1986 Act (exemptions from prohibition) there is substituted-
 
 
    "(2) Notice of an exemption granted to a person shall be given-
 
 
    (a) by serving a copy of the exemption on him; and
 
    (b) by publishing the exemption in such manner as the Secretary of State considers appropriate for bringing it to the attention of other persons who may be affected by it.
      (2A) Notice of an exemption granted to persons of a class shall be given by publishing the exemption in such manner as the Secretary of State considers appropriate for bringing it to the attention of-
 
 
    (a) persons of that class; and
 
    (b) other persons who may be affected by it.
      (3) An exemption may be granted-
 
 
    (a) indefinitely; or
 
    (b) for a period specified in, or determined by or under, the exemption."
      (2) For subsection (5) of that section there is substituted-
 
 
    "(5) The Secretary of State may by order revoke an order by which an exemption was granted to a person or vary an order by which more than one exemption was so granted so as to terminate any of the exemptions-
 
 
    (a) at the person's request;
 
    (b) in accordance with any provision of the order by which the exemption was granted; or
 
    (c) if it appears to the Secretary of State inappropriate that the exemption should continue to have effect.
      (6) The Secretary of State may by order revoke an order by which an exemption was granted to persons of a class or vary an order by which more than one exemption was so granted so as to terminate any of the exemptions-
 
 
    (a) in accordance with any provision of the order by which the exemption was granted; or
 
    (b) if it appears to the Secretary of State inappropriate that the exemption should continue to have effect.
      (7) The Secretary of State may by direction withdraw an exemption granted to persons of a class from any person of that class-
 
 
    (a) at the person's request;
 
    (b) in accordance with any provision of the order by which the exemption was granted; or
 
    (c) if it appears to the Secretary of State inappropriate that the exemption should continue to have effect in the case of the person.
      (8) Before-
 
 
    (a) making an order under subsection (5)(b) or (c) or (6); or
 
    (b) giving a direction under subsection (7)(b) or (c),

the Secretary of State shall consult the Authority and give notice of his proposal to do so (with reasons) and of a period within which representations may be made to him.
      (9) The notice under subsection (8) shall be given-
 
 
    (a) where the Secretary of State is proposing to make an order under subsection (5)(b) or (c), by serving a copy of it on the person to whom the exemption was granted;
 
    (b) where he is proposing to make an order under subsection (6), by publishing it in such manner as the Secretary of State considers appropriate for bringing it to the attention of persons of the class of persons to whom the exemption was granted; and
 
    (c) where he is proposing to give a direction under subsection (7)(b) or (c), by serving a copy of it on the person from whom he proposes to withdraw the exemption."
Reasons for decisions under the 1986 Act.     84. For section 38A of the 1986 Act (duty to consider representations and give reasons) there is substituted-
 
 
"Reasons for decisions.     38A. - (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 7B(5)(a)(i) or (ii);
 
    (e) the determination of a question referred in pursuance of a condition included in a licence by virtue of section 7B(5)(a)(iii);
 
    (f) the determination of a dispute referred under section 27A(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 publish a notice stating the reasons for the decision in such manner as it or he considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be interested.
 
      (3) The Authority shall send a copy of a notice published in respect of a decision mentioned in paragraph (b), (c), (d), (e) or (g) of subsection (1) to the licence holder to whose licence, or to whom, the decision relates.
 
      (4) In preparing a 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 36(3) directed the Authority not to enter in the register required to be kept under that section.
 
      (6) In this section "final order" and "provisional order" have the same meanings as in section 28."
 
Altering activities requiring gas licence.     85. After section 41B of the 1986 Act there is inserted-
 
 
Alteration of activities requiring licence
 
"Power to alter activities requiring licence.     41C. - (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 5(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-
 
 
    (a) the conveyance of gas through pipes to premises or to pipe-line systems operated by gas transporters;
 
    (b) the supply to premises of gas conveyed through pipes; or
 
    (c) arranging with gas transporters for gas to be introduced into, conveyed by means of or taken out of pipe-line systems operated by the gas transporters.
      (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 41D.
 
      (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 41G; or
 
    (b) following consultation by the Secretary of State in accordance with section 41H.
      (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.     41D. - (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 41E 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 41E 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 the Authority would expect to be included in such licences.
References to Competition Commission.     41E. - (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 the Authority 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 4AA; and
 
    (b) any social or environmental policies set out or referred to in guidance issued under section 4AB.
      (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.     41F. - (1) In making a report on a reference under section 41E, 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 41E(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 41E as it applies to reports of the Commission under that Act.
 
      (5) A report of the Competition Commission on a reference under section 41E 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.     41G. - (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 duly made and not withdrawn.
      (2) The notice shall be given-
 
 
    (a) by serving a copy on the Secretary of State, the Health and Safety Executive and the Council; and
 
    (b) by publishing it in such manner as the Authority considers appropriate for bringing it to the attention of persons 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.     41H. - (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 41G), 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, the Health and Safety Executive 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 likely to be affected by such an order."
 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries index
© Parliamentary copyright 2000
Prepared 12 April 2000