House of Commons portcullis
House of Commons
Session 2003 - 04
Internet Publications
Other Bills before Parliament

Energy Bill [HL]


Energy Bill [HL]
Part 4 — Energy Regulation
Chapter 1 — Electricity trading and transmission

104

 

(b)   

publish the modifications in such manner as it considers appropriate.

(8)   

The power under subsection (1) may not be exercised after the end of the

period of eighteen months beginning with the day on which that subsection

comes into force.

(9)   

In subsection (2)(a), the reference to distribution systems is to be construed in

5

accordance with section 4(4) of the 1989 Act.

132     

Alteration of transmission activities requiring licence

(1)   

Section 4 of the 1989 Act (prohibition on unlicensed activities in connection

with supply of electricity) is amended as follows.

(2)   

In subsection (1) (which lists the activities prohibited), for paragraph (b)

10

substitute—

“(b)   

participates in the transmission of electricity for that purpose;”.

(3)   

After subsection (3) insert—

“(3A)   

In subsection (1)(b) above, the reference to a person who participates in

the transmission of electricity is to a person who—

15

(a)   

co-ordinates, and directs, the flow of electricity onto and over a

transmission system by means of which the transmission of

electricity takes place, or

(b)   

makes available for use for the purposes of such a transmission

system anything which forms part of it.

20

(3B)   

For the purposes of subsection (3A)(b), a person shall not be regarded

as making something available just because he consents to its being

made available by another.”

(4)   

In subsection (4) (definitions for the purposes of Part 1), for the definition of

“transmit” substitute—

25

   

“‘transmission’, in relation to electricity, means transmission by means of

a transmission system;

   

‘transmission system’ means a system which—

(a)   

consists (wholly or mainly) of high voltage lines and electrical

plant, and

30

(b)   

is used for conveying electricity from a generating station to a

substation, from one generating station to another or from

one substation to another.”

133     

Transmission licences

(1)   

In section 6 of the 1989 Act (licences authorising supply etc.), in subsection (1)

35

(kinds of licence which may be granted), for paragraph (b) substitute—

“(b)   

a licence authorising a person to participate in the transmission

of electricity for that purpose (‘a transmission licence’);”.

(2)   

After subsection (6) of that section insert—

“(6A)   

A transmission licence may authorise the holder to participate in the

40

transmission of electricity in any area, or only in an area specified in the

licence.

 

 

Energy Bill [HL]
Part 4 — Energy Regulation
Chapter 1 — Electricity trading and transmission

105

 

(6B)   

The Authority may, with the consent of the holder of a transmission

licence, modify terms included in the licence in pursuance of subsection

(6A) above.”

(3)   

In section 7 (licence conditions: general), after subsection (2) insert—

“(2A)   

Without prejudice to the generality of paragraph (a) of subsection (1),

5

conditions included in a transmission licence by virtue of that

paragraph may—

(a)   

require the licence holder not to carry on an activity which he

would otherwise be authorised by the licence to carry on, or

(b)   

restrict where he may carry on an activity which he is

10

authorised by the licence to carry on.”

134     

New standard conditions for transmission licences

(1)   

If the Secretary of State considers it necessary or expedient to do so for the

purpose of implementing the new trading and transmission arrangements, he

may determine new standard conditions in relation to transmission licences.

15

(2)   

The Secretary of State shall publish any conditions determined under

subsection (1) in such manner as he considers appropriate.

(3)   

Conditions published in accordance with subsection (2) shall be standard

conditions for the purposes of transmission licences, subject to any

modifications of the standard conditions for the purposes of licences of that

20

type made—

(a)   

under Part 1 of the 1989 Act, or

(b)   

under this Act,

   

after the determination under subsection (1).

(4)   

The standard conditions for the purposes of transmission licences may contain

25

provision—

(a)   

for any standard condition included in a transmission licence 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;

30

(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;

(c)   

for any standard condition included in such a licence which is

suspended to be brought back into operation in such manner, and in

35

such circumstances, as may be so specified or determined.

(5)   

In section 8A of the 1989 Act (standard conditions of licences), in subsection (1)

(incorporation in future licences of conditions which are standard conditions

by virtue of section 33(1) of the Utilities Act 2000 (c. 27)), for the words from

“section 6(1)” to “supply licences)” substitute “section 6(1)(a), (c) or (d) (that is

40

to say, generation licences, distribution licences or supply licences)”.

(6)   

In that section, after subsection (1) insert—

“(1A)   

Subject to subsection (2), each condition which by virtue of section

134(3) of the Energy Act 2004 is a standard condition for the purposes

of transmission licences shall be incorporated by reference in each

45

 

 

Energy Bill [HL]
Part 4 — Energy Regulation
Chapter 1 — Electricity trading and transmission

106

 

transmission licence granted on or after the day on which section 134(6)

of that Act comes into force.”

(7)   

The power under subsection (1) may not be exercised—

(a)   

after the end of the period of eighteen months beginning with the day

on which that subsection comes into force, or

5

(b)   

on or after the day on which subsections (5) and (6) come into force.

135     

Conversion of existing transmission licences

Schedule 17 (which makes provision for a licensing scheme in relation to

existing transmission licences) has effect.

136     

Grant of transmission licences

10

(1)   

If the Secretary of State considers it necessary or expedient to do so for the

purpose of implementing the new trading and transmission arrangements, he

may by direction—

(a)   

require GEMA to grant a transmission licence to such person, and on

such terms and subject to such conditions, as the direction may

15

provide;

(b)   

require GEMA to refuse an application for a transmission licence.

(2)   

The Secretary of State shall consult GEMA before issuing a direction under

subsection (1).

(3)   

Subsection (2) may be satisfied by consultation before, as well as by

20

consultation after, the commencement of this section.

(4)   

The powers under subsection (1) may not be exercised after the end of the

period of eighteen months beginning with the day on which that subsection

comes into force.

(5)   

The power under subsection (1)(a) may only be exercised on one occasion and

25

then only to require the grant of a single licence.

(6)   

The power under subsection (1)(b) may not be exercised once the power under

subsection (1)(a) has been exercised.

137     

Duties to provide information etc. to Secretary of State

(1)   

If GEMA receives an application for a transmission licence at a time when the

30

power under section 136(1)(b) is exercisable, it shall as soon as practicable send

a copy of the application to the Secretary of State.

(2)   

GEMA shall provide the Secretary of State with all such information as he may

require for the purposes of or in connection with the carrying-out of any of his

functions under this Chapter.

35

(3)   

Each holder of a licence under section 6 of the 1989 Act shall provide the

Secretary of State with all such information and other assistance as he may

require for the purposes of or in connection with the carrying-out of any of his

functions under this Chapter.

(4)   

Section 105(1) of the Utilities Act 2000 (c. 27) (general restrictions on disclosure

40

of information) does not apply to a disclosure made in pursuance of this

section.

 

 

Energy Bill [HL]
Part 4 — Energy Regulation
Chapter 2 — Interconnectors for electricity and gas

107

 

138     

Property arrangements schemes

Schedule 18 (which makes provision about property arrangements schemes)

has effect.

139     

Interpretation of Chapter 1 of Part 4

In this Chapter—

5

“transmission licence” means a licence under section 6(1)(b) of the 1989

Act;

and references to the new trading and transmission arrangements are to be

construed in accordance with section 130.

140     

Amendments consequential on Chapter 1 of Part 4

10

(1)   

Schedule 19 (which makes amendments consequential on the provisions of this

Chapter) has effect.

(2)   

Where the effect of—

(a)   

a modification under section 131, or

(b)   

a scheme under Schedule 17,

15

   

is to reduce in any respect the area in which the holder of a transmission licence

may carry on activities, Schedule 4 to the 1989 Act shall have effect in relation

to him as if any reference to the activities which he is authorised by his licence

to carry on included a reference to the activities which he was previously so

authorised to carry on.

20

141     

Transition

The Secretary of State may by order make in connection with the coming into

force of any provision of this Chapter such transitional provision or saving as

he considers necessary or expedient.

Chapter 2

25

Interconnectors for electricity and gas

Electricity interconnectors

142     

Operators of electricity interconnectors to be licensed

(1)   

The 1989 Act is amended as follows.

(2)   

In subsection (1) of section 4 (licensable activities), at the end of paragraph (c)

30

insert “or

(d)   

participates in the operation of an electricity interconnector,”.

(3)   

Before subsection (4) of that section insert—

“(3C)   

A reference in this Part to participating in the operation of an electricity

interconnector is a reference to—

35

(a)   

co-ordinating and directing the flow of electricity into or

through an electricity interconnector; or

 

 

Energy Bill [HL]
Part 4 — Energy Regulation
Chapter 2 — Interconnectors for electricity and gas

108

 

(b)   

making such an interconnector available for use for the

conveyance of electricity;

   

and a person is not to be regarded as participating in the transmission

of electricity by reason only of activities constituting participation in

the operation of an electricity interconnector.

5

(3D)   

For the purposes of subsection (3C)(b), a person shall not be regarded

as making something available just because he consents to its being

made available by another.

(3E)   

In this Part ‘electricity interconnector’ means so much of an electric line

or other electrical plant as—

10

(a)   

is situated at a place within the jurisdiction of Great Britain; and

(b)   

subsists wholly or primarily for the purposes of the conveyance

of electricity (whether in both directions or in only one) between

Great Britain and a place within the jurisdiction of another

country or territory.

15

(3F)   

For the purposes of this section—

(a)   

a place is within the jurisdiction of Great Britain if it is in Great

Britain, in the territorial sea adjacent to Great Britain or in an

area designated under section 1(7) of the Continental Shelf Act

1964; and

20

(b)   

a place is within the jurisdiction of another country or territory

if it is in that country or territory or in waters in relation to

which authorities of that country or territory exercise

jurisdiction.”

(4)   

In section 5(1) (power of the Secretary of State to grant exemptions from

25

licensing), for “or (c)” substitute “, (c) or (d)”.

(5)   

In section 6 (power to grant licences), after subsection (1)(d) insert “or

(e)   

a licence authorising a person to participate in the operation of

an electricity interconnector (‘an interconnector licence’).”

(6)   

After subsection (2) of that section insert—

30

“(2A)   

The same person may not be the holder of an interconnector licence and

the holder of a licence falling within any of paragraphs (a) to (d) of

subsection (1).”

(7)   

Before subsection (7) of that section insert—

“(6C)   

An interconnector licence authorising participation in the operation of

35

an electricity interconnector—

(a)   

must specify the interconnector or interconnectors in relation to

which participation is authorised; and

(b)   

may limit the forms of participation in the operation of an

interconnector which are authorised by the licence.”

40

143     

Standard conditions for electricity interconnectors

(1)   

The Secretary of State must, before the commencement of subsection (6),

determine standard conditions for electricity interconnector licences.

(2)   

Those standard conditions may contain provision—

 

 

Energy Bill [HL]
Part 4 — Energy Regulation
Chapter 2 — Interconnectors for electricity and gas

109

 

(a)   

for a standard condition included in an electricity interconnector

licence 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 a standard condition included in such a licence to be

5

suspended in such manner, and in such circumstances, as may be so

specified or determined; or

(c)   

for a standard condition included in such a licence the effect of 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

10

determined.

(3)   

The Secretary of State must publish the standard conditions determined by

him under this section.

(4)   

The publication must be in such manner as the Secretary of State considers

appropriate.

15

(5)   

The standard conditions determined by the Secretary of State have effect

subject to any modifications made under Part 1 of the 1989 Act or under this

Act.

(6)   

Before subsection (2) of section 8A of the 1989 Act (standard conditions)

insert—

20

“(1B)   

Subject to subsection (2), each condition which by virtue of section 143

of the Energy Act 2004 is a standard condition for the purposes of

interconnector licences shall be incorporated, by reference, in each

interconnector licence granted on or after the commencement of

subsection (6) of that section.”

25

(7)   

In this section “electricity interconnector licence” means an interconnector

licence under section 6(1)(e) of the 1989 Act.

144     

Consequential amendments of the 1989 Act

(1)   

The 1989 Act is amended as follows.

(2)   

In section 3A—

30

(a)   

in subsection (1) (principal objective of GEMA in relation to electricity),

at the end insert “or the provision or use of electricity interconnectors”;

and

(b)   

in subsection (5)(a) (duty as to carrying out of functions), after

“electricity”, where first occurring, insert “or to participate in the

35

operation of electricity interconnectors”.

(3)   

In section 29 (regulations)—

(a)   

in subsection (1)(b), after “electricity”, where first occurring, insert

“from the use of electricity interconnectors,”;

(b)   

in subsection (2)(b), after “electricity” insert “or in the use of electricity

40

interconnectors”;

(c)   

in subsection (2)(c), after “electricity” insert “or to participate in the

operation of an electricity interconnector”.

(4)   

In section 30(2)(a) (duty of inspector to inspect apparatus belonging to a licence

holders), after “electricity” insert “or to participate in the operation of

45

electricity interconnectors”.

 

 

Energy Bill [HL]
Part 4 — Energy Regulation
Chapter 2 — Interconnectors for electricity and gas

110

 

(5)   

In section 43 (concurrent functions of GEMA and the OFT under the Enterprise

Act 2002), in each of subsections (2A) and (3), after “electricity” insert “or the

use of electricity interconnectors”.

(6)   

In section 58(2) (information protected by directions), after “electricity” insert

“or to participate in the operation of electricity interconnectors”.

5

(7)   

In section 64(1) (interpretation), after the definitions of “electricity distributor”

and “electricity supplier” insert—

   

“‘electricity interconnector’ has the meaning given by section

4(3E);”.

(8)   

In section 98(1) (statistical information)—

10

(a)   

after “electricity”, where first occurring, insert “or the use of electricity

interconnectors”; and

(b)   

at the end insert “or to participate in the operation of electricity

interconnectors”.

145     

Grant of electricity interconnector licences to existing operators

15

(1)   

This section applies where a person is participating in the operation of an

electricity interconnector at the time when the power of GEMA to grant

electricity interconnector licences comes into force.

(2)   

The Secretary of State shall have power to grant such a licence to that person

under section 6 of the 1989 Act.

20

(3)   

Sections 6A(5), 7 and 8A of the 1989 Act (notice of licence and licence

conditions) shall have effect in relation to the grant of licences by the Secretary

of State by virtue of this section as if—

(a)   

references in those sections to GEMA included references to the

Secretary of State; and

25

(b)   

in section 8A, the words “the Secretary of State and” in subsection (4)(b)

and subsection (5) were omitted.

(4)   

Before granting a licence to a person by virtue of this section, the Secretary of

State must consult—

(a)   

that person;

30

(b)   

GEMA; and

(c)   

such other persons as the Secretary of State considers appropriate.

(5)   

Subsection (4) may be satisfied by consultation that took place wholly or partly

before the commencement of this section.

(6)   

In this section—

35

   

“electricity interconnector licence” means an interconnector licence under

section 6(1)(e) of the 1989 Act; and

   

“participating in the operation of an electricity interconnector” has the

same meaning as in Part 1 of the 1989 Act.

Gas interconnectors

40

146     

Operators of gas interconnectors to be licensed

(1)   

The Gas Act 1986 (c. 44) is amended as follows.

 

 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2004
Revised 23 April 2004