Energy Bill

House of Commons

Session 2007 - 08
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Energy Bill

Energy Bill
Schedule 2 — Property schemes
84

Schedule 2
Section 40

Property schemes
“Schedule 2A
Section 6E.

property schemes
Scheme-making power
5
1     (1)
This paragraph applies where—
(a)
a tender exercise is held in relation to an offshore
transmission licence,
(b)
any transmission assets have been transferred to the
successful bidder or, for operational purposes, it is
10
necessary for any transmission assets to be so transferred,
and
(c)
those assets were not constructed or installed by the
successful bidder.
      (2)
The Authority may, on an application under paragraph 3, make a
15
scheme (“a property scheme”) providing for—
(a)
the transfer to the successful bidder of, or
(b)
the creation in favour of the successful bidder of rights in
relation to,

property, rights or liabilities.
20
      (3)
In sub-paragraph (1)—
(a)
“transmission assets” means the transmission system in
respect of which the offshore transmission licence is (or is
to be) granted or anything which forms part of that system,
and
25
(b)
the reference to the successful bidder in paragraph (c)
includes, if the successful bidder is a body corporate, a
reference to any body corporate which was associated with
the successful bidder at the time the transmission assets
were constructed or installed.
30
      (4)
Until such time as section 180 of the Energy Act 2004 (meaning of
“high voltage line”) comes into force, “transmission system” in
sub-paragraph (3)(a) includes a system which, if that section were
in force, would be a transmission system.
Further provision about the content of a scheme
35
2     (1)
A property scheme may also contain—
(a)
provision for the creation, in relation to property which the
scheme transfers, of an interest in or right over the
property in favour of the asset owner;
(b)
provision for the creation of any rights or liabilities as
40
between the asset owner and the successful bidder;
(c)
provision for imposing on the asset owner or the
successful bidder an obligation to enter into a written

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agreement with, or to execute an instrument of another
kind in favour of, the other;
(d)
provision requiring the successful bidder to pay the asset
owner compensation;
(e)
provision requiring the asset owner to pay the successful
5
bidder compensation;
(f)
supplemental, incidental and consequential provision.
      (2)
The property, rights and liabilities which may be transferred by a
property scheme include property, rights or liabilities which
would not otherwise be capable of being transferred.
10
      (3)
If a property scheme provides for the division of an estate or
interest in land and any rent is—
(a)
payable in respect of the estate or interest under a lease, or
(b)
charged on the estate or interest,

the scheme may contain provision for apportionment or division
15
so that one part is payable in respect of, or charged on, only one
part of the estate or interest and the other part is payable in respect
of, or charged on, only the other part of the estate or interest.
      (4)
A property scheme which contains provision which affects a third
party may also contain provision requiring the successful bidder
20
or the asset owner to pay the third party compensation.
Applications for schemes
3     (1)
An application for a property scheme may be made by—
(a)
the preferred bidder,
(b)
the successful bidder, or
25
(c)
a person who owns the property, rights and liabilities in
relation to which provision of a kind mentioned in
paragraph 1(2) is proposed to be included in the scheme.
      (2)
An application must specify—
(a)
the property, rights and liabilities in relation to which
30
provision of a kind mentioned in paragraph 1(2) is
proposed to be included in the scheme,
(b)
the name and address of the non-applicant party, and
(c)
the name and address of each third party whom the
applicant considers would be affected by a provision of the
35
proposed property scheme.
      (3)
All property, rights and liabilities specified in an application in
accordance with sub-paragraph (2)(a) must belong to the same
person.
      (4)
A person may make more than one application under this
40
paragraph.
Timing of applications
4
An application for a property scheme, in relation to a tender
exercise, may only be made at a time when—

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(a)
a notice identifying the preferred bidder has been
published under paragraph 35(2) (and not withdrawn), or
(b)
a notice has been published under paragraph 36
identifying the successful bidder.
5     (1)
No application may be made for a property scheme after the end
5
of the transitional period.
      (2)
Subject to sub-paragraph (3), “the transitional period” means the
period of 4 years beginning with the day on which section 92 of the
Energy Act 2004 (competitive tenders for offshore transmission
licences) comes into force.
10
      (3)
Before the end of the transitional period, the Secretary of State
may, by order, extend that period by a period specified in the
order.
      (4)
An order under sub-paragraph (3) may relate to a particular case,
or to cases of a particular description, only.
15
      (5)
The total transitional period in any case must not exceed 7 years.
      (6)
Before making an order under sub-paragraph (3), the Secretary of
State must give notice of the proposal to extend the transitional
period.
      (7)
The notice must—
20
(a)
state that the Secretary of State proposes to make an order
extending the transitional period and set out the terms of
the proposed order,
(b)
state the reasons why the Secretary of State proposes to
make the order, and
25
(c)
specify the time (not being less than 28 days from the date
of publication of the notice under sub-paragraph (8)(b))
within which representations with respect to the proposals
may be made.
      (8)
The notice must be given—
30
(a)
by serving a copy of it on the Authority, and
(b)
by publishing it in such manner as the Secretary of State
considers appropriate for bringing it to the attention of—
(i)
the owner of any property, right or liability who
may have an interest in the making of the proposed
35
order, and
(ii)
if the order relates to a case where a tender exercise
has begun, any person who has submitted an
application for the offshore transmission licence to
which the exercise relates.
40
Notifying the non-applicant party
6     (1)
On receipt of an application for a property scheme, the Authority
must serve on the non-applicant party a notice which—
(a)
invites the non-applicant party to make representations to
the Authority about the application within the period
45

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specified in the notice (being not less than 21 days)
beginning with the day on which the notice is served, and
(b)
describes the effect of paragraphs 9 and 11.
      (2)
A notice under sub-paragraph (1) must be accompanied by—
(a)
a copy of the application, and
5
(b)
a notice under paragraph 16 which complies with the
requirements of sub-paragraph (3).
      (3)
The notice under paragraph 16 must require the non-applicant
party to provide the Authority, within the period specified in the
notice (being not less than 7 days) beginning with the day on
10
which the notice is served, with—
(a)
the name and address of each person to whom sub-
paragraph (4) applies, or
(b)
if the non-applicant party does not consider that there is
any person to whom that sub-paragraph applies, a
15
statement to that effect.
      (4)
This sub-paragraph applies to a person—
(a)
whom the non-applicant party considers is a third party
who would be affected by a provision of the proposed
property scheme, and
20
(b)
whose name and address were not specified in the
application under paragraph 3(2)(c).
Notifying third parties
7     (1)
As soon as reasonably practicable after receiving the information
required by a notice within paragraph 6(2)(b), the Authority must
25
serve on each person within sub-paragraph (2)—
(a)
a copy of the application, and
(b)
a notice inviting that person to make representations to the
Authority about the application within the period
specified in the notice (being not less than 21 days)
30
beginning with the day on which the notice is served.
      (2)
A person is within this sub-paragraph if the person’s name and
address were—
(a)
specified in the application in accordance with paragraph
3(2)(c), or
35
(b)
provided to the Authority in response to a notice within
paragraph 6(2)(b).
Publishing the application
8
As soon as reasonably practicable after an application is made for
a property scheme, the Authority must publish a notice which—
40
(a)
states that an application for a property scheme has been
made,
(b)
states the names of the applicant and the non-applicant
party, and
(c)
contains a general description of the property scheme to
45
which the application relates.

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Supplementing the application
9     (1)
The non-applicant party may, by notice served on the Authority
during the period mentioned in paragraph 6(1)(a), modify the
application so as to specify additional property, rights or liabilities
of the asset owner in relation to which provision of a kind
5
mentioned in paragraph 1(2) is proposed to be included in the
scheme.
      (2)
Where an application is modified by a notice under sub-paragraph
(1) (a “modification notice”), this Schedule has effect from that
time as if any additional property, rights or liabilities specified in
10
the notice had been specified in the application in accordance with
paragraph 3(2)(a).
      (3)
A modification notice must specify the name and address of each
person—
(a)
whom the non-applicant party considers to be a third party
15
who would be affected by a provision of the proposed
property scheme as modified by the notice, and
(b)
who is not within paragraph 7(2).
      (4)
On receipt of a modification notice, the Authority must serve on
the applicant a notice (a “warning notice”) which invites the
20
applicant to make representations to the Authority about the
modification notice within the period specified in the warning
notice (being a period of not less than 21 days) beginning with the
day on which the warning notice is served.
      (5)
A warning notice must be accompanied by—
25
(a)
a copy of the modification notice,
(b)
a notice under paragraph 16 which complies with the
requirements of sub-paragraph (6), and
(c)
a copy of any information provided by the non-applicant
to the Authority in response to a notice within paragraph
30
6(2)(b).
      (6)
The notice under paragraph 16 must require the applicant to
provide the Authority, within the period specified in the notice
(being not less than 7 days) beginning with the day on which the
notice is served, with—
35
(a)
the name and address of each person to whom sub-
paragraph (7) applies, or
(b)
if the applicant does not consider that there is any person
to whom that sub-paragraph applies, a statement to that
effect.
40
      (7)
This sub-paragraph applies to a person—
(a)
whom the applicant considers is a third party who would
be affected by a provision of the proposed property
scheme as modified by the modification notice, and
(b)
whose name and address were not—
45
(i)
specified in the application in accordance with
paragraph 3(2)(c),

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(ii)
provided to the Authority in response to a notice
within paragraph 6(2)(b), or
(iii)
specified in the modification notice under sub-
paragraph (3).
      (8)
As soon as reasonably practicable after receiving the information
5
required by a notice within sub-paragraph (5)(b), the Authority
must serve on each person within sub-paragraph (9) a notice
inviting that person to make representations to the Authority
about the modification notice within the period specified in the
notice (being a period of not less than 21 days) beginning with the
10
day on which the notice is served.
      (9)
A person is within this sub-paragraph if the person’s name and
address were—
(a)
specified in the application in accordance with paragraph
3(2)(c),
15
(b)
provided to the Authority in response to a notice within
paragraph 6(2)(b) or sub-paragraph (5)(b) of this
paragraph, or
(c)
specified in the modification notice.
     (10)
A notice under sub-paragraph (8) must be accompanied by—
20
(a)
a copy of the modification notice, and
(b)
if a copy of the application has not previously been served
on the person under paragraph 7(1), a copy of the
application.
10
As soon as reasonably practicable after the Authority receives a
25
modification notice, the Authority must publish a notice which—
(a)
states that a modification notice has been served on the
Authority in relation to an application,
(b)
states the names of the applicant and the non-applicant
party in relation to the application, and
30
(c)
contains a general description of the modifications made to
the application by the modification notice.
Restricting or withdrawing the application
11    (1)
Where an application for a property scheme has been made, the
applicant and the non-applicant party may, by a notice served by
35
them jointly on the Authority—
(a)
restrict the property, rights and liabilities in relation to
which provision of a kind mentioned in paragraph 1(2) is
proposed, or
(b)
withdraw the application.
40
      (2)
Where a notice is served under sub-paragraph (1) the Authority
must serve a copy of the notice on any person served with a notice
in relation to the application under paragraph 7(1) or 9(8).
      (3)
A notice may be served under sub-paragraph (1) at any time
before a property scheme is made in response to the application.
45
      (4)
If, at any time, a notice specifying the preferred bidder, in relation
to a tender exercise, is withdrawn under paragraph 35, any

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application for a property scheme previously made, in relation to
that exercise, by the preferred bidder or by the asset owner (unless
previously withdrawn under sub-paragraph (1)) is treated as
withdrawn at that time.
      (5)
Where an application is withdrawn by virtue of sub-paragraph
5
(4), the Authority must serve notice to that effect on—
(a)
the asset owner, and
(b)
any person served with a notice in relation to the
application under paragraph 7(1) or 9(8).
      (6)
If a notice is served under sub-paragraph (1) or an application is
10
withdrawn by virtue of sub-paragraph (4), the Authority may
direct the applicant or the non-applicant party (or both) to make a
payment to a person within sub-paragraph (7) in respect of the
costs incurred by such a person in connection with the application.
      (7)
Those persons are—
15
(a)
the Authority;
(b)
any third party affected by a provision of the proposed
property scheme.
      (8)
A determination under sub-paragraph (6) must be made on the
basis of what is just in all the circumstances of the case.
20
      (9)
The Authority must serve notice of a direction given under sub-
paragraph (6) on—
(a)
the applicant (if not the recipient of the direction),
(b)
the non-applicant party (if not the recipient of the
direction), and
25
(c)
any person served with a notice in relation to the
application under paragraph 7(1) or 9(8).
     (10)
Any sums received by the Authority under sub-paragraph (6) are to be
paid into the Consolidated Fund.
The Authority’s functions in relation to applications
30
12    (1)
On an application for the making of a property scheme, the
Authority must determine whether the proposed provision in
relation to any property, right or liability specified in the
application in accordance with paragraph 3(2)(a) is necessary or
expedient for operational purposes.
35
      (2)
Sub-paragraph (1) does not apply, in relation to any property,
right or liability specified in the application, if the successful
bidder and the asset owner agree that the proposed provision, in
relation to that property, right or liability, is necessary or
expedient for operational purposes.
40
      (3)
If the Authority determines under sub-paragraph (1) that the
proposed provision, in relation to any property, right or liability
specified in the application, is not necessary or expedient for
operational purposes—
(a)
it must refuse the application in relation to the property,
45
right or liability, but