Energy Bill

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Energy Bill

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 1 — Nuclear sites: decommissioning and clean-up
49

61
Amendment of Nuclear Installations Act 1965
After section 1(3) of the Nuclear Installations Act 1965 (c. 57) (nuclear site
licences) insert—
“(4)
Subsection (1) is subject to section 43 of the Energy Act 2008
(prohibition on use of site in absence of approved funded
5
decommissioning programme).”
General
62
Meaning of “associated”
(1)
For the purposes of this Chapter, one body corporate is associated with another
if one of them has a significant interest in the other or a third body corporate
10
has a significant interest in both of them; and subsections (2) to (5) set out the
circumstances in which one body corporate (“A”) has a significant interest in
another (“B”).
(2)
Where B is a company, A has a significant interest in B if A possesses or is
entitled to acquire—
15
(a)
20% or more of the issued share capital of B,
(b)
such rights as would entitle A to exercise 20% or more of the votes
exercisable in general meetings of B,
(c)
such part of the issued share capital of B as would entitle A to 20% or
more of the amount distributed if the whole of the income of B were in
20
fact distributed among the shareholders, or
(d)
such rights as would, in the event of the winding up of B or in any other
circumstances, entitle it to receive 20% or more of the assets of B which
would then be available for distribution among the shareholders.
(3)
Where B is a limited liability partnership, A has a significant interest in B if A—
25
(a)
holds 20% or more of the voting rights in B,
(b)
is a member of B and has a right to appoint or remove 20% or more of
other members, or
(c)
is a member of B and controls alone, or pursuant to an agreement with
other members, 20% or more of the voting rights in B.
30
(4)
In subsection (3)(a) and (c) the references to “voting rights” are to the rights
conferred on members in respect of their interest in a limited liability
partnership to vote on those matters which are to be decided on by a vote of
the members of the limited liability partnership.
(5)
In any case, A has a significant interest in B if A has the power, directly or
35
indirectly, to secure that the affairs of B are conducted in accordance with A’s
wishes.
(6)
In determining whether, by virtue of this section, A has a significant interest in
B, A shall be taken to possess—
(a)
any rights and powers possessed by a person as nominee for A, and
40
(b)
any rights and powers possessed by a body corporate which A controls
(including rights and powers which such a body corporate would be
taken to possess by virtue of this paragraph).

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 2 — Offshore renewables installations
50

(7)
In order to determine whether one body corporate controls another for the
purposes of subsection (6)(b), subsections (2) to (5) and (6)(a) are to be applied,
but as if—
(a)
for “has a significant interest in” in each place there were substituted
“controls”, and
5
(b)
for “20%” in each place there were substituted “50%”.
63
Interpretation
In this Chapter—
“approved funded decommissioning programme” means a funded
decommissioning programme approved under section 42;
10
“cleaning-up” and “decommissioning”, in relation to a site or installation,
includes the treatment, storage, transportation and disposal of
hazardous material (within the meaning of section 37 of the Energy Act
2004) and of other matter and substances that need to be dealt with or
removed in or towards making the site or installation suitable to be
15
used for other purposes;
“the designated technical matters” has the meaning given by section 41;
“document” includes anything in which information is recorded in any
form;
“enactment” includes an enactment comprised in, or in an instrument
20
made under, an Act of the Scottish Parliament or Northern Ireland
legislation;
“funded decommissioning programme” is to be construed in accordance
with section 41;
“nuclear installation” has the meaning given by section 26 of the Nuclear
25
Installations Act 1965 (c. 57);
“nuclear site licence” has the meaning given by that section;
“relevant nuclear installation”, in relation to a site, means a nuclear
installation which is or is intended to be established on the site;
“site operator” means a person who holds a nuclear site licence in respect
30
of a site;
“the technical matters” has the meaning given by section 41.
Chapter 2
Offshore renewables installations
64
Decommissioning notices relating to offshore renewable energy installations
35
(1)
The Energy Act 2004 (c. 20) is amended as follows.
(2)
In section 105(2) (notices), for “that person” substitute “—
(a)
a person falling within subsection (1)(a), (b) or (c), or
(b)
if a person to whom paragraph (a) applies is a body corporate, a body
corporate associated with that person (subject to section 105A),”.
40
(3)
In section 105(3) (consents) for the words from the beginning to “proposals—”
substitute—
“(3)
Before requiring a person to submit a decommissioning programme in
respect of proposals made by a person within paragraph (a) or (b) of

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 2 — Offshore renewables installations
51

subsection (1), the Secretary of State must be satisfied that at least one
of the statutory consents required for giving effect to those proposals—
”.
(4)
After section 105 (requirement to prepare decommissioning programme)
insert—
5
“105A
Section 105 notices: supplemental
(1)
The Secretary of State may not give a notice under section 105(2)(b) to
a body corporate associated with a person (“the responsible person”)
within section 105(1)(a), (b) or (c) unless the Secretary of State—
(a)
has given a notice to the responsible person under section
10
105(2)(a), and
(b)
is not satisfied that adequate arrangements (including financial
arrangements) have been made by the responsible person to
ensure that a satisfactory decommissioning programme will be
carried out.
15
(2)
Subsection (1) does not apply if—
(a)
there has been a failure to comply with a notice under section
105(2), or
(b)
the Secretary of State has rejected a programme submitted in
compliance with such a notice.
20
(3)
For the purposes of this section and section 105, one body corporate is
associated with another if one of them controls the other or a third body
corporate controls both of them, and subsections (4) to (8) set out the
circumstances in which one body corporate (“A”) controls another
(“B”).
25
(4)
Where B is a company, A controls B if A possesses or is entitled to
acquire—
(a)
one half or more of the issued share capital of B,
(b)
such rights as would entitle A to exercise one half or more of the
votes exercisable in general meetings of B,
30
(c)
such part of the issued share capital of B as would entitle A to
one half or more of the amount distributed if the whole of the
income of B were in fact distributed among the shareholders, or
(d)
such rights as would, in the event of the winding up of B or in
any other circumstances, entitle it to receive one half or more of
35
the assets of B which would then be available for distribution
among the shareholders.
(5)
Where B is a limited liability partnership, A controls B if A—
(a)
holds a majority of the voting rights in B,
(b)
is a member of B and has a right to appoint or remove a majority
40
of other members, or
(c)
is a member of B and controls alone, or pursuant to an
agreement with other members, a majority of the voting rights
in B.
(6)
In subsection (5)(a) and (c) the references to “voting rights” are to the
45
rights conferred on members in respect of their interest in a limited
liability partnership to vote on those matters which are to be decided
on by a vote of the members of the limited liability partnership.

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 2 — Offshore renewables installations
52

(7)
In any case, A controls B if A has the power, directly or indirectly, to
secure that the affairs of B are conducted in accordance with A’s
wishes.
(8)
In determining whether, by virtue of subsections (4) to (7), A controls
B, A is to be taken to possess—
5
(a)
any rights and powers possessed by a person as nominee for it,
and
(b)
any rights and powers possessed by a body corporate which it
controls (including rights and powers which such a body
corporate would be taken to possess by virtue of this
10
paragraph).”
(5)
In section 108 (reviews of decommissioning programmes), after subsection (3)
insert—
“(3A)
A proposal under subsection (3)(b) may, in particular, be made in
relation to a body corporate associated with a person who has a duty
15
under section 109(1) (and for this purpose “associated” is to be
construed in accordance with section 105A(3) to (8)).”
65
Security for decommissioning obligations
After section 110 of the Energy Act 2004 (c. 20) (failure to carry out
decommissioning programme) insert—
20
“110A
Protection of funds held for purposes of decommissioning
(1)
This section applies where any security in relation to the carrying out
of an approved decommissioning programme, or for compliance with
the conditions of its approval, has been provided by a person (“the
security provider”) by way of a trust or other arrangements.
25
(2)
In this section a reference to “the protected assets” is a reference to the
security and any property or rights in which it consists.
(3)
The manner in which, and purposes for which, the protected assets are
to be applied and enforceable (whether in the event of the security
provider’s insolvency or otherwise) is to be determined in accordance
30
with the trust or other arrangements.
(4)
For the purposes of subsection (3), no regard is to be had to so much of
the Insolvency Act 1986, the Insolvency (Northern Ireland) Order 1989
or any other enactment or rule of law as, in its operation in relation to
the security provider or any conduct of the security provider, would—
35
(a)
prevent or restrict the protected assets from being applied in
accordance with the trust or other arrangement, or
(b)
prevent or restrict their enforcement for the purposes of being
so applied.
(5)
In subsection (4) “enactment” includes an instrument made under an
40
enactment.
110B
Section 110A: supplemental
(1)
The Secretary of State may direct a security provider to publish
specified information about the protected assets.

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 2 — Offshore renewables installations
53

(2)
A direction under this section may specify—
(a)
the time when the information must be published, and
(b)
the manner of publication.
(3)
If a security provider fails to comply with a direction, the Secretary of
State or a creditor of the security provider may make an application to
5
the court under this section.
(4)
If, on an application under this section, the court decides that the
security provider has failed to comply with the direction, it may order
the security provider to take such steps as the court directs for securing
that the direction is complied with.
10
(5)
In this section—
“the protected assets” has the same meaning as in section 110A;
“security provider” means a person who has provided security in
relation to which that section applies.
(6)
In subsections (3) and (4) references to “the court” are references—
15
(a)
to the High Court, in relation to an application in England and
Wales or Northern Ireland, or
(b)
to the Court of Session, in relation to an application in
Scotland.”
66
Provision of information to Secretary of State
20
After section 112 of the Energy Act 2004 (c. 20) (duty to inform Secretary of
State) insert—
“112A
Power of Secretary of State to require information and documents
(1)
The Secretary of State may by notice require a person within subsection
(2) to provide the Secretary of State with such relevant information or
25
documents as the Secretary of State may require in connection with the
exercise of functions under this Chapter.
(2)
Those persons are—
(a)
a person who has been, or may be, given a notice under section
105(2)(a) in relation to a relevant object,
30
(b)
where a person falling within paragraph (a) is a body corporate,
a body corporate associated with that person,
(c)
a person not within paragraph (a) or (b) who by virtue of
provision made under section 108(3)(b) is subject to the duty
under section 109(1) in relation to a decommissioning
35
programme relating to a relevant object.
(3)
Information or a document is “relevant” if it relates to—
(a)
the place where the relevant object is or is to be situated,
(b)
the relevant object,
(c)
where the recipient of the notice is a body corporate falling
40
within subsection (2)(c) or section 105(2)(a), details of an
associated body corporate,
(d)
the financial affairs of the recipient of the notice or, where the
recipient is a body corporate falling within subsection (2)(c) or
section 105(1)(a), (b) or (c), an associated body corporate,
45

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 3 — Oil and gas installations
54

(e)
the security that the recipient proposes to provide in relation to
the carrying out of a decommissioning programme relating to
the relevant object or for the recipient’s compliance with any
conditions of the programme’s approval, or
(f)
where the recipient of the notice (“R”) is a body corporate falling
5
within subsection (2)(c) or section 105(1)(a), (b) or (c), the name
or address of any person whom R believes to be an associated
body corporate.
(4)
But if a notice under subsection (1) requires information in connection
with a function of the Secretary of State under section 107(1) or (4), the
10
notice may require the provision of information or documents which
the Secretary of State considers are necessary or expedient for the
purpose of exercising those functions (whether or not they are of a kind
specified in subsection (3)).
(5)
A notice under subsection (1) must specify the documents or
15
information, or the description of documents or information, to which
it relates.
(6)
Information or documents required to be provided under this section
must be provided within such period as is specified in the notice under
subsection (1).
20
(7)
In this section, “associated”, in relation to a body corporate, is to be
construed in accordance with section 105A(3) to (8).
(8)
A person who fails, without reasonable excuse, to comply with a notice
under subsection (1) is guilty of an offence.
(9)
A person who discloses information obtained by virtue of a notice
25
under this section is guilty of an offence unless the disclosure—
(a)
is made with the consent of the person by or on behalf of whom
the information was provided,
(b)
is for the purpose of the exercise of the Secretary of State’s
functions under this Chapter, the Electricity Act 1989 or Part 4
30
of the Petroleum Act 1998, or
(c)
is required by or under an enactment.”
Chapter 3
Oil and gas installations
67
Persons who may be required to submit abandonment programmes
35
(1)
Section 30 of the Petroleum Act 1998 (c. 17) (persons who may be required to
submit programmes) is amended as follows.
(2)
In subsection (1)—
(a)
after paragraph (b) insert—
“(ba)
a person to whom subsection (5)(a) and (b) applied in
40
relation to the installation, but who—
(i)
transferred the right mentioned in that
subsection to another person, and

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 3 — Oil and gas installations
55

(ii)
has not obtained a consent required under the
licence in relation to the transfer;”, and
(b)
in paragraph (e) for “company” in each place substitute “body
corporate”.
(3)
In subsection (2)(c) for “company” in each place substitute “body corporate”.
5
(4)
For subsection (5)(b) substitute—
“(b)
either—
(i)
any activity mentioned in subsection (6) is carried on
from, by means of or on the installation, or
(ii)
the person intends to carry on an activity mentioned in
10
that subsection from, by means of or on the
installation,”.
(5)
For subsection (8) substitute—
“(8)
For the purposes of this section, one body corporate is associated with
another if one of them controls the other or a third body corporate
15
controls both of them; and subsections (8A) to (8D) set out the
circumstances in which one body corporate (“A”) controls another
(“B”).
(8A)
Where B is a company, A controls B if A possesses or is entitled to
acquire—
20
(a)
one half or more of the issued share capital of B,
(b)
such rights as would entitle A to exercise one half or more of the
votes exercisable in general meetings of B,
(c)
such part of the issued share capital of B as would entitle A to
one half or more of the amount distributed if the whole of the
25
income of B were in fact distributed among the shareholders, or
(d)
such rights as would, in the event of the winding up of B or in
any other circumstances, entitle it to receive one half or more of
the assets of B which would then be available for distribution
among the shareholders.
30
(8B)
Where B is a limited liability partnership, A controls B if A—
(a)
holds a majority of the voting rights in B,
(b)
is a member of B and has a right to appoint or remove a majority
of other members, or
(c)
is a member of B and controls alone, or pursuant to an
35
agreement with other members, a majority of the voting rights
in B.
(8C)
In subsection (8B)(a) and (c) the references to “voting rights” are to the
rights conferred on members in respect of their interest in a limited
liability partnership to vote on those matters which are to be decided
40
on by a vote of the members of the limited liability partnership.
(8D)
In any case, A controls B if A has the power, directly or indirectly, to
secure that the affairs of B are conducted in accordance with A’s
wishes.”
(6)
In subsection (9)—
45
(a)
for “subsection (8)” substitute “subsections (8) to (8D)”, and
(b)
for “company” in each place substitute “body corporate”.