Energy Bill

House of Commons

Session 2009 - 10
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Other Bills before Parliament

Energy Bill

Energy Bill
Part 2 — Schemes for reducing fuel poverty
8

9
Schemes for reducing fuel poverty: supplementary
(1)
A support scheme may make provision about arrangements to be made by
scheme suppliers to ensure that, so far as practicable, scheme customers
receive the benefits to be provided under the scheme, which may in particular
include provision about—
5
(a)
arrangements for enabling scheme suppliers to identify scheme
customers;
(b)
arrangements for drawing to the attention of scheme customers—
(i)
the fact that benefits are available under the scheme, and
(ii)
ways of applying for those benefits;
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(c)
arrangements for paying or otherwise providing the benefits.
(2)
A support scheme may include provision for prohibiting scheme suppliers
from discriminating against scheme customers or persons who, if they were
customers of scheme suppliers, would be scheme customers.
(3)
A support scheme—
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(a)
may require scheme suppliers to make payments to the Secretary of
State or the Authority in respect of costs which either of them incurs for
the purposes of the provision of evidence as mentioned in section
8(4)(c) for the purposes of the scheme, and
(b)
must make provision for the payment into the Consolidated Fund of any sums
20
so received.
(4)
Without prejudice to section 32(5), a support scheme may in particular—
(a)
provide for different criteria to be applied for the purpose of
identifying scheme customers of different scheme suppliers;
(b)
provide for different benefits, or different amounts of benefits, to be
25
provided by different scheme suppliers or to different scheme
customers;
(c)
impose requirements in relation to scheme suppliers by reference to
pre-existing arrangements.
(5)
A support scheme may make provision for requiring scheme suppliers to
30
provide to the Authority such information as the Authority may require for the
purpose of carrying out its functions in relation to the scheme.
(6)
A support scheme may provide that, in such cases or circumstances as the
Secretary of State may determine, any requirement of the scheme—
(a)
is not to apply, or
35
(b)
is to apply subject to modifications,

and may provide for any such determination to be made subject to such
conditions or limitations as the Secretary of State thinks appropriate.
10
Reconciliation mechanism: regulations
(1)
The Secretary of State may by regulations make provision for the establishment
40
and operation of a reconciliation mechanism.
(2)
In this section and section 11, “reconciliation mechanism” means arrangements
for securing that, after adjustment under the arrangements, the amounts of
benefits provided by scheme suppliers under a support scheme or schemes (or
part of a support scheme) correspond, so far as reasonably practicable, to an
45
equitable distribution between the scheme suppliers in question of the

Energy Bill
Part 2 — Schemes for reducing fuel poverty
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aggregate amount of benefits provided under the scheme or schemes (or that
part of a scheme).
(3)
Regulations under subsection (1) may—
(a)
require scheme suppliers in relation to whom a reconciliation
mechanism applies to make payments to the person operating the
5
mechanism (“the operator”) or to another scheme supplier in relation to
whom it applies;
(b)
confer on scheme suppliers in relation to whom a reconciliation
mechanism applies entitlements to receive payments from the operator
or from another scheme supplier in relation to whom it applies;
10
(c)
make provision—
(i)
as to how the amount of any benefits provided under a support
scheme is to be determined, and
(ii)
as to what constitutes an equitable distribution (as mentioned in
subsection (2)),
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for the purposes of the mechanism.
(4)
Regulations which provide for the amounts of any payments mentioned in
subsection (3)(a) or (b) to be determined by the operator must, if the operator
is not the Authority, include provision for appeals by scheme suppliers against
any such determinations.
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(5)
Without prejudice to section 32(6), regulations under subsection (1) may confer
functions on the Authority, and may, in particular, provide for the Authority
to be the operator.
(6)
Regulations under subsection (1) may make provision for requiring scheme
suppliers in relation to whom a reconciliation mechanism applies to provide to
25
the Authority or the operator such information as the Authority or, as the case
may be, the operator may require for the purpose of carrying out its functions
in relation to the mechanism.
11
Reconciliation mechanism: licence modifications
(1)
The Secretary of State may, for the purpose of enabling or facilitating the
30
establishment or operation of a reconciliation mechanism, modify—
(a)
a condition of a particular licence under section 6(1)(b) or (d) of the
Electricity Act 1989 (transmission licences and supply licences);
(b)
the standard conditions incorporated in licences under those
provisions by virtue of section 8A of that Act;
35
(c)
a document maintained in accordance with the conditions of licences
under section 6(1) of that Act, or an agreement that gives effect to a
document so maintained.
(2)
The power in subsection (1)—
(a)
may be exercised generally, only in relation to specified cases or subject
40
to exceptions (including provision for a case to be excepted only so long
as specified conditions are satisfied);
(b)
may be exercised differently in different cases;
(c)
includes a power to make incidental, supplemental, consequential or
transitional modifications.
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(3)
Provision included by virtue of that power in licences, or in a document or
agreement relating to licences—

Energy Bill
Part 2 — Schemes for reducing fuel poverty
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(a)
need not relate to the activities authorised by the licences;
(b)
may make different provision for different cases.
(4)
Before making a modification under this section, the Secretary of State must
consult—
(a)
holders of any licence being modified,
5
(b)
the Authority, and
(c)
such other persons as the Secretary of State thinks it is appropriate to
consult.
(5)
The Secretary of State must publish details of any modifications as soon as
reasonably practicable after they are made.
10
(6)
A modification under subsection (1) of part of a standard condition of a licence
does not prevent any other part of the condition from continuing to be
regarded as a standard condition for the purposes of Part 1 of the Electricity
Act 1989.
(7)
Where the Secretary of State makes a modification under subsection (1)(b) of
15
the standard conditions of a licence of any type, the Authority must—
(a)
make the same modification of those standard conditions for the
purposes of their incorporation in licences of that type granted after
that time, and
(b)
publish the modification.
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12
Functions of Authority and Secretary of State under Part 2
(1)
Sections 4AA to 4B of the Gas Act 1986 (principal objective and general duties,
as amended by section 16) apply to the carrying out, in relation to licensed gas
suppliers, of functions conferred on the Secretary of State or the Authority by
or under this Part as they apply in relation to the carrying out of functions
25
conferred on that person by or under Part 1 of that Act.
(2)
Sections 3A to 3D of the Electricity Act 1989 (principal objective and general
duties, as amended by section 17) apply to the carrying out, in relation to
licensed electricity suppliers, of functions conferred on the Secretary of State or
the Authority by or under this Part as they apply in relation to the carrying out
30
of functions conferred on that person by or under Part 1 of that Act.
(3)
The Authority must keep under review—
(a)
the operation of any support scheme, and
(b)
licensed suppliers’ compliance with it.
13
Regulations under Part 2: procedure etc
35
(1)
Before making regulations under section 8 or 10, the Secretary of State must
consult—
(a)
the Authority,
(b)
in the case of a support scheme that applies to licensed gas suppliers, or
a reconciliation mechanism that applies in relation to them, licensed gas
40
suppliers,
(c)
in the case of a support scheme that applies to licensed electricity
suppliers, or a reconciliation mechanism that applies in relation to
them, licensed electricity suppliers, and

Energy Bill
Part 2 — Schemes for reducing fuel poverty
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(d)
such other persons as the Secretary of State thinks it is appropriate to
consult.
(2)
Subsection (1) may be satisfied by consultation before, as well as by
consultation after, this section comes into force.
(3)
The Secretary of State may not make regulations under section 8 except with
5
the consent of the Treasury.
(4)
A support scheme—
(a)
must contain provision specifying a period (“the scheme period”) at the
end of which the scheme is to cease to have effect, and
(b)
may provide for the Secretary of State to review the scheme, or any part
10
of it—
(i)
after such period, or at such intervals, as may be specified in or
determined in accordance with the scheme, or
(ii)
when the Secretary of State is satisfied that one or more
conditions specified in the scheme is satisfied.
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(5)
Where a support scheme (“the current scheme”) has effect, no regulations may
be made under section 8 to—
(a)
amend or revoke the current scheme, or
(b)
make another support scheme that applies to any of the scheme
suppliers to which the current scheme applies,
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except following a review of the current scheme conducted in accordance with
provision made under subsection (4)(b).
(6)
Nothing in subsection (5) is to be taken to prevent a support scheme or any part
of it being renewed at the end of the scheme period by regulations under
section 8 which provide for it to have effect for a further scheme period.
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14
Schemes for reducing fuel poverty: interpretation
(1)
For the purposes of this Part, fuel poverty is reduced if—
(a)
the number of people living in fuel poverty is reduced, or
(b)
the extent to which any person is living in fuel poverty is reduced.
(2)
For the purposes of this Part—
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(a)
a person is living in fuel poverty if the person would (or, in the case of
a person living in Scotland, would if living in England and Wales) be
regarded as living in fuel poverty for the purposes of the Warm Homes
and Energy Conservation Act 2000 (see section 1 of that Act), and
(b)
the extent to which a person is living in fuel poverty is reduced if the
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difference between the cost of keeping the person’s home warm and
what would be a reasonable cost for doing so is reduced.
(3)
References in subsection (2)(b) to a reasonable cost and to a warm home have
the same meanings as they would have in subsection (1) of section 1 of the
Warm Homes and Energy Conservation Act 2000.
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(4)
If, by virtue of regulations under subsection (2)(b) of that section, the definition
in subsection (1) of that section is substituted, the Secretary of State may by
regulations specify what is to be regarded as a reduction in the extent to which
a person is living in fuel poverty for the purposes of this Part.
(5)
In this Part—
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Energy Bill
Part 2 — Schemes for reducing fuel poverty
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“fuel poverty risk group” means a category of persons of whom, in the
opinion of the Secretary of State, the proportion who are (or, but for a
support scheme, would be) living in fuel poverty is higher than the
proportion of people in Great Britain who are living in fuel poverty;
“licensed electricity supplier” means the holder of a licence under section
5
6(1)(d) of the Electricity Act 1989;
“licensed gas supplier” means the holder of a licence under section 7A of
the Gas Act 1986;
“licensed supplier” means a licensed electricity supplier or licensed gas
supplier;
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“pre-existing arrangements”, in relation to a scheme supplier, means
arrangements made by the supplier before the commencement of
section 8 with a view to reducing fuel poverty;
“scheme customer”, in relation to a support scheme and a scheme
supplier, means a customer of the supplier to whom benefits are, or are
15
to be, provided by the supplier under the scheme;
“scheme supplier”, in relation to a support scheme, means a licensed
supplier to whom the scheme applies;
“support scheme” has the meaning given by section 8(2).
15
Schemes for reducing fuel poverty: consequential amendments
20
(1)
In the Gas Act 1986, in section 28(8) (orders for securing compliance), in the
definition of “relevant requirement”, at the end insert “or section 8 or 10 of the
Energy Act 2010 (schemes for reducing fuel poverty)”.
(2)
In the Electricity Act 1989, in section 25(8) (orders for securing compliance), in
the definition of “relevant requirement”, at the end insert “or section 8 or 10 of
25
the Energy Act 2010 (schemes for reducing fuel poverty)”.
(3)
Nothing in subsection (1) or (2) is to be taken to limit the kind of provision that
can be made by regulations under section 8 or 10 about enforcement of a
requirement imposed by, or payment of a sum due under, the regulations.
(4)
The Utilities Act 2000 is amended as follows.
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(5)
In section 33(1) (standard conditions of electricity licences)—
(a)
after paragraph (c) omit “, or”;
(b)
after paragraph (d) insert “or
(e)
section 11 of the Energy Act 2010 (reconciliation
mechanism: power to amend licence conditions).”
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(6)
In section 105 (general restrictions on disclosure of information)—
(a)
in subsection (1), after “2004” insert “or Part 2 of the Energy Act 2010”;
(b)
in subsection (3)(a), after “2008” insert “, Part 2 of the Energy Act 2010”.

Energy Bill
Part 3 — Regulation of gas and electricity markets
13

Part 3
Regulation of gas and electricity markets
General duties of the Gas and Electricity Markets Authority and the Secretary of State
16
Amendments of section 4AA of the Gas Act 1986
(1)
Section 4AA of the Gas Act 1986 is amended as follows.
5
(2)
In subsection (1) omit the words following “pipes”.
(3)
After subsection (1) insert—
“(1A)
Those interests of existing and future consumers are their interests
taken as a whole, including—
(a)
their interests in the reduction of gas-supply emissions of
10
targeted greenhouse gases; and
(b)
their interests in the security of the supply of gas to them.
(1B)
The Secretary of State and the Authority shall carry out their respective
functions under this Part in the manner which the Secretary of State or
the Authority (as the case may be) considers is best calculated to further
15
the principal objective, wherever appropriate by promoting effective
competition between persons engaged in, or in commercial activities
connected with, the shipping, transportation or supply of gas conveyed
through pipes.
(1C)
Before deciding to carry out functions under this Part in a particular
20
manner with a view to promoting competition as mentioned in
subsection (1B), the Secretary of State or the Authority shall consider—
(a)
to what extent the interests referred to in subsection (1) of
consumers would be protected by that manner of carrying out
those functions; and
25
(b)
whether there is any other manner (whether or not it would
promote competition as mentioned in subsection (1B)) in which
the Secretary of State or the Authority (as the case may be) could
carry out those functions which would better protect those
interests.”
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(4)
In subsection (2)—
(a)
for the words from the beginning to “having regard to” substitute “In
performing the duties under subsections (1B) and (1C), the Secretary of
State or the Authority shall have regard to”;
(b)
in paragraph (b), for “or Part 5 of the Energy Act 2008” substitute “, Part
35
5 of the Energy Act 2008 or section 4, Part 2, or sections 27 to 30 of the
Energy Act 2010”.
(5)
In subsection (3) for “that duty” substitute “the duties under subsections (1B),
(1C) and (2)”.
(6)
In subsection (5)—
40
(a)
for the first “subsection” substitute “subsections (1B) and”;
(b)
omit “(so far as not otherwise required to do so by this subsection)”.

Energy Bill
Part 3 — Regulation of gas and electricity markets
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(7)
After subsection (5A) insert—
“(5B)
In subsection (1A)—
“emissions” has the same meaning as in the Climate Change Act
2008 (see section 97 of that Act);
“gas-supply emissions” in relation to emissions of a targeted
5
greenhouse gas, means any such emissions (wherever their
source) that are wholly or partly attributable to, or to
commercial activities connected with, the shipping,
transportation or supply of gas conveyed through pipes;
“targeted greenhouse gases” has the same meaning as in Part 1 of
10
the Climate Change Act 2008 (see section 24 of that Act).”
(8)
In subsection (6) after “subsections” insert “(1C),”.
17
Amendments of section 3A of the Electricity Act 1989
(1)
Section 3A of the Electricity Act 1989 is amended as follows.
(2)
In subsection (1) omit the words following “transmission systems”.
15
(3)
After subsection (1) insert—
“(1A)
Those interests of existing and future consumers are their interests
taken as a whole, including—
(a)
their interests in the reduction of electricity-supply emissions of
targeted greenhouse gases; and
20
(b)
their interests in the security of the supply of electricity to them.
(1B)
The Secretary of State and the Authority shall carry out their respective
functions under this Part in the manner which the Secretary of State or
the Authority (as the case may be) considers is best calculated to further
the principal objective, wherever appropriate by promoting effective
25
competition between persons engaged in, or in commercial activities
connected with, the generation, transmission, distribution or supply of
electricity or the provision or use of electricity interconnectors.
(1C)
Before deciding to carry out functions under this Part in a particular
manner with a view to promoting competition as mentioned in
30
subsection (1B), the Secretary of State or the Authority shall consider—
(a)
to what extent the interests referred to in subsection (1) of
consumers would be protected by that manner of carrying out
those functions; and
(b)
whether there is any other manner (whether or not it would
35
promote competition as mentioned in subsection (1B)) in which
the Secretary of State or the Authority (as the case may be) could
carry out those functions which would better protect those
interests.”
(4)
In subsection (2)—
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(a)
for the words from the beginning to “having regard to” substitute “In
performing the duties under subsections (1B) and (1C), the Secretary of
State or the Authority shall have regard to”;
(b)
in paragraph (b), for “or Part 2 or 5 of the Energy Act 2008” substitute
“, Part 2 or 5 of the Energy Act 2008 or section 4, Part 2, or sections 27 to
45
30 of the Energy Act 2010”.