Appendix 1
S.I. 2011/1414: memorandum from the Department
of Energy and Climate Change
Warm Home Discount (Reconciliation) Regulations
2011 (S.I. 2011/1414)
1. By a letter to the Department dated 29 June
2011 the Joint Committee has requested a memorandum on the following
point:
What is the purpose of the duty in regulation
9(2)(b) and what is the sanction for failure to comply with it?
2. The purpose of regulation 9(2) as a whole
is to impose a duty on scheme electricity suppliers to make reconciliation
payments when notified by the Operator of the reconciliation mechanism
that they are due. Sub-paragraph (b) is included because it is
likely that in practice suppliers will make payments by the method
mentioned in it, namely by giving the Operator a continuing authority
to debit reconciliation payments from their bank accounts. Its
purpose is to make it clear that the duty of a supplier using
this method of payment is not merely to provide a direct debit
authority, but to ensure that funds are available to be debited
on the date on which the Operator notifies the supplier they are
due to be taken.
3. We also consider that the inclusion of regulation
9(2)(b) aids the internal consistency of the regulation, in that
regulation 9(2)(a) relates to cases where a notice has been given
under regulation 9(1)(b)(i) while regulation 9(2)(b) relates to
cases where a notice has been given under regulation 9(1)(b)(ii).
4. The sanction for failure by a scheme electricity
supplier to comply with any duty in these Regulations, including
that in regulation 9(2)(b), is that the Gas and Electricity Markets
Authority has power to make an order for securing compliance under
section 25 of the Electricity Act 1989 or to impose a penalty
under section 27A of that Act. That power arises since a duty
or requirement imposed on a licence holder under section 11 of
the Energy Act 2010 (the power under which these Regulations are
made) is included within the definition of 'relevant requirement'
in section 25(8) of the Electricity Act 1989. A scheme electricity
supplier must be a holder of an electricity supply licence, by
virtue of the definition of 'scheme electricity supplier' in the
Warm Home Discount Regulations 2011 which is applied by regulation
2(2) of these Regulations.
5. An additional consequence of failure to comply
with the duty in regulation 9(2)(b) will be liability to pay late
payment interest under regulation 12.
Department Of Energy And Climate Change
4 July 2011
| 
