Utilities Bill - continued        House of Lords

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  PART IV
  AMENDMENT OF THE ELECTRICITY ACT 1989
 
Electricity licensing
Prohibition on unlicensed distribution of electricity.     28. - (1) Section 4 of the 1989 Act (prohibition on unlicensed supply etc. of electricity) is amended as follows.
 
      (2) In subsection (1), after paragraph (b) there is inserted-
 
 
    "(bb) distributes electricity for that purpose;".
      (3) In subsection (4)-
 
 
    (a) before the definition of "supply" there is inserted-
 
    ""distribute", in relation to electricity, means distribute by means of a distribution system, that is to say, a system which consists (wholly or mainly) of low voltage lines and electrical plant and is used for conveying electricity to any premises or to any other distribution system;"
 
    (b) for the definition of "supply" there is substituted-
 
    ""supply", in relation to electricity, means supply of electricity conveyed by a distribution system to premises other than premises occupied by a licence holder for the purpose of carrying on the activities which he is authorised by his licence to carry on;".
Exemptions from electricity licensing.     29. For section 5 of the 1989 Act (exemptions from prohibition) there is substituted-
 
 
"Exemptions from prohibition.     5. - (1) The Secretary of State may by order grant exemption from paragraph (a), (b), (bb) or (c) of section 4(1)-
 
    (a) either to a person or to persons of a class;
 
    (b) either generally or to such extent as may be specified in the order; and
 
    (c) either unconditionally or subject to such conditions as may be so specified.
      (2) Before making an order under subsection (1) the Secretary of State shall give notice-
 
 
    (a) stating that he proposes to make such an order and setting out the terms of the proposed order;
 
    (b) stating the reasons why he proposes to make the order in the terms proposed; and
 
    (c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations with respect to the proposals may be made,
       and shall consider any representations which are duly made in respect of the proposals and not withdrawn.
 
      (3) The notice required by subsection (2) shall be given-
 
 
    (a) by serving a copy of it on the Authority and the Council; and
 
    (b) by publishing it in such manner as the Secretary of State considers appropriate for bringing it to the attention of those likely to be affected by the proposed order.
      (4) Notice of an exemption granted to a person shall be given-
 
 
    (a) by serving a copy of the exemption on him; and
 
    (b) by publishing the exemption in such manner as the Secretary of State considers appropriate for bringing it to the attention of other persons who may be affected by it.
      (5) Notice of an exemption granted to persons of a class shall be given by publishing the exemption in such manner as the Secretary of State considers appropriate for bringing it to the attention of-
 
 
    (a) persons of that class; and
 
    (b) other persons who may be affected by it.
      (6) An exemption may be granted-
 
 
    (a) indefinitely; or
 
    (b) for a period specified in, or determined by or under, the exemption.
      (7) Conditions subject to which an exemption is granted may (in particular) require any person carrying on any activity in pursuance of the exemption-
 
 
    (a) to comply with any direction given by the Secretary of State or the Authority as to such matters as are specified in the exemption or are of a description so specified;
 
    (b) except in so far as the Secretary of State or the Authority consents to his doing or not doing them, not to do or to do such things as are specified in the exemption or are of a description so specified; and
 
    (c) to refer for determination by the Secretary of State or the Authority such questions arising under the exemption as are specified in the exemption or are of a description so specified.
      (8) The Secretary of State may by order revoke an order by which an exemption was granted to a person or vary an order by which more than one exemption was so granted so as to terminate any of the exemptions-
 
 
    (a) at the person's request;
 
    (b) in accordance with any provision of the order by which the exemption was granted; or
 
    (c) if it appears to the Secretary of State inappropriate that the exemption should continue to have effect.
      (9) The Secretary of State may by order revoke an order by which an exemption was granted to persons of a class or vary an order by which more than one exemption was so granted so as to terminate any of the exemptions-
 
 
    (a) in accordance with any provision of the order by which the exemption was granted; or
 
    (b) if it appears to the Secretary of State inappropriate that the exemption should continue to have effect.
      (10) The Secretary of State may by direction withdraw an exemption granted to persons of a class from any person of that class-
 
 
    (a) at the person's request;
 
    (b) in accordance with any provision of the order by which the exemption was granted; or
 
    (c) if it appears to the Secretary of State inappropriate that the exemption should continue to have effect in the case of the person.
      (11) Before-
 
 
    (a) making an order under subsection (8)(b) or (c) or (9); or
 
    (b) giving a direction under subsection (10)(b) or (c),
       the Secretary of State shall consult the Authority and give notice of his proposal to do so (with reasons) and of a period within which representations may be made to him.
 
      (12) The notice under subsection (11) shall be given-
 
 
    (a) where the Secretary of State is proposing to make an order under subsection (8)(b) or (c), by serving a copy of it on the person to whom the exemption was granted;
 
    (b) where he is proposing to make an order under subsection (9), by publishing it in such manner as the Secretary of State considers appropriate for bringing it to the attention of persons of the class of persons to whom the exemption was granted; and
 
    (c) where he is proposing to give a direction under subsection (10)(b) or (c), by serving a copy of it on the person from whom he proposes to withdraw the exemption."
Licences authorising supply etc. of electricity.     30. For section 6 of the 1989 Act there is substituted-
 
 
"Licences authorising supply, etc.     6. - (1) The Authority may grant any of the following licences-
 
    (a) a licence authorising a person to generate electricity for the purpose of giving a supply to any premises or enabling a supply to be so given ("a generation licence");
 
    (b) a licence authorising a person to transmit electricity for that purpose in that person's authorised area ("a transmission licence");
 
    (c) a licence authorising a person to distribute electricity for that purpose ("a distribution licence"); or
 
    (d) a licence authorising a person to supply electricity to premises ("a supply licence").
      (2) The same person may not be the holder of both a distribution licence and a supply licence.
 
      (3) A supply licence may authorise the holder to supply electricity-
 
 
    (a) to any premises;
 
    (b) only to premises specified in the licence, or to premises of a description so specified; or
 
    (c) only to any premises situated in a specified area, or to premises of a specified description which are so situated.
      (4) The Authority may, with the consent of the holder of a supply licence, modify terms included in the licence in pursuance of subsection (3) so as to extend or restrict the premises to which the licence holder may give a supply of electricity.
 
      (5) A distribution licence may authorise the holder to distribute electricity in any area, or only in an area specified in the licence.
 
      (6) The Authority may, with the consent of the holder of a distribution licence, modify terms included in the licence in pursuance of subsection (5) so as to extend or restrict the area within which the licence holder may distribute electricity.
 
      (7) A licence and any extension or restriction of a licence under subsection (4) or (6) shall be in writing.
 
      (8) A licence shall, unless previously revoked in accordance with any term or condition of the licence, continue in force for such period as may be specified in or determined by or under the licence.
 
      (9) In this Part-
 
 
    "authorised area", in relation to the holder of a transmission licence, means so much of the area designated as such in the licence as is not for the time being designated in a subsequent transmission licence;
 
    "electricity distributor" means any person who is authorised by a distribution licence to distribute electricity except where he is acting otherwise than for purposes connected with the carrying on of activities authorised by the licence;
 
    "electricity supplier" means any person who is authorised by a supply licence to supply electricity except where he is acting otherwise than for purposes connected with the carrying on of activities authorised by the licence.
Procedure for licence applications.     6A. - (1) This section applies to any application-
 
 
    (a) for a licence; or
 
    (b) for the extension or restriction of a licence under section 6(4) or (6).
      (2) The application shall be made in such form and manner, and shall contain, or be accompanied by, such information and documents and such fee (if any), as may be prescribed.
 
      (3) Within the prescribed period after the making of the application the applicant shall publish a notice of the application in the prescribed manner.
 
      (4) Where the Authority proposes to refuse the application, it shall give to the applicant a notice-
 
 
    (a) stating that it proposes to refuse the application;
 
    (b) stating the reasons why it proposes to refuse the application; and
 
    (c) specifying the time within which representations with respect to the proposed refusal may be made,
       and shall consider any representations which are duly made and not withdrawn.
 
      (5) Where the Authority grants the licence, extension or restriction applied for, it shall as soon as practicable thereafter send a notice of the grant to any person who holds a licence and whose interests may, in the opinion of the Authority, be affected by the grant.
 
      (6) In this section "prescribed" means prescribed in regulations made by the Authority.
 
      (7) Any sums received by the Authority under this section shall be paid into the Consolidated Fund.
 
Applications for transmission licences.     6B. - (1) This section applies to applications for a transmission licence (in addition to the requirements of section 6A).
 
      (2) The applicant shall give notice of the application to any person who holds a transmission licence and whose authorised area includes the whole or any part of the area to which the application relates.
 
      (3) Before granting the transmission licence applied for, the Authority shall give notice-
 
 
    (a) stating that it proposes to grant the licence;
 
    (b) stating the reasons why it proposes to grant the licence; and
 
    (c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed licence may be made,
       and shall consider any representations or objections which are duly made and not withdrawn.
 
      (4) A notice under subsection (3) shall be given by publication in such manner as the Authority considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them.
 
      (5) The Authority shall send a copy of a notice under subsection (3) to-
 
 
    (a) the applicant;
 
    (b) the Secretary of State; and
 
    (c) any person who holds a transmission licence and whose authorised area includes the whole or any part of the area to which the application relates."
Enactments referring to public electricity suppliers.     31. - (1) References in any enactment to public electricity suppliers shall have effect after the commencement of this section as if they were references to-
 
 
    (a) electricity suppliers;
 
    (b) electricity distributors; or
 
    (c) both electricity suppliers and electricity distributors,
       according to the nature of the activities carried on by the persons to whom they referred before that time.
 
      (2) References in any enactment to the supply of electricity shall have effect after the commencement of this section as if they were references to-
 
 
    (a) the supply of electricity;
 
    (b) the distribution of electricity;
 
    (c) both the supply and distribution of electricity,
       according to the nature of the activities to which they referred before that time.
 
      (3) References in any enactment to holders of licences under section 6(2) of the 1989 Act shall have effect after the commencement of this section as if they were references to electricity suppliers.
 
Electricity licence conditions.     32. - (1) Section 7 of the 1989 Act (conditions of licences) is amended as follows.
 
      (2) In subsection (1) for "grantor" and "section 3 above" there is substituted respectively "Authority" and "sections 3A to 3C".
 
      (3) In subsection (2) for "a licence" there is substituted "a transmission licence or distribution licence".
 
      (4) In subsection (3)-
 
 
    (a) for "Conditions included in a licence by virtue of subsection (1)(a) above" there is substituted "Without prejudice to the generality of paragraph (a) of subsection (1) above, conditions included in a licence by virtue of that paragraph"; and
 
    (b) for "Director" (in each place it appears) there is substituted "Authority or Secretary of State";
 
    (c) in paragraph (c) after "licence" (in the first place it appears) there is inserted ", or under any document referred to in the licence,".
      (5) After subsection (3) there is inserted-
 
 
    "(3A) Conditions included in a transmission licence or a distribution licence by virtue of subsection (1)(a) may require the holder, in such circumstances as are specified in the licence-
 
 
    (a) so to increase his charges for the transmission or distribution of electricity as to raise such amounts as may be determined by or under the conditions; and
 
    (b) to pay the amounts so raised to such licence holders as may be so determined."
      (6) For subsection (5) there is substituted-
 
 
    "(5) Conditions included in a licence may contain provision for the conditions-
 
 
    (a) to have effect or cease to have effect at such times and in such circumstances as may be determined by or under the conditions; or
 
    (b) to be modified in such manner as may be specified in the conditions at such times and in such circumstances as may be so determined."
      (7) After subsection (6) there is inserted-
 
 
    "(6A) Conditions included in a licence may provide for references in the conditions to any document to operate as references to that document as revised or re-issued from time to time."
 
      (8) In subsection (7) for "Secretary of State or the Director" there is substituted "Authority".
 
Standard conditions of electricity licences.     33. - (1) Such conditions as may be determined by the Secretary of State before the commencement of subsection (3), and published by him in such manner as he considers appropriate, in relation to any of the types of licence mentioned in section 6(1) of the 1989 Act (that is to say, in relation to generation licences, transmission licences, distribution licences or supply licences) shall, subject to such modifications of the conditions made under Part I of the 1989 Act after the determination under this subsection, be standard conditions for the purposes of licences of that type.
 
      (2) The standard conditions for the purposes of licences of any type may contain provision-
 
 
    (a) for any standard condition included in a licence of that type 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; or
 
    (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 for the time being suspended to be brought back into operation in such manner and in such circumstances as may be so specified or determined.
      (3) After section 8 of the 1989 Act there is inserted-
 
 
"Standard conditions of licences.     8A. - (1) Subject to subsection (2), each condition which by virtue of section 33(1) of the Utilities Act 2000 is a standard condition for the purposes of any of the types of licence mentioned in section 6(1) (that is to say, generation licences, transmission licences, distribution licences or supply licences) shall be incorporated by reference in each licence of that type granted after the commencement of this section.
 
    (2) Subject to the following provisions of this section, the Authority may, in granting a licence of any type, modify any of the standard conditions for licences of that type in its application to the licence to such extent as it considers requisite to meet the circumstances of the particular case.
 
      (3) Before making any modifications under subsection (2), the Authority shall give notice-
 
 
    (a) stating that it proposes to make the modifications and setting out their effect;
 
    (b) stating the reasons why it proposes to make the modifications; and
 
    (c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,
       and shall consider any representations or objections which are duly made and not withdrawn.
 
      (4) A notice under subsection (3) shall be given-
 
 
    (a) by publishing the notice in such manner as the Authority considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the modifications; and
 
    (b) by sending a copy of the notice to the Secretary of State and the Council.
      (5) If, within the time specified in the notice under subsection (3), the Secretary of State directs the Authority not to make any modification, the Authority shall comply with the direction.
 
      (6) The Authority shall not under subsection (2) make any modifications of a condition of a licence of any type unless it is of the opinion that the modifications are such that-
 
 
    (a) the licence holder would not be unduly disadvantaged in competing with other holders of licences of that type; and
 
    (b) no other holder of a licence of the same type would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence being modified).
      (7) The modification under subsection (2) of part of a condition of a licence shall not prevent any other part of the condition which is not so modified being regarded as a standard condition for the purposes of this Part.
 
      (8) In this section "modify" includes fail to incorporate and "modification" shall be construed accordingly."
 
Modification of conditions of particular licence.     34. - (1) In section 11 of the 1989 Act (modification of licence conditions by agreement), for subsection (1) there is substituted-
 
 
    "(1) Subject to the following provisions of this section, the Authority may modify the conditions of a particular licence.
 
      (1A) The Authority may not make any modifications under this section unless the licence holder has consented to the modifications and, in the case of standard conditions of the licence, the Authority is of the opinion that the modifications-
 
 
    (a) are requisite to meet the circumstances of the particular case; and
 
    (b) are such that-
 
      (i) the licence holder would not be unduly disadvantaged in competing with other holders of licences of that type; and
 
      (ii) no other holder of a licence of the same type would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence being modified)."
      (2) After subsection (4) of that section there is inserted-
 
 
    "(5) The modification under this section of part of a standard condition of a licence shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Part."
 
 
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