Utilities Bill - continued        House of Lords
PART IV, AMENDMENT OF THE ELECTRICITY ACT 1989 - continued
Electricity licensing - continued

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Reasons for decisions under the 1989 Act.     42. After section 49 of the 1989 Act (keeping of register) there is inserted-
 
 
"Reasons for decisions.     49A. - (1) This section applies to the following decisions of the Authority or the Secretary of State, namely-
 
    (a) the revocation of a licence;
 
    (b) the modification of the conditions of a licence;
 
    (c) the giving of any directions or consent in pursuance of a condition included in a licence by virtue of section 7(3)(a) or (b);
 
    (d) the determination of a question referred in pursuance of a condition included in a licence by virtue of section 7(3)(c);
 
    (e) the determination of a dispute referred under section 23(1);
 
    (f) the making of a final order, the making or confirmation of a provisional order or the revocation of a final order or of a provisional order which has been confirmed.
      (2) As soon as reasonably practicable after making such a decision the Authority or the Secretary of State shall publish a notice stating the reasons for the decision in such manner as it or he considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be interested.
 
      (3) The Authority shall send a copy of a notice published in respect of a decision mentioned in paragraph (a), (b), (c), (d) or (f) of subsection (1) to the licence holder to whose licence, or to whom, the decision relates.
 
      (4) In preparing a notice under subsection (2) the Authority or the Secretary of State shall have regard to the need for excluding, so far as that is practicable, any matter which relates to the affairs of a particular individual or body of persons (corporate or unincorporate), where it or he considers that publication of that matter would or might seriously and prejudicially affect the interests of that individual or body.
 
      (5) This section does not apply to a decision resulting in any provision which the Secretary of State has under section 49(4) directed the Authority not to enter in the register required to be kept under that section."
 
Altering activities requiring electricity licence.     43. After section 56 of the 1989 Act there is inserted-
 
 

"Alteration of activities requiring licence
Power to alter activities requiring licence.     56A. - (1) The Secretary of State may by order provide-
 
 
    (a) that specified activities are to become licensable activities; or
 
    (b) that specified activities are to cease to be licensable activities.
      (2) For the purposes of this Part activities are licensable activities if undertaking them without the authority of a licence or exemption constitutes an offence under section 4(1).
 
      (3) An order under this section may make consequential, transitional, incidental or supplementary provision including-
 
 
    (a) amendments (or repeals) in any provision of this Act or any other enactment; and
 
    (b) provision modifying any standard conditions of licences or (in the case of an order under subsection (1)(a)) provision determining the conditions which are to be standard conditions for the purposes of licences authorising the undertaking of activities which are to become licensable activities.
      (4) An order under this section may only provide for activities to become licensable activities if they are activities connected with the generation, transmission, distribution or supply of electricity.
 
      (5) An order under this section providing for activities to become licensable activities may only be made on the application of the Authority made in accordance with section 56B.
 
      (6) An order under this section providing for activities to cease to be licensable activities may be made either-
 
 
    (a) on the application of the Authority made in accordance with section 56E; or
 
    (b) following consultation by the Secretary of State in accordance with section 56F.
      (7) An order under this section may provide that it is to remain in force only for a period specified in the order.
 
      (8) An order shall not be made under this section unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.
 
Application by Authority for order including new activities.     56B. - (1) If the Authority proposes to make an application for an order providing for activities to become licensable activities, it shall give notice-
 
 
    (a) stating that it proposes to make an application for an order providing for the activities to become licensable activities;
 
    (b) setting out the conditions which it would expect such an order to determine to be standard conditions for the purposes of licences authorising the undertaking of the activities and any other conditions which it would expect to be included in such licences; and
 
    (c) specifying a reasonable period (not being less than 28 days from the date of publication of the notice) within which representations or objections may be made with respect to the proposal,
       and shall consider any representations or objections which are duly made and not withdrawn.
 
      (2) The notice shall be given by serving a copy on the Council and by publishing it in such manner as the Authority considers appropriate for bringing it to the attention of-
 
 
    (a) persons appearing to it to be carrying on, or be intending to carry on, the activities; and
 
    (b) any other persons appearing to it to be likely to be affected by an order providing for the activities to become licensable activities.
      (3) If an objection has been duly made (and not withdrawn) by a person who is carrying on or intends to carry on the activities, the Authority shall make a reference to the Competition Commission under section 56C before making the application.
 
      (4) In any other case where the Authority considers it appropriate to make a reference to the Commission under section 56C before making the application, the Authority may make such a reference.
 
      (5) If a reference is made to the Commission, the application shall not be made unless the Commission has reported on the reference that the fact that the activities to which the application relates are not licensable activities operates, or may be expected to operate, against the public interest.
 
      (6) The application shall set out-
 
 
    (a) the activities which the Authority considers should become licensable activities; and
 
    (b) the conditions which the Authority would expect to be determined to be standard conditions for the purposes of licences authorising the undertaking of the activities in question and any other conditions which it would expect to be included in such licences.
References to Competition Commission.     56C. - (1) A reference to the Competition Commission under this section shall require the Commission to investigate and report on whether the fact that the activities specified in the reference are not licensable activities operates, or may be expected to operate, against the public interest.
 
      (2) The Authority may, at any time, by notice given to the Commission vary the reference by adding to the activities specified in the reference or by excluding from the reference some of the activities so specified; and on receipt of such notice the Commission shall give effect to the variation.
 
      (3) The Authority shall specify in the reference, or a variation of the reference, for the purpose of assisting the Commission in carrying out the investigation on the reference-
 
 
    (a) the conditions which the Authority would expect to be determined to be standard conditions for the purposes of licences authorising the undertaking of the activities specified in the reference and any other conditions which it would expect to be included in such licences; and
 
    (b) any effects adverse to the public interest which, in its opinion, the fact that the activities so specified are not licensable activities has or may be expected to have.
      (4) As soon as practicable after making the reference, or a variation of the reference, the Authority shall serve a copy of it on the Council and publish particulars of it in such manner as the Authority considers appropriate for bringing it to the attention of-
 
 
    (a) persons appearing to the Authority to be carrying on, or be intending to carry on, the activities specified in it; and
 
    (b) any other persons appearing to the Authority to be likely to be affected by it.
      (5) The Authority shall, for the purpose of assisting the Commission in carrying out the investigation on the reference, give to the Commission-
 
 
    (a) any information which is in its possession and which relates to matters falling within the scope of the investigation, and which is either requested by the Commission for that purpose or is information which in its opinion it would be appropriate for that purpose to give to the Commission without any such request; and
 
    (b) any other assistance which the Commission may require, and which it is within its power to give, in relation to any such matters,
       and the Commission shall take account of the information for the purpose of carrying out the investigation.
 
      (6) In determining for the purposes of this section whether the fact that particular activities are not licensable activities operates, or may be expected to operate, against the public interest, the Commission shall have regard to-
 
 
    (a) the matters referred to in section 3A; and
 
    (b) any social or environmental policies set out or referred to in guidance issued under section 3B.
      (7) The provisions mentioned in subsection (8) are to apply in relation to references under this section as if-
 
 
    (a) the functions of the Commission in relation to those references were functions under the Fair Trading Act 1973;
 
    (b) the expression "merger reference" included a reference under this section;
 
    (c) in section 70 of the Fair Trading Act 1973-
 
      (i) references to the Secretary of State were references to the Authority; and
 
      (ii) the reference to three months were a reference to six months.
      (8) The provisions are-
 
 
    (a) sections 70 (time limit for report on merger), 85 (attendance of witnesses and production of documents) and 93B (false or misleading information) of the Fair Trading Act 1973;
 
    (b) Part II of Schedule 7 to the Competition Act 1998 (performance of the Commission's general functions); and
 
    (c) section 24 of the Competition Act 1980 (modification of provisions about performance of such functions).
Reports on references.     56D. - (1) In making a report on a reference under section 56C, the Competition Commission shall include in the report definite conclusions on whether the fact that the activities specified in the reference (or the reference as varied) are not licensable activities operates, or may be expected to operate, against the public interest.
 
      (2) The Commission shall also include in the report such an account of its reasons for those conclusions as in its opinion is expedient for facilitating proper understanding of the questions raised by the reference and of its conclusions.
 
      (3) Where the Commission concludes that the fact that particular activities are not licensable activities operates, or may be expected to operate, against the public interest, it shall specify in the report-
 
 
    (a) the effects adverse to the public interest which that fact has or may be expected to have; and
 
    (b) any modifications to the conditions specified in the reference in accordance with section 56C(3)(a) which they consider appropriate.
      (4) Section 82 of the Fair Trading Act 1973 (general provisions as to reports) shall apply in relation to reports of the Commission on references under section 56C as it applies to reports of the Commission under that Act.
 
      (5) A report of the Commission on a reference under section 56C shall be made to the Authority.
 
      (6) On receiving the report, the Authority shall send a copy of it to the Secretary of State.
 
      (7) Subject to subsection (8), the Authority shall, not less than 14 days after the copy is received by the Secretary of State, send another copy to the Council and publish that other copy in such manner as the Authority considers appropriate for bringing the report to the attention of persons likely to be affected by it.
 
      (8) If it appears to the Secretary of State that the publication of any matter in the report would be against the public interest or the commercial interests of any person, he may, before the end of the period of 14 days mentioned in subsection (7), direct the Authority to exclude that matter from the copy of the report to be sent to the Council and published under that subsection.
 
Application by Authority for order excluding activities.     56E. - (1) Before making an application for an order providing for activities to cease to be licensable activities, the Authority shall give notice-
 
 
    (a) stating that it proposes to make an application for an order providing for the activities to cease to be licensable activities; and
 
    (b) specifying a reasonable period (not being less than 28 days from the date of publication of the notice) within which representations or objections may be made with respect to the proposal,
       and shall consider any representations or objections which are duly made and not withdrawn.
 
      (2) The notice shall be given-
 
 
    (a) by serving a copy on the Secretary of State and the Council; and
 
    (b) by publishing it in such manner as the Authority considers appropriate for bringing it to the attention of persons appearing to the Authority to be likely to be affected by such an order.
      (3) An application under this section shall set out-
 
 
    (a) the activities which the Authority considers should cease to be licensable activities; and
 
    (b) the Authority's reasons for proposing that the order be made.
Consultation by Secretary of State about order excluding activities.     56F. - (1) If the Secretary of State proposes to make an order providing for activities to cease to be licensable activities (otherwise than on an application by the Authority under section 56E), he shall give notice-
 
 
    (a) stating that he proposes to make an order providing for the activities to cease to be licensable activities; and
 
    (b) specifying a reasonable period (not being less than 28 days from the date of publication of the notice) within which representations or objections may be made with respect to the proposal,
       and shall consider any representations or objections duly made (and not withdrawn).
 
      (2) The notice shall be given-
 
 
    (a) by serving a copy 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 persons appearing to him to be likely to be affected by such an order."
 
Duties of electricity distributors
Duty to connect on request.     44. For sections 16 and 17 of the 1989 Act (duty to supply on request and exceptions to that duty) there are substituted-
 
 

"Duties of electricity distributors
Duty to connect on request.     16. - (1) An electricity distributor is under a duty-
 
 
    (a) to make a connection between a distribution system of his and any premises, when required to do so by-
 
      (i) the owner or occupier of the premises; or
 
      (ii) an authorised supplier acting with the consent of the owner or occupier of the premises,
 
    for the purpose of enabling electricity to be conveyed to or from the premises;
 
    (b) to make a connection between a distribution system of his and any distribution system of another authorised distributor, when required to do so by that authorised distributor for the purpose of enabling electricity to be conveyed to or from that other system.
      (2) Any duty under subsection (1) includes a duty to provide such electric lines or electrical plant as may be necessary to enable the connection to be used for the purpose for which it is required.
 
      (3) The duties under this section shall be performed subject to such terms as may be agreed under section 16A for so long as the connection is required.
 
      (4) In this section and sections 16A to 23-
 
 
    (a) any reference to making a connection includes a reference to maintaining the connection (and continuing to provide the necessary electric lines or electrical plant);
 
    (b) any reference to requiring a connection includes a reference to requiring the connection to be maintained (and the continued provision of the necessary electric lines and electrical plant); and
 
    (c) any reference to the provision of any electric line or electrical plant is a reference to the provision of such a line or an item of electrical plant either by the installation of a new one or by the modification of an existing one.
      (5) The duties under this section are subject to the following provisions of this Part and any regulations made under those provisions.
 
Procedure for requiring a connection.     16A. - (1) Where a person requires a connection to be made by an electricity distributor in pursuance of section 16(1), he shall give the distributor a notice requiring him to offer terms for making the connection.
 
      (2) That notice must specify-
 
 
    (a) the premises or distribution system to which a connection to the distributor's system is required;
 
    (b) the date on or by which the connection is to be made; and
 
    (c) the maximum power at which electricity may be required to be conveyed through the connection.
      (3) The person requiring a connection shall also give the distributor such other information in relation to the required connection as the distributor may reasonably request.
 
      (4) A request under subsection (3) shall be made as soon as practicable after the notice under subsection (1) is given (if not made before that time).
 
      (5) As soon as practicable after receiving the notice under subsection (1) and any information requested under subsection (3) the distributor shall give to the person requiring the connection a notice-
 
 
    (a) stating the extent (if any) to which his proposals are acceptable to the distributor and specifying any counter proposals made by him;
 
    (b) specifying any payment which that person will be required to make under section 19(1) or regulations under section 19(2);
 
    (c) specifying any security which that person will be required to give under section 20; and
 
    (d) stating any other terms which that person will be required to accept under section 21.
      (6) A notice under subsection (5) shall also contain a statement of the effect of section 23.
 
Exceptions from duty to connect.     17. - (1) Nothing in section 16(1) requires an electricity distributor to make a connection if and to the extent that-
 
 
    (a) he is prevented from doing so by circumstances not within his control;
 
    (b) circumstances exist by reason of which his doing so would or might involve his being in breach of regulations under section 29, and he has taken all such steps as it was reasonable to take both to prevent the circumstances from occurring and to prevent them from having that effect; or
 
    (c) it is not reasonable in all the circumstances for him to be required to do so.
      (2) Without prejudice to the generality of subsection (1) an electricity distributor is not required to make a connection if-
 
 
    (a) making the connection involves the distributor doing something which, without the consent of another person, would require the exercise of a power conferred by any provision of Schedule 3 or 4;
 
    (b) the distributor's licence does not provide for that provision to have effect in relation to him; and
 
    (c) any necessary consent has not, at the time the request is made, been given.
      (3) Subsection (1)(c) does not permit an electricity distributor to disconnect any premises or distribution system to which a connection is being maintained by him unless the distributor gives-
 
 
    (a) where the connection is to premises, to the occupier or to the owner if the premises are not occupied;
 
    (b) where the connection is to another distribution system, to the person who is authorised by a licence or exemption to run that system,
       not less than seven working days' notice of his intention to disconnect the premises or distribution system."
 
Abolition of tariffs.     45. Section 18 of the 1989 Act (charging by reference to tariffs) shall cease to have effect.
 
Power to recover expenditure.     46. - (1) Section 19 of the 1989 Act (power to recover expenditure) is amended as follows.
 
      (2) In subsection (1) for "a public electricity supplier", "supplier" and "supply of electricity" there is substituted respectively "an electricity distributor", "distributor" and "connection".
 
      (3) For subsection (2) there is substituted-
 
 
    "(2) The Secretary of State may, after consultation with the Authority, make provision by regulations for entitling an electricity distributor to require a person requiring a connection in pursuance of section 16(1) to pay to the distributor, in respect of any expenses reasonably incurred in providing any electric line or electrical plant used for the purpose of making the connection, such amount as may be reasonable in all the circumstances if-
 
 
    (a) the connection is required within the prescribed period after the provision of the line or plant; and
 
    (b) a person for the purpose of connecting whose premises or distribution system the line or plant was provided ("the initial contributor") has made a payment to the distributor in respect of those expenses."
      (4) In subsection (3) for "a public electricity supplier" there is substituted "an electricity distributor."
 
      (5) In subsection (4) for the words from "maintaining" to the end there is substituted "continuing to provide it".
 
Power to require security.     47. - (1) Section 20 of the 1989 Act (power to require security) is amended as follows.
 
      (2) For subsection (1) there is substituted-
 
 
    "(1) Subject to the following provisions of this section, an electricity distributor may require any person who requires a connection in pursuance of section 16(1) to give him reasonable security for the payment to him under section 19 in respect of the provision of any electric line or electrical plant.
 
      (1A) If a person fails to give any security required under subsection (1), or the security given has become invalid or insufficient, and he fails to provide alternative or additional security, the electricity distributor may if he thinks fit-
 
 
    (a) if the connection has not been made, refuse to provide the line or plant for so long as the failure continues; or
 
    (b) if the connection is being maintained, disconnect the premises or distribution system in question."
      (3) In subsection (3), for "a public electricity supplier" and "supplier" (in each place) there is substituted respectively "an electricity distributor" and "distributor".
 
      (4) Subsections (2) and (4) shall cease to have effect.
 
Additional terms of connection.     48. For section 21 of the 1989 Act (additional terms of connection) there is substituted-
 
 
"Additional terms of connection.     21. An electricity distributor may require any person who requires a connection in pursuance of section 16(1) above to accept in respect of the making of the connection-
 
    (a) any restrictions which must be imposed for the purpose of enabling the distributor to comply with regulations under section 29; and
 
    (b) any terms restricting any liability of the distributor for economic loss resulting from negligence which it is reasonable in all the circumstances for that person to be required to accept."
 
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