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ELECTRICITY ACT 1989

UK Public General Acts

Version 19/05/2013

1989 CHAPTER 29

Default Geographical Extent: E+W+S


  • Part I (E+W+S+N.I.). ELECTRICITY SUPPLY
    • Introductory (E+W+S+N.I.)
    • Licensing of supply etc.
    • Electricity transmission and the operation of electricity interconnectors: independence (E+W+S+N.I.)
    • Modification of licences
    • Appeal from decisions of the Authority (E+W+S+N.I.)
    • Duties of electricity distributors]
    • Enforcement of obligations of regulated persons]
    • Provisions with respect to supply generally
    • Protection of public interest
    • Consumer protection: standards of performance
    • Consumer protection: miscellaneous
    • [F340 Article 37] Disputes
    • Investigation of complaints
    • Other functions of Director
    • Provisions with respect to committees
    • Provisions with respect to Consumers’ etc. Councils
    • Alteration of activities requiring licence
    • Miscellaneous
    • Supplemental
  • PART II (E+W+S+N.I.). REORGANISATION OF THE INDUSTRY
    • Transfers to successor companies (E+W+S+N.I.)
    • Ownership of successor companies
    • Finances of successor companies
    • Provisions with respect to floatation (E+W+S+N.I.)
    • Provisions with respect to existing bodies
    • Miscellaneous (E+W+S+N.I.)
    • Supplemental (E+W+S+N.I.)
  • Part III (E+W+S+N.I.). MISCELLANEOUS AND SUPPLEMENTAL
    • Miscellaneous
    • Amendment of enactments (E+W+S+N.I.)
    • Amendment etc. of pension schemes
    • Supplemental (E+W+S+N.I.)

Introductory Text

Electricity Act 1989

1989 CHAPTER 29

An Act to provide for the appointment and functions of a Director General of Electricity Supply and of consumers’ committees for the electricity supply industry; to make new provision with respect to the supply of electricity through electric lines and the generation and transmission of electricity for such supply; to abolish the Electricity Consumers’ Council and the Consultative Councils established under the Electricity Act 1947; to provide for the vesting of the property, rights and liabilities of the Electricity Boards and the Electricity Council in companies nominated by the Secretary of State and the subsequent dissolution of those Boards and that Council; to provide for the giving of financial assistance in connection with the storage and reprocessing of nuclear fuel, the treatment, storage and disposal of radioactive waste and the decommissioning of nuclear installations; to amend the Rights of Entry (Gas and Electricity Boards) Act 1954 and the Local Government (Scotland) Act 1973; and for connected purposes.

[27th July 1989]

BE IT ENACTED by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Annotations:

Modifications etc. (not altering text)

C1 Act: power to modify conferred (E.W.S.) (8.5.2003) by Electricity (Miscellaneous Provisions) Act 2003 (c. 9), s. 2(3)

C2 Act: transfer of functions (1.10.2008) by Consumers, Estate Agents and Redress Act 2007 (c. 17), ss. 30(3)(a), 66(2) (with s. 6(9), Sch. 3); S.I. 2008/2550, art. 2, Sch.


Part I (E+W+S+N.I.)
ELECTRICITY SUPPLY



Annotations:

Modifications etc. (not altering text)

C3 Pt. I modified (5.10.2004) by Energy Act 2004 (c. 20), ss. 184(12), 185(13), 198(2); S.I. 2004/2575, art. 2(1), Sch. 1

C4 Pt. I modified (S.) (30.11.2005) by The Electricity from Non-Fossil Fuel Sources (Scotland) Saving Arrangements Order 2005 (S.S.I. 2005/549), arts. 1(1), 9

C5 Pt. I (ss. 1-64) applied (1.10.2001) by S.I. 2001/3264, regs. 4(2), 5(2)

C6 Pt. I (ss. 1-64) amended (E.W.) (27.10.2000) by S.I. 2000/2727, art. 10

Pt. I (ss. 1-64) amended (7.11.2000) by 2000 c. 27, s. 105(1)(a); S.I. 2000/2974, art. 2, Sch. (subject to transitional provisions in arts. 3-12)

Pt. I (ss. 1-64) amended (E.W.) (1.10.2001) by S.I. 2000/2727, art. 10 (as substituted (1.10.2001) by S.I. 2001/3268, art. 2(13))


Introductory (E+W+S+N.I.)


F1 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (E+W+S+N.I.)

Annotations:

Amendments (Textual)

F1 S. 1 repealed (1.10.2001) by 2000 c. 27, s. 108, Sch. 8; S.I. 2001/3266, art. 2, Sch. (subject to transitional provisions in arts. 3-20)


F2 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (E+W+S+N.I.)

Annotations:

Amendments (Textual)

F2 S. 2 repealed (7.11.2000) by 2000 c. 27, s. 108, Sch. 8; S.I. 2000/2974, art. 2, Sch. (subject to transitional provisions in arts. 3-12)


F3 3 General duties of Secretary of State and Director.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F3 S. 3A substituted for s. 3 (20.12.2000) by 2000 c. 27, s. 13; S.I. 2000/3343, art. 2, Sch. (subject to transitional provisions in arts. 3-15) (as amended by S.I. 2001/1780, art. 2)


[F4 3A The principal objective and general duties of the Secretary of State and the Authority.

(1) The principal objective of the Secretary of State and the Gas and Electricity Markets Authority (in this Act referred to as “the Authority”) in carrying out their respective functions under this Part is to protect the interests of [F5 existing and future] consumers in relation to electricity conveyed by distribution systems [F6 or transmission systems] F7 ... .

[F8 (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; F9 ...
(b) their interests in the security of the supply of electricity to them[F10 ; and
(c) their interests in the fulfilment by the Authority, when carrying out its functions as designated regulatory authority for Great Britain, of the objectives set out in Article 36(a) to (h) of the Electricity Directive.]
(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 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 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 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.]
(2) [F11 In performing the duties under subsections (1B) and (1C) , the Secretary of State or the Authority shall have regard to]

(a) the need to secure that all reasonable demands for electricity are met; and
(b) the need to secure that licence holders are able to finance the activities which are the subject of obligations imposed by or under this Part[F12 , the Utilities Act 2000[F13 , Part 2 or 3 of the Energy Act 2004[F14 , Part 2 or 5 of the Energy Act 2008 or section 4, Part 2, or sections 26 to 29 of the Energy Act 2010] ] ] [F15 ; and
(c) the need to contribute to the achievement of sustainable development.]
(3) In performing [F16 the duties under subsections (1B) , (1C) and (2) ] , the Secretary of State or the Authority shall have regard to the interests of—

(a) individuals who are disabled or chronically sick;
(b) individuals of pensionable age;
(c) individuals with low incomes; and
(d) individuals residing in rural areas;
but that is not to be taken as implying that regard may not be had to the interests of other descriptions of consumer.
(4) The Secretary of State and the Authority may, in carrying out any function under this Part, have regard to—

(a) the interests of consumers in relation to gas conveyed through pipes (within the meaning of the M1 Gas Act 1986) ; and
(b) any interests of consumers in relation to—
[F17 (i) communications services and electronic communications apparatus, or]
(ii) water services or sewerage services (within the meaning of the M2 Water Industry Act 1991) ,
which are affected by the carrying out of that function.
(5) Subject to [F18 subsections (1B) and] (2) , the Secretary of State and the Authority shall carry out their respective functions under this Part in the manner which he or it considers is best calculated—

(a) to promote efficiency and economy on the part of persons authorised by licences or exemptions to [F19 distribute, supply or participate in the transmission of] electricity[F20 ,] [F21 to participate in the operation of electricity interconnectors] [F22 or to provide a smart meter communication service] and the efficient use of electricity conveyed by distribution systems [F23 or transmission systems] ;
(b) to protect the public from dangers arising from the generation, transmission, distribution or supply of electricity [F24 or the provision of a smart meter communication service] ;
F25 (ba). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) to secure a diverse and viable long-term energy supply,
[F26 and F27 ... shall] , in carrying out those functions, have regard to the effect on the environment of activities connected with the generation, transmission, distribution or supply of electricity [F24 or the provision of a smart meter communication service] .
[F28 (5A) In carrying out their respective functions under this Part in accordance with the preceding provisions of this section the Secretary of State and the Authority must each have regard to—

(a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed; and
(b) any other principles appearing to him or, as the case may be, it to represent the best regulatory practice.]
[F29 (5B) In subsection (1A) — “emissions” has the same meaning as in the Climate Change Act 2008 (see section 97 of that Act) ; “electricity-supply emissions” in relation to emissions of a targeted greenhouse gas, means any such emissions (wherever their source) that are wholly or partly attributable to, or to commercial activities connected with, the generation, transmission, distribution or supply of electricity or the provision or use of electricity interconnectors; “targeted greenhouse gases” has the same meaning as in Part 1 of the Climate Change Act 2008 (see section 24 of that Act).]

(6) In [F30 subsections [F31 (1C) ,] (3) and (4) references to consumers include] both existing and future consumers.

(7) In this section and sections 3B and 3C, references to functions of the Secretary of State or the Authority under this Part include a reference to functions under the Utilities Act 2000 which relate to electricity conveyed by distribution systems [F32 or transmission systems] .

(8) In this Part, unless the context otherwise requires— “exemption” means an exemption granted under section 5; “licence” means a licence under section 6 and “licence holder” shall be construed accordingly.]

Annotations:

Amendments (Textual)

F4 S. 3A substituted for s. 3 (20.12.2000) by 2000 c. 27, s. 13; S.I. 2000/3343, art. 2, Sch. (subject to transitional provisions in arts. 3-15) (as amended by S.I. 2001/1780, art. 2)

F5 Words in s. 3A(1) inserted (26.1.2009) by Energy Act 2008 (c. 32), ss. 83(2)(a), 110(2); S.I. 2009/45, art. 2(d)(i)

F6 Words in s. 3A(1) inserted (1.4.2006 for specified purposes, 1.4.2010 in so far as not already in force) by Energy Act 2004 (c. 20), s. 179(2)(3)(a), 198(2); S.I. 2005/2965, art. 3

F7 Words in s. 3A(1) omitted (8.6.2010) by virtue of Energy Act 2010 (c. 27), ss. 17(2), 38(3)

F8 Ss. 3A(1A)-(1C) inserted (8.6.2010) by Energy Act 2010 (c. 27), ss. 17(3), 38(3)

F9 Word in s. 3A(1A)(a) omitted (10.11.2011) by virtue of The Electricity and Gas (Internal Markets) Regulations 2011 (S.I. 2011/2704), regs. 1(1), 27(a)

F10 S. 3A(1A)(c) and preceding word inserted (10.11.2011) by The Electricity and Gas (Internal Markets) Regulations 2011 (S.I. 2011/2704), regs. 1(1), 27(b)

F11 Words in s. 3A(2) substituted (8.6.2010) by Energy Act 2010 (c. 27), ss. 17(4)(a), 38(3)

F12 Words in s. 3A(2)(b) substituted (24.8.2004 for specified purposes, 5.10.2004 in so far as not already in force) by Energy Act 2004 (c. 20), ss. 190(3), 198(2); S.I. 2004/2184, art. 2(1), Sch. 1; S.I. 2004/2575, art. 2(1), Sch. 1

F13 Words in s. 3A(2)(b) substituted (26.11.2008) by Energy Act 2008 (c. 32), ss. 102(6), 110(2)

F14 Words in s. 3A(2)(b) substituted (8.6.2010) by Energy Act 2010 (c. 27), ss. 17(4)(b), 38(3)

F15 S. 3A(2)(c) and preceding word inserted (26.1.2009) by Energy Act 2008 (c. 32), ss. 83(2)(b), 110(2); S.I. 2009/45, art. 2(d)(i)

F16 Words in s. 3A(3) substituted (8.6.2010) by Energy Act 2010 (c. 27), ss. 17(5), 38(3)

F17 S. 3A(4)(b)(i) substituted (25.7.2003 for specified purposes, 29.12.2003 in so far as not already in force) by Communications Act 2003 (c. 21), s. 411(2), Sch. 17 para. 98 (with Sch. 18); S.I. 2003/1900, arts. 1(2), 2(1), Sch. 1 (with art. 3) (as amended by S.I. 2003/3142, art. 1(3)); S.I. 2003/3142, art. 3(2) (with art. 11)

F18 Words in s. 3A(5) substituted (8.6.2010) by Energy Act 2010 (c. 27), ss. 17(6)(a), 38(3)

F19 Words in s. 3A(5)(a) substituted (1.9.2004) by Energy Act 2004 (c. 20), s. 198(2), Sch. 19 para. 4; S.I. 2004/2184, art. 2(2), Sch. 2

F20 Word in S. 3A(5)(a) substituted (19.9.2012) by The Electricity and Gas (Smart Meters Licensable Activity) Order 2012 (S.I. 2012/2400), arts. 1, 3(a)(i)

F21 Words in s. 3A(5)(a) inserted (1.12.2004) by Energy Act 2004 (c. 20), ss. 147(2)(b), 198(2); S.I. 2004/2575, art. 2(2), Sch. 2

F22 Words in s. 3A(5)(a) inserted (19.9.2012) by The Electricity and Gas (Smart Meters Licensable Activity) Order 2012 (S.I. 2012/2400), arts. 1, 3(a)(ii)

F23 Words in s. 3A(5)(a) inserted (1.4.2006 for specified purposes, 1.4.2010 in so far as not already in force) by Energy Act 2004 (c. 20), s. 179(2)(3)(a), 198(2); S.I. 2005/2965, art. 3

F24 Words in s. 3A(5) inserted (19.9.2012) by The Electricity and Gas (Smart Meters Licensable Activity) Order 2012 (S.I. 2012/2400), arts. 1, 3(b)

F25 S. 3A(5)(ba) repealed (26.1.2009) by Energy Act 2008 (c. 32), ss. 83(2)(c), 110(2), Sch. 6; S.I. 2009/45, art. 2(d)(bb)(e)(vi)(i)

F26 Words in s. 3A(5) substituted (5.10.2004) by Energy Act 2004 (c. 20), ss. 83(b), 198(2); S.I. 2004/2575, art. 2(1), Sch. 1

F27 Words in s. 3A(5) omitted (8.6.2010) by virtue of Energy Act 2010 (c. 27), ss. 17(6)(b), 38(3)

F28 S. 3A(5A) inserted (5.10.2004) by Energy Act 2004 (c. 20), ss. 178, 198(2); S.I. 2004/2575, art. 2(1), Sch. 1

F29 S. 3A(5B) inserted (8.6.2010) by Energy Act 2010 (c. 27), ss. 17(7), 38(3)

F30 Words in s. 3A(6) substituted (26.1.2009) by Energy Act 2008 (c. 32), ss. 83(2)(d), 110(2); S.I. 2009/45, art. 2(d)(i)

F31 Word in s. 3A(6) inserted (8.6.2010) by Energy Act 2010 (c. 27), ss. 17(8), 38(3)

F32 Words in s. 3A(7) inserted (1.4.2006 for specified purposes, 1.4.2010 in so far as not already in force) by Energy Act 2004 (c. 20), s. 179(2)(3)(a), 198(2); S.I. 2005/2965, art. 3

Modifications etc. (not altering text)

C7 Ss. 3A-3D applied (24.8.2004 for specified purposes, 5.10.2004 in so far as not already in force) by Energy Act 2004 (c. 20), ss. 190(2), 198(2); S.I. 2004/2184, art. 2(1), Sch. 1; S.I. 2004/2575, art. 2(1), Sch. 1

C8 S. 3A: transfer of functions (23.3.2005) by The Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2005 (S.I. 2005/849), art. 1, Sch. (with art. 6)

C9 Ss. 3A-3D applied (21.8.2006) by Climate Change and Sustainable Energy Act 2006 (c. 19), ss. 8(6), 28(1)

C10 Ss. 3A-3D applied (26.11.2008) by Energy Act 2008 (c. 32), ss. 102(4), 110(2)

C11 Ss. 3A-3D applied (8.4.2010) by Energy Act 2010 (c. 27), ss. 30(2), 38(1)

C12 Ss. 3A-3D applied (18.12.2011) by Energy Act 2011 (c. 16), ss. 78(2), 121(3)

C13 Ss. 3A-3D applied (18.12.2011) by Energy Act 2011 (c. 16), ss. 98(14), 121(3)

C14 Ss. 3A-3D applied (21.3.2012) by Energy Act 2011 (c. 16), ss. 22(10), 121(1); S.I. 2012/873, art. 2(a)(v)

Marginal Citations

M1 1986 c. 44.

M2 1991 c. 56.


[F33 3B Guidance on social and environmental matters.

(1) The Secretary of State shall from time to time issue guidance about the making by the Authority of a contribution towards the attainment of any social or environmental policies set out or referred to in the guidance.

(2) The Authority shall, in carrying out its functions under this Part, have regard to any guidance issued under this section.

(3) Before issuing guidance under this section the Secretary of State shall consult—

(a) the Authority;
[F34 (b) the Council;]
(c) licence holders; and
(d) such other persons as the Secretary of State considers it appropriate to consult in relation to the guidance.
(4) A draft of any guidance proposed to be issued under this section shall be laid before each House of Parliament.

(5) Guidance shall not be issued under this section until after the period of forty days beginning with—

(a) the day on which the draft is laid before each House of Parliament; or
(b) if the draft is laid before the House of Lords on one day and the House of Commons on another, the later of those two days.
(6) If, before the end of that period, either House resolves that the guidance should not be issued, the Secretary of State must not issue it.

(7) In reckoning any period of forty days for the purposes of subsection (5) or (6) , no account shall be taken of any time during which—

(a) Parliament is dissolved or prorogued; or
(b) both Houses are adjourned for more than four days.
(8) The Secretary of State shall arrange for any guidance issued under this section to be published in such manner as he considers appropriate.]

Annotations:

Amendments (Textual)

F33 S. 3B inserted (20.12.2000) by 2000 c. 27, s. 14; S.I. 2000/3343, art. 2, Sch. (subject to transitional provisions in arts. 3-15) (as amended by S.I. 2001/1780, art. 2)

F34 S. 3B(3)(b) substituted (1.10.2008) by Consumers, Estate Agents and Redress Act 2007 (c. 17), s. 66(2), Sch. 7 para. 8; S.I. 2008/2550, art. 2, Sch.

Modifications etc. (not altering text)

C7 Ss. 3A-3D applied (24.8.2004 for specified purposes, 5.10.2004 in so far as not already in force) by Energy Act 2004 (c. 20), ss. 190(2), 198(2); S.I. 2004/2184, art. 2(1), Sch. 1; S.I. 2004/2575, art. 2(1), Sch. 1

C9 Ss. 3A-3D applied (21.8.2006) by Climate Change and Sustainable Energy Act 2006 (c. 19), ss. 8(6), 28(1)

C10 Ss. 3A-3D applied (26.11.2008) by Energy Act 2008 (c. 32), ss. 102(4), 110(2)

C11 Ss. 3A-3D applied (8.4.2010) by Energy Act 2010 (c. 27), ss. 30(2), 38(1)

C12 Ss. 3A-3D applied (18.12.2011) by Energy Act 2011 (c. 16), ss. 78(2), 121(3)

C13 Ss. 3A-3D applied (18.12.2011) by Energy Act 2011 (c. 16), ss. 98(14), 121(3)

C14 Ss. 3A-3D applied (21.3.2012) by Energy Act 2011 (c. 16), ss. 22(10), 121(1); S.I. 2012/873, art. 2(a)(v)


[F35 3C Health and safety.

(1) The Secretary of State and the Authority shall consult [F36 the Health and Safety Executive] about all electricity safety issues which may be relevant to the carrying out of any of their respective functions under this Part.

(2) The Secretary of State may require the Authority also to consult him about electricity safety issues of particular descriptions.

(3) The Secretary of State and the Authority shall, in carrying out their respective functions under this Part, take into account any advice given by [F36 the Health and Safety Executive] about any electricity safety issue (whether or not in response to consultation under subsection (1) ).

(4) The Authority shall, in carrying out its functions under this Part, take into account any advice given by the Secretary of State about any electricity safety issue (whether or not in response to consultation under subsection (2) ).

(5) For the purposes of this section an electricity safety issue is anything concerning the generation, transmission, distribution or supply of electricity which may affect the health and safety of—

(a) members of the public; or
(b) persons employed in connection with any of those activities.]
Annotations:

Amendments (Textual)

F35 S. 3C inserted (20.12.2000) by 2000 c. 27, s. 15; S.I. 2000/3343, art. 2, Sch. (subject to transitional provisions in arts. 3-15) (as amended by S.I. 2001/1780, art. 2)

F36 Words in s. 3C(1)(3) substituted (1.4.2008) by The Legislative Reform (Health and Safety Executive) Order 2008 (S.I. 2008/960), art. 1, Sch. 3 (with art. 21, Sch. 2)

Modifications etc. (not altering text)

C7 Ss. 3A-3D applied (24.8.2004 for specified purposes, 5.10.2004 in so far as not already in force) by Energy Act 2004 (c. 20), ss. 190(2), 198(2); S.I. 2004/2184, art. 2(1), Sch. 1; S.I. 2004/2575, art. 2(1), Sch. 1

C9 Ss. 3A-3D applied (21.8.2006) by Climate Change and Sustainable Energy Act 2006 (c. 19), ss. 8(6), 28(1)

C10 Ss. 3A-3D applied (26.11.2008) by Energy Act 2008 (c. 32), ss. 102(4), 110(2)

C11 Ss. 3A-3D applied (8.4.2010) by Energy Act 2010 (c. 27), ss. 30(2), 38(1)

C12 Ss. 3A-3D applied (18.12.2011) by Energy Act 2011 (c. 16), ss. 78(2), 121(3)

C13 Ss. 3A-3D applied (18.12.2011) by Energy Act 2011 (c. 16), ss. 98(14), 121(3)

C14 Ss. 3A-3D applied (21.3.2012) by Energy Act 2011 (c. 16), ss. 22(10), 121(1); S.I. 2012/873, art. 2(a)(v)


[F37 3D Exceptions from sections 3A to 3C.

(1) Section 3A does not apply in relation to the issuing by the Secretary of State of guidance under section 3B.

(2) Sections 3A to 3C do not apply in relation to functions of the Secretary of State under [F38 sections 36 to 37] .

(3) Sections 3A to 3C do not apply in relation to anything done by the Authority—

(a) in the exercise of functions relating to the determination of disputes;
(b) in the exercise of functions under section 43(3).
(4) The Authority may nevertheless, when exercising any function under section 43(3) , have regard to any matter in respect of which a duty is imposed by sections 3A to 3C (“a general matter”) , if it is a matter to which [F39 the Office of Fair Trading] could have regard when exercising that function (but that is not to be taken as implying that, in relation to functions mentioned in subsection (2) , regard may not be had to any general matter).

(5) The duties imposed by sections 3A to 3C do not affect the obligation of the Authority or the Secretary of State to perform or comply with any other duty or requirement (whether arising under this Act or another enactment, by virtue of any [F40 EU] obligation or otherwise).]

Annotations:

Amendments (Textual)

F37 S. 3D inserted (20.12.2000) by 2000 c. 27, s. 16; S.I. 2000/3343, art. 2, Sch. (subject to transitional provisions in arts. 3-15) (as amended by S.I. 2001/1780, art. 2)

F38 Words in s. 3D substituted (1.3.2005) by Energy Act 2004 (c. 20), ss. 99(3), 198(2); S.I. 2005/442, art. 2(1), Sch. 1

F39 Words in s. 3D(4) substituted (1.4.2003) by Enterprise Act 2002 (c. 40), s. 279, Sch. 25 para. 20(2); S.I. 2003/766, art. 2, Sch. (with art. 3) (as amended (20.7.2007) by S.I. 2007/1846, reg. 3(2), Sch.)

F40 Words in Act substituted (22.4.2011) by The Treaty of Lisbon (Changes in Terminology) Order 2011 (S.I. 2011/1043), arts. 2, 3, 6 (with art. 3(2)(3), 4(2), 6(4)(5))

Modifications etc. (not altering text)

C7 Ss. 3A-3D applied (24.8.2004 for specified purposes, 5.10.2004 in so far as not already in force) by Energy Act 2004 (c. 20), ss. 190(2), 198(2); S.I. 2004/2184, art. 2(1), Sch. 1; S.I. 2004/2575, art. 2(1), Sch. 1

C9 Ss. 3A-3D applied (21.8.2006) by Climate Change and Sustainable Energy Act 2006 (c. 19), ss. 8(6), 28(1)

C10 Ss. 3A-3D applied (26.11.2008) by Energy Act 2008 (c. 32), ss. 102(4), 110(2)

C11 Ss. 3A-3D applied (8.4.2010) by Energy Act 2010 (c. 27), ss. 30(2), 38(1)

C12 Ss. 3A-3D applied (18.12.2011) by Energy Act 2011 (c. 16), ss. 78(2), 121(3)

C13 Ss. 3A-3D applied (18.12.2011) by Energy Act 2011 (c. 16), ss. 98(14), 121(3)

C14 Ss. 3A-3D applied (21.3.2012) by Energy Act 2011 (c. 16), ss. 22(10), 121(1); S.I. 2012/873, art. 2(a)(v)

C15 S. 3D(4) excluded (20.12.2000) by S.I. 2000/3343, art. 10(1)(b) (subject to transitional provisions in arts. 3-15)


[F41 3E Binding decisions of the Agency for the Cooperation of Energy Regulators and of the European Commission (E+W+S+N.I.)

The Authority must carry out its functions under this Part in the manner that it considers is best calculated to implement, or to ensure compliance with, any binding decision of the Agency or the European Commission made under the Electricity Directive, the Electricity Regulation or the Agency Regulation in relation to electricity.]

Annotations:

Amendments (Textual)

F41 S. 3E inserted (10.11.2011) by The Electricity and Gas (Internal Markets) Regulations 2011 (S.I. 2011/2704), regs. 1(1), 33


[F42 3F Authority to consult and cooperate with other authorities (E+W+S+N.I.)

(1) When carrying out its functions as designated regulatory authority for Great Britain the Authority must, wherever it thinks fit—

(a) consult and cooperate with the Agency and designated regulatory authorities for Northern Ireland and other Member States;
(b) provide the Agency and the designated regulatory authorities for Northern Ireland and other Member States with information they may require in order to carry out their functions under the Electricity Directive, the Electricity Regulation or the Agency Regulation as it applies in relation to electricity; and
(c) consult relevant national authorities.
(2) In exercising functions in accordance with subsection (1) the Authority must, wherever it thinks fit, cooperate with the designated regulatory authorities for Northern Ireland and other Member States within a region which includes Great Britain with a view, within that region, to—

(a) the integration of national markets;
(b) the promotion and facilitation of cooperation between transmission system operators;
(c) the optimal management of electricity networks;
(d) the promotion of jointly managed cross-border trade in electricity and the allocation of cross-border capacity;
(e) enabling an adequate level of interconnection capacity;
(f) the coordination of the development of network codes; and
(g) the coordination of the regulation of electricity markets, including rules concerning the management of congestion of electricity networks.
(3) In this section— “network code” means a network code developed under Article 6 of the Electricity Regulation and adopted by the European Commission; “region” includes a geographical area defined in accordance with Article 12(3) of the Electricity Regulation; and “relevant national authority” means any of the following— (a) the Competition Commission; (b) the Office of Communications; (c) the Office of Fair Trading; (d) the Water Services Regulation Authority.]

Annotations:

Amendments (Textual)

F42 S. 3F inserted (10.11.2011) by The Electricity and Gas (Internal Markets) Regulations 2011 (S.I. 2011/2704), regs. 1(1), 35


Licensing of supply etc.


4 Prohibition on unlicensed supply etc.

(1) A person who—

(a) generates electricity for the purpose of giving a supply to any premises or enabling a supply to be so given;
[F43 (b) participates in the transmission of electricity for that purpose;]
[F44 (bb) distributes electricity for that purpose;]
(c) supplies electricity to any premises, F45 ...
[F46 (d) participates in the operation of an electricity interconnector] [F47 ; or
(e) provides a smart meter communication service,]
shall be guilty of an offence unless he is authorised to do so by a licence F48 ... .
(2) A person guilty of an offence under this section shall be liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to a fine.
(3) No proceedings shall be instituted in England and Wales in respect of an offence under this section except by or on behalf of the Secretary of State or the Director.

[F49 (3A) In subsection (1) (b) above, the reference to a person who participates in the transmission of electricity is to a person who—

(a) co-ordinates, and directs, the flow of electricity onto and over a transmission system by means of which the transmission of electricity takes place, or
(b) makes available for use for the purposes of such a transmission system anything which forms part of it.
(3B) For the purposes of subsection (3A) (b) , a person shall not be regarded as making something available just because he consents to its being made available by another.]

[F50 (3C) A reference in this Part to participating in the operation of an electricity interconnector is a reference to—

(a) co-ordinating and directing the flow of electricity into or through an electricity interconnector; or
(b) making such an interconnector available for use for the conveyance of electricity;
and a person is not to be regarded as participating in the transmission of electricity by reason only of activities constituting participation in the operation of an electricity interconnector.
(3D) For the purposes of subsection (3C) (b) , a person shall not be regarded as making something available just because he consents to its being made available by another.

(3E) In this Part “electricity interconnector” means so much of an electric line or other electrical plant as—

(a) is situated at a place within the jurisdiction of Great Britain; and
(b) subsists wholly or primarily for the purposes of the conveyance of electricity (whether in both directions or in only one) between Great Britain and a place within the jurisdiction of another country or territory.
(3F) For the purposes of this section—

(a) a place is within the jurisdiction of Great Britain if it is in Great Britain, in the territorial sea adjacent to Great Britain or in an area designated under section 1(7) of the Continental Shelf Act 1964; and
(b) a place is within the jurisdiction of another country or territory if it is in that country or territory or in waters in relation to which authorities of that country or territory exercise jurisdiction.]
[F51 (3G) A reference in this Part to providing a smart meter communication service is a reference to making arrangements with each domestic supplier to provide a service, for such suppliers, of communicating relevant information to and from smart meters through which electricity is supplied to domestic premises.]

(4) In this Part, unless the context otherwise requires— [F52 “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;] [F53 “generate”, in relation to electricity, means generate at a relevant place;] [F54 “supply”, in relation to electricity, means its supply to premises in cases where— (a) it is conveyed to the premises wholly or partly by means of a distribution system, or (b) (without being so conveyed) it is supplied to the premises from a substation to which it has been conveyed by means of a transmission system, but does not include its supply to premises occupied by a licence holder for the purpose of carrying on activities which he is authorised by his licence to carry on;] [F55 “transmission”, in relation to electricity, means transmission by means of a transmission system; “transmission system” means a system which— (a) consists (wholly or mainly) of high voltage lines and electrical plant, and (b) is used for conveying electricity from a generating station to a substation, from one generating station to another or from one substation to another. but does not include its supply to premises occupied by a licence holder for the purpose of carrying on activities which he is authorised by his licence to carry on;]

[F56 (5) In this section— “relevant place” means a place in Great Britain, in the territorial sea adjacent to Great Britain or in a Renewable Energy Zone; and “system” means a system the whole or a part of which is at a relevant place;

and references in this section to premises are references to premises situated at a relevant place, or at a place that is not in a Renewable Energy Zone but is in an area designated under section 1(7) of the Continental Shelf Act 1964.]
[F57 (6) In this section— “domestic supplier” means an electricity supplier— (a) who is authorised, in accordance with the conditions of a licence, to supply electricity to domestic premises; and (b) who supplies electricity to domestic premises in accordance with that licence; “external electronic communications network” means a network which— (a) is an electronic communications network, within the meaning of section 32 of the Communications Act 2003; and (b) does not form part of a smart meter; “relevant information” means information relating to the supply of electricity; and “smart meter” means— (a) an electricity meter which can send and receive information using an external electronic communications network; or (b) an electricity meter and a device which is associated with or ancillary to that meter and which enables information to be sent to and received by the meter using an external electronic communications network.]

Annotations:

Amendments (Textual)

F43 S. 4(1)(b) substituted (24.8.2004 for specified purposes, 1.9.2004 in so far as not already in force) by Energy Act 2004 (c. 20), ss. 135(2), 198(2); S.I. 2004/2184, art. 2(1)(2), Sch. 1, Sch. 2

F44 S. 4(1)(bb) inserted (1.10.2001) by 2000 c. 27, s. 28(2); S.I. 2001/3266, art. 2, Sch. (subject to transitional provisions in arts. 3-20)

F45 Word in s. 4(1) omitted (19.9.2012) by virtue of The Electricity and Gas (Smart Meters Licensable Activity) Order 2012 (S.I. 2012/2400), arts. 1, 4(2)(a) (with art. 38(1)-(3))

F46 S. 4(1)(d) and preceding word inserted (14.8.2006) by Energy Act 2004 (c. 20), ss. 145(2), 198(2); S.I. 2006/1964, art. 2, Sch.

F47 S. 4(1)(e) and preceding word inserted (19.9.2012) by The Electricity and Gas (Smart Meters Licensable Activity) Order 2012 (S.I. 2012/2400), arts. 1, 4(2)(b) (with art. 38(1)-(3))

F48 Words in s. 4(1) repealed (1.10.2001) by 2000 c. 27, s. 108, Sch. 8; S.I. 2001/3266, art. 2, Sch. (subject to transitional provisions in arts. 3-20)

F49 S. 4(3A)(3B) inserted (24.8.2004 for specified purposes, 1.9.2004 in so far as not already in force) by Energy Act 2004 (c. 20), ss. 135(3), 198(2); S.I. 2004/2184, art. 2(1)(2), Sch. 1, Sch. 2

F50 S. 4(3C)-(3F) inserted (1.12.2004) by Energy Act 2004 (c. 20), ss. 145(3), 198(2); S.I. 2004/2575, art. 2(2), Sch. 2

F51 S. 4(3G) inserted (19.9.2012) by The Electricity and Gas (Smart Meters Licensable Activity) Order 2012 (S.I. 2012/2400), arts. 1, 4(3)

F52 S. 4(4): definition of “distribute” inserted (7.11.2000 for specified purposes, 20.12.2000 for further specified purposes and otherwise 1.10.2001) by 2000 c. 27, s. 28(3)(a); S.I. 2000/2974, art. 2, Sch. (subject to transitional provisions in arts. 3-12); S.I. 2000/3343, art. 2, Sch. (subject to transitional provisions in arts. 3-15) (as amended by S.I. 2001/1780, art. 2); S.I. 2001/3266, art. 2, Sch. (subject to transitional provisions in arts. 3-20)

F53 Words in s. 4(4) inserted (1.3.2005 for specified purposes, 29.7.2010 for specified purposes) by Energy Act 2004 (c. 20), ss. 89(1), 198(2); S.I. 2005/442, art. 2(1), Sch. 1; S.I. 2010/1889, art. 2

F54 Words in s. 4(4) substituted (1.4.2006 for specified purposes, 1.4.2010 in so far as not already in force) by Energy Act 2004 (c. 20), ss. 179(1), 198(2); S.I. 2005/2965, art. 3

F55 Words in s. 4(4) substituted (24.8.2004 for specified purposes, 1.9.2004 in so far as not already in force) by Energy Act 2004 (c. 20), ss. 135(4), 198(2); S.I. 2004/2184, art. 2(1)(2), Sch. 1, Sch. 2

F56 S. 4(5) inserted (1.3.2005 for specified purposes, 29.7.2010 for specified purposes) by Energy Act 2004 (c. 20), ss. 89(2), 198(2); S.I. 2005/442, art. 2(1), Sch. 1; S.I. 2010/1889, art. 2

F57 S. 4(6) inserted (19.9.2012) by The Electricity and Gas (Smart Meters Licensable Activity) Order 2012 (S.I. 2012/2400), arts. 1, 4(4)

Modifications etc. (not altering text)

C16 S. 4(1)(a)(c) excluded by S.I. 1990/193, art. 3(1)

C17 S. 4(1)(a) excluded (1.10.2001) by S.I. 2001/3270, art. 3(1)(a) (with art. 4(1)(2), Sch. 2)

C18 S. 4(1)(bb) excluded (1.10.2001) by S.I. 2001/3270, art. 3(1)(b) (with art. 4(3)(4), Sch. 3)

C19 S. 4(1)(c) excluded (1.10.2001) by S.I. 2001/3270, art. 3(1)(c) (with art. 4(5)(8), Sch. 4)


[F58 5 Exemptions from prohibition.

(1) The Secretary of State may by order grant exemption from paragraph (a) , (b) , (bb) , [F59 (c) , (d) or (e) ] 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.]
Annotations:

Amendments (Textual)

F58 S. 5 substituted (1.10.2001) by 2000 c. 27, s. 29; S.I. 2001/3266, art. 2, Sch. (subject to transitional provisions in arts. 3-20)

F59 Words in s. 5(1) substituted (19.9.2012) by The Electricity and Gas (Smart Meters Licensable Activity) Order 2012 (S.I. 2012/2400), arts. 1, 5

Modifications etc. (not altering text)

C20 S. 5: functions transferred to Scottish Ministers (S.) (14.12.2000) by virtue of S.I. 2000/3253, arts. 1(1), 2, Sch. (with art. 6)