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Energy Act 2008

Section 97 and Schedule 5 : Power to amend licence conditions: electricity

537.In transferring these legal metrology functions, it is necessary to ensure that the NWML can recover the costs of carrying out these transferred functions. To make this possible, licence payment conditions therefore need to be modified to allow the Authority to recover funds from the licence fee and pass them through the Consolidated Fund to the NWML.

538.This section therefore allows the Secretary of State to modify electricity transmission and distribution licence conditions under section 6(1)(b) or (c) and section 8A of the Electricity Act 1989 (c.29). Section 6(1)(b) covers the requirements for licensing electricity transmitters and section 6(1)(c) covers the requirements for licensing electricity distributors, whilst section 8A covers standard conditions of such licences.

539.It has the effect that following licence modifications, the Authority will be able to recover from electricity transmission and distribution operators costs incurred by the NWML in respect of functions in relation to electricity meters, and pay those costs into the Consolidated Fund.

540.There are a number of checks and balances built into the section by virtue of subsections (4) to (9). They require the Secretary of State to consult licence holders, the Authority and any other persons as appropriate before making licence modifications, which must be published, and ensure those modifications apply to all future licences.

541.Subsection (9) has the effect that modifications can only be made to licence conditions by the Secretary of State for 6 months after subsection (1) comes into force. The deadline is to provide certainty to the gas transporters that the power will only be used once for the purpose of allowing the Authority to recover funds and pass them onto NWML. Given the technical nature of the licence modification, it is not considered appropriate to set it out on the face of the Act.

542.Paragraph 13 of Schedule 5 makes amendments to the Utilities Act 2000 (c.27) which are consequential on the transfer of functions from the Authority to the Secretary of State.

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