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Energy Act 2008

Section 88: Power to amend licence conditions etc: smart meters

466.This section gives the Secretary of State the power to modify, for the purposes described below:

  • a particular electricity distribution or supply licence (subsection (1)(a))

  • a gas transporter, shipper or supply licence (subsection (1)(c))

  • standard licence conditions of those types of gas and electricity licence (subsections (1)(b) and (1)(d).

  • documents maintained under the licence conditions of relevant gas and electricity licences – for example, industry codes (subsection (1)(e)).

467.Subsection (2) sets out the scope of the modification power. It may only be exercised for the purpose of:

  • requiring licence holders to provide or install, or facilitate the provision, installation or operation of, a meter of a particular kind; or

  • requiring licence holders to make arrangements relating to such matters.

468.Subsection (3) sets out an inclusive list of various types of modifications that may be made under the new power. These include the technical specifications of the meter and provisions to allow two way communications between energy suppliers/distributors and meters installed in business or domestic premises (see paragraphs (a) and (j)).

469.Paragraph (l) makes provision for the Secretary of State to set a date from which the modification(s) come into force. This would, for example, allow the Secretary of State to set a time limit for the roll-out of smart meters.

470.Subsection (4)(a) allows the modification power to be exercised to make different provision in relation to different classes of customer (for example domestic, small business or medium/larger businesses). Subsection (4)(d) makes provision for the Secretary of State to make any incidental, supplementary, consequential or transitional modifications to licence conditions or documents of the kind mentioned in subsection (1)(e).

471.By virtue of subsection (5) the modification power may not be exercised after the end of the period of 5 years beginning with the day on which subsection (1) comes into force. Subsection (1) comes into force on the passing of the Act (see section 99(1)).

472.Subsection (6) ensures that, where the power under subsection (1) to make modifications is exercised, certain general provisions of the Gas and Electricity Acts which are relevant to this power are applicable – so that, for example, the modifications can include a requirement for the licence holder to comply with directions by the Secretary of State or the Gas and Electricity Markets Authority as to specified matters.

473.Subsection (7) states that references to a meter in any part of section 81 also include visual display units or other devices associated with or ancillary to the meter.

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