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Energy Act 2010

Part 3: Regulation of Gas and Electricity Markets

This Part contains a number of provisions relating to the energy market framework –

  • General duties of the Gas and Electricity Markets Authority and the Secretary of State – clarification of Ofgem’s principal objective in relation to tackling climate change, ensuring secure energy supplies and the role of measures other than competition in protecting the interests of consumers.

  • Exploitation of electricity trading and transmission arrangements – powers for the Secretary of State to introduce a Market Power Licence Condition for electricity generators that will make it easier for Ofgem to address certain issues arising from the exploitation of market power where there are constraints on the amount of electricity that can be transmitted.

  • Time limit for the imposition of financial penalties by the Gas and Electricity Markets Authority – extension of the time limit within which Ofgem can impose financial penalties for breaches of licence conditions from twelve months to five years.

  • Notification period for changes to domestic gas and electricity supply contracts – introduction of a power for the Secretary of State to modify supply licences for the purpose of ensuring that domestic consumers are notified about changes, by their gas or electricity supplier, to the terms of their contracts or the price charged for their gas or electricity, within a specified period.

  • Adjustment of energy charges – introduction of a power for the Secretary of State to address situations where cross-subsidies between gas and electricity businesses lead to groups of consumers being disadvantaged.

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