Electricity Act 1957

19 Central guarantee fund

(1) The Electricity Council shall establish and maintain a fund, which shall be known as the central guarantee fund, for the following purposes, that is to say:—

(a) in the event of any temporary inability on the part of the Electricity Council, the Generating Board or any Area Board to discharge their obligations in respect of the payment of interest on, or the redemption or repayment of, any British Electricity Stock or Exchequer advances or any temporary loan, for enabling the payment in question to be made out of the fund;

(b) for repaying to the Treasury any payments made by them for the purpose of fulfilling any guarantee given by the Treasury under section seventeen of this Act, or under section forty-two of the principal Act;

and the moneys in the central guarantee fund shall not be applied for any other purposes.

(2) The Generating Board and each of the Area Boards shall in each financial year contribute to the central guarantee fund such sums as the Electricity Council, with the approval of the Minister and the Treasury, may from time to time determine, including any sums required to make good payments out of the fund for the purposes mentioned in the preceding subsection:

Provided that—

(a) the aggregate of the sums standing to the credit of the central guarantee fund shall not at any time exceed the sum of twenty million pounds ;

(b) the aggregate of the sums contributed to the central guarantee fund, excluding any sums required to make good payments out of the fund, shall not in any financial year exceed the sum of four million pounds.

(3) If the Electricity Council propose to determine any sums to be contributed under the last preceding subsection, but the Minister and the Treasury do not approve the proposal, the Minister, with the approval of the Treasury, may himself determine the sums to be so contributed.

(4) The Electricity Council, for the purpose of correcting from time to time, having regard to changed circumstances, the extent of the contributions made by the Electricity Boards to the central guarantee fund under this section, may, with the approval of the Minister and the Treasury, repay out of the fund to any such Board any part of those contributions previously made by that Board.

(5) All moneys in the central guarantee fund, which are not for the time being required to be applied for the purposes of the fund, shall be invested in such securities of Her Majesty's Government in the United Kingdom, or such securities guaranteed by the Treasury, as may be determined by the Electricity Council with the approval of the Minister and the Treasury.

(6) Any interest arising from the investment of moneys in the fund shall be paid into the fund, except when the sums standing to the credit of the fund have reached the sum of twenty million pounds, and shall in that case be distributed among the Generating Board and the Area Boards in such shares as may be determined by the Electricity Council, having regard to the extent of their respective contributions to the fund.

(7) If the Generating Board or any Area Board fail to discharge their obligations in respect of any such payments as are referred to in paragraph (a) of subsection (1) of this section, or in respect of contributions which they are required to make to the central guarantee fund, the Electricity Council, with the approval of the Minister, may give directions to that Board with respect to the management or policy of the Board, including tariffs and other financial matters, during such period as the Minister after consultation with the Electricity Council and the Board may determine, being a period which extends at least until those obligations (including any contributions required to be made to the central guarantee fund in respect of the default) have been met.