Electricity Act 1947

PART III FINANCIAL PROVISIONS.

36 General duties and powers of Central Authority and Area Boards in financial matters.

(1) It shall be the duty of the Central Authority so to exercise and perform their functions under this Act, including their functions in relation to Area Boards, as to secure that the combined revenues of the Central Authority and all the Area Boards taken together are not less than sufficient to meet their combined outgoings properly chargeable to revenue account taking one year with another.

(2) Without prejudice to the powers of the Central Authority under Part I of this Act to exercise, by means of directions given to Area Boards, a general control over the policy of those Boards in financial as in other matters, such directions may require Area Boards—

(a) to submit for the approval of the Central Authority periodic estimates of revenue and expenditure;

(b) to obtain the approval of the Central Authority of programmes of development involving capital expenditure, and of expenditure otherwise properly chargeable to capital account and in other classes of cases where it is desirable in the opinion of the Central Authority to secure co-ordination between different Area Boards in matters involving expenditure.

37 Fixing and variation of tariffs.

(1) The prices to be charged by the Central Authority for the supply of electricity by them to Area Boards shall be in accordance with such tariffs as may be fixed by the Authority from time to time, and different tariffs may be fixed for different Area Boards.

(2) The tariffs fixed under the last foregoing subsection shall be so framed as to show the methods by which and the principles on which the charges are to be made as well as the prices which are to be charged, and shall be published in such manner as in the opinion of the Central Authority will secure adequate publicity for them.

(3) Subject to any directions of the Central Authority and to the provisions of this Act with respect to railways/the prices to be charged by Area Boards for the supply of electricity by them shall be in accordance with such tariffs as may be fixed from time to time by them, and those tariffs shall be so framed as to show the methods by which and the principles on which the charges are to be made as well as the prices which are to be charged, and shall be published in such manner as in the opinion of the Area Board will secure adequate publicity for them:

Provided that—

(a) the tariffs in force immediately before the vesting date in the area of supply or any part of the area of supply of any authorised undertakers shall remain in force, until varied or replaced by tariffs fixed in accordance with this section, and apply to the supply of electricity by the Area Board within whose area the said area of supply or part thereof is comprised; and

(b) nothing in this subsection shall affect any agreement in force immediately before the vesting date.

(4) A tariff fixed by an Area Board under the last foregoing subsection may include a rent or other charge in respect of electrical fittings provided by the Board on the premises of the consumer.

(5) The Central Authority may give directions to any Area Board requiring them, in such classes of cases as may be specified in the directions, to obtain the approval in writing of the Central Authority before exercising their powers under the foregoing provisions of this section.

(6) The Central Authority may, if they consider that the tariffs in force in the area or any part of the area of an Area Board ought to be varied or replaced by new tariffs, direct the Area Board to submit proposals for varying or replacing those tariffs, and may approve the proposals so submitted either without modifications or with such modifications as, after consultation with the Area Board, they think fit to make; and it shall be the duty of the Area Board to give effect to any proposals approved under this subsection.

(7) Notwithstanding anything in the foregoing provisions of this section, an Area Board may enter into an agreement with any consumer for the supply of electricity to him on such terms as may be specified in the agreement:

Provided that an Area Board, in exercising their powers under this subsection, shall—

(a) secure that such agreements are only made in cases where the tariffs in force are not appropriate owing to special circumstances; and

(b) comply with any directions given by the Central Authority, whether of a general or specific character.

(8) An Area Board, in fixing tariffs and making agreements under this section, shall not show undue preference to any person or class of persons and shall not exercise any undue discrimination against any person or class of persons, and the Central Authority shall, in exercising their powers under this section in relation to the fixing of tariffs and making of agreements by Area Boards, secure compliance by Area Boards with this subsection.

38 Investigation into and modification of provisions of Act of 1943 regarding price of electricity supplied under s. 16 (1).

(1) The Minister and the Secretary of State shall, before the expiry of the tenth year after the passing of the Act of 1943, cause an investigation to be made into the working of the provisions of subsection (1) of section sixteen of that Act and of the Fourth Schedule thereto regarding the price to be charged by the North of Scotland Board for electricity supplied under the said subsection and shall cause a report of the result of the investigation to be laid before Parliament.

(2) The Minister and the Secretary of State acting jointly may, after consideration of the said report, make, by order, such alterations or modifications in the provisions aforesaid as they may think fit.

(3) An order under the last foregoing subsection shall be laid before Parliament immediately after it is made, and if either House of Parliament, within the period of forty days beginning with the day on which the order is laid before it, resolves that it be annulled, the order shall cease to have effect, but without prejudice to anything previously done thereunder or to the making of a new order.

In reckoning any such period of forty days, no account shall be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.

(4) The Fourth Schedule to the Act of 1943 (which contains rules for the ascertainment of the price payable to the North of Scotland Board for electricity supplied under subsection (1) of section sixteen of that Act) shall be amended by the insertion in sub-paragraph (a) of paragraph 4 after the words " resultant sum " of the words " increased (except in the case of a station to the establishment of which consent was given under section two of the [9 Edw. 7. c. 34.] Electric Lighting Act, 1909, or section eleven of the Electricity (Supply) Act, 1919, after the fifth day of August nineteen hundred and forty-three) by such percentage as the Secretary of State and the Minister of Fuel and Power acting jointly may from time to time determine."

39 Borrowing powers of Central Authority and Area Boards.

(1) The Central Authority and any Area Board may, with the consent of the Minister and with the approval of the Treasury or in accordance with the terms of any general authority issued by the Minister with the approval of the Treasury, borrow temporarily, by way of overdraft or otherwise, such sums as the borrowing Authority or Board may require for meeting their obligations or discharging their functions under this Act.

(2) The Central Authority may, with the consent of the Minister and the approval of the Treasury, borrow money by the issue of British Electricity Stock, for all or any of the following purposes, that is to say—

(a) the redemption of any British Electricity Stock;

(b) the provision of money for meeting any expenditure incurred by the Central Authority or any Area Board in connection with any works the cost of which is properly chargeable to capital account;

(c) the provision of any working capital required by the Central Authority or any Area Board;

(d) the provision of money required for the payment of compensation to any local authority, in respect of severance or, in pursuance of a direction of the Minister under Part II of this Act, in respect of expenditure on capital works;

(e) any other purpose for which capital moneys are properly applicable by the Central Authority or any Area Board, including the repayment of any money temporarily borrowed under the last foregoing subsection for any of the purposes mentioned in this subsection; and

(f) any other payment which the Central Authority or any Area Board are authorised to make and which ought in the opinion of the Central Authority to be spread over a term of years.

(3) The aggregate of the amounts outstanding in respect of the principal of any stock issued by the Central Authority, otherwise than for the purpose of paying compensation under Part II of this Act whether in stock or cash, and in respect of any temporary loans raised by the Central Authority or any Area Board shall not at any time exceed the sum of seven hundred million pounds:

Provided that nothing in this subsection shall prevent the Central Authority from borrowing in excess of the said sum for the purpose of redeeming any British Electricity Stock which they are required or entitled to redeem, or of repaying any money temporarily borrowed under subsection (1) of this section.

(4) Save as aforesaid, neither the Central Authority nor any Area Board shall borrow any money.

40 British Electricity Stock.

(1) The Central Authority—

(a) may create and issue any stock required for the purpose of exercising their powers under the last foregoing section;

(b) shall create and issue such stock as is required for the purpose of satisfying any right to compensation which, under, any provision of this Act, is expressly required to be satisfied by the issue of stock;

and the stock so created and issued is in this Act referred to as " British Electricity Stock,"

(2) Subject to the provisions of this section, and of the Third Schedule to this Act, British Electricity Stock shall be issued, transferred, dealt with and redeemed upon such terms and in accordance with such provisions as may be prescribed by regulations made by the Minister, with the approval of the Treasury, and any such regulations may, in relation to any such stock, apply with or without modifications any provisions of the [38 & 39 Vict. c. 83.] Local Loans Act, 1875, or of any enactments relating to stock issued by a local authority.

(3) Any British Electricity Stock in which no person other than the Central Authority has any beneficial interest shall be cancelled.

(4) Where any British Electricity Stock has through inadvertence been issued in respect of securities the whole of the beneficial interest in which was vested immediately before the vesting date in a body to whom Part II of this Act applies, not being a local authority, the stock shall be deemed to be held on behalf of the Central Authority.

41 Apportionment of liabilities in respect of stock and borrowed moneys as between Central Authority and Area Boards.

(1) The Central Authority may require any Area Board to contribute, to such extent as may be determined by the Central Authority, towards the satisfaction of the obligations of the Central Authority in respect of—

(a) the redemption of British Electricity Stock or the payment of interest thereon;

(b) the repayment of sums to the Treasury under the next following section or the payment of interest thereon;

(c) the making of payments under Part II of this Act by way of compensation to local authorities; or

(d) the repayment of any sums temporarily borrowed by the Central Authority or the payment of interest thereon ;

and the Area Board shall comply with that requirement.

(2) The Central Authority, in exercising their powers under this section, shall act on general principles settled from time to time with the approval of the Minister.

42 Treasury guarantees.

(1) The principal of and the interest on any British' Electricity Stock created and issued for the purpose of satisfying any right to compensation which, under any provision of this Act, is expressly required to be satisfied by the issue of stock, shall be guaranteed by the Treasury, and the Treasury may guarantee, in such manner and on such conditions as they think fit, the redemption or repayment of, and the payment of any interest on, any other British Electricity Stock or any temporary loan raised by the Central Authority or any Area Board.

(2) Any sums required by the Treasury for fulfilling any such guarantee as is provided for by the last foregoing subsection shall be charged on and issued out of the Consolidated Fund of the United Kingdom or the growing produce thereof (hereinafter referred to as " the Consolidated Fund "), and any such sums shall be repaid together with interest thereon at such rate as the Treasury may determine by the Central Authority to the Treasury in such manner and over such period as the Treasury may, after consultation with the Minister, determine.

(3) Immediately after a guarantee is given under this section, the Treasury shall lay a statement of the guarantee before each House of Parliament.

(4) Where any sum is issued out of the Consolidated Fund under this section, the Treasury shall forthwith lay before each House of Parliament, a statement that that sum has been issued.

43 Reserve Funds of Central Authority and Area Boards.

(1) The Central Authority shall establish and maintain a general reserve fund, which shall be known as the central reserve fund.

(2) The Central Authority and the Area Boards shall contribute to the central reserve fund such sums at such times as the Central Authority may determine and the management of the said fund and the application of the moneys comprised therein shall be as the Central Authority may determine:

Provided that—

(a) no part of the said fund shall be applied otherwise than for the purposes of the Central Authority and Area Boards; and

(b) the power of the Minister to give directions to the Central Authority shall extend to the giving to them, with the approval of the Treasury, of directions as to any matter relating to the establishment or management of the said fund, the carrying of sums to the credit thereof, or the application thereof, notwithstanding that the directions may be of a specific character.

(3) Any Area Board may establish a general reserve fund for the purposes of the Area Board, which shall be known as an area reserve fund.

(4) If an Area Board establish an area reserve fund, they shall, from their surplus revenue, contribute to the said fund, to such extent as the Central Authority may approve, and the management of the said fund and the application of the moneys comprised therein shall be as the Area Board may determine:

Provided that—

(a) no part of the fund shall be applied otherwise than for the purposes of the Area Board; and

(b) the power of the Central Authority to give directions to any Area Board shall extend to the giving to them, with the approval of the Minister, of directions as to any matter relating to the establishment or management of the area reserve fund or the carrying of sums to the credit thereof, notwithstanding that the directions may be of a specific character.

(5) The foregoing provisions of this section shall be without prejudice to the power of the Central Authority or any Area Board to establish appropriate reserves for replacements or other purposes:

Provided that an Area Board shall act in regard to the establishment, management and application of any such reserve in accordance with any directions of the Central Authority, whether of a general or specific character.

(6) It is hereby declared that one of the purposes of the central reserve fund and the area reserve funds is the prevention of frequent fluctuations in the charges made by the Central Authority and the Area Boards, and the powers of that Authority and those Boards in relation of those funds shall be exercised accordingly.

44 Application of surplus revenues of Central Authority and Area Boards.

(1) Any excess of the Central Authority's revenues for any financial year over their outgoings for that year properly chargeable to revenue account shall be applied for such purposes as the Authority may determine:

Provided that—

(a) no part of any such excess shall be applied otherwise than for the purposes of the Authority or any Area Board; and

(b) the power of the Minister to give directions to the Authority shall extend to the giving to them, with the approval of the Treasury, of directions as to the application of any such excess, notwithstanding that the directions may be of a specific character.

(2) Any excess of any Area Board's revenues for any financial year over their outgoings for that year properly chargeable to revenue account shall be applied for such purposes of the Area Board as the Board may, with the approval of the Central Authority, determine.

45 Sums which are to be chargeable to revenue account.

The Central Authority and the Area Boards shall charge to revenue account in every year all charges which are proper to be made to revenue account, including, in particular, proper allocations to the central reserve fund (but not including, in the case of an Area Board, allocations to an area reserve fund), proper provision for the redemption of capital and proper provision for depreciation of assets or for renewal of assets, and all payments (including the payments which are by the relevant provision of this Act, or by any other relevant enactment, to be deemed to be capital payments) which fall to be made in that year to any local authority under Part II of this Act in respect of any loan of that local authority, and references in this Act to outgoings properly chargeable to revenue account shall be construed accordingly.

46 Accounts and audit of Central Authority and Area Boards.

(1) The Central Authority and each Area Board shall keep proper accounts and other records in relation to the business of that Authority or the business of that Board, as the .case may be, and shall prepare in respect of each financial year a statement of accounts in such form as the Minister, with the approval of the Treasury, may direct, being a form which shall conform with the best commercial standards.

(2) The form of the said statement shall be such as to secure the provision of separate information as respects the generation of electricity, the distribution of electricity, and each of the main other activities of the Electricity Board concerned, and to show as far as may be the financial and operating results of each such activity.

(3) The accounts of the Central Authority and of every Area Board shall be audited by auditors to be appointed in respect of each financial year by the Minister:

Provided that no person shall be qualified to be so appointed unless he is a member of one or more of the following bodies:—

• The Institute of Chartered Accountants in England and Wales;

• The Society of Incorporated Accountants and Auditors;

• The Society of Accountants in Edinburgh;

• The Institute of Accountants and Actuaries in Glasgow;

• The Society of Accountants in Aberdeen;

• The Association of Certified and Corporate Accountants, Limited.

(4) So soon as the accounts Of any Area Board have been audited, they shall send the statement of their accounts referred to in subsection (1) of this section to the Central Authority together with a copy of any report made by the auditors on that statement or on the accounts of the Board.

(5) So soon as the accounts of the Central Authority have been audited, they shall send a copy of the statement of their accounts referred to in subsection (1) of this section to the Minister together with a copy of any report made by the auditors on that statement or on the accounts of the Authority and shall also send copies of the statements of accounts of every Area Board to the Minister together with any reports on those statements or accounts as aforesaid, and copies thereof shall be made available to the public at a reasonable price.

(6) The Minister shall lay a copy of every such statement and report before each House of Parliament.

47 Provisions as to North of Scotland Board.

(1) Where stock has been issued by the Central Authority by way of compensation to the holders of securities of any body to whom Part II of this Act applies, other than a local authority, being a body whose property, rights, liabilities and obligations vest in the North of Scotland Board by virtue of this Act, there shall be issued to the Central Authority stock of the North of Scotland Board of such amount as in the opinion of the Treasury is, having regard to values at the vesting date, of a value equal to that of the stock issued by the Central Authority.

(2) Where sums have been paid by the Central Authority to the holders of any such securities as aforesaid by way of interest on stock issued by the Central Authority as aforesaid, being interest in respect of any period before the issue of stock by the North of Scotland Board as aforesaid, the North of Scotland Board shall repay those sums to the Central Authority.

(3) Where the property, rights, liabilities and obligations of a local authority vest by virtue of this Act in the North of Scotland Board, that Board shall repay to the Central Authority all sums paid by the Authority under Part II of this Act to the local authority by way of compensation, and any dispute between the North of Scotland Board and the Central Authority under this subsection shall be determined by the Minister and the Secretary of State jointly.

(4) Where stock has been issued by the Central Authority by way of compensation to the holders of securities of any body to whom Part II of this Act applies, other than a local authority, being a body who, immediately before the vesting date, held securities or the whole of the beneficial interest in securities of another such body whose property, rights, liabilities and obligations vest in the North of Scotland Board by virtue of this Act, there shall be determined by agreement between the Central Authority and the North of Scotland Board or, in default of such agreement, by the Minister and the Secretary of State jointly the amount of compensation that would have been payable in respect of those securities of that other body if they, or the beneficial interest therein, had not been held by a body to whom Part II of this Act applies, and there shall be issued to the Central Authority stock of the North of Scotland Board of such amount as in the opinion of the Treasury is, having regard to values at the vesting date, of a value equal to the amount so determined:

Provided that this subsection shall not apply in a case where the body holding the securities or the beneficial interest therein are a body to whom subsection (1) of this section applies.

(5) Where any property, rights, liabilities or obligations are transferred by an order made under Part II of this Act to or from the North of Scotland Board from or to any other Electricity Board, the order may provide for adjusting the obligations of the North of Scotland Board under this section to such extent as the Minister and the Secretary of State think fit.

(6) Any stock issued by the North of Scotland Board under this section shall be deemed to have been issued under section thirteen of the Act of 1943.

(7) The limit imposed by subsection (1) of section fourteen of the said Act on the amount of loans raised by the North of Scotland Board which the Treasury may guarantee shall cease to have effect:

Provided that the aggregate of the amounts outstanding in respect of the principal of any stock issued (other than stock issued to the Central Authority under this section) and of any temporary loans raised by the North of Scotland Board shall not at any time exceed the sum of one hundred million pounds, but nothing in this proviso shall prevent the said Board from borrowing in excess of the said sum for the purpose of redeeming any stock which they are required or entitled to redeem or of repaying any such temporary loans.

(8) Where the property, rights, liabilities and obligations of any authorised undertakers have vested under Part II of this Act in the North of Scotland Board, the prices to be charged by that Board for electricity supplied within the area of supply of those undertakers shall, pending any determination in accordance with regulations under section ten of the Act of 1943 applying to such prices, not exceed the prices charged in the said area immediately before the vesting date.