The Fossil Fuel Levy (Scotland) Regulations 1996

Regulation 2(2)

SCHEDULE 1 INTERPRETATION OF SCHEDULES 2 AND 3

Interpretation of Schedules 2 and 3

In this Schedule and in Schedules 2 and 3—

“estimated”, in relation to any amount, cost, quantity or value, means estimated by the Director on the basis of information furnished to him pursuant to these Regulations;

“leviable unit” means a unit of leviable electricity;

“LIBOR”, in relation to any particular day means the rate per centum per annum which is the arithmetic mean (rounded if necessary to the nearest whole multiple of one sixteenth of one per centum, with any odd thirty-second being rounded upwards) of the offered quotations (expressed as percentages) for deposits in sterling for a three month period which appear on the Reuters display screen page entitled LIBP (or such other page as may replace that page from time to time in that system) at or about 11.00 a.m. London time on that day excluding, if there are more than three such quotations, the highest and lowest of them (or, if there are more than one highest or lowest quotation, excluding only one of them) or, if that page is not available, or if fewer than three quotations are available at that time on that page, the arithmetic mean (rounded if necessary to the nearest whole multiple of one sixteenth of one per centum, with any odd thirty-second being rounded upwards) of the respective rates notified to the Director by any three United Kingdom clearing banks selected by the Director as the rate at which each such bank is offered deposits for three months for a sterling amount of £25 million by prime banks in the London Interbank Market at or about 11.00 a.m. London time on that day;

“y” means, as the case may be, either the initial period commencing on 16th February 1996 and ending on 31st March 1997 or any successive financial year following that initial period in which the qualifying month falls;

“y—1” means the period of 12 months immediately preceding period y except where—

(a)

period y is the initial period commencing on 16th February 1996 and ending on 31st March 1997 in which case any symbol with the subscript y—1 shall have the value zero; and

(b)

period y is the financial year ending on 31st March 1998 in which case y—1 means the initial period commencing on 16th February 1996 and ending on 31st March 1997;

“y—2” means the period of 12 months immediately preceding period y—1 except—

(a)

where period y is either—

(i)

the initial period commencing on 16th February 1996 and ending on 31st March 1997; or

(ii)

the financial year ending on 31st March 1998,

any symbol with the subscript y—2 shall have the value zero; and

(b)

where period y is the financial year ending on 31st March 1999, y—2 means the initial period commencing on 16th February 1996 and ending on 31st March 1997.

Regulation 5(1)

SCHEDULE 2 METHOD OF CALCULATING AMOUNT OF ANY PAYMENT IN RESPECT OF LEVY

1.  In this Schedule:

• the superscript " is used to denote the first estimate made by the Director of the amount in question for the period in question to calculate the levy rate for that period;

• the superscript ' is used to denote the revised estimate made by the Director of that amount to calculate the levy rate for the period immediately following that period; and

• the absence of a superscript is used to denote the actual amount in question.

2.  In this Schedule the following symbols have the following meanings:—

• A_y is the aggregate of the total costs calculated in relation to each public electricity supplier in accordance with paragraph 1 of Schedule 3 in respect of period y;

• AA_y is the aggregate of the total costs calculated in relation to each public electricity supplier in accordance with paragraph 2 of Schedule 3 in respect of period y;

• B_y is the aggregate of the total costs calculated in relation to each public electricity supplier in accordance with paragraph 3 of Schedule 3 in respect of period y;

• BB_y is the aggregate of the total costs calculated in relation to each public electricity supplier in accordance with paragraph 4 of Schedule 3 in respect of period y;

• C_y is the amount of the administrative expenses of the Director attributable to the levy incurred in respect of period y;

• E_y is the aggregate amount of all interest payments pursuant to regulation 24(1) in respect of period y less the aggregate amount of all interest payments pursuant to regulation 24(2) in respect of period y;

• F_y is the aggregate amount of all interest payments pursuant to regulation 25 received in period y;

• G_y is the aggregate amount of levy or interest payments due in respect of period y which, in the opinion of the Director, will be either irrecoverable or recoverable only at excessive cost;

• X_y is the aggregate amount (exclusive of levy and value added tax) charged (whether or not a bill or invoice has been delivered to a customer) by licensed suppliers for leviable electricity supplied by them in period y; and

• K_y is the correction factor for y calculated in accordance with paragraph 5.

3.  Subject to any adjustment which may be required pursuant to the Regulations, the amount of any payment to be made by a licensed supplier in respect of the levy in period y shall be calculated by applying to the aggregate amount (exclusive of value added tax and levy) charged (whether or not any bill or invoice has been delivered to a customer) by the supplier for leviable electricity supplied by him during the qualifying month the percentage figure R_y where R_y is the percentage figure r_y given by the formula—

after it has been rounded to the nearest tenth of a per centum (any odd twentieth of a per centum being rounded upwards).

4.  In the formula in paragraph 3 the value of

No math image to display

is given by the formula—

5.  In the formula in paragraph 3 the correction factor K_y shall be the amount of money, whether positive or negative, given by the following formula—

where—

• I_y—₁ is the arithmetic average of the LIBOR rates on the last day of each of the first six months in period y—1; and

• I_y—₂ is the arithmetic average of the LIBOR rates on the last day of each of the first six months in period y—2.

Regulation 5(2) and (3)

SCHEDULE 3

PART I methods of calculating actual cost of purchasing or generating certain electricity

Method of calculating actual cost of purchasing certain electricity

1.  The method of calculating the total cost to each public electricity supplier P of purchasing electricity supplied by him during qualifying months (n = any qualifying month in period y) which was generated in pursuance of qualifying arrangements (which, when combined with the like total cost attributable to every other public electricity supplier, is expressed as A_y in paragraph 2 of Schedule 2) is given by the formula—

where—

• Σ _n signifies the summation over all the qualifying months within the period y;

• S _n is the aggregate of the amounts due from supplier P under his qualifying arrangements in respect of electricity supplied in month n (whether or not such amounts have been paid) excluding any advance or deferred payments;

• U _n is the aggregate of any deferred payments supplier P is required under his qualifying arrangements to make in month n;

• together with interest as provided for in the correction factor K_y in Schedule 2.

Method of calculating actual cost of generating certain electricity

2.  The method of calculating the total cost to each public electricity supplier P of generating electricity supplied by him during qualifying months (n = any qualifying month in period y) which was generated in pursuance of qualifying arrangements (which, when combined with the like total cost attributable to every other public electricity supplier, is expressed as AA_y in paragraph 2 of Schedule 2) is given by the formula—

where—

• Σ _n signifies the summation over all the qualifying months within the period y;

• S& subn; is the aggregate of the amounts which are due or deemed to be due from supplier P under his qualifying arrangements to the generator in respect of electricity which was generated by him in pursuance of such arrangements and which was supplied in month n (whether or not such amounts have been paid) excluding any advance or deferred payments;

• U& subn;is the aggregate of any deferred payments supplier P is required or deemed to be required under his qualifying arrangements to make to the generator in month n;

• together with interest as provided for in the correction factor K_y in Schedule 2.

PART II methods of calculating hypothetical cost of purchasing or generating certain electricity

Method of calculating hypothetical cost of purchasing certain electricity

3.—(1) The method of calculating what would have been the total cost (in pounds) to each public electricity supplier P of purchasing the electricity mentioned in either paragraph 1 or paragraph 2 of this Schedule if that electricity had been generated by a fossil fuel generating station (which, when combined with the like total cost attributable to every other public electricity supplier, is expressed as By in paragraph 2 of Schedule 2) is given by the formula—

(2) In the formula specified in sub-paragraph (1) above—

• Σ_n signifies the summation over all the qualifying months within period y;

• W_n is the reference price (in pence per unit) in respect of the electricity referred to in paragraph 1 or, as the case may be, paragraph 2 of this Schedule within month n, calculated in accordance with paragraph 5 except during a security period, when it shall be the price determined as the Director, after consultation with licensed suppliers, sees fit; and

• V_n is the number of units of the electricity referred to in paragraph 1 or, as the case may be, paragraph 2 of this Schedule within month n.

Method of calculating hypothetical cost of generating certain electricity

4.—(1) The method of calculating what would have been the total cost (in pounds) to each public electricity supplier P of generating the electricity mentioned in either paragraph 1 or paragraph 2 of this Schedule if that electricity had been generated by a fossil fuel generating station (which, when combined with the like total cost attributable to every other public electricity supplier, is expressed as BB_y in paragraph 2 of Schedule 2) is given by the formula—

(2) In the formula specified in sub-paragraph (1) above—

• Σ_n signifies the summation over all the qualifying months within period y;

• W_n is the reference price (in pence per unit) in respect of the electricity referred to in paragraph 1 or, as the case may be, paragraph 2 of this Schedule within month n, calculated in accordance with paragraph 5 except during a security period, when it shall be the price determined as the Director, after consultation with licensed suppliers, sees fit; and

• V_n is the number of units of the electricity referred to in paragraph 1 or, as the case may be, paragraph 2 of this Schedule within month n.

5.  In the formula in paragraphs 3 and 4 the reference price Wn shall be given by the following formula:—

where—

a

FC_n is the notional cost of fuel (calculated in pence per gigajoule) which would be consumed in generating the relevant amount of electricity if it had been generated by the generating station at Longannet in month n which is given by the following formula:—

where—

(i)

CP_n is the price (in pounds per tonne) of coal shown in the Relevant Table in relation to quarter q—2 (where “quarter q” means the calendar quarter in which month n occurs, “quarter q—1” means the quarter immediately preceding quarter q, and “quarter q—2” means the quarter immediately preceding quarter q—1); and

(ii)

δ_n is the average net calorific value of coal which would have been consumed in generating electricity at the generating station at Longannet in relation to quarter q—2 (where “quarter q” means the calendar quarter in which month n occurs, “quarter q—1” means the quarter immediately preceding quarter q, and “quarter q—2” means the quarter immediately preceding quarter q—1); and

b

α is the average incremental heat rate of the generating station at Longannet (calculated in net gigajoule per kWh).

6.  In paragraphs 3 and 4 “security period” means a period commencing on the date on which security directions come into force and ending on the specified date, and in this paragraph—

(a) “security directions” means directions given under paragraph (b) of sub-section (4) of section 34 of the Act (whether or not such directions are given in conjunction with directions given under any other provision of that section); and

(b) “specified date” means the date (not being earlier than the date on which the security directions cease to be in force) specified by the Director in a notice to licence holders as the date by which any procedure governing the despatch of electricity from generating stations the operation of which was suspended while the security directions were in force once more becomes operative.

7.  In paragraph 5 “the Relevant Table” means the table showing the average price of coal purchased by the major United Kingdom power producers as contained in the Energy Trends published from time to time by the Department of Trade and Industry, or any table expressly published to replace the same. If the Relevant Table shall at any time be suspended or terminated, an alternative method of computation, as nearly as practicable consistent with the Relevant Table, shall be determined by the Director after consultation with the public electricity suppliers.

Regulation 28

SCHEDULE 4 DESCRIPTIONS OF INFORMATION WHICH CERTAIN PERSONS MAY BE REQUIRED TO FURNISH

PART I

1.  Estimates for any year or part of a year of—

(a) non-fossil fuel generating capacity available in pursuance of qualifying arrangements, expressed in megawatts;

(b) electricity from non-fossil fuel generating stations supplied in pursuance of qualifying arrangements, expressed in megawatts hours; and

(c) total amounts falling due under qualifying arrangements, expressed in pounds sterling, and the terms of any qualifying arrangements.

2.  Particulars of any changes expected to occur during the year in any total amounts falling due mentioned in paragraph 1(c).

3.  Estimates for any year or part of a year of—

(a) total quantities of electricity to be supplied by a licensed supplier, excluding quantities sold to other suppliers, as measured by a meter installed for the purpose at the point of supply and expressed in kilowatt hours;

(b) total quantities of electricity to be supplied by a licensed supplier, excluding quantities sold to other suppliers, without being measured by a meter, expressed in kilowatt hours, with particulars of the manner in which such quantities have been calculated;

(c) total quantities of leviable and other electricity to be delivered to a licensed supplier;

(d) total quantities of electricity delivered to any system of electric lines and electrical plant operated by a licensed supplier;

(e) loss factors applicable to, and actual kilowatt hours lost during, the conveyance of electricity by means of a system of electric lines and electrical plant operated by a licensed supplier;

(f) average revenue from the supply of electricity by a licensed supplier after deduction of value added tax and payments in respect of the levy, expressed in pence per kilowatt hour;

(g) total revenue, including the levy but excluding value added tax, from the supply of electricity;

(h) total quantities of electricity sold to a licensed supplier by another licensed supplier, expressed in kilowatt hours; and

(i) total quantities of electricity purchased by a licensed supplier.

4.  Estimates of the amounts of any deferred payments to be made in any year, and of the dates upon which any such payments are to be made.

5.  Actual figures for any year or part of a year in respect of which an estimate has been, or could have been required to be, furnished.

6.  In the case of a licence under section 6(1)(c) or (2) of the Act granted after the coming into force of these Regulations, the date upon which the licence holder intends to start undertaking the activities authorised by the licence.

7.  The date upon which any licence holder intends to cease carrying on any activities authorised by his licence.

PART II

8.  Estimates for any year or part of a year of—

(a) total quantities of leviable and other electricity delivered to or from a transmission system in Scotland, expressed in kilowatt hours;

(b) total quantities of electricity delivered to or from a transmission system in Scotland from or to—

(i) another transmission system in Scotland;

(ii) a transmission system in England and Wales; or

(iii) an interconnector

expressed, in either case, in kilowatt hours; and

(c) loss factors applicable to, and actual kilowatt hours lost during, the conveyance of electricity by means of a transmission system in Scotland.

9.  Actual figures for any year or part of a year in respect of which an estimate has been, or could have been required to be, furnished.

PART III

10.  Estimates for any year or part of a year of—

(a) total quantities of electricity generated in non-fossil fuel generating stations to be acquired by each licensed supplier otherwise than in pursuance of qualifying arrangements, as measured at the busbar side of the busbar selection isolators and expressed in kilowatt hours;

(b) total quantities of electricity generated in non-fossil fuel generating stations to be acquired pursuant to qualifying arrangements, as measured at the busbar side of the busbar selection isolators and expressed in kilowatt hours; and

(c) total quantities of electricity generated in fossil fuel generating stations to be acquired by each licensed supplier, as measured at the busbar side of the busbar selection isolators and expressed in kilowatt hours.

11.  Particulars of any changes expected to occur during the year in any total quantity mentioned in paragraph 10.

12.  In the case of a non-fossil generating station which is capable of being fuelled by a fossil fuel—

(a) a description of each type of fuel which may be used in the station;

(b) the quantities of each type of fuel estimated to be used in the station during a particular period; and

(c) the types, quantities and net calorific values of fuel actually used in the station during a particular period.

13.  Actual figures for any year or part of a year in respect of which an estimate has been, or could have been required to be, furnished.

Interpretation

14.  In paragraph 8(b)(ii) of this Schedule “interconnector” means a system of electric lines and plant by means of which electricity may be conveyed between Scotland and any other country, or between Scotland and other parts of the United Kingdom.