The Electricity and Gas (Internal Markets) Regulations 2011

Duty to allow others to use storage facilities: exemptions for new and modified facilities

8.—(1) For the italic heading preceding section 19 of the Gas Act 1986 substitute—

“Pipe-line systems, storage facilities and LNG import or export facilities: rights of use etc”.

(2) Section 19A of the Gas Act 1986 (exemptions from duty to allow others to use storage facilities)(1) is amended as follows.

(3) For subsection (1) substitute—

“(1) Section 19B applies to a storage facility, except as provided in subsections (1A) and (1B).

(1A) Section 19B does not apply to a storage facility if it is subject to a minor facility exemption under section 8S(2).

(1B) Section 19B does not apply to a storage facility if, or to the extent that, it is exempt under this section.

(1C) The Authority must maintain on its website a list of the facilities to which section 19B applies.

(1D) If only part of the capacity of a storage facility is exempt under this section, the list under subsection (1C) must specify the extent to which section 19B applies to the facility.”.

(4) In subsection (2), after “an exemption” insert “under this section”.

(5) After subsection (2) insert—

“(2A) An application under subsection (2) must relate to—

(a) a storage facility (or proposed storage facility) which is not yet operational; or

(b) a modification (or proposed modification) which falls within subsection (2B) and is not yet operational.

(2B) A modification (or proposed modification) falls within this subsection if it is—

(a) a modification of a storage facility to provide for a significant increase in the capacity of the facility; or

(b) a modification of a storage facility to enable the development of new sources of gas supply.

(2C) The Authority must send to the European Commission a copy of an application under subsection (2) as soon as is reasonably practicable following its receipt.”.

(6) For subsection (3) substitute—

“(3) An exemption under this section must be given in writing and on the following terms—

(a) a term specifying the period of the exemption, or specifying how that period is to be determined;

(b) a term as to whether the exemption applies to all of the capacity of the facility or part of that capacity only;

(c) a term that the owner must comply with the capacity allocation mechanism approved in accordance with section 19DB(3); and

(d) such other terms regarding non-discriminatory access to the facility or any other matter as the Authority considers appropriate.

(3A) When determining a term under subsection (3) the Authority must take into account—

(a) the capacity of the facility or (as the case may be) the increase in capacity of the facility;

(b) the length of time required to recover the investment in the facility or (as the case may be) the investment in the modification;

(c) the implications of the exemption for the operation of the gas market in Great Britain.”.

(7) Omit subsections (4) and (5).

(8) In subsection (6)—

(a) for the words from the beginning to “either” substitute “Where the Authority receives an application under subsection (2) in relation to a facility or modification, it must give an exemption if it is satisfied that”;

(b) omit paragraph (a).

(9) After subsection (6) insert—

“(6A) An exemption given in accordance with subsection (6) may apply to all of the capacity of the facility concerned or to part of that capacity only, regardless of the extent of the exemption applied for; but this is subject to subsection (7).”.

(10) In subsection (7), at the end insert “or part of that increase in its capacity”.

(11) After subsection (7) insert—

“(7A) When deciding whether the requirements of subsection (8)(a), (d) and (e) are met, the Authority must take into account the way in which capacity is to be allocated under the capacity allocation mechanism approved in accordance with section 19DB.”.

(12) In subsection (8)—

(a) in paragraph (a) for “significant increase in its capacity” substitute “modification”;

(b) in paragraph (b) omit “to provide for a significant increase in its capacity”;

(c) in paragraph (d) after “capacity;” insert “and”;

(d) omit paragraph (f) (and the “and” preceding it).

(13) In subsection (9), for “subsection (10)” substitute “subsections (9A) and (10)”.

(14) After subsection (9) insert—

“(9A) Subsection (9) does not prevent a further exemption being given by virtue of subsection (6)(b) in respect of a facility if the previous exemption given by virtue of that provision in respect of the facility has been revoked under section 19AA(5)(4).”.

(15) In subsection (10)—

(a) after “a significant increase in its capacity” insert “or to enable the development of new sources of gas supply”;

(b) for “that increase in its capacity” (in each place) substitute “that modification”.

(16) In subsection (11), for “together with the reasons for its decision” substitute “under this section, together with the reasons for its decision,”.

(1)

Section 19A was inserted by regulation 2(2) to, and paragraph 1 of Schedule 2 to, S.I. 2000/1937 and has since been amended by the Utilities Act 2000 (c. 27), section 3(2); Regulation 2(2) of, and paragraph 1 and 2 of Schedule 2 to, S.I. 2004/2043; and regulation 4 of S.I. 2009/1349.

(2)

Inserted by regulation 6 of these Regulations.

(3)

Inserted by regulation 15 of these Regulations.

(4)

Inserted by regulation 9 of these Regulations.