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Explanatory Memorandum to Electricity (Single Wholesale Market) (Northern Ireland) Order 2007

Legislative Background

3.This Order forms part of the primary legislation programme for Northern Ireland during direct rule. There are some 20-25 such Orders every year which in effect form the Northern Ireland statute book. These Orders are normally made under the Northern Ireland Act 2000 which authorises the making of legislation for Northern Ireland which (but for direct rule) would be enacted by the Northern Ireland Assembly. Although these Orders take the form of statutory instruments their content is similar to that of primary legislation.

4.When preparations for this Order were at an early stage a difficulty emerged concerning vires in that under section 6(2)(a) of the Northern Ireland Act 1998 an Act of the Assembly (and therefore an Order in Council under the Northern Ireland Act 2000) cannot make provision which “confers functions exercisable otherwise than in or as regards Northern Ireland”. It was felt that in the context of provision for a Single Electricity Market (SEM) the legislation would need to confer such functions (in respect of certain activities in Ireland).

5.It was therefore decided to take an additional power in the Northern Ireland (Miscellaneous Provisions) Act 2006 to make provision by Order in Council for giving effect to the SEM Agreement with Ireland.

6.The Order is made under two wide powers. Except in so far as it “confers functions exercisable otherwise than in or as regards Northern Ireland” the Order falls within the powers conferred by the Northern Ireland Act 2000. But for the doubts on vires mentioned above, the Order would have been made under that power.

7.The Order proceeds largely by amending existing NI domestic electricity legislation to provide mechanisms for regulating a single market in Northern Ireland and Ireland (parallel provisions are being introduced simultaneously in Ireland). In amending domestic law in a few places provision was made which while applying to SEM circumstances could also apply to purely domestic circumstances. This was done to ensure consistency of approach across the electricity legislation.

8.The citation of the Northern Ireland Act 2000 is intended to avoid any argument as to whether such amendments to domestic law went beyond what was strictly speaking necessary to implement the SEM Agreement. Arguably they do not, but the SEM is of such political and economic importance that an abundance of caution was exercised to avoid any concerns over vires.

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