Part 3

Energy Regulation
Chapter 3

Special administration regime for energy licensees

Financial support for companies in administration

Indemnities
166
1
This section applies where an energy administration order has been made in relation to a company.
2
The Secretary of State may agree to indemnify persons in respect of one or both of the following—
a
liabilities incurred in connection with the exercise and performance by the energy administrator of his powers and duties; and
b
loss or damage sustained in that connection.
3
The agreement may be made in whatever manner, and on whatever terms, the Secretary of State considers appropriate.
3A
As soon as practicable after agreeing to indemnify persons under this section, the Secretary of State must lay a statement of the agreement before Parliament.
4
If sums are paid by the Secretary of State in consequence of an indemnity agreed to under this section, the company must pay him—
a
such amounts in or towards the repayment to him of those sums as he may direct; and
b
interest, at such rates as he may direct, on amounts outstanding under this subsection.
5
Payments to the Secretary of State under subsection (4) must be made at such times and in such manner as he may determine.
6
Subsection (4) does not apply in the case of a sum paid by the Secretary of State for indemnifying a person in respect of a liability to the company in relation to which the energy administration order was made.
6A
Where a sum has been paid out by the Secretary of State in consequence of an indemnity agreed to under this section, the Secretary of State must lay a statement relating to that sum before Parliament—
a
as soon as practicable after the end of the financial year in which that sum is paid out; and
b
(except where subsection (4) does not apply in the case of the sum) as soon as practicable after the end of each subsequent relevant financial year.
6B
In relation to a sum paid out in consequence of an indemnity, a financial year is a relevant financial year for the purposes of subsection (6A) unless—
a
before the beginning of that year, the whole of that sum has been repaid to the Secretary of State under subsection (4); and
b
the company in question is not at any time during that year subject to liability to pay interest on amounts that became due under that subsection in respect of that sum.
7
The consent of the Treasury is required—
a
for the doing of anything by the Secretary of State under subsection (2);
b
for the giving by him of any direction under subsection (4); and
c
for the making of a determination under subsection (5).
8
The power of the Secretary of State to agree to indemnify persons—
a
is confined to a power to agree to indemnify persons in respect of liabilities, loss and damage incurred or sustained by them as relevant persons; but
b
includes power to agree to indemnify persons (whether or not they are identified or identifiable at the time of the agreement) who subsequently become relevant persons.
9
A person is a relevant person for the purposes of this section if he is—
a
the energy administrator;
b
an employee of the energy administrator;
c
a member or employee of a firm of which the energy administrator is a member;
d
a member or employee of a firm of which the energy administrator is an employee;
e
a member of a firm of which the energy administrator was an employee or member at a time when the order was in force;
f
a body corporate which is the employer of the energy administrator;
g
an officer, employee or member of such a body corporate.
10
For the purposes of subsection (9)—
a
the references to the energy administrator are to be construed, where two or more persons are appointed to act as the energy administrator, as references to any one or more of them; and
b
the references to a firm of which a person was a member or employee at a particular time include references to a firm which holds itself out to be the successor of a firm of which he was a member or employee at that time.
11
The Secretary of State must pay sums received by him by virtue of subsection (4) into the Consolidated Fund.
S. 166 in force at 5.10.2004 by S.I. 2004/2575, art. 2(1), Sch. 1
Ss. 154-171 modified (1.10.2005) by Energy Administration Rules 2005 (S.I. 2005/2483), rules 1, 184 (with rules 3, 187)
Ss. 156-167 applied (with modifications) (18.12.2011) by Energy Act 2011 (c. 16), ss. 96(1)-(4), 121(3)
S. 166(3A) inserted (18.12.2011) by Energy Act 2011 (c. 16), ss. 93(2), 121(3)
S. 166(6A)(6B) inserted (18.12.2011) by Energy Act 2011 (c. 16), ss. 93(3), 121(3)
Ss. 154-171 modified (7.6.2013) by The Energy Supply Company Administration Rules 2013 (S.I. 2013/1046), rules 1, 205(2)-(4) (with rules 3, 208)
Ss. 156-167 applied (with modifications) (23.7.2018) by Smart Meters Act 2018 (c. 14), ss. 4(1)-(4), 14(5)
Ss. 154-171 modified (E.W.) (1.8.2020) by The Smart Meter Communication Licensee Administration (England and Wales) Rules 2020 (S.I. 2020/629), rules 1, 3(2)-(4) (with rule 4(1))
Ss. 156-167 applied (with modifications) (31.3.2022 for specified purposes, 1.6.2022 in so far as not already in force) by Nuclear Energy (Financing) Act 2022 (c. 15), ss. 33(1)-(5), 44(1)(c)(2)(c)
Pt. 3 Ch. 3: power to modify conferred (31.3.2022 for specified purposes, 1.6.2022 in so far as not already in force) by Nuclear Energy (Financing) Act 2022 (c. 15), ss. 38, 44(1)(c)(2)(c)
Ss. 156-167 power to apply (with modifications) conferred (26.10.2023) by Energy Act 2023 (c. 52), s. 334(2)(l), Sch. 18 para. 50
Ss. 156-167 applied (with modifications) (26.12.2023) by Energy Act 2023 (c. 52), ss. 44, 334(3)(a)
Pt. 3 Ch. 3 power to apply and modify conferred (26.12.2023) by Energy Act 2023 (c. 52), ss. 48, 334(3)(a)