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Nuclear Energy (Financing) Act 2022

Contents

Part 4: Miscellaneous and Final Provisions

Section 40: Decommissioning of nuclear sites: bodies corporate not "associated"

  1. This section amends the Energy Act 2008 to provide clarification as to the meaning of ‘associated’ for the purposes of determining the bodies on whom the Secretary of State may potentially impose obligations under an FDP in relation to a new nuclear power station. Subsection (1) amends section 67 of the Energy Act 2008 in order to make it subject to a new section 67A.
  2. Subsection (2) adds in a new section 67A to the Energy Act 2008, to clarify the interests, rights and powers that should not be taken into account for the purposes of determining whether one body corporate is ‘associated’ with a nuclear site operator. The section covers, for example, the activities of security trustees and secured creditors. For example, secured creditors and security trustees may carry out activities connected to the holding and enforcement of certain security rights, but they would only ever exercise these to enforce or preserve or realise the value of their security in the event of a default by the operator under the relevant financing arrangements. These rights are contingent and have nothing to do with the day-to-day management or operation of the company, and so should be disregarded when considering which bodies corporate are ‘associated’ with the operator. Subsections (1) to (3) of the new section 67A of the Energy Act 2008 make provision for this.
  3. Subsection (4) of the new section 67A also clarifies that, where A acquires shares in B by virtue of the exercise of ‘relevant share security rights’, such shares should only be excluded from consideration for the purposes of section 67 where A retains those shares only for the purpose of preserving the value of the security interest in question or of realising that security interest. This is to avoid a circumstance where corporate bodies may attempt to use this provision to exclude their activities from consideration for the purposes of the definition of ‘associated’ inappropriately.
  4. To ensure that the activities of security trustees are fully captured for the purposes of this provision, subsections (5)(b) and (c) of the new section 67A makes clear that this section covers rights and shares held on trust.

Section 41: Financial provision

  1. Section 41 recognises that as a matter of House of Commons procedure, a financial resolution needed to be agreed for the Bill from which the Act resulted.
  2. Subsection (1) provides that there is to be paid out of money provided by Parliament.
    1. any expenditure incurred by the Secretary of State by virtue of this Act;
    2. any expenditure incurred by the Competition and Markets Authority by virtue of this Act;
    3. any expenditure incurred by the Authority by virtue of this Act;
    4. any increase attributable to this Act in the sums payable out of money so provided under any other Act.
  3. Subsection (2) clarifies that section 40(1)(a) includes expenditure by the Secretary of State for the purposes of or in connection with:
    1. the establishment of a revenue collection counterparty;
    2. making payments or providing financial assistance to a revenue collection counterparty;
    3. making payments to a nuclear RAB administrator or a relevant licensee nuclear company under or by virtue of Part 3.
  4. Subsection (3) confirms that, in this context, financial assistance or payments may be subject to conditions, including repayment conditions.
  5. Subsection (4) defines the relevant terms for this section.

Section 42: Minor and consequential provision

  1. This clarifies the Schedule contains minor and consequential provisions.

Section 43: Extent

  1. This lays out the territorial extent of the Act. The detail of this can be seen in Annex A.

Section 44: Commencement

  1. This section provides details on early commencement of a limited number of provisions, which will come into force on the day on which the Act is passed (subsection (1)). Subsection (2) sets out the provisions in the Act that will come into force two months after the Act is passed.

Section 45: Short Title

  1. This section contains the short title by which the Act may be cited.

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